OBLIGATIONS & CONTRACTS

2010 BAR REVIEW

SAN SEBASTIAN COLLEGE

A.

OBLIGATION

1.

DEFINITION ART. 1156, CIVIL CODE

2.

CIVIL OBLIGATION NATURAL OBLIGATION (Art. 1423)

CIVIL OBLIGATION MORAL OBLIGATION

2. ELEMENTS:
2.a) PARTIES
2.b) OBJECT PRESTATION (TO GIVE, TO DO, NOT TO DO)
- Determinate, Useful, Lawful, Assessible in Money,
Possible
2.c) SANCTION JURIDICAL TIE

3. KINDS OF OBLIGATIONS:
3.a) ACCORDING TO THE PECULIARITIES OF THE PRESTATION PURE,
CONDITIONAL, WITH A PERIOD.
3.b) ACCORDING TO NUMBER OF PARTIES JOINT, SOLIDARY
3.c) ACCORDING TO PRESTATIONS TO BE RENDERED INDIVIDUAL,
MULTIPLE (ALTERNATIVE, FACULTATIVE)
3.d) ACCORDING TO QUALITIES OF OBJECT POSITIVE/NEGATIVE,
SPECIFIC/GENERIC, DIVISIBLE/INDIVISIBLE,
PRINCIPAL/ACCESSORY.

5. SOURCES OF AN OBLIGATION: (ART. 1157)

5.a) LAW
5.b) CONTRACTS ART. 1305
5.c) QUASI-CONTRACTS NEGOTIORUM GESTIO (ART. 2144);
SOLUTIO INDEBITI (ART. 2154)
5.d) DELICT ART. 100, RPC, RULE 111, SEC. 1, RULES OF COURT;
ARTS. 29, 30, 32, 33, 34, 35 OF THE NCC.

5.e) QUASI-DELICT ARTS. 1162, 2176

6. DUTIES OF OBLIGOR.
6.a) PRESTATION TO GIVE SPECIFIC THING

- PRINCIPAL OBLIGATION TO DELIVER DETERMINATE THING

(ART. 1244)
- ACCESSORY OBLIGATIONS:
I) TO PRESERVE THE THING DILIGENCE OF A GOOD FATHER
(ART. 1163) GENERAL RULE
EXCEPTIONS:
(a) ART. 1733 COMMON CARRIERS OVER GOODS, EXTRAORDINARY DILIGENCE

(b) ART. 1755 PASSENGERS, UTMOST DILIGENCE

(c ) ART. 2000 INN KEEPERS

QUERY: CAN PARTIES, BY STIPULATION, VARY THE REQUIRED

DEGREE OF DILENCE?
ANS.: GENERAL RULE, YES.
EXCEPTIONS: (a) LAW PROHIBITS SAID STIPULATION.
EXAMPLES INN KEEPERS (ART. 2003) AND COMMON
CARRIERS OF PASSENGERS (ART. 1757)
II) TO DELIVER ACCESSIONS AND ACCESSORIES EVEN NOT
MENTIONED (ART. 1166).
III) TO DELIVER FRUITS (ART. 1164) FROM TIME OBLIGATION TO
DELIVER ARISES.

6.b) PRESTATION TO GIVE GENERIC THING

PRINCIPAL OBLIGATION DELIVER THING OF THE QUALITY SPECIFIED
(ART. 1246)

-NO LEGAL ACCESSORY UNTIL THING TO BE DELIVERED HAS

BEEN INDIVIDUALIZED.
6.c) PRESTATION TO DO
- PERFORM THE ACT AS PROMISED AND NOT SUBSTITUTE IT
(ART. 1244)
- SHALL BE EXECUTED AT THE COST OF DEBTOR (ART. 1167)

 6.d) PRESTATION NOT TO DO

- DEBTOR MUST NOT PERFORM CONDUCT
PROHIBITED.
- IF DEBTOR DOES WHAT HAS BEEN
FORBIDDEN, SHALL BE UNDONE AT
DEBTORS EXPENSE (ART. 1168)
7. DELAY ART. 1169
-MORA OE DELAY IS FAILURE TO
PERFORM THE OBLIGATION IN DUE TIME
THRU MALICE OR NEGLIGENCE.

