Week 1: Obligations and Contracts

Discuss the definition of “obligation”

Meaning of Obligation
The term obligation is derived from the Latin word “obligatio” which means a “tying” or
“binding.”
(1) It is a tie of law or a juridical bond by virtue of which one is bound in favor of another to
render something — and this may consist in giving a thing, doing a certain act, or not doing a certain act.
(2) Manresa defines the term as “a legal relation established between one party and another,
whereby the latter is bound to the fulfillment of a prestation which the former may demand of him.” (8
Manresa 13.)
(3) Article 1156 gives the Civil Code definition of obligation, in its passive aspect. Our law merely
stresses the duty of the debtor or obligor (he who has the duty of giving, doing, or not doing) when it
speaks of obligation as a juridical necessity.
Obligation
- A legal or moral duty to do or not do something.
- A formal, binding agreement or acknowledgement of a liability to pay a certain amount
or to do a certain thing for a particular person or set of persons; esp., a duty arising by contract.
- obligate
- An obligation is a legal bond (vinculum iuris) by which one or more parties (obligants)
are bound to act or refrain from acting. Thus, an obligation imposes on the obligor a duty to
perform, and simultaneously creates a corresponding right to demand performance by the
obligee to whom performance is to be tendered.
- Article 1156 – An obligation is a juridical necessity to give, to do, or not do.

1157
Law – set of rules that regulates and enforces actions of people or entities
Contract – an agreement between two or more parties creating obligations that are enforceable or
otherwise recognizable at law.
Quasi contract - A quasi contract is a legal obligation imposed by law to prevent unjust enrichment. This
is also called a contract implied in law or a constructive contract.
Provide right to money
Based on the concept of equity, conscience, and principles of natural justice
Imposed by the law and is not the outcome of any agreement
The contract refers to an agreement that is enforceable by law. Quasi-Contract is one that is not
exactly an agreement but it is similar to an agreement. Both parties give their consent
voluntarily and freely.
Quasi delicts - A quasi-delict is a wrong which occurs unintentionally, as a result of something like
negligence, where as a true delict requires intentional action. Thus, someone who commits murder has
committed a delict, while manslaughter would be an example of a quasi-delict.
- An act whereby a person, without malice, but by fault, negligence or imprudence not legally
excusable, causes injury to another.
- A quasi delict may be public or private; the neglect of the affairs of a community, when it is our
duty to attend to them, may be a crime; the neglect of a private matter, under similar circumstances,
may be the ground of a civil action
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.
Agreement Unnecessary. – The law cannot exist as a source of obligations, unless the acts to
which its principles may be applied exist. But once those acts or facts exist, the obligations arising
therefrom by virtue of express provisions of the law are entirely independent of the of the parties. Such
obligations and their correlative rights are govern by the law by which they are created.
Obligation Not Presumed. – Under the terms of this article, obligations derived from law are not
to be presumed. Only those expressly provided for in this code or in special laws are enforceable.
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. This obligation is provided by law.

1159 – Obligations arising from contracts have the force of law between the contracting parties and
should be complied with in good faith. (1091a)
Good faith – state of mind consisting in honesty in belief or purpose, faithfulness to one’s duty
or obligation,
Validity of Contract. Autonomy of will (Autonomy – independence)
Article 1159 speaks of contractual obligations or obligations arising from contracts or voluntary
agreements. It presupposes that the contract entered into are valid and enforceable. Terms of the
contract should, therefore, not be contrary to law, morals, good customs, public policy, or public order.
If the contract does not violate any of these limitations, it should be given effect, notwithstanding the
absence of any legal provision at the time it was entered into which governs it.
Falsification of Contract. – unauthorized insertion of additional stipulations does not void the
whole contract, it shall still be enforced, disregarding only the additional stipulation.

1160 – Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title XVII,
of this Book. (n)
A quasi contract is a contract that exists by order of a court, not by agreement of the parties.
Courts create quasi-contracts to avoid the unjust enrichment of a party in a dispute over payment for a
good or service.
an obligation of one party to another imposed by law independently of an agreement between
the parties.
Solutio Indebiti
Undue payment; arises when a person unduly delivers a thing through mistake to another who
has no right to demand it.
quasi-Contract is one that is not exactly an agreement but it is similar to an agreement. Both
parties give their consent voluntarily and freely.
A quasi-contract refers to the obligation of the contract created out of order by the court not to
let one party get unfair benefit out of the situation at the expense of other parties where there is the
absence of initial agreement among the parties and there is a dispute between them.

