PART I – OBLIGATION  What constitutes diligence of a good father – nature of the

obligation & corresponds w/ the circumstances of the

 An obligation is a juridical necessity to give, to do or not to do. persons, of the time, & of the place (Art. 1173)
(Art. 1156)  When negligence shows bad faith, Arts. 1171 & 2201 (2) shall
 It is a juridical relation whereby a person (creditor) may apply. (Art. 1173)
demand from another (debtor) the observance of a
determinative conduct (giving, doing, or not doing), and in EFFECTS OF OBLIGATION
case of breach, may demand satisfaction from the assets of
1. Obligation to give – oblig. To deliver the thing agreed upon
the latter. (Arias Ramos)
2. Oblig. To do/not to do – do/not do the service agreed upon
ELEMENTS OF AN OBLIGATION (APOE):
SPECIFIC VS. GENERIC THING (Art. 1165)
1. Active subject – a.k.a. obligee/creditor; one in whose favor the
obligation is constituted Specific/determinate – it is capable of particular designation
2. Passive subject – a.k.a. obligor/debtor; one who has the duty Generic/indeterminate – refers only to a class/genus & can’t be
of giving, doing or not doing pointed out w/ particularity
3. Object – prestation; conduct w/c has to be observed by the
debtor/obligor Obligations of the debtor:
4. Efficient cause – a.k.a. vinculum/juridical tie; reason why the
obligation exists SPECIFIC GENERIC
Deliver the thing w/c is
Deliver the thing agreed
SOURCES OF OBLIGATIONS (LCQAQ [1157]): neither of superior nor
upon (Art. 1165)
inferior quality
1. Law Specific performance i.e.
2. Contracts Take care of the thing w/ delivery of another thing
3. Quasi-contracts proper diligence of a good within the same genus as
4. Acts or omissions punished by law father unless the law or the thing promised if such
5. Quasi-delicts parties stipulates another thing is damaged due to lack
standard of care (Art. 1163) of care or a general breach
NOTE: Exclusive is committed
Deliver all accessions, If the object is generic, but
CLASSIFICATIONS OF OBLIGATIONS: accessories and fruits of the the source is specified or
thing (Art. 1166, NCC) delimited, the obligation is to
1. From viewpoint of sanction: preserve the source
a. Civil obligation (Art. 1156) Pay damages in case of Pay damages in case of
b. Natural obligation – duty not to recover what has been breach of obligation by breach of obligation by
voluntarily paid although payment was no longer required reason of delay, fraud, reason of delay, fraud,
(Sanction: law) negligence, contravention of negligence, contravention of
c. Moral obligation – duty of Catholic to attend mass the tenor thereof the tenor thereof (Art. 1170)
(sanction: conscience/morality) Obligation is not
2. From viewpoint of subject matter: Fortuitous event extinguished (genus
a. Real oblig. – oblig. To give extinguishes the obligation nunquamperuit – genus
b. Personal oblig. – oblig. To do or not to do never perishes)
3. From affirmativeness & negativeness of oblig.
a. Positive/affirmative – to give or to do
In failing to deliver, remedies of the creditor:
b. Negative – not to do
4. From viewpoint of persons obliged: SPECIFIC GENERIC
a. Unilateral – only one of the parties is bound Specific performance
b. Bilateral – both parties are bound (delivery of any thing
i. Reciprocal Specific performance
belonging to the same
ii. Non-reciprocal species)
Rescission (action to rescind Ask that the obligation be
Quasi-contract under Art. 1380, NCC) complied with at the debtor’s
expense
 Juridical relation resulting from a lawful, voluntary, and Resolution or specific
unilateral act, which has for its purpose the payment of Resolution (action for
performance, with damages
indemnity to the end that no one shall be unjustly enriched to cancellation under Art. 1191,
in either case (Art. 1191,
benefited at the expense of another NCC)
NCC)
Damages, in both cases (Art. 1170, NCC)
KINDS OF QUASI-CONTRACTS:
Note: May be exclusive or in addition to the above‐
1. Negotiorum gestio (unauthorized management)
mentioned remedies
a. Gestor must voluntarily assume the agency of property
b. Property must be either abandoned/neglected
c. Management must not be authorized by owner either Note: In obligation to deliver a specific thing, the creditor has
expressedly/impliedly the right to demand preservation of the thing, its accessions,
d. Assumption of management must be made in good faith accessories, and the fruits. The creditor is entitled to the fruits
2. Solutio indebiti (undue payment) and interests from the time the obligation to deliver the thing
a. He who paid was NOT under obligation to do so arise.
b. The payment was made by reason of an essential mistake
of fact Personal Right vs. Real Right

