Course Code: BAM 026

Module #1

Name: ________________________________________ Class number: __________________

Section: _________ Schedule: _____________________ Date: _________________________

Lesson Title: OBLIGATION: GENERAL PROVISION Materials:

Lesson Objectives: Student Activity Sheet
At the end of this module, I can:
1. Define obligation and identify the requisites and kinds of References:
obligation. Law on Obligations and
2. Identify and define the sources of obligation. Contracts by Atty. Andrix D.
Domingo,CPA,MBA

Productivity Tip:
Your ability to stay focused is a critical factor in your success or failure. Getting things done is
important, and focus is the key to getting things done. For starters, set your timer to 45 minutes.
Commit yourself to totally avoiding any distractions until the timer alarms. Have a 5-minute
break after. Then, repeat again until you are done with this module. Happy learning!

A. LESSON PREVIEW/REVIEW

1) Introduction (2 mins)

Welcome to your first law subject in college! I want you to know that there is no need for you
to feel intimidated and scared. I can assure you that the Law on Obligations and Contracts is
not as hard as you imagined it to be.

Of course, you will encounter many legal terms that you are not familiar with. Your greatest weapon will
be your willingness to learn new things. The beauty about being knowledgeable on this subject is the fact
that you can practically apply it in everyday life.

Knowing and understanding the legal provisions contained in the Law on Obligations and Contracts is
not only important for you to finish your degree, but it can also protect you, your interests and that of your
loved ones.

I hope that you take time to read by heart the productivity tip! Believe me, this technique will be so helpful
in getting your modules done. Remember to set your alarm before you begin.

So, when you are ready, let’s begin!

2) Activity 1: What I Know Chart, part 1 (3 mins)

You may be a bit surprised to see that you are being asked to do Activity 1! In your mind, you might want
to ask, how can I answer Activity 1 when in fact we do not have any discussions yet!

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Name: ________________________________________ Class number: __________________

Section: _________ Schedule: _____________________ Date: _________________________

The purpose of this activity is to know if you have any idea about the questions being asked. There is no
wrong or right answer in Activity 1. This is also a tool for both of us to see what you know before starting
and after you have finished working on this module! That way, we can assess if you learned something!

Now, try to answer the What I Know Part. Again, there is no right or wrong answer!

What I Know Questions: What I Learned (Activity 4)

1. What is an obligation?

2. What are the elements of

obligation?

3. What are the sources of

obligation?

B. MAIN LESSON

1) Activity 2: Pre-Printed Content Notes (13 mins)

Article 1156. An obligation is a juridical necessity

to give, to do or not to do.

The above-mentioned article contains the legal definition of an

obligation. It is a juridical necessity because in case of

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Section: _________ Schedule: _____________________ Date: _________________________

noncompliance, the aggrieved party can go to court to enforce fulfillment of the obligation and to compel the
other party to give, to do or not to do something.

ESSENTIAL REQUISITES:

An obligation has four essential requisites:

a. PASSIVE SUBJECT – it is the person who has the duty to fulfill the obligation. The passive subject is also
called the debtor or the obligor.
b. ACTIVE SUBJECT – it is the person who is entitled to demand the fulfillment of the obligation. The active
subject is also called the creditor or obligee.
c. OBJECT or PRESTATION – It is the subject matter of the obligation.
d. JURIDICAL or LEGAL TIE – It is that which binds or connects the parties to the
obligation. It is also called the efficient cause.

Example:
Under a service contract, A bound himself to repair the computer
of B for P2,500.00.

Passive Subject/Debtor/Obligor: A
Active Subject/Creditor/Obligee: B
Object or Prestation: Repair of the Computer
Juridical or Legal Tie: Service Contract

KINDS OF OBLIGATIONS:

1. REAL OBLIGATION – it is an obligation to give. It means that the debtor is bound to deliver the subject matter
to the creditor.
2. PERSONAL OBLIGATION – it is an obligation to do or not to do. Here, the subject matter is an act to be done
or not to be done.

SOURCES OF OBLIGATION:

Article 1157: Obligations arise from:

(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts

Here are the more complex legal terminologies that you may have not heard of until now. Tempted to retreat and
surrender? Relax. The above law provision states the sources of obligations. Let me discuss it to you one by
one.

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Section: _________ Schedule: _____________________ Date: _________________________

Law: Obligation to pay taxes or the father’s obligation to support his family are examples of obligation derived
from law.

Contract: Obligation to pay an indebtedness by virtue of a contract of loan is an example of an obligation derived
from contract. The debtor is bound to pay his debt because he agreed to pay the loan as stipulated or stated in
the contract.

