Obligations

and Contracts

By: Atty. Michelle Pablo

Overview of Obligations

Juan Pedro

1. Juan borrowed Php25k from Pedro to

Tommy Rudy Gina Juana be paid on April 1, 2023.
2. Tommy promised to deliver a car to
Gina on March 30, 2023.
3. Rudy agreed to refrain from going near
his ex-wife, Juana within a 3 km radius.
 What is an Obligation?
Le
ot ga
lly Requisites of an Obligation
n
re
it

qu
ke

ire Passive Subject

Li

d Person who has the duty to fulfill the

TO GIVE obligation (Debtor/Obligor)

Active Subject
Must fulfil or pay Enforceable
Person who can demand fulfillment of
damages TO DO in court the obligation (CreditorObligee)

Object
NOT TO DO Conduct required to be observed. Giving.
Doing. Not Doing. (to give, to do, not to do)

Juridical or Legal Tie

That which binds or connects the
parties to the obligation

An obligation is a juridical necessity to give, to

do, or not to do (Art. 1156, CC)
 Form of an Obligation?

General Rule: Does not

Do not have any form at
require a particular form
all
to be valid

Obligations Arising Obligations Arising

from Contracts from other sources
Kinds of Obligation?

Subject matter is Subject matter is

a thing to be an act to be done
delivered or not done

Real Personal
Obligations Obligations
 Sources of Obligations

SI/NG

LAW /LEGAL CONTRACT QUASI-CONTRACT CRIMES/ DELICT QUASI-DELICT

The law imposes Stipulation of Arises from lawful, Arises from civil Arises from damage caused to
the obligation parties voluntary, and liability which is a another through an act or
unilateral acts consequence of a omission, there being fault or
criminal act negligence but no contractual
relationship
Legal Obligations

• Legal obligations cannot be presumed

• There must be a law that clearly sets out the obligation
• Civil Code
• Special Laws

LAW /LEGAL
Legal Obligations

• Is the employer required to provide legal assistance to its

employees?
• Are private schools required to provide clothing allowance to its
teachers?
• Should the winner in a gambling activity return the money to the
loser?
• Can the husband be made to pay for the medical assistance
rendered to his wife, even if he was not a party to contract?

LAW /LEGAL
Contractual Obligations

• Obligations arising from a contract have the force of law and must be
complied with by the parties in good faith
• Contract must be valid and enforceable
• A contract is valid if it is not contrary to law, morals, good customs, public order, and public policy
• Key terms to remember
• Contract – meeting of minds between parties to give something or render some service
• Binding force – valid contracts have the force of law between the parties
• Good faith compliance – parties must fulfil what is required by the terms of the contract

CONTRACT
Contractual Obligations

Failure to fulfil contractual obligation results in injury to the other party

COMPENSATION DAMAGES SPECIFIC PERFORMANCE

CONTRACT
 Quasi = almost like (“parang”)

Quasi-Contractual Obligations

• Quasi-Contracts are treated like contracts,

although does not meet all attributes of a
contract
• A legal relationship is created
• resulting from certain lawful, voluntary and unilateral acts
• by virtue of which, parties become bound to each other
• To the end that no one will be unjustly enriched or
benefited at the expense of another

SI/NG

QUASI-CONTRACT
 Quasi = almost like (“parang”)

Quasi-Contractual Obligations

Illustration:
• Juan owes the government Php1M in
Solution Indebiti (SI) taxes, but he paid Php10M instead by
something is received mistake. Juan is entitled to get back his
when there is no right excess payment
lawful, voluntary
to demand it and it and unilateral acts
was unduly delivered • Bank employee mistakenly transferred
Php50,000 to Juan’s account instead of
through mistake.
Pedro’s account. Bank can recover the
money transferred because bank has no
duty to transfer money to Juan’s account

SI/NG

QUASI-CONTRACT
 Quasi = almost like (“parang”)

Quasi-Contractual Obligations

Illustration:
Through Juan’s efforts, he saved Negotiorum Gestio (NG)
Pedro’s (his neighbor) house from voluntary management of the
being burned. lawful, voluntary property or affairs of another
and unilateral acts without knowledge and consent
Pedro has an obligation to reimburse of the property owner
Juan’s expenses even if he did not
consent to Juan saving his house.

SI/NG

QUASI-CONTRACT
Civil obligations from Crimes (delict)

A person criminally liable is also civilly liable

On the public On the private victim

Breach of social order causes personal suffering or injury
resulting in award of damages

CRIMES/ DELICT
 Civil obligations from Crimes (delict)

Restitution
Return the thing to the victim (e.g., stolen vehicle)

Scope of civil liability Reparation for the damage caused

(governed by penal Compensation for the victim because the damage caused
laws)

Indemnification for consequential damages

Compensation for special damages (loss of business, income, reputation,
goodwill, etc)

CRIMES/ DELICT
 Obligations from Quasi-delict (Torts)

An act or omission by a person

• which causes damage to another in his
person, property, or rights
• giving rise to an obligation to pay for the
damage done
• there being fault or negligence
• but there is no pre-existing contractual
relation between the parties

QUASI-DELICT
Obligations from Quasi-delict (Torts)

• Examples of quasi-delicts
• Obligation of father (or mother) for damage caused by minor children who live in their company
• Liability of guardian for damages caused by minor or incapacitated who are under their authority and live in
their company
• Liability of employers for damages caused by their employees and household helpers acting in the scope of
their functions

Minor Minor /
Father Guardian Employee
Child Mother Incapacitated Employer

Vicarious Liability

QUASI-DELICT
 Crimes / Delict vs Quasi-delict (Torts)
CRIMES / DELICT
• As to intent. There is criminal /
malicious intent or criminal negligence
• As to effects. Concerns public interest
• As to liabilities. civil and criminal
• As to purpose. Purpose is punishment
• As to compromise. Criminal liability
cannot be compromised
• As to proof. Requires proof beyond
reasonable doubt
QUASI-DELICT
• There is only negligence
• Concerns private interest
• There is only civil liability
• Indemnification of offended party
• Civil liability can be compromised
• Fault or negligence need only be proved
by preponderance of evidence
QUASI-DELICT