PART II – NATURE & EFFECTS OF PERSONAL (jus ad rem) REAL (jus in re)
Enforceable only against a
OBLIGATIONS definite person/group of
Enforceable against the
whole world
persons
 Normal standard of diligence – diligence of a good father of a
Right to demand from Right over a specific thing,
family (Art. 1163) another, as a definite without a definite passive
 passive subject, the subject against whom the 5. CR liable for damages
fulfillment of the prestation to right may be personally 6. DR may relieve himself of oblig. By consigning the thing
give, to do or not to do enforced
Has a definite passive Rules on Default:
No definitive passive subject
subject
Unilateral obligs.:
BREACH OF OBLIGATION General Rule (GR): Default or delay begins from extrajudicial
or judicial demand – mere expiration of the period fixed is not
 Catch – all provision: Art. 1170 – those who are guilty of enough in order that DR may incur delay (Art. 1169)
fraud/negligence/delay & contravene in tenor thereof are
liable for damages EXCEPTION (XPN): Art. 1169
1. Voluntary – debtor is liable for damages if he is guilty of:
a. Default/delay (mora) 1. Oblig. Or law expressly so dictates
b. Fraud (dolo) 2. Time is of the essence
c. Negligence (culpa) 3. Demand would be useless, as DR has rendered it beyond his
d. Breach through contravention of tenor thereof power to perform
2. Involuntary – debtor is unable to perform oblig. Due to
Reciprocal obligs:
fortuitous events thus not liable for damages
GR: Fulfillment by both parties should be simultaneous
DEFAULT or MORA (Art. 1169)
XPN: when different dates for the performance of oblig is fixed
 Those obliged to deliver or to do something incur in delay from by the parties
the time the obligee judicially or extrajudicially demands from
them the fulfillment of their obligation FRAUD (Art. 1171)
 In reciprocal obligations, neither party incurs in delay if the
other does not comply in a proper manner with what is  An intentional evasion of the faithful performance of the oblig.
incumbent upon him. From the moment one of the parties  Type of fraud that must be present in order that obligor be held
fulfills his obligations, delay by the other begins. (Art. 1169, liable for damages – must be incidental fraud or that which is
NCC) present during the performance of the obligation, and not
causal fraud, or fraud employed in the execution of a
Note: In reciprocal obligations, the moment one party is ready contract, which vitiates consent
to comply with his obligation, delay by the other begins. There
is no need for demand from either party. Kinds of Fraud:

DELAY Fraud during the Fraud during the

perfection of the contract performance of the oblig
Kinds of Delay (causal fraud/dolo (incidental fraud/dolo
causante [Art. 1338]) incidente [Art. 1344])
1. Mora solvendi – default on the part of the debtor/obligor When Employed
a. Ex re – default in real obligations (to give) Before or during the During the performance of a
b. Ex personae – default in personal obligations (to do) perfection of a contract pre-existing obligation
2. Mora accipiendi – default on the part of the creditor/oblige Purpose of execution
3. Compensation morae – default on the part of both in reciprocal To secure the consent of
To evade the normal
another to enter into the
Mora Solvendi fulfillment of the oblig.
contract
Resultant effect
Requisites:
Vitiation of consent Breach of an obligation
1. Obligation pertains to debtor Status of contract
2. Oblig. Is determinate, due, demandable and liquidated Voidable Valid
3. Oblig. Hasn’t been performed on its maturity date Right or remedy of aggrieved party
4. There is judicial or extra-judicial demand by the creditor Right of innocent party to Right of innocent
annul the contract w/ party/creditor to claim for
5. Failure of the debtor to comply w/ such demand
damages damages
Effects:

