OBLIGATIONS AND 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

Obligation

A juridical necessity to give, to do or not to do

Active Subject

The one who can compel compliance with the obligation

Passive Subject

The one compelled to comply with or perform the obligation

Juridical or Legal Tie

Also known as efficient cause; that which binds the parties or connects the parties to the obligation

Prestation

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

Contract

An agreement that is effective, juridically speaking, to give rise to obligation

Fraud

Intentional non-performance of obligation, deception. An intent to evade the norma fulfillment of obligation

Dolo Incidente or Incidental Fraud

Fraud incident to the performance of an obligation. Does not affect the validity of the contract but renders the guilty party liable for damages

Dolo Causante or Causal Fraud

Fraud used by one of the parties a contract in securing the consent of the other party and renders the contract voidable through annulment and defective.

Culpa or Negligence

Carelessness or lack of diligence

Culpa Contractual or Contractual Negligence

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

Civil Negligence or Culpa Aquiliana

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

Mora or Delay

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 obligor in reciprocal obligations. The delay of the creditor neutralizes the delay of the debtor and vice versa. Contract is the considered extinguished.

Acts of Man / Fortuitous Event

Where there is human intervention like war, fire, robbery or invasion

Acts of God / Force Majeure

Independent of will of any human being like earthquake, flood, hurricane, lighting strike and volcano eruption

Payment

Delivery of money and performance on an obligation in a manner other than delivery of money

Contracts

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

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.

Relativity

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

Obligatory Force

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

Mutuality

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

Autonomy

The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient.

Preparation or Generation

The negotiations stage of the contract leading to a definite agreement

Perfection or Birth

When there has been a meeting of minds with respect to subject matter and cause of the contract

Consummation or Termination

The extinction of the contract by the performance of the obligation created by it.

Mistake

An unconscious ignorance or forgetfulness of the existence of non-existence of a fact, pas or present material to the contract.

Violence

Serious or irresistible force is employed

Intimidation

Compelled by a reasonable and well-grounded fear of an imminent and grace evil upon his person or property

Undue Influence

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

Cause

The essential or more proximate purpose why a party assumes an obligation

Reformation

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

Rescissible

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

Ratification

Extinguishes the action to annul a voidable contract, may be effected expressly or tacitly

Voidable Contracts

A valid contract but one that can be avoided at the option of one or both of the parties

Unenforceable Contract

Cannot be sued upon or enforced unless ratified, thus it is as if they have no effect yet.

Void Contracts

A contract having no legal force or binding effect.