KINDS OF MORA:
(a) MORA SOLVENDI MORA OF
DEBTOR
(b) MORA ACCIPIENDI MORA OF
CREDITOR
(c ) COMPENSATIO MORAE MORA OF
BOTH CREDITOR AND DEBTOR

GENERAL RULE : NO DEMAND, NO DELAY

EXCEPTIONS:
(a) OBLIGATION OR LAW EXPRESSLY SO
DECLARES.
(b) TIME CONTROLLING MOTIVE FOR
ESTABLISHMENT OF CONTRACT.

NOTE: RECIPROCAL OBLIGATION FROM

THE MOMENT ONE PARTY FULFILLS HIS
OBLIGATION, DELAY BY THE OTHER
BEGINS.

8. FORTUITOUS EVENT ART. 1174

GENERAL RULE FORTUTITOUS EVENT
EXTINGUISHES THE OBLIGATION.

REQUISITES OF FORTUITOUS EVENT AS A BASIS

OF EXEMPTION FROM LIABILITY (LASAM VS.
SMITH, 45 PHIL. 657):
(a) MUST BE INDEPENDENT OF HUMAN WILL
(b) IMPOSSIBLE TO FORESEE OR IF IT CAN BE
FORESEEN, IMPOSSIBLE TO AVOID.
(c) IMPOSSIBLE FOR DEBTOR TO FULFILL
OBLIGATION IN A NORMAL WAY.
(d) DEBTOR HAS NO CONCURRENT FAULT.

EXCEPTIONS DEBTOR STILL LIABLE:

(a) WHEN EXPRESSLY SPECIFIED BY LAW ART.
1942 (BAILEE); ART. 2001 (THIEF IN A HOTEL); ART.
2147 (OFFICIOUS MANAGER.
(b) DECLARED BY STIPULATION.

(c ) ASSUMPTION OF RISK ARTS. 1717 and 1724

(CONTRACTOR)
(d) DEBTOR IN DELAY ART. 1165, PAR. 3
(e) DEBTOR GUILTY OF NEGLIGENCE OR FAULT.

9. REMEDIES GIVEN TO CREDITOR IN CASE OF BREACH:

9.A) OBLIGATION TO GIVE SPECIFIC THING

ACTION FOR SPECIFIC PERFORMANCE PLUS
DAMAGES; OR RESCISSION PLUS DAMAGES.
9.B) OBLIGATION TO GIVE GENERIC THING
ACTION FOR SUBSTITUTED PERFORMANCE PLUS
DAMAGES (ART. 1165, PAR. 2)
9.C) OBLIGATION TO DO ACTION FOR
SUBSTITUTED PERFORMANCE UNLESS
PERSONAL QUALITIES OF DEBTOR WERE
CONSIDERED (ART. 1167, PAR. 1); ACTION FOR
DAMAGES; IF IMPROPERLY EXECUTED, WHAT
WAS POORLY DONE BE UNDONE (ART. 1167, PAR.
2)
9.D) OBLIGATION NOT TO DO ACTION FOR
DAMAGES; TO UNDO FORBIDDEN ACT DONE AT
EXPENSE OF DEBTOR (ART. 1168)

10. SUBSIDIARY REMEDIES OF

CREDITOR:
(a) ACCION SUBROGATORIA
(b) ACCION PAULIANA ACCION
PUBLICIANA

(c ) ACTION TO DECLARE THE

NULLITY OF ABSOLUTELY
SIMULATED TRANSFERS (ART. 1409).

11. KINDS OF OBLIGATION:

11.a) ACCORDING TO THE PECULIARITIES OF THE
PRESTATION
i ) PURE OBLIGATION DEMANDABLE AT ONCE.
ii) WITH A CONDITION FUTURE AND UNCERTAIN
EVENT.

(a) SUSPENSIVE CONDITION

(b) RESOLUTORY CONDITION

(iii) WITH A PERIOD FUTURE AND CERTAIN EVENT

(a) SUSPENSIVE PERIOD

(b) RESOLUTORY PERIOD

(iv) RULES GOVERNING LOSS, DETERIORATION,
IMPROVEMENT OF THING WHILE CONDITION IS
PENDING (ART. 1189)
DEFINITION OF LOSS A THING IS LOST WHEN IT
PERISHES, GOES OUT OF THE COMMERCE OF
MEN, OR DISAPPEARS, SO THAT ITS EXISTENCE IS
UNKNOWN OR IT CAN NOT BE RECOVERED.

