Professional Documents
Culture Documents
LAW REVIEW 2
I. OBLIGATIONS
II. CONTRACTS
a. SPECIAL CONTRACTS
1) SALE
2) BARTER
3) LEASE
4) LOAN
5) DEPOSIT
6) ALEATORY CONTRACTS
7) GUARANTY AND
SURETYSHIP
8) PLEDGE, MORTGAGE,
ANTICHRESIS
b. PREPARATORY CONTRACTS
1) AGENCY
2) PARTNERSHIP
3) TRUSTS
III. EXTRA-CONTRACTUAL
OBLIGATIONS
a. LAW
b. QUASI-CONTRACTS
c. DELICTS
d. QUASI-DELICTS
IV. DAMAGES
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C. DISJUNCTIVE there are several obligations and
only one or some of them must be fulfilled
I. OBLIGATIONS
(A.) IN GENERAL
(B.) SOURCES
(C.) COMPLIANCE
(D.) KINDS OF CIVIL OBLIGATIONS
(E.) BREACH
(F.) REMEDIES FOR BREACH
(G.) MODES OF EXTINGUISHMENT
4. AS TO PERFORMANCE OF PRESTATION
(ARTS. 1221-1225, 1209-1210)
(A.) IN GENERAL
A. DIVISIBLE
B. INDIVISIBLE
C. JOINT INDIVISIBLE
D. SOLIDARY INDIVISIBLE
PRESCRIPTION OF ACTIONS
I. Manner of Breach
3. ELEMENTS OF OBLIGATIONS
4.
5.
1.
2.
II.
1.
2.
3.
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EXTRA-JUDICIAL REMEDIES
EXPRESSLY GRANTED BY LAW ARTS. 1786,
1788, 1526
STIPULATED
JUDICIAL REMEDIES
PRINCIPAL REMEDIES ARTS. 1191, 1170
SUBSIDIARY REMEDIES ARTS. 1380, 1177
ANCILLARY REMEDIES RULES OF COURT
PAYMENT OR PERFORMANCE
ARTS. 1232-44, 1246-51, 1302
RA 8183
PD 72, SECS. 31-32
SPECIAL FORMS OF PAYMENT
A. DATION IN PAYMENT ART. 1245
B. APPLICATION OF PAYMENTS ARTS. 1252-54, 1248
C. PAYMENT BY CESSION OR ASSIGNMENT ART.
1255
D. TENDER OF PAYMENT AND CONSIGNATION
ARTS. 1256-61
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2.
3.
4.
5.
6.
KINDS OF NOVATION
A. AS TO ITS NATURE
1. SUBJECTIVE OR PERSONAL
2. OBJECTIVE RO REAL
B. AS TO ITS FORM
1. EXPRESS
2. IMPLIED
7.
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I. OBLIGATIONS
A. IN GENERAL
1. DEFINITION
Art. 1156
Art. 1156. An obligation is a juridical necessity to
give, to do or not to do.
2. KINDS OF OBLIGATIONS AS TO BASIS &
ENFORCEABILITY
Arts. 1423-1430; 1139-1155
Title III. - NATURAL OBLIGATIONS
Art. 1423. Obligations are civil or natural.
Civil obligations
o Give a right of action to compel their
performance.
Natural obligations
o Not being based on positive law but on
equity and natural law,
o Do not grant a right of action to enforce
their performance,
o But after voluntary fulfillment by the
obligor,
o They authorize the retention of what has
been delivered or rendered by reason
thereof.
Cannot recover
o What he has delivered or
o The value of the service he has rendered.
Art. 1425. When
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He cannot demand
o The return of what he has delivered or
o The payment of the value of the service
he has rendered.
Art. 1429. When a testate or intestate heir
Which he received
o By will or
o By the law of intestacy from the estate of
the deceased,
Pays a legacy
o In compliance with a clause in the
defective will,
Fixed by law.
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Art. 1140. Actions to recover movables
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Involving the exercise of powers or
authority arising from Martial Law
o Including the arrest, detention and/or
trial of the plaintiff,
The same must be brought within one year.
o
By a fortuitous event
From enforcing his right
Is not reckoned against him.
Is interrupted when:
a. They are filed before the court,
b. There is a written extrajudicial demand
by the creditors, and
c. There is any written acknowledgment of
the debt by the debtor.
To demand accounting
Was prevented
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3. ELEMENTS OF OBLIGATIONS
B. SOURCES OF OBLIGATIONS
Is a meeting of minds
3. QUASI-CONTRACTS
- Arts. 1160, 2142-2175
Art. 1160. Obligations derived from quasi-contracts
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In this Chapter
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May be suffered by
o The owner of the property or
o Business under management.
Without prejudice to
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(4)
Art. 2148.
General Rule: The officious manager shall be liable
for fortuitous events if:
(1)
He is manifestly unfit
By his intervention
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Refers to things
He may recover
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o
C. OTHER QUASI-CONTRACTS
SECTION 3. - Other Quasi-Contracts
Art. 2164. When, without the knowledge of the
person obliged to give support, it is given by a
stranger,
He is treated or helped
By another person
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He can recover
Only insofar as the payment
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Fails to do it,
At his cost.
Chapter Two
WHAT CIVIL LIABILITY INCLUDES
Art. 104. What is included in civil liability
Quasi-delicts
Shall be governed by
CHAPTER 2
QUASI-DELICTS
Art. 2177. Responsibility for fault or negligence
Civil liability
Civilly liable.
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C. COMPLIANCE WITH OBLIGATIONS
- ARTS. 19, 1163-66,1244, 1246, 1460, 440, 442
CHAPTER 2
HUMAN RELATIONS
Art. 19. Every person must,
Is also obliged
To take care of it
Exception:
o Unless the law or
o The stipulation of the parties
o Requires another standard of care.
Art. 1164. The creditor
Has a right
A determinate thing,
o The creditor,
o In addition to the right granted him by
Article 1170*,
o May compel the debtor
o To make the delivery.
