OBLIGATIONS & CONTRACTS

2010 BAR REVIEW

SAN SEBASTIAN COLLEGE

A.

OBLIGATION

1.

DEFINITION ART. 1156, CIVIL CODE

2.

CIVIL OBLIGATION NATURAL OBLIGATION (Art. 1423)

CIVIL OBLIGATION MORAL OBLIGATION

2. ELEMENTS:
2.a) PARTIES
2.b) OBJECT PRESTATION (TO GIVE, TO DO, NOT TO DO)
- Determinate, Useful, Lawful, Assessible in Money,
Possible
2.c) SANCTION JURIDICAL TIE

3. KINDS OF OBLIGATIONS:
3.a) ACCORDING TO THE PECULIARITIES OF THE PRESTATION PURE,
CONDITIONAL, WITH A PERIOD.
3.b) ACCORDING TO NUMBER OF PARTIES JOINT, SOLIDARY
3.c) ACCORDING TO PRESTATIONS TO BE RENDERED INDIVIDUAL,
MULTIPLE (ALTERNATIVE, FACULTATIVE)
3.d) ACCORDING TO QUALITIES OF OBJECT POSITIVE/NEGATIVE,
SPECIFIC/GENERIC, DIVISIBLE/INDIVISIBLE, PRINCIPAL/ACCESSORY.

5. SOURCES OF AN OBLIGATION: (ART. 1157)

5.a) LAW
5.b) CONTRACTS ART. 1305
5.c) QUASI-CONTRACTS NEGOTIORUM GESTIO (ART. 2144);
SOLUTIO INDEBITI (ART. 2154)
5.d) DELICT ART. 100, RPC, RULE 111, SEC. 1, RULES OF COURT;
ARTS. 29, 30, 32, 33, 34, 35 OF THE NCC.
5.e) QUASI-DELICT ARTS. 1162, 2176

6. DUTIES OF OBLIGOR.
6.a) PRESTATION TO GIVE SPECIFIC THING
- PRINCIPAL OBLIGATION TO DELIVER DETERMINATE THING (ART. 1244)
- ACCESSORY OBLIGATIONS:
I) TO PRESERVE THE THING DILIGENCE OF A GOOD FATHER (ART. 1163)
GENERAL RULE
EXCEPTIONS:
(a) ART. 1733 COMMON CARRIERS OVER GOODS, EXTRA-ORDINARY
DILIGENCE
(b) ART. 1755 PASSENGERS, UTMOST DILIGENCE
(c ) ART. 2000 INN KEEPERS

QUERY: CAN PARTIES, BY STIPULATION, VARY THE REQUIRED

DEGREE OF DILENCE?
ANS.: GENERAL RULE, YES.
EXCEPTIONS: (a) LAW PROHIBITS SAID STIPULATION.
EXAMPLES INN KEEPERS (ART. 2003) AND COMMON
CARRIERS OF PASSENGERS (ART. 1757)
II) TO DELIVER ACCESSIONS AND ACCESSORIES EVEN NOT
MENTIONED (ART. 1166).
III) TO DELIVER FRUITS (ART. 1164) FROM TIME OBLIGATION TO
DELIVER ARISES.

6.b) PRESTATION TO GIVE GENERIC THING

PRINCIPAL OBLIGATION DELIVER THING OF THE QUALITY SPECIFIED
(ART. 1246)

-NO LEGAL ACCESSORY UNTIL THING TO BE DELIVERED HAS

BEEN INDIVIDUALIZED.
6.c) PRESTATION TO DO
- PERFORM THE ACT AS PROMISED AND NOT SUBSTITUTE IT
(ART. 1244)
- SHALL BE EXECUTED AT THE COST OF DEBTOR (ART. 1167)

 6.d) PRESTATION NOT TO DO

- DEBTOR MUST NOT PERFORM CONDUCT
PROHIBITED.
- IF DEBTOR DOES WHAT HAS BEEN
FORBIDDEN, SHALL BE UNDONE AT DEBTORS
EXPENSE (ART. 1168)
7. DELAY ART. 1169
-MORA OE DELAY IS FAILURE TO PERFORM
THE OBLIGATION IN DUE TIME THRU MALICE
OR NEGLIGENCE.

