LAW 1 – Obligations and Contracts

Glossary of Terms
OBLIGATIONS
1. Obligation – juridical necessity to give, to do, or not to do.
2. Civil Obligation – obligations which give the creditor or obligee a right under the
law to enforce their performance in courts of justice.
3. Natural Obligations – obligations not being based on positive law but on equity and
natural law, do not grant a right of action to enforce their performance although in
case of voluntary fulfillment by the debtor, the latter may not recover what has been
delivered or rendered by reason thereof.
4. Passive Subject (called debtor or obligor) – the person who is bound to the
fulfillment of obligation, he who has the duty.
5. Active Subject (called creditor or obligee) – the person who is entitled to demand
the fulfillment of obligation; he who has the right.
6. Object or Prestation (subject matter of the obligation) – conduct required to be
observed by the debtor. It may consist in giving, doing or not doing.
7. Juridical or Legal Tie (also called as efficient cause/vinculum juris) – that which
binds or connects the parties to the obligation. The tie in an obligation can easily
be determined by knowing the source of the obligation (law, contract, quasi
contract, delict, and quasi delict).
8. Form of an Obligation – refers to the manner in which an obligation is manifested
or incurred. It may be oral, or in writing, or partly oral and partly in writing.
9. Right – the power which a person has under the law, to demand from another any
prestation.
10. Wrong (cause of action) – is an act or omission of one party in violation of the legal
rights (recognized by law) of another.
11. Injury – refers to the wrongful violation of the legal right of another.
12. Real Obligation (obligation to give) – is that in which the subject matter is a thing
which the obligor must deliver to the obligee.
13. Personal Obligation (obligation to do or not to do) – is that in which the subject
matter is an act to be done or not to be done.
14. Contract – is a meeting of minds between two (2) persons whereby one bids
himself with respect to the other, to give something or to render some service.
15. Quasi- contracts – certain lawful, voluntary, and unilateral acts giving rise to a
juridical relation to the end that no one shall be unjustly enhanced at the expense
of another.
16. Negotiorum Gestio – voluntary administration of the property, business or affairs
of another without his consent or authority. This creates the obligation to reimburse
the gestor for necessary and useful expenses.
17. Solutio Indebiti – payment by mistake of an obligation which was not due when
paid. This creates the obligation to return the payment.
18. Quasi-delict (also known as tort or culpa aquiliana) – these are acts or omissions
that cause damage to another, these being no contractual relation between the
parties.
19. Determinate Thing (specific) – when it is particularly designated or physically
segregated from all others of the same class.
20. Indeterminate thing (genetic) – when it is not particularly or physically segregated
from all others of the same class.
21. Natural Fruits – are the spontaneous products of the soil and the young and other
products of animals.
22. Industrial Fruits – are those products by land of any kind through cultivation or
labor.
23. Civil Fruits – are those which are the result of a juridical relation such as the rent
of a building price lease of land and other property and the amount or perpetual or
life annuities.
24. Personal right – this is the right that may be enforced by one person on another,
such as the right of the creditor to demand the delivery of the thing and its fruits
from the debtor.
25. Real right –this refers to the right or power over a specific thing, such as
possession or ownership, which is right enforceable against the whole world. This
is the right acquired by the creditor over a thing and its fruits when they have been
delivered to him.
26. Accessions – they include everything that is produced by a thing or is incorporated
or attach thereto, either naturally or artificially.
27. Accessories – those joined to or included with the principal thing for the latter’s
better use, perfection or enjoyment (such as the keys to a car or a house, or the
bracelet of a wristwatch).
28. Damages – refer to the harm done and the sum of money that may be recovered.
29. Injury – refers to the wrongful or tortuous act. It is the legal wrong to be redressed.
30. Actual or Compensatory Damages – these refer to the pecuniary loss (such as
loss in business or profession) that may be recovered. It includes the value of the
loss suffered and profits not realized.