If the obligor
o Delays, or
o Promised to deliver the same thing to
two or more persons who do not have the
same interest,
o He shall be responsible for any fortuitous
event
o Until he has effected the delivery.
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Physical segregated
To everything which is
o Produced thereby, or
o Incorporated or attached thereto,
o Either naturally or artificially.
Art. 442.
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o
o
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o
Art. 1183.
Impossible conditions,
CHAPTER 3
DIFFERENT KINDS OF OBLIGATIONS
SECTION 1. - Pure and Conditional Obligations
Art. 1179.
Every obligation
o Whose performance
o Does not depend upon a:
Shall be valid.
Every obligation
o Which contains a resolutory condition
o Shall also be demandable,
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At a determinate time
At a determinate time
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o
o
(4) If it deteriorates
By its nature, or
By time,
Art. 1189.
In case of the
o Improvement,
o Loss or
o Deterioration of the thing
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The parties,
In case of the
o Loss,
o Deterioration or
o Improvement of the thing,
The provisions which,
With respect to the debtor,
Are laid down in the preceding article
o Shall be applied to the party
o Who is bound to return.
As for the obligations to do and not to do,
o The provisions of the second paragraph* of
Article 1187
Shall be observed
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Art. 1180. When the debtor binds himself to pay
It shall be regulated
Of the thing
The obligor
o Being unaware of the period or
o Believing that the obligation has become
due and demandable,
May be recovered,
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Art. 1196.
It can be inferred
In every case,
o The courts shall determine such period
o As may under the circumstances
He becomes insolvent,
Unless he gives
i. A guaranty or
ii. Security for the debt;
2.
To the creditor
They disappear,
- Unless he immediately gives
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- New ones equally satisfactory;
4.
In consideration of which
5.
2. AS TO PLURALITY OF PRESTATION
A. CONJUNCTIVE
B. ALTERNATIVE (ARTS. 1199-1205)
C. FACULTATIVE (ART. 1206)
A. CONJUNCTIVE
B. ALTERNATIVE
The indemnity
Shall be fixed
Taking as a basis
o The value of the last thing which
disappeared, or
o That of the service which last became
impossible.
Damages
Other than the value
Of the last thing or service
o May also be awarded.
By different prestations
o Shall completely perform one of them.
Art. 1200.
GENERAL RULE: The right of choice
To the creditor.
*Article 1205
Art. 1201. The choice
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To the creditor,
o The obligation shall cease to be alternative
Until then
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C. FACULTATIVE
Art. 1206. When only one prestation
On account of his
Delay,
Negligence or
Fraud.
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3. AS TO RIGHTS & OBLIGATIONS OF MULTIPLE
PARTIES
A. JOINT (Arts. 1207-1222)
B. SOLIDARY (NCC ARTS 927, 1824, 1911, 1945,
2157, 2194, 2146; FC ARTS 94, 121; RPC ART.
90)
C. DISJUNCTIVE
A. JOINT (Arts. 1207-1222)
SECTION 4. - Joint and Solidary Obligations
Art. 1207. The concurrence of
o Two or more creditors or
o Two or more debtors
May be prejudiced
o Only by their collective acts, and
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May do whatever
Made by
The creditor
o Who may have executed
o Any of these acts, as well as
He who collects the debt,
Corresponding to them.
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To reimbursement
o From his co-debtors.
Art. 1221.
To reimbursement
o From his co-debtors
Of the share
o Which affects one of the solidary debtors
By anyone of them
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Judicial or
Extrajudicial demand
o Upon him by the creditor,
The provisions of the preceding paragraph shall
apply.
A solidary debtor
B. SOLIDARY
(NCC ARTS 927, 1824, 1911, 1945, 2157, 2194,
2146; FC ARTS 94, 121; RPC ART. 90)
Art. 927
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The principal is
o Solidarily liable with the agent
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To another person
Without prejudice to
o The direct obligation of the latter
(delegate)
o Toward the owner of the business.
Family Code
Art. 94. The absolute community of property
The support of
The spouses,
2.
3.
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4.
5.
Of either spouse
o Used by the family;
6.
7.
Expenses
To commence or complete
o A professional or vocational course, or
o Other activity for self-improvement;
5.
6.
Expenses
To commence or complete
- A professional, vocational course, or
- Other activity for self-improvement;
7.
Ante-nuptial debts
Of either spouse
8.
The value
By both spouses
- In favor of their common legitimate
children
- For the exclusive purpose of
o Commencing or completing
- A professional or vocational course or
- Other activity for self-improvement;
and
9.
Expenses of litigation
Ante-nuptial debts
Of either spouse
o Insofar as they have redounded
o To the benefit of the family;
The support of
The spouse,
2.
3.
4.
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Crimes punishable
o By other afflictive penalties
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o
The crime of
o Oral defamation and
o Slander by deed
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4. AS TO PERFORMANCE OF PRESTATION
(ARTS. 1221-1225, 1209-1210)
A. DIVISIBLE
B. INDIVISIBLE
C. JOINT INDIVISIBLE
D. SOLIDARY INDIVISIBLE
Art. 1221.
The payment
of damages and
Interest
Without prejudice to
Their action against
o The guilty or negligent debtor.
Through the
Judicial or
Extrajudicial demand
of damages and
o Interest
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A. DIVISIBLE
B. INDIVISIBLE
SECTION 5. - Divisible and Indivisible Obligations
Art. 1223. The divisibility or indivisibility of the
things
In which there is
o Only one debtor and
o Only one creditor
The debtors
o Who may have been ready to fulfill their
promises
It shall be divisible.
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1. So provided by law or
2. Intended by the parties.
In obligations not to do,
o Divisibility or indivisibility
o Shall be determined by
May be prejudiced
o Only by their (creditors) collective acts, and
D. SOLIDARY INDIVISIBLE
Art. 1210. The indivisibility of an obligation
To solidarity.
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5. AS TO THE PRESENCE OF AN ACCESSORY
UNDERTAKING IN CASE OF BREACH
WITH A PENAL CLAUSE (distinguish from
liquidated damages)
(ARTS. 122601230)
SECTION 6. - Obligations with a Penal Clause
Art. 1226. In obligations with a penal clause,
The penalty
Shall substitute
o The indemnity for damages and
o The payment of interests
In case of noncompliance,
By the debtor.