1. Debtor may be liable for damages or interests Remedies of defrauded party:

2. When it has for its object a determinate thing, debtor may bear
1. Specific performance (Art. 1233)
the risk of loss of the thing even if the loss is due to fortuitous
2. Resolution of the contract (Art. 1191)
event (Art. 1165)
3. Damages, in either case
Mora Accipiendi
NEGLIGENCE (Art. 1172):
Requisites:
Fraud Negligence
1. Offer of performance by a capacitated debtor There is no deliberate
2. Offer must be to comply prestation as it should be performed There is deliberate intention intention to cause damage
3. Refusal of the creditor w/o just cause to cause damage or injury even if the act was
done voluntarily
Effects: Liability cannot be mitigated Liability may be mitigated
GR: Waiver for future
1. Responsibility of debtor (DR) is limited to fraud & gross negligence may be allowed
negligence in certain cases
2. DR is exempted from risk of loss of thing; creditor (CR) bears Waiver for future fraud is XPN: Nature of the
risk of loss void obligation or public policy
3. Expenses by DR for preservation of thing after delay is requires extraordinary
chargeable to CR diligence (e.g. common
4. If oblig. Bears interest, DR doesn’t have to pay from time of carrier)
delay
Note: When negligence is so gross that it amounts to wanton
 attitude on the part of the debtor, the laws in case of fraud shall
apply. Effects of Fortuitous Event:
Where negligence shows bad faith (i.e., deliberately 1. on determinate oblig. – oblig. Is extinguished
committed) it is considered equivalent to fraud. Any waiver of 2. on generic oblig. – oblig. Is not extinguished
an action for future negligence of this kind is therefore void.
(De Leon, Obligations and Contract, 2003 ed., p. 57) REMEDIES

Kinds of Culpa According to Source of Oblig: 1. Specific performance or substituted performance by a 3rd
person in case of an oblig. To deliver a generic thing, & in
1. Culpa contractual – results in a breach of a contract obligs. to do, unless it is purely a personal act
2. Culpa aquiliana – civil negligence/tort/quasi-delict 2. Rescission (or resolution in reciprocal obligations)
3. Culpa criminal – results in the commission of a crime/delict 3. Damages, in any case
4. Subsidiary remedies of creditors:
Culpa Culpa Aquiliana Culpa Criminal
a. Accion subrogatoria
Contractual
b. Accion pauliana
Negligence is Negligence is Negligence is
merely incidental direct direct, c. Accion directa
substantive, &
independent
RESCISSION (Art. 1191)
There is a pre- No pre-existing No pre-existing  Refers to the cancellation of the contract or reciprocal
existing obligation obligation (except (except the duty
obligation in case of breach on the part of one, w/c breach is
(contract, express the duty to be never to harm
or implied) careful) others) violative of the reciprocity between the parties
Proof needed – Proof needed – Proof needed –  Properly called resolution
preponderance of preponderance of proof of guilt  Rescission under Art. 1380 is rescission based on lesion or
evidence evidence beyond fraud upon creditors
reasonable doubt  Available to reciprocal obligations, since resolution is implied
Respondeat Defense of good This is not a therein
superior or father is a proper proper defense.  Injured party may demand resolution
command & complete Ee’s guilt is
responsibility or defense (insofar automatically Er’s May the injured party demand resolution after he elects specific
master/servant as employers or civil guilt if former performance?
rule guardians are is insolvent
concerned) GR: No. His right is not conjunctive, thus, he may not choose
Presumed DR is Victim has to Accused is both remedies of resolution and specific performance
at fault & it’s his prove the presumed
duty to prove that negligence of the innocent until the XPN: Yes, if specific performance should become impossible
there was no defendant contrary is proved
negligence When does liability for damages arise?

