OBLIGATIONS AND

CONTRACTS – LECTURE
SIENA COLLEGE, TAYTAY
The Law on Obligations and contracts is part of the Civil Code of the Philippines.
Definition – obligation is a juridical necessity to give, to do or not to do.
To give – something tangible; to do – service; not to do – not to do something
Examples:
I promise to give B a car (to give)
I promise to paint the house of B (to do)
I promise not to paint the house of B (not to do)
 Meaning of juridical necessity –
rights and obligations arising from
obligations are legally enforceable
and demandable in a court of
justice or court of law
Kinds of obligations under the law: civil (demandable in a court of law), and natural obligations (not enforceable in a court of law)
Essential requisites of an obligation:
Juridical or legal tie – the vinculum or link which binds the parties
to an obligation (words commonly used are: promise, commit,
oblige, or other similar words)
Prestation (consists in giving, doing or not doing – to give, to do, or not to do)
Subject: active -creditor – he can demand the fulfillment of
the obligation; passive – debtor – person from whom the
prestation is demandable.
Sources of obligation:
 Law (imposed by the law itself. Ex. Husband and wife are
expected to support each other; payment of taxes every April 15 of
each year)
 Contracts (agreement entered into by 2
parties where there is meeting of minds)
 Quasi contracts – certain lawful, voluntary and unilateral acts give rise
to the juridical relation of quasi-contract to the end that no one shall
unjustly enrich or benefit himself at the expense of another. Two forms:
 Solutio indebiti – one must return one is not owing him. Ex. A owes B P/
50,000.00. On due date, A pays B P/ 60,000.00. In this case, B should return the
P/ 10,000.00 to A since A only owes B P/ 50,000.00 and not P/ 60,000.00
* Negotiorum gestio – one must take care of the
properties of another (neighbor) in his absence.
Acts or omissions punishable by law – commission or a crime or
offense; offender is liable for criminal and civil obligations. Civil
obligations normally come in the form of damages = to money
Quasi-delict – a legal wrong, committed through fault or negligence, on a person
or property. Ex. While playing touch ball, you hit the ball so hard that it went
over your fence and hit a bystander. You are liable for damages in this case.
The civil liability arising out of the commission of a crime includes:
Restitution (restore what was done wrong)
Reparation of damages (repair)
Indemnification of consequential damages (indemnify)
Example: You stole the rooster of your neighbor. Restitution: return the rooster; reparation
of damages – in the event that you cannot anymore return the rooster, pay the value of said
rooster to your neighbor; indemnification – the rooster is used by your neighbor as a source
of income. You will pay him his income for the lost of the rooster.
The level of diligence required from someone who obliges himself to give
something to the creditor is the diligence of a good father of a family. He
has to take care of the thing prior to its delivery to the creditor.
Kinds of “thing” in obligations and contracts:
 Determinate (or specific)– when it is particularly designated or
physically segregated from all others of the same class. Example:
Honda from a group of cars; Pilot from a group of sign pens
 Indeterminate (or generic) – when it refers to a class of things or
genus and is so indefinite that it cannot be designated specifically.
Example. Cars, pens, paper, computers.
The obligation to deliver a determinate or specific thing carries with it the delivery
of all its accessions (whatever is inseparably attached thereto) and accessories
(things which are joined to another as an ornament, or to make it complete.
Example of accession: harvest from one’s land; puppies of a dog
Example of accessories: frame of a picture, keys of a house, stones of a ring
When does the debtor incur in delay? (meaning he is already late
in fulfilling the prestation entered into). Answer: when the
creditor
 demands judicially (through the court) or extrajudicially (outside of court) the
fulfillment of the obligation. However, the demand of creditor is not necessary in
the following cases to make the debtor liable for what he has promised:
 When the obligation or the law expressly so declares. Example:
payment of income tax on or before April 15 of each year; or the
contract provides for the deadline for the performance of the obligation
 When from the nature and the circumstances of the obligation, it appears that the designation of the
time when the thing is to be delivered or the service is to be rendered was a controlling motive for the
establishment of the contract. Example: I asked you to sew my dress for Christmas. I need not
demand from you the delivery of my dress since I need it on or before December 25.
When demand would be useless, as when the obligor has rendered it beyond his power
to perform. Example: A obliged himself to deliver to B an antique jar on Wednesday.
Through A’s negligence, the antique jar was destroyed. In this case, no demand was
necessary.
 Reciprocal obligations – the performance of one is
conditioned on the simultaneous fulfillment of the other.
Four sources of liability which may entitle
the injured party to damages:
Fraud – it involves deliberate intent and dishonesty
 Negligence – it is the failure to observe for the protection of the interest
of another person, that degree of care, precaution and vigilance which the