Iniquitous or
Unconscionable.
Art. 1227.
General Rule:
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Any waiver of
An action for future fraud
o Is void.
I. MANNER OF BREACH
Diligence
Which is required by the nature of the
obligation and
Corresponds with
o The circumstances of the
Persons,
Time, and
Place.
I. Manner of Breach
Any waiver of
An action for future fraud
Is void.
Incur in delay
Any waiver of
An action for future fraud
o Is void.
Is also demandable,
o But such liability may be regulated by the
courts,
o According to the circumstances.
Art. 1173. The fault or negligence of the obligor
Consists in
o The omission of that
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EXCEPTION:
Expressly so declares; or
(2) When from the nature and circumstances of
the obligation
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In reciprocal obligations,
Neither party incurs in delay if the other
o Does not comply or
o Is not ready to comply
In a proper manner
Art. 1165.,
The creditor,
o In addition to the right granted him by Article
1170,
Art. 1786.
Every partner
To a third person,
Fails to do so
o Becomes a debtor
o For the interest and damages
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Fraudulent intent or
Negligence,
o After the judicial summons.
(4)
2. ACT OF CREDITOR
Art. 1165.,
The creditor,
o In addition to the right granted him by Article
1170,
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F. REMEDIES FOR BREACH OF OBLIGATIONS
NCC Arts. 1165-68, 1170, 1177-78, 1191-92, 2236
FC Arts. 153, 155
Rule 39 Sec. 13
III.
EXTRA-JUDICIAL REMEDIES
1.
2.
IV.
JUDICIAL REMEDIES
1.
2.
3.
The creditor,
o In addition to the right granted him by Article
1170,
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General rule:
All rights acquired
o In virtue of an obligation
Are transmissible,
Exception:
o If there has been no stipulation to the
contrary.
*Art. 1191. The power to rescind obligations
If it cannot be determined
Which of the parties
First violated the contract,
o The contract shall be deemed
extinguished, and
o Each shall bear his own damages.
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Art. 302.
Neither the right to receive legal support
Nor any money or property obtained as such
support or
Any pension or gratuity from the government
o Is subject to attachment or execution.
Art. 1708. The laborer's wages
General Rule
Shall not be subject to execution or attachment,
Exception:
Except for debts incurred for
Food,
Shelter,
Clothing and
Medical attendance.
Family Code
Art. 153. The family home
Is deemed constituted
On a house and lot
o From the time it is occupied as a family
residence.
o From the time of its constitution and
Is exempt from
Execution,
Forced sale or
Attachment
Excluding jewelry;
(e) Household furniture and utensils
(h)
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o
I. EXTRA-JUDICIAL REMEDIES
2. STIPULATED
Every partner
Fails to do so
o Becomes a debtor
o For the interest and damages
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Art. 1170.
Those who
o In the performance of their obligations are
o Guilty of
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o
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G. MODES OF EXTINGUISHMENT OF
OBLIGATIONS Art. 1231
8.
9.
Rescission,
Fulfillment of a resolutory condition, and
Prescription,
Are governed elsewhere in this Code.
1. PAYMENT OR PERFORMANCE
ARTS. 1232-44, 1246-51, 1302
RA 8183
PD 72, SECS. 31-32
SECTION 1. - Payment or Performance
Art. 1232. Payment means
Of an obligation.
Art. 1233. A debt shall not be understood to have
been paid
Unless the thing or service
o In which the obligation consists
Has been completely delivered or rendered,
o As the case may be.
1215
KINDS OF COMPENSATION
A. LEGAL
B. CONVENTIONAL/FACULTATIVE
C. JUDICIAL
13. NOVATION ARTS. 1291-1304, 1215
KINDS OF NOVATION
A. AS TO ITS NATURE
I. SUBJECTIVE OR PERSONAL
II. OBJECTIVE RO REAL
B. AS TO ITS FORM
I. EXPRESS
II. IMPLIED
14. OTHER MODES
ACT OF CREDITOR
G. MODES OF EXTINGUISHMENT OF
OBLIGATIONS Art. 1231
Art. 1231. Obligations are extinguished by:
1. Payment or performance:
2.
3.
4.
5.
Compensation;
6.
Novation.
Annulment,
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He can recover
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o By the debtor
Is deemed to be a donation,
o Which requires the debtor's consent.
But the payment is in any case
Valid as to the creditor
o Who has accepted it.
Capacity to alienate it
Shall not be valid,
o Without prejudice to the provisions of
Article 1427 under the Title on "Natural
Obligations."
o
o
o
o
Art. 1241.
Payment to a person
o Who is incapacitated to administer his
property
Shall be valid
o If he has kept the thing delivered, or
o Insofar as the payment has been
beneficial to him.
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Other circumstances
Art. 1249.
The payment of debts in money
o Shall be made in the currency stipulated, and
o If it is not possible to deliver such currency,
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o
o
Who is preferred,
o Even without the debtor's knowledge;
(2) When a third person, not interested in the
obligation, pays
Of the debtor;
(3) When, even without the knowledge of the debtor,
a person interested in the fulfillment of the
obligation pays,
Every obligation
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Unless
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This cession,
o Unless there is stipulation to the
contrary,
Shall only release the debtor
From responsibility
o For the net proceeds
o Of the thing assigned.
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Consignation alone
Shall produce the same effect
In the following cases:
1. When the creditor is
Absent or unknown, or
Art. 1257.
In order that the consignation of the thing due
May release the obligor,
o It must first be announced
o To the persons
o Interested in the fulfillment of the obligation.
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Shall be extinguished
In case of the
o Improvement,
o Loss or
o Deterioration of the thing
By its nature, or
By time,
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(6) If it is improved
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A determinate thing,
o The creditor,
o In addition to the right granted him by
Article 1170*,
o May compel the debtor
o To make the delivery.
