Breach of Obligation

- Fraud
- Negligence
- Delay
- Contravention of Tenor

Modes of Extinguishment (Art. 1231)

- Payment/Performance
- Loss of the thing due
- Condonation (Remission)
o Gratuitous act, requires acceptance of obligor
- Confusion (Merger)
o takes place when the characters of creditor and debtor are merged in the same person
- Compensation
o Both parties become debtor and creditor of each other, offsetting
o Requisites
 Both are principal creditor/debtor of each other
 Sum of money, if consumable of the same kind
 Both debts are due
 Liquidated and demandable
 over neither of them there be any retention or controversy, commenced by third
persons and communicated in due time to the debtor
- Novation
o Modification (change of object, substituting debtor, subrogation)
o Dation vs Cession (Dation – 1 creditor, requires insolvency, delivery of a thing, transfer of
ownership)
o A juridical act of dual function. At the time it extinguishes an obligation it creates a new
one in lieu of the old
o Can be done w/o knowledge of debtor, but creditor must be informed
o Classification
 As to NATURE:
 Subjective or personal (Passive – substitute debtor, Active – subrogation of
creditor)
 Objective or real (change of object)
 Mixed (subjective and objective)
 As to FORM: Express, Implied
 As to EFFECT: Total, Partial
o Requisites: Old VALID, Agreement of ALL PARTIES, EXTINGUISHMENT of Old, New VALID
- Consignation: ready to pay, deposit to proper court if creditor cannot accept tender of payment
REMEDY of debtor (ready to pay, unjustified grounds, payment is full)
- Dation in payment: conveyance of ownership of a thing as equivalent to the performance of the
obligation. 1245:, whereby property is alienated to the creditor in satisfaction of a debt in
money, shall be governed by the law of sales
 CONTRACTS

Article 1305: A contract is a meeting of the minds between two persons whereby one binds himself,
with respect to the other to give something or to render some service.

3 Types of Elements:

1.) Essential (Cannot exist without)

a. Consent
b. Object CERTAIN/Subject Matter
c. Cause/Consideration
2.) Natural – laws governing stipulations in the contract
3.) Accidental – agreed, cannot exist without stipulated, for the purpose of limiting or modifying the
normal effects of the contract

Stages: (NPC)

1.) Preparation, conception, generation/Negotiation – negotiating, bargaining, deciding on the

terms, SIGNIFY INTEREST
2.) Perfection or birth – finalizes agreement, manner, mode, object, debtor chu chu
3.) Consummation or death – fulfillment of obligations

- stipulations, clauses, terms & conditions should NOT BE CONTRARY to Law, Morals, Good
customs, public policy, public order (Principle of Autonomy of Contracts)

Art 1315. Contracts are perfected by mere consent, and from that moment the parties are bound not
only to the fulfillment of what has been expressly stipulated but also to all the consequences which,
according to their nature, may be in keeping with good faith, usage and law.

- Real contract: Not perfected until there is delivery of the thing

Art. 1319. Consent is manifested by the meeting of the offer and the acceptance upon the thing and
the cause which are to constitute the contract. The offer must be certain and the acceptance absolute.
A qualified acceptance constitutes a counter-offer. Acceptance made by letter or telegram does not
bind the offerer except from the time it came to his knowledge. The contract, in such a case, is
presumed to have been entered into in the place where the offer was made.

- Acceptance may be implied (consumption) or express

Art. 1327. The following CANNOT GIVE CONSENT to a contract: (1) Unemancipated minors; (2) Insane
or demented persons, and deaf-mutes who do not know how to write. (1263a)

TYPES:
 1.) Consensual – by mere consent
2.) Real – not by mere consent, but by delivery
3.) Formal/Solemn – immoveable property, written in public instrument, delivery can be
constructive

VALID OFFER

- COMPLETE
- DEFINITE
- INTENTIONAL

CONTRACT OF ADHESION (“ADHERE”

- Stipulatory Contract
- Ex: Insurance Contract

VICES OF CONSENT (VIMFU)

- mistake, violence (injury), intimidation (use of words), undue influence, or fraud is voidable

Mistake – generally vice

MISTAKE OF FACT

MISTAKE OF LAW

- Vice, exception: Mutual error

Primary classifications of obligation:

- Pure and conditional

- With a period
- Alternative and facultative
- Joint and solidary
- Divisible and indivisible
- With a penal clause

Secondary

- Real or personal
- Determinate or generic
- Unilateral or bilateral
- Legal conventional penal
- Civil and natural