THE LAW ON OBLIGATIONS AND
CONTRACTS
Articles
 Article 1156 – An obligation is juridical necessity to
give, to do or not to do
 Article 1157 – Obligation arise from: (a) Law, (b)
Contracts, (c) Quasi-Contracts, (d) Acts or omissions
punished by law, and (e) Quasi-Delicts
 Article 1158 – Obligations derived from law are not
presumed. Only those expressly determined in this code
or in special law are demandable, and shall be regulated
by percepts of law which established them; and as to
what has not been forseen, by provsions of this Book
 Article 1159 – Obligations arising from contracts have
force of law between contracting parties and should be
complied with good faith
 Article 1160 – Obligations derived from quasi-contracts
shall be subject to provisions of Chapter 1
 Article 1161 – Civil obligations arising from crimal
offenses shall be governed by penal laws, subject to
provisions of article 2177, and pertinent provisions of
Chapter 2, Preliminary Title, on Human Relations, and
Title XVIII
 Article 1162 – Obligations derived from quasi-delicts
shall be governed by provisions of Chpater 2, Title
XVII of this Book, and by special laws
 Article 1163 – Ever person obliged to give something is
also obliged to take care of with proper diligence of
good father of a family, unless law or stipulation of
parties requires another standard of care
 Article 1164 – Creditor has right to fruits of thing from
time obligation to deliver it arise. However, he shall
acquire no real right over it until same has been
delivered to him
 Article 1165 – when what is to be delivered is
determinate thing, creditor, in addition to right granted
him by Article 1170, may compel debtor to make
delivery
 If thing is indeterminate or generic, he may ask the
obligation be complied with at expense of debtor
 If obligor delays, or has promised to deliver same
thing to two or more persons who do not have
same interest, he shall be responsible for fortuitous
event until he has effected delivery
 Article 1166 – The obligation to give a determinate
thing includes that of delivering all its accessions and
accessories, even though they may not have been
mentioned
 Article 1167 – If person obliged to do something fails
to do it, same shall be executed at his cost
 This same rule shall be observed if he does it
contravention of tenor of obligation. Furthermore,
it may be decreed that what has been poorly done
be undone
 Article 1168 – Obligation consists in not doing, and
obligor does what has been forbidden him, it shall also
be undone at his expense
 Article 1169 – those obliged to deliver or to do
something incur in delay from time the obligee
judicially or extrajudicially demands from them the
fulfillment of obligation
 However, demand by creditor shall be
necessary in order that delay may exist:
 Obligation or law expressly so declares;
or
 When from nature and circumstances of
obligation it appears that designation of
time when thing is to be delivered or
service is to be rendered was a control
motive for establishment of contract; or
 When demand would be useless, as
obligor has rendered it beyond his power
to perform
 In receiprocal obligations, neither party incurs
in delay if other does not comply or is not
ready to comply in proper manner with what is
incumbent upon him. From moment one of
parties fulfills his obligation, delay by other
begins
 Article 1170 – Performance of obligations are guilty
of fraud, neglience, or delay and those who in any
manner contravence tenor thereof, liable for damages
 Article 1171 – Responsibility arising from fraud is
demandable in all obligations. Any waiver of action
for future fraud is void
 Article 1172 – Responsibility arising from neglience
in performance of every kind of obligation is also
demandable, but such liability may be regulated by
courts, according to circumstances
 Article 1173 – Fault or neglience of obligor consists
in omission of that diligence which is required by
nature of obligation and corresponds with
circumstances of person, of time and place. When
neglience shows bad faith, provisions of article 1171
and 2201
 Law or contract does not state diligence which is
to be observed in performance, which is
expected of good father of family shall be
required
 Article 1174 – Except in cases expressly specified by
law, or it is declared by stipulation requires
assumption of risk, no person shall be responsible for
those event which could not be foreseen, or though
foreseen, were inevitable
 Article 1175 – Usurious transactions shall be
governed by special laws
 Article 1176 – Receipt or principal by creditor, w/o
