✅[E] LAW ON OBLIGATIONS AND CONTRACTS

Law

A rule of conduct, just, obligatory and laid down by a legitimate power for common observance and benefit

Divine Law

Based on religion or faith and is concerned by the concept of sin

Natural Law

Based on morality or equity; basis of state law

Moral Law

Norms of good conduct in a specific community; varies according to era, conditions, or people

Physical Law

Laws of physical science

State Law

Law imposed by the state and is enforceable in court

Private Law

Human regulates the relations of the members of a community with each other for purely private ends

Public Law

State governs the relations of an individual with the state

Substantive Law

Establishes rights as well as duties of an individual

Procedural Law

Lays down the procedure by which rights or claims may be enforced

Ignorance of the Law

In maxim in Article 3 of the civil code is ignorantia legis neminem excusat. Ignorance of the law shall excuse no one from compliance therewith

Obliga

Latin for tying or binding

RA 386, Book 4

The law on obligations and contracts which is the body of rules that deals with the nature and sources of obligations and the rights and duties arising from agreements and particular contracts

Civil Obligations

Gives right of action to compel their performance

Natural Obligations

Based on equity and natural law, does not grant a right of action to enforce performance merges with moral obligations

Active Subject

(Obligee/Creditor): the person who has the right or power to demand the prestation.

Passive Subject

(Obligor/Debtor): the person bound to the perform the prestation.

Juridical or Legal Tie

Which binds the parties or connects the parties to the obligation; efficient cause

Prestation

An object or undertaking of the obligation or that which is to be given, to be done, or not to be done

Dolo

What is the legal term for fraud?

Fraud

Intentional non-performance of obligation; deception. there is an intent to evade the normal fulfillment of the obligation and to cause damage

Quasi-contracts

Also known as an implied-in-law contract or a constructive contract; A legal concept that applies when there is no explicit contract between parties, but the law imposes certain obligations on them to prevent unjust enrichment or unfairness

Quasi-delict

Refers to acts or omissions that result in harm or injury to another person, even though there is no pre-existing contractual relationship between the parties

Article 1171

Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void

Dolo Incidente

What is the legal term for incidental fraud?

Dolo Incidente

Fraud committed in the performance of an obligation already existing because of contract

Dolo Causante

What is the legal term for causal fraud?

Dolo Causante

Failure to disclose facts when there is a duty to reveal them, as when confidential relations bind the parties; Fraud employed in the execution of the contract

Dolo Incidente

Which type of fraud does not affect the validity of the contract and renders the guilty party for damages?

Dolo Causante

Which type of fraud renders contracts voidable and renders the contract defective and subject it to annulment and give the innocent party a right to ask for damages?

Culpa

What is the legal term for negligence?

Culpa

The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place

Culpa Contractural

What is the legal term for contractual negligence?

Culpa Aquiliana

What is the legal term for civil negligence?

Culpa Contractural

There is a pre-existing obligation and there is fault in carrying out such

Culpa Aquiliana

Negligence becomes a source of obligation in itself without a pre-existing contract

Mora

What is the legal term for delay?

Delay

Where there is failure in performance of an obligation on time constituting a breach

Mora Solvendi

Delay on the part of the debtor to fulfill his obligation

Mora Accipiendi

Delay on the part of the creditor to accept the performance of the obligation

Compensation Morae

Delay of obligors in reciprocal obligations

Contravention of the tenor of the obligation

A situation where one party fails to fulfill their obligation in accordance with the terms and conditions specified in the agreement or contract

Fortuitous Events

An event which could not be foreseen, or which, through foreseen, was inevitable

Acts of Man

A fortuitous event where there is human intervention (ex: war, fire, robbery, invasion)

Act of God

A fortuitous event independent of will or any human being (ex: earthquake, flood, hurricane, lightning strike, volcano eruption)

Payment

Includes delivery of many, and performance of an obligation in manner other than delivery of money, like delivery of a determine object agreed upon or rendition of a service

Contract

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

Obligatory Force

Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith

Autonomy

The contracting parties may establish such stipulations, clauses, terms, and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy

Mutuality

The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them

Relativity/Transmissibility

Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law

Consensuality

Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage, and law

Preparation or Generation

Stage of a contract; The negotiation stage of the contract leading to an agreement

Perfection or Birth

Stage of a contract; Takes place when the parties agree upon the essential elements of the contract. The parties at this stage have come to a definite meeting of the minds regarding the subject matter and cause of the contract

Consummation or Termination

Stage of a contract; the extinction of the contract by the performance of the obligation created by it

Consent

The conformity or concurrence of wills and with respect to contracts, it is the agreement of the will of one contracting party with that of another or another or others, upon the object and terms of the contracts

