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OBLICON LISTS
OBLIGOR – DEBTOR
OBLIGEE – CREDITOR
Art 1156 Essential reqs for existence of obligation
1. Juridical tie
2. Prestations or conduct to be observed
3. Subject/persons
Art 1157 Sources of obligation
1. Law
2. Contracts
3. Quasi contracts
4. Delicts
5. Quasi delicts
Art 1159 Components of contract
1. Complying in good faith – implied
2. Observing stipulation of contract – expressly
written
Art 1161 Reqs for obligations when it comes to delicts
1. Juridical tie – crime committed
2. Prestation – to give damages
3. Subject – obligor (offender), obligee (victim)
Art 1164 Personal right
1. Begins when right to deliver object of prestation
has risen in favor of creditor
2. Enforceable only against debtor under obligation
to give
3. Passive, definite debtor
4. Can be defeated by 3rd person in good faith who
innocently acquired prop prior to delivery
Art 1164 Real right (delivery creates it)
1. Prior to delivery no real right yet
2. Enforceable against whole world
3. Passive, no definite debtor
4. Will prejudice everybody claiming object
Art 1165 Fortuitous event will not excuse debtor from
obligation when
1. Obligor delays
2. Has promised to deliver same thing to 2 or more
persons who do not have same interest
Art 1166 Principal includes
1. Accession
2. Accessories
Art 1168 Remedies of person required to do something
(Chavez v. Gonzales)
1. Damages
2. File suit
3. Have it executed at other’s cost
*obligation to give money is not included
Art 1169 Demand not necessary to put person in delay
when (only applies to an obligation “to do”)
1. Law stipulates
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Ex. Promissory note
2. Time is of the essence
Ex. Stock market transactions
3. Demand would be USELESS as when the obligor
has rendered it beyond his power to perform
Art 1169 Kinds of delay
1. Mora solvendi – debtor’s fault
2. Mora accipiendi – creditor’s fault
Art 1169 Demand
1. Judicial (commencement of suit)
2. Extra judicial (notice)
Art 1169 Cases where extrajudicial demand be made before
filing civil suit
1. Ejectment cases
2. Consignment cases
Art 1169 Reqs for default
1. Obligation demandable and already liquidated
2. Debtor delays performance
3. Creditor requires performance judicially or extra
judicially
Art 1169 Reciprocal obligations
1. Created at same time and out of same cause
2. Results in mutual relationship of creditor and
debtor
3. Performance is conditioned upon simultaneous
fulfilment of the other
4. Non-fulfilment of the other entitled the other to
rescind the contract
Art 1170 Sources of liability
1. Fraud
2. Negligence
3. Delay
4. Contravention of the tenor of the obligation
Art 1174 Elements of a fortuitous even (Nakpil v. CA)
1. Cause of breach of obligation must be
independent of will of debtor
2. Event must be unforeseeable or unavoidable
3. Event must render it impossible for debtor to
fulfill obligation in normal manner
4. Debtor must be free from any participation in or
aggravation of injury
Art 1174 One can still be held liable for fortuitous delay
1. Law requires
2. Stipulation of parties
3. Nature of obligation requires (assumption of risk)
4. Object of the obligation is generic (ex. Money)
IN SUM: Still liable when there is a fortuitous event when
Art 1165 & 1174
1. Obligor delays
2. Obligor has promised the object of the obligation
to 2 or more persons who do not have the same
interests
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3. Law requires Implied term of contract?

4. Stipulation of parties
5. Nature of the obligation requires an assumption
of risk
6. Object of the obligation is generic
Art 1177 Successive measures taken by creditor before he
may bring action for rescission for allegedly fraudulent sale
1. Exhaust props of debtor through levying by
attachment & execution upon all prop of the
debtor
2. Exercise all rights and actions of debtor, save
those personal to him
a. Ex. Personal to debtor – to claim
support
3. Seek rescission of contracts executed by debtor in
fraud of their rights
Art 1178 Exceptions to transmissible rights
1. By law
2. Stipulation of parties
3. Material ingredient to obligation (personal
character/skill needed)
Art 1179 Kinds of obligation
1. Pure obligation – demandable immediately
2. Conditional – depends on
a. Future/uncertain event
b. Past event unknown to parties
Art 1179 Kinds of Conditions
1. Resolutory (condition subsequent) – demandable
at once when condition happens
2. Suspensive (condition precedent) – demandable
after the happening of future event or past
unknown event
Art 1182 Cases where legal treatment transforms to a
period
1. Only suspensive potestative condition and not
obligation is void
2. Debtor will pay when means permit him to do so
(Art 1180)
3. When in reciprocal obligations, the Court finds
there is just cause for fixing a period
4. Doesn’t fix period but from the nature and
circumstances it can be inferred period was
intended
5. When the fulfillment of the obligation is left to
the sole will of the debtor
Valid suspensive potestative conditions
1. Art 1180 – debtor will pay when his means
permit him to do so
2. All resolutory conditions
A: Good faith; otherwise there are consequences like
doctrine of constructive fulfillment
Art 1186 Doctrine of constructive fulfilment – condition
shall be deemed fulfilled when obligor voluntarily prevents
its fulfillment
Requisites
1. Condition is suspensive
2. Obligor actually prevents fulfillment of condition
3. Obligor acts voluntarily
Art 1187 Obligation to give
1. Effects retroact day of the constitution of the
obligation
2. When obligation imposes reciprocal
protestations, fruits/interests during pendency of
condition deemed mutually compensated
Art 1187 Obligation to or not to do
1. Courts will determine retroactive effect
Art 1189 Improvement, loss & deterioration in suspensive
conditions
1. Thing lost without fault of debtor, obligation
extinguished
2. Thing lost through fault of debtor, obliged to pay
damages
3. Thing deteriorates without fault of debtor,
impairment be borne by creditor
4. Deteriorates through fault of debtor, creditor may
choose
a. Rescission of obligation; and
b. Fulfillment with indemnity for damages
in either case
5. Thing improved by nature, time, improvement
shall inure to benefit of creditor
6. Improved at expense of debtor shall have no
other right than that granted to the usufructuary
a. Usufruct – gives right to enjoy prop of
another with obligation of preserving
form and substance unless title
constituting of it or law provides
otherwise
Art 1189 Diff ways of losing object
1. It perishes
2. Goes out of commerce
3. Disappears such a way that its existence is
unknown or it cannot be recovered
Fault of debtor = sources of liab (art. 1170)