reservation w/ respect to interest, shall give rise to
presumption that said interest has been paid
 Receipt of later installment of debt w/o
reservation as to prior installments, shall
likewise raise presumption such, installments
have been paid
 Article 1177 – Creditors, after having pursued
property in possession of debtor to satisfy claims, may
exercise all rights and bring all actions of latter for
same purpose, save which are inherent in person; they
may also impugn acts which debtor may have done to
defraud them
 Article 1178 – Subject to laws, all rights acquired in
virtue of obligation are transmissible, if has been no
stipulation to contrary
  Article 1179 – Every obligation whose performance
does not depend upon future or uncertain event, or
past event unknown to parties, is demandable at once
 Every obligation which contain resolutory
condition shall also demandable, w/o prejudice to
effects of happening of event
 Article 1180 – Debtor binds himself to pay when means
permit him to do so, obligation shall be deemed to be
with a period, subject provisions of article 1197
 Article 1181 – Conditional obligations, acquisition of
rights, as well as extinguishment or loss of those
already acquired, shall depend upon happening of event
which constitutes condition
 Article 1182 – Fulfillment of condition depends upon
sole will of debtor, conditional obligation shall be void.
If depends upon chance or upon will of third person,
obligation shall take effect in conformity with
provisions of Code
 Article 1183 - Impossible conditions, contrary to good
customs or public policy and prohibited by law shall
annul the obligation which dependds upon them. If
obligation is divisible, part which is not affected by
impossible or unlawful condition shall be valid
 Condition not to do an impossible thing shall be
considered as not having been agreed upon
 Article 1184 – Condition that some event happen at
determinate time shall extinguish obligation as soon as
time expires or becomes indubitable that event will not
take place
 Article 1185 – Condition that some event will not
happen at determinate time shall render obligation
effective from moment time indicated has elapsed, or
become evident that event cannot occur
 If no time has been fixed, condition shall be deemed
fulfilled at such time as may probably been
contemplated, bearing in mind nature of obligation
 Artcile 1186 – Condition shall be deemed fulfilled
when obligor voluntarily prevents its fulfillment
 Article 1187 – Effects of conditional obligation to give,
once condition has been fulfilled, shall retroact to day
of constitution of obligation. Nevertheless, when
obligation imposes reciprocal prestations upon parties,
fruits and interests during pendency of condition shall
be deemed to mutually compensated. If obligation is
unilateral, debtor shall appropriate fruits and interests
received, unless from nature and circumstances of
obligation should be inferred intention of person
constituting same was different
 Obligations to do and not to do, courts shall
determine, retroactive effect of condition that has
been complied with
 Article 1188 – Creditor may, before fulfillment of
condition, bring appropriate actions for preservation of
rights
 Debtor may recover what during same time he has
paid by mistake in case of suspensive condition
 Article 1189 – Conditions have been imposed with
intention of suspending efficacy of obligation to give,
following rule shall be observed in case of
improvement, loss or deterioration of thing during
pendency of condition
 If thing is lost w/o debtor fault, obligation shall be
distinguished
 Debtor’s fault on lost, he is obliged to pay
damages
 Thing deterioriates w/o debtor’s fault, impairment
borne by creditor
 Deterioriates through fault of debtor, creditor
choose between rescission of obligation and its
fulfillment, indemnity for damages in either cash
 Thing is improved by its nature, improvement shall
inure benefit of creditor
 Improvement expense of debtor, he shall no right
than granted to usufructuary
 Article 1190 – Conditions have their purpose
extinguishement of obligation to give, parties, upon
fulfillment of said conditions, shall return to each other
what they’ve received
 Case of loss, deterioration or improvement of
thing, provisions, with respect to debtor, laid down
in preceding article shall be applied to party who
bound to return
 Obligations to do and not to do, provisions of
second parangraph or article 1187 shall be
observed as regards effect of extinguishment of
obligation
 Article 1191 – Power to rescind oblihgations is implied
