PSBA-QC

BUSINESS LAW 1 QUESTIONNAIRES

1st Quiz

Course: Bachelor of Science in Accountancy

1. Peter is obliged to deliver an apple iPhone to Jack. Identify the

elements of an obligation in this case. Explain.

 Active Subject: Jack serves as the creditor; he is entitled to

demand performance of the obligation. As he has the right to
claim, receive, or demand the Apple iPhone to be delivered,

 Passive Subject: Peter is the debtor, and he is bound to the

fulfilment of the obligation. He does nothing until the
demand for performance of the obligations is upon him.

 Prestation: Apple iPhone is the subject matter of the

obligation between Jack and Peter. It requires observation by
the active subject to prevent any fault or damage incurred by
the latter.

 Juridical Tie: The agreement to give or to deliver the

prestation. It binds Jack and Peter to the obligation.

2. Enumerate and define the sources of an obligation.

Under Article 1157, an obligation imposed on a person and the

corresponding right granted to another may arise from the
following: law; contracts; quasi-contracts; delicts; and quasi-
delicts.

1. Law

 An obligation may arise from a lawful intent to make

the obligation demandable. If an obligation arises from
a law, the act or condition on which it depends is a
factor in determining when it is demandable. Thus,
they are not presumed because this imposes a burden
upon the debtor.

 For example, the obligation to pay taxes, the obligation

to support one’s family or in accordance with Article
 195 of the Family Code.

2. Contracts

 Contracts are obligatory upon the parties or arise from

the stipulation of the parties in compliance with
Article 1306. They have the force of law between the
parties and should be complied with in good faith. It
presumes that the contract is valid and enforceable.

 For example, the obligation to repay a loan by virtue of

an agreement.
3. Quasi-Contracts

 Quasi-contracts are juridical relations 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 be unjustly enriched at the
expense of one another. (Article 2142). Quasi-
contracts are not contracts because there is no
consent given. However, the law itself supplies the
consent.

 The two most popular quasi-contracts are the

(a) ‘Negotiorum Gestio’ voluntary management of

the property or affairs of another without the knowledge
or consent of the latter. A great example of this is the
voluntary or official management of the property or affairs
of another without his knowledge or consent.

(b) Solutio Indebiti which basically means payment

by mistake or when an object is received with no right to
demand it and it is unduly delivered through mistake.

4. Delicts

 It is simply a criminal offense, and an obligation arises

because of its right under Article 100 of the Revised
Penal Code. Every person who is criminally liable is
also civilly liable. Civil liability involves restitution,
reparation, or indemnification.

 Between Civil Liability and Criminal Liability, even if

the person is not found to be criminally guilty, he can
still be found civilly liable to pay damages.

 For example, to return the jewels stolen by her.

 5. Quasi-Delicts

 Quasi-Delicts are acts or omissions that are at fault, or

negligence caused by a person that causes damage to
another, his property, or his rights. Thus, this obliges
the person who caused the damage to pay the injured
party damages (Article 2176).

 Example, the obligation of the owner of an animal to

pay for the damage incurred by the while playing
outside his property.

3. Peter is a driver of a passenger jeepney. One day when Peter was

driving the jeepney, his cellular phone rang. Peter answered the
call and because of this he lost control of the jeepney causing an
accident injuring his passengers. Is Peter liable for damages in
favor of his injured passengers? Why? In case Peter is not able to
pay damages to his injured passengers, may the passengers
demand payment of damages from owner-operator of the jeepney?
Why?

Yes, Peter is civilly liable as he incurred damage and

injury due to his negligence. Peter is the intervening cause. He
is held accountable as he serves as the driver of the passengers
(victims) and it is his responsibility to take care of anyone who
they allow to go inside the vehicle. Passengers or victims may
file claims with the drivers. Thus, he is responsible for covering
any injury or personal property claim that results from the
accident. If Peter cannot cover all the damage that incurred, the
owner despite the absence of presence of the owner in the
scene, he or she is still liable because they are the owner of the
Jeepney in accordance with Article 2176 imposes a civil liability
on a person for damage caused by his act or omission
constituting fault or negligence in relation with Article 2180 The
 obligation imposed by Article 2176 is demandable not only for
one's own acts or omissions, but also for those persons for whom
one is responsible.

4. Peter promised to deliver a 2-year-old female chocolate brown

Labrador retriever to Jack. The 2-year-old female chocolate brown
Labrador retriever was lost due to fortuitous event. Is Peter still
liable? Explain.

Yes, Peter is liable for the loss of a 2-year-old female

chocolate brown Labrador retriever, because the 2-year-old female
chocolate brown Labrador retriever was presumed to be a
determinate thing, even though the loss was due to a fortuitous
event.

Jack has the right to compel to the debtor to make the delivery or
specific performance plus damages in case of breach. Jack has the
right to hold the debtor liable in case the thing is lost or damaged
due to a fortuitous event.