If the obligor
o Delays, or
o Promised to deliver the same thing to
two or more persons who do not have the
same interest,
o He shall be responsible for any fortuitous
event
o Until he has effected the delivery.
Art. 1268.
When the debt
o of a thing certain and determinate
Proceeds from a criminal offense,
o The debtor shall not be exempted from
o The payment of its price,
o Whatever may be the cause for the loss,
3.
4.
In bad faith.
Art. 2159. Whoever in bad faith accepts an undue
payment,
(2) If he keeps it
To a third person,
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3. CONDONATION OR REMISSION OF THE DEBT
ARTS. 1270-74, 748, 749
SECTION 3. - Condonation or Remission of the Debt
Art. 1270. Condonation or remission is
Essentially gratuitous, and
Requires the acceptance by the obligor.
It may be made
o Expressly or impliedly.
Express condonation
Art. 1272.
Whenever the private document
o In which the debt appears
Is found in the possession of the debtor,
It shall be presumed
o That the creditor delivered it voluntarily,
An oral donation
o Requires the simultaneous delivery
of the thing or
of the document
o Representing the right donated.
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4. CONFUSION OR MERGER OF RIGHTS
ARTS. 1275-77, 1215, 1217
SECTION 4. - Confusion or Merger of Rights
The creditor
o Who may have executed any of these acts,
o As well as he who collects the debt,
Shall be liable to the others
o For the share in the obligation
o Corresponding to them.
Art. 1217.
Payment made
By one of the solidary debtors
o Extinguishes the obligation.
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5. COMPENSATION
ARTS. 1278-1290, 1243, 1215
KINDS OF COMPENSATION
A. LEGAL ARTS. 1279, 1286, 1290
B. CONVENTIONAL ART. 1282
FACULTATIVE ARTS. 1287, 1288
C. JUDICIAL- ART. 1283
SECTION 5. - Compensation
Art. 1278. Compensation shall take place
When two persons,
o in their own right,
Are creditors and debtors of each other.
LEGAL
Art. 1279. In order that compensation may be
proper, it is necessary that:
1. Each one of the obligors
Be bound principally, and
That he be at the same time a principal
creditor of the other;
2. Both debts consist in a sum of money, or
If the things due are consumable,
They be of the same kind, and
Also of the same quality
CONVENTIONAL
Art. 1282. The parties may agree upon the
compensation of debts which are not yet due.
JUDICIAL
Art. 1283. If one of the parties to a suit
Over an obligation
Has a claim for damages against the other,
o The former may set it off
o By proving his right
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LEGAL
Art. 1286. Compensation takes place
By operation of law,
o Even though the debts may be payable
o At different places,
For expenses of
Exchange or
Of a depositary or
Of a bailee in commodatum.
FACULTATIVE
Art. 1288. Neither shall there be compensation
If one of the debts consists in civil liability
Arising from a penal offense.
Art. 1289. If a person should have against him
several debts
Which are susceptible of compensation,
o The rules on the application of payments
o Shall apply to the order of the
compensation.
LEGAL
Art. 1290. When all the requisites mentioned in
Article 1279 are present,
Compensation takes effect
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Made by
o Any of the solidary creditors or
o With any of the solidary debtors,
The creditor
Who may have executed
Any of these acts,
As well as he who collects the debt,
o Shall be liable to the others
o For the share in the obligation
Corresponding to them.
Art. 1217.
Payment made
By one of the solidary debtors
o Extinguishes the obligation.
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6. NOVATION
ARTS. 1291-1304, 1215
KINDS OF NOVATION
A. AS TO ITS NATURE
I. SUBJECTIVE or PERSONAL ART. 1291
# 2, 3
II. OBJECTIVE or REAL - ART. 1291 # 1
B. AS TO ITS FORM
I. EXPRESS ART. 1292
II. IMPLIED ART. 1292
C. OTHER MODES
SECTION 6. - Novation
Art. 1291. Obligations may be modified by:
1. Changing their object or principal conditions;
2. Substituting the person of the debtor;
3. Subrogating a third person in the rights of the
creditor.
B. AS TO ITS FORM
I. EXPRESS ART. 1292
II. IMPLIED ART. 1292
Art. 1292. In order that an obligation may be
extinguished
By another
o Which substitutes the same,
It is imperative
o That it be so declared
In unequivocal terms, or
o That the old and the new obligations
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In any event.
Art. 1298. The novation is void
If the original obligation was void,
o Except
CONVENTIONAL SUBROGATION
Art. 1301. Conventional subrogation of a third
person
Requires the consent
o Of the original parties and
o Of the third person.
LEGAL SUBROGATION
Art. 1302. It is presumed that there is legal
subrogation when:
1. A creditor pays another creditor
Who is preferred,
Even without the debtor's knowledge;
2. A third person, not interested in the obligation,
pays
With the express or tacit approval
Of the debtor;
3. Even without the knowledge of the debtor, a
person interested in the fulfillment of the
obligation pays,
Without prejudice to the effects of confusion
As to the latter's share.
Art. 1303. Subrogation
Transfers to the persons subrogated
o The credit
Either
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o
o
Made by
o Any of the solidary creditors or
o With any of the solidary debtors,
The creditor
Who may have executed
Any of these acts,
As well as he who collects the debt,
o Shall be liable to the others
o For the share in the obligation
Corresponding to them.
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9. ACCORDING TO SUBJECT MATTER
i. THING
ii. RIGHT
iii. SERVICE
II. CONTRACTS
ARTS. 1305-1422
A. IN GENERAL
1. DEFINITION ARTS. 1305
AUTO-CONTRACT ARTS. 1491,
1646, 1890
2. ELEMENTS OF CONTRACTS
i. ESSENTIAL
ii. NATURAL
iii. ACCIDENTAL
B. FUNDAMENTAL
CHARACTERISTICS/PRINCIPLES OF
CONTRACTS
1. CONSENSUALITY OF CONTRACTS
ARTS. 1305, 1317
CONTRACT OF ADHESION
2. AUTONOMY OF CONTRACTS
ARTS. 1306, 1799, 2088, 2130
3. MUTUALITY OF CONTRACTS
ARTS. 1308-10, 1182
ACCELERATION CLAUSE
ESCALATION CLAUSE
4. OBLIGATORY FORCE OF
CONTRACTS ARTS. 1159, 131516, 749
5. RELATIVITY OF CONTRACTS
ARTS. 1311-14, 1177-78, 1381(3)
PRIVITIY OF CONTRACTS
C. CLASSIFICATION OF CONTRACTS
1. ACCORDING TO DEGREE OF
DEPENDENCE
i. PREPARATORY ARTS.
