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Oblicon Ateneo BarOps Summer Reviewer PDF
Oblicon Ateneo BarOps Summer Reviewer PDF
Oblicon Ateneo BarOps Summer Reviewer PDF
Civil Law
SUMMER REVIEWER
OBLIGATIONS AND CONTRACTS • neither party may unilaterally evade his obligation
in the contract, unless:
TITLE 1 - OBLIGATION a. Contract authorizes it
b. Other party assents
• Parties may freely enter into any stipulations
Art. 1156. An obligation is a juridical necessity provided they are not contrary to law, morals,
to give, to do or not to do. (n) good customs, public order or public policy
—Adviser: Dean Cynthia del Castillo Head: Joy Ponsaran, Eleanor Mateo; Understudy: Joy Tajan, John Paul Lim;
Subject Head: Jennifer Sanchez; Pledgees: Maria Angela Alarilla, Gregorio Rafael Bueta, Kristi Fe Mari Lu
Civil Law Summer Reviewer
ATENEO CENTRAL BAR OPERATIONS 2007
2. Reparation for damage caused 2. Real Obligations: obligations to give; where the
3. Indemnity for Consequential damages subject matter is a thing which the obligor must
deliver to the obligee
EFFECT OF ACQUITTAL IN CRIMINAL CASE a. Determinate or specific – object is particularly
1. When due to reasonable doubt – no civil liability designated or physically segregated from all
2. When due to exempting circumstances – there is other things of the same class
civil liability b. Generic –object is designated by its class or
3. When there is preponderance of evidence – there genus
is civil liability c. Limited Generic – generic objects confined to
a particular class
CRIMES WITHOUT CIVIL LIABILITY Ex: An obligation to deliver one of my horses
1. Contempt (Tolentino, Volume IV, p. 91; De Leon, 2003 ed.,
2. Insults to persons in authority p. 7)
3. gambling
4. violations of traffic regulations (De Leon, 2003 EFFECT OF OBLIGATIONS
ed.,p. 23)
DUTIES OF DEBTOR IN AN OBLIGATION TO GIVE
QUASI-DELICT/TORTS (OBLIGATION EX QUASI- A DETERMINATE THING (See Arts. 1163, 1164,
DELICTO Or EX QUASI MALEFICIO ) 1166.)
• It is an act or omission arising from fault or 1. To preserve or take care of the thing due with the
negligence which causes damage to another, diligence of a good father of a family
there being no pre-existing contractual relations
between the parties DILIGENCE OF A GOOD FATHER OF A FAMILY –
• ELEMENTS: ordinary care or that diligence which an average or
1. There must be an act or omission reasonably prudent person would exercise over his
2. There must be fault or negligence attributable to own property
the person charged
3. There must be damage or injury NOTE: Rule on Standard of Care
4. There must be a direct relation of cause and • That which the law requires; or
effect between the act arising from fault or • That stipulated by the parties; or
negligence and the damage or injury (proximate • In the absence of the two, diligence of a good
cause ); father of a family
5. There is no pre-existing contractual relation
between the parties. 2. To deliver the fruits of the thing: Right to the
fruits of the thing from the time the obligation to
NEGLIGENCE deliver it arises
• Failure to observe for the protection of the
interests of another person, that degree of care, WHEN OBLIGATION TO DELIVER ARISES
precaution and vigilance which the circumstances • GENERAL RULE: From the time of the
justly demand, whereby such other person perfection of the contract (i.e. meeting of the
suffers injury. (US v. Barrias, 23 Phil. 434 [1912]) minds between the parties)
• EXCEPTIONS
CHAPTER 2. – NATURE & EFFECTS OF
a. when the parties made a stipulation as
OBLIGATIONS
regards the right of the creditor to the fruits of
See Arts. 1163 - 1178 the thing
QuickTime™ and a
TIFF (Uncompressed) decompressor b. when the obligation is subject to a
NATURE OF OBLIGATIONS
are needed to see this picture.