 Those liable under Art. 1170 shall pay damages only if aside
What is the degree of diligence required?
from the breach of contract, prejudice or damage was
1. That agreed upon caused.
2. In the absence of such, that w/c is required by law
Kinds of Damages (MENTAL):
3. In the absence of the foregoing, diligence of good father that
reasonable diligence which an ordinary prudent person would  Moral – for mental & physical anguish
have done under the same circumstances (XPN: Common  Exemplary – corrective or to set an example
carriers requiring extraordinary diligence [Arts. 1998-2002])
 Nominal – to vindicate a right – when no other kind of damages
FORTUITOUS EVENT (Art. 1174) may be recovered
 Temperate – when the exact amount of damages can’t be
 an event w/c can’t be foreseen, or w/c though foreseen, is determined
inevitable  Actual – actual losses as well as unrealized profit
 instances where it doesn’t exempt: if the obligor delays; if  Liquidated – predetermined beforehand by agreement
obligor is guilty of bad faith
PART III – KINDS OF OBLIGATIONS
Fortuitous event vs. Force Majeure
Primary Classification of civil obligations:
Fortuitous event Force majeure
General term that is Term that is applicable only 1. Pure, conditional, and with a term or period
applicable regardless of to those fortuitous events 2. Alternative and facultative
whether the event is w/c are dependent upon 3. Joint and solidary
independent of or human intervention (wars, 4. Divisible and indivisible
dependent upon human strikes, riots, etc.) 5. With and without a penal clause
intervention
Event w/c usually happens Event w/c doesn’t usually PURE AND CONDITIONAL OBLIGATIONS (Arts. 1179-
or w/c could have been happen & w/c couldn’t have
1192):
reasonably foreseen been reasonably foreseen
Pure obligation – one without a condition or term; demandable
at once, provided there will be no absurdity; created from
Rule on Fortuitous Event:
moment of agreement between the parties (Art. 1179)
General Rule – no liability for fortuitous event
Exception – Conditional obligation – subject to a condition & the effectivity
of w/c is subordinated to the fulfillment or non-fulfillment of a
1. when expressly declared by law (bad faith, subj. matter is future & uncertain event, or upon a past event unknown to the
generic, DR is in delay) parties.
2. when expressly declared by stipulation/contract when nature of
oblig. Requires assumption of risk Condition – uncertain event w/c wields an influence on a legal
relationship
 Term or period – that which necessarily must come whether Effects of fulfillment of resolutory condition:
the parties know when it will happen or not
1. Real obligations
Period vs. Condition a. Parties shall return to each other what they have received
b. Oblig. Is extinguished
PERIOD CONDITION c. In case of the loss, deterioration or improvement of the
As to time thing, Art. 1189, w/ respect to the DR, shall be applied to
May refer to past event the party who is bound to return
Refers to the future
unknown to the parties 2. Personal obligations – courts shall determine, in each case, the
As to requisites retroactive effect of the condition that has been complied w/
Futurity & certainty Futurity & UNcertainty
As to fulfillment SUSPENSIVE VS. RESOLUTORY (Art. 1181)
It will happen at an exact
date or at an indefinite time, May or may not happen SUSPENSIVE RESOLUTORY
but is sure to arrive Effect of fulfillment
As to its Influence on the Obligation to be Fulfilled or Performed Obligation arises or Obligation is extinguished
No effect or influence upon May give rise to an obligation becomes effective
the existence of the obligation (suspensive) or the cessation Effect of non-fulfillment
but only in its demandability or of one already existing If not fulfilled, no juridical If not fulfilled, juridical
performance (resolutory ) relation is created relation is consolidated
As to retroactivity of effects
When rights are acquired
Does not have retroactive
Rights are not yet acquired,
effects unless there is an Has retroactive effect Rights are already acquired,
agreement to the contrary but there is hope or
but subject to the threat or