Art 1183 Impossible conditions are contrary to

1. Good customs Art 1191 2 options for reciprocal obligations
2. Public policy 1. Rescind
3. Prohibited by law 2. Fulfill
4. “or when useless” (Damages either way)

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Art 1911 Rescinding of contract has the effect of
1. Abrogate the contract from the beginning; and
2. Restore the parties to their relative positions as if
no contract has been made
Art 1191 Requisites of effectivity of expressly stipulated
rescission
1. Agreement providing violation of terms shall
cause rescission without court intervention
2. Notice to be given to defaulter
Art 1193 Kinds of period
1. Suspensive period – gave rise to effectivity of
obligation
2. Resolutory – extinguishes obligation
1. Thing lost through fortuitous event – debtor
deliver that which creditor could choose from
among remainder or which remains if only one
subsists
2. Thing lost through fault of debtor – creditor may
claim any of those subsisting or price od that
which through fault of debtor had disappeared
with right to damages
3. Things are lost through fault of debtor – creditor
can choose based on price of any one of them
also with indemnity for damages
Art 1207 Solidary obligation exists
1. Expressly states
2. Law or nature of obligation requires it

Art 1197 Two step process (Gregorio Araneta Inc. v. Phil Art 1207 Surety v. Guarantor
Sugar Estates Dev Co, Ltd.) Surety Guarantor
1. Courts must determine Insurer of debt Insurer of insolvency
a. Obligation does not fix period Binds himself to pay Subsidiarily liable for the
b. Period is made upon will of the debtor obligation of debtor when debt of the debtor
2. Court must decide period was probs it becomes due
contemplated by parties Solidary debtor Jointly liable BUT can be
a. Be based on nature and circumstances stipulated to be solidarily
of the case liable
Art 1198 Debtor will lose every right to make use of a Creditor can right away Required to pay for
period collect from him indebtedness only after
1. After obligation contracted, becomes insolvent creditor has successfully
unless gives a guaranty or security for debt exhausted all means to
a. Insolvent – person still has assets but collect from debtor
liab exceed his assets assuming he pays
all debts at the same time Art 1207 Phrases for solidary obligation
2. He does not furnish to the creditor the guaranties 1. Individually & jointly liable
or securities which he has promised 2. Collectively, separately, distinctly, respectively
3. When by his own acts he has impaired said or severally
guaranties or securities after establishment & 3. Individually liable
when through fortuitous event they disappear 4. Several obligation
unless he immediately gives new ones equally as 5. Juntos o separadamente
satisfactory 6. Mancomun o insolidum
4. When the debtor violates any undertaking in 7. Jointly & severally guaranteed
consideration of which creditor agreed to the
period Art 1210
5. When debtor attempts to abscond Solidary Indivisibility
Refers to Juridical tie Prestation
Art 1200 Debtor will have no right to choose prestations Liab for breach All debtors Only debtor
which are liable for breach guilty of breach
1. Impossible of obligation of obligation is
2. Unlawful committed by a liable for
3. Could not have been object of the obligation debtor damages
Reqs 2 debtors or 2 1 debtor and 1
Art 1202 When only one is practicable
creditors creditor
1. Impossible
Liab for Other debtors Not liable for
2. Unlawful
insolvency proportionally insolvency of 1
3. Could not have been object of the obligation
liable debtor
4. Possible prestation but because of some special
attendant circumstances they cannot be done
Solidary debt can be enforced as joint in relation to
Art 1204 Indemnity fixed for alternatives is based on obligations with a period when
1. Value of last thing that disappeared; or 1. Art 1211 – solidarity may exist although the
2. Service which last became impossible creditors and the debtors may not be bound in the
same manner and by the same periods and
Art 1205 Choice with creditor – pre selection rules conditions ( you can collect from anyone but only
the share that is due)

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2. Art 1212 3. Condonation or remission

4. Confusion or merger of rights of creditor and
Art 1215 Modes of Extinguishment debtor
1. Novation – new creditors, debtor or principle of 5. Compensation
condition 6. Novation
2. Compensation – 2 persons in own right are
debtors and creditors of each other Art 1231 Death does not extinguish obligation unless
3. Confusion – merger of characters of creditor and 1. Personal in nature
debtor 2. Intransmissible
4. Remission – condonation of obligation
Art 1232 Payment means
Art 1218 No reimbursement for payment made by co- 1. Performance
debtor when 2. Delivery
1. Payment is made after obligation has prescribed
2. Payment is made after obligation has become Art 1233 Complete compliance required except
illegal 1. Art 1234 – doctrine of substantial compliance (no
waiver of damages)
Art 1225 Indivisible v. Divisible 2. Art 1235 – irregularity accepted (waiver of
Divisible Indivisible damages)
Obligation for its object Obligation to give a
the execution of certain determinate (specific) Art 1236 -1238 Payment made by 3rd person
number of days of work thing 1. 3rd person pays without knowledge or against will
Object is accomplishment Not susceptible to partial of debtor
or work by metrical units performance a. Can only recover up to extent of what
or analogous things which debtor has benefited
by their nature are b. No subrogation of rights
susceptible of partial 2. 3rd person pays with knowledge but without
performance consent
a. Can only recover up to extent of what
Art 1226 Creditor in obligation with penal clause shall still debtor has benefited
be entitled to damages when b. No subrogation of rights
1. Guilty pf fraud 3. 3rd person pays with knowledge and with consent
2. Debtor refuses to pay for penalty a. Can recover amount paid to the creditor
3. Stipulated by parties b. There is legal subrogation
4. When the creditor accepts payment due to
Art 1228 If through act of owner in a contract, contractor contract
will be prevented from finishing works on contractual a. Can recover amount paid to the creditor
completion date (Allen v. Province of Albay) b. There is legal subrogation
1. Owner shall be deemed to have waived time 5. 3rd person pays creditor without being reimbursed
period – donation
2. Contractor only bound to finish within reasonable
time Art 1240 Payment should be made to
3. If there are liquidated damages provided in case 1. Creditor
of delay, cannot anymore be sustained 2. Successors-in-interest
4. Neither could liquidated damages be restored to 3. Any person authorized to receive it
be made applicable to an unreasonable length of
time Art 1241 Payment to an incapacitated person shall be valid
if
Kinds of damages 1. Kept the thing delivered
1. Actual – cost of goods 2. Insofar as payment has been beneficial to him
2. Moral
3. Exemplary – extreme bad faith Art 1241 Benefit to the creditor need not be proven when
*breach of contract in good faith = actual damages 1. If after the payment, 3rd person acquires creditor’s
rights
Art 1229 Courts cannot intervene, except when 2. If the creditor ratifies payment to the 3rd person
PENALTIES are unconscionable may 3. If by creditor’s conduct, the debtor has been led
1. Temper to believe that the 3rd person has authority to
2. Reduce receive payment
3. Delete
Art 1231 Modes of extinguishment Art 1245 Reqs for dation in payment (Caltex v. IAC)
1. Payment or performance 1. Must be a performance of prestation in lieu of
2. Loss of thing due payment

