Obligations and Contracts

For Management Accounting Students

CAE216

SYLLABUS

I. The course will tackle:

a. Introduction to Law
i. Three Main Divisions of Power in Government (Three Branches of Government)
ii. Meaning and Kinds of Laws
b. Civil Law articles 1156 to 1430
c. Jurisprudence related to Obligations and Contracts
II. Objectives.
For the students to:
a. To have basic knowledge of laws in the Philippines
b. To understand the law on Obligations and Contracts as stated in the Civil Code of the
Philippines

III. Course Coverage

Week 1 Introduction to Law

Three Branches of Government
Articles 1156 to 1162 of the Civil Code of the Philippines
General Provision
Meaning of Obligation
Juridical Necessity
Nature of Obligation
Essential Requisites of Obligation
Forms of Obligations
Kinds of Obligations
Sources of Obligations

Week 2 Articles 1163 to 1178

Nature and Effect of Obligations
Specific or Determinate Thing
Generic or Indeterminate Thing
Fruits: Kinds, Rights, Obligations
Rights: Personal, Real, Transmissibility
Accessions and Accessories
Delay: Kinds, Requisites, Effect
Liability: Fraud, Negligence
Fortuitous Event
Force Majeure
Simple Loan or Mutuum
Presumption: Kinds

Week 3 Articles 1179 to 1192

Different Kinds of Obligations
Pure and Conditional Obligations
Pure Obligation, Conditional Obligation
Condition: Kinds, Distinction, Classification, Kinds of Obligation
according to Person Obliged

Week 4 Articles 1193 to 1206

Obligations with a Period
Meaning of Obligation with a Period
Meaning and Kinds of Period or Term
Difference between Period and Condition
 Effect of Loss, Deterioration, Improvement before arrival of period
Payment before arrival of period
Presumption as to Benefit of Period
Computation of Term or Period
When Courts may fix a period

Alternative Obligations
Kind of Obligation According to Object
Meaning of Alternative Obligation
Right to Choose
Facultative Obligation

Week 5 Articles 1207 to 1225

Joint and Solidary Obligations
Kinds of Obligations According to the Number of Parties
Meaning of Joint and Solidary
Collective Obligation
Joint Indivisible Obligation
Indivisible vs. Solidary
Kinds of Solidary Obligation According to Legal Tie
Assignment, Payment, Liability
Divisible and Indivisible
Meaning, Distinction
Kinds of Division, Kinds of Indivisibility
Indivisible Obligations
Divisible Obligations
Divisibility or Indivisibility in Obligations Not To Do

Week 6 Articles 1226 to 1251

Obligations with a Penal Clause
Meaning of Principal and Accessory Obligations
Meaning of Obligation with a Penal Clause
Penal Clause vs. Condition
Meaning, Purpose, Kinds of Penal Clause
Penalty, Performance
Subsidiary, Joint Penal Clause
Penalty Demandable Without Proof of Actual Damages
Extinguishment of Obligations
Causes of Extinguishment of Obligations
Payment or Performance
Payment: Meaning, Forms
When Debt Considered Paid
Substantial Performance in Good Faith
Partial Performance
Subrogation
Free Disposal of Thing Due, Capacity to Alienate
Legal Tender
Ordinary and Extraordinary Inflation or Deflation

Week 7 Midterms

Week 8 Articles 1252 to 1274

Application of Payments
Requisites
Payment by Cession
Tender of Payment and Consignation
Meaning and Requisites of Tender of Payment, Consignation

Condonation or Remission of Debt

 Meaning, Requisites, Kinds, Effects, Presumptions

Week 9 Articles 1275 to 1304

Confusion or Merger of Rights
Meaning, Reason, Requisites, Effects
Compensation
Meaning, Object, Kinds
Novation
Meaning, Requisites, Function, Kinds, Effect
Expromission, Delegacion
Subrogation: Meaning, Kinds, Effects

Week 10 Articles 1305 to 1328

Contracts
Meaning, Parties, Distinguished from Obligation
Distinguished from Agreement
Classes of contracts
Requisites of valid contract
Classification of Contracts According to Its Name or Designation
Classification of Contracts According to Perfection
Essential Requisites of Contact: Consent, Object, Cause
Consent
Meaning, Capacity
Offer: Meaning
Acceptance
Business Advertisements

Week 11 Articles 1329 to 1355

Characteristics of Consent
Mistake of Law, Fact
Meaning, effect, when vitiate contract
Vices of Consent: Incapacity, Error or mistake, Violence
or Force, Intimidation or Threat or Duress, Undue
Influence, Fraud or Deceit.
Meaning, Nature,
Nature of Violence or Force
Nature of Intimidation or Threat
Usual Exaggerations in Trade
Expression of Opinion
Simulation of Contract: Meaning, Kinds
Object of Contract
Concept, Kinds, Requisites
Things, Services as Object/s
Future Inheritance
Cause of Contract
Meaning, Classification, Requisites,
Effect of Absence/ Failure/ Illegality/ Falsity /
Inadequacy
Presumption
Distinguished from Object
Motive, Cause Distinguished from Motive
Lesion: Meaning, Effect

Week 12 Articles 1356 to 1379

Forms of Contracts
Meaning, Written Form
Classification According to Form
Rules, Validity, Enforceability
Form for Convenience of Parties
Notarization Requirement
 Reformation of Instruments
Meaning, Reason, Requisites, Procedure
Distinguished from Annulment
Mutual Mistake, Ignorance
When Reformation not Allowed
Mortgage or Pledge Stated as Sale
Party Entitled to Reformation
Interpretation of Contracts
Meaning, Literal Meaning, Intent of Parties
Contemporaneous and Subsequent Acts
Special Intent vs. General Intent
Interpretation of Stipulations with Several Meanings
Interpretation of Words with Different Meanings, Obscure Words
Usage or Custom as Aid in Interpretation
Rules in Case Impossible to Settle Doubts
Principles of Interpretation in the Rules of Court

Kinds of Defective Contracts: Rescissible, Voidable, Unenforceable, Void or Inexistent

Week 13 Articles 1380 to 1408

Rescissible Contracts
Meaning, Requisites, Binding Force, Nature of Action, Period of Filing
Cases of Rescissible Contracts
Mutual Restitution
When Rescission Not Allowed
Contracts Approved by Courts
Alienation in Fraud of Creditors
Liability of Purchaser in Bad Faith

Voidable Contracts
Meaning, Effect, Requisites, Binding Force, Nature of Action, Period of
Filing
Ratification: Meaning, Effect, Requisites, Who May Ratify
Party Who May File for Annulment
Mutual Restitution Upon Annulment

Unenforceable Contracts
Meaning, Kinds, Effect, Requisites, Binding Force, Nature of Action
Rights of Third Person to Assail Unenforceable Contract
Statute of Frauds
Unauthorized Contracts
When Unforceable Contract Becomes Voidable/ Valid /

Week 14 Article 1409 to 1430

Void or Inexistent Contracts
Meaning of Void, Meaning of Inexistent, Characteristics, Instances
Void Contract Cannot be Novated
Action or Defense is Imprescriptible
Contract is Illegal and Act is Crime
Contract is illegal and Act not Crime
Recovery Where Contract is for Illegal Purpose
Recovery by Incapacitated Person
Other Recoveries

Natural Obligations

Week 15 Final Exams

Grading System:

30% Recitation
20% Quizzes
15% Midterm Exam
15% Final Exams
20% Group Presentation (50% peer evaluation, 50% instructor evaluation)

Textbook: The Law on Obligations and Contracts, 12th Edition, by Hector S. De Leon and
Hector M. De Leon Jr.