circumstances justly demand, whereby such other persons suffer injury.
Delay –
 Contravention of the tenor of the obligations – the debtor
fails to fulfill or deliberately does not fulfill his obligation.
In case of fortuitous event (act of God like typhoon, lightning, flood, earthquake), the obligation
to deliver a determinate thing is extinguished; this does not apply in the case of indeterminate
thing since it can easily be replaced. However, if the thing is lost through the fault of the debtor,
even due to a fortuitous event, his obligation is not extinguished. He has to pay for damages.
 The receipt of the principal by the creditor, without reservation
with respect to the interest, shall give rise to the presumption that
the said
interest has been paid. The receipt of a later installment of a debt
without reservation as to prior installments, shall likewise raise
the presumption
 that such installments have been paid. (Presumption
means it can be overcome by evidence; it is rebuttable)
 An unpaid creditor can run after the
properties of the debtor except the following:
Clothing
Household furniture and utensils
Professional libraries of lawyers,
physicians, etc.
All rights acquired by virtue of an obligation are transmissible, if
there has been no stipulation to the contrary. (Note: personal
obligations are not transmissible.
 Example: I promised to support your studies until you
finish College. On your 3rd year in school, I died. Can
you compel my children to still support your studies?
Answer is no, since my obligation to you is personal
and not real. A real obligation is transmissible. If I
borrowed money from the bank for the construction of
our house and I died prior to the completion of my
payment. Can the bank run after my children for said
loan/debt? Answer is yes because it is a real obligation.
MODULE II
Kinds of obligation:
Pure – not subject to any condition or event.
Ex. I will give him a book.
Conditional – subject to conditions. Ex. I
will give him a book if he marries me.
Kinds of condition:
 b.1. suspensive – suspends the demandability of the obligation until
the happening of the condition. Ex. I will give you a car if you pass
the CPA licensure exam.
 b.2. resolutory – makes the obligation immediately demandable but is extinguished
(ended, cancelled) upon the happening of the condition. Ex. I will let you use my car
until you graduate from college. Therefore, upon graduation from college, the car will
be returned to me.
b.3. casual – depends on chance or luck. Ex. I will pay you my debt if
I win in the lotto. This is not a valid condition because it is dependent
on chance. A chance is something which may or may not happen.
b.4. potestative – a condition which is entirely dependent on the debtor. It’s
fulfillment is in the hands of the debtor. Ex. I will pay you my debt when I
feel like paying you. This condition is deemed not to have been written.
b.5. mixed – a combination of potestative and casual. Ex. I will pay you my debt if I win in the lotto and if I decide to put my bet. This condition is deemed not to have been written at all.
b.6. impossible – a condition which will never happen. Ex. I will
give you P/ 50,000.00 if you go to the moon. This is not allowed
by law.
b.7. conditions against the law, morals, public
policy, public order – not acceptable.
 c. obligations with a period – a period is defined as a space
in time. Ex. I will give you the book on December 25, 2012.
 General rule, the creditor cannot demand the fulfillment of the
obligation until the arrival of the period, except in the following
cases:
 c.1. when, after the obligation is contracted, the debtor
becomes insolvent; unless, he gives a guaranty or security;
 c.2. when the debtor does not furnish the
guaranty or security he promised to the creditor;
c.3. when by the acts of debtor he has impaired said
guaranty or security; unless he furnishes a new one;
 c.4. when the debtor violates any undertaking in
consideration of which the creditor agreed to the period;
c.5. when the debtor attempts to abscond
(escape).
Alternative obligation – there is a choice available to the debtor.
The choice belongs to the debtor unless the creditor is given the
right to choose. Ex. A promised to give B a
car, a refrigerator, or a microwave. The choice among the 3 prestations
belongs to A, the debtor. Once the debtor has chosen the prestation, he
should communicate the choice to the creditor to make it effective.
Facultative – provides a substitute for the original obligation. Ex. A promised to
give B a ring. In the event that the ring is not available, A instead would give a
necklace. Here, there is substitution on the object or prestation.
 Joint – there are three possible combinations: 1 debtor with 2 or more creditors; 2 or more debtors with 1
creditor; 2 or more debtors with 2 or more creditors. Joint means that the creditors are allowed only to receive
their proportional share of the obligation and the debtors are only liable to their proportional share of the
obligation. Ex. A and B oblige to pay C P/ 10,000.00. In this case, A should pay C only 5,000 and B should pay
C only 5,000.00. In the event that C collects from A and B, A and B should only pay 5,000 each.
Ex. A and B oblige to pay C
P/ 10,000.00. In this case, A
should pay C only 5,000 and
B should pay C only
5,000.00. In the event that C
collects from A and B, A and
B should only pay 5,000
each.
Joint means that the creditors are allowed

