NOTES- Obligation and Contracts

Source: Fidelito Soriano books

Kinds of damages :

a. Actual or compensatory – value of the loss suffered and profits not realized. Proof is required.
b. Moral ( court discretion)
c. Nominal (court discretion)
d. Liquidated damages – agreed by the parties to be paid in case of breach.
e. Exemplary damage – correction for public good ( court discretion)

Fraud – deliberate or intentional evasion by the debtor of the normal compliance of his obligation

Kinds of fraud:

1. Fraud in obtaining consent (affects the validity of the contract):

a. Causal fraud –Consent would not have been given
- Voidable
b. Incidental fraud – Consent would have still been given but the person giving it would have
agreed on different terms.
- Valid
- Liable for damages
2. Fraud in the performance of obligation
- Does not affect the validity of the contract because it happens after perfect of
the contract.
- Party employing it shall be liable to damages

Waiver of an action for future fraud is void because it will encourage

commission of fraud. Thus, the debtor will still be liable for damages if he
commits fraud in the performance of his obligation despite the waiver.

Waiver of an action for past fraud is ok because it happened already. Such

waiver is an act of liberality on the part of the creditor.

Negligence – omission of diligence which is required by the nature of the obligation.

The test of negligence is whether the defendant used that reasonable care and caution which an
ordinary person would have used in the same situation.

Kinds of negligence (culpa):

1. Culpa contractual – example is breach of contract of carriage as when the a passenger in the bus
is hurt during trip.
i. Master servant rule applies. The negligence of the employee is the negligence of
the master.
 NOTES- Obligation and Contracts

Source: Fidelito Soriano books

2. Culpa aquiliana – quasi-delict. Master-servant rule does not apply.

3. Culpa criminal – negligence that results to crime or DELICT.

Delay or default or more is the non-fulfillment of an obligation on time.

a. Mora solvendi - delay on the part of the debtor

b. Mora accipiendi – creditor
c. Compensatio morae – delay in reciprocal obligation. Both parties are in delay. Hence, as
if there is no delay.

General rule: No Demand, No Delay

Exception to the rule:

a. When the law so provides. Example. In the payment of taxes.
b. When the contract expressly so declares. Stipulation
c. Time is the essence of the contract.
d. When demand would be useless. If the thing he is obliged to deliver has been destroyed
through his fault or he has delivered it to another person.
e. In reciprocal obligation – from the moment one party fulfills his obligation and the other
party cannot comply at the same time.