OBLIGATIONS and CONTRACTS

obligation

is a juridical necessity to give, to do or not to do.

ACTIVE SUBJECT, PASSIVE SUBJECT, PRESTATION and VINCULUM JURIS

Elements of an Obligation

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.

PRESTATION

(Object): the conduct required to be observed by the debtor/obligor (to give, to do or not to do).

VINCULUM JURIS

(Juridical or Legal Tie;

Efficient Cause): that which binds or

connects the parties to the obligation.

LAW, CONTRACTS, QUASI-CONTRACTS, DELICTS and QUASI-DELICTS

Sources of Obligations

QUASI-CONTRACTS

Juridical relation resulting from lawful, voluntary and unilateral acts, which has for its purpose, the payment of indemnity to the end that no one shall be unjustly enriched or benefited at the expense of another.

LAW

must be expressly or impliedly set forth and cannot be presumed

Negotiorum Gestio

officious or voluntary

management of the property or affairs of another without the knowledge or consent of the latter.

Solutio Indebiti

undue payment. The juridical relation arises when:

a thing is received without any right; and

the thing delivered by mistake.

DELICTS

Acts or omissions punished by law;

crimes

Restitution, Reparation of damages caused, Indemnity for consequential damages

Extent of Civil Liability

felony

Every person criminally liable for a ______ is also civilly liable.

QUASI-DELICTS

Voluntary acts or omissions

with fault or negligence causing damage to another; not a crime nor a contract

real obligation

TO GIVE: to deliver either

(1) a specific or determinate thing, or (2) a generic or indeterminate thing.

Personal Obligation

obligation to do (positive) or not to do (negative)

Accessories

those joined to or included with

the principal for the latter's completion, better use, perfection or enjoyment

Accessions

additions to or improvement upon a thing, either naturally or artificially

Specific thing

Particularly designated or physically segregated from all other of the same class; identified by individuality.

Generic thing

Object is designated only by its class/

genus/ species.

Limited Generic Thing

When the generic objects are confined to a particular class.

Voluntary

Breach of Obligation: fraud, negligence, delay or contravention of tenor of the obligation

Involuntary

Breach of Obligation: fortuitous event

Substantial Breach and Casual Breach

TYPES OF BREACH

Substantial Breach

Total breach

Casual Breach

Partial breach

FRAUD

(DOLO): deliberate or intentional

evasion of the normal fulfillment of an

obligation

NEGLIGENCE

(CULPA): omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the person, of the time and of the place

Causal Fraud

(Dolo Causante) - fraud employed in the execution of the contract

Incidental Fraud

(Dolo Incidente) - fraud in performance of obligation already existing because of a contract

Culpa Contractual

negligence in the performance of a contract

Culpa Aquiliana

Quasi-delicts (Kind of Negligence)

Culpa Criminal

wrong or negligence in

the commission of a crime

DELAY

(MORA): failure to

perform an obligation on time which

constitutes breach of the obligation

Mora Solvendi

delay on the part of the

debtor to fulfill his obligation either to

give (Ex re) or to do (Ex persona),

Mora Accipiendi

delay on the part of

the creditor to accept the performance of the obligation

Compensatio Morae

delay of the parties in reciprocal obligations; effect: as if there is no default.

CONTRAVENTION OF THE TENOR

violation of the terms and conditions

stipulated in the obligation, which must not be due to a fortuitous event or force majeure

Fortuitous Event

Any event which could not be foreseen, or which though foreseen are inevitable

Fortuitous Event

A happening independent of the will of the debtor and which makes the normal fulfillment of the obligation impossible

Act of God

an accident, due directly or

exclusively to natural causes without human intervention, which by no amount of foresight, pains or care, reasonably to have been expected, cold have been prevented.

Act of Man

force majeure is a superior or

irresistible force, which is essentially an ______; Includes unavoidable accidents, even if there has been an intervention of human element, provided that no fault or negligence can be imputed to the debtor

Ordinary Delay

failure to perform an obligation on time.

Legal Delay

failure to perfume an obligation on time which failure constitutes a breach of obligation.

Insist on specific performance

Resolve contract

Claim damages

REMEDIES OF DEFRAUDED PARTY

Specific Performance

performance by the debtor of the prestation itself

Substituted Performance

someone else performs or something else is performed at the debtor's expense

Equivalent Performance

right to claim damages (in either performance or rescission)

Rescission

right to rescind or cancel

the contract

Pursue the Leviable

to attach the properties of the debtor, except those exempt by law from execution

Accion Directa, Accion Subrogatoria, Accion Pauliana

Subsidiary Remedies of Creditor

Accion Subrogatoria

right of creditor to exercise all of the rights and bring all of the actions which his debtor may have against third persons;

Accion Pauliana

Rescission, which involves the right of the creditor to attack or impugn by means of a rescissory action any

act of the debtor which is in fraud and to the prejudice of his rights as creditor.