KINDS OF MORA:
(a) MORA SOLVENDI MORA OF DEBTOR
(b) MORA ACCIPIENDI MORA OF CREDITOR
(c ) COMPENSATIO MORAE MORA OF BOTH
CREDITOR AND DEBTOR
GENERAL RULE : NO DEMAND, NO DELAY
EXCEPTIONS:
(a) OBLIGATION OR LAW EXPRESSLY SO
DECLARES.
(b) TIME CONTROLLING MOTIVE FOR
ESTABLISHMENT OF CONTRACT.
(c ) DEMAND WOULD BE USELESS

NOTE: RECIPROCAL OBLIGATION FROM

THE MOMENT ONE PARTY FULFILLS HIS
OBLIGATION, DELAY BY THE OTHER
BEGINS.

8. FORTUITOUS EVENT ART. 1174

GENERAL RULE FORTUTITOUS EVENT
EXTINGUISHES THE OBLIGATION.

REQUISITES OF FORTUITOUS EVENT AS A BASIS OF

EXEMPTION FROM LIABILITY (LASAM VS. SMITH, 45 PHIL.
657):
(a) MUST BE INDEPENDENT OF HUMAN WILL
(b) IMPOSSIBLE TO FORESEE OR IF IT CAN BE FORESEEN,
IMPOSSIBLE TO AVOID.
(c) IMPOSSIBLE FOR DEBTOR TO FULFILL OBLIGATION IN A
NORMAL WAY.
(d) DEBTOR HAS NO CONCURRENT FAULT.

EXCEPTIONS DEBTOR STILL LIABLE:

(a) WHEN EXPRESSLY SPECIFIED BY LAW ART.
1942 (BAILEE); ART. 2001 (THIEF IN A HOTEL); ART.
2147 (OFFICIOUS MANAGER.
(b) DECLARED BY STIPULATION.
(c ) ASSUMPTION OF RISK ARTS. 1717 and 1724
(CONTRACTOR)
(d) DEBTOR IN DELAY ART. 1165, PAR. 3
(e) DEBTOR GUILTY OF NEGLIGENCE OR FAULT.

9. REMEDIES GIVEN TO CREDITOR IN CASE OF BREACH:

9.A) OBLIGATION TO GIVE SPECIFIC THING ACTION

FOR SPECIFIC PERFORMANCE PLUS DAMAGES; OR
RESCISSION PLUS DAMAGES.
9.B) OBLIGATION TO GIVE GENERIC THING ACTION
FOR SUBSTITUTED PERFORMANCE PLUS DAMAGES
(ART. 1165, PAR. 2)
9.C) OBLIGATION TO DO ACTION FOR SUBSTITUTED
PERFORMANCE UNLESS PERSONAL QUALITIES OF
DEBTOR WERE CONSIDERED (ART. 1167, PAR. 1);
ACTION FOR DAMAGES; IF IMPROPERLY EXECUTED,
WHAT WAS POORLY DONE BE UNDONE (ART. 1167,
PAR. 2)
9.D) OBLIGATION NOT TO DO ACTION FOR DAMAGES;
TO UNDO FORBIDDEN ACT DONE AT EXPENSE OF
DEBTOR (ART. 1168)

10. SUBSIDIARY REMEDIES OF CREDITOR :

(a) ACCION SUBROGATORIA
(b) ACCION PAULIANA ACCION
PUBLICIANA
(c ) ACTION TO DECLARE THE NULLITY OF
ABSOLUTELY SIMULATED TRANSFERS
(ART. 1409).

11. KINDS OF OBLIGATION:

11.a) ACCORDING TO THE PECULIARITIES OF THE
PRESTATION
i ) PURE OBLIGATION DEMANDABLE AT ONCE.
ii) WITH A CONDITION FUTURE AND UNCERTAIN EVENT.
(a) SUSPENSIVE CONDITION
(b) RESOLUTORY CONDITION

(iii) WITH A PERIOD FUTURE AND CERTAIN EVENT

(a) SUSPENSIVE PERIOD
(b) RESOLUTORY PERIOD
(iv) RULES GOVERNING LOSS, DETERIORATION,
IMPROVEMENT OF THING WHILE CONDITION IS PENDING
(ART. 1189)
DEFINITION OF LOSS A THING IS LOST WHEN IT
PERISHES, GOES OUT OF THE COMMERCE OF MEN, OR
DISAPPEARS, SO THAT ITS EXISTENCE IS UNKNOWN OR
IT CAN NOT BE RECOVERED.

