The Law on Obligations

and Contracts
Professor Eva U Cammayo, PhD, CPA, LPT
1st sem 2023-2024
 Introduction to Law

 What is Law?
any rule of action or any system of uniformity.
determines not only the activities of men as rational beings but also the
movements or motions of all objects of creation.
the discipline and profession concerned with the customs, practices,
and rules of conduct of a community that are recognized as binding by the
community.
a rule usually made by a government that states how people may and
may not behave in a society.
 General Divisions of Law
 Law (in its strict legal sense) which is promulgated and enforced by the state. This
refers to what is known as the state law;
 Law (in the non-legal sense) that is not promulgated and enforced by the state
(includes divine law, natural law, moral law, and physical law.
 Divine law. Any law (or rule) that, in the opinion of believers, comes directly from the will of
God. example The 10 commandment of God.
 Natural law. is a theory in ethics and philosophy that says that human beings possess intrinsic
values that govern their reasoning and behavior. Natural law maintains that these rules of right
and wrong are inherent in people and are not created by society or court judges. examples.
Right to defend oneself; right to liberty; right to acquire property
 moral law. Is a general rule of right living. one that promotes well being and benefits to those
around. examples: support your family; help your groupmates/teammates
 physical law. A universal statement about both nature and society, based on empirical
observations of physical behavior, tested using scientific method. example: Newton's First
Law (Law of Inertia): An object at rest tends to stay at rest, and an object in motion tends to
stay in motion with the same speed and direction unless acted upon by an external force
 Characteristics of Law

 it is rule of conduct. It tells us what shall be done and what shall not be done.
 it is obligatory. Law is considered a positive command imposing a duty to obey
and involving a sanction which forces obedience.
 it is promulgated by legitimate authority. It is the legislative branch of the
government that promulgates laws. (congress, also LGUs enact ordinances)
 it is of common observance and benefit. Law is intended by man to serve
man.The phrase "Law is intended by man to serve man" suggests that laws are
created by human beings with the purpose of benefiting and serving
humanity. It emphasizes the idea that the primary goal of law is to promote
justice, protect individual rights, maintain order, and serve the best interests
of society as a whole.
 why is law important?

 what would life be without law? Chaotic, unpredictable, lack or order, lack of
justice
 what does law do?
1. law secures justice
2. resolves social conflict
3. orders society
4. protects interest
5. controls social relations
 what is our duty as members of society?
 how does law secure justice?

 Equal Treatment: Laws are designed to ensure that all individuals are treated
equally and without discrimination. They establish principles of equality before the
law, prohibiting unjust distinctions based on factors such as race, gender, religion,
or socioeconomic status.

 Protection of Rights: Laws protect the rights and freedoms of individuals, including
basic human rights such as the right to life, liberty, and property. They provide legal
mechanisms to safeguard these rights and offer remedies for violations.

 Due Process: Law guarantees due process, which means that individuals are entitled
to fair treatment and legal procedures when facing accusations or charges. This
includes the right to a fair trial, the presumption of innocence until proven guilty,
and the right to legal representation.
 Sources of Law

 Principal Sources
1. constitution. fundamental law or supreme law or highest law of the land
2. legislation. enacted law or statute law; also ordinances (enacted by LGUs). it is
the preponderant source of law in the Philippines. examples a). Civil code. It
covers areas such as contracts, property, obligations and contracts, family
relations, and succession. b). revised penal code (RPC). it is the primary law
that defines crimes and prescribes penalties for criminal offenses in the country.
The RPC serves as the foundation of criminal law in the Philippines and provides
a comprehensive framework for understanding and prosecuting criminal acts.
The RPC covers a wide range of criminal offenses, including crimes against
persons, crimes against property, crimes against chastity, crimes against public
order, crimes against public interest, and crimes against national security. Each
offense is defined and classified, and specific penalties are prescribed based on
the severity of the crime.
 main sources of law