in reciprocal ones, obligors should not comply with
what is incumbent upon him
 Injured party may choose between fulfillment and
rescission of obligation with payment of damages
in either case. May also seek recission, even after
chosen fulfillment, if latter should become
impossible
 Court shall decree recision claimed, unless there’s
just, authorizing fixing of period
 Understood to be w/o prejudice rights of third
person who acquired thing, accordance w/ articles
1385 and 1388 and mortgage law
 Article 1192 – both parties have committed breach of
obligation, liability of first infractor shall be equitably
tempered by courts. Cannot be determined which
parties first violated contract same shall be deemed
extinguished, and shall bear own damages
 Article 1193 – Obligation for fulfillment a day certain
has been fixed, shall be demandable when day comes
 Obligations with resolutory period take effect at
once, terminate upon arrival of day certain
 Day certain is understood to be necessarily come,
althoughmay not be known
 Encertainty consists whether day will come or not,
obligatiion is conditional, and shall be regulated
by rules if preceding section
 Article 1194 – Case of loss, deterioration or
improvement of thing before arrival of day certain,
rules in article 1189 shall be observed
 Article 1195 – Anything paid or delivered before arrival
of period, obligor being unaware of period or believe
obligation has become due and demandable, may be
recovered with fruits and interests
 Article 1196 – whenever in obligation period is
designated, presumed to have been established for
 benefit of both creditor and debtor, unless from tenor of all damages
same or other circumstances, should appear that period  All thing lost of fortuitous event, may alter all
has been established in favor of one or other  Article 1206 – Only one prestation has been agreed
 Article 1197 – Obligation does not fix period, but from upon, obligor may render another substitution,
nature and circumstances it can be inferred period was obligation is called facultative
intended, court may fix duration  Loss or deterioration of thing intended as
 Courts shall also fix duration of periodd when substitute, through neglience obligor, does not
depends upon will of debtor render him liable. Substitution has been made,
 Courts shall determine such period as may under obligor is liable for loss of substitute on account of
circumstances, probably contemplated by parties. delay, neglience or fraud
Once fixed by courts, period cannot be changed by
them
 Article 1198 – debtor shall lose every right to make use
of period
 After obligation has been contracted, becomes
insolvent, unless gives guanranty or security for
debt
 Does not furnish to creditor, guaranties or
securities which he has promised
 Own acts he impaired said guaranties or securities
after establishment, and through fortuitous event
they disappear, uness immediately give new ones
qual satisfactory
 Debtor violates undertake, in consider of creditor
agreed to period
 Debtor attempts to abscond
 Article 1199 – person alternatively bound by different
prestations shall completely perform one of them
 Creditor cannot be compell to receive part of one
and part of other undertaking
 Article 1200 – Right of choice belongd to debtor, unless
has been expressly granted to creditor
 Debtor shall have no right to choose prestations
which impossible, unlawful or could not have
been object of obligation
 Article 1201 – Choice shall produce no effect except
from time has been communicated
 Article 1202 – Debtor shall lose right of choice when
among prestations, he is alternatively bound, only one
practicable
 Article 1203 – Through creditor’s acts, debtor cannot
make choice according to terms of obligation, latter
may rescind contract with damages
 Article 1204 – Creditor shall have right to indemnity for
damages, through fault of debtor, all things, alternate
object of obligation have been lost, or compliance of
obligation become impossible
 Indemnity shall fixe taking basis value of last
thing which disappear, or service which last
became impossible
 Damages other than value of last thing or service
may also be awarded
 Article 1205 – Choice has been expressly given to
creditor, obligation shall cease alternative from day the
selection communicated to debtor
 Thing lost through fortuiytous event, shall perform
obligation deliver the remainder, or which remains
if only one substitutes
 Thing lost of debtor’s fault, pay the damage or pay
damages
 All thing lost of debtor’s fault, pay damages and