Professional Documents
Culture Documents
OF BUSINESS AND
TECHNOLOGY
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Article 1158. Obligations derived from law are not presumed.
Only those expressly determined in this Code or in special laws
are demandable, and 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 Book. (1090)
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1. Legal Obligation
This articles refers to legal obligation/s arising from law.
They are not presumed because they are considered a burden
upon the obligor. They are the exception not the rule. To be
demandable, they must be clearly set forth in the law.
(1) An employer has no legal obligation to furnish free legal
assitance to his employees because there is no law requiring it.
Therefore an employee cannot recover or reimburse from the
employer the amount he may have paid to the lawyer hired by
him to recover the damages caused to said employees by a
stranger/s while in performance of his duties. (Dela Cruz vs.
Northern Theatrical Enterprises. 95 Phil. 739)
(2) A private school has no legal obligation to provide
clothing allowance to its teachers because there is no law which
imposes this obligation upon schools. But a person who wins
money in gambling has the duty to return his winnings to the
loser. (Article 2014)
2. Contractual Obligation.
Article 1159. Obligations arising from contracts have the
force of law between the contracting parties and should be
complied with in good faith.
The above article speaks of contractual obligations or
obligations arising from contracts or voluntary agreements.
Ofcourse the said contracts should be valid and enforceable.
A Contract is a meeting of minds between two persons
whereby one binds himself, with respect to the other, to give
something or to render some services.
(1) Binding Force – Obligations arising from contracts have
the forcce of law between the contracting perties, i.e., they have
same binding effect of obligations imposed by laws. This does
not mean however that contracts is superior to the law. Contract
must be valid and it cannot be valid if it is against the law.
(2) Requirements of a valid contract – A contract is valid if it
is not contrary to law, morals, good customs, public order, and
public policy. A contract is invalid or void if it is contrary to those
things mentiond above. In legal sense void means “It does not
exist’
(3) Breach of Contract – A contract may be breached or
violated by a party in a whole or in to comply, without legal
reason or justification, with his obligation under the contract
promised.
Compliance in good faith
Compliance in good faith means compliance or perpormance
in accordance with stipulations or terms of the contract or
agreement. Sincerity and honesty must be observed to prrevent
one party from taking unfair advantage over the other.
Example:
If Antomen agrees to sell her bicycle to Hannah and Hannah
agrees to buy the bicycle of Antomen, voluntarily and willingly,
then they are bound by the terms of their contract and neither
party may, upon his own will, and without any justifiable reason,
withdraw the contract or escape from obligation thereunder. That
which is agreed upon in the contract is the law between Antomen
and Hannah must be complied in good faith.
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Article 1163: Every person obliged to give something is also
obliged to take care of it with the proper diligence of a good
father of a family, unless the law or the stipulation of the parties
requires another standard of care.
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Every business man or business woman must know and
understand the nature and effects of obligation because the
moment you engaged your customer in sales of contract or
service whether one like it or not, aware of it or not, there is an
obligation to fulfill with your customers, clients, supplier, seller or
service provider.
EXAMPLES:
1) A Honda City car
2) The sum of $1000.
3) A sack of rice
4) A Labrador dog
5) A wrist watch
Examples:
(1) Irish posted in online selling store a boxer’s short
with a talking smiley and Yen paid through gcash for that
item. Therefore Irish has an obligation to deliver any boxer’s
shorts as long as it has a talking smiley regardless of its
brand.
EXAMPLE:
They are:
1. To deliver the thing which is of the quality intended by
the parties taking into consideration the purpose of the
obligaation and other circumstances.
2. To be libale for damages in case of fraud, negligence, or
delay, in the performance of his obligation, or contravention of
the tenor thereof.
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Article 1164. The creditor has a right to the fruits of the thing
from the time the obligation to deliver it arises. However, he
shall acquire no real right over it until the same has been
delivered to him.
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The general rule is that the creditor has the right to the
fruits of the thing from the time the obligation to deliver it arises.
Ownership over the thing though, is only required when such an
object is delivered to him. The essential element therefore of
ownership is delivery.
Therefore, although the creditor has the right has the right
to the fruits of a thing from the time the obligation to deliver the
thing itself arises, his ownership will start when the thing is
delivered to him.
Example:
Cherry sold her dog to Antomen for 15,000 pesos and while
in the possession of Cherry, the dog gave birth to a puppy in
which Antomen is the one entitled to the puppy if Antomen has
already paid the amount of 15, 000 pesos to Cherry.
PERSONAL RIGHT is the right or power of a person to demand
from another — to give, to do, or not to do.
Example:
If Yen was a creditor to a house and Janine was the debtor
and both agreed that the payment for the rent of the house
would be monthly. Janine upon paying is what we call REAL
RIGHT. But upon Yen expecting Janine to pay every month is
what we call PERSONAL RIGHT.