1161 – ARTICLE 1161. Civil obligations arising from criminal offenses shall be governed by the penal
laws, subject to the provisions of article 2177, and of the pertinent provisions of Chapter 2, Preliminary
Title, on Human Relations, and of Title XVIII of this Book, regulating damages. (1092a)
This provision refers to civil obligations arising from crimes. Under the law “every person
criminally liable for a felony is also civilly liable”. The civil liability arising out of the commission of crime
includes: (1) restitution (2) reparation of damage caused and (3) indemnification of consequential
damages.
Mang Kanor is found guilty by the court of theft of colored television belonging to Mang Wally.
Aside from sentencing him imprisonment, the court also orders Mang Kanor to return the colored
television (restitution), or if he has disposed of the same, to pay its value (reparation) and other
damages (indemnification) suffering by Mang Wally.

1162 – ARTICLE 1162. Obligations derived from quasi-delicts shall be governed by the provisions of
Chapter 2, Title XVII of this Book, and by special laws. (1093a)
Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
Article 2176 (1902a)

Contract
- An agreement between two or more parties creating obligations that are enforceable or
otherwise recognizable at law.
- A promise or set of promises by a party to a transaction, enforceable or otherwise recognizable
at law; the writing expressing that promise or set of promises.
- Broadly, any legal duty or set of duties not imposed by the law of tort; esp., a duty created by a
decree or declaration of a court.
- Loosely, an enforceable agreement between two or more parties to do or not to do a thing or
set of things

Creditor Obligee Debtor Obligor

- A party to a contract. - One to whom an - One who owns an - One who has
- More specif., one who obligation is owed; a obligation to another, undertaken an
contracts to do work or promise, creditor, or esp. an obligation to obligation; a promisor
provide supplies for donor beneficiary. pay money. or debtor.
another. - One who obliges - One who is obliged to
another to do do something.
something.

Meaning of Juridical Necessity

Obligation is a juridical necessity because in case of non-compliance, the courts of justice may
be called upon to enforce its fulfillment or, in default thereof, the economic value that it represents. In a
proper case the debtor may also be made liable for damages, which represent the sum of money given
as a compensation for the injury or harm suffered by the creditor or obligee (he who has the right to the
performance of the obligation) for the violation of his rights.
In other words, the debtor must comply with his obligation whether he likes it or not; otherwise,
his failure will be visited with some harmful or undesirable legal consequences. If obligations were not
made enforceable, then people can disregard them with impunity. If an obligation cannot be enforced, it
may be only a natural obligation.
 - Juridical
- Of or relating to judicial proceedings or to the administration of justice
- Of or relating to law; legal.

Know the elements of an obligation

An obligation as defined in Article 1156 is constituted upon the concurrence of the four (4)
essential elements thereof, namely:
(1) A passive subject (called debtor or obligor) or the person who is bound to the fulfillment of
the obligation; he who has a duty;
- the person bound to perform or to pay. He is the one against whom the obligation can
be demanded. He is also called the obligor or the debtor.

(2) An active subject (called creditor or obligee) or the person who is entitled to demand the
fulfillment of the obligation; he who has a right;
- the person who has the right or power to demand the performance or payment of the
obligation. He is also called the obligee or the creditor.

(3) Object or prestation (subject matter of the obligation) or the conduct required to be
observed by the debtor. It may consist in giving, doing, or not doing. (see Art. 1232.) Without the
prestation, there is nothing to perform. In bilateral obligations (see Art. 1191.), the parties are
reciprocally debtors and creditors; and
- the object of the contract. It is the conduct required to be observed by the debtor or
the obligor. It may be an obligation to give, to do, or not to do.

(4) A juridical or legal tie (also called efficient cause) or that which binds or connects the parties
to the obligation. The tie in an obligation can easily be determined by knowing the source of the
obligation. (Art. 1157.)
- Vinculum Juris also known as the juridical or legal Tie. Other authors call it the efficient
cause. It is that which binds or connects the parties to the obligation. (De Leon) In other words, it is the
legal relation between the debtor and the creditor (or obligor and obligee).

Week 2: Obligations and Contracts

Be Familiar with the Different Kinds of Prestation & Explain the Classification of Obligations:

By the object of the obligation of prestation:

 The following are three kinds of prestation (objects of contracts). It must be recalled that, under
Article 1156 of the New Civil Code of the Philippines, an obligation is the juridical necessity to do, to give
or not to do.
1. TO GIVE. The prestation to give is a real obligation. It is the obligation to deliver either [a] a
specific or determinate thing, or [b] a generic or indeterminate thing. An example of this would be the
vendor's obligation to give the vendee the thing purchased.
2. TO DO. The prestation to do is a positive personal obligation. It includes all kinds of work or
service. An example of this would be the obligation of a painter to create an artwork for the person who
commissioned him.
3. NOT TO DO. The prestation not to do is a negative personal obligation. It refers to the duty to
abstain from doing an act and includes the obligation not to give.

