• CLO1.

Explain what the Philippine law on obligations and

M1 Course Learning contracts is and the prevailing jurisprudence relating

thereto, specifically on the nature and effect of
obligations, different kinds of obligations, extinguishment

Outcomes of obligations, nature of contracts and its essential

requisites, form of contracts, interpretation of contracts
and the various kinds of defective contracts under the
Philippine law.

Module Learning • Discuss the introduction to law and the general provisions
of the law on obligations.

Outcomes

Chapter Learning • Discuss the general provisions on the

law on obligations.

Outcomes 02

CHAPTER OUTCOMES
 03
Topic Outline
This chapter discusses the general provisions on the
law on obligations:

Art. 1156, obligation Art. 1160, (13) quasi-contractual obligations, (14) kinds of
quasi-contracts;
Art. 1157, (8) sources of obligation, (9) sources
classified; Art. 1161, (15) civil liability arising from crimes or delicts, (16)
scope of civil liability; and

Art. 1158, (10) legal obligations;

Art. 1162, (17) obligations arising from quasi-delicts, (18) requisites

Art. 1159, (11) contractual obligations, (12) compliance in good faith; of quasi-delicts, (19) distinction between crime and quasi-delict.

CHAPTER 1. - GENERAL PROVISIONS | ARTS. 1156 – 1162

OUTLINE OF TOPICS:
1. Sources of Obligations
2. Kinds of Obligations
3. Extinguishment of Obligation
4. Importance of a Contract
5. Requisites of a Contract
6. Forms of a Contract
7. Interpretation of a Contract
8. Classes of Defective Contracts
c. Viewpoint of subject matter
• real obligation – to give
• personal obligation – to do or not to do

d. Viewpoint of Person obligated to

perform
• Unilateral – one parties is bound
• Bilateral – both parties are bound
i. Reciprocal
ii. Non- reciprocal
 Obligation derived from the law are not
presumed. Only those expressly
determined in this code or by special laws
are demandable and shall be regulated by
the precepts of the law which established
them: and as to what has not been
foreseen, by the provisions of this book.
obligations arising from the contract have the
full force of law between the contracting
parties and should be complied with in good
faith.

a 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 unjustly enriched or benefited at the expense of
another
A. Negotium Gestio
The voluntary management of the
property or affairs without the knowledge
or consent of the latter.

B. Solutio Indebiti
the juridical relation which is created
when something is received when there is
no right to demand it and it was unduly
deliver through mistake.
This is an act or omission punishable by law.
The principle is that the person committed an
act or committed to do an act, and the act or
omission is punishable by law, he is civilly
liable.

One which cause the damage to another there is

being fault or negligence but there is no pre- existing
contractual relation between the parties ,is obliged
to pay for the damage done (ART.2176)
 Obligations arising from law are not
presumed, to be demandable and
enforceable, the obligation must be
stated by: the law which created the
obligation. Such being the case, the
agreement of the parties under this
obligations is no longer necessary
because it is the law which govern their
obligations.
 Obligations derived from law
shall be governed by the law
which establishes them. In
case of insufficiency, the same
shall be supplemented by the
provisions of the Civil Code
a. The obligation of husband and wife to
support each other. ( Art. 195, Family code)

b. The obligation of the taxpayer to file his

income tax return ( Title II, section 23 NIRC)