only to receive their proportional share of

the obligation and the debtors are only

liable to their proportional share of the

obligation.
Ex. A and B owe C and D 10,000.00; A
should pay either C or D 5,000.
Solidary – the obligation is treated as a whole. The whole amount is demandable and payable. How do you know if the obligation
is solidary. It normally uses the following words: “solidarily”, “jointly and severally”, “I” (collective). Ex. A and B solidarily
bind themselves to pay C and D 10,000.00. In this case, should A pay either C or D, it will be in the amount of 10,000.00.
Divisible – obligation is capable to partial fulfillment or compliance. Ex. A promised to deliver to B 5 cases of soft drinks. A can deliver today 3 cases, tomorrow, 1 case, next day 2 cases. The
dibvisibility of the obligation is dependent on the agreement of the parties.
 Indivisible – opposite of divisible. The obligation
is not capable of partial fulfillment or performance.
Obligation with a penal clause – penal clause means penalty or liquidated
damages. Ex. I promise to sew your dress. In the event that I cannot sew
it as promised, I will pay you damages in the amount of P/ 2,000.00.
Kinds of penal clause:
j.1. subsidiary – only the penalty can be demanded. Ex, A promised to deliver to B a
car on January 20, 2012. In the event that A cannot deliver the car, he will pay B P/
10,000.00. Come January 20, 2012, A was not able to deliver the car, A should pay B
10,000.00
j.2. joint – both the principal contract and penalty are demandable. Ex. A promised to paint B’s house. If A fails to do so, A will still paint the house and pay B for damages.
Sources of penal clause:
Law (if you fail to file your income tax return on or before April
15, you are liable for surcharges and penalty; this is provided for
in the National Internal Revenue Code).
Contract – based on agreement of the
parties.
Purpose of penalty: to cover or answer for the damages suffered by the creditor for the non-fulfillment of the debtor’s obligation.
The nullity of the penal clause does not carry with it the nullity of
the principal obligation. Ex. The court declares that the penalty is
too much, the principal obligation stays or subsists.
The nullity of the principal obligation also annuls or nullifies the penalty. The
penalty is an accessory obligation. As such, it is attached to the principal
obligation. If there is no principal obligation, the penal clause cannot subsist.
Art. 1179. Every obligation whose
performance does not depend
upon a future or uncertain event,
or upon a past event unknown to
the parties, is demandable at
once.
Art. 1182. When the
fulfillment of the condition
depends upon the sole will
of the debtor, the
conditional obligation shall
be void.
Art. 1183. Impossible
conditions, those contrary to
good customs or public policy
and those prohibited by law
shall annul the obligation
which depends upon them.
Art. 1191. The power to rescind obligations is
implied in reciprocal ones, in case one of the
obligors should not comply with what is
incumbent upon him.