SUSPENSIVE/RESOLUTORY CONDITION
(a.1) LOSS WITHOUT FAULT OF DEBTOR,
OBLIGATION IS EXTINGUISHED; WITH FAULT OF
DEBTOR, LIABLE FOR DAMAGES.
(a.2) DETERIORATION WITHOUT FAULT OF
DEBTOR, IMPAIRMENT TO BE BORNE BY
CREDITOR; WITH FAULT OF DEBTOR, CREDITOR
HAS 2 OPTIONS, RESCISSION PLUS DAMAGES
OR FULFILLMENT PLUS DAMAGES.

(a.3) IMPROVEMENT IMPROVED BY NATURE,

BENEFITS CREDITOR; AT THE EXPENSE OF
DEBTOR, RIGHT OF A USUFRUCTUARY,
REMOVE IMPROVEMENT OR SET OFF.

11.b) ACCORDING TO PRESTATIONS TO BE

RENDERED INDIVIDUAL, MULTIPLE
(ALTERNATIVE, FACULTATIVE)
(i) ALTERNATIVE OBLIGATION SEVERAL
PRESTATIONS ARE DUE BUT THE PAYMENT OR
PERFORMANCE OF ONE OF THEM WOULD BE
SUFFICIENT TO EXTINGUISH THE OBLIGATION.

(ii) FACULTATIVE OBLIGATION ONLY ONE

PRESTATION WAS AGREED UPON AND IS DUE BUT
OBLIGOR MAY DELIVER OR RENDER ANOTHER IN
SUBSTITUTION.
WHO HAS RIGHT OF CHOICE? IN ALTERNATIVE,
DEBTOR OR CREDITOR OR 3RD PERSON (ART.
1200, PAR. 1; ART. 1309).
IN FACULTATIVE, DEBTOR.

11.c) ACCORDING TO NUMBER OF PARTIES JOINT,

SOLIDARY
(i) JOINT OBLIGATION MANCOMUNADA
CONCURRENCE OF SEVERAL CREDITORS OR
DEBTORS AND CREDITORS CAN DEMAND FROM
EACH DEBTOR ONLY HIS PROPORTIONATE SHARE.
(ii) SOLIDARY OBLIGATION CONCURRENCE OF
SEVERAL CREDITORS OR DEBTORS AND
CREDITORS CAN DEMAND FROM ONE DEBTOR THE
FULFILLMENT OF THE ENTIRE OBLIGATION.
RULE : THERE IS SOLIDARY LIABILITY IF:
(a) EXPRESSLY STIPULATED.
(b) LAW OR NATURE REQUIRES SOLIDARITY EXAMPLES: Art. 2194 QUASI-DELICT; ART. 119, R.P.C. COPRINCIPALS, CO-ACCOMPLICES, CO-ACCESSORIES; ART. 1945 BAILEE

 EFFECTS OF A JOINT INDIVISIBLE

OBLIGATION:
(a) IF ANYONE OF THE DEBTORS IS
INSOLVENT, OTHERS SHALL NOT BE
LIABLE FOR HIS SHARE.
EFFECTS OF REMISSION UPON A
SOLIDARY OBLIGATION IT DEPENDS:
(a) TOTAL REMISSION EXTINGUISHES THE
WHOLE DEBT FOR ALL DEBTORS.
(b) PARTIAL REMISSION REDUCES THE
AMOUNT DUE BUT BALANCE REMAINS A
SOLIDARY CREDIT.

11.d) ACCORDING TO QUALITIES OF OBJECT

POSITIVE/ NEGATIVE, SPECIFIC/ GENERIC,
DIVISIBLE/ INDIVISIBLE, PRINCIPAL/
ACCESSORY.
(i) INDIVISIBLE OBLIGATION BY RTEASON
OF THEIR PURPOSE, ARE NOT
SUSCEPTIBLE OF BEING EXECUTED/
PERFORMED BY PARTS OR FRACTIONS.
(ii) DIVISIBLE OBLIGATION CAN BE
EXECUTED OR PERFORMED BY PARTS OR
FRACTION.

GENERAL RULE INDIVISIBILITY (ARTS. 1233PAYMENT AND 1248- PARTIAL PAYMENTS)

EXCEPTIONS: OBLIGATIONS PARTLY LIQUIDATED
(ART. 1248,
PAR. 2); INSTALLMENT CONTRACTS
(ART. 1720,
PAR. 2); PARTIAL IILLEGALITY AND
OBLIGATION IS
DIVISIBLE (ART. 1420).

(iii) OBLIGATION WITH A PENAL CLAUSE

ACCESSORY OBLIGATION, STIPULATED FOR
BREACH OF SOME OBLIGATIONS AGREED UPON.