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Module number 1

OBLIGATIONS AND CONTRACTS

TITLE I – OBLIGATIONS
CHAPTER 1
GENERAL PROVISIONS

1156. An obligation is a juridical necessity to give, to do, or not to do.

JURIDICAL NECESSITY – juridical tie; connotes that in case of noncompliance, there

will be legal sanctions.

 An obligation is nothing more than the duty of a person (obligor) to satisfy a

specific demandable claim of another person (obligee) which, if breached, is
enforceable in court.
 A contract necessarily gives rise to an obligation but an obligation does not
always need to have a contract.

DAMAGES – sum of money given as a compensation for the injury or harm suffered by
the obligee for the violation of his right.

KINDS OF OBLIGATION

A. From the viewpoint of “sanction” –

(a) CIVIL OBLIGATION – that defined in Article 1156; an obligation, if not

fulfilled when it becomes due and demandable, may be enforced in court through
action; based on law; the sanction is judicial due process

(b) NATURAL OBLIGATION – a special kind of obligation which cannot be

enforced in court but which authorizes the retention of the voluntary payment or
performance made by the debtor; based on equity and natural law. (i.e. when there is
prescription of duty to pay, still, the obligor paid his dues to the obligee – the obligor
cannot recover his payment even there is prescription) the sanction is the law, but only
conscience had originally motivated the payment.
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(c) MORAL OBLIGATION – the sanction is conscience or morality, or the law

of the church. (Note: If a Catholic promises to hear mass for 10 consecutive
Sundays in order to receive P1,000, this obligation becomes a civil one.)

B. From the viewpoint of subject matter -

(a) REAL OBLIGATION – the obligation to give

(b) PERSONAL OBLIGATION – the obligation to do or not to do (e.g. the duty

to paint a house, or to refrain from committing a nuisance)

C. From the affirmativeness and negativeness of the obligation -

(a) POSITIVE OR AFFIRMATIVE OBLIGATION – the obligation to give or to

do

(c) NEGATIVE OBLIGATION – the obligation not to do (which naturally

inludes not to give)

D. From the viewpoint of persons obliged - “sanction” –

(a) UNILATERAL – where only one of the parties is bound (e.g. Plato owes
Socrates P1,000. Plato must pay Socrates.)

(d) BILATERAL – where both parties are bound (e.g. In a contract of sale, the
buyer is obliged to deliver)
 may be: (b.1) reciprocal (b.2) non-reciprocal – where performance by one is non-
dependent upon performance by the other

ELEMENTS OF OBLIGATION

a) ACTIVE SUBJECT – (Creditor / Obligee) the person who is demanding the

performance of the obligation;

b) PASSIVE SUBJECT – (Debtor / Obligor) the one bound to perform the

prestation or to fulfill the obligation or duty;
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c) PRESTATION – (to give, to do, or not to do) object; subject matter of the
obligation; conduct required to be observed by the debtor;

d) EFFICIENT CAUSE – the JURIDICAL TIE which binds the parties to the
obligation; source of the obligation.

e) CAUSA (causa debendi/causa obligationes) - why obligation exists

PRESTATION (Object)
1. TO GIVE – delivery of a thing to the creditor (in sale, deposit, pledge,
donation);

2. TO DO – covers all kinds of works or services (contract for professional

services);

3. NOT TO DO – consists of refraining from doing some acts (in following

rules and regulations).

Requisites of Prestation / Object:

1) licit (if illicit, it is void)

2) possible (if impossible, it is void)

3) determinate or determinable (or else, void)

4) pecuniary value

 INJURY – wrongful act or omission which causes loss or harm to another

 DAMAGE – result of injury (loss, hurt, harm)

1157. Obligation arises from – (1) law; (2) contracts; (3) quasi-
contracts; (4) acts or omissions punished by law; (5) quasi-delicts.

1. LAW (Obligation ex lege) – imposed by law itself; must be expressly or impliedly

set forth and cannot be presumed [See Article 1158]
2. CONTRACTS (Obligation ex contractu) – arise from stipulations of the parties:
meeting of the minds / formal agreement must be complied with in good faith
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because it is the “law” between parties; neither party may unilaterally evade his
obligation in the contract, unless:

a) contract authorizes it
b) other party assents

Note: Parties may freely enter into any stipulations, provided they are not contrary to
law, morals, good customs, public order or public policy [See Article 1159]

3. QUASI-CONTRACTS (Obligation ex quasi-contractu) – arise from lawful,

voluntary and unilateral acts and which are enforceable to the end that no one
shall be unjustly enriched or benefited at the expense of another

- 2 kinds:

a) Negotiorum gestio - unauthorized management; This takes place

when a person voluntarily takes charge of another’s abandoned
business or property without the owner’s authority
b) Solutio indebiti - undue payment; This takes place when
something is received when there is no right to demand it, and it
was unduly delivered thru mistake [See Article 1160]

4. DELICTS (Obligation ex maleficio or ex delicto) – arise from civil liability which is

the consequence of a criminal offense

Governing rules
a) Pertinent provisions of the RPC and other penal laws subject to
Art 2177 Civil Code [Art 100, RPC – Every person criminally liable for a
felony is also civilly liable]
b) Chapter 2, Preliminary title, on Human Relations ( Civil Code )
c) Title 18 of Book IV of the Civil Code – on damages [See Article
1161]

5. QUASI-DELICTS / TORTS (Obligation ex quasi-delicto or ex quasi-maleficio) –

arise from damage caused to another through an act or omission, there being no
fault or negligence, but no contractual relation exists between the parties [See
Article 1162]

1158. Obligations from law are not presumed. Only those (1) expressly
determined in this code or (2) in special laws are demandable, and
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shall be regulated by the precepts of the law which establishes them;

and as to what has not been foreseen, by the provisions of this code.
Unless such obligations are EXPRESSLY provided by law, they are
not demandable and enforceable, and cannot be presumed to exist.
The Civil Code can be applicable suppletorily to obligations arising
from laws other than the Civil Code itself.

 Special laws – refer to all other laws not contained in the Civil Code.

1159. Obligations arising from contracts have the force of law between
the contracting parties and should be complied with in good faith.

CONTRACT – meeting of minds between two persons whereby one binds himself, with
respect to the other, to give, to do something or to render some service; governed
primarily by the agreement of the contracting parties.
VALID CONTRACT – it should not be against the law, contrary to morals, good
customs, public order, and public policy.
 In the eyes of law, a void contract does not exist and no obligation will arise from
it.
OBLIGATIONS ARISING FROM CONTRACTS – primarily governed by the stipulations,
clauses, terms and conditions of their agreements.
 If a contract’s prestation is unconscionable (unfair) or unreasonable, even if it
does not violate morals, law, etc., it may not be enforced totally.
 Interpretation of contract involves a question of law.
COMPLIANCE IN GOOD FAITH – compliance or performance in accordance with the
stipulations or terms of the contract or agreement.
FALSIFICATION OF A VALID CONTRACT – only the unauthorized insertions will be
disregarded; the original terms and stipulations
6. GUILT Proved beyond reasonable doubt
Preponderance of evidence
Note: The SC in Sagrada v. Naccoco implied that the sources of obligation in Art 1162
is exclusive. Many commentators believe, however that it should not be. At present,
there is one more possible source of obligations - PUBLIC OFFER (Public Offer is in
fact a source of obligation in the German Civil Code) – Ateneo memory aid
*** The enumeration in 1157 is not scientific because in reality there are only 2 sources
of obligations: law and contract (quasi- contract, delicts, and quasi-delicts are imposed
by law) [Leung Ben v. O'Brien, 38 Phil. 182]