The injured party may choose between the

fulfillment and the rescission of the obligation,
with the payment of damages in either case. He
may also seek rescission, even after he has
chosen fulfillment, if the latter should become
impossible.
Art. 1192. In case both parties have
committed a breach of the obligation, the
liability of the first infractor shall be
equitably tempered by the courts. If it
cannot be determined which of the parties
first violated the contract, the same shall be
deemed extinguished, and each shall bear his
own damages. (n)
Art. 1193. Obligations for whose
fulfillment a day certain has been
fixed, shall be demandable only
when that day comes.
A day certain is understood
to be that which must
necessarily come, although
it may not be known when.
Art. 1195. Anything paid or delivered before
the arrival of the period, the obligor being
unaware of the period or believing that the
obligation has become due and demandable,
may be recovered, with the fruits and
interests.
Art. 1198. The debtor shall lose every right to make use
of the period:
(1) When after the obligation has been contracted, he
becomes insolvent, unless he gives a guaranty or
security for the debt;
(2) When he does not furnish to the creditor the
guaranties or securities which he has promised;
(3) When by his own acts he has impaired said
guaranties or securities after their establishment, and
when through a fortuitous event they disappear, unless
he immediately gives new ones equally satisfactory;
(4) When the debtor violates any undertaking, in
consideration of which the creditor agreed to the
period;
(5) When the debtor attempts to abscond. (1129a)
Art. 1199. A person alternatively bound by
different prestations shall completely perform
one of them.
The creditor cannot be compelled to receive
part of one and part of the other undertaking.
Art. 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
prestations which are impossible, unlawful or
which could not have been the object of the
obligation. (1132)
Art. 1201. The choice shall produce no effect
except from the time it has been communicated.
Art. 1204. 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.
Art. 1206. When only one prestation has been
agreed upon, but the obligor may render
another in substitution, the obligation is called
facultative.
Art. 1214. The debtor may pay
any one of the solidary
creditors; but if any demand,
judicial or extrajudicial, has
been made by one of them,
payment should be made to
him.
Art. 1217. Payment made by one of the
solidary debtors extinguishes the
obligation. If two or more solidary debtors
offer to pay, the creditor may choose which
offer to accept.
Art. 1218. Payment by a
solidary debtor shall not entitle
him to reimbursement from his
co-debtors if such payment is
made after the obligation has
prescribed or become illegal.
Art. 1225. For the purposes of the preceding articles,
obligations to give definite things and those which are
not susceptible of partial performance shall be deemed
to be indivisible.

When the obligation has for its object the execution of a

certain number of days of work, the accomplishment of
work by metrical units, or analogous things which by
their nature are susceptible of partial performance, it
shall be divisible.