1479, 1767, 1868
ii. PRINCIPAL ARTS. 1458,
1638, 1642, 1933, 1962
iii. ACCESSORY ARTS. 2047,
2085
2. ACCORDING TO PERFECTION
i. CONSENSUAL ARTS.
1315, 1475
ii. REAL ARTS. 1316, 1934
iii. FORMAL ARTS. 1356
3. ACCORDING TO SOLEMNITY OR
FORM ARTS. 1356
i. ANY FORM
ii. SPECIAL FORM
4. ACCORDING TO PURPOSE
i. TRANSFER OF
OWNERSHIP ARTS. 725,
1458, 1638
ii. CONVEYANCE OF USE
ARTS. 562, 1642, 1933
iii. RENDITION OF SERVICE
ARTS. 1642, 1868
5. ACCORDING TO NATURE OF
OBLIGATION PRODUCED
i. BILATERAL ARTS. 1642,
1458
ii. UNILATERAL ARTS. 2047,
2093
6. ACCORDING TO CAUSE ARTS.
1350
i. ONEROUS ARTS. 1458,
1638, 1642
ii. GRATUITOUS OR
LUCRATIVE ARTS. 725,
1933
iii. REMUNERATORY
7. ACCORDING TO RISK
i. COMMUTATIVE
ii. ALEATORY ART. 2010
8. ACCORDING TO NAME
i. NOMINATE
ii. INNOMINATE ART. 1307
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D. STAGES OF CONTRACTS
1. NEGOTIATION
CONTRACT OF OPTION ARTS.
1324, 1479, 1482
2. PERFECTION
3. PERFORMANCE
4. CONSUMMATION
E. ESSENTIAL ELEMENTS OF CONTRACTS
ART. 1318
1. CONSENT OF THE CONTRACTING
PARTIES ARTS. 1319-46, 37-42,
739, 1476 (4), 1490-91, 1533 (5),
1646, 1782, 1409 (7), 5
ARTS. 87, 124, 234 FC
RA 6809
ART. XII, SECS. 7 & 8
CONSTITUTION
COGNITION THEORY
MANIFESTATION THEORY
2. OBJECT CERTAIN, WHICH IS THE
SUBJECT MATTER OF THE
CONTRACT ARTS. 1347-49,
1311, 1178
3. CAUSE OF THE OBLIGATION
ARTS. 1350-55
4. DELIVERY
5. DUE OBSERVANCE OF
PRESCRIBED FORMALITIES
F.
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6.
II. CONTRACTS
A. IN GENERAL
1. DEFINITION ARTS. 1305
AUTO-CONTRACT ARTS. 1491, 1646,
1890
2. ELEMENTS OF CONTRACTS
i. ESSENTIAL
ii. NATURAL
iii. ACCIDENTAL
1. DEFINITION
Art. 1305. A contract
Is a meeting of minds
The property of
The property
The property
o Of the State or
o Of any subdivision thereof, or
o Of any government-owned or
controlled corporation, or
institution,
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B. FUNDAMENTAL
CHARACTERISTICS/PRINCIPLES OF
CONTRACTS
1. CONSENSUALITY OF CONTRACTS ARTS.
1305, 1315, 1317
CONTRACT OF ADHESION
- Perfection by mere consent of consensual
contracts: Consensual contracts are perfected
by mere consent.
2. AUTONOMY OF CONTRACTS ARTS. 1306,
1799, 2088, 2130
- Freedom to stipulate: The parties are free to
create or establish stipulations, clauses, terms
and conditions as they may deem convenient,
provided these are not contrary to law, morals,
good customs, public order, or public policy
(Art. 1306).
ACCELERATION CLAUSE
ESCALATION CLAUSE
- Mutuality of contracts: A contract binds both
contracting parties and its validity or the
compliance therewith cannot be left to the will
of only one party (Art. 1308).
4. OBLIGATORY FORCE OF CONTRACTS ARTS.
1159, 1308, 1315-16, 749
- Obligatory force of contracts: Obligations
arising from contracts have the force of law
between the contracting parties, and should be
complied with in good fiath.
5. RELATIVITY OF CONTRACTS ARTS. 1311-14,
1177-78, 1381(3)
PRIVITY OF CONTRACTS
- Relativity of contracts: Contracts take effect
only between the parties, their assigns, and
heirs. Except where the rights and obligations
arising from the contract are not transmissible
by their nature, by stipulation, or by provision
of law (Art. 1311) in which case the assigns or
heirs are not affected anymore.
1. CONSENSUALITY OF CONTRACTS ARTS.
1305, 1315, 1317
CONTRACT OF ADHESION
Contract of Adhesion - A contract in which one party
has already prepared a form of a contract, containing
stipulations desired by him and he simply asks the
other party to agree to them if he wants to enter into
the contract.
Adhesion contracts are not entirely prohibited. The
one who agrees to the contract is in reality, free to
reject it entirely; if he adheres, he gives his consent.
Void if there is UNDUE ADVANTAGE on the part of the
dominant party. Ambiguity construed strictly against
the drafter.
Art. 1305. A contract is
A meeting of minds
Between two persons
Whereby one binds himself, with respect to
the other,
o To give something or
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Unless it is ratified,
Expressly or impliedly,
By the person
Law,
Moral,
Good customs,
Public order, or
Public policy.
Art. 1799. A stipulation which excludes
One or more partners
From any share in the profits or losses
o Is void.
Art. 2088. The creditor cannot
Appropriate the things
o Given by way of pledge or mortgage, or
Dispose of them.
