 What is the Law on Obligations and Contracts?

The law on obligations and contracts deals with

the nature and sources of obligations, and the rights and duties arising from agreements and
particular contracts
 Let’s break it down into obligations which is the juridical necessity to give, to do or not to do,
why is it a juridical necessity? Well, because the courts of justice may impose penalties when
there is a breach to an obligation. While Obligations are the actions or omissions, contracts bind
both parties to such act or omission
 What is its significance in Real Estate Transactions?
The Philippines follows the Torrens system of land registration, wherein ownership and title to land are
registered with the government. Understanding the framework and key considerations is crucial to protect
one's rights and interests in any real estate transaction. Such as in a contract of sale is a critical document in
real estate transactions as it outlines the terms and conditions of the sale. A contract is a legal
agreement that sets out the terms of a transaction, deal, or exchange between two or more
parties — which may be individuals or companies.
- They act as a representation of obligations
- They highlight the necessary details and expectations of the agreement
- They ideally help generate more revenue
- Ensures confidentiality
- They alleviate risks and avert disputes
- They boost the effectiveness of operations
- They maintain strong cooperation and interaction
- They give assurance and satisfaction to all parties
- They solidify your organization’s image and philosphies
 What are the sources of Obligations? Law, Contracts, Quasi-Contracts, Delicts and Quasi-Delicts
but we focus on Contracts as this is the lifeblood of real estate transactions in order to protect
the rights of both buyers and sellers.
 What are the different kinds of Obligations? Real and Personal Obligations, To give to do or not
to do.

How are obligations extinguished? Obligations are extinguished:

1) By payment or performance:

2) By the loss of the thing due:

3) By the condonation or remission of the debt;

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

5) By compensation;

6) By novation. (Article 1231, Civil Code)

Other causes of extinguishment of obligations, such as annulment, rescission, fulfillment of a resolutory

condition, and prescription, are governed elsewhere in the Civil Code.

 What are the relevant contracts in Real Estate?

 CONSENT OBJECT CAUSE
 REAL CONTRACTS: FORM IMPORTANT: ENFORCEABILITY, CONVENIENCE AND VALIDITY
 CHARACTERISTICS OF CONTRACTS: AUTONOMOUS, MUTUALITY, OBLIGATORY FORCE,
RELATIVITY
 PREPARATION/NEGOTIATION STAGE, PERFECTION/SIGNED AND DELIVERED,
CONSUMMATION/ALL OBLIGATIONS ARE FULFILLED
 OFFER: COMPLETE, INTENTIONAL AND DEFINITE
 DEFECTIVE CONTRACTS
- RESCISSIBLE CONTRACT-
- VOIDABLE CONTRACT
- UNENFORCEABLE CONTRACTS
- VOID CONTRACTS- LACK ONE OF THE ESSENTIAL REQUISITES OF CONTRACT, VOID IN ITSELF,
ILLICIT (AGAINST PUBLIC ORDER, PUBLIC POLICY, MORALS)