3. administrative or executive orders, regulations and rulings. These issued by

administrative officials under legislative authority. They are intended to clarify
or explain the law and carry into effect its general provisions. examples: a)
Executive Orders (EOs): Executive Orders are directives issued by the President
of the Philippines to manage and govern executive branch operations. b).
Administrative Orders (AOs) in the Philippines are directives issued by the heads
of executive departments or agencies to manage and govern the internal
operations and policies of their respective departments. AOs primarily address
administrative matters and provide guidance or instructions to the agency's
personnel or stakeholders.
 main sources of law

4. judicial decisions. The doctrine of precedent. These are decisions of the

supreme court (SC), applying or interpreting the laws or the Constitution form
part of the legal system of the Philippines. The decisions of a superior court on a
point of law are binding on all subordinate courts. The SC however, may reverse
or modify any of its rulings. Example. People v. Echegaray (G.R. No. 117472,
1999): This ruling upheld the constitutionality of the death penalty law in the
Philippines at that time. It affirmed that the death penalty is not cruel,
degrading, or inhuman punishment, but its imposition must be carried out with
utmost caution, judiciousness, and in accordance with due process. howver, The
death penalty was abolished in the Philippines in 2006 through Republic Act No.
9346. What happened with those in the death row?
 main sources of law

 5. customs. It consists of those habits and practices which through long and
uniterrupted usage have become acknowledged and approved by the society
as binding rules of conduct. These should not be contrary to law, public order
or public policy. Public order refers to the maintenance of peace, stability,
and security within a society or community. It encompasses the rules,
regulations, and measures established to ensure the smooth functioning of
society and the protection of individuals' rights and safety. Public policy refers
to the decisions, actions, and courses of action undertaken by governments
and public authorities to address societal issues and achieve specific goals
 examples of public orders: curfew regulations; traffic regulations; noise
regulations.
 examples of public policy:education policy; environmental policy; healthcare
policy
 other sources

1. principles of justice and equity. Examples: a). Anti-Discrimination Laws: Laws

that prohibit discrimination based on attributes such as race, color, religion,
sex, national origin, disability, or age. These laws aim to ensure equal
treatment and opportunities for all individuals. b). Equal Pay Laws: Laws that
require employers to pay employees equal wages for equal work, regardless
of gender. These laws seek to address gender-based pay disparities and
promote pay equity
2. decisions of foreign tribunals. Laws based on decisions of foreign tribunals
typically involve the recognition and enforcement of judgments or rulings
issued by courts or tribunals in other countries. These laws aim to ensure
fairness, promote international cooperation, and provide a framework for the
application of foreign legal decisions.
 other sources of law
3. opinion of textwriters. Laws based on the opinions of legal text writers are not
common, as legal systems typically rely on statutes, precedents, and legal principles
established through judicial decisions. However, legal text writers, such as legal scholars
and commentators, can play an influential role in shaping legal thinking and providing
interpretations of existing laws. Their writings often contribute to legal discourse,
academic discussions, and the development of legal theories. While these writings do not
have the binding authority of statutes or court decisions, they can influence legal practice
and shape the understanding and interpretation of the law.
4. religion. example: Family Law: The Philippines has special provisions in its legal system
that pertain to marriage, divorce, and family matters, which are influenced by religious
principles. The Family Code of the Philippines, for instance, contains provisions based on
Catholic teachings, such as the absolute prohibition of divorce and the recognition of
marriage as an indissoluble union. however, annulment is a legal declaration that a
marriage is null and void, rendering it as if it never existed. Legal separation in the
Philippines is a legal process that allows married couples to live separately and be
recognized by law as being legally separated. It does not result in the dissolution of the
marriage, meaning the couple remains married, but they are granted certain rights and
obligations associated with the separation
 Major Classifications of Law

 as to its purpose
1. substantive law. This refers to the body of laws that create, define, and
regulate legal rights and obligations. It establishes the rights, duties, and
responsibilities of individuals and organizations, as well as the consequences
of violating those rights or failing to fulfill those duties. Substantive law forms
the core of a legal system and provides the rules and principles that govern
various aspects of society. Examples: The contract laws; The criminal law
2. adjective law. is more commonly known as "procedural law." Procedural law
establishes the rules and processes that govern how legal rights are enforced,
legal actions are initiated, and cases are conducted within the legal system.
It outlines the methods, procedures, and remedies available for individuals to
seek redress for their rights or resolve legal disputes.
major classification of law-as to subject
matter

Civil Law: Civil law deals with the private rights and relationships between individuals or
organizations. It covers areas such as contracts, property, torts, family law, and inheritance.
Civil law aims to resolve disputes and provide remedies for harm caused by one party to another.

