Article 1245

Dation in payment (dacion en pago), whereby property is alienated to the creditor in

satisfaction of a debt in money, shall be governed by the law of sales. (n)

It involves the delivery by the debtor of a thing to the creditor as an accepted equivalent of the
performance of an obligation. This can involve the transfer of ownership of property or assets to
satisfy a debt.

The law of sales governs because dation in payment may be considered a specie of sale in which
the amount of the money debt becomes the price of the thing alienated.

Diffirentiate with Adjudication: Adjudication, on the other hand, refers to a legal process where
a court or another authorized body makes a decision or judgment on a dispute or claim. In the
context of obligations and contracts, adjudication may occur when there is a disagreement
between parties regarding the performance of a contract or the satisfaction of an obligation. The
adjudicating body examines the evidence and legal arguments presented by the parties and
renders a decision or judgment to resolve the dispute.