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2. Must be some difference between prestation due
and that which is given in substitution
3. Must be an agreement between creditor and
debtor that obligation is immediately
extinguished by reason of the performance of a
prestation different from that due
Art 1245 Elements of Pactum Commisorium VOID
1. Must be a debtor-creditor relationship between
parties
2. Property of debtor was used as security for the
loan
a. Mortgage or;
b. Pledge
3. Automatic appropriation of property upon failure
of the debtor to pay the obligation as provided in
their agreement
Art 1248 Partial Payment is allowed when
1. Stipulation of parties
2. Debts partially liquidated and partially
unliquidated
Art 1250 There is Extraordinary Inflation when
1. Uncommon to man
2. Beyond common fluctuation
Art 1249 Delivery of promissory notes payable to order, or
bills of exchange or other mercantile documents shall
produce the same effect as payment when
1. They have been cashed
2. Through fault of creditor they have been
impaired which only applies when
a. Instruments executed by 3rd persons
b. Delivered by the debtor to the creditor
Art 1250 Extraordinary inflation - value of currency at time
of establishment of obligation should prevail EXCEPT
1. Tort
2. Expropriations
Art 1251 Places of payment
1. Agreement or if none
2. Place where things is found at obligation’s
constitution
a. Generic: domicile of debtor
Art 1251 Additional expenses borne by creditor when
making payment if
1. Changes domicile in bad faith
2. Incurred delay
Art 1253 Installments – duty of creditor to inform debtor
1. Amount of interest that falls due
2. That he is applying installment payments to said
interest
Art 1255 Cession presupposes
1. Debtor is under financial difficulties
2. 2 or more creditors
3. As many debts due as there are creditors
Art 1255 What happens in Cession
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1. Transfer only possession not ownership
2. All props transferred
3. Creditors can still get remaining amount of
debtor
Art 1256 Consignation alone shall produce same effect
1. When creditor is absent or does not appear in
place of payment
2. When he is incapacitated to receive payment at
the time it is due
3. When without just cause he refuses to give
receipt
4. When 2 or more persons claim the same right to
collect
5. When title of the obligation has been lost
Art 1256 Cases when consignation is not necessary
1. Option contract
2. Legal redemption
3. Sale with right to repurchase
*not consignation because it is an exercise of right or
privilege
For a valid tender of payment (Far East Bank & Trust Co.)
1. Fusion of intent, ability & capability to make
good such offer
2. Absolute
3. Must cover amount due
Art 1256-1258 Requisites for Effective tender of payment
and consignation (Soco v. Militante)
1. Debt due
2. Consignation of obligation made because creditor
to which tender of payment was made refused to
accept it or he was absent or incapacitated or
because several persons claimed to be entitled to
the amount due
3. Previous notice of the consignation had been
given to person interest (1st notice)
4. Amount due placed at the disposal of the court
5. After consignation made, person interest was
notified (2nd notification)
Art 1260 When can debtor withdraw deposit
1. Before creditor has accepted
2. Before judicial declaration consignation has been
properly made
Art 1261 After consignation if the creditor authorizes
debtor to withdraw
1. Lose ever preference which he may have over the
thing
2. Solidary co-debtors, guarantors and sureties shall
be released and cannot be revived without their
consent
Art 1265 Debtor in possession of the thing shall be
presumed that the loss was because of his fault except
1. Proof to contrary
2. Earthquake
3. Flood
4. Storm
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5. Other natural calamity
Art 1266 Prestation becomes impossible
1. Legal impossibility
2. Physical impossibility
Art 1267 Requisites for Manifestly Beyond Contemplation/
Rebus sic Santibus (Tagaytay jurisprudence)
1. The event or change in the circumstances could
not have been foreseen at the time of the
execution of the contract
2. This change makes the performance of the
contract extremely difficult but not impossible
3. The change must not be due to any act of the
parties
4. The contract is a future prestation
IN SUM: Other instances when debtor will be released
from obligation
1. Art 1266
2. Art 1267
Art 1276 Extinguishes accessory obligation
1. Merger of guarantor and debtor
2. Merger of guarantor and creditor
Art 1279 Requisites of compensation
1. Each one of them be creditors and debtors of
each other
Ex. Person buying stocks is not indebtedness
2. Both debts consist in a sum of money or if things
due are consumable (generic) they be same kind
& also same quality if latter has been stated
3. 2 debts are due
4. They be liquidated and demandable
Ex. Not when there is a running interest
5. Over neither of them there be any retention or
controversy commenced by 3rd persons &
communicated in due time to the debtor
Exceptions to 1279
1. Art 1280 – Guarantor may set up compensation
as regards what the creditor may owe the
principal debtor (not mutual debtors and
creditors)
2. Art 1282 – May agree to compensation of debts
not yet due
Art 1285 3 cases when creditor assigns credit to a 3rd person
1. Debtor consents to assignment of rights made by
a creditor in favor of a 3rd person – debtor cannot
set up against assignee compensation unless
assignor was notified by debtor to reserve his
right to compensation
2. When creditor communicated cession to debtor
but debtor did not consent, latter may set up
compensation of debts previous to cession but not
of subsequent ones
3. When the assignment is made without knowledge
of the debtor he may set up compensation of all
credits prior to the same & also later ones until he
has knowledge of the assignment
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Art 1287 Compensation not allowed
1. Debts from depositum
2. Bailee in commodatum
3. Support
4. Debs consisting of civil liability arising from
penal offense
Art 1291 Novation
1. Changing object or principal conditions
2. Substituting persons of debtor
3. Subrogating rights to 3rd person in rights of
creditor
Art 1292 Novation happens
1. Expressly stated
2. Complete incompatibility of obligations
Art 1292 No novation when
1. Not all parties to the original contract consented
to subsequent contract
2. Modification are introduced before a bargain
becomes obligatory
Art 1292 Elements of Novation
1. Previous valid obligation
2. Agreement of all parties to new contract
3. Extinguishment of old contract
4. Validity of new one
Art 1294 Kinds of Novation of the debtor
1. Delegacion – old debtor to extinguish his
obligation suggests to the creditor that he
substituted by a new debtor of his choise and
creditor agrees
2. Expromission – if the old debtor is substituted
without the knowledge or consent of the old
debtor and the obligation is extinguished
Art 1295 2 Cases when creditor can go against old creditor
when there is a delegacion
1. When insolvency of new debtor has already been
existing & of public knowledge at the time of the
delegation by the old debtor
2. When insolvency of the new debtor is known to
the old debtor when he delegates his debt
*creditor must not know new debtor is insolvent
*insolvency must have existed at the time the old debtor
delegated his debt
Art 1298 Novation is void if original obligation was void
EXCEPT
1. Annulment may be claimed only by the debtor
2. Ratification validates acts which are voidable
Art 1300 Types of subrogation
1. Legal – takes effect by mandate of law & does
not proceed from an agreement of the parties
2. Conventional – clearly established by
unequivocal terms of the substituting obligation
or the evident incompatibility of the new and old
obligations on every point
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Art 1302 Legal Subrogation is presumed when
1. When creditor pays another creditor who is
preferred even without the debtor’s knowledge
2. When a 3rd person not interested in the obligation
pays with the express or tacit approval of the
debtor
3. When even without knowledge of the debtor, a
person interested in the fulfilment of the
obligation pays, without prejudice to the effects
of confusion as to the latter’s share
*novation not presumed except for Art 1302
Art 1305 Stages of contracts
1. Negotiation
2. Perfection
3. Consummation
4. Extinguishment
Art 1306 Violation of a law generally does not make the
contract void. Law violated must be
1. Mandatory
2. Prohibitory
Parties may agree that a foreign law shall govern their
employment contract (Industrial Personnel v. De Vera)
1. Expressly stipulate in contract that a specific
foreign law shall govern
2. Foreign law invoked must be proven before the
courts pursuant to the PH rules on evidence
3. Foreign law not contrary, to law, morals, good
customs, public order, public policy
4. Contract processed to PH overseas employment
assoc (POEA)
Art 1307 Innominate contract shall be governed by
1. Stipulation of the parties
2. Provisions on obligations & contracts in Title 1 &
2 of the civil code
3. Rules governing the most analogous nominate
contracts
4. Customs of place
