Terms:

1. Guaranty – a person, called the guarantor, binds himself to the creditor to fulfill the obligation of the
principal debtor in case the latter should fail to do so.

2. Suretyship – one person (principal) has undertaken an obligation and another person (surety) is also
under a direct and primary obligation or other duty to the obligee, who is entitled to but one
performance, and as the two who are bound, the second rather than the first should perform.

3. Compromise – a contract whereby the parties, by making reciprocal concessions, avoid a litigation or
put an end to one already commenced.

4. Bondsman – a surety offered in virtue of a provision of law or of a judicial order.

5. Pledge – contract by virtue of which the debtor delivers to the creditor or to a third person a movable,
or instrument evidencing incorporeal rights for the purpose of securing the fulfillment of a principal
obligation with the understanding that when the obligation is fulfilled, the thing delivered shall be
returned with all its fruits and accessions.

6. Estafa – committed by a person who, pretending to be the owner of any real property, shall convey,
sell, encumber or mortgage the same.

7. Pacto comisorio – automatic appropriation by the creditor of the thing pledged or mortgaged upon
failure of the debtor to pay his debt within the period agreed upon by virtue of authority or right
previously given the creditor.

8. Mortgage – a contract whereby the debtor secures to the creditor the fulfillment of a principal
obligation, especially subjecting to such security, immovable property or real rights over immovable
property in case the principal obligation is not complied with at the time stipulated.

9. Foreclosure – remedy available to the mortgagee by which he subjects the mortgaged property to the
satisfaction of the obligation to secure which the mortgage was given through the sale of the property
at public auction and the application of the proceeds thereof to the payment of his claim.

10. Deficiency judgment – if there be a balance due to the mortgagee after applying the proceeds of the
sale ordered by the court, the mortgagee is entitled to recover the deficiency and if this is embodied in a
judgment

11. Redemption – transaction by which the mortgagor-owner of mortgaged property reacquires or buys
back the property within a certain period and for a certain amount after his default or after the
foreclosure sale of the property for the satisfaction of the mortgaged debt.

12. Equity of redemption – right of the mortgagor to redeem the mortgaged property after his default in
the performance of the conditions of the mortgage but before the sale if the mortgaged property.
13. Right of redemption – right of the mortgagor to redeem the mortgagor to redeem the mortgaged
property within a certain period after it was sold for the satisfaction of the mortgage debt.

14. Antichresis – the creditor acquires the right to receive the fruits of an immovable of his debtor, with
the obligation to apply them to the payment of the interest, if owing, and thereafter to the principal of
his credit.

15. Chattel mortgage – contract by virtue of which personal property is recorded in the Chattel
Mortgage Register as a security for the performance of an obligation.

16. Affidavit of good faith – an oath in a contract of chattel mortgage wherein the parties “severally
swear that the mortgage is made for the purpose of securing the obligations specified in the conditions
thereof and for no other purposes and that the same is just and valid obligation and one not entered
into for the purpose of fraud.”

17. Worker – any member of the labor force, whether employed or not.

18. Recruitment and placement - any act of canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not: Provided, That any person or entity which, in
any manner, offers or promises for a fee, employment to two or more persons shall be deemed engaged
in recruitment and placement.

19. Private fee-charging employment agency - any person or entity engaged in recruitment and
placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or
both.

20. License - a document issued by the Department of Labor authorizing a person or entity to operate a
private employment agency.

21. Private recruitment entity - any person or association engaged in the recruitment and placement of
workers, locally or overseas, without charging, directly or indirectly, any fee from the workers or
employers.

22. Authority - a document issued by the Department of Labor authorizing a person or association to
engage in recruitment and placement activities as a private recruitment entity.

23. Seaman - any person employed in a vessel engaged in maritime navigation.

24. Overseas employment - employment of a worker outside the Philippines.

25. Emigrant -any person, worker or otherwise, who emigrates to a foreign country by virtue of an
immigrant visa or resident permit or its equivalent in the country of destination.

26. Person - an individual, partnership, association, corporation, business trust, legal representatives, or
any organized group of persons.
27. Employer - any person acting directly or indirectly in the interest of an employer in relation to an
employee and shall include the government and all its branches, subdivisions and instrumentalities, all
government-owned or controlled corporations and institutions, as well as non-profit private institutions,
or organizations.

28. Employee - any individual employed by an employer.

29. Agriculture - farming in all its branches and, among other things, includes cultivation and tillage of
soil, dairying, the production, cultivation, growing and harvesting of any agricultural and horticultural
commodities, the raising of livestock or poultry, and any practices performed by a farmer on a farm as
an incident to or in conjunction with such farming operations, but does not include the manufacturing
or processing of sugar, coconuts, abaca, tobacco, pineapples or other farm products.

30. Employ - to suffer or permit to work.

31. Wage - paid to any employee shall mean the remuneration or earnings, however designated,
capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which is payable by an employer to an
employee under a written or unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair and reasonable value, as determined by the
Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the
employer to the employee.