Because despite the general rule in the case of fortuitous events,

the situation of Peter and Jack falls under the exception.

5. Jack is obliged to wash the car of Peter on July 1, 2018. On July 1,

2018, Peter reminds Jack of his obligation to wash the car. Jack
changed his mind and does not want to wash the car of Peter. May
Jack be compelled to wash the car of Peter. Why?
Yes, Jack fails to perform an obligation, or Jack does the
obligation in contravention of the tenor of the obligation, then Peter
may demand that the obligation be performed at the expense of
him. Yet, Peter cannot compel Jack because this would go against
the constitutional prohibition against involuntary servitude. The
only remedy is to ask Jack that the obligation be performed by
 some other person who is more willing to do it, but it will be
charged to him at his expense.

6. Jack is obliged to pay 5Million pesos to Peter. On due date Peter

demanded payment from Jack but Jack failed to pay. What are the
remedies of Peter so that payment can be made? Explain each
remedy fully.

Yes, Jack can be compelled to pay Peter because, based on

Article 1170, those who are in the performance of the obligation are
guilty of default, fraud, negligence, and in any manner of the tenor
are held liable for the damages.

In this case, Jack is not able to fulfill his obligation and, since
there is a prescribed time, legal delay or default constitutes a
breach of obligation.

A specific performance is an alternative remedy to damages that

may be issued at the discretion of the court. Restitution is
applicable in cases where the contract was avoided because of
certain conditions.

7. When is an obligation demandable at once?

If it is a pure obligation which one is not suspended by any

condition, an obligation is demandable at once, whether it has
been contracted without any condition, or when thus contracted,
the condition has been performed. It is immediately demandable.

8. Peter promised to give PhP10,000.00 to Jack if Peter goes to

Boracay. When is Peter’s obligation demandable? Explain.

In the case of Peter and Jack, they are part of a suspensive

condition. Jack’s ability to demand is suspended. He cannot
demand or enforce the performance of the prestation until such a
 condition happens. Thus, Jack cannot demand the Php 10,000,000
because the demandability of the obligation is suspended until the
happening of a certain condition, which is Peter, who is going to

Boracay.

9. Peter promised to give a car to Jack until Jack passes Business

Law 1. When is the obligation demandable? Explain.

The obligation is demandable at once, but it will be extinguished

upon the happening of the condition. Jack may demand the
delivery of the car now, but he must return it to Peter when he
passes the Business Law 1.

10. Enumerate and define the kinds of obligations according to

object.

Kinds of obligation according to object.

(1) Simple obligation — one where there is only one prestation.
(2) Compound obligation — one where there are two or more
prestation. It may be.
(a) Conjunctive obligation— one where there are several
prestation and all of them are due.
(b) Distributive obligation— one where one of two or
more of the prestation is due. It may be
I. Alternative Obligation (Article 1199)- debtor is
alternatively bound with various prestation that are
due but the performance of one of them is sufficient to
extinguish the obligation.
II. Facultative Obligation (Article 1206)- debtor is
bound to perform one prestation is due to deliver one
thing with a reserved to choose another prestation or
thing as substitute for the principal.
11. For whose benefit is the period in an obligation? Give the
general rule and the exceptions to the general rule.

General Rule:

When a period has been agreed upon for the performance or

fulfillment of an obligation, it is presumed to have been established for
the benefit of both the creditor and the debtor.

Exceptions to the General Rule:

The tenor of the obligation or the circumstances may show that

it was the intention of the parties to constitute the period for the
benefit of either the debtor or the creditor. The benefit of the period
may be the subject of an express stipulation of the parties.

I. Term is for the benefit of the debtor alone. He cannot be

compelled to pay prematurely, but he can, if he desires to
do so.
II. The term is for the benefit of the creditor; he may demand
fulfillment even before the arrival of the term, but the
debtor cannot require him to accept payment before the
expiration of the stipulated period.

12. In an alternative obligation, who has the right of choice? Give

the general rule and its exception.

An alternative obligation is one wherein various prestation are

due but the performance of one of them is sufficiently
 determined by the choice which, as a rule, belongs to the
debtor.

Article 1200—The right of choice belongs to the debtor unless

it has been expressly granted to the creditor. The debtor shall
have no right to choose those prestation which are impossible,
unlawful or which could not have been the object of the
obligation.

Right of choice, as a rule, given to debtor. As a general rule, the

right to choose the prestation belongs to the debtor. By way of
exception, it may be exercised by the creditor but only when
expressly granted to him—Article 1205, or by a third person
when the right is given to him by common agreement—Article
1306.

13. Illustrate by way of example the concepts of culpa aquiliana and

culpa contractual.

Culpa Contractual- Suppose that Apple and her family had a

business. They have a 1-year contract with a courier company.
Upon the delivery, one of the courier drivers shows negligence,
resulting in damage to the product, which is presumed to be
fragile. Now, the customer has the right to compel since the courier
driver's is in negligence in the performance, he is liable, as well as
Apple, due to the failure to fulfill the pre-existing obligation.