Art 1307 Innominate Contracts
1. Do ut des – parties mutually give each other a
certain thing
2. Facio ut facias – parties mutually render a service
3. Do ut facias; facias ut des – mixed prestation
such that one party gives something & the other
party does something
Art 1308 Cases when court can intervene into contract of 2
persons
1. Contract is inequitable, when the determination
of the performance was left to the will of 3rd
person, court can adjust it
2. If there is a penal clause that is iniquitous, court
can remove it or reduce the penalty
3. Rebus sic santibus
4. If there is reason for court to fix a period
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a. When suspensive potestative condition
is void but obligation on which it
hinges is still valid
b. When debtor binds himself to pay when
his means permit him to do so
c. When one party seeks rescission in a
reciprocal obligation but court finds
just cause to fix a period
d. When from nature & circumstances of
obligation it is obvious that a period
was intended by parties
e. When obligation is dependent on sole
will of the debtor
Art 1311 Contracts cannot take effect to heir or assigns
when
1. Nature of contract does not allow transmission
2. Parties stipulate that no transmission of rights be
allowed
3. Law provides non-transmission
Art 1311 Reqs of Pour Autrui
1. There must be a stipulation in favor of a 3rd
person
2. Stipulation must be part not the whole of the
obligation
3. Contracting parties must have clearly decidedly
conferred a favor upon a 3rd person NOT a mere
incidental benefit or interest
4. Neither of the contracting parties bears the legal
representation or authorization of the 3rd party
5. Favored party must have communicated his
acceptance of said stipulation to the obligor
before its revocation
Art 1311 Exceptions to relativity
1. Tort interference
2. Contracts pour autrui
3. Contracts creating real rights, 3rd persons who
come into possession of the object of the contract
are bound
4. Contracts intended to defraud creditors
Art 1313 Elements of Tort Interference
1. Existence of a valid contract
2. Knowledge on part of the 3rd person of the
existence of contract
3. Interference of 3rd person is without legal
justification or excuse
4. Malice in PH
Art 1316 Real contract affected upon delivery
1. Deposit
2. Pledge
3. Commodatum
Art 1317 Apparent Authority may result from
1. General manner by which the corp holds out an
officer or agents as having power to act or in
other words, the apparent authority with which it
clothes him to act in general
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2. Acquiescence in his acts of a particular nature, Breach of contract to withdraw offer during the
with actual or constructive knowledge, whether period because contract of option is deemed
within or without the scope of his ordinary perfected
powers
Art 1327 Who cannot give consent
Art 1318 Reqs of a Contract 1. Unemancipated minors
1. Consent of contracting parties 2. Insane or demented person, & deaf-mutes who do
2. Object certain which is the subject matter of the not know how to write
contract
3. Cause of the obligation which is established Art 1328 Contracts are voidable if agreed to in
1. State of drunkeness
Inexistent Ostensible 2. During hypnotic spell
Absence of one of the All elements are present
essential requisites ostensibly Situations when contract during drunkenness is voidable
Pari delicto does not apply Pari delicto will apply 1. Drunkenness was brought about by the opposite
party
Offer – certain 2. Fraudulent advantage was taken of it
Acceptance – absolute 3. Dunkenness was so complete as to deprive the
party of his reason of an agreeing mind
Art 1320 Acceptance may be
1. Implied Art 1330 When consent is given through…it is voidable
a. Acts 1. Mistake
b. Conduct 2. Violence
2. Express 3. Intimidation
a. Words 4. Undue influence
5. Fraud
Jardine Davies v. CA
Failure to comply with a Failure to comply with a
condition imposed on the condition imposed on the
perfection of the contract performance of an Art 1331 General rule: BOTH must be mistaken,
obligation exceptions
Failure of the contract Gives the other party 1. Substance of the thing which is the object of the
options or remedies to contract
protect interests 2. Those conditions which principally induced the
parties to enter into a contract
Art 1321 Offeror may fix
1. Time For mistake of identity or qualifications to vitiate consent
2. Place 1. Mistake must be with regard either to the identity
3. Manner of acceptance of qualifications of one of the parties
2. Identity or qualification must have been the
Art 1322 Offer becomes ineffective upon principal consideration for the celebration of the
1. Death contract
2. Civil interdiction
3. Becomes insane Art 1332 Mistake or fraud is alleged when
4. Becomes insolvent 1. When one of the parties is unable to read
*before acceptance is conveyed 2. Or if the contract is in a language not understood
by him
Art 1324 Rules when there is an option period:
1. If the period is not itself founded upon a Before benefits can be availed of
consideration: 1. Person invoking must prove that he has
conditions
Offeror is still free & has the right to withdraw 2. Burden of proof shifts to the person enforcing the
the offer contract to show that the terms have been
a. Before its acceptance explained
b. If an acceptance has been made, before
the offeror’s coming to know of such Art 1333 No mistake if the party alleging it knew the
fact by communicating that withdrawal 1. Doubt
to the offeree 2. Contingency; or
3. Risk affecting the object of the contract
2. If the period has a separate consideration:
Art 1334 Mistake of law may vitiate consent if the
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1. The mistake as to the legal effect of the Refers to very cause why Incidental fraud; without
agreement must be mutual the other party entered which party would still
2. Such mutual mistake frustrates the real purpose into the contract have entered into the
of the parties contract
Annullable Only damages
Art 1335 To determine degree of intimidation
1. Age Art 1345 Simulation of a contract may be
2. Sex 1. Absolute – when parties do not intend to be
3. Condition bound at all (VOID)
2. Relative – parties conceal their true agreement
Requisites for intimidation as vitiated consent (De Leon v. (VALID)
CA)
1. That the intimidation must be the determining Considerations to determine whether contract is simulated
cause of the contract or must have caused the 1. Intention of the parties
consent to be given 2. Contemporaneous and subsequent acts
2. That the threatened act must be unjust or
unlawful Art 1346 A relative simulation binds the parties to their real
3. That the threat must be real and serious there agreement when
being an evident disproportion between the evil 1. It does not prejudice a 3rd person
and the resistance which all men can offer, 2. Not intended for any purpose contrary to:
leading to the choice of the contract as the lesser a. Law
evil b. Morals
4. That it produces a reasonable and well grounded c. Good customs
fear from the fact that the person from whom it d. Public order
comes has the necessary means or ability to e. Public policy
inflict the threatened injury
Art 1347 What can be objects of contracts
Art 1337 During undue influence the ff circumstances shall 1. All things not outside the commerce of men
be considered (including future things but NOT future
1. Confidential, family, spiritual, or other relations inheritance)
between the parties 2. All rights which are transmissible
2. Was suffering from mental weakness 3. All services which are not contrary to:
3. Ignorant a. Law
4. Financial distress b. Morals
c. Good customs
Due influence examples (Banez v. CA) d. Public order
1. Persuasion e. Public policy
2. Argument
3. Appeals to the affections Art 1348 What cannot be objects of contracts
1. Impossible things
Art 1339 There is fraud when there’s a failure to disclose 2. Impossible services
facts in such cases
1. When there is a duty to reveal them; or Art 1350 Kinds of contracts
2. Parties are bound by confidential relations 1. Onerous contract – cause is to be understood to
be, for each contracting party, the prestation or
Art 1341 Expression of an opinion does not signify fraud promise of a thing or service by the other
UNLESS 2. Reciprocal contract – obligation or promise of
1. Made by an expert each party is the consideration for that of the
2. Other party has relied on the former’s knowledge other
3. Remuneratory contracts – cause is the service or
Art 1342 Misrep by a 3rd person does not vitiate consent benefit which is remunerated
UNLESS such misrep has created 4. Contracts of pure beneficence – mere liberality of
1. Substantial mistake the benefactor is the cause of the contract; it does
2. Same is mutual not involve any material thing but rather it
involves only the generosity of the benefactor
Art 1344 In order that fraud may make a contract voidable
1. Should be serious Art 1352 What kinds of contract produce no effect
2. Should NOT have been employed by both 1. Without cause
contracting parties (not pari delicto) 2. With unlawful cause – when contrary to:
a. Law
Types of fraud in performance of a contract b. Morals
Dolo causante Dolo incidente c. Good customs