suspensive condition or period; arises upon
1. Personal Obligations: obligations to do or not fulfillment of the condition or arrival of the
to do; where the subject matter is an act to be period
done or not to be done
a. Positive – obligation to do PERSONAL V. REAL RIGHT
b. Negative – obligation not to do Personal Real
Jus ad rem, a right Jus in re, a right
enforceable only enforceable against
Page 105 of 297
Civil Law Summer Reviewer
ATENEO CENTRAL BAR OPERATIONS 2007
breach of the obligation. (De Leon, 2003 ed., p. c. Obligations to deliver a determinate
42) thing, liable for fortuitous events. If debtor
can prove that loss would have resulted
REQUISITES OF DELAY even if he had not been in default, the
1. Obligation must be due, demandable and court may equitably mitigate the
liquidated; damages (Art. 2215[4])
2. Debtor fails to perform his positive obligation on d. Resolution (Art 1170, in proper cases)
the date agreed upon;
3. A demand (not merely a reminder or notice), 2. Mora Accipiendi – default on part of creditor
judicial or extra-judicial, made by the creditor when he unjustifiably refuses to accept the
upon the debtor to fulfill, perform or comply with performance of the obligation.
his obligation otherwise, he will be in default; and • REQUISITES:
4. Failure of the debtor to comply with such a. Offer of performance by the debtor
demand. b. Offer must be to comply with the
prestation as it should be performed
KINDS OF DELAY c. Creditor refuses the performance without
1. Mora Solvendi– default on the part of the debtor: just cause
• Mora Solvendi Ex re – default in real • EFFECTS:
obligations a. Responsibility of debtor is limited to
• Mora Solvendi Ex persona – default in fraud and gross negligence
personal obligations b. Debtor is exempted from risk of loss
• REQUISITES: of thing; creditor bears risk of loss
a. The obligation must be due, enforceable c. Expenses by debtor for preservation
and already liquidated or determinate in of thing after delay is chargeable to
amount; creditor
b. There must be non-performance; and d. If obligation bears interest, debtor does
c. There must be a demand, unless not have to pay from time of delay
demand is not required. e. Creditor liable for damages
• GENERAL RULE: Those obliged to deliver f. Debtor may relieve himself of
or to do something incur in delay from the obligation by consigning the
time the obligee judicially or extrajudicially thing
demands from them the fulfillment of their
obligation. 3. Compensatio morae – both parties are in
• EXCEPTIONS (no demand necessary) default (in reciprocal obligations); there is no
a. When the obligation or the law expressly actionable default on the part of both parties
so declare; or
b. When from the nature and the • Rule in Reciprocal Obligations: In reciprocal
circumstances of the obligation it obligations, neither party incurs in delay if the
appears that the designation of the time other does not comply or is not ready to comply
when the thing is to be delivered or the in a proper manner with what is incumbent upon
service is to be rendered was a him. From the moment one of the parties fulfills
controlling motive for the establishment his obligation, delay by the other begins.
of the contract; or • Performance must be simultaneous unless
c. When demand would be useless, as different dates for the performance of the
when the obligor has rendered it beyond obligation were fixed by the parties
his power to perform
• EFFECTS: QuickTime™ and a CESSATION OF THE EFFECTS OF MORA:
TIFF (Uncompressed) decompressor
a. Debtor is toguilty
are needed of breach of the
see this picture. • renunciation (express or implied)
obligation • prescription
b. Liability: If obligation to pay money- must • NOTE: There is no delay in negative obligations
pay interest. If no extra-judicial demand, and natural obligations.
interest runs from the filing of the
complaint. In other obligations, pay FORTUITOUS EVENT – An event which could not be
damages. foreseen, or which though foreseen, was inevitable
REQUIREMENTS: (Nakpil and Sons vs. CA): Art. 1178 Subject to the laws, all rights acquired in
1. The cause of the breach of the obligation must be virtue of an obligation are transmissible, if there has
independent of the will of the debtor been no stipulation to the contrary. (1112)
2. The event must be either unforeseeable or Art. 1191. The power to rescind obligations is implied
unavoidable in reciprocal ones, in case one of the obligors should
3. The event must be such as to render it not comply with what is incumbent upon him.
impossible for the debtor to fulfill his obligation in The injured party may choose between the fulfillment
a normal manner and the rescission of the obligation, with the payment
4. The debtor must be free from any participation in, of damages in either case. He may also seek
or aggravation of injury to the creditor rescission, even after he has chosen fulfillment, if the
latter should become impossible.
RULE ON FORTUITOUS EVENT: The court shall decree the rescission claimed, unless
• GENERAL RULE: No liability for fortuitous event there be just cause authorizing the fixing of a period.
