Obligatio

ns and
contracts
 01
NATURE AND
SOURCES OF
02
CLASSIFICATI
03
ON OF Kinds of
OBLIGATIONS OBLIGATIONS obligations
WHAT IS
obligation?
Under Article 1156 of the Civil
Code, An obligation is a juridical
necessity to give, to do or not
to do

Article 1156 pertains to

“civil” obligations which give a
right of action to compel the
performance or fulfillment of an
obligation. In this sense, there is
juridical necessity.
WHAT IS
obligation?
In 1156, there are two persons
involved, namely the one who
renders the obligation, and the
one to whom it is rendered.

Obligation encompasses both

sides of the equation the debt
and the credit.
Elements of
obligations
• Active subject (the creditor) – obligee

• Passive subject (the debtor) – obligor

• Prestation – subject matter of obligation – object

• Vinculum Juris (efficient cause/juridical tie) – the reason why the obligation
exists
Elements of
obligations
• VINCULUM

• Is that which binds the parties to the object of the obligation, without
which, no obligation may exist.

• This is what lacking in natural obligations

Elements of
obligations
• PRESTATION/OBJECT

• The object of every obligation is always a prestation. Prestation is

defined as the particular conduct required to be observed by the
debtor (obligor) and which can be demanded by the oblige
(creditor)

• Is not a thing, rather is the 3 act in the meaning of obligation (to give, to
do, or not to do)

• Giving and doing are not the same. Giving is connected with the thing to
be delivered (real obligations) while in obligations to do, compliance with
the obligation is incumbent upon the person obliged.
Elements of
obligations
• ACTIVE/PASSIVE SUBJECT

• Obligee (Creditor) – Denominated as the active subject. The one who has
the power to demand the performance of the prestation.

• Obligor (Debtor) – Passive Subject. The one required to perform the

prestation.

• From the viewpoint of the active subject, the obligation is a right or

credit; from that of the passive subject, it is a debt.
Sources of
obligations
1. Law

2. Contracts

3. Quasi-Contracts

4. Acts or Omissions
punishable by law

5. Quasi-delicts
I. law
• Obligations arising from law are not presumed. (Article 1158)

• In order to be demandable or enforceable, obligations arising from law must

be expressly determined in the civil code or in special laws
Ii. contracts
• Under Article 1159, Obligations arising from contracts have the force of law
between the contracting parties and should be complied with in good faith.

• Article 1305, defines a contract as a meeting of minds between two persons

whereby one binds himself, with respect to the other, to give something or to
render some service

• Contracts are as good as a law since the terms and conditions agreed
upon by the parties is considered a law between them. In law on contracts,
this is what we call obligatory force of contracts, which presupposes the
existence of a valid and enforceable contract
Iii. QUASI-
CONTRACTS
• Article 2142 - Certain lawful, voluntary and unilateral acts give rise to the
juridical relation of quasi-contract to the end that no one shall be unjustly
enriched or benefited at the expense of another

• Article 2124 creates the legal fiction of a quasi-contract precisely

because of the absence of any actual agreement between the parties
concerned.

• Characteristics: (1) It arises from a lawful act. (2) The act is voluntary
because the actor in quasi-contracts is not bound by any pre-existing
obligation to act. (3) It is unilateral, because it arises from the sole will
of the actor who is not previously bound by any reciprocal or bilateral
agreement.
Iii. QUASI-
CONTRACTS
• Negotiorum Gestio – Whoever voluntarily takes charge of the agency
or management of the business or property of another, without any
power from the latter, is obliged to continue the same until the termination of
the affair and its incidents, or to require the person concerned to substitute
him, if the owner is in a position to do so. (Article 2144 of the Civil Code)

• Requisites of Negotiorum Gestio (1) a person, called the officious manager or

gestor, voluntarily assumes the agency or management of the business or
property of another (2) the property or business is neglected or abandoned
(3) there is no authorization form the owner, either expressly or impliedly (4)
the assumption of agency or management is done in good faith.
Iii. QUASI-
CONTRACTS
• Solutio Indebiti – arises when something is received when there is no
right to demand it, and it was unduly delivered through mistake, the
obligation to return it arises.

• Requisites: (1) That he who paid was not under obligation to do so; and (2)
That payment was made by reason of an essential mistake of fact
iV. DELICTS
• Delicts are acts or omissions punishable by law.

• Every person criminally liable for a felony is also civilly liable (Article 100 of
the Revised Penal Code)

• Crime has a dual character: (1) As an offense against the State because of the
disturbance of the social Order (2) As an offense against the private person
injured by the crime.