Quasi-contract: It is important to know the meaning of quasi. Quasi means “as if”. So, when we say quasi
contract, it means as if contract. It is like a contract but is actually not because it failed to secure the consent of
the other party which is a necessary requisite for a valid contract.

There are two kinds of quasi-contract:

a. Solutio Indebiti – it is the juridical relation which is created when something is received when there is no right
to demand it and it was unduly delivered through mistake.

Example: A owes B Php500.00. A pays B Php1,000.00 by mistake. B must return to A the excess of Php500.00.

b. Negotiorum Gestio – it is the voluntary management of the property or

affairs of another without the knowledge or consent of the latter.

Example: A went to Baguio without leaving somebody to take care of his dog.
Without the knowledge of A, his neighbor B voluntarily took care of his dog
and incurred expenses while he is away for nearly 1 month. A has the
obligation to reimburse B for said expenses even if he did not actually give
his consent to the act of B.

Acts or omissions punished by law: This is an obligation which arises from

crimes or criminal offenses. This is also known as delicts. The thief has the
obligation to return the car stolen by him and the convicted murderer has the
obligation to indemnify the family of his victim.

Quasi-Delicts: Like I have told you a while ago, quasi means

“as if”. So, when we say quasi-delicts, it means, as if crimes.
Quasi-delict is not a crime because even though harm may
have occurred, certain elements of a crime are not present.

The owner of an animal has to pay for the damage which it

may have caused to another.

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2) Activity 3: Skill-building Activities (18 mins + 2 mins checking)

Exercise I

1. Give your own an example of a business transaction and identify the passive subject, active
subject, object or prestation and juridical tie.

________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________

2. Give your own example or illustration of the five different sources of obligation.

a.______________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
b.______________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
c.______________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
d.______________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
e.______________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________

3) Activity 4: What I Know Chart, part 2 (2 mins)

It’s time to answer the questions in the What I know chart in Activity 1. Log in your answers in the table.

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Name: ________________________________________ Class number: __________________

Section: _________ Schedule: _____________________ Date: _________________________

4) Activity 5: Check for Understanding (5 mins)

Exercise I. Modified TRUE or FALSE.

Direction: On the first space, write true if the statement is true or false if the answer is false. If your
answer is false, supply the necessary detail on the second space provided for.

__________ ____________________1. An obligation is the necessity to give, to do or not to do.

__________ ____________________2. The passive subject is also called the creditor.
__________ ____________________3. The active subject is also called the debtor.
__________ ____________________4. The object or prestation of the obligation is also known as
juridical tie.
__________ ____________________5. The juridical tie or legal tie is also known as efficient cause.

A. LESSON WRAP-UP

Activity 6: Thinking about Learning

Congratulations for finishing this module! Shade the number of the module that you finished

Did you have challenges learning the concepts in this module? If none, which parts of the module helped you
learn the concepts?
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
_______________________________________________________________________________________.

Some question/s I want to ask my teacher about this module is/are:

________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
_______________________________________________________________________________________.

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Learning Scores Action Plan

Date
Target/Topic

What module# did you What contributed to the quality of your

What were your
What’s the do? What were the performance today? What will you do next
scores in the
date today? learning targets? What session to maintain your performance or
activities?
activities did you do? improve it?

FAQs

Law is a rule of conduct, just, obligatory, promulgated by legitimate authority and of common observance
and benefit. (I Sanchez Roman 3)
Obligations derived from law are not presumed.

A contract is meeting of minds between two persons whereby one binds himself, with respect to the other,
to give something or to render some service. (Art. 1305)
A contract is valid if all essential elements are present and it is not contrary to law, morals, good customs,
public order and public policy.
Obligations arising from contracts have the force of law between the contracting parties and should be
complied with in good faith.

A quasi-contract is that juridical relation resulting from lawful, voluntary and unilateral acts by virtue of
which the parties become bound to each other to the end that no one will be unjustly enriched or benefited
at the expense of another. (Art. 2142)

Acts and omissions punished by law are felonies (delitos) (Art. 1 Revised Penal Code)
A person criminally liable is also civilly liable.

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A quasi-delict is 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 relations between the parties (Art. 2176)
Before a person can be held liable for quasi-delict, the following requisites must be present:
o There must be an act or omission;
o There must be fault or negligence;
o There must be damage caused;
o There must be a direct relation or connection of cause and effect between the act or omission
and the damage; and
o There is no pre-existing contractual relation between the parties.

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