LAW 015: BUSINESS LAW (Obligations & Contracts)

Flashcards for review of Business Law: Obligations & Contracts

Law

Any rules of action or any system of uniformity.

Law (in the strict legal sense)

Law promulgated and enforced by the state; also known as state law.

Law (in the non-legal sense)

Law not promulgated and enforced by the state; also known as divine law, natural law, moral law, physical law.

Divine Law

The law of religion and faith concerning sin and salvation.

Natural Law

The divine inspiration in man of the sense of justice, fairness, and righteousness.

Moral Law

The totality of the norms of good and right conduct growing out of the collective sense of right and wrong of every community.

Physical Law

Uniformities of actions and orders of sequence which are physical phenomena that we sense and feel.

State Law

The law that is promulgated and enforced by the state; also called positive law, municipal law, or imperative law.

Rule of Conduct

Prescribes what individuals can and cannot do.

Obligatory

Compliance is mandatory, violations result in penalties.

Promulgated by Legitimate Authority

Only a recognized governing body can create and enforce laws.

Common Observance and Benefit

Laws are made to benefit society as a whole, ensuring fairness and order.

Maintaining Peace and Order

Prevents anarchy and violence.

Protecting Individuals and Property

Ensures safety and security.

Regulating relationships

Guides social, economic, and political interactions

Providing justice and fairness

Ensures equal treatment under the law.

Setting standards of behavior

Establishes acceptable conduct for individuals and organizations.

Regulation of Conduct

Sets guidelines on how individuals should behave.

Resolution of Disputes

Courts provide legal mechanisms to settle conflicts fairly.

Protection of Rights and Liberties

Law guarantees basic human rights and freedoms.

Social Control

Law discourages harmful actions by imposing penalties.

Promotion of the Common Good

Laws are designed to benefit society as a whole.

Facilitation of Social Change

Laws adapt to social, technological, and economic changes.

The Constitution

The supreme law of the land that serves as the foundation for all laws in the country.

Legislation

Laws enacted by Congress (Senate and House of Representatives).

Administrative Rules and Regulations

Issued by government agencies to implement laws.

Judicial Decisions or Jurisprudence

Decisions of the Supreme Court and other courts serve as precedents for future cases.

Custom

Long-established practices that have been accepted as law when recognized by courts.

International Law

Treaties and agreements with other nations

Legal Doctrines

Legal interpretations from legal scholars and experts.

Law as a Means of Social Control

A formal system of rules enforced by the government violations of which result in legal consequences.

Morality

Based on personal and societal beliefs about right and wrong.

Religion

Derived from religious doctrines and beliefs.

Custom

Long-standing social practices and traditions that regulate behavior.

Supreme Court

The final arbiter of legal disputes.

Court of Appeals

Reviews decisions of lower courts.

Court of Tax Appeals

Handles cases related to tax laws, customs duties, and assessments.

Sandiganbayan

Handles cases of public officials accused of corruption.

Regional Trial Courts

Handle civil, criminal, and special cases.

Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts

Handle minor criminal and civil cases, such as petty theft or small property disputes.

Shari’ah Courts

Handle Muslim personal and family law cases in Mindanao.

Family Courts

Handle cases like child custody, adoption, and domestic violence.

Substantive Law

Defines rights, duties, and obligations

Procedural Law

Governs legal proceedings

Public Law

Regulates the relationship between individuals and the state

Private Law

Deals with relations between individuals

Law on Obligations and Contracts

The body of rules which deals with the nature and sources of obligations and rights and duties arising from agreements and the particular contracts.

Civil Code of the Philippines

The primary law governing private relations between individuals.

Book I – Persons and Family Relations

Covers legal status, capacity, and rights of individuals.

Book II – Property, Ownership, and Its Modifications

Defines types of property, ownership rights, and modes of acquiring ownership.

Book III – Different Modes of Acquiring Ownership

Discusses legal ways to acquire property, such as donation, succession (inheritance), and prescription.

Book IV – Obligations and Contracts

Governs agreements, obligations, and liabilities between parties.

Conclusive Presumption of Knowledge of Law

Ignorance of the law excuses no one from compliance.

Ignorance of the Law is Not an Excuse

Every person is presumed to know the law once it has been duly published and enforced.

The Law Becomes Binding After Publication

Laws must be published in the Official Gazette or a newspaper of general circulation before they become enforceable.

