OBLIGATIONS AND CONTRACTS PRELIM REVIEWER 2.

Indivisible
o As to their dependence upon one
1. Meaning and importance of juridical necessity
another
(Art. 1156)
1. Principal
o An obligation is a juridical necessity to
2. Accessory
give, to do or not to do. Juridical
o As to the existence of a burden or
necessity connotes that in case of
condition
noncompliance, there will be legal
1. Pure
sanctions.
2. Conditional
o The duty of a person (called debtor or
3. Obligation with a term
obligor) to satisfy a specific or
o As to the nature of performance
demandable claim of another person
1. Positive
(called creditor or obligee) which if
2. Negative
breached is enforceable in court.
o As to the nature of creation of the
obligation
2. Essential elements of an obligation (APPJ):
1. Legal
o Active Subject (creditor/obligee) – the
2. Conventional
one who is demanding the performance
o As to the character of responsibility or
of the obligation
liability
o Passive Subject (debtor/obligor) – the
1. Joint
one bound to perform the prestation to
2. Solidary
give, to do or not to do
o As to the grant of right to choose one
o Prestation or Object – the subject matter
prestation out of several, or to
of the obligation with economic value or
substitute the first one
susceptible to pecuniary substitution in
1. Alternative
case of noncompliance
2. Facultative
o Juridical Tie – binds the debtor to
o As to the imposition of penalty
perform the obligation. Makes the
1. Simple
obligation demandable and enforceable
2. Obligation with penalty

