Article 1156 is an obligation is a judicial necessity to give, to do, or not to do.

PERSONAL OBLIGATIONS:
1. Positive personal obligation or obligation to do or render service.
2. Negative personal obligation is obligation not to do or not to give.

Every obligation has four essential elements: an active subject; a passive subject; the prestation;
and the legal tie.

The ACTIVE SUBJECT is 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.

The PASSIVE SUBJECT is 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.

The PRESTATION is 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.

The VINCULUM JURIS is 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).

ELEMENTS OF CONTRACT

 Consent of the contracting parties.

 Subject matter.
 Cause

RECIPROCAL OBLIGATIONS are those created or established at the same time, out
of the same cause, and which results in a mutual relationship of creditor and debtor
between parties. In reciprocal obligations, the performance of one is conditioned on the
simultaneous fulfillment of the other obligation.

NATURE OF OBLIGATION

1. DETERMINATE OBLIGATION - the creditor, in addition to the right granted

him by Article 1170, may compel the debtor to make the delivery. If the thing is
indeterminate or generic, he may ask that the obligation be complied with at the
expense of the debtor.
2. SPECIFIC
3. GENERIC
STAGES OF CONTRACT
1. Preparation - negotiation and bargaining until an agreement is reached
2. Perfection (birth of the contract) - the moment when minds of the parties meet
or agree on all the terms of the contract
3. Consummation (death of the contract) - when the contract is performed and
its terms fulfilled

OBLIGATION IS EXTINGUISHED:

(1) By payment or performance

(2) By the loss of the thing due
(3) By the condonation or remission of the debt: creditor gave up his right
either partly or wholely

(4) By the confusion or merger of the rights of creditor and debtor;

(5) By compensation: It is a mode of extinguishing to the concurrent amount, the

obligations of those persons who in their own right are reciprocally
debtors and creditors of each other (Art. 1232, NCC). It involves the
simultaneous balancing of two obligations in order to extinguish them to
the extent in which the amount of one is covered by that of the other.

(6) By novation: the extinguishment of an obligation by the substitution or change of

the obligation by a subsequent one which terminates the first, either by changing the
object or principal conditions, or by substituting the person of the debtor, or
subrogating a third person in the rights of the creditor