ACCELERATION CLAUSE
ACCELERATION CLAUSE, or the stipulation stating
that on the occasion of the mortgagors default, the
whole sum remaining unpaid automatically becomes
due and demandable. It is
ALLOWED
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ESCALATION CLAUSE
What is equitable
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By their nature, or
By stipulation or
By provision of law.
o The heir is not liable
To the obligor
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o
o
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C. CLASSIFICATION OF CONTRACTS
1. ACCORDING TO DEGREE OF DEPENDENCE
I. PREPARATORY ARTS. 1479, 1767, 1868
II. PRINCIPAL ARTS. 1458, 1638, 1642, 1933,
1962
III. ACCESSORY ARTS. 2047, 2085
2. ACCORDING TO PERFECTION
I. CONSENSUAL ARTS. 1315, 1475
II. REAL ARTS. 1316, 1934
III. FORMAL ART. 1356
3. ACCORDING TO SOLEMNITY OR FORM ARTS.
1356
I. ANY FORM
II. SPECIAL FORM
4. ACCORDING TO PURPOSE
I. TRANSFER OF OWNERSHIP ARTS. 725, 1458,
1638
II. CONVEYANCE OF USE ARTS. 562, 1642,
1933
III. RENDITION OF SERVICE ARTS. 1642, 1868
5. ACCORDING TO NATURE OF OBLIGATION
PRODUCED
I. BILATERAL ARTS. 1642, 1458
II. UNILATERAL ARTS. 2047, 2093
6. ACCORDING TO CAUSE ARTS. 1350
I. ONEROUS ARTS. 1458, 1638, 1642
II. GRATUITOUS OR LUCRATIVE ARTS. 725,
1933
III. REMUNERATORY
7. ACCORDING TO RISK
I. COMMUTATIVE
II. ALEATORY ART. 2010
8. ACCORDING TO NAME
I. NOMINATE
II. INNOMINATE ART. 1307
9. ACCORDING TO SUBJECT MATTER
I. THING
II. RIGHT
III. SERVICE
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In Commodatum
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The bailor retains the ownership of the thing
loaned,
While in simple loan,
o Ownership passes to the borrower.
o
There is no deposit
Art. 2085
The following requisites are essential
o To the contracts of pledge and mortgage:
1.That they be constituted
To secure the fulfillment
Of a principal obligation;
2.That the pledgor or mortgagor
Be the absolute owner
Of the thing pledged or mortgaged;
3.That the persons constituting the pledge or
mortgage
Have the free disposal of their
property, and
2. ACCORDING TO PERFECTION
I. CONSENSUAL ARTS. 1315, 1475
Art. 1315. Contracts are perfected by mere consent,
and
From that moment
The parties are bound
o Not only to the fulfillment of what has
been expressly stipulated
o But also to all the consequences
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2. ACCORDING TO PERFECTION
II. REAL ARTS. 1316, 1934
Art. 1316. Real contracts,
Such as deposit, pledge and commodatum,
o Are not perfected
o Until the delivery
o Of the object of the obligation.
Art. 1934. An accepted promise
To deliver something by way of commodatum or
simple loan
o Is binding upon parties,
2. ACCORDING TO PERFECTION
III. FORMAL ART. 1356
*Art. 1356.
Contracts shall be obligatory,
o In whatever form they may have been
entered into,
In such cases,
o The right of the parties stated in the
following article
o Cannot be exercised.
*Art. 1357.
If the law requires a
o Document or
o Other special form,
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I. ANY FORM
II. SPECIAL FORM
* Art. 1356.
Contracts shall be obligatory,
o In whatever form they may have been
entered into,
Are present.
In Commodatum
o The bailor retains the ownership of the thing
loaned,
While in simple loan,
o Ownership passes to the borrower.
4. ACCORDING TO PURPOSE
I. TRANSFER OF OWNERSHIP ARTS. 725, 1458,
1638
*Art. 725. Donation
Is an act of liberality
Otherwise provides.
* Art. 1642. The contract of lease may be of
o Things, or
o Work and service.
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4. ACCORDING TO PURPOSE
III. RENDITION OF SERVICE ARTS. 1642, 1868
Art. 1642. The contract of lease may be of
a. Things, or
b. Work and service.
*Art. 1868. By the contract of agency
A person binds himself
o To render some service or
o To do something
In representation or on behalf of another,
With the consent or authority of the latter.
5. ACCORDING TO NATURE OF OBLIGATION
PRODUCED
I. BILATERAL ARTS. 1642, 1458
* Art. 1642. The contract of lease may be of
a. Things, or
b. Work and service.
*Art. 1458. By the contract of sale
One of the contracting parties
o Obligates himself
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Art. 2093.
In addition to the requisites prescribed in Article
2085*,
o It is necessary,
In order to constitute
Of the creditor, or
Of a third person
By common agreement.
*Art. 2085. The following requisites are essential to the
contracts of pledge and mortgage:
(1) That they be constituted to secure the fulfillment of a
principal obligation;
(2) That the pledgor or mortgagor be the absolute owner of
the thing pledged or mortgaged;
(3) That the persons constituting the pledge or mortgage
have the free disposal of their property, and in the absence
thereof, that they be legally authorized for the purpose.
Third persons who are not parties to the principal obligation
may secure the latter by pledging or mortgaging their own
property.
In Commodatum
o The bailor retains the ownership of the thing
loaned,
While in simple loan,
o Ownership passes to the borrower.
In remuneratory ones,
o The service or benefit
o Which is remunerated; and
The prestation or
Promise of
A thing or service
o By the other;
In remuneratory ones,
o The service or benefit
o Which is remunerated; and
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7. ACCORDING TO RISK
I. COMMUTATIVE
- Those contracts where the contracting parties
contemplate the assured fulfillment of the
terms and conditions of their agreement such
as contracts of mortgage and pledge. Here,
generally, there is no risk to anticipate.
II. ALEATORY ART. 2010
Art. 2010. By an aleatory contract,
One of the parties or both
Reciprocally bind themselves
o To give or
o To do something
In consideration of
o What the other shall give or do
o Upon the happening of an event
Which is uncertain, or
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3) Rules governing the most analogous
nominate contracts, and
4) Customs of the place.