• EXCEPTIONS: This is understood to be without prejudice to the
1. When expressly declared by law ( bad faith, rights of third persons who have acquired the thing, in
subject matter is generic, debtor is in delay ) accordance with Articles 1385 and 1388 and the
2. When expressly declared by stipulation or Mortgage Law. (1124)
contract Art. 1192. In case both parties have committed a
3. When nature of obligation requires assumption of breach of the obligation, the liability of the first
risk infractor shall be equitably tempered by the courts. If
4. When the obligor is in default or has promised to it cannot be determined which of the parties first
deliver the same thing to two or more persons violated the contract, the same shall be deemed
who do not have the same interest (Art. 1165[3]) extinguished, and each shall bear his own damages.
(n)
EFFECT OF FORTUITOUS EVENT
Determinate Generic Obligation REMEDIES AVAILABLE TO CREDITORS FOR THE
Obligation SATISFACTION OF THEIR CLAIMS
Obligation is Obligation is not 1. Exact fulfillment of the obligation by specific or
extinguished extinguished based on the substitute performance with a right to damages in
rule that the genus never either case;
perishes (genus nunquam 2. In case of reciprocal obligations, petition the court
peruit) to resolve the contract;
3. Pursue the leviable (not exempt from attachment
Art. 1176 The receipt of the principal by the creditor, under the law) property of the debtor;
without reservation with respect to the interest, shall 4. Accion directa (Arts. 1729 and 1652):Right of
give rise to the presumption that said interest has been the lessor to go directly to sublessee for unpaid
paid. rents of the lessee. Right of the laborers or
The receipt of a later installment of a debt without persons who furnish materials for a piece of work
reservation as to prior installments, shall likewise raise undertaken by a contractor to go directly to the
the presumption that such installments have been paid. owner for any unpaid claims due to the contractor
5. Accion subrogatoria – to be subrogated to all
the rights and actions of the debtor save those
PRINCIPLE IN ARTICLE 1176 which are inherent in his person
• Before the presumption that a prior installment • REQUISITES:
had been paid may arise, the receipt must a. The debtor to whom the right of action
specify the installment for which payment is properly pertains must be indebted to the
made. QuickTime™ and a creditor;
TIFF (Uncompressed) decompressor
are needed to see this picture. b. The creditor must be prejudiced by the
Art. 1177 The creditors, after having pursued the inaction or failure of the debtor to proceed
property in possession of the debtor to satisfy their against the third person;
claims, may exercise all rights and bring all the c. The creditor must have pursued first or
actions of the latter for the same purpose, save those exhausted all the properties of the debtor
which are inherent in his person; they may also which are not exempt from execution;
impugn the acts which the debtor may have done to d. The debtor's assets are insufficient to satisfy
defraud them. (1111) his claims; and
e. The right of account is not purely personal fulfillment of a condition or upon the expiration of a
6. Accion Pauliana – asking the court to rescind or period and is demandable at once
to impugn all the acts which the debtor may have CONDITIONAL – one whose effectivity is
done to defraud the creditors (Arts. 1380-1389) subordinated to the fulfillment or non-fulfillment of a
• REQUISITES: future AND uncertain event or upon a past event
a. There is a credit in favor of plaintiff unknown to the parties
b. The debtor has performed an act subsequent CONDITION - Future and uncertain event or a past
to the contract, giving advantage to other event unknown to the parties
persons
c. The creditor is prejudiced by the debtor's act 1. Suspensive – happening of condition gives rise
which are in favor of 3rd parties and to obligation
rescission will benefit the creditor • Effects:
d. The creditor has no other legal remedy a. Effectivity retroacts to the day of the
e. The debtor's acts are fraudulent constitution of the obligation
b. No retroactivity with reference to fruits or
Without the With the fault of the
interest and prescription
fault of the debtor
debtor c. Creditor may preserve rights