Classifications of obligations.
(1) Primary classification of obligations under the Civil Code:
(a) Pure and conditional obligations (Arts. 1179-1192.);
Pure Obligation – A pure obligation is one which is not subject to any condition and no
specific date is mentioned for its fulfillment and is, therefore, immediately demandable. The obligation
is immediately demandable if there is no condition and no date is mentioned for its fulfillment. Of
course, a period must have been intended by the parties for performance, but the duration thereof will
depend upon the nature of the obligation and the circumstances.
- A distinction must be made between the immediate demandability of a pure
obligation and its fulfillment by the obligor who may be granted by the court a reasonable period for
performance. The period remains pure even where such period is fixed by the court.

Conditional Obligation – A conditional obligation is one whose consequences are

subject in one way or another to the fulfillment of a condition.
- An obligation that depends on an uncertain event
Condition – Is a future and uncertain event, upon the happening of which, the
effectivity or extinguishment of an obligation (or rights) subject to it depends.

(b) Obligations with a period (Arts. 1193-1198.);

(c) Alternative (Arts. 1199-1205.) and facultative obligations (Art. 1206.);
Alternative Obligations – an obligation that can be satisfied I at least two different
ways, at the choice of the obligor.
(d) Joint and solidary obligations (Arts. 1207-1222.);
Joint Obligations – An obligation that binds two or more debtors to a single
performance for one creditor.
- An obligation that binds one debtor to a single performance for two or more
creditors.
(e) Divisible and indivisible obligations (Arts. 1223-1225.); and
(f) Obligations with a penal clause. (Arts. 1226-1230.)

(2) Secondary classification of obligations under the Civil Code:

(a) Unilateral and bilateral obligations (Arts. 1169-1191.);
(b) Real and personal obligations (Arts. 1163-1168.);
(c) Determinate and generic obligations (Art. 1165.);
(d) Civil and natural obligations (Art. 1423.); and
(e) Legal, conventional, and penal obligations. (Arts. 1157, 1159, 1161.)
(3) Classification of obligations according to Sanchez Roman:
(a) By their juridical quality and efficaciousness:
1) Natural. — according to natural law;
2) Civil. — according to civil law; and
3) Mixed. — according to both natural and civil law.
(b) By the parties or subject:
1) unilateral or bilateral;
2) individual or collective (see Arts. 1207, 1208.); and
3) joint or solidary.
(c) By the object of the obligation or prestation:
1) specific or generic; [Real – to give or deliver]
Generic –
To give or deliver an INDETERMINATE thing. Cannot be pointed out with
particularity. Refers only to a class or genus.
The loss/destruction of the thing to be delivered DOES NOT EXTINGUISH
the obligation.
All remedies namely, Specific, Substitute and Equivalent, are available.
Specific –
To give or deliver a DETERMINATE thing, the fruits, and the
accessories and accessions; preserve the thing itself (Art. 1163); DETERMINATE
if it is particularly designated or physically segregated others of the same class.
The loss/destruction of the thing to be delivered EXTINGUISHES the
obligation as long as the destruction was without fault of the debtor and
occurred before delay. However, there is an EXCEPTION, the obligation is NOT
EXTINGUISH if the law or stipulation provides so and when the nature of the
obligation requires the assumption of risk (Art. 1262).
Only the Specific and Equivalent Remedy is available. Thus, substitute
is not available because the thing to be delivered is a determinate thing and
therefore, it cannot be changed
2) positive or negative (see Art. 1168.);
3) real or personal;
4) possible or impossible (see Arts. 1183, 1306.);
5) divisible or indivisible;
6) principal or accessory (see Art. 1226.); and
7) simple or compound (see Art. 1199.); if compound, it may be:
a) conjunctive. — demandable at the same time; or
b) distributive. — either alternative or facultative.
(d) By their juridical perfection and extinguishment:
1) Pure or conditional; and
2) With a period. (Vol. 8, pp. 20-24.)

https://www.studocu.com/ph/document/university-of-san-carlos/law-on-obligations-and-
contracts/details-on-article-1158-of-laws-on-obligations-and-contracts/19439810

https://cdizonoblicon.wordpress.com/2017/02/25/article-1159/
https://lspuoblicon2017blog.wordpress.com/2017/03/17/article-1160/#:~:text=due%20to
%20him)-,Negotiorum%20gestio,property%20without%20the%20latter's%20authority.

https://lspuoblicon2017blog.wordpress.com/category/chapter-1-general-provisions-of-obligations/
article-1161/

https://lspuoblicon2017blog.wordpress.com/2017/03/17/article-1162/#:~:text=When%20the
%20accused%20in%20a,only%20a%20preponderance%20of%20evidence.

https://www.studocu.com/ph/document/pamantasan-ng-cabuyao/business-law/oblicon-art-1162-
1167-reviewer/15197220