9. ACCORDING TO SUBJECT MATTER
I. THINGS
- Contracts covering things such as contract of sale, deposit,
pledge.
II. RIGHT
- Contract covering transmissible rights or credits such as a
contract of usufruct, assignment of credits.
III. SERVICE
- Contracts covering services such as carriage whether
common or simple, agency, deposit.
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D. STAGES OF CONTRACTS
1.NEGOTIATION
CONTRACT OF OPTION ARTS. 1324, 1479,
1482
2. PERFECTION
3. PERFORMANCE
4. CONSUMMATION
1. NEGOTIATION
CONTRACT OF OPTION ARTS. 1324, 1479,
1482
Art. 1324.
When the offerer
Has allowed the offeree
o A certain period to accept,
Art. 1479.
A promise to buy and sell
A determinate thing
o For a price certain
Is reciprocally demandable.
By a consideration
Of an obligation.
4. CONSUMMATION
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o
Of acceptance,
All of which
o Must be complied with.
4. DELIVERY
5. DUE OBSERVANCE OF PRESCRIBED
FORMALITIES
Certain
Of the obligation
Which is established.
1. CONSENT OF THE CONTRACTING PARTIES
ARTS. 1319-46, 37-42, 739, 1476 (4), 1490-91,
1533 (5), 1646, 1782, 1409 (7), 5
ARTS. 87, 124, 234 FC
RA 6809
ART. XII, SECS. 7 & 8 CONSTITUTION
COGNITION THEORY
MANIFESTATION THEORY
SECTION 1. - Consent
Art. 1319. Consent is manifested by
The meeting of the offer and
The acceptance upon
o The thing and
o The cause
A qualified acceptance
o Constitutes a counter-offer.
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Is understood to be
o Without prejudice to
o Special disqualifications established in
the laws.
*Art. 1328.
Contracts entered into during a lucid interval
o Are valid.
Contracts agreed to in a state of
drunkenness or during a hypnotic spell
o Are voidable.
*Art. 1330.
A contract where consent
Is given through
o Mistake,
o Violence,
o Intimidation,
o Undue influence, or
o Fraud
Is voidable.
Art. 1331. In order that mistake may invalidate
consent,
It should refer
o To the substance of the thing
Art. 1332.
When one of the parties is unable to read, or
If the contract is in a language not
understood by him, and
o Mistake or fraud is alleged,
There is intimidation
o When one of the contracting parties
o Is compelled by
o A reasonable and well-grounded fear
o Of an imminent and grave evil
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Is not fraudulent
o But may constitute error.
Incidental fraud
o Only obliges the person employing it
o To pay damages.
Absolute
o Takes place when
o The parties do not intend
o To be bound at all;
Relative
o When the parties
o Conceal their true agreement.
Art. 1346.
An absolutely simulated or fictitious contract
Is void.
A relative simulation,
o When it does not prejudice a third person
and
o Is not intended for any purpose contrary
to law, morals, good customs, public
order or public policy
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The property of
The property
The property
o Of the State or
o Of any subdivision thereof, or
o Of any government-owned or
controlled corporation, or
institution,
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-
In case of disagreement,
The husband's decision shall prevail,
o Subject to recourse to the court
o By the wife for proper remedy,
o Which must be availed of within five
years
o From the date of the contract
implementing such decision.
RA 6809
December 13, 1989
AN ACT LOWERING THE AGE OF MAJORITY FROM
21 TO 18 YEARS, AMENDING FOR THE PURPOSE
EXECUTIVE ORDER NUMBERED TWO HUNDRED NINE,
AND FOR OTHER PURPOSES
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All services
Which are not contrary to law, morals, good
customs, public order or public policy
o May likewise be the object of a contract.
By their nature, or
By stipulation or
By provision of law.
o The heir is not liable
To the obligor
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-
The prestation or
Promise of
A thing or service
o By the other;
In remuneratory ones,
o The service or benefit
o Which is remunerated; and
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F.
FORM OF CONTRACTS
*Art. 1356.
Contracts shall be obligatory,
o In whatever form they may have been
entered into,
*Art. 1357.
If the law requires a
o Document or
o Other special form,
Of hereditary rights or
An act
i. Appearing or which should appear in a
public document, or
ii. Should prejudice a third person;
4) The cession of actions or rights
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An oral donation
o Requires the simultaneous delivery
of the thing or
of the document
o Representing the right donated.
Provided it be:
1. In writing,
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o
o
o
Made,
Signed by the parties, and
Attached to the public instrument.
Is through an agent,
o The authority of the agent
o Shall be in writing;
e.
f.
ii.
it is a sufficient memorandum;
An agreement of the leasing
2.
Unless
(1) The same, or
(2) Some note or
(3) Memorandum, thereof,
Be in writing, and
Cannot be received
Is not to be performed
Of another;
c. An agreement made
In consideration of marriage,
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14. To ratify or recognize obligations
Contracted before the agency;
15. Any other act of strict dominion.
iii.
Of hereditary rights or
An act
i. Appearing or which should appear in a
public document, or
ii. Should prejudice a third person;
4) The cession of actions or rights
Exceeds P500
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G. REFORMATION OF CONTRACTS
ARTS. 1359 69
CHAPTER 4 - REFORMATION OF INSTRUMENTS
Art. 1359.
There having been a meeting of the minds Of the
parties to a contract
When their true intention is not expressed in the
instrument
o Purporting to embody the agreement,
By reason of
o Mistake, fraud, inequitable conduct or
accident,
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H. INTERPRETATION OF CONTRACTS
ARTS. 1370-79
Art. 1370. If the terms of a contract
Are clear and leave no doubt upon the
intention of the contracting parties,
o The literal meaning of its stipulations
o Shall control.
-
Shall prevail.
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I.
o
o
Together with
o Their fruits, and
o The price
o With its interest;
May be rescinded
Suffer lesion
By more than 1/4 of the value of the
things
Which are the object thereof
2.