As to effect of will of debtor expectancy that they will
danger of extinction
When duration is left When condition is left soon be acquired
exclusively to the will of the exclusively, the very validity of
debtor, oblig. Is still valid the obligation is affected OBLIGATIONS WITH A PERIOD (Art. 1193-1198)
 An oblig. Whose demandability or extinguishment is subject to
SUSPENSIVE CONDITION the expiration of a period or term (Art. 1193)
 Condition the fulfillment of w/c will give rise to the acquisition of  Period – certain length of time which determines the effectivity
a right or extinguishment of oblig.
 Day certain – that w/c must necessarily come, although it may
What are the effects of loss, deterioration, & improvements in not be known when
real obligs.?
Requisites for a valid period or term:
W/ DR’S FAULT W/O DR’S FAULT 1. Future
Loss 2. Certain
DR pays damages Obligation extinguished 3. Possible, legally & physically
Deterioration
CR‐choose b/w rescission of For whose benefit is the period constituted:
obligation or fulfillment (with Impairment borne by CR
indemnity for damages in GR: When a period has been agreed upon for the performance
either case) or fulfillment of an obligation, it is presumed to have been
Improvement established for the benefit of both the creditor and the debtor.
1. By the thing’s nature or by time – inure to the benefit of the XPN: When it appears from the tenor of the period or other
CR circumstances that it was established for the benefit of one of
2. At the debtor’s expense – DR shall have no right other than the parties.
that granted to a usufructuary
What is the effect of the term being for the benefit of either the
CR or the DR?
What are the requisites for Art. 1189 to apply?
1. When it is for the benefit of the creditor – CR may demand the
1. Must be a real oblig.
performance of the oblig. At any time but the DR can’t
2. Object is a specific/determinate thing compel him to accept payment before the expiration of the
3. Oblig. Is subject to a suspensive condition period (e.g. “on demand)
4. The condition is fulfilled 2. When it is for the benefit of the debtor – DR may oppose any
5. There is loss, deterioration or improvement of the thing during premature demand on the part of the CR for performance of
the pendency of the happening of the condition the oblig., or if he so desires, he may renounce the benefit of
the period by performing his oblig. In advance
Note: the same conditions apply in case of an obligor in
obligations with a resolutory condition. In such cases, the third Effect of fortuitous event in an oblig. w/ a period:
requisite must read, “subject to a resolutory condition.”
 Only relieves the contracting parties from the fulfillment of their
Effects of fulfillment of suspensive condition: respective obligation during the term or period.
1. Real oblig.
When may the court fix the period? (Art. 1197)
a. GR: effects retroact to the day of constitution of oblig. 1. If oblig. Doesn’t fix a period, but from its nature &
b. XPN: no retroactivity as to: fruits & interests circumstances it can be inferred that a period was intended
c. XPN to the XPN: there may be retroactivity as to the fruits by the parties (Art. 1197)
& interests in unilateral obligations if such intention appears 2. If the duration of the period depends upon the will of the DR.
2. Personal oblig. – court determines the retroactive effect of the (Art. 1182)
condition fulfilled 3. In case of reciprocal obligs., when there is just cause for fixing
the period
RESOLUTORY CONDITION 4. If the DR binds himself when his means permit him to do so
(Art. 1180, in relation to 1193 and 1197)
 A condition where the rights already acquired are lost upon the
fulfillment of the condition When may debtor lose his right to make use of the period (Art.
1198)
1. Insolvency of DR, unless security is provided
2. Did not deliver security promised
3. Impaired security through his own acts or thru fortuitous event,
unless he gives new security equally satisfactory (if
impairment is w/o fault of DR, he shall retain the right)
4. Violates undertaking in consideration of extension of period
5. DR attempts to abscond