Criminal Law: Criminal law focuses on offenses committed against society as a whole. It defines
crimes, establishes their elements, and prescribes punishments for those found guilty. Criminal
law aims to maintain public order, deter criminal behavior, and seek justice through the
prosecution of offenders.

Constitutional Law: Constitutional law pertains to the fundamental principles and framework of
a country's legal system. It encompasses the interpretation and application of a constitution,
including the powers and limitations of government institutions, protection of individual rights,
and the relationship between the state and its citizens.
major classification of law-as to subject
matter
 Administrative Law: Administrative law governs the activities and operations of administrative
agencies and their interaction with individuals and organizations. It covers areas such as licensing,
regulations, government decision-making, and administrative procedures. Administrative law ensures
that administrative actions are fair, reasonable, and within the scope of the agency's authority.

 International Law: International law encompasses the rules and principles governing the relationships
between sovereign states, international organizations, and individuals in the international
community. It covers areas such as treaties, diplomatic relations, human rights, international trade,
and armed conflict. International law aims to promote peaceful coexistence, cooperation, and the
resolution of disputes between nations.

 Commercial Law: Commercial law, also known as business law or mercantile law, deals with legal
matters related to commerce, trade, and business transactions. It covers areas such as contracts,
commercial transactions, corporate law, intellectual property, and consumer protection. Commercial
law provides a legal framework for conducting business activities and resolving commercial disputes.
major classification of law-as to subject
matter
 Labor Law: Labor law governs the relationship between employers,
employees, and labor unions. It addresses issues such as employment
contracts, wages, working conditions, collective bargaining, and workplace
rights. Labor law aims to protect the rights of workers, promote fair
employment practices, and maintain a balance between employers and
employees.

 Environmental Law: Environmental law encompasses regulations and legal

principles concerning the protection and conservation of the environment. It
covers areas such as pollution control, natural resource management, land
use planning, and environmental impact assessment. Environmental law aims
to promote sustainable development and ensure the responsible use of
natural resources.
 Business Law

 Business law, also known as commercial law or corporate law, refers to the
body of legal rules and regulations that govern the formation, operation, and
dissolution of businesses, as well as the commercial transactions and
interactions between individuals, organizations, and government entities in
the business context. It encompasses various legal areas, including contract
law, employment law, intellectual property law, tax law, securities law, and
more.

 Business law provides a framework for establishing and running businesses,

ensuring legal compliance, protecting the rights and interests of parties
involved, and resolving disputes that may arise in the business environment.
It covers a wide range of legal issues that businesses encounter
 Law on Obligations and Contracts

 it is the body of rules which deals with the nature and sources of obligations and the rights and duties arising from
agreements and the particular contracts. It typically covers the following key areas:

 Contracts: This aspect of the law deals with the formation, validity, interpretation, and enforcement of contracts. It
outlines the essential elements of a contract, such as offer, acceptance, consideration, and mutual consent. It also
addresses various types of contracts, such as sale contracts, lease agreements, employment contracts, and more.

 Obligations: The law defines obligations as the legal ties that bind parties to perform certain acts or refrain from
specific actions. It covers both contractual obligations and obligations arising from civil wrongs (torts) or other legal
sources. It establishes the rights and duties of the parties involved and provides remedies for breach of obligations.

