Regulatory Framework for Business Transactions - Law on Obligations and Contracts

Comprehensive vocabulary flashcards covering the essential legal terms and concepts from the Law on Obligations and Contracts based on the provided CPA review lecture notes.

Obligation

A juridical necessity to give, to do, or not to do, as defined under Art. 1156 of the Civil Code.

Civil Obligation

An obligation that provides a right of action to compel performance through legal means.

Natural Obligation

An obligation based on equity and natural law rather than positive law; it doesn't grant a right of action to enforce performance but allows retention of voluntary payments.

Prestation

The subject matter of an obligation (the thing to be given, the act to be done, or the act to be avoided).

Negotiorum Gestio

A nominate quasi-contract where a person voluntarily manages the neglected business or property of another without authority, creating an obligation for the owner to compensate the manager.

Solutio Indebiti

A nominate quasi-contract created when something is unduly delivered through mistake to a person who has no right to demand it.

Quasi-delict

An act or omission that causes damage to another through fault or negligence, where no pre-existing contractual relation exists between the parties.

Pure Obligation

An obligation whose performance does not depend on a future or uncertain event and is demandable at once.

Potestative Condition

A condition that depends solely on the will of one of the contracting parties; if it depends solely on the debtor's will and is suspensive, the obligation is void.

Solidary Obligation

An obligation where each debtor is liable for the entire debt, or each creditor is entitled to demand the whole obligation.

Dolo Causante

Causal fraud used to obtain consent in a contract, which renders the contract voidable.

Dolo Incidente

Incidental fraud committed in the performance of an obligation, which does not affect the contract's validity but makes the guilty party liable for damages.

Culpa Aquiliana

Civil negligence as a source of obligation, distinct from contractual or criminal negligence.

Mora Solvendi

Delay on the part of the debtor to perform their obligation.

Fortuitous Event

An extraordinary event that is impossible to foresee or avoid, generally excusing a debtor from non-performance.

Novation

A mode of extinguishing an obligation by changing its object or principal conditions, or by substituting the person of the debtor or subrogating a third person to the rights of the creditor.

Dation in Payment (Dacion en pago)

The delivery and transmission of ownership of a thing by the debtor to the creditor as a substitute for the performance of the obligation.

Consignation

The act of depositing the object of the obligation in a competent court after the creditor unjustly refuses a valid tender of payment.

Legal Tender

Currency which a creditor cannot be compelled to refuse as payment. In the Philippines, coins have specific limits (e.g., P2,000 for P1 coins) while notes have no limit.

Contract of Adhesion

A contract where one party prepares a form with set stipulations and the other party can only accept or reject it, without the ability to modify the terms.

Stipulation Pour Autrui

A contract stipulation that confers a clear and deliberate favor upon a third person, who may demand its fulfillment if they accepted it before revocation.

Rescissible Contract

A contract validly entered into but which may be set aside due to economic prejudice (lesion) or fraud against creditors.

Unenforceable Contract

A contract that cannot be sued upon in court unless ratified, such as those that violate the Statute of Frauds or those entered into without authority.

Legal Capacity

The power to do acts with legal effect, which is acquired and may be lost, unlike juridical capacity which is inherent.