OBLIGATIONS AND CONTRACTS
Obligations may also arise from
Article 1158
Obligations derived from law are not presumed.
Only those expressly determined in this Code or in
special laws are demandable, and shall be
regulated by the precepts of the law which
establishes them; and as to what has not been
foreseen, by the provisions of this book.
1. Agreement is unnecessary – if there is
already a law that imposes to you an
obligation, agreement of parties becomes
unnecessary.
2. Obligation not presumed – obligations
derived from must be expressly provided in
the NCC or in special laws, otherwise, no
obligation.
Article 1159
Obligations arising from contracts have the force of
law between the contracting parties and should be
complied with in good faith.
1. Neither party may unilaterally and upon his
own exclusive volition, escape his
obligations under the contract, unless the
other party assented thereto, or unless for
causes sufficient in law and pronounced
adequate by a competent tribunal.
2. Principle of autonomy of will – when parties
entered contract willingly and voluntarily,
they are bound by it. Courts need not agree
w the contract.
3. Validity of contract – obligations arising
from contract presupposes that the
contract is valid and enforceable, otherwise
no obligation is formed.
a. Contract must not be contrary to
law, morals, good customs, public
policy, or public order.
i. Absent violations of the
abovementioned, contract
should be given effect.
b. Divisible contracts If contract is
falsified in part by an addition of
stipulations, contract will only be
invalid as to the additional
stipulation.
c.
voidable contracts because such
contracts are valid until void.
4. Attorney’s contracts
a. If no contract, recover reasonable
compensation for services only
b. If with contract, court can disregard
if compensation agreed upon is
unreasonable.
i. ONLY in Attorney’s contracts,
for court to disregard it, no
need to prove that contract
is against public morals or
policy. Unreasonableness of
compensation is sufficient.
5. Pre-contractual obligations – obligations
may arise while the same is under
negotiations. This is for recovery of
damages or expenses incurred during
negotiations. Conditions
a. Offer must be clear and definite
leading the party to incur expenses
in the expectation of entering into a
contract
b. Withdrawal of offer must be without
any legitimate cause
6. Obligations arise at the perfection of
contract
7. Obligations governed by the agreement of
the parties
8. Compliance in good faith – compliance in
accordance with the stipulations, terms,
and clauses of the contract.
a. Interpret not by the letter that
killeth but by the spirit that giveth
life
b. PURPOSE: to prevent one party
from taking unfair advantage over
the other party
9. Innominate contracts
a. I give that you may give
b. I do that you may give
c. I give that you may do
d. I do that you may do
e. NOTE: if there is no expectation to
do or give, after giving or doing, then
there is no contract. There must be
an expectation.
Article 1160
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