basics

Obligation

A legal tie that binds a person to give, do, or not do something.

Elements of an Obligation

Active subject (creditor), Passive subject (debtor), Prestation (what is to be done/given/not done), Juridical tie (legal reason).

Active subject

The person who has the right (creditor).

Passive subject

The person who must perform (debtor).

Prestation

The act or thing that must be done, given, or not done.

Juridical tie

The legal reason or source that binds the parties in an obligation.

Sources of Obligation (Article 1157)

Law, Contracts, Quasi-contracts, Delicts (crimes), Quasi-delicts (torts).

Obligation arising from Law

Obligation imposed by law (Example: paying taxes).

Obligation arising from Contracts

Obligation agreed upon by parties (Example: a loan agreement).

Obligation arising from Quasi-contracts

Obligation created to prevent unjust enrichment (Example: returning something not yours by mistake).

Obligation arising from Delicts

Obligation to pay damages after committing a crime (Example: theft).

Obligation arising from Quasi-delicts

Obligation to repair damage caused by negligence (Example: injury due to carelessness).

Real Obligation

Obligation to give something.

Personal Obligation

Obligation to do or not to do something.

Positive Obligation

Obligation to give or to do.

Negative Obligation

Obligation not to do something.

Contract

A meeting of minds between two persons where one binds himself to give something or render service.

Essential Requisites of a Valid Contract

Consent, Object, Cause.

Consent

Agreement of both parties to enter into a contract.

Object

The subject matter of the contract; must be lawful.

Cause

The reason why the parties entered the contract.

Stages of a Contract

Preparation, Perfection, Consummation.

Preparation Stage

Includes offer and negotiation.

Perfection Stage

Occurs when both parties agree on the object and cause.

Consummation Stage

When both parties perform what was promised.

Characteristics of a Contract

Mutuality, Relativity, Autonomy, Obligatory force.

Mutuality

Both sides are bound; neither party can revoke alone.

Relativity

Contracts bind only the parties involved, not third persons.

Autonomy

Parties can set terms as long as they are lawful.

Obligatory Force

Contracts must be performed in good faith.

Void Contract

Has no legal effect at all (Example: illegal object).

Voidable Contract

Valid until annulled (Example: one party is a minor).

Unenforceable Contract

Cannot be enforced in court unless ratified.

Rescissible Contract

Valid but can be rescinded due to damage or injury.