JRU LAW C201 - Lecture Slides With Audio - Week 07 - 2022-2023

Law on Obligations and Contracts
Obligations with a Period

Alternative Obligations
Facultative Obligations
Obligation with a Period
What is an “obligation with a period”?
An obligation with a period is an obligation the effects of which

depend on the arrival or expiration of a period.
What is a “period”?
A period is a future and certain event, day, or length of time upon

the arrival or expiration of which the obligation becomes
demandable or terminates.
What is a “period”? (continued)
“A day certain is understood to be that which must necessarily

come, although it may not be known when.
What is a “period”? (continued)
If the uncertainty consists in whether the day will come or not,

the obligation is conditional, and it shall be regulated by the rules
of the preceding Section.”
- Article 1193, Civil Code

What are the kinds of periods?
a. suspensive period
b. resolutory period
What is a “suspensive period”?
A suspensive period is a period upon the arrival or expiration of

which the obligation becomes demandable.
What is a “suspensive period”? (continued)
“Obligations for whose fulfillment a day certain has been fixed,

shall be demandable only when that day comes.”

Example No. 1 of a suspensive period:
On February 14, 2015, B borrowed PhP50,000.00 from C and

promised to pay it back on December 25, 2015.
In this case, the obligation of B shall become demandable only

upon arrival of the stipulated date.
Example No. 2 of a suspensive period:
On January 31, 2015, D promised to deliver twenty bouquets of

roses to F after ten days.
In this case, the obligation of D shall become demandable only

upon expiration of the stipulated period.
What is a “resolutory period”?
A resolutory period is a period upon the arrival or expiration of

which the obligation terminates.
What is a “resolutory period”? (continued)
“Obligations with a resolutory period take effect at once, but

terminate upon arrival of the day certain.”

Example No. 1 of a resolutory period:
On December 1, 2014, G promised to give H PhP2,500.00 every

month until H dies.
In this case, the obligation of G terminates upon arrival of the

period.
Example No. 2 of a resolutory period:
On March 1, 2015, J sold to K a computer. In connection with

this, J promised that he would replace any defective part of the
computer free of charge for one year.
In this case, the obligation of J shall terminate upon expiration of

the period.
For whose benefit is the period established?
“Whenever in an obligation a period is designated, it is presumed

to have been established for the benefit of both the creditor and
the debtor,
For whose benefit is the period established? (continued)
unless from the tenor of the same or other circumstances it should

appear that the period has been established in favor of one or of
the other.”

Article 1196 of the Civil Code provides that a period is presumed

to be established for the benefit of both the creditor and the
debtor.
In such a case, the creditor may not demand fulfillment of the

obligation before the arrival or expiration of the suspensive
period.
In the same way, the debtor may not fulfill the obligation before
the arrival or expiration of the suspensive period without the
consent of the creditor.
Example No. 1:
On April 1, 2015, L borrowed PhP20,000.00 from Q and

promised to pay it back with 6% interest after exactly one year.
Example No. 1, continued:
In this case, Q may not compel L to pay before one year has
passed. Likewise, L cannot pay early without the consent of Q.
In this case, it is presumed that the period of one year was

established for the benefit of both L and Q.
L is benefited by the period because he would be able to use the

money for a year. Q would also be benefited because of the
interest that would accrue on the debt for one year.
Example No. 2:
T gives cooked ham to his friends every Christmas. To avoid the

holiday rush, T orders hams early from V, his supplier.
On September 10, 2015, T placed an order with V for fifteen

hams. V accepted the order and agreed to deliver the hams to T’s
house on December 23, 2015.
In this case, T may not compel V to deliver the hams before the
arrival of the date they agreed on.
Likewise, V may not deliver the hams early without the consent
of T.
Can a court fix a period for an obligation?
As a general rule, if an obligation does not state a period, a court

is not authorized to fix one for the debtor and the creditor.
Can a court fix a period for an obligation? (continued)
However, a court may fix a period when:
a. no period was fixed but a period was intended; or
b. when the duration of the period depends on the will of the

debtor.
“If the obligation does not fix a period, but from its nature and
the circumstances it can be inferred that a period was intended,
the courts may fix the duration thereof.
The courts shall also fix the duration of the period when it
depends upon the will of the debtor.”

Example:
X just bought a parcel of land and wanted to have a house of his

own, so he entered into a contract with W where W agreed to
build a house for X in exchange for PhP1,000,000.00.
Example, continued:
However, they forgot to expressly fix a period within which

construction must be finished.
In this case, it can be inferred that they intended that W build a

house within a certain period. A court can fix this period for
them.
“When the debtor binds himself to pay when his means permit
him to do so, the obligation shall be deemed to be one with a
period, subject to the provisions of article 1197.”

Example:
F borrowed PhP10,000.00 from G and promised to pay it back

“little by little and from time to time, whenever I have money”.
Example, continued:
In this case, the obligation of F shall be considered an obligation

with a period. A court may fix the period for F and G.
What is the effect if the determinate thing due is lost, deteriorates,

or is improved before the suspensive period arrives or expires?
“In case of loss, deterioration or improvement of the thing before

the arrival of the day certain, the rules in article 1189 shall be
observed.”

