OBLIGATIONS AND CONTRACTS

OUTLINE

PART ONE – OBLIGATIONS

I. General Provisions
a. Concept of Obligation (Art. 1156, NCC)
b. Essential Requisites of Obligation
c. Civil Obligation vs Natural Obligation (Arts. 1423-1430, NCC)
d. Sources of Obligation
1. Law (Art. 1158, NCC)
2. Contract (Art.1159; 1305, NCC)
3. Quasi-contract (Art. 1160, NCC) – Definition; kinds
4. Delict or crime (Art.1161, NCC) – Scope of liability
5. Quasi-delict (Art. 1162, NCC)—Definition; Crimes vs. Quasi delict
II. Nature and Effect of Obligations
a. Determinate and Generic Things
b. Obligations of One Obliged to Give a Determinate Thing
c. Remedies of Creditor in case of Breach – debtor fails to perform his obligation to deliver
a determinate thing; debtor fails to perform his obligation to deliver a generic thing;
debtor fails to perform his obligations in obligation to do (Sec. 18 par. 2, Art. III, 1987
Constitution)
d. Grounds for liability for damages (Art.1170, NCC)
1. Fraud (Art. 1171) – Definition; Kinds
2. Negligence (Arts. 1172-1173, NCC) – Definition; Kinds of negligence (culpa
contractual vs. culpa aquiliana vs culpa criminal); Negligence vs. Diligence; Kinds
of diligence
 Saludaga vs. Far Eastern University, G.R. No. 179337, April 30, 2008
3. Delay (Art. 1169, NCC) – Definition; Kinds; Effects; Rule and Exceptions (When
demand is not necessary to put debtor in delay)
4. Contravention of the tenor of the obligation (Art. 1170, NCC)

e. Fortuitous Events (Art. 1174, NCC) – Definition; kinds; requisites; rule and Exceptions
 Sicam vs. Jorge, G.R. No. 159617, August 8, 2007
f. Remedies of Creditor to Enforce Payment of his Claims Against Debtor (Art. 1177, NCC)
g. Rule on transmissibility of rights and exceptions thereto (Art. 1178, NCC) – Rule and
Exceptions

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 III. Different Kinds of Obligations
a. Pure and Conditional Obligations (Arts. 1179-1192, NCC) – Concept; Classification of
Conditions; Doctrine of Constructive Fulfillment of Suspensive Condition; Rules in case
of loss, deterioration or improvement of determinate; Rules on case of fulfillment of
resolutory conditions
b. Obligations with a Period (Arts. 1180, 1193-1198, NCC) – Concept; Kinds of Period;
When the court may fix the period; Presumption as to who has the benefit of the period
c. Alternative Obligations vs Facultative Obligations (Arts. 1199-1206, NCC)
d. Joint and Solidary Obligations (Arts. 1207-1222, Art. 2194 NCC)
 Ruks Konsult and Construction vs Adworld Sign and Advertising Corp., et
al. G.R. No. 204866, January 21, 2015
e. Divisible and Indivisible Obligations (Arts. 1223-1225, NCC)
f. Obligations with a Penal Clause (Arts. 1226-1304, NCC)

IV. Extinguishment of Obligations

a. Payment or performance (Art. 1232-1251, NCC) – Meaning of payment; How must
payment be made; Who must make the payment; Rules on payment by a third person; To
whom shall payment be made; Where payment must be made.

Legal tender, concept; Medium of payment; Rules on Checks (BPI vs. Sps. Royeca, G.R.
No. 176664 July 21, 2008; Bognot vs. RRI Lending Corp. G.R. No. 180144 September
24, 2014)

Special forms of payment: (a) Dacion en pago; (b) Application for payment; (c)
Payment by cession; (d) Tender of payment and consignation (Arts. 1252-1261)

b. Loss of the Thing Due (Arts. 1262-1269, NCC)

c. Condonation or Remission of the Debt (Arts. 1270-1274, NCC)
d. Confusion or Merger of the Rights of Creditor and Debtor (Arts. 1275-1277, NCC)
e. Compensation (Art.1278-1290) – Concept; Kinds of Compensation; Requisites of Legal
Compensation
f. Novation (Arts. 1291-1304)

PART TWO – CONTRACTS

V. General Provisions
a. Contract, Defined (Art. 1305, NCC) – Nature and concepts
b. Essential Requisites of Contracts (Art. 1318, NCC)
c. Classification of Contracts
d. Stages of a Contract

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 e. Basic Principles of Contract (Arts. 1306, 1308, 1311, 1315, 1159)

VI. Form of Contracts

VII. Reformation of Contracts
VIII. Interpretation of Contracts

IX. Defective Contracts

a. Rescissible Contract (Arts. 1380-1389) – Definition; Requisites; Nature and extent;
Period for filing; persons entitled to bring action; payment made in state of insolvency;
Alienation presumed in fraud of creditors

b. Voidable Contract (Arts. 1390-1402) - Definition, nature and effects; Annulment:

Meaning and the period for filing action for annulment; persons entitled and those not
entitled to filing such actions; extinguishment of action for annulment; Ratification:
definition; requisites; effects; persons who can ratify

c. Unenforceable Contract (Arts. 1403-1408) – Statute of Frauds; Ratification of

unenforceable contracts; When unenforceable contract becomes a voidable contract or
valid contract; Right of third persons to assail an unenforceable contract

d. Void Contract (Art. 1409-1422) – Meaning; Characteristics; Persons entitled to raise

defense of illegality or nullity; Principle of in pari delicto

PART THREE – ESTOPPEL

Arts. 1431- 1439

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