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Article 1166. The obligation to give a determinate thing
includes that of delivery of all its accessions and accessories,
even thouh they may not have been mentioned. (1097a)
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Discussion:
Examples:
House or trees on a land, rents, of a building; airconditioner
in a car; profits or dividends accruing from share of stocks, etc.
Example:
3. Now, if the kitchen was painted white but the painting was
poorly done, B may ask X that it be undone or, in case of X’s
refusal, he may ask C to paint the kitchen at the expense of X.
Example:
If the obligation contracted by Irish is to sing in a concert
and she fails to comply with her obligations, the performance of
the same by another would be impossible or would result to be
so different that the obligation could not be considered
performed.
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Article 1168. When the obligation consists in not doing, and the
obligor does what has been forbidden him, it shall also be
undone at his expense.
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Example:
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Article 1169. Those obliged to deliver or to do something incur
in delay from the time the obligee judicially or extra-judicially
demands from them the fulfillment of their obligation.
Meaning Of Delay:
Example:
Effects Of Delay:
a. The delay of the obligor cancels the delay of the obligee and
vice versa. Situations when demand is not necessary to put
debtor in delay:
As a general rule, delay by the debtor begins only from the
moment a demand, judicial or extra-judicial, for the fulfillment of
the former’s obligation is made by the creditor. Without such
amount, the effect of default will not arise. The exceptions are
mentioned below:
Example:
Example:
Under the law, taxes should be paid on or before a specific date;
otherwise penalties and surcharges are imposed without the
need of demand for payment by the government.
Example:
The delivery of balloons on a particular date when a children’s
party will be held; the making of a wedding dress where the
wedding is scheduled at a certain time
Example:
Under this situation, any demand for the delivery of the horse on
September 5 would be useless as S has made it impossible for
him to perform his obligation.
Joshua agreed to sell his Cellphone set for Php 20,000. The
obligation of Joshua is to deliver the Cellphone while that of
Julius, to pay Php 20,000 . Since no date is set for performance
of their respective obligations, it is understood that it must be
simultaneous. Joshua cannot demand payment if he himself
cannot deliver the cellphone. From the moment Joshua delivers
the cellphone, Julius is in default if he does not pay Joshua
without the need of any demand.
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Article 1170. Those who in the performance of their obligations
are guilty of fraud, negligence, or delay and those who in any
manner contravene the tenor thereof, are liable for damages.
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Example:
(2) Waiver of the liability for future fraud is void (Art. 1171),
while such waiver may, in a certain sense, be allowed in
negligence (Art. 1172).
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Article 1171. Responsibility arising from fraud is demandable in
all obligations. Any waiver of an action for future fraud is void.
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Example:
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Article 1172. Responsibility arising from negligence in the
performance of every kind of obligation is also demandable, but
such liability may be regulated by the courts, according to the
circumstances.
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Example:
Example:
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Article 1173. The fault or negligence of the obligor consists in
the omission of that diligence which is required by the nature of
the obligation and corresponds with the circumstances of the
person, of the time and of the place. When negligence shows bad
faith, the provisions of articles 1171 and 2201, paragraph 2 shall
apply.
Factors to be considered:
Negligence is a question of fact, that is, its existence being
dependent upon the particular circumstances of each case. In
determining the issue of negligence, the following factors must
be considered:
Example:
Example:
Example:
Example:
Driving at 100 kph on the superhighway is permissible but
driving at the same rate of speed in Ayala Ave. Makati is gross
recklessness.
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Article 1174. Except in cases expressly specified by the law, or
when it is otherwise declared by stipulation, or when the nature
of the obligation requires the assumption of risk, no person shall
be responsible for those events which could not be foreseen, or
which though foreseen, were inevitable.
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Examples:
Examples:
Meaning of usury
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Article 1176. The receipt of the principal by the creditor,
without reservation with respect to the interest, shall give rise to
the presumption that said interest has been paid.
Meaning Of Presumption
Example:
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Article 1177. The creditors, after having pursued the property
in possession of the debtor to satisfy their claims, may exercise
all the rights and bring all the actions of the latter for the same
purpose, save those which are inherent in his person; they may
also impugn the acts which the debtor may have done to defraud
them.
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In case the debtor does not comply with his obligation, the
creditor may avail himself of the following remedies to satisfy his
claim:
Example:
On the due date, D could not pay C his obligation in the amount
of php 400,000.00. However, D owns a car worth about php
200,000.00 and X is indebted to him for Php40,000.00. Before
the due date of the obligation, D sold his land worth php
200,000.00 to Y.
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Article 1178. Subject to the laws, all rights acquired in virtue of
an obligation are transmissible, if there has been no stipulation
to the contrary.
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(stipulation- a condition, demand, or promise in an
agreement or contract)
Transmissibility Of Rights