Obligation

An juridical necessity to give, to do, or not to do.

Obligatio

Tying or binding.

Civil Obligations

Obligations which give to the creditor or obligee a right under the law to enforce their performance in courts of justice.

Natural Obligations

Based on equity and natural law; do not grant a right of action to enforce performance.

Passive Subject (Debtor or Obligor)

The person who is bound to the fulfillment of the obligation; he who has a duty.

Active subject (Creditor or Obligee)

The person entitled to demand the fulfillment of the obligation; he who has the right

Object or Prestation

The conduct required to be observed by the debtor. It may consist of giving, doing, or not doing.

Juridical or Legal Tie

Which binds or connects the parties to the obligation.

Forms of Obligations

Refers to the manner in which an obligation is manifested or incurred.

Obligation

Is the act or performance which the law will enforce.

Right

The power which a person has under the law, to demand from another any prestation.

Wrong (Cause of Action)

Is an act or omission of one party in violation of the legal right or rights of another

Real Obligation (Obligation to Give)

The subject matter is a thing which the obligor must deliver to the obligee.

Personal Obligation (Obligation to do or not to do)

The subject matter is an act to be done or not to be done.

Positive Personal Obligation

Obligation to do or to render service

Negative Personal Obligation

Obligation not to do (naturally includes obligations “not to give”).

Law (Source of Obligation)

When they are imposed by law itself.

Contracts (Source of Obligation)

When they arise from the stipulation of the parties.

Quasi-Contracts (Source of Obligation)

When they arise from lawful, voluntary, and unilateral acts which are enforceable to the end that no one shall be unjustly enriched or benefited at the expense of another.

Crimes or Acts or Omissions Punished by Law (Source of Obligation)

When they arise from civil liability which is the consequence of a criminal offense.

Quasi-Delicts or Torts (Source of Obligation)

When they arise from damage caused to another through an act or omission, there being fault or negligence, but no contractual relation exists between the parties.

Legal Obligations

Refers to legal obligations or obligations arising from law.

Contract

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

Binding Force

Obligations arising from contracts have the force of law between the contracting parties.

Requirement of a Valid Contract

A contract is valid if it is not contrary to law, morals, good customs, public order, and public policy.

Breach of Contract

A breach of contract takes place when a party fails or refuses to comply, without legal reason or justification, with his obligation under the contract as promised.

Compliance in Good Faith

Compliance or performance in accordance with the stipulations or terms of the contract or agreement.

Quasi-Contractual Obligations

That juridical relation resulting from certain lawful, voluntary and unilateral acts by virtue of which the parties become bound to each other to the end that no one will be unjustly enriched or benefited at the expense of another.

Negotiorum Gestio

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

Solutio Indebeti

Is the juridical relation which is created when something is received when there is no right to demand it and it was unduly delivered through mistake.

Crimes or Delicts

Acts or omissions punishable by law.

Quasi-Delict

Is an act or omission by a person (tortfeasor) which causes damage to another in his person, property, or rights giving rise to an obligation to pay for the damage done, there being fault or negligence but there is no preexisting contractual relation between the parties.

Criminal Negligence (Crime/Delict)

Negligence affecting public interest, leading to both criminal and civil liabilities.

Negligence (Quasi-Delict)

Negligence concerning private interests, leading to only civil liability.

Determinate Thing

Identified by its individuality; debtor cannot substitute without creditor's consent.

Generic Thing

Identified only by its specie; debtor can give anything of the same class.

Diligence of a Good Father of a Family

Ordinary care that a reasonably prudent person exercises over their own property.

Natural Fruits

Spontaneous products of the soil and the young and other products of animals.

Industrial Fruits

Those produced by lands of any kind through cultivation or labor.

Civil Fruits

Those derived by virtue of a juridical relation.

Personal Right

The right or power of a person to demand from another the fulfillment of the latter's obligation.

Real Right

The right or interest of a person over a specific thing without a definite passive subject.

Remedies of Creditor in a Specific Real Obligation

Demand specific performance, demand rescission or cancellation, or demand payment of damages.

Remedies of Creditor in a Generic Real Obligation

Ask for performance of the obligation by a third person, recover damages in case of breach.

Accessions

Fruits of a thing or additions to or improvements upon a thing.