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d. Public policy *if they prevented meeting of the mind proper remedy is
e. Public order annulment
*burden of proof is upon party who insists that contract
Art 1353 False cause under contracts shall render them needs to be reformed
void if it should not be proved they were founded upon
another cause which is (relative simulation) Art 1359 Reqs for reformation
1. True 1. That the instrument embodying the contract does
2. Lawful not reveal the true intention of the parties
2. Existence of an actual contract entered into by the
Art 1354 Although cause it not stated in contracts, it is parties
presumed it
1. Exists Reqs for reformations
2. Lawful 1. Meeting of the minds of the parties to a contract
*unless contrary proven by debtor 2. Instrument does not express true intention of the
parties
Art 1355 Lesion or inadequacy of cause shall not invalidate 3. Failure of the instrument to express true
a contract unless intentions of the parties due to
1. Against law a. Mistake
2. Fraud b. Fraud
3. Mistake c. Inequitable conduct
4. Undue influence d. Accident
e. Clerk/typist
Art 1356 Contracts which must have some form
1. Contracts which the law requires to be in some Art 1361 Mistake as grounds for reformation
particular form (writing) in order to make them 1. Must be mutual (clear and convincing evidence)
valid & enforceable (solemn contracts) 2. Must generally involve factual matters
2. Contracts that the law requires to be proved by *quantum of proof – clear and convincing evidence
some writing (memorandum) of its terms as in
those covered by the old statute of fraud – now Art 1366 No reformation
art 1403 (2) of civil code 1. Simple donations inter vivos wherein no
condition is imposed
Art 1358 Following must appear in a public document 2. Wills
1. Acts & contracts which have for their object 3. When the real agreement is void
a. Immovable prop
- Creation Art 1368 Persons with legal standing to initiate reformation
- Transmission 1. Party
- Modification or 2. Successor-in-interest
- Extinguishment of real
rights Art 1371 To judge the intention of contracting parties
b. sales of real prop or an interest therein 1. Contemporaneous
are governed by Art 1403 no. 2 & 1405 2. Subsequent acts
4. Cession, repudiation or renunciation of
a. hereditary rights Art 1372 General terms but they shall not be understood to
b. of those conjugal partnership of gains comprehend
(NOT ALLOWED) 1. Things that are distinct
5. Power administer property, or any other power 2. Cases that are different from those upon which
which has for its object the parties intended to agree
a. An act appearing or which should
appear in a public document Art 1376 In the interpretation of the ambiguities of the
b. Should prejudice a 3rd person contract…shall be borne in mind
6. Cession of actions or rights proceeding from an 1. Usage; or
act appearing in a public document 2. Customs
*All other contracts where the amount involved exceeds
5000 pesos must appear in writing – even in a private one Art 1378 Doubts refer to incidental circumstances of a
contract
Art 1359 Reformation may be caused by Contract Prevails
1. Mistake Gratuitous contract Least transmission of
2. Fraud rights and interests
3. Inequitable conduct Onerous contract In favor of the greatest
4. Accident reciprocity of interests
5. Clerk or typist commits a mistake (art 1364)
Art 1380