31. Moral Damages – they include physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation,
and similar injury
32. Temperate or Moderate Damages – they are more than nominal but less than
compensatory damages, but may be recovered if the courts finds that some
pecuniary loss has been suffered but its amount cannot, from the nature of the
case, be proved with certainty.
33. Liquidated damages – those agreed upon by the parties to a contract, to be paid
in case of breach.
34. Exemplary or Corrective Damages – imposed by way of example or correction for
the public good, in addition to the moral, temperate, liquidated, or compensatory
damages.
35. Fraud – is the deliberate or intentional evasion by the debtor of the fulfillment of
his obligation in a normal manner.
36. Casual fraud (dolo causente) – fraud without which consent would not have been
given it renders the contract voidable.
37. In Incidental Fraud (dolo incidente) – fraud without which consent would have still
been given but the person giving it would have agreed on different terms. The
contract is valid but the party employing it shall be liable for damages.
38. Negligence – it is the omission of that diligence which is required by the nature of
the obligation and corresponds with the circumstances of the person, of the time,
and of the place.
39. Culpa Aquiliana (civil negligence or tort or quasi-delict or culpa extra contractual)
– these are acts or omissions that cause damage to another, there being no
contractual relation between parties.
40. Culpa contractual (contractual negligence) – negligence in the performance of a
contract (such as the negligence committed by the driver of a bus when a
passenger is hurt during a trip because there is here a breach of contract of
carriage).
41. Culpa criminal (criminal negligence) – negligence that results in the commission of
a crime.
42. Delay or default or mora is the non-fulfillment of an obligation with respect to time.
43. Mora Solvendi – delay on the part of the debtor.
44. Mora Accipeindi – delay on the part of the creditor.
45. Compensatio Morae – delay in reciprocal obligations, both parties are in default.
Here, it is as if there is no delay.
46. Fortuitous Event – events which could not foreseen, or which though foreseen are
inevitable.
47. Accion Subrogatoria – exercise all the rights and bring all the actions of the debtor
except those personal to him.
48. Accion Pauliana – impugn the acts which the debtor may have done to defraud his
creditors.
49. Diligence of Good Father of a Family – diligence which an average, reasonably
prudent person exercises over his own property.
50. Extraordinary diligence – diligence required of a common carrier (person or
company engaged in the transportation of persons and/or cargoes) it is bound to
carry the passenger safely as far as human care and foresight can provide using
utmost diligence of very cautious persons with a due regard for all circumstances.
51. Pure obligation – is one without a term or condition and is demandable at once.
52. Conditional obligation – is one whose demandability or extinguishment depends
upon the happening of a condition.
53. Suspensive Condition – the happening of which gives rise to the obligation, it is
the fulfillment of the condition that produces the efficacy of the obligation. No
fulfillment, no obligation.
54. Resolutory Condition – the happening of which extinguishes the obligation. The
obligation takes effect at once but will terminate the happening of the event.
55. Condition – is a future and uncertain event upon which an obligation is
subordinated or made to depend.
56. Potestative Condition – one which depends upon the will of one of the parties
(facultative condition).
57. Casual – one which depends exclusively upon chance.
58. Mixed – one which depends upon the will of one of the contracting parties and
partly upon chance or the will of a third person.
59. Period – is a future and certain event upon the arrival or which the obligation
subject to it either arises or extinguished.
60. Obligation with a period – one whose effects or consequences are subjected in
one way or another to the expiration on arrival of said period of term.
61. Suspensive period (ex die) – the obligation begins only from a day certain upon
the arrival of period.
62. Resolutory Perios (in diem) – the obligation is valid up to a day certain and
terminated upon arrival of the period.
63. Alternative Obligation – is one wherein various prestations are due but the
performance of one of them is sufficient as determined by the choice, with as a
general rule, belongs to the debtor.
64. Facultative Obligation – is one where only one prestation has been agreed upon
but the obligation may render another substitution.
65. Joint Obligation – one where the whole obligation is to be paid of fulfilled
proportionately by the different debtors and/or is to be demanded proportionately
by the different creditors.