Loss Obligation is Debtor obliged to pay d. Debtor – recovery of payment by mistake or
extinguished damages even w/o mistake
Deterioration Impairment Creditor may choose
borne by the between rescission RULES ON LOSS, DETERIORATION, AND
creditor or its fulfillment with IMPROVEMENTS DURING PENDENCY OF A
damages in either SUSPENSIVE CONDITION (Art. 1189)
case
ALTERNATIVE OBLIGATIONS (See Arts. 1199 – REQUISITES FOR MAKING THE CHOICE:
1206) 1. Made properly so that creditor or his agent will
actually know
FACULTATIVE - only one prestation has been 2. Made with full knowledge that a selection is
agreed upon but another may be given in substitution indeed being made
3. Made voluntarily and freely
EFFECT OF LOSS OR DETERIORA0TION THRU 4. Made in due time – before or upon maturity
NEGLIGENCE, DELAY OR FRAUD OF OBLIGOR: 5. Made to all proper persons
• Of thing intended as substitute - no liability 6. Made w/o conditions unless agreed by the
• Of the substitute after substitution is made – with creditor
liability 7. May be waived, expressly or impliedly
• It falls under art 1241, par 1,2,3 - the Art. 1235. When the obligee accepts the
benefit is total so, performance is performance, knowing its incompleteness or
total irregularity, and without expressing any protest or
iii. Anyone in possession of the credit - but objection, the obligation is deemed fully complied
will apply only if debt has not been with. (n)
previously garnished
• Attempt in Good Faith to perform without willful or
PAYMENT MADE TO AN INCAPACITATED
intentional departure
PERSON, VALID IF
• Deviation is slight
1. Incapacitated person kept the thing delivered, or
• Omission/Defect is technical or unimportant
2. Insofar as the payment has been beneficial to
him • Must not be so material that intention of parties is
not attained
RD
PAYMENT TO 3 PARTY NOT AUTHORIZED,
VALID IF PROVED AND ONLY TO THE EXTENT EFFECT OF SUBSTANTIAL PERFORMANCE IN
OF BENEFIT; PRESUMED IF GOOD FAITH
1. After payment, 3rd person acquires the creditor’s • Obligor may recover as though there has been
rights strict and complete fulfillment, less damages
rd
2. Creditor ratifies payment to 3 person suffered by the oblige
3. By creditor’s conduct, debtor has been led to • Right to rescind cannot be used for slight breach
make the payment (estoppel)
SPECIAL RULES/FORMS OF PAYMENT
PAYMENT MADE IN GOOD FAITH TO A PERSON
IN POSSESSION OF CREDIT SHALL RELEASE 1. APPLICATION OF PAYMENTS – the designation
DEBTOR; REQUISITES: of the debt which payment shall be made, out of
1. Payment by debtor must be made in good faith 2 or more debts owing the same creditor:
2. Creditor must be in possession of the credit and stipulation or application of party given benefit of
not merely the evidence of indebtedness period – OK; to be valid: must be debtor’s choice
or w/ consent of debtor
• NOTE: With respect to time and place of
payment - must be according to the obligation REQUISITES FOR THE APPLICATION OF
PAYMENT:
WHERE PAYMENT SHOULD BE MADE a. Various debts of the same kind
1. In the place designated in the obligation b. Same debtor
2. If there is no express stipulation and the c. Same creditor
undertaking is to deliver a specific thing – at the d. All debts must be due
place where the thing might be at the moment the • EXCEPTION: there may be application of
obligation was constituted payment even if all debts are not yet due if:
3. In other case – in the place of the domicile of the a. Parties so stipulate
debtor b. When application of payment is made by the
• Time of payment - time stipulated party for whose benefit the term has been
• Effect of payment – extinguish obligation constituted
Except: order to retain debt c. Payment is not enough to extinguish all debts
4. CESSION or ASSIGNMENT
4. CONSIGNATION
CESSION/ASSIGNMENT IN FAVOR OF
CREDITORS – the process by which debtor transfer TENDER -the act of offering the creditor what is
all the properties not subject to execution in favor of due him together with a demand that the creditor
creditors is that the latter may sell them and thus, accept the same (When creditor refuses w/o just
apply the proceeds to their credits; extinguish up to cause to accept payment, he becomes in mora
amount of net proceeds ( unless w/ contrary accepiendi and debtor is released from
stipulation ) responsibility if he consigns the thing or sum due)