c. The obligation of the legitimate

ascendants and descendants to support
each other. (Art. 195, Family code).
 General information “Freedom to contract
or autonomy of will”. The “ contract” entered
into between the parties shall have the force
of law between them . Any violations by
either party shall produce a cause of action
against the violator. However, in order for a
contract to be valid and enforceable, it must
not be contrary to the laws, morals, good
customs, public policy, otherwise the
contracts void. ( Rt. 1306,1409 Civil Code)
a. Entered into must have three essential element:
consent, object and cause.
b. The contract must not be contrary to law, public
policy, public order and public moral.
c. If the contrary to letter (b), the agreement or
contract is void, because it does not exist and
no obligation will arise.
d. Even, if valid it must follow the forms of contract
, otherwise it may be declared as unenforceable
under Art. 1403 of the Civil Code.
if the part of the contract is void but the
contract is susceptible of division, that
part which is not affected may be
enforced disregarding that part which is
void. Such, that if the contract is falsified
by the unauthorized insertion of
additional stipulation, this falsified
insertion shall be considered inexistent
and the part unaffected shall be enforced.
 It is a juridical relation which
arises from certain lawful,
voluntary and unilateral acts, to
the end that no one maybe
unjustly enriched or benefited
at the expense of another.
a. Negotiorum Gestio – voluntary
administration of the property,
business or affairs of a third person
without the consent or the authority of
its owner.

b. Solutio Indebiti- payment by mistake

of an obligation which was not due
when paid.
a) Art. 2144, civil Code . Whoever
voluntarily take charge of the agency or
management of the business or
property of another, without any power
from the latter, is obliged to continue
the same until the termination of the
affair and its incident, or to require the
person concerned to substitute him, if
the owner is in a position to do so.
Example:
D, merchant- farmer and owner of a ten-
hectare agricultural land, left for USA on a
pleasure trip. While enroute to USA typhoon
“Dading” devastated the entire Philippines
including the land owned by D. Before the
typhoon reached our area of the responsibility,
C a neighbor of D, employed six farmers to
harvest the palay planted on the land of D. The
expenses incurred was P1,200. In here the
obligation of D upon arrival is to reimburse C
P1,200, because he must not be enriched at
the expense of another.
b) Article 2154 – if something is received when
there is no right to demand it, and it was
unduly delivered through mistake, the
obligation to return it arises.
Example:
D owes C P10,000 on Dec. 20, 2012. on
Dec. 20, 2011, d, thinking that the obligation
was already due, paid C the full amount of
the obligation. In this case, C ‘s obligation is
to return the amount paid because the
obligation is not yet due and the obligee ( C )
has no right to demand it.
C) Art. 2164, Civil Code.- When without knowledge
of the person obliged to give support, it is given
by a stranger , the latter shall have a right to
claim the same from the former, unless it
appears that he gave it out of piety and without
intention of being repaid.

d) Art. 2167, Civil Code, - When, through accident

or other cause, a person injured or become
seriously ill, and he is treated or helped while he
is not in a condition to give consent to a
contract, he shall be liable to pay for the services
of the physician or other person aiding him,
unless the service has been rendered out of pure
generosity.
e) Art.2168 Civil Code,- When during a fire, a flood,
storm or other calamity property is saved from
destruction by another person without the knowledge
of the owner, the latter is bound to pay the former just
compensation.

f) Art.2174 Civil Code- when, in a small community a

majority of the inhabitants of age decides upon a
measure for protection against lawlessness, fire,
flood, storm or other calamity, anyone who objects to
the plan and refuses to contribute to the expenses but
is benefited by the projects as executed shall be liable
to pay his share of said expenses.
a. Philippine revised Penal Code and other
Penal laws, subject to the provisions of Art.
2177 of the civil code.

b. Chapter II, Preliminary Title, on human

Relations of the Civil Code.

c. Civil Code on damages, Title 18 Book IV

 Every person criminally liable is
also civilly liable under Art. 100 of the
Revised Penal Code . If a person
therefore is guilty of the crime
charged, he must not only be
imprisoned but he shall also answer
for damages as civil obligations.
 As a rule when a person commits a
crime he can be held criminally liable and
in addition he can also be held civilly
liable because most often the commission
of crime causes not only more evil but
also material damage. Not all crimes
cause material injury. Therefore if there is
no material damage to be compensated
here is no civil liability to be indemnified.
a. Contempt
b. Gambling
c. Violation of Traffic
Regulations
A. Restitution- Art. 105 revised Penal Code-
The restitution of the things itself must be made
whenever possible , with allowance for any deterioration
or diminution of value as determined by the court.