However, even though the object or service may be

physically divisible, an obligation is indivisible if so
provided by law or intended by the parties.
Art. 1226. In obligations with a penal clause, the
penalty shall substitute the indemnity for
damages and the payment of interests in case of
noncompliance, if there is no stipulation to the
contrary. Nevertheless, damages shall be paid if
the obligor refuses to pay the penalty or is guilty
of fraud in the fulfillment of the obligation.
Art. 1230. The nullity of the penal clause does
not carry with it that of the principal
obligation.
The nullity of the principal obligation carries
with it that of the penal clause.
MODULE III
EXTINGUISHMENT OF OBLIGATIONS
Obligations are extinguished by:
Payment or performance – Ex. A owes B P/ 50.00. A paid B the P/50.00 on due date. The obligation is extinguished by payment
Ex. A promised to paint B’s room. A, on Sunday, painted B’s room. The obligation of A to B is extinguished by performance
Loss of the thing due (the thing must be specific and not generic because
generic thing can be replaced; the loss must be without the fault of the
debtor because if he is at fault the obligation is not extinguished.
Ex. A promised to give B his only car. The car was stolen without the fault of A. The obligation of A to B is extinguished.
Ex. A promised to give B his only car. A parked the car in front of their house and
forgot to lock the doors. The following day, the car was stolen. Is the obligation
extinguished? No, because the car got lost due to A’s negligence. A is liable for
damages to B.
Ex. A promised to give B a car. The one he had in mind was his Porsche. The said Porsche was stolen. The obligation is not extinguished because the Porsche can be replaced by another car since this
is a generic thing.
 By the condonation or remission of the debt (forgiveness,
abandonment of the right of the creditor). Condonation can be
applied either for one debtor only or several or all the debtors.
Ex. A owes B P/ 20 thousand. B told A not to pay him anymore. There is condonation here.
Ex. A and B owe C P/ 20 thousand. C told A not to pay him anymore. Is the obligation extinguished? Yes, only as far as A is concerned. The obligation still subsists as far as B is concerned because the condonation or remission was only
made applicable for one of the debtors.
A debt already prescribed cannot be condoned.
Confusion or merger of the rights of the creditor and debtor in one person.
This case is wherein the personality of the debtor and the creditor are merged in one person. It normally happens in the case of a negotiable instrument. There is only one person who has in his possession the document.
Ex. A made a promissory note payable to B order for P/ 20,000.00. B indorsed it to C, C to D, D to E, E to F. F owes A the same amount. He indorsed the same promissory note to A. A now becomes the debtor and the creditor. The debtor because he issued the
promissory note and a creditor because F owed him money.
Compensation – a situation where the debtor and creditor are debtor and creditor to each other. Compensation may be total or partial.
Example: On February 1, 2012, A borrowed from B P/ 5,000.00 payable on February 29, 2012. On February 15, 2012, B borrowed from A P/ 2,500.00 payable also on February 2012. In this case,
both A and B owe each other a sum of money. This is a partial compensation since on February 29, 2012, A still owes B P/ 2,500.00.
Novation – or change either in the object of the obligation or the parties.
IF the debtor is changed to another person, there is substitution of obligation. If the creditor is changed to another person, there is subrogation of rights. If both the object of the obligation and the party or parties is/are
changed, there is mixed novation.
Example: A promised to give B a radio on Saturday. However, instead of giving B a radio, A will instead give B a cell phone. There is novation of the object of the obligation.
A promised to pay B on Saturday. However, A has to leave for Japan. So he told B that his son C will just pay B on Saturday. Here there is substitution
A promised to pay B on Saturday. However, B has to go to the U.S. So, B’s son C will be subrogated over him.
9. Death of either party – this is only true for real obligations. Because personal obligations are not transferrable.
 10. Prescription – meaning that the obligation has already prescribed.
There is a prescription in the payment of a sum of money. Collection of a sum of money normally prescribes in ten years. Thus, after ten years, you cannot collect anymore from the debtor.
11. Effects of special laws – as in the case of insolvency. Thus, when the debtor becomes insolvent (meaning he has more liabilities than assets), and the court proves him to be such, the creditor cannot collect from him anymore.
MODULE IV
•Contract – is a meeting of minds between two
or more persons whereby one binds himself with
respect to the other to giving something or to
render some service.