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Art 1191 Rescinding Art 1380 Rescissible

Reciprocal Obligations contracts Absentee Until the domicile is
1. Monetary 1. There is damage known
damage not to a party
essential 2. Financial,
2. Based on breach economic, Art 1389 Action to claim rescission
of trust (sources quantifiable Under guardianship From the time the
of liab) damage incapacity terminates &
the aggrieved party has
Art 1381 Cases of Rescissible contracts unsuccessfully exhausted
1. Those which are entered into by guardians all other legal remedies
whenever the wards whom they represent suffer Absentees From the time he learns of
lesion by more than ¼ of the value of the things the contract & said
which are the object thereof absentee has
2. Those agreed upon in representation of absentees unsuccessfully exhausted
if the latter suffer the lesion stated in the all other legal remedies
proceeding number In fraud of creditors From time of the
3. Those undertaken in fraud of creditors when the discovery of fraud & after
latter cannot in any other manner collect the her has unsuccessfully
claim due them exhausted all other legal
4. Those which refer to things under litigation if remedies
they have been entered into by defendant without Contracts entered into From the time of
knowledge & approval of the litigants or of without knowledge & knowledge of the
competent judicial authority approval of the litigants or transaction & unsuccessful
5. All other contracts specially declared by law to of competent judicial exhaustion of all other
be subject of rescission authority legal remedies

Absentees Art 1390 Contracts are voidable or annullable, even though

1. 2 years – without any news about the absentee or there may have been no damage to the contracting parties
since the receipt of the last news 1. Those where on the parties is incapable of giving
2. 5 years – in case the absentee has left a person in consent to a contract
charge of the admin of his property 2. Those where the consent is vitiated by
b. mistake
Contracts in Fraud of creditors requisites (Bobis v. c. violence
Provincial Sheriff of Camarines Norte) d. intimidation
1. Both contracting parties acting maliciously & e. undue influence
with fraud f. fraud
2. Their purpose is to prejudice creditors *contracts are binding unless they are annulled by a proper
3. Creditors are deprived by the transaction of all action in court
means by which they may effect collection of
their claims Art 1391 Start of Periods (4 years)
Intimidation, violence or From the time the defect
Art 1381 Requisites on an action for rescission undue influence of the consent ceases
1. A judgement Mistake or fraud From the time of the
2. Issuance by the trial court of a writ of execution discovery of the same
of the satisfaction of the judgment Minors or other From the time the
3. Failure of the sheriff to enforce & satisfy the incapacitated persons guardianship ceases
judgment of the court *voidable contracts – judicial demand necessary to
4. Creditor has exhausted the property of the debtor interrupt a period
Art 1385 What to return during rescission Art 1393 Ratification may be effected
1. Object subject of the rescissible contract 1. Expressly
2. Fruits 2. Tacitly
3. Interest a. Person who has the right to invoke
ratification has knowledge of the
Rescission cannot take place when reason which renders the contract
1. The object is in possession of a 3rd person; and voidable
2. Person is not in bad faith b. Reason has ceased
c. Person executes an act which
Art 1389 4 years shall not begin until necessarily implies an intention to
Guardianship Termination of the waive his right
former’s incapacity

