THE-LAW-ON-OBLIGATIONS-AND-CONTRACTS (1)

THE LAW ON OBLIGATIONS AND CONTRACTS

CHAPTER 1: GENERAL PROVISIONS

ART. 1156

• An obligation is defined as a juridical necessity to:

  • give

  • do or

  • not to do.

JURIDICAL NECESSITY

• In case of non-compliance:

  • Courts may be called upon by the aggrieved party to enforce fulfillment.

  • Economic value may be claimed if obligation is not fulfilled.

ESSENTIAL REQUISITES OF AN OBLIGATION

1. Passive Subject (Debtor or Obligor)

   • The person bound to fulfill the obligation.

2. Active Subject (Creditor or Obligee)

   • The person entitled to demand fulfillment of the obligation.

3. Object or Prestation

   • The specific conduct required of the debtor (giving, doing, not doing).

4. Juridical Tie (Efficient Cause)

   • The connection that binds parties to the obligation.

   • Example: In a building contract, X binds himself to build a house for Y for P1M.

FORM OF OBLIGATIONS

1. General Rule: No specific form is required for obligations arising from contracts for their validity.

2. Obligations arising from other sources do not require any form.

KINDS OF OBLIGATION ACCORDING TO THE SUBJECT MATTER

1. Real Obligation

   • Involves a subject matter that is a thing to be delivered.

   • Example: X binds himself to deliver a car to Y.

2. Personal Obligation

   • Involves an act to be done or not to be done:

     • a. Positive - obligation to do

     • b. Negative - obligation not to do.

ART. 1157: OBLIGATIONS ARISE FROM

1. Law

2. Contracts

3. Quasi-Contracts

4. Acts or omissions punished by law

5. Quasi-delicts (Torts)

SOURCES OF OBLIGATIONS

1. Law

   • Obligations imposed by law (e.g., taxes, support).

2. Contracts

   • Obligations arising from agreements between parties (e.g., obligation to pay loan).

3. Quasi Contracts

   • Arise from lawful, voluntary acts to prevent unjust enrichment.

4. Crimes (Delict)

   • Obligations from civil liability resulting from criminal offenses (e.g., stolen car must be returned or compensated).

5. Quasi-Delict (Torts)

   • Damages caused to another without contractual relations (e.g., responsibility for damages caused by falling objects).

ART. 1158

• Obligations from law must be clearly defined to be enforceable.

• Only those specifically mentioned in law or code are demandable.

LEGAL OBLIGATION

• Must be clearly stated in law to be demandable.

• Example: Employers are not obliged to provide legal assistance to employees.

ART. 1159

• Obligations from contracts have the force of law and must be performed in good faith.

• Valid and enforceable contracts are required.

THE CONCEPT OF CONTRACT

• A contract is defined as the meeting of minds between two parties where one binds to provide something or perform a service.

BINDING FORCE

• Obligations from contracts are binding as if imposed by law.

REQUIREMENTS OF A VALID CONTRACT

• Contracts must:

  • Not be contrary to law, morals, good customs, public order, or public policy.

COMPLIANCE IN GOOD FAITH

• Refers to performance according to contract terms.

• Non-compliance after benefiting from a contract may result in unjust enrichment.

• Example: If S sells his house to B, both must adhere to the contract.

EXAMPLE OF VOID CONTRACT

• A contract where S agrees with B to kill X for P100,000.

ART. 1160

• Obligations from quasi-contracts are subject to specific provisions.

QUASI CONTRACT

• Legal relations arising from unilateral actions to prevent unjust enrichment.

KINDS OF QUASI CONTRACT

1. Negotiorum Gestio

   • Voluntary management of another's property without consent.

   • Example: Neighbor saves X’s house from fire while X is away.

2. Solutio Indebiti

   • Relation created by undue payment through mistake.

   • Example: D mistakenly pays T, who is not authorized to receive payment.

ART. 1161: CIVIL OBLIGATIONS ARISING FROM CRIMES

• Governed by penal laws and specific provisions on human relations and damages.

CIVIL OBLIGATION ARISING FROM CRIMES

• Crimes often cause both moral and material damage.

• Every criminally liable person is also civilly liable for damages.

SCOPE OF CIVIL LIABILITY

• Includes:

1. Restitution

2. Reparation for damages

3. Indemnification for consequential damages.

EXAMPLE OF CIVIL LIABILITY

• If X steals Y's car:

  • X must return the car or pay its value.

  • X must pay for damages caused to the car and any other damages suffered by Y.

ART. 1162

• Obligations from quasi-delicts are regulated by the applicable provisions.

QUASI-DELICT

• An act/omission causing damage without a contractual relationship.

REQUISITES OF QUASI-DELICT

1. There must be an act or omission.

2. There must be fault or negligence.

3. Damage must be caused.

4. There must be a direct cause-effect relationship to the damage.

5. No pre-existing contractual relationship between parties.