Accion Directa

the right of lessor to go directly to a

sublessee for unpaid rents of the lessee

Pure Obligation

Effectivity or extinguishment does not depend upon the fulfillment or non-fulfillment of a condition or

upon the expiration of a term or period and characterized by the quality of its being IMMEDIATELY DEMANDABLE.

Conditional Obligation

Effectivity is subject to the fulfillment or non-fulfillment of a condition, which is characterized to be a FUTURE and UNCERTAIN event.

Suspensive Condition

Obligation shall only be effective upon the fulfillment of the condition (Art.1181).

Resolutory Condition

Obligation becomes demandable immediately after its establishment or constitution.

Casual Condition

The fulfillment of the condition depends upon chance and/or upon the will of a third person

Mixed Condition

The fulfillment of the condition depends partly upon the will of a party to the obligation and partly upon chance and/or will of a third person

Impossible Condition:

conditions which are impossible, contrary to good customs, or

public policy and those prohibited by law shall annul the obligations which depend upon them

Reciprocal Obligations

Obligations which are established from same cause, such that one obligation is correlative to the other. It results in mutual relationship between the creditor and the debtor.

Potestative

dependent on sole will of 1 party

Obligations with a period

an obligation which depends on a future and certain event

Alternative Obligations

Several prestations are due but the performance of one is sufficient

Facultative Obligation

Only one prestation has been agreed upon but the debtor may render another in substitution

Joint Obligations

One where a concurrence of several creditors, or of several debtors, or of several creditors and debtors, by virtue of which, each of the creditors

has a right to demand, and each of the debtors is bound to render compliance with his proportionate part of the prestation which constitute the object of the obligation

Solidary Obligation

An obligation where there is concurrence of several creditors, or of several debtors, or of several creditors and several debtors, by virtue

of which, each of the creditors has the right to demand, and each of the debtors is bound to render, entire compliance with the prestation

which constitutes the object of the obligation

Divisible Obligation

One which is susceptible of partial performance; that is, the debtor can legally perform the obligation by parts and the creditor cannot demand a single performance of the entire

obligation

Indivisible Obligation

One which cannot be validly performed in parts

Obligation with a Penal Clause

An accessory undertaking to

assume greater liability in case of breach. It is attached to an obligation in

order to ensure performance.

Payment

means not only delivery of money but also performance, in any manner, of the obligation.

Cession/Assignment

Act whereby a debtor abandons all his property to his creditors, so that the latter may apply the proceeds (of its sale) to their credits.

dacion en pago

Delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation.

Tender of payment

Manifestation made by debtor to creditor of his desire to comply

with his obligation, with offer of immediate performance

Consignation

Deposit of the object of obligation in a competent court in accordance to the rules prescribed by law, whenever the creditor unjustly refuses payment or because of some circumstances

which render direct payment to the creditor impossible or inadvisable.

Loss of a thing Due

A thing is lost when it perishes, goes out of commerce or disappears in such a way that its existence is unknown or it cannot be recovered

CONDONATION

An act of liberality, by virtue of

which, without receiving any equivalent, creditor renounces the enforcement of the obligation.

COMPENSATION

Offsetting of two obligations

which are reciprocally extinguished if they are of the same value, or extinguished to the concurrent amount if of different values.

CONFUSION

The meeting in one person of the

qualities of creditor and debtor of the same obligation

NOVATION

Extinguishment of an obligation by

the substitution or change of the obligation by a subsequent one which extinguishes or modifies the first either by changing the object or principal

conditions, or by substituting the person of the debtor, or by subrogating a third person in the rights of the creditor.

Objective Novation and Subjective Novation

Kinds of Novation

contract

is a meeting of minds, between two persons whereby one binds

himself, with respect to the other, to give something or to render some service.

Solemn or formal

special formalities are

required for perfection (Contract)

Consensual

consent is enough (Contract)

Real

consent and delivery is required (contract)

Accessory

depends on another contract

for its existence (contract)

Preparatory

a preliminary step towards

the celebration of a subsequent

contract (contract)

Unilateral

only one party is bound by

the prestation (contract)

Bilateral

where both parties are bound by reciprocal prestations;

Commutative

fulfillment is determined in

advance (contract)

Aleatory

fulfillment is determined by

chance (contract)

Gratuitous

no correlative prestation is

received by a party (contract)

Onerous

there is an exchange of

correlative prestations (contract)

Remuneratory

the prestation is based on services or benefits already received (contract)

Do ut des

I give so that you may give

Do ut facias

I give so that you may do

Facio ut facias

I do so that you may do

Facio ut des

I do so that you may give