OBLIGATIONS AND CONTRACTS
OBLIGATION
- is enforceable.
- a tie or bond recognized by law (juridical
necessity) by virtue of which one is bound in
favor of another to render something:
 Thing
 Doing a certain act
 Not doing a certain act
Juridical necessity
- in the case of obligations, it is such because
the courts of justice may be called upon by the
aggrieved party to enforce its fulfillment or, in
default thereof the economic value it
represents.
- debtor/obligor may be liable for damages.
Damages- sum of money given as
compensation for the injury or harm suffered
by the creditor or oblige for the violation of his
rights.
-debtor must comply with his obligation
whether he likes it or not; otherwise his failure
is met with consequences.
CIVIL OBLIGATIONS
- Obligations which give to the creditor
or oblige a right under the law to
enforce their performance in courts of
justice.
NATURAL OBLIGATIONS
- Not based on positive law but on
equity and natural law. (no legal basis)
- Do not grant a right of action to
enforce.
- In case of voluntary fulfillment by
debtor, what has been
delivered/rendered may NOT be
recovered.
Essential Requisites of an Obligation
Passive subject
- person bound to fulfillment of the obligation.
- has duty
- debtor/obligor
Active subject
- person entitled to demand the fulfillment of
obligation
- has right
- creditor or oblige
Object
- conduct required to be done by debtor.
- subject matter of obligation.
Juridical or Legal tie
- binds or connects the parties to obligation.
- Also called efficient cause.
Forms of Obligation
- refers to the manner in which an obligation is
manifested or incurred
(oral, in writing, partly oral, partly in writing)
- law does not require any form for obligations
arising from contracts for their validity or
binding force.
- obligations arising from other sources DO
NOT have any form at all.
Kinds of Obligation According to the
Subject Matter
Real Obligation
- Obligation to give
- Subject matter is the thing which the
obligor must deliver to the oblige.
Personal Obligation
- Obligation to do or not to do
- Subject matter is an act to be done or
not to be done.
2 kinds of Personal Obligations:
 Positive personal obligation
- To do or to render service.
 Negative Personal Obligation
- Obligation not to do.
- Includes “not to give”
ART. 1157 OBLIGATIONS ARISE FROM
 Law
- When they are imposed by law itself.
Ex.
obligation to pay taxes, obligation to support
ones family, etc.
 Contracts
- When they arise from stipulation of the
parties.
 Quasi-contracts
- Arise from lawful, voluntary, and
unilateral acts
- No one shall be unjustly enriched or
benefitted at the expense of another.
- In a sense can, be considered as arising
from law.
Ex.
obligation to return money paid by mistake.
 Crimes or Acts/Omissions published by
law
- Arising from civil liability, consequence
of a criminal offense.
 Quasi-delicts or torts
- Damage done to another through acts or
omission, with negligence, but no
contractual relation between parties.
- has the appearance of a crime but is not a
crime.
Ex.
obligation of head of the family living in a
building to answer for damages thrown from
their floor
Obligation of a driver of a vehicle to pay for
damages for driving carelessly and crashing on
something/someone.
CLASSIFICATIONS OF THE 5 SOURCES OF
OBLIGATION
- obligations emanating from law
- obligations emanating from private acts:
 arising from illicit acts
(punishable in case of crimes/acts or not
punishable in case of quasi-delicts/torts)
 arising from licit acts
(contracts and quasi-contracts)
Note: obligations can be seen as to having only 2
sources; law and contracts, because quasi-contracts,
delicts, and quasi-delicts are imposed by law.
ART. 1158 Obligations derived from the law are
NOT presumed. Only those expressly
determined in this Code or in special laws are
demandable, and shall be regulated b the
precepts of the law which establishes them.
Legal Obligations
- obligations arising from law
- not presumed because considered as a
burden to obligor.
- Has the exception to be demandable; must
be clearly set forth in the law to be so.
Ex.
-An employee cannot demand his/her employer to
pay for his legal assistance because no law requires
the employer to do so.
Special laws- all other laws not contained in the
Civil Code.
Ex.
Corporation Code, Negotiable Instruments Law,
Insurance Code, National Internal Revenue Code,
Revised Penal Code, Labor Code, etc.
ART. 1159 Obligations arising from contracts
have the force of law between the contradicting
parties and should be complied with in good
faith
Contractual Obligations
- Obligations arising from contracts or
voluntary agreements.
Contract- meeting of minds between 2 or more
persons.
Binding force- force of law between contradicting
parties.
Requirement of a valid contract- not contrary to
law, morals. Good customs, public order, and
public policy.
Breach of Contract- when a party fail or refuses to
comply, without legal reason or justification, his
obligations under the contract.
Compliance in good faith
-compliance/performance in accordance with the
stipulations or terms of the contract or agreement.
ART. 1160 OBLIGATIONS DERIVED FROM
QUAI-CONTRACTS SHALL BE SUBJECT
TO GENERAL PROVISIONS
Quasi-contractual Obligations
 - A quasi-contract is that juridical relation
resulting from lawful, voluntary, and
unilateral acts by virtue of which the
parties become bound to each other to the
end that o one will be unjustly enriched or
benefited at the expense of another.
Kinds of Quasi-contracts
 Negotiorum getio
- Voluntary management of the propert or
afairs of another without the knowledge or
consent of another.
Ex.
X’s house was next to a burning building and x
and his family were away, Y saved the house.
Y has rights to demand for reimbursement
after Y incurred expenses to save X’s house.
 Solutio indebiti
- When something is received when there is
no right to demand it, and it was unduly
delivered through mistake.
Requisites:
- No right to receive the thing delivered
- The thing was delivered through mistake.
Ex.
D owes C 1000. D pays T believing he is
authorized to receive the payment, makes T
have the obligation to return the money. Or if
D pays C more than what the former owes then
C has an obligation to giveback the excess
amount.
 Other examples of Quasi-contracts
- An implication of a quasi-contract without
the formal/verbal agreement to do so.
- Cases that are not in true contract but are
based on quasi-contracts.
Ex.
S leaves goat milk on B’s front porch that B
uses every day. After a weak S asks B for
payment of the used milk. B has the obligation
to pay S the amount of the milk.
ART. 1161 CIVIL OBLIGATIONS
ARIING FROM CRIMINAL OFFENSES
SHALL BE GOVERNED BY THE PENAL
LAWS.
Civil Liability Arising from Crimes or Delicts
Civil Liability in Addition to Criminal Liability
- every person criminally liable for an act or
omission is also civilly liable for damages
suffered by the aggrieved party.
- When there I not only moral evil but also
material damage.
Criminal Liability without Civil Liability
- Crimes which cause no material damages,
no civil liability can be enforced.
Ex.
contempt, insults to persons in authority,
gambling, violations of traffic regulations, etc.
Civil Liability without Criminal Liability
- Not criminally responsible but is liable
civilly.
Ex.
failure to pay contractual debt, causing damage
to another’s property without
malicious/criminal intent, when obligation
arises from quasi-delict.
Scope of Civil Liability
 Restitution
 Reparation for the damage caused
 Indemnification for consequential
damages.
Ex.
X stole the car of Y, X should return the
car/pay its value if it cannot be returned, pay
for damages caused to the car, pay such other
damages suffered by Y as consequence of the
crime.
ART. 1162 OBLIGATIONS DERIVED
FROM QUAI-DELICTS SHALL BE
GOVERNED BY THE PROVISIONS OF
CHAPTER 2, AND BY SPECIAL LAWS.
Obligations arising from quasi-delicts
Quasi-delict- act/omission by a person
(tortfeasor) which causes damages to another
in his person, property, giving the person an
obligation to conform to the consequences of
their actions, there being fault or negligence,
but there is no pre-existing contractual relation
between the parties.
Requisites of a Quasi-delict
 An act or omission
 Fault or negligence
 Damage caused
  Direct relation of cause and effect
between the act/omission and the
damage
 No pre-existing contractual relation
between parties.