B. Reparation of the damaged cause- Art.106, Revised

Penal Code-
The court shall determine the amount of damage ,
taking into consideration the price of the thing ,
whenever possible and its special sentimental value to
the injured party, and reparation shall be made
accordingly.
C. Indemnification for consequential
damages- Art. 107 Revised penal
Code-
Indemnification for
consequential damages shall
include not only those caused to
the injured party, but also suffered
by his family or by a third person
by reason of the crime.
a. When civil liability for damage is made
in the criminal case proof or evidence
beyond reasonable doubt is required.

b. when claim for damage is filed

separately with the criminal action, mere
preponderance of evidence is enough.
6. Effect if the guilty party died pending trial
The civil obligation is not extinguished. The
injured party may file his claims against the
estate of the offender, but heirs are not liable
beyond the value of the property they received
from the decedent. (Art. 1178 & 1311 Civil
Code)

7. Effect the guilty party is acquitted of criminal

action filed
The extinction of the civil action. However the
civil action based on delicts may be deemed
extinguished if there is finding in a final
judgment in the criminal action that the act or
omission from which the civil liability may arise
did not exist.
8. Minimum Amount recoverable in case of
death.
The minimum amount recoverable in cased
of death caused by a crime or quasi- delict is P
50, 000, without the need of presenting
evidence or proof of damage may be recovered
by the injured party.
9. May a person who committed an act
constituting a crime be exempted from criminal
liability?
Yes, this is provided for in article 12 of the
revised Penal Code. The ff. persons are
exempted from criminal liability even if the act
committed constitutes a crime.
1. An imbecile or insane person , unless he acted
a lucid interval.
2. A person under 9 years of age.
3. A person over 9 years of age but below 15
unless he acted with discernment.
4. Person acting under the compulsion of an
irresistible force.
5. Person acting under the impulse of an
uncontrollable fear of an equal or greater injury.

Note: those persons are exempted from criminal

liability but not from civil liability. Their civil
liability shall devolve upon their guardians or
person who has control on them.
 Obligations derived from
quasi- delicts shall be governed
by the provisions of Chapter 2,
Title XVII of this book this Book,
and by special Laws.
1.Concept
Quasi- delict or tort or Culpa Aquiliana, is
wrong committed against a person
independent of contract and without criminal
intent.
2. Basis of Liability
Manresa a Spanish Commentator in Civil Law,
states the liability for quasi-delict is founded
upon an indisputable principle of equity
namely, the fault or negligence cannot
prejudice anyone else besides its author and in
no case should it consequences be borne by
him who, without will or fault on his part,
becomes the victim of the result or suffers the
harm produced by such fault or negligence.
a. The act or omission complained of is due to
the fault or negligence of the offending party.
b. The act or omission causes damage or injury.
c. There is a direct relation of cause and effect
between the fault or negligence and the
damage or injury.
d. There is no pre- existing relation between the
offender and offended parties.
a. Culpa acquiliana or quasi-
delict, the negligence as a
source of obligations.
b. Culpa contractual, the
negligence in the performance
of an obligations
In Culpa it is not the act or omission
which gives rise to the
responsibility but the want of cared
required from the circumstances . In
Dolo the act done or executed by
the actor is willful or deliberate with
an intention to cause the resulting
loss.
a. In Culpa or Quasi- delict, whenever in the
execution of the act or omission fault or
negligence supervenes the actor is liable
while in crime unless there is a law penalizing
it. The “Nullum Crimen, Nulla Poena sine
lege”
b. In culpa or quasi- delict , criminal intent is not
necessary while in crime, criminal intent is
necessary except in criminal negligence.
c. In culpa or quasi- delict damages are
awarded to the injured party; while in
crime some violation will not make the
person liable for the damages because
there is no one injured.
d. In culpa or quasi- delict, the right
violated is a private right while in crime
the right violated is public right.
e. In culpa or quasi- delict the proof of fault
or negligence will only be by
preponderance of evidence; while in
crime it is beyond reasonable doubt.