Elements of a contract:
Essential: consent of the parties; object or subject
matter; and cause or consideration
Natural: those the existence of which is presumed by
law unless there is an agreement to the contrary. Ex.
Warranty in case of eviction in a contract of sale
Accidental: consist of the unusual stipulation of the
parties such as conditions, terms. Etc. Ex. The interest
agreed upon in a contract of loan.
 • Classification of contracts:
•Express – shown in words either written or oral
•Implied – shown by conduct or gestures
•Executed – already been performed
•Executory – one not yet performed
•Nominate – with special name or designation in the
Civil Code. Ex. Contract of Sale, Lease Contract,
Marriage Contract, Employment Contract.
•Innominate – no special name or designation in the
Civil Code. Classes of innominate contracts:
•Do ut des (I give that you give)
•Do ut facias (I give that you make)
•Facio ut des (I make that you give)
•Facio ut facias ( I make that you make)
•Consensual – perfected by mere consent
•Real – perfected by the delivery of the
thing which is the object of the contract
(ex. Deposit, pledge, commodatum)
•Unilateral – only one of the parties has an
obligation
•Bilateral – reciprocal obligations – both
parties are obligated to each other
•Any person who induces someone to violate his
contract is also liable for damages to the other
contracting party
•An offer made to and accepted by an agent is
binding on the principal if the agent acted with
authority and within the scope of authority given
him by the principal.
•Business advertisements of things for sale are
mere invitations to make an offer.

•Usual exaggerations in trade, when the other

party had an opportunity to know the facts, are not
in themselves fraudulent.

• A mere expression of opinion doers not signify

fraud unless made by an expert and the other party
has relied on the former’s special knowledge.
 Essential requisites of a contract:
•Consent of the parties – should be of legal age, not
demented or insane, not deaf-mute who does not
know how to write. Consent must be given freely
and voluntarily. A contract where consent is given
through mistake, violence, intimidation, undue
influence or fraud is voidable (can be cancelled).

•Object – must be not contrary to law, morals, public

policy, public order, or impossible

•Cause or consideration – cause is the reason or

motive for the contract; consideration is the value
received or given by virtue of the contract.
 Form of contract:
Contracts are effective whether in written or oral
form. However, the following should appear in a
document:

•Donation or sale of real property

•Donation of personal property the value of which
exceeds P/ 5,000.00
•Authority of an agent to sell real property
•Contracts involving immovable
•Sale or large cattle
•Negotiable instruments
•Contracts falling under the Statute of Frauds
 The following must appear in a public document (a
document filed in a public office and kept there):

•All contracts involving immovable or real property

•Cession, repudiation or renunciation of hereditary

rights or those of conjugal partnership of gains

•Power to administer the properties of another

(agency)

•Cession of action or rights proceeding from an act

appearing in a public document.
Reformation of instrument – where the contract fails
to express the true will of the parties, the remedy is
reformation; if it is a mere typographical error, it is a
mere correction of the error, not reformation.
Interpretation of contract – when the contract is very
clear, there is no need to interpret it in no other way
than what is written. Interpretation must consider
the usage of the trade or place where the contract is
executed.
Module v
DEFECTIVE CONTRACTS
A. Rescissible contracts:
Art. 1381. The following contracts are rescissible:

(1) Those which are entered into by guardians whenever

the wards whom they represent suffer lesion by more
than one-fourth of the value of the things which are the
object thereof;

(2) Those agreed upon in representation of absentees, if

the latter suffer the lesion stated in the preceding
number;

(3) Those undertaken in fraud of creditors when the

latter cannot in any other manner collect the claims due
them;
(4) Those which refer to things under litigation if they have
been entered into by the defendant without the knowledge
and approval of the litigants or of competent judicial
authority;

(5) All other contracts specially declared by law to be

subject to rescission. (1291a)

Art. 1389. The action to claim rescission must be

commenced within four years.

For persons under guardianship and for absentees, the

period of four years shall not begin until the termination of
the former's incapacity, or until the domicile of the latter is
known. (1299)
B. VOIDABLE CONTRACTS

Art. 1390. The following contracts are voidable or

annullable, even though there may have been no damage to
the contracting parties:

(1) Those where one of the parties is incapable of giving

consent to a contract;

(2) Those where the consent is vitiated by mistake, violence,

intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by
a proper action in court. They are susceptible of
ratification. (n)

Art. 1391. The action for annulment shall be brought

within four years.