Consensual Contract

Contract is formed simply by the mutual agreement or consent of the parties involved (ex: sale of goods, lease agreements, service contracts)

Real Contract

Contract that is formed not only by the agreement of the parties but also by the delivery of a thing or the performance of an act (ex: deposit, pledge, commodatum)

Solemn Contract

Contract that requires certain formalities or ceremonies for its validity (ex: marriage contracts, wills, deeds of sale)

Offer

A proposal to enter into a contract

Acceptance

The manifestation by the offeree of his agreement to the terms of the offer; May be express (written or oral) or implified (inferred from actions)

Unemancipated Minor

Those who have not reached the age of majority and are still subject to parental authority

Vices of Consent

The person whose agreement was influenced by one of these reasons can take legal action to cancel the contract

The existence of any of these causes in the giving of consent makes the contract voidable and the party whose consent was secured through any of these means may file an action to declare the contract as void. The contract, however, remains valid until the court decides the action of its nullity

Mistake

An unconscious ignorance or forgetfulness of the existence of non/existence of a fact, past, or present material to the contract

Violence

Serious or irresistible force is employed in order to wrest consent

Intimidation

When one of the contracting parties is compelled by a reasonable and well-grounded fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse, descendants or ascendants, to give his consent

Undue Influence

When a person takes improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice

Consent

The 1st essential element of a contract

Objects of Contract

The 2nd essential element of a contract

Cause

The essential or more proximate purpose why a party assumes an obligation; the reason which moves the contracting parties to enter a contract

Public Documents

Acts and contract which have their object the creation, transmission, modification, or extinguishment of real rights over immovable property

Reformation of Instruments

A legal fix used when there's a mistake in a written document

Remedy in equity by means of which a written instrument is made or construed so as to express or conform to the real intention of the parties when some error or mistake has been committed

Rescissible Contracts

Kind of defective contract; Agreements that can be canceled or rescinded by a court due to certain legal defects or grounds specified by law

Rescission

A remedy granted by law, both to the contracting parties and to third persons in order to secure reparation of damage caused them by a contract, even if the contract be valid, by means of the restoration things to their condition prior to the celebration of said contract

Voidable Contracts

Contracts that are valid or binding unless they are annulled by a proper action in court; They are susceptible of ratification

Ratification of Voidable Contracts

Cleanses the contract from all its defects from the moment it was constituted

Unenforceable Contracts

Cannot be sued upon or enforced unless ratified, this it is as if they have no effect yet; Are invalid and unenforceable from the beginning

Void Contracts

Agreements that are not legally binding and have no legal effect from the outset

Void ab Initio

A Latin term that means to "void from the beginning"

Contractor-Supplied Materials

Contractor supplies materials for a project

Owner-Supplied Materials (OSM)

The client or owner of a project provides the necessary materials for the completion of the work;

15 Years

How long is an engineer or architect who drew up the plans and specifications for a building liable for?

10 Years

How long can the Post-Construction Liabilities be brought up following the collapse of a building?

Lump Sum Contract

The designer-contractor agrees to furnish both the labor and the materials, and to deliver the job completely on the date agreed upon

Cost-Plus Contract

A type of contract where the client agrees to reimburse the contractor for all allowable expenses incurred during the project; Contractor receives an additional amount as profit or fee, usually expressed as a percentage of the total project costs

Cost-Plus a fixed amount

In this type of Cost-Plus contract, the client agrees to reimburse the contractor for the actual costs incurred in completing the project, plus a predetermined fixed amount as profit or fee

Cost-Plus a certain percentage

In this type of Cost-Plus contract, the client agrees to reimburse the contractor for the actual costs incurred during the project, plus a certain percentage of those costs as profit or fee

Cost-Plus a certain percentage with variable increase or decrease as bonus or deduction

In this type of Cost-Plus contract, the parties agree on a basic price which both of them believe is reasonably the amount that will be spent for labor and materials

Damages

Estimated reparation in money for detriment or injury sustained, or the compensation or satisfaction imposed by law for a wrong or injury caused by a violation of legal right

Actual or Compensatory Damages

The adequate compensation for pecuniary loss suffered

Moral Damages

Incapable of pecuniary estimation or computation but are recoverable in the amount to be determined by the court provided they are proximate result of the wrongdoer's act or omission.

Nominal Damages

Award to prove legal injury but no damages caused.

Temperate or Moderate Damages

May be recovered when the court finds that some pecuniary loss has been suffered, but its amount cannot, from the nature of the case, be proved with certainty

Liquidated Damages

Damages that parties to a contract agree in advance should be paid if the contract is breached

Exemplary or Corrective Damages

Those which are imposed in additional to moral, temperate, liquidated or compensatory damages by way of example or correction for the public good