66. Solidary Obligation – one where each one of the debtors is bound to render, and//or
each of the creditors has a right to demand from any of the debtors, entire
compliance with the prestation.
67. Prescription – one acquires ownership and other rights through the lapse of time
in the manner and under the conditions laid down by the law (acquisitive).
In the same way, rights and actions are lost by prescription (extinctive).
68. Divisible Obligation – is one the object of which in its delivery or performance is
capable of partial fulfillment.
69. Indivisible Obligation – is one the object of which, in its delivery or performance is
not capable of partial fulfillment.
70. Principal Obligation – is one which can stand by itself and does not depend for its
validity and existence upon another obligation.
71. Accessory Obligation – is one which is attached to a principal obligation and
therefore cannot stand alone.
72. Obligation with Penal Cause – is one which contains an accessory undertaking to
pay a previously stipulated indemnity in case of breach of the principal prestation
intended primarily to induce its fulfillment.
73. Penal Cause – is an accessory undertaking attached to an obligation to assume
greater liability in case of breach – i.e the obligation is not fulfilled, or its partly or
irregularly complied with.
74. Payment on Performance – mode of extinguishing an obligation not only the
delivery of many but also performance.
75. Dation in Payment – (adjudicacion or dacion en pago ) is the convergence of
ownership of a thing as an accepted equivalent of performance (payments in kind).
76. Legal Tender – is the currency which if offered by debtor in the right amount, the
creditor must accept in payment of debt in money.
77. Inflation – is a sharp sudden increase of money or credit or both without a
corresponding increase in business transactions. Inflation causes a drop in the
value of money resulting in the rise of general price level.
78. Deflation – is the reduction in the value and circulation of the available money or
credit resulting in a decline of the general price level it is the opposite of inflation.
79. Application of payment – is the designation of the debt to which should be applied
the payment made by a debtor who has various debts of the same kind in favor of
one and the same creditor.
80. Tender of Payment – it is the act in the part of debtor of offering to the creditor the
thing or amount due (extrajudicial).
81. Consignation – is the act of depositing the thing or amount due with the proper
court when the creditor does not desire or cannot receive it, after complying with
the formalities required by law (judicial).
82. Thing – is lost when it perishes, or goes out of commerce or disappears in such a
way that its existence or unknown or cannot be recovered.
83. Subrogation – it is the substitution of one person (subrogee) in the place of the
creditor (subroger) with reference to a lawful claim or right, giving the former all the
rights of the latter, including the rights to employ all remedies enforce to payment.
- The person who pays for the debtor is put into the shoes of the
creditor.
84. Free disposal of the thing due means that the thing to be delivered must not be
subject to any claim or lien or encumbrance (e.g. mortgage, pledge) of a third
person.
85. Capacity to Alienate – means that the person is not incapacitated to enter into
contracts and for that matter, to make a disposition of the thing due.
86. Payment by Cession/assignment – is another special form of payment. It is the
assignment or abandonment of all the properties of the debtor for the benefit of
his creditors in order that the latter may sell the same and applying the proceeds
thereof to the satisfaction of their credits.
87. Condonation or remission – is the gratuitous abandonment by the creditor of his
right against the debtor.
88. Confusion or merger – is the meeting in one person of the qualities of creditor
and debtor with respect to the same obligation.
 89. Compensation – is the extinguishment to the concurrent amount of the debts of
two persons who, in their own right are debtors and creditors of each other.
90. Commodatum – is a gratuitous contract whereby one of the parties delivers to
another something not consumable so that the latter may use the same for a
certain time and return it.
91. Novation – is the total or partial extinction of an obligation through the creation of
a new one which substitutes it.
92. Expromision – that which takes place when a third person of his own initiative
and without the knowledge or against the will of the original debtor assumes the
latter’s obligation with the consent of the creditor.
93. Delegacion – that which takes place when the creditor accepts a third person to
take place of the debtor at the instance of the latter.

Prepared By: Atty. Idlefonso O. Lamboso 6/28/18