This period shall begin:

In cases of intimidation, violence or undue influence,

from the time the defect of the consent ceases.

In case of mistake or fraud, from the time of the

discovery of the same.
And when the action refers to contracts
entered into by minors or other incapacitated
persons, from the time the guardianship
ceases. (1301a)

Art. 1392. Ratification extinguishes the action

to annul a voidable contract. (1309a)
C. UNENFORCEABLE CONTRACTS (n)
Art. 1403. The following contracts are unenforceable,
unless they are ratified:
(1) Those entered into in the name of another person
by one who has been given no authority or legal
representation, or who has acted beyond his powers;
(2) Those that do not comply with the Statute of
Frauds as set forth in this number. In the following
cases an agreement hereafter made shall be
unenforceable by action, unless the same, or some
note or memorandum, thereof, be in writing, and
subscribed by the party charged, or by his agent;
evidence, therefore, of the agreement cannot be
received without the writing, or a secondary evidence
of its contents:
(a) An agreement that by its terms is not to be performed
within a year from the making thereof;

(b) A special promise to answer for the debt, default, or

miscarriage of another;

(c) An agreement made in consideration of marriage,

other than a mutual promise to marry;
(d) An agreement for the sale of goods, chattels or things in
action, at a price not less than five hundred pesos,
unless the buyer accept and receive part of such goods
and chattels, or the evidences, or some of them, of such
things in action or pay at the time some part of the
purchase money; but when a sale is made by auction
and entry is made by the auctioneer in his sales book, at
the time of the sale, of the amount and kind of property
sold, terms of sale, price, names of the purchasers and
person on whose account the sale is made, it is a
sufficient memorandum;

(e) An agreement of the leasing for a longer period than

one year, or for the sale of real property or of an
interest therein;
(f) A representation as to the credit of a third person.

(3) Those where both parties are incapable of giving

consent to a contract.
 D. VOID AND INEXISTENT CONTRACTS

Art. 1409. The following contracts are inexistent and

void from the beginning:

(1) Those whose cause, object or purpose is contrary to

law, morals, good customs, public order or public policy;

(2) Those which are absolutely simulated or fictitious;

(3) Those whose cause or object did not exist at the time
of the transaction;

(4) Those whose object is outside the commerce of men;

(5) Those which contemplate an impossible service;

(6) Those where the intention of the parties relative to

the principal object of the contract cannot be
ascertained;

(7) Those expressly prohibited or declared void by law.

These contracts cannot be ratified. Neither can the right

to set up the defense of illegality be waived.
Art. 1411. When the nullity proceeds from the illegality of
the cause or object of the contract, and the act constitutes a
criminal offense, both parties being in pari delicto, they
shall have no action against each other, and both shall be
prosecuted. Moreover, the provisions of the Penal Code
relative to the disposal of effects or instruments of a crime
shall be applicable to the things or the price of the
contract.

This rule shall be applicable when only one of the parties is

guilty; but the innocent one may claim what he has given,
and shall not be bound to comply with his promise. (1305)
Art. 1413 - Interest paid in excess of the interest
allowed by the usury laws may be recovered by the
debtor, with interest thereon from the date of the
payment.
Art. 1417. - When the price of any article
or commodity is determined by statute, or
by authority of law, any person paying any
amount in excess of the maximum price
allowed may recover such excess.
Art. 1418. When the law fixes, or authorizes
the fixing of the maximum number of hours
of labor, and a contract is entered into
whereby a laborer undertakes to work
longer than the maximum thus fixed, he may
demand additional compensation for service
rendered beyond the time limit.
Art. 1419. When the law sets, or
authorizes the setting of a minimum wage
for laborers, and a contract is agreed
upon by which a laborer accepts a lower
wage, he shall be entitled to recover the
deficiency.
END OF SESSION