Alternative Obligation
What are the kinds of obligations based on the number of

prestation/s?
a. simple obligation
b. compound obligation
What is a “simple obligation”?
A simple obligation is an obligation where there is only one

prestation.
What is a “compound obligation”?
A compound obligation is an obligation where there are two or

more prestations.
What are the kinds of compound obligations?
a. conjunctive obligation
b. distributive obligation
What is a “conjunctive obligation”?
A conjunctive obligation is an obligation where there are several

prestations and all of them are due.
Example of a conjunctive obligation:
J bought office cubicle panels from K. K promised to deliver the

panels to J’s office building and install them according to J’s
specifications.
In this case, K has a conjunctive obligation.

What is a “distributive obligation”?
A distributive obligation is an obligation where there are several

prestations and only one of them is due.
What are the kinds of distributive obligations?
a. alternative obligation
b. facultative obligation
What is an “alternative obligation”?
An alternative obligation is an obligation where several

prestations are due but the performance of one is sufficient.
What is an “alternative obligation”? (continued)
“A person alternatively bound by different prestations shall

completely perform one of them.”

Example of an alternative obligation:
L borrowed PhP3,000,000.00 from Q.
They agreed that L can repay his debt to Q by paying

PhP3,000,000.00 in cash or building a house for Q.
Example of an alternative obligation, continued:
In this case, L has an alternative obligation. There are two

prestations but L only needs to perform one.
May the debtor perform a part of one prestation and a part of

another?
“The creditor cannot be compelled to receive part of one and part

of the other undertaking.”

Who has the right to choose which prestation will be performed?
“The right of choice belongs to the debtor, unless it has been

expressly granted to the creditor.”

Who has the right to choose which prestation will be performed?
Example:
T and V agreed to trade pets. In exchange for the hermit crab of

T, V promised to give T his centipede “Senti”, his millipede
“Millie”, or his spider “Eensy”.
Example, continued:
With regard to V’s obligation, V (the debtor) has the right to

choose which pet shall be given because the right to choose was
not expressly granted to T (the creditor).
When will the choice take effect?
“The choice shall produce no effect except from the time it has
been communicated.”

What is the effect if the debtor has the right of choice but one or
some of the prestations is/are impossible or unlawful?
“The debtor shall have no right to choose those prestations which

are impossible, unlawful or which could not have been the object
of the obligation.”

What is the effect if the debtor has the right of choice but all of
the prestations, except for one, become impossible without the
creditor’s fault?
“The debtor shall lose the right of choice when among the
prestations whereby he is alternatively bound, only one is
practicable.”

What is the effect if the debtor has the right of choice but one of
the prestations becomes impossible due to the creditor’s fault?
“If through the creditor's acts the debtor cannot make a choice
according to the terms of the obligation, the latter may rescind the
contract with damages.”

Example:

Example, continued:
If V has not made a choice yet as to which pet to give and in the
meantime Senti dies because of the fault of T, V will have the
following options:
Example, continued:
a. have his contract with T rescinded, return the hermit crab,

and demand payment of damages; or
b. deliver Millie or Eensy and demand payment of damages.

What is the effect if, before the debtor has made his choice, one
or some of the prestations become/s impossible due to his fault?
The debtor will not be liable for damages. He may just perform
one of the remaining prestations.
Example:

Example, continued:
meantime Eensy dies, V will still have an obligation to deliver a
pet to T. V will just have to choose between Senti and Millie.
What is the effect if the debtor has the right of choice but all of
the prestations become impossible due to his fault?
“The creditor shall have a right to indemnity for damages when,

through the fault of the debtor, all the things which are
alternatively the object of the obligation have been lost, or the
compliance of the obligation has become impossible.
The indemnity shall be fixed taking as a basis the value of the last
thing which disappeared, or that of the service which last became
impossible.”

Example:

Example, continued:
meantime, because of V’s fault, Eensy dies, followed by Millie,
and lastly by Senti, V will be liable to T for the value of Senti.
If the creditor has the right to choose the prestation that will be
performed, when will the choice take effect?
“When the choice has been expressly given to the creditor, the
obligation shall cease to be alternative from the day when the
selection has been communicated to the debtor.”

“Until then the responsibility of the debtor shall be governed by

the following rules:
(1) If one of the things is lost through a fortuitous event, he shall

perform the obligation by delivering that which the creditor
should choose from among the remainder, or that which
remains if only one subsists;
(2) If the loss of one of the things occurs through the fault of the
debtor, the creditor may claim any of those subsisting, or the
price of that which, through the fault of the former, has
disappeared, with a right to damages;
Example:

“Millie”, or his spider “Eensy”, whichever T will choose.
Example, continued:
If T has not made a choice yet and in the meantime Eensy dies
because of V’s fault, T will have the following options:
a. just claim Senti or Millie; or
b. demand payment of the price of Eensy, plus damages.