• While an act or omission is felonious because it is punishable by law, it gives

rise to civil liability not so much because it is a crime but because it caused
damage to another.
V. quasi-DELICTS
• Under Article 2176 of the Civil Code, Whoever by act or omission causes
damage to another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict

• Requisites to sustain a claim based on Quasi-Delict:

1. Damage suffered by the offended party

2. Fault or negligence on the part of the offender

3. Connection of cause and effect between the fault or negligence of the

offender and the damage incurred by the offended party.
V. quasi-DELICTS
• The concept of quasi-delict is not limited to cases of negligence but also
covers intentional and deliberate acts which are unlawful. The term “fault”
covers deliberate and intentional acts
Classification of
obligation
1. Civil or Natural

2. Real or Personal

3. Pure, conditional or with a

term

4. Conjunctive, alternative, or
facultative

5. Joint or Solidary

6. Divisible or indivisible; and

7. With a penal clause

 CIVIL VS
NATURAL
CIVIL NATURAL
(Title I) (Title III)
Based on positive Equity and natural law
law/man-made law
Grants a right to Does not grant a right
compel performance or of action for fulfillment.
fulfillment
The obligation may still
be fulfilled voluntarily.
Provides for a legal Does not provide legal
sanction in case of its sanction in case of its
breach breach
 Real vs
personal
REAL PERSONAL

Obligation is to give a Obligation is to do, and

thing not to do
There is no negative There is a negative
obligation only positive and positive obligation
obligation
Specific vs generic obligations
• Real Obligations can either be specific (determinate) or generic
(indeterminate) depending on the nature of the thing to be delivered.

• Specific Obligation – In an obligation to give, it consists in the delivery of a

specific or determinate thing.

• Generic Obligation – Consists merely in that of delivering any member of

the genus or class.

• A thing is determinate when it is particularly designated or physically

segregated from all others of the same class.

• A thing is indeterminate when only the genus or class has been determined,
without the same being designated and distinguished.
 Duties of
1. obligor
To Preserve the Specific thing due

2. To Deliver Fruits

3. To Deliver Accessions and Accessories

To Preserve the Specific thing due
• The only way by which the debtor may be able to comply with his determinate
obligation is by delivering the exact thing which is due. THERE IS NO OTER
WAY.

• Debtor in a determinate obligation is bound to observe the “proper diligence

of a good father of a family” which is the most common standard of conduct.
(Art. 1163)
Duty To deliver fruits
• A debtor is bound to deliver the fruits of a determinate thing.

• A creditor shall acquire a right over the fruits of a determinate thing due only
from the time the obligation to deliver the said thing arises.

• Obligation to deliver arises from the moment the vinculum attaches,

even when another date has been fixed for the deliver of the thing.
Duty To deliver fruits (creditor acquires
•real right)
Article 1164 provides that the creditor “shall acquire no real right over it until
the same has been delivered to him”

• Personal right vs Real right

• Personal right – is the power of one person to demand from another, as a

definite passive subject, the fulfillment of a prestation to give, to do, or
not to do.

• Real right – is the power belonging to a person over a specific thing,

without a passive subject individually determined, against whom such
right may be personally exercised.
Kinds of obligations

1. Pure Obligations

2. Conditional Obligations
Pure obligations
• Every obligation whose performance does not depend upon a future or
uncertain event, or upon a past event unknown to the parties, is
demandable at once. Every obligation which contains a resolutory condition
shall also be demandable, without prejudice to the effects of the happening of
the event. (Article 1179)

• For obligation to be pure, the same must not also be subjected to a term or
period

• Demandable at once; Obligation is due upon demand; Obligation is due

immediately

• However, if the obligor binds himself to pay when his means permit him to do
so, the obligation is with a period not pure obligation.
Conditional
obligations
• In conditional obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon
the happening of the event which constitutes the condition.

• The event must be future and uncertain. As a the most important

character of a condition is uncertainty.
Conditional
obligations
• Suspensive

• Resolutory

• Potestative

• Casual

• Mixed
Suspensive condition
• The effectivity of the obligation shall take place only if and when the event
which constitutes the condition happens or is fulfilled.

• The happening of the condition gives rise to the obligation.

• When the suspensive condition arrives, the effects of the obligation shall
retroact to the day of the constitution of the obligation. (Art. 1187)
Resolutory condition
• A condition that constitutes "a future and uncertain event, upon the
happening or fulfillment of which rights which are already acquired by virtue
of the obligation are extinguished or lost (Jurado, Comments and
Jurisprudence on Obligations and Contracts (1987)

• The happening of the condition extinguishes the obligation.

• An obligation subject to a resolutory condition is immediately demandable but

it is extinguished upon the happening of the condition.

• Once the resolutory condition is fulfilled, the obligation is extinguished and

the parties are required to return to each other what they have received.
Potestative condition
• A condition is potestative when its fulfillment depends exclusive upon the will
of one of the contracting parties.

• The fulfillment of which depends exclusively upon the will of the debtor, in
which case , the conditional obligation is void. (Art.1182)
casual condition
• A condition that depends on chance, hazard, or the will of a third person.
(valid obligation)
Mixed condition
• A condition that depends partly on the will of one of the contracting parties,
or the obligor, and partly on chance, hazard or the will of a third person,