Culpa Aquiliana: Supposedly, the assigned driver of the school

bus is on leave due to sickness. Given that, he assigned his son,
who has less experience in driving. In the proximity of the school,
many children are crossing the pedestrian lane. A student is hit by
the bus due to reckless driving. The reckless driving of the driver is
a culpa-aquiliana. Therefore, the negligence of the driver is not the
negligence of the owner.
14. Explain the Doctrine of Proximate Cause.

In layman’s terms, the proximate cause refers to the chain of

events in motion. Determining the proximate cause affects the
damage that should be covered or not. The proximate cause should
have a direct relation to the outcome of the said matter. Which
basically means that a proximate cause should be the direct reason
why such damage has occurred.

For instance, boys are instructed to fall in line at the stage, which
consists of 5 boys. Suppose that Jack, who is in the front, is at the
edge of the stage, and Peter is on the last line. While falling in line,
Peter is so excited that he pushes the person in front of him, and
the same goes for the person behind him. Due to this, Jack falls off
the stage and incurs an injury. Therefore, Peter, as the one who
started pushing, is the proximate cause of the injury to Jack and
has the right to compel.

However, if Peter and the other boys are having fun and Peter is
able to stop himself from pushing the person in front of him, but
Jack, who gets way too excited, falls off the stage by himself, then
it is clear to say that Peter is not the proximate cause anymore
because the injury is caused by Jack himself and he cannot
compel anyone.

In order to determine the proximate cause, the actual cause should

also be discovered in order to prove the relation between the
causes. And in the case of Jack, he cannot compel Peter because
there are a series of events that happened before the accident.

15. When does the debtor incur delay? Give the general rule and its
exceptions.
 Default or delay can simply mean failure to perform obligation
on time and that is just ordinary delay whereas legal delay or
default constitutes Breach of Obligation. In order for there to be
default, first, there must be an obligation which is demandable.

When there is a failure to perform at the prescribed time. There

is a demand of by the creditor for the performance and after the
demand there is the failure to perform the obligation.

Demand in the general rule is essential. It is necessary to

constitute the debtor in the fall without such demand.

General Rule:

The debtor incurs in delay from the time the creditor demands
fulfillment of the obligation, but the debtor fails to comply with
such demand (no demand, no delay, as a rule).

The following are the requisites of delay:

a. The debtor does not perform his obligation on the date it is

due.

b. The creditor demands the performance of the obligation.

c. The debtor does not comply with the creditor’s demand.

Exceptions:

a. When the party so stipulate.

b. Law requires a time for a performance.
c. When time is of the essence, if the obligation was entered
into stipulating that I need this by a certain date.
d. When demand would be useless.
e. Demand is not necessary in case of reciprocal obligations
which involve simultaneous performance.

16. Distinguish Mora Solvendi from Mora Accipiendi from

Compensatio Morae.
 Mora Solvendi- Delay or default on the part of the debtor to fulfill
his obligation. This does not apply to obligations not to do so. This
involves positive acts either to do or to give. In the event that this
happens, the debtor is liable for interest and damages starting from
the delay of the default up until the demand. The debtor is also
liable in the event the thing is lost or destroyed due to a fortuitous
event, if and only if the thing is determinate.

Mora Accipiendi- Delay on the part of the creditor without

justifiable reason to accept performance of the obligation. In order
to say that Mora Accipiendi is happening, there must be an offer on
the part of the debtor to perform the obligation or prestation
exactly as was talked about or agreed upon, or the creditor must
have refused performance without just cause.

Compensation Morae- delay on the part of both parties. Since

both parties are accounted for, it is inevitable that each other’s
delays will now be cancelled or that the delay of one party will
correspond to the delay of the other.

17. Peter promised to deliver a car to Jose if Peter goes to

Hongkong. Is the obligation valid or void? Explain.

Void. Because Peter and Jose are under a Purely Potestative

Condition—it would be treated as void. It is void because it is
uncertain whether Peter will go to Hong Kong. There is no guarantee
that Peter would go overseas, which means Jose cannot demand the
performance of the obligation given that the validity and compliance of
the obligation is left to the will that is solely dependable on Peter.

A General Rule in the Event of a Purely Potestative Condition:

 If it relies solely on the will of the debtor, then the obligation

is void. But if the obligation is a pre-existing one and it
doesn't depend on the condition for its existence, then only
 the condition shall be void. The obligation will still be valid
because it was already pre-existing and doesn't depend on its
existence on the condition.

18. Peter promised to deliver a car to Jose until Peter goes to

Hongkong. Is the obligation valid or void? Explain.

Valid, because even though Peter and Jose are part of a suspensive
condition. Jose’s ability to demand is extinguished upon the
occurrence of the condition. Wherefore, Jose may demand the
performance of the obligation until such a condition happens.