REVIEWER IN LAW 101  An obligation is a juridical necessity to give, to do or not
LAW ON OBLIGATIONS AND CONTRACTS
(FOR FINALS)
 Future and certain event upon the arrival of which the
obligation subject to it either arises or is terminated. -
Period
 That remedy granted by law to the contracting parties
and sometimes even to third persons in order to secure
reparation of damages caused to them by a valid contract,
by means of the restoration of things to their condition in
which they were prior to the celebration of said contract.
- Rescission
 It is a meeting of minds between two or more persons
whereby one binds himself, with respect to the other, to
give something or to render some service. - Contract
 It is a juridical relation to give, to do or not to do. -
Obligation
 It is the conformity or concurrence of will of two parties
upon the object and terms of the contract. – Consent
 A contract which possesses all the essential requisites of
a valid contract but one of the parties is incapable of
giving consent, or the consent is vitiated by mistake,
violence, intimidation, undue influence or fraud. -
Voidable
 That kind of contract which has no specific name or
designation in law. – Innominate Contract
 It is a stipulation in a contract clearly and deliberately
conferring a favor upon a third person. – Stipulation
pour autrui
 Pledge.
 That kind of element without which no contract can
validly exist. – Essential Elements
 A contract which gives a person for consideration a
certain period within which to accept the offer of the
offerer. – Option Contract
 It is the false notion of a thing or a fact material to the
contract. – Mistake or Error
 It arises from ignorance of certain provision of law or
from an erroneous conclusion as to the legal effect of an
agreement on the part of one of the parties in the
contract. – Mistake of Law
 Fraud committed by one party before or at the time of the
celebration of the contract to secure the consent of the
other. – Causal Fraud
 An act of deliberately deceiving others, by feigning or
pretending by agreement, the appearance of contract
which is either non-existent or concealed. – Simulation
of contract
 Object of a contract - Subject Matter
 It is the remedy allowed by law by means of which a
written instrument is amended or rectified so as to
express or conform to the real agreement. – Reformation
 Instances of a valid contract. -
 It is purely personal or a private reason which a party has
in entering into a contract. - Motive
 A contract which, because of certain defects, generally
produces no effect at all. – Void or Inexistent Contract
 Contract entered into by one party during his lucid
interval is valid.
 Contract a meeting of minds between two persons
whereby one binds himself, with respect to the other, to
give something or to render some service.
 A contract cannot be given effect if it is contrary to law
because law is superior to a contract. – True
 Any third person who induces another to violate his
contract shall be liable for damages to the other
contracting party (Art. 1314).
 Ignorance of the law excuses no one from compliance
therewith (Art. 1334).
to do.
 Juridical tie is the vinculum or the link which binds the
parties to an obligation.
 The creditor or the obligee is the person who can demand
the performance of the obligation.
 Law is a source of obligation.
 Those who in the performance of his obligations are
guilty of delay shall be liable for damages. – True
 A pure obligation is one which is not subject to
conditions or burdens nor does it mention a specific date
for its fulfillment, thereby immediately demandable
 A condition is a future and uncertain event while a period
is future but certain event.
 A potestative condition the happening of which depends
on the exclusive will of the debtor is void.
 A resolutory condition produces the extinguishment of
an obligation upon the happening of the event.
 Real contracts like pledge are perfected until the delivery
of the object of the obligation (Art. 1316).
 Consensual Contracts are perfected by mere consent.
 Consent, object and cause are the essential elements of
contract.
 Acceptance in a contract must be absolute.
 Concealment is equivalent to misrepresentation which
renders a contract also voidable.
 An opinion given with fraud by a mining engineer about
a sale of a piece of land by saying that it has a deposit of
mines which encouraged the other party to enter into the
said contract will also render the contract voidable.
(Basta fraud, mistake, undue influence, violence and
intimidation ang cause ng consent, voidable)
 Right to vote is an intransmissible right which cannot be
an object of a contract.
 Judicial intervention is necessary only when both the
parties cannot agree with the period.
 A condition which depends upon the sole will of a debtor
invalidates the obligation. (If this happens, there will be
no burden on the debtor and consequently, no juridical
tie is created, Art. 1156)
 Obligation with a period is presumed to be for the benefit
of both the creditor and debtor.
 When the debtor becomes insolvent, he has no right to a
period, thus the obligation becomes a pure and simple
obligation which is immediately demandable (Art.
1198).
 Sale is a source of obligation (Art. 1157). *sale is a
form of contract
 The choice in an alternative obligation produces effect
even without communication to the other party. *other
party pertains to the debtor
 In alternative obligation, two or more prestations have
been agreed upon and compliance of one satisfies the
obligation.
 Facultative obligation, only one prestation but obligor
may render another in substitution
 There is a solidary obligation where each one of the
debtors is bound to render, and/or one of the creditors
has a right to demand the entire compliance with the
prestation.
 Indivisibility of an obligation does not necessarily give
rise to solidarity (Art. 1210).
 Remission of the whole obligation, obtained by one of
the solidary debtors, entitles him to reimbursement from
his co-debtors.
Classification of contract according to perfection
(1) Consensual Contract
(2) Real Contract
Kinds of defective contracts
 (1) Rescissible Contract
(2) Voidable Contract
(3) Unenforceable Contract
(4) Void/Inexistent Contract
Essential requisites or elements of a contract
(1) Consent
(2) Object
(3) Cause (Art. 1318)
Essential requisites of an obligation
(1) Active Subject
(2) Passive Subject
(3) Object
(4) Juridical Tie
Causes of extinguishment of obligation
(1) By pay or performance;
(2) By loss of the thing due;
(3) By the condonation or remission of debt;
(4) By confusion or merger of the rights of
the creditor and debtor;
(5) By compensation;
(6) By novation. (Art. 1231)
Vices of consent which renders a contract voidable
(1) Error or mistake;
(2) Violence or force;
(3) Intimidation or threat or duress;
(4) Undue influence;
(5) Fraud or deceit.
Give at least one instance where a debtor loses his right
to a period
(1) Insolvency (Art. 1198)
(1) When after the obligation has been
contracted, he becomes insolvent, unless he gives a
guaranty or security for the debt;
(2) When he does not furnish to the creditor the
guaranties or securities which he has promised;
(3) When by his own acts he has impaired said
guaranties or securities after their establishment, and
when through a fortuitous event they disappear,
unless he immediately gives new ones equally
satisfactory;
(4) When the debtor violates any undertaking,
in consideration of which the creditor agreed to the
period;
(5) When the debtor attempts to abscond. (Art.
1198)
What are the rescissible contracts?
- They are the least infirm or defective.
They are valid because all the essential
requisites of a contract exist but by
reason of injury or damage to one of
the parties or to third persons, such as
creditors, the contract may be
rescinded. Thus, the defect is external.
Until such contracts are rescinded in an
appropriate proceeding, they remain
valid and binding upon the parties
thereto.