d. Judicial – set off; upon order of the court; b. Old obligation subsists if new obligation is
needs pleading and proof; all requirements void or voidable but annulled already
must concur except liquidation (except: intention of parties)
e. Total – when 2 debts are of the same c. If old obligation has condition
amount i. If Resolutory and it occurred – old
f. Partial – when 2 debts are not of the same obligation already extinguished; no new
amount obligation since nothing to novate
ii. If Suspensive and it never occurred –as
EFFECT OF ASSIGNMENT OF CREDIT TO 3RD if no obligation; also nothing to novate
PERSON; CAN THERE STILL BE d. If old obligation has condition, must be
COMPENSATION compatible with the new obligation; if new is
a. If made after compensation took place – no w/o condition – deemed attached to new
effect; compensation already perfected e. If new obligation has condition
b. If made before compensation took place – i. If resolutory: valid
depends ii. If suspensive and did not materialize:
i. With consent of debtor – debtor is old obligation is enforced
estopped unless he reserves his right
and gave notice to assignee KINDS OF NOVATION:
ii. With knowledge but w/o consent of a. REAL/OBJECTIVE – change object,
debtor – compensation may be set up as cause/consideration or principal condition
to debts maturing prior to assignment b. PERSONAL/SUBJECTIVE
iii. W/o knowledge – compensation may be i. Substituting person of debtor
set-up on all debts prior to his knowledge (passive)
• EXPROMISION; initiative is from 3rd
8. NOVATION person or new debtor; new debtor and
creditor to consent; old debtor released
NOVATION – from obligation; subject to full
extinguishment of obligation by creating/ substituting reimbursement and subrogation if made
a new one in its place w/ consent of old debtor; if w/o consent
or against will , only beneficial
• Changing object or principal conditions reimbursement; if new debtor is
• Substituting person of debtor insolvent, not responsible since w/o his
consent
•
rd
Subrogating 3 person in right of creditor
• DELEGACION; initiative of old debtor; all
REQUISITES: parties to consent; full reimbursement; if
a. Valid obligation insolvent new debtor – not responsible
b. Intent to extinguish old obligation – old debtor because obligation
expressed or implied: extinguished by valid novation unless:
completely/substantially incompatible old and insolvency already existing and of public
new obligation on every point knowledge or know to him at time of
c. Capacity and consent of parties to the new delegacion
obligation 1. Delegante – old debtor
d. Valid new obligation 2. Delegatario - creditor
3. Delegado – new debtor
rd
EFFECTS OF NOVATION: ii. Subrogating 3 person to rights of
a. Extinguishment of principal carries creditor ( active )
accessory, except:
QuickTime™ and a
1. Conventional - agreement and
TIFF (Uncompressed) decompressor
i. Stipulation
are neededto contrary
to see this picture. consent of all parties; clearly
ii. Stipulation pour autrui unless beneficiary established
consents 2. Legal - takes place by operation of
iii. Modificatory novation only; obliged to w/c law; no need for consent; not
is less onerous presumed except as provided for in
iv. Old obligation is void law:
PRESUMED WHEN-
a. Creditor pays another preferred 4. Fulfill what has been expressly stipulated
creditor even w/o debtor’s 5. All consequences w/c may be in keeping with
knowledge good faith, usage and law
rd
b. 3 person not interested in 6. Relativity – binding only between the parties,
obligation pays w/ approval of their assigns, heirs; strangers cannot demand
debtor enforcement
c. Person interested in fulfillment of
obligation pays debt even w/o EXCEPTION TO RELATIVITY:
knowledge of debtor 1. Accion pauliana
2. Accion directa
Difference from Change of debtor 3. Stipulation pour autrui
payment by 3rd
person REQUISITES OF STIPULATION POUR AUTRUI
1. debtor is not 1. debtor is released 1. Parties must have clearly and deliberately
necessarily conferred a favor upon a 3rd person
released from debt 2. The stipulation in favor of a 3rd person should be
2. can be done w/o 2. needs consent of creditor a part of, not the whole contract
consent of creditor – express or implied 3. That the favorable stipulation should not be
conditioned or compensated by any kind of
obligation whatsoever
3. one obligation 3. two obligations; one is