Ex.
- X broke Y’s window from playing
softball. X has obligations to pay for
damages EVEN without a pre-existing
contract between the 2 to do so.

Crimes distinguished from Quasi-delict

CRIME QUASI-DELICT
Criminal or malicious Only negligence
intent
Purpose is punishment Indemnification
Affects public interest Concerns private
interest
Two liabilities: Only civil liability
-criminal
-civil
Cannot be Can be compromised.
compromised or
settled by the parties
themselves.
The guilt of the Negligence of the
accused must be defendant need only
proven beyond be proven by
reasonable doubt preponderance
(superior or greater
weight)
of evidence.
 - Derived by virtue of a juridical relation.
(life annuities/other similar income)

NATURE AND EFFECT OF

OBLIGATIONS

 Specific or determinate Right of Creditor to the Fruits

 Generic or indeterminate
- Creditor is entitled to the fruits from the
Duties of debtor in obligation to give a determinate time the obligation to make delivery
thing: arises.

1. Preserve or take care of things. When obligation to deliver the fruit arises:
- Diligence of a good father of a family
- Arises from the time of the perfection of
- Another standard for care.
the contract.
- Factors to be considered
- If subject to suspensive condition or
- diligence required depends upon the
period; upon the fulfillment of condition
nature of the obligation and circumstances
or arrival of the term.
o the person, along with time and place.
- Contract of sale; arises from perfection
- debtor is not liable if failure to preserve
EVEN IF it is subject to suspensive
the thing is due to fortuitous events or
condition or suspensive period.
force majeure.
- Arising from law, quasi-contracts, delicts,
- Reason for debtor’s obligation
and quasi-delicts; time of performance is
- so that the thing may be delivered or
determined by the provisions of the laws
preserved in the condition it was
applicable.
delivered.
2. Deliver the fruits of the thing.
3. Deliver the accessions or accessories.
4. Deliver the thing itself.
5. Answer for damages in case of non-
fulfillment or breach.

Duties of debtor in obligation to give a generic

thing:

1. Deliver a thing which is of the quality

intended by the parties.
2. To be liable for damages in case of fraud,
negligence, or delay.

ART.1164 THE CREDITOR HAS THE RIGHT

TO THE FRUITS OF THE THING. HE
SHALL ACQUIRE NO REAL RIGHT UNTIL
THE THING HAS BEEN DELIVERED TO
HIM.

Different Kinds of Fruits

1. Natural Fruits
- Spontaneous products of the soil.
(produced without the intervention of
human labor)
- Young and other products of animals.
2. Industrial Fruits
- Produced by lands of any kind, through
cultivation or labor.
(brought about by reason of human labor)
3. Civil Fruits