(BL 01) Obligation and Contract

Module 3:

CONCEPT OF DAMAGES
DAMAGES refer to the harm done. This requires compensation for causing loss or injury
through negligence or a deliberate act, or a court's estimate or award of a sum as a fine for
breach of a contract or of a statutory duty.
INJURY refers to the wrongful, unlawful and tortuous act. It is the legal wrong to be redressed.

KINDS OF DAMAGES (M-E-N-T-A-L)

1. Moral damages – include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be recovered if they are the proximate result of the
defendant's wrongful act for omission (Art. 2217)

2. Exemplary damages or corrective damages - are imposed, by way of example or correction for the
public good, in addition to the moral, temperate, liquidated or compensatory damages (Art. 2229)

3. Nominal damages - are adjudicated in order that a right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him (Art.2221)

4. Temperate damages or moderate damages - are more than nominal but less than compensatory
damages, may be recovered when the court finds that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be provided with certainty (Art. 2224)

Temperate damages must be reasonable under the circumstances (Art.2225)

 
5. Actual damages – these refers to pecuniary loss (such as loss in business or profession) that may be
recovered. It includes loss of possible earnings. Indemnification for damages shall comprehend not only
the value of the loss suffered, but also that of the profits which the obligee failed to obtain (Art. 2200)

Note: proof of pecuniary loss is required unless provided by law or stipulation

6. Liquidated damages - are those agreed upon by the parties to a contract, to be paid in case of breach
thereof (Art.2226)

Important: proof is NOT required in order that moral, nominal, temperate or liquidated or exemplary
damages may be adjudicated. The assessment of such damages, except liquidated ones, is left to the
discretion of the court, according to the circumstances of each case.

ART. 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. (1101)

ART. 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for
future fraud is void. (1120a)

ART. 1172. Responsibility arising from negligence in the performance of every king of
1 |Obligation and Contract- Module 3
(BL 01) Obligation and Contract
Module 3:

obligation is also demandable, but such liability may be regulated by the courts, according to the circumstances.
(1130)

WHEN IS THE DEBTOR/OBLIGOR LIABLE FOR DAMAGES?

Under Art. 1170, liability for damages shall be demanded from those who in the performance of their
obligations are guilty of:

a. FRAUD (DOLO) s the intentional deception made by one person resulting in the injury of another.
o The fraud referred to is incidental fraud, that is, fraud incident to the performance of a pre-
existing obligation.

b. NEGLIGENCE (CULPA) consists in the omission by the obligor 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. (Art. 1173, NCC

c. DELAY (MORA) like when there has been judicial or extra-judicial demand and the debtor does not
comply his obligation, delay will occur.

d. IN CONTRAVENTION OF THE TENOR OF THE OBLIGATION – refers to the violation of the

terms and conditions or defects in the performance of the obligation, like when a landlord fails to
maintain a legal and peaceful possession of a tenant being leased by the latter because the landlord was
not the owner and the real owner wants to occupy the land, there is contravention of the tenor of the
obligation.

2 |Obligation and Contract- Module 3