3. Different types of obligations (26 types)

4. Sources of obligations and damages
o As to judicial enforceability
o Sources of obligations Art. 1157.
1. Civil obligation
Obligations arise from (LCQAQ):
2. Natural Obligation
1. Laws
3. Moral Obligation
2. Contracts
o As to the subject matter
3. Quasi-contracts
1. Real
4. Acts and omissions punished by
2. Personal
law
o As to the number of persons bound to
5. Quasi-delicts
perform
o Sources of damages. Art. 1170 (FNDVF):
1. Unilateral
1. Fraud
2. Bilateral
2. Negligence
o As to the capability of fulfillment
3. Delay
1. Possible
4. Violation of the terms of the
2. Impossible
contract
o As to susceptibility of partial fulfillment
5. In some cases, Fortuitous events
1. Divisible
5. 2 kinds of quasi-contracts (Art. 1160. NGSI): o Exhaustion of debtor’s properties
o Negotiorium gestio – takes place when
somebody takes charge of the agency or 9. Cases where debtor may be held in default (Art.
management of the business or property 1169. LTUA)
of another without any power from the o When the law or obligation expressly so
latter. The owner of the business or declares
property shall reimburse the gestor for o When from the nature of the contract, it
the necessary and useful expenses appears that time is of the essence and
incurred by the latter, and for the this is the motivating factor in the
damages suffered by him in the establishment of the contract
performance of his functions as gestor. o When demand would be useless
o Solutio indebiti – takes place when o When the debtor admits, he is in default
somebody receives something from
another without any right to demand for 10. Kinds of delay (Art. 1169. Mora solvendi, mora
it, and the thing is unduly delivered to accipiendi, compensatio morae)
him through mistake. The obligation to o Mora solvendi – part of debtor/obligor
return the thing arises on the part of the o Mora accipiendi – part of
recipient. creditor/obligee
o Compensatio morae – part of both which
6. Determinate/specific thing vs arises from reciprocal obligations
indeterminate/generic thing (Art. 1165)
o Determinate/specific – something which 11. What is public policy
is susceptible of particular designation o The principle that injury to the public
or specification good is a basis for denying the legality of
o Indeterminate/generic – something a contract or other transaction.
which is not particularized or specified
but has reference only to a class or genus 12. When a debtor can be held liable in case of a
fortuitous event (exceptions) (Art. 1174.
7. Accessions and accessories (Art. 1166) ENDPBCGF):
o Accession – includes everything which is o Expressly stipulated
produced by a thing, and all those o Nature of the obligation requires the
incorporated or attached thereto, either assumption of risk
naturally or artificially. Accessions cover o Obligor is in delay
accession discrete and accession o Obligor promises the same thing to two
continue which includes accession or more persons who do not have the
natural and accession industrial. same interest
o Accessories – things which are united or o Possessor is in bad faith and the thing is
attached as ornaments to a principal lost due to fortuitous event
thing, or for the latter’s use or o Obligor contributed to the loss of the
perfection. thing
o Obligor is guilty of fraud, negligence or
8. Remedies available to a creditor (CDRAAE): delay, or if he contravened the tenor of
o Compel specific performance the obligation
o Damages o When a person failed to take steps to
o Rescission forestall the possible adverse
o Accion subrogatoria consequences of such a loss
o Accion pauliana
13. Types of condition (Art. 1182. Potestative, o When no period is mention, but it can be
casual, mixed) inferred from the nature and
o Potestative – when the performance or circumstances of the obligation that a
fulfillment of the condition depends period was intended by the parties
upon the will of the debtor o When the period is dependent upon the
o Casual – when the performance or will of the debtor
fulfillment of the condition depends
upon chance and/or the will of a third 18. Alternative obligations. When it is a valid choice
person (Art. 1199)
o Mixed – when the performance or o One where the debtor is alternatively
fulfillment of the condition depends bound by different prestations but the
partly upon the will of a party to the complete performance of one of them is
obligation and partly upon chance sufficient to extinguish the obligation.
and/or the will of a third person Where there are several prestations,
only one is due
14. Constructive fulfillment/payment (Art. 1186)
o The condition shall be deemed fulfilled 19. When a creditor can make a choice with regard
when the obligor voluntarily prevents its to payment (Art. 1200)
fulfillment o The general rule is that the right of
choice belongs to the debtor unless that
15. When is a thing considered legally lost (Par. 2, right had been expressly granted to the
Art. 1189)? creditor. Implied grant of the right to the
o A thing is considered lost when it creditor is not allowed. If it does not
perishes, or goes out of commerce, or appear on the agreement as to who of
when it disappears in such a way that its the debtor and creditor has the right of
existence is unknown or it cannot be choice, it is the debtor who can choose
recovered the prestation. The creditor shall have it
only when expressly granted to him.
16. Period vs condition (Art. 1193)
o As to time 20. Joint vs solidary obligation (Art. 1207)
1. P always refers to the future o Solidary obligation – one in which each
2. C can refer to a past event of the debtors is liable for the entire
unknown to the parties obligation and each of the creditors is
o As to fulfillment entitled to demand the satisfaction of
1. Sure to happen at an exact date the whole obligation from any of all of
known from the start, or at an the debtors
indefinite time, but sure to o Joint obligation – in case of concurrence
arrive of two or more creditors or of two or
2. May or may not happen being more debtors in one of the same
an uncertain event obligation, and in the absence of an
o As to its influence on the obligation express or indubitable terms
1. Affects only demandability or characterizing the obligation as solidary,
performance of the obligation the presumption is that the obligation is
2. May cause the arising of the only joint
obligation, or the cessation of
one already existing 21. Modes of extinguishment of obligations (Art.
17. When a court can set a period (Art. 1197. ND) 1231. 6 PLCCCN):
 o Payment or performance same or is not in a position to accept it
o Loss of the thing due due to certain reasons or circumstances
o Condonation or remission of the debt
o Confusion or merger of the rights of the 25. Forms or modes of payment
creditor and debtor o Modes (VIDAPTC)
o Compensation 1. Voluntary
o Novation 2. Involuntary
o (ARFP) Annulment, rescission, fulfilment 3. Dation in payment
of a resolutory condition, and 4. Application of payment
prescription 5. Payment by cession
6. Tender of payment
22. Dacion en pago (Art. 1245) 7. Consignation
o The alienation by the debtor of a o Forms (CC)
particular property in favor of his 1. Cash
creditor, with the latter’s consent, for 2. Check or other negotiable
the satisfaction of the former’s money instrument
obligation to the latter, with the effect of
extinguishing the said money obligation 26. When a debtor can be held liable when a thing
is lost (7 exceptions. Art. 1262. LSNDPCG):
23. When a check can be considered as valid o When the law or obligation expressly so
payment (Art. 1249. CAVLN) declares
o When a manager’s check was consigned o When there is stipulation of the parties
with the court o When the nature of the obligation
o When the creditor has accepted the requires the assumption of risk
debtor’s check for the repurchase of the o When there is delay/default
latter’s property o When the debtor promised to deliver
o When after the payment of the check in the same thing to two or more persons
court by the vendor a retro, the vendee without the same interest
a retro petitioned the court to allow him o When it arised from a crime
to withdraw the amount in deposit o When the thing is generic
o When the check has lost its value due to
the fault of the creditor 27. Confusion or merger (Art. 1275)
o When the foreign bill of exchange lost its o The merging or convergence of the
value for the reason that the creditor rights of a creditor and a debtor in one
neglected to make a protest and the same person with regard to the
same obligation
24. Tender of payment vs consignation (Art. 1258)
o Tender of payment – voluntary act of the 28. Kinds of fruits (natural, industrial, civil)
debtor whereby he offers to the creditor o Natural fruits – spontaneous products of
for acceptance the immediate the soil and the young and other
performance of the former’s obligation products of animals
to the latter o Industrial – produced by lands of any
o Consignation – the act of depositing the kind through cultivation or labor
object of the obligation to the court or o Civil – rents of buildings, price of leases
competent authority after the creditor of lands and other property and the
has unjustifiably refused to accept the amount of perpetual or life annuities or
other similar income