SUSPENSIVE/RESOLUTORY CONDITION
(a.1) LOSS WITHOUT FAULT OF DEBTOR,
OBLIGATION IS EXTINGUISHED; WITH FAULT OF
DEBTOR, LIABLE FOR DAMAGES.
(a.2) DETERIORATION WITHOUT FAULT OF
DEBTOR, IMPAIRMENT TO BE BORNE BY
CREDITOR; WITH FAULT OF DEBTOR, CREDITOR
HAS 2 OPTIONS, RESCISSION PLUS DAMAGES
OR FULFILLMENT PLUS DAMAGES.
(a.3) IMPROVEMENT IMPROVED BY NATURE,
BENEFITS CREDITOR; AT THE EXPENSE OF
DEBTOR, RIGHT OF A USUFRUCTUARY, REMOVE
IMPROVEMENT OR SET OFF.

11.b) ACCORDING TO PRESTATIONS TO BE RENDERED

INDIVIDUAL, MULTIPLE (ALTERNATIVE, FACULTATIVE)
(i) ALTERNATIVE OBLIGATION SEVERAL
PRESTATIONS ARE DUE BUT THE PAYMENT OR
PERFORMANCE OF ONE OF THEM WOULD BE
SUFFICIENT TO EXTINGUISH THE OBLIGATION.
(ii) FACULTATIVE OBLIGATION ONLY ONE
PRESTATION WAS AGREED UPON AND IS DUE BUT
OBLIGOR MAY DELIVER OR RENDER ANOTHER IN
SUBSTITUTION.
WHO HAS RIGHT OF CHOICE? IN ALTERNATIVE, DEBTOR
OR CREDITOR OR 3RD PERSON (ART. 1200, PAR. 1; ART.
1309).
IN FACULTATIVE, DEBTOR.

11.c) ACCORDING TO NUMBER OF PARTIES JOINT,

SOLIDARY
(i) JOINT OBLIGATION MANCOMUNADA
CONCURRENCE OF SEVERAL CREDITORS OR DEBTORS
AND CREDITORS CAN DEMAND FROM EACH DEBTOR
ONLY HIS PROPORTIONATE SHARE.
(ii) SOLIDARY OBLIGATION CONCURRENCE OF
SEVERAL CREDITORS OR DEBTORS AND CREDITORS
CAN DEMAND FROM ONE DEBTOR THE FULFILLMENT
OF THE ENTIRE OBLIGATION.
RULE : THERE IS SOLIDARY LIABILITY IF:
(a) EXPRESSLY STIPULATED.
(b) LAW OR NATURE REQUIRES SOLIDARITY EXAMPLES: Art. 2194 QUASI-DELICT; ART. 119, R.P.C. CO-PRINCIPALS,
CO-ACCOMPLICES, CO-ACCESSORIES; ART. 1945 - BAILEE

 EFFECTS OF A JOINT INDIVISIBLE

OBLIGATION:
(a) IF ANYONE OF THE DEBTORS IS
INSOLVENT, OTHERS SHALL NOT BE LIABLE
FOR HIS SHARE.
EFFECTS OF REMISSION UPON A SOLIDARY
OBLIGATION IT DEPENDS:
(a) TOTAL REMISSION EXTINGUISHES THE
WHOLE DEBT FOR ALL DEBTORS.
(b) PARTIAL REMISSION REDUCES THE
AMOUNT DUE BUT BALANCE REMAINS A
SOLIDARY CREDIT.

11.d) ACCORDING TO QUALITIES OF OBJECT

POSITIVE/ NEGATIVE, SPECIFIC/ GENERIC,
DIVISIBLE/ INDIVISIBLE, PRINCIPAL/
ACCESSORY.
(i) INDIVISIBLE OBLIGATION BY RTEASON OF
THEIR PURPOSE, ARE NOT SUSCEPTIBLE OF
BEING EXECUTED/ PERFORMED BY PARTS OR
FRACTIONS.
(ii) DIVISIBLE OBLIGATION CAN BE
EXECUTED OR PERFORMED BY PARTS OR
FRACTION.

GENERAL RULE INDIVISIBILITY (ARTS. 1233PAYMENT AND 1248- PARTIAL PAYMENTS)

EXCEPTIONS: OBLIGATIONS PARTLY LIQUIDATED
(ART. 1248,
PAR. 2); INSTALLMENT CONTRACTS
(ART. 1720,
PAR. 2); PARTIAL IILLEGALITY AND
OBLIGATION IS
DIVISIBLE (ART. 1420).
(iii) OBLIGATION WITH A PENAL CLAUSE
ACCESSORY OBLIGATION, STIPULATED FOR
BREACH OF SOME OBLIGATIONS AGREED UPON.