OBLIGATIONS AND CONTRACTS

Chapter 1GENERAL PROVISIONS

Art. 1156

Definition of Obligation-a juridical necessity to give, to do or not

to do.-a juridical relation whereby a person (called the creditor)
may demand from another (called the debtor) the observance of a
determinate conduct (the giving, doing, or notdoing), and in case
of breach, may demand satisfaction from the assets of the
latter.( Arias Ramos, p. 74)

Judicial necessity because non-compliance can result in judicial

or legal sanction.

Elements of Obligation:1)an active subject (obligee or

creditor): the possessor of a right; he in whose favor the
obligation is constituted;2)a passive subject (obligor or debtor):
he who has the duty of giving, doing or notdoing;
3)
the object or prestation: the subject matter of the obligation; it
may consist of giving a thing, or doing or not doing a certain act;
4)
the efficient cause (vinculum or juridical tie): the reason why
the obligation existsand
5)

Causa (
causa debendi/causa obligationes) - why obligation exists
Requisites of Object:
a.
licit
- if illicit, it is void
b.
possible if impossible, it is void
c.
determinate or determinable
- or else, void
d.pecuniary value

Kinds of Obligations1)From the viewpoint of

sanctiona)civil obligation (perfect obligation) : defined
in Art. 1156, Civil Code, andsanctioned by judicial
processb)natural obligation: the duty not to recover
what has voluntarily been paidalthough payment was no longer
required: it is sanctioned by law, but only because conscience had
originally motivatedthe paymentExample: Knowing that it already
prescribed, a debtor still paid his debt to thecreditor.c)moral
obligation: sanctioned by conscience or morality, or the laws of
thechurch.Example: the duty of a catholic to hear mass on
Sundays2)From the viewpoint of subject matter a)real obligation:
the obligation to giveb)personal obligation: to obligation to do or
not to do3)From the affirmativeness and negativeness of

the obligationa)positive or affirmative obligation: the obligation

to give or to dob)negative obligation: the obligation not to give or
not to do4)From the persons obligeda)unilateral: when only one of
the parties is boundb)bilateral: where both parties are or may be
boundi)reciprocal: the performance of one is dependent upon the
performance of the other ii)non-reciprocal: the performance of
one is not dependent on theperformance by the other

Article 1157, Articles 1158-62 Art. 1157

Sources of Obligation (LCQAQ)

1)
Law,
(
OBLIGATION EX LEGE
) - Must be expressly or impliedly set forth andcannot be
presumed
2)
Contracts,

(OBLIGATION EX CONTRACTU
) - Must be complied with in goodfaith because it is the law
between parties; neither party may unilaterally evadehis
obligation in the contract,
unless:
a)contract authorizes itb)other party assents

Parties may freely enter into any stipulations, provided they are
not contrary to law,morals, good customs, public order or public
policy
3)
Quasi-contracts (
OBLIGATION EX QUASI-CONTRACTU
) - That juridicalrelation resulting from a lawful, voluntary and
unilateral act, and which has for itspurpose, the payment of
indemnity to the end that no one shall be unjustlyenriched or
benefited at the expense of another
4)
Acts or omissions punishable by law/Delicts (
OBLIGATION EX MALEFICIO OR EX DELICTO
) and
5)
Quasi delicts/Torts (
OBLIGATION EX QUASI-DELICTO or EX QUASIMALEFICIO
) - It is a fault or act of negligence ( or omission of care )
whichcauses damage to another, there being no pre-existing cont
ractual relationsbetween the parties
Art. 1158
: law

Obligations derived from law are1)not presumed but must

be expressly determined in this Code or other
speciallaws;2)regulated by the precepts of law which establishes

them; and as to what nothas been foreseen, by the provisions of

this book.
Art. 1159
: contracts

Obligations arising from contracts:1)have the force of law

between the parties; and

meaning that neither party may unilaterally and upon his own
exclusive volition,escape his obligations under the contract,
unless the other party assented thereto,
or unless for causes sufficient in law and pronounced adequate by
a competenttribunal. (p. 81)2)should be complied with in good
faith.

Compliance in good faith means that we must interpret not by

the letter that killethbut by the spirit that giveth life. (p. 81)

Principle of Privity of Contracts: The terms of the contract cannot

be extended tothird parties or those not included in the contract.
Article 1160
: quasi-contracts

Obligations derived from quasi-contract shall be subject to

the provisions of Chapter 1, Title XVII, of this Book.

Definition of Quasi-contract: that juridical relation resulting from a

lawful, voluntary,and unilateral act, and which has for its purpose
the payment of indemnity to the endthat no one shall be unjustly
enriched or benefited at the expense of another. (Art.2142, Civil
Code)

Kinds of Quasi-contract1)Negotiorium gestio (unauthorized

management): takes place when a personvoluntarily takes charge
of anothers abandoned business or property withoutthe owners
authority;

Reimbursement should be made to the gestor for necessary and

useful expenses.2)Solutio Indebiti (undue payment) : takes place
when something is receivedwhen there is no right to demand it,
and it was unduly delivered by mistake.

The recipient has the duty to return what was received.

Art. 1161
: Ex Delicto or Ex Maleficio

Rules that govern:1)pertinent provisions of the Revised Penal

Code and other penal laws, subject tothe provisions of Art. 2177,
Civil Code;2)Chapter 2, Preliminary Title, on Human Relations of
the Civil Code;3)Title 18 of Book IV of the Civil Code (on
damages).
What civil liability arising from a crime includes:

a.restitutionb.reparation of damage
causedc.indemnity for consequential damages
Effect of acquittal in criminal case:

when acquittal is due to reasonable doubt

no civil liability

when acquittal is due to exempting circumstances

there is civil liability

when there is preponderance of evidence

there is civil liability
Art. 1162
: Ex Quasi-Delicts or Ex Quasi-Maleficio

Rules that govern:1)Chapter 2, Title 17, Book IV, Civil

Code2)Special laws.

Definition of Quasi-delict: a fault or act of negligence (or omission

of care), whichcauses damages to another, there being no preexisting contractual relationsbetween the parties.

Definition of Negligence: the omission of that diligence which is

required by thecircumstances of person, place and time (Art.
1173)


Requirements before a Person can be held Liable for a Quasi
Delict1)There must be fault or negligence attributable to the
person charged;2)There must be damage or injury;3)There must
be a direct relation
of cause and effect between the fault or negligence on the
one hand and the damage or injury on the other hand(proximate
cause).

Proximate cause is that adequate and efficient cause, which

in the natural order of events, necessarily produces the damages
or injury complained of. (p. 102)
In Sagrada v. Naccoco, the Supreme Court held that the sources
of obligationin Art 1157 is exclusive. Many commentators believe,
however that it should not be. At present, there is one more
possible source of obligations - PUBLIC OFFER (Public Offer is in
fact a source of obligation in the German Civil Code)