(3) If all the things are lost through the fault of the debtor, the
choice by the creditor shall fall upon the price of any one of
them, also with indemnity for damages.
Example:

“Millie”, or his spider “Eensy”, whichever T will choose.
Example, continued:
If T has not made a choice yet and in the meantime Senti, Millie,
and Eensy die because of V’s fault, T may demand payment of
the price of Senti, Millie, or Eensy, whichever he may choose. In
addition, he may demand V to pay damages.
The same rules shall be applied to obligations to do or not to do

in case one, some or all of the prestations should become
impossible.”

Facultative Obligation
What is a “facultative obligation”?
A facultative obligation is an obligation where only one

prestation has been agreed upon but the debtor may perform
another in substitution.
What is a “facultative obligation”? (continued)
“When only one prestation has been agreed upon, but the obligor
may render another in substitution, the obligation is called
facultative.”

Example of a facultative obligation:
W borrowed PhP20,000.00 from X. W promised that if he would

fail to pay his debt within 30 days, he would give X a laptop
instead.
Example of a facultative obligation, continued:
In this case, if W would fail to comply with the original

prestation, he may still fulfill his obligation by performing
another prestation in substitution.
What is the effect if the thing intended as a substitute is lost or

deteriorates?
“The loss or deterioration of the thing intended as a substitute,

through the negligence of the obligor, does not render him liable.
What is the effect if the thing intended as a substitute is lost or

deteriorates? (continued)
But once the substitution has been made, the obligor is liable for
the loss of the substitute on account of his delay, negligence or
fraud.”

References
De Leon, H. S. & De Leon, H. M. (2014). The Law on

Obligations and Contracts, 2011 ed. Manila: Rex Book Store.
Jurado, Desiderio P. (2010). Comments & Jurisprudence on

Obligations and Contracts. Manila: Rex Book Store.
Assignment
Read the following provisions of law:
Civil Code
Articles 1207, 1208, 1209, 1211, 1212, 1213, 1214, 1216, 1217

JRU LAW C201 - Lecture Slides With Audio - Week 07 - 2022-2023

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

JRU LAW C201 - Lecture Slides With Audio - Week 07 - 2022-2023

Uploaded by

Copyright:

Available Formats

Law on Obligations and Contracts

Obligations with a Period

What is an “obligation with a period”?

An obligation with a period is an obligation the effects of which

A period is a future and certain event, day, or length of time upon

What is a “period”? (continued)

“A day certain is understood to be that which must necessarily

What is a “period”? (continued)

If the uncertainty consists in whether the day will come or not,

- Article 1193, Civil Code

What are the kinds of periods?

What is a “suspensive period”?

A suspensive period is a period upon the arrival or expiration of

What is a “suspensive period”? (continued)

“Obligations for whose fulfillment a day certain has been fixed,

- Article 1193, Civil Code

Example No. 1 of a suspensive period:

On February 14, 2015, B borrowed PhP50,000.00 from C and

In this case, the obligation of B shall become demandable only

Example No. 2 of a suspensive period:

On January 31, 2015, D promised to deliver twenty bouquets of

In this case, the obligation of D shall become demandable only

What is a “resolutory period”?

A resolutory period is a period upon the arrival or expiration of

What is a “resolutory period”? (continued)

“Obligations with a resolutory period take effect at once, but

- Article 1193, Civil Code

Example No. 1 of a resolutory period:

On December 1, 2014, G promised to give H PhP2,500.00 every

In this case, the obligation of G terminates upon arrival of the

Example No. 2 of a resolutory period:

On March 1, 2015, J sold to K a computer. In connection with

In this case, the obligation of J shall terminate upon expiration of

For whose benefit is the period established?

“Whenever in an obligation a period is designated, it is presumed

For whose benefit is the period established? (continued)

unless from the tenor of the same or other circumstances it should

- Article 1196, Civil Code

For whose benefit is the period established? (continued)

Article 1196 of the Civil Code provides that a period is presumed

For whose benefit is the period established? (continued)

In such a case, the creditor may not demand fulfillment of the

For whose benefit is the period established? (continued)

For whose benefit is the period established? (continued)

On April 1, 2015, L borrowed PhP20,000.00 from Q and

Example No. 1, continued:

Example No. 1, continued:

In this case, it is presumed that the period of one year was

Example No. 1, continued:

L is benefited by the period because he would be able to use the

For whose benefit is the period established? (continued)

T gives cooked ham to his friends every Christmas. To avoid the

Example No. 2, continued:

On September 10, 2015, T placed an order with V for fifteen

Example No. 2, continued:

Can a court fix a period for an obligation?

As a general rule, if an obligation does not state a period, a court

Can a court fix a period for an obligation? (continued)

However, a court may fix a period when:

a. no period was fixed but a period was intended; or

b. when the duration of the period depends on the will of the

Can a court fix a period for an obligation? (continued)