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Implied ratification (Spouses Viloria v. Continental
Airlines)
1. Silence
2. Acts showing approval or adoption of contract
3. Acceptance and retention of benefits flowing
therefrom
Art 1395 Ratification as a unilateral act
1. Generally done by the injured party not by the
party causing injury
2. The consent of the injuiring party is not required
because such party normally desires the
effectivity of the contract anyway from its
inception
Art 1396 Effects of ratification
1. Transforms the contract completely as one
without infirmity
2. Cures the defect which initially made the contract
voidable
3. Retroacts to the day when the contract was
entered into
Art 1397 Action for annulments of contracts may instituted
against all who are obliged
1. Principally
2. Subsidiarily
EXCEPTION of persons who are not parties principally or
subsidiarily in a contract may be entitled to exercise an
action for nullity (Ibanez v. HSBC)
1. He is prejudiced in his rights with respect to one
of the parties
2. He can show the detriment which positively
would result to him from the contract in which he
had no intervention
If the case is filed for enforcement of contract to a minor
Active misrep Passive misrep
Liable to pay his Liable only up to the
obligation as if he were a extent he has been
person of age benefited by the contract
Art 1398 Obligation having been annulled contracting
parties shall restore to each other
1. Things which have the subject matter of the
contract
2. Fruits
3. Price with its interest
*except in cases provided by law
Art 1400 Whenever a person obliged by the decree of
annulment to return the thing cannot do so because it has
been lost through his fault, he shall return
1. Fruits received
2. Value of thing at the time of the loss with interest
from same date
Art 1403 Following contracts are unenforceable, unless
ratified
1. Those entered into in the name of another person
by one who has been given no authority or legal
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representation or who has acted beyond his
powers
2. Those that do not comply with the Statute of
Frauds as set forth in this number. In the ff. cases
an agreement hereafter made shall be
unenforceable by action, unless the same or some
note or memorandum thereof, be in writing &
subscribed by the party charged or by his agent;
evidence, therefore of the agreement cannot be
received without the writing or secondary
evidence of its contents
a. An agreement that by its terms is not to
be performed within a year from the
making thereof
b. A special promise to answer for the
debt, default or miscarriage of another
c. An agreement made in consideration of
marriage, other than a mutual promise
to marry
d. An agreement for the sale of goods,
chattels or things in auction, at a price
not less than P500, unless the buyer
accept & receive part of such goods or
chattels or the evidences or some of
them of such things in auction, or pay
at the time some part of the purchase
money; but when a sale is made by
auction & entry is made by the
auctioneer in his sales book, at the time
of the sale, of the amount & kind of
prop sold, terms of sale, price, names of
the purchasers & person on whose
account the sale is made, it is a
sufficient memorandum
e. An agreement for the leasing for a
longer period than 1 year or for the sale
of real property or of an interest therein
f. A representation as the credit of a 3rd
person
3. Those where both parties are incapable of giving
consent to a contract
Reqs to be taken out from the statute of frauds
1. Those in writing
2. Subscribed by the party charged or by his agent
Statute of frauds may only be invoked in a case for
1. Violation of contract
2. For specific performance
Art 1405 Contract infringing the statute of frauds referred
to in no.2 of art. 1403 are ratified by
1. Failure to object to the presentation of oral
evidence to prove the same; or
2. By the acceptance of benefits under them
Art 1407
Both parties are Annullable contract
incapacitated and one of
the guardians ratifies the
contract
Both parties are Valid contract
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incapacitated and both
guardians ratify the
contract
Art 1409 Following contracts are inexistent and void from
the beginning
1. Those whose cause, object or purpose is contrary
to law, morals, good customs, public order or
public policy (these are exceptions to the
autonomy of contracts)
2. Those which are absolutely simulated or fictitious
3. Those whose cause or object did not exist at the
time of the transaction
4. Those whose object is outside the commerce of
men
5. Those which contemplate an impossible service
6. Those where the intention of the parties relative
to the principal object of the contract cannot be
ascertained
7. Those expressly prohibited or declared void by
law
*cannot be ratified
*neither can the right to set up defense of illegality be
waived
2 Types of void contracts
Inexistent Ostensible
1,4,7 2,3,5,6
GENERAL RULE: pari delicto does not apply to a void
contract
EXCEPTIONS: 1411 (par 1) & 1412 (par 1)
EXCEPTIONS TO THE EXCEPTIONS: 1413-1419 (both
of them are not in good faith but they can recover)
Art 1411 When the nullity proceeds from the illegality of
1. Cause; or
2. Object; and
3. Act constitutes an criminal offense
*both parties being in pari delicto, they shall have
1. No action against each other
2. Both shall be prosecuted
*when only one is guilty, the innocent may (par 2)
1. May claim what he has given; and
2. Shall not be bound to comply with his promise
Art 1412 If the act in which the unlawful or forbidden
cause consists does not constitute a crim offense, ff. rule
shall be observed
1. When the fault is on the part of both contracting
parties, neither may recover what he has given by
virtue of the contract or demand the performance
of the other’s undertaking
2. When only one of the contracting parties is at
fault, he cannot recover what he has given by
reason of the contract, or ask for the fulfillment
of what has been promised him. The other, who
is not as fault, may demand the return of what he
has given without any obligation to comply with
his promise
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Art 1414 When money is paid or property delivered for an
illegal purpose, the contract may be repudiated
1. By one of the parties before the purpose has been
accomplished; or
2. Before any damage has been caused to a 3rd
person
*if public interest will be subserved can allow to recover
the money or prop
Art 1421 Reqs of exception to mutuality; if a 3rd person is
1. Greatly prejudiced
2. As his interest is directly affected
*he may…
1. He may file a case for nullification of a contract;
or
2. Set the same as a defense even if said prejudiced
person is not a party to the void contract
Art 1431 Estoppel is not applicable
1. Against gov suing in its capacity as sovereign or
asserting gov rights
2. When a law or public policy will be violated
3. Against gov owing to the mistakes or error of its
officers
4. To questions of law
*quantum of proof – clear and convincing
Art 1432 Principles of estoppel are adopted insofar as they
are not in conflict with the provisions of
1. This code
2. Code of commerce
3. Rules of court
4. Special laws
Art 1433 Estoppel may be
1. In pais
2. By deed
Elements of Estoppel in Pais (source is by act or omission)
1. Conduct amounting to false representation or
concealment of material facts or at least
calculated to convey the impression that the facts
are otherwise than, & inconsistent with, those
which the party subsequently attempts to assert
2. Intent, or at least expectation that this conduct
shall be acted upon, or at least influenced by the
other party
3. Knowledge, actual or constructive of the actual
facts
Elements of Estoppel by Deed (source is written contract)
1. There must have been a representation or
concealment of material facts
2. The representation must have been with
knowledge of the facts
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3. The party to whom it was made must have been
ignorant of the truth of the matter
4. It must have been made with the intention that
the other party would act upon it
Reqs as related to the party claiming estoppel
1. Lack of knowledge of the truth of the facts in
question
2. Reliance in good faith upon the conducts or
statements of the party estopped
3. Action or inaction based thereon of such
character as to change the position or the status of
the party claiming estoppel to his injury or
detriment
Art 1437 When in a contract between 3rd persons
concerning immovable property, 1 of them is misled by a
person with respect to the ownership of real right over the
real estate, the latter is precluded from asserting his legal
title or interest therein, provided all these reqs are present
1. There must be fraudulent representation or
wrongful concealment of facts known to the party
estopped
2. Party precluded must intend that the other should
act upon the facts as misrepresented
3. Party misled must have been unaware of the true
facts
4. Party defrauded must have acted in accordance
with the misrepresentation
Art 1439 Estoppel is effective only as
1. Between the parties
2. Successors-in-interest
Art 2144 Whoever voluntarily takes charge of the agency
or management of the business or prop of another without
any power from the latter is obliged to
1. Continue the same until the termination of the
affair & its incidents
2. To require the person concerned to substitute him
id the owner is in the position to do so
EXCEPTION:
This juridical relation does not arise in either of these
instances
1. When the prop of business is not neglected or
abandoned
2. If in fact the manager has been tacitly authorized
by the owner
Following are circumstances under which one may
undertake to carry out a business matter for another (Sison
& Azarraga v. Balgos)
1. That they related to determined things or affairs
2. That there be no administrator or representative
of the owner who is charged with the
management thereof
3. That there is no express or tacit mandate on the
part of the owner for it very often may happen
even without his knowledge
4. That the actor be inspired by the beneficent idea
of averting losses & damages to the owner or
interested party through the abandonment of the
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things that belong to him or of the business in
which he may be interest; that administration is
not for profit or with avaricious idea of gain
Art 2145 Officious manager shall perform his duties
1. With all diligence of a good father of a family; &
2. Pay damages which through his fault or
negligence may be suffered by the owner of the
property or business under management
Courts may however…
1. Increase; or
2. Moderate
…indemnity according the circumstances of each case
Art 2147 Officious manager shall be liable for any
fortuitous event
1. If he undertakes risky operations which the
owner was not accustomed to embark upon
2. If he has preferred his own interest to that of the
owner
3. If he fails to return the prop or business after
demand of the owner
4. If he assumed the management in bad faith
Art 2148 Except when the management was assumed to
save the prop or business from imminent danger, the
officious manager shall be liable for fortuitous events
1. If he is manifestly unfit to carry on the
management
2. If by his intervention he prevented a more
competent person taking up the management
Art 2150 Although the officious management may not have
been expressly ratified, the owner of the prop or business
who enjoys the advantages of the same shall be
1. Liable for obligations incurred in his interest
2. Shall reimburse officious manager for the
necessary & useful expenses & for the damages
he may have suffered in the performance of his
duties
Art 2151 Even though the owner did not derive any benefit
& there has been no imminent and manifest danger to the
property of business, the owner is liable as under 1st par of
preceding article provided
1. Officious manager has acted in good faith; &
2. The prop or business is intact, ready to be
returned to the owner
Art 2152 Officious manager is personally liable for a
contract which he has entered into with 3rd persons, even
though he acted in the name of owner & there shall be no
right of action between the owner & 3rd persons. There
shall NOT apply
1. If the owner has expressly or tacitly ratified the
management; or
2. When the contract refers to things pertaining to
the owner of the business
Art 2153 Management is extinguished
1. When the owner repudiates it or puts an end
thereto
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2. When the officious manager withdraws from the damage