4. Neither of the contracting parties bears the legal
extinguished and new one rd
created representation or authorization of 3 party
4. 3rd person has no 4. new debtor is obliged to pay 5. The third person communicates his acceptance
obligation to pay if before revocation by the original parties
insolvent 6. Art 1312; Art 1314
b. Bilateral – both parties are required to offeror comes to know, and not when the offeree
render reciprocal prestations merely manifests his acceptance
5. As to name or designation
a. Nominate ELEMENTS OF VALID OFFER / ELEMENTS OF
b. Innominate VALID ACCEPTANCE
I. Do ut des – I give that you may give 1. Definite--unequivocal
II. Do ut facias – I give that you may do 2. Complete--unconditional
III. Facio ut des – I do that you may give 3. Intentional
IV. Facio ut facias – I do that you may do
WHEN OFFER BECOMES INEFFECTIVE:
STAGES IN A CONTRACT: 1. Death, civil interdiction, insanity or insolvency of
1. Preparation - negotiation either party before acceptance is conveyed
2. Perfection/birth 2. Express or implied revocation of the offer by the
3. Consummation – performance offeree
3. Qualified or conditional acceptance of the offer,
CHAPTER 2. – ESSENTIAL REQUISITES OF A which becomes a counter-offer
CONTRACT 4. Subject matter becomes illegal or impossible
See Arts. 1318 - 1355 before acceptance is communicated
the offeror may accept or reject. c. They were contracts for necessities such as
food, but here the persons who are bound to
RULE ON ADVERTISEMENTS AS OFFERS give them support should pay therefor
• Business advertisements – Not a definite offer, d. Minor is estopped for having misrepresented
but mere invitation to make an offer, unless it his age and misled the other party (when age
appears otherwise is close to age of majority as in the Mercado
• Advertisement for Bidders – only invitation to v Espiritu and Sia Suan v Alcantara cases.
make proposals and advertiser is not bound to
accept the highest or lowest bidder, unless
appears otherwise
*In the Sia Suan v Alcantara case, there is a
OPTION - option may be withdrawn anytime before strong dissent by J.Padilla to the effect that the
acceptance is communicated but not when supported minor cannot be estopped if he is too young to give
by a consideration other than purchase price: option consent; one that is too young to give consent is
money too young to be estopped. Subsequently, in
Braganza v Villa-Abrille, the dissent became the
ruling. Minors could not be estopped.
d. Produces a well grounded fear that the • immediate, direct and most proximate reason
person making it will carry it over why parties enter into contract
3. Undue influence • REQUISITES:
1. It must exist
SIMULATED CONTRACTS 2. It must be true
1. Absolute – no intention to be bound at all, 3. It must be licit
fictitious only – void from beginning
2. Relative – there is intention to be bound but MOTIVE
concealed; concealed contract binds: • purely private reason; illegality does not
a. No prejudice to 3rd persons invalidate contract except when it predetermines
b. Not contrary to law, morals, etc. purpose of contract; when merged into one
1. Entered into by guardian whenever e. transfer of all his property by a debtor when
ward suffers damage by more than he is financially embarrassed or insolvent
1/4 of value of object f. transfer made between father and son where
2. Agreed upon in representation of there is present any of the above
absentees, if absentee suffers lesion circumstances
by more than ¼ of value of property g. failure of the vendee to take exclusive
3. Contracts where rescission is based possession of the property
on fraud committed on creditor
(accion pauliana) Rescission in Art Rescission Proper in
4. Objects of litigation; contract entered 1191 Art 1381
into by defendant w/o knowledge or It is a principal action it is a subsidiary remedy
approval of litigants or judicial retaliatory in character
authority Only ground is non- There are 5 grounds to
5. Payment by an insolvent – on debts performance of one’s rescind. Non-
w/c are not yet due; prejudices claim obligation or what is performance by the other
of others incumbent upon him is not important
6. Provided for by law - art 1526, 1534, Applies only to Applies to both unilateral
1538, 1539, 1542, 1556, 1560, 1567 reciprocal obligation and reciprocal obligations
