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DEFINITION OF OBLIGATION

The term obligation is derived from the Latin word obligatio which means tying or binding. It is a tie or bond recognized by law by virtue of which one is bound in favor of another to render something and this may consist in giving a thing, doing a certain act, or not doing a certain act.

Obligation, definition

SOURCES OF OBLIGATION
Obligations arise from: 1. 2. 3. Law when they are imposed by law itself. Contracts when they arise from the stipulation of the parties. Quasi-contracts when they arise from lawful, voluntary, and unilateral acts. Acts or omissions punished by law when they arise from civil liability which is the consequence of a criminal offense. Quasi-delicts when they arise from damage caused to another through an act or omission.

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Obligation, sources

KINDS OF OBLIGATION

1.

Pure and conditional obligations Pure obligation is one which is not subject to any condition and is immediately demandable. Conditional obligation is one whose consequences are subject in a way or another to the fulfillment of a condition.

2.

Obligations with a period An obligation with a period is one whose consequences are subjected in one way or another to the expiration of said period or term.

Obligation, kinds

3.

Alternative obligations An alternative obligation is one wherein various prestations are due but the performance of one of them is sufficient as determined by the choice which, as a general rule, belongs to the debtor.

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Joint and solidary obligations Joint obligation is one where the whole obligation is to be paid or fulfilled proportionately by the different debtors and/or is to be demanded proportionately by the different creditors. Solidary obligation is one where each one of the debtors is bound to render, and/or each one of the creditors has a right to demand from any of the debtors, entire compliance with the prestation.

Obligation, kinds

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Divisible and indivisible obligations Divisible obligation is one the object of which, in its delivery or performance, is capable of partial fulfillment. Indivisible obligation is one the object of which, in its delivery or performance, is not capable of partial fulfillment.

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Obligations with a penal clause A penal clause is an accessory undertaking attached to an obligation to assume greater liablity in case if breach, i.e., the obligation is not fulfilled, or is partly or irregularly complied with.

Obligation, kinds

DEFINITION OF CONTRACTS

A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something, or to render some service.

Contracts, definition

STAGES IN THE LIFE OF A CONTRACT

1.

Preparation or negotiation this includes all the steps taken by the parties leading to the perfection of the contract. Perfection or birth this when the parties have come to a definite agreement or meeting of the minds regarding the subjects matter and cause of the contract. Consummation or termination this is when the parties have performed their respective obligations and the contract may be said to have been fully accomplished or executed, resulting in the extinguishment or termination thereof.

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Contracts, life stages

CLASSIFICATIONS OF CONTRACTS
Classification according to its name or designation: 1. Nominate contract that which has a specific name or designation in law. 2. Innominate contract that which has no specific name or designation in law. Classification according to perfection: 1. Consensual contract that which is perfected by mere consent. 2. Real contract that which is perfected by the delivery of the thing subject matter of the contract. 3. Solemn contract that which requires compliance with certain formalities prescribed by law, such prescribed form being thereby an essential element thereof.
Contracts, classifications

 Classification according to cause: 1. Onerous the cause of which, for each contracting party is the prestation or promise of a thing or service by the other. 2. Remuneratory the cause of which is the service or benefit which is remunerated. 3. Gratuitous the cause of which is the liberality of the benefector or giver. Classification according to form: 1. Informal that which may be entered into in whatever form provided all the essential requisites for their validity are present. 2. Formal that which is required by law for its efficacy to be in a certain specified form.
Contracts, classifications

FREEDOM TO CONTRACTS

The right to enter into contract is one of the liberties guaranteed to the individual by the Constitution. However, the constitutional prohibitions against the impairment of contractual obligations refers only to legally valid contracts. In other words, an individual does not have an absolute right to enter into any kind of contract. Limitations to contractual stipulations: 1. Law 2. Police power

Contracts, freedom