management, subject to the provisions of Art Restitutio Restitution -- Generally
2144 n including no
3. By death, civil interdiction, insanity or including fruits & restitution
insolvency of the owner or the officious manager fruits & price with
price with interest
Requisites of Solutio Indebiti (City Cebu v. Piccio) interest
1. When he who paid was not under the obligation 4 yrs 4 yrs No
to do so prescriptiv prescriptive prescriptio
2. The payment was made by reason of an essential e period period n
mistake in fact -- Ratification Ratification Cannot
by guardians
Art 2159 Whoever in bad faith accepts an undue payment Effects of
1. Shall pay legal interest if a sum of money is annulment
involve; or operate
2. Shall be liable for fruits received or which should prospectivel
have been received if the thing produces fruits y
Subsidiary
Art 2162 He shall be exempt from the obligation to restore action-
who, believing in good faith that payment was being made must first
of a legit & subsisting claim exhaust all
1. Destroyed the document; or other legal
2. Allowed the action to prescribe; or remedies
3. Gave up the pledges; or Judicial
4. Cancelled the guaranties for his right demand
He who paid unduly may proceed only against necessary to
1. True debtor; or interrupt a
2. The guarantors with regard to whom the action is period
still effective 3rd person 3rd person Cannot 3rd person
can assail can assail can assail
Art 2164 For one to recover under this provision, it must be Essential Essential Essential
proven (De Marcaida v. Redfern) reqs are reqs are reqs are
1. That support has been furnished a dependent of comeplete complete complete
one bound to give support but who fails to do so
2. That the support was supplied by a stranger
3. That the support was given without knowledge of
the person charged with the duty
4. That the support is given with the expectation of
recovering it

Art 1265 Obligation to pay funeral expenses

*the ff. are obliged to support each other
1. Spouses
2. Legit ascendants & descendants
3. Parents & their legit children, & the legit and
illegit children of the latter (grandchildren)
4. Parents and their illegit children, & the legit and
illegit children of the latter (grandchildren)
5. Legit brothers & sisters, whether of full or half-
blood

Whenever 2 or more persons are obliged to give support,

the liability shall devolve upon the ff. persons in the ff.
order
1. Spouse
2. Descendants in the nearest degree
3. Ascendants in the nearest degree
4. Brothers and sisters

Rescissibl Voidable Unenforceab Void

e le
Damage No damage No

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