3.
4.
5.
To be subject to rescission.
For obligations
To whose fulfillment
It cannot be instituted
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In fraud of creditors,
In fraud of creditors,
o Shall indemnify the creditors
o For damages suffered by them
o On account of the alienation,
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Which have been the subject matter
of the contract,
o
-
*Art. 1330.
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Is voidable.
5.
Unless
(1) The same, or
(2) Some note or
(3) Memorandum, thereof,
Be in writing, and
Cannot be received
Is not to be performed
Of another;
i. An agreement made
In consideration of marriage,
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k.
l.
6.
it is a sufficient memorandum;
An agreement of the leasing
Art. 1405.
Contracts infringing the Statute of Frauds,
o Referred to in No. 2 of Article 1403,
Are ratified
3. VOID OR INEXISTENT
ARTS. 1409-22, 1318, 1353, 1378, 1491, 1898
CHAPTER 9 - VOID AND INEXISTENT CONTRACTS
Art. 1409. The following contracts are
INEXISTENT AND VOID from the beginning:
1.
2.
Art. 1406.
When a contract is enforceable
o Under the Statute of Frauds, and
A public document is necessary
o For its registration in the Registry of
Deeds,
The parties may avail themselves of
o The right under Article 1357.
Art. 1357. If the law requires a document or other special
form, as in the acts and contracts enumerated in the
following article, the contracting parties may compel each
other to observe that form, once the contract has been
perfected. This right may be exercised simultaneously with
the action upon the contract.
Art. 1407.
In a contract where both parties are incapable of
giving consent,
o Express or implied
3.
4.
5.
6.
7.
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Unless it is ratified,
Expressly or impliedly,
By the person
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-
Art. 1412.
If the act
o In which the unlawful or forbidden cause
consists
2.
By statute, or
By authority of law,
o Any person paying any amount
o In excess of the maximum price allowed
Certain
Of the obligation
Which is established.
*Art. 1378.
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It shall be void
The property of
The property
The property
o Of the State or
o Of any subdivision thereof, or
o Of any government-owned or
controlled corporation, or
institution,
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SPECIAL CONTRACTS
A. SALES
1. IN GENERAL
2. ELEMENTS
3. OBLIGATIONS OF SELLER/BUYER
4. REMEDIES
5. EXTINGUISHMENT OF SALE
B. BARTER OR EXCHANGE
C. LEASE
1. IN GENERAL
2. ELEMENTS
3. OBLIGATIONS OF LESSOR/LESSEE
4. REMEDIES
5. TERMINATION OF LEASE
D. LOAN
1. IN GENERAL
2. KINDS OF LOAN
i. COMMODATUM
ii. MUTUUM
3. NATURE/CHARACTERISTICS
4. SUBJECT MATTER
5. RIGHTS AND OBLIGATIONS OF
BAILOR AND BAILEE
6. MODES OF EXTINGUISHMENT
E. DEPOSIT WAREHOUSE RECEIPTS LAW /
TRUST RECEIPTS LAW
1. IN GENERAL
2. KINDS OF DEPOSIT
i. JUDICIAL
ii. EXTRA-JUDICIAL
1. VOLUNTARY
2. NECESSARY
3. NATURE/CHARACTERISTICS
4. SUBJECT MATTER
5. RIGHTS AND OBLIGATIONS OF
DEPOSITOR AND DEPOSITARY
6. MODES OF EXTINGUISHMENT
F. ALEATORY CONTRACTS INSURANCE,
GAMBLING, LIFE ANNUITY
SPECIAL CONTRACTS: ACCESSORY
CONTRACTS
G. GUARANTY AND SURETYSHIP
1. DEFINITION
2. NATURE/CHARACTERISTICS/EXTENT
3. EFFECTS OF GUARANTY, BETWEEN
i. GUARANTOR AND CREDITOR
ii. GUARANTOR AND DEBTOR
iii. CO-GUARANTORS
4. MODES OF EXTINGUISHMENT
H. PLEDGE, MORTGAGE, AND ANTICHRESIS
1. IN GENERAL
2. ESSENTIAL ELEMENTS
3. EFFECTS/RIGHTS AND OBLIGATIONS
4. EXTINGUISHMENT/FORECLOSURES
8. LIMITED PARTNERSHIP
C. TRUSTS
1. IN GENERAL
2. KINDS
i. EXPRESS
ii. IMPLIED
III. EXTRA-CONTRACTUAL
OBLIGATIONS
A.
B.
C.
D.
LAW
QUASI-CONTRACTS
DELICTS
QUASI-DELICTS
IV. DAMAGES
A. IN GENERAL
B. KINDS OF DAMAGES
1. ACTUAL OR COMPENSATORY
2. MORAL
3. NOMINAL
4. TEMPERATE OR MODERATE
5. LIQUIDATED
6. EXEMPLARY
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SPECIAL CONTRACTS
D. SALES
1.
2.
3.
4.
5.
IN GENERAL
ELEMENTS
OBLIGATIONS OF SELLER/BUYER
REMEDIES
EXTINGUISHMENT OF SALE
The other
o To pay therefor a price certain in money or its
equivalent.
Art. 1467.
Is a contract of sale,
*Art. 1350.
In onerous contracts
o The cause
o Is understood to be,
o For each contracting party,
The prestation or
Promise of
A thing or service
o By the other;
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In remuneratory ones,
o The service or benefit
o Which is remunerated; and
Which is uncertain, or
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Recording laws, or
In a merchant's store, or
In fairs, or markets,
o In accordance with the Code of
Commerce and special laws.
Art. 1537. The vendor is bound to deliver
Art. 1545.
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Art. 1525. The seller of goods is deemed to be an
unpaid seller within the meaning of this Title:
(1) When the whole of the price has not been paid or
tendered;
(2) When a bill of exchange or other negotiable
instrument has been received as conditional
payment, and
Is unusually inadequate;
(2) When the vendor remains in possession
As lessee or otherwise;
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Is executed;
(4) When the purchaser retains for himself
Art. 1620.
Art. 1623.
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