and 1659 Only a party to the Even a third person who
ii. Under art 1382 - Payments made in a contract may demand is prejudiced by the
state of insolvency fulfillment or seek the contract may demand the
1. Plaintiff has no other means to obtain rescission of the rescission of the contract.
reparation. contract
2. Plaintiff must be able to return Court may fix a period Court cannot grant
whatever he may be obliged to return or grant extension of extension of time for
due to rescission time for the fulfillment fulfillment of the
3. The things must not have been of the obligation obligation
passed to 3rd parties who did not act Its purpose is to cancel Its purpose is to seek
in bad faith the contract reparation for the damage
4. It must be made within the or injury caused, thus
prescribed period (of 4 years) allowing partial rescission
of the contract
OBLIGATION CREATED BY THE RESCISSION OF 2. VOIDABLE CONTRACTS – intrinsic defect; valid
THE CONTRACT: Mutual Restitution until annulled; defect is due to vice of consent or
a. Things w/c are the objects of the contract legal incapacity
and their fruits • CHARACTERISTICS:
b. Price with interest a. Effective until set aside
b. May be assailed or attacked only in an action
MUTUAL RESTITUTION NOT APPLICABLE WHEN for that purpose
a. creditor did not receive anything from c. Can be confirmed ( NOTE: confirmation is
contract the proper term for curing the defect of a
b. thing already in possession of party in good voidable contract)
faith; subject to indemnity only; if there are 2 d. Can be assailed only by the party whose
st
or more alienations – liability of 1 infractor consent was defective or his heirs or assigns
BADGES OF FRAUD QuickTime™ and a WHAT CONTRACTS ARE VOIDABLE:
a. consideration of decompressor
TIFF (Uncompressed) the conveyance is
are needed to see this picture. a. Minors ( below 18 )
inadequate or fictitious b. Insane unless acted in lucid interval
b. transfer was made by a debtor after a suit c. Deaf mute who can’t read or write
has been begun and while it is pending d. Persons specially disqualified: civil
against him interdiction
c. sale upon credit by an insolvent debtor e. In state of drunkenness
d. evidence of indebtedness or complete f. In state of hypnotic spell
insolvency
extrinsic defect; produce legal effects only after g. Anyone may invoke the nullity of the contract
ratified whenever its juridical effects are asserted
against him
KINDS:
a. Unauthorized or No sufficient authority – KINDS OF VOID CONTRACT:
entered into in the name of another when: a. Those lacking in essential elements: no
i. No authority conferred consent, no object, no cause (inexistent
ii. In excess of authority conferred ( ultra ones) – essential formalities are not complied
vires) with ( ex: donation propter nuptias – should
b. Curable by Ratification - Both parties conform to formalities of a donation to be
incapable of giving consent -2 minor or 2 valid )
insane persons i. Those w/c are absolutely simulated or
c. Curable by Acknowledgment - Failure to fictitious – no cause
comply with Statute of Frauds ii. Those which cause or object did not exist
i. Agreement to be performed within a year at the time of the transaction – no
after making contract cause/object
ii. Special promise to answer for debt, iii. Those whose object is outside the
default or miscarriage of another commerce of man – no object
iii. Agreement made in consideration of iv. Those w/c contemplate an impossible
promise to marry service – no object
iv. Agreement for sale of goods, chattels or v. Those w/c intention of parties relative to
things in action at price not less than principal object of the contract cannot be
500; exception: auction when recorded ascertained
sale in sales book b. Prohibited by law
v. Agreement for lease of property for more c. Those expressly prohibited or declared
than one year and sale of real property void by law - Contracts w/c violate any legal
regardless of price provision, whether it amounts to a crime or
vi. Representation as to credit of another not
d. Illegal/Illicit ones – Those whose cause,
TWO WAYS OF CURING UNENFORCEABLE object or purpose is contrary to law, morals,
CONTRACTS: good customs, public order or public policy ;
a. Failure of defendant to object in time, to Ex: Contract to sell marijuana
the presentation of parole evidence in court,
the defect of unenforceability is cured
b. Acceptance of benefits under the
contract. If there is performance in either
part and there is acceptance of performance,
it takes it out of unenforceable contracts; also
estoppel sets in by accepting performance,
the defect is waived
incapacitated person does not know what he 1. estoppel in pais (by conduct)
is entering into; unable to understand the c. estoppel by silence
consequences of his own action d. estoppel by acceptance of benefits
b. If agreement is not illegal per se but merely 2. Technical estoppel
prohibited and prohibition is designated for a. Estoppel by deed
the protection of the plaintiff – may recover b. Estoppel by record
what he has paid or delivered by virtue of c. Estoppel by judgment
public policy d. Estoppel by laches
KINDS
TITLE 4. – ESTOPPEL
See Arts. 1431 - 1439
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