 Performance and Non-Performance: This aspect of the law focuses on the parties' obligations to perform their
contractual duties. It addresses issues related to performance, including time, place, and manner of performance. It
also covers situations where non-performance or breach of contract occurs, providing remedies and mechanisms for
resolving disputes.
Law on Obligations and Contracts

 Contracts of Sale and Lease: The law on obligations and contracts typically includes specific provisions related to contracts of sale and lease. It
outlines the rights and obligations of buyers and sellers in sales transactions and landlords and tenants in lease agreements. It covers issues such as
transfer of ownership, warranties, remedies for defects, rent, and eviction.

 Torts: Torts refer to civil wrongs committed by one party against another, resulting in harm or injury. The law on obligations and contracts often
addresses tort liability and provides remedies for victims of tortious acts. It covers torts such as negligence, defamation, trespass, and others.

 Remedies: The law provides various remedies for parties who suffer harm or breach of obligations. These remedies may include monetary
compensation (damages), specific performance (enforcement of contractual obligations), injunctions (court orders to refrain from certain actions),
and restitution (return of property or compensation for unjust enrichment).

 It's important to note that the specific provisions and principles of the Law on Obligations and Contracts may vary depending on the jurisdiction or
legal system in which it is applied. Different countries have their own civil codes or statutes that govern obligations and contracts. Therefore, it's
crucial to refer to the specific laws and regulations of the relevant jurisdiction for a comprehensive understanding and application of the law on
obligations and contracts.

 Like
 Dislike
 Tell me more.
 Can you provide examples of specific remedies for breach of obligations?
 What are some common types of torts that are addressed in the law on obligations and contracts?
 How can I find the specific laws and regulations for obligations and contracts in my jurisdiction?
rule in case of doubt in interpretation or application of laws.
 Plain Meaning Rule: This rule suggests that when the language of a law is
clear and unambiguous, it should be interpreted and applied according to its
plain and ordinary meaning. The court or legal authority will rely on the
literal interpretation of the language without resorting to other methods of
interpretation.

 Legislative Intent: When the language of a law is unclear or ambiguous, courts

may seek to determine the legislative intent behind the law. This involves
examining legislative history, such as legislative debates, committee reports,
or statements made by lawmakers during the drafting and enactment of the
law. The objective is to understand the purpose and intention behind the law
and interpret it accordingly.
rule in case of doubt in interpretation or
application of laws.
 resumption of Consistency: This principle assumes that laws should be
interpreted in a manner that promotes consistency and harmony within the
legal system. When faced with conflicting provisions or interpretations, courts
will strive to interpret the law in a way that avoids contradictions and
maintains coherence.

 Rule of Lenity: The rule of lenity, also known as the principle of strict
construction, applies in criminal cases where there is ambiguity or doubt in
the interpretation of penal statutes. It holds that if there are multiple
reasonable interpretations of a criminal law, the interpretation that is most
favorable to the accused should be applied.
rule in case of doubt in interpretation or
application of laws.
 Precedent and Case Law: Legal systems that follow the
doctrine of stare decisis (binding precedent) rely on
previous judicial decisions to guide the interpretation and
application of laws. When faced with a doubt or
ambiguity, courts may look to past decisions that have
addressed similar issues for guidance.
conclusive presumption of knowledge of
law
 The concept of conclusive presumption of knowledge of law is a legal principle that
assumes individuals are aware of the law and are bound by it, regardless of whether they
actually have knowledge of specific laws or legal provisions. In other words, it presumes
that ignorance of the law is not an excuse for failing to comply with it.

 The rationale behind the conclusive presumption of knowledge of law is rooted in the
principle that laws are publicly available and accessible to everyone. It is considered a
necessary element of a functioning legal system to ensure that individuals are held
accountable for their actions and that the law is applied uniformly.

 Under this principle, individuals are generally expected to abide by the law and can be
held liable for violations or non-compliance, regardless of their awareness or
understanding of specific legal provisions. Consequently, it is generally not a valid
defense to claim ignorance of the law as a justification for one's actions.
thus, ignorance of the provisions
of the law imposing a penalty for
illegal possession of firearms, or
punishing the possession of
prohibited drugs, does not
constitute a valid excuse for their
violation.
 end of lesson
September 11, 2023