The Law on Obligations and Contracts

Art.1156. An obligation is a juridical necessity to give, to do or not to do.

Why is it a juridical necessity? It is because of incase of noncompliance of either contracting parties,

there will be legal sanctions.

Essential Requisites of Contract

Passive subject (debtor or obligor) bound to the fulfillment of the obligation; he who has the duty

Active subject (creditor or obligee) entitled to demand the fulfillment of the obligation; who has the
right

Object or prestation (subject matter of the obligation)

Juridical or legal ties (efficient cause)

Real obligation (obligation to give) the obligor has to deliver a thing to the obligee

Personal obligation (obligation to do or not to do) action; positive personal obligation, to do; negative
personal obligation, not to do.

Art. 1157. Sources of Obligation

1. Law, when they are imposed by law itself

2. Contracts, when they arise from the stipulation of the parties
3. Quasi-contracts, when they arise from lawful, voluntary, and unilateral acts which are
enforceable to an end that no one shall be unjustly enriched or benefited at the expense of
another.
4. Delicts, when they arise from civil liability which is the consequence of a criminal offense
5. Quasi-delicts, when they arise from damage caused to another through an act or omission,
there being fault or negligence, but no contractual relation exists between the parties.

Art. 1159. Contracts

Contract- meeting of minds between 2 or more persons whereby on binds himself, w respect to the
other, to give something or to render some service.

Compliance in good faith- means compliance or performance in accordance with the stipulations or
terms of the contract or agreement. Sincerity and honesty must be observed to prevent one party
from taking unfair advantage over the other.

art. 1163.

Determinate thing/ specific thing, particularly designated or physically segregated from others of the
same class; identified by its individuality, the debtor cannot substitute it with another.

Indeterminate thing/ generic thing, refers to a class or genus to which it pertains and cannot be
pointed out with particularity; identified only by its specie, the debtor can give anything of the same
class and the same kind.

Art. 1164. Different kinds of fruits

Natural fruits, spontaneous products of the soil, and the young and other products of animals;
without intervention of human.
Industrial fruits, produced by lands of any kind through cultivation or labor; with intervention of
human labor.

Civil fruits, those derived by virtue of a juridical relation.

Personal rights, the right or power of a person to demand from another.

Real rights, the right or interest of a person over a specific thing.

Art.1166.

Accessions, fruits of a thing or additions to impovemnet upon a thing (principal)

Accessories, things joined to or included with principal thing for the latter’s embellishment, better
use, or completion.

Art. 1169. Different kinds of delay.

Ordinary delay, merely the failure to perform an obligation on time.

Legal delay/default/mora, failure to perform an obligation on time which failure constitutes a breach
of the obligation.

Mora solvendi, delay on the part of the debtor to fulfill his obligation.

Mora accipiendi, delay on the part of the creditor to accept the performance of the obligation.

Compensati morae, delay of the obligors in reciprocal obligations.

EXCEPTIONS ON THE GENERAL RULE “NO DEMAND, NO DELAY.”

1. When the obligation so provides.

2. When the law so provides.
3. When time is of the essence.
4. When demand would be useless.
5. When there is performance by a party in reciprocal obligations.

Art. 1170. Grounds for liability for damages

FRAUD (dolo) – deliberate intentional evasion of the faithful fulfillment of an obligation;

NEGLIGENCE (culpa or fault) – voluntary act or omission of diligence, there being no malice, which
prevents the normal fulfillment of an obligation;

DELAY (mora) – default or tardiness in the performance of an obligation after it has been due and
demandable;

CONTRAVENTION OF TERMS OF OBLIGATION (violation)– violation of terms and conditions stipulated

in the obligation; this must not be due to a fortuitous event

Art. 1174. Fortuitous event, is any event which cannot be foreseen, or which, though foreseen, is
inevitable.

EXEPTIONS
1. When it is expressly stipulated that he shall
be liable even if non-performance of the
obligation is due to fortuitous
events;
2. When the nature of the obligation requires
the assumption of risk;
3. When the obligor is in delay;
4. When the obligor has promised the same
thing to two or more persons who do not have
the same interest;
5. When the possessor is in bad faith and the
thing lost or deteriorated due to fortuitous
event;
6. When the obligor contributed to the loss of
the thing.
1. When it is expressly stipulated that he shall
be liable even if non-performance of the
obligation is due to fortuitous
events;
2. When the nature of the obligation requires
the assumption of risk;
3. When the obligor is in delay;
4. When the obligor has promised the same
thing to two or more persons who do not have
the same interest;
5. When the possessor is in bad faith and the
thing lost or deteriorated due to fortuitous
event;
6. When the obligor contributed to the loss of
the thing.
1. When it is expressly stipulated that he shall
be liable even if non-performance of the
obligation is due to fortuitous
events;
2. When the nature of the obligation requires
the assumption of risk;
3. When the obligor is in delay;
4. When the obligor has promised the same
thing to two or more persons who do not have
the same interest;
5. When the possessor is in bad faith and the
thing lost or deteriorated due to fortuitous
event;
6. When the obligor contributed to the loss of
the thing.
1. When it is expressly stipulated that he shall be liable even if non-performance of the obligation is
due to fortuitous events;

2. When the nature of the obligation requires the assumption of risk;

3. When the obligor is in delay;

4. When the obligor has promised the same thing to two or more persons who do not have the same
interest;

5. When the possessor is in bad faith and the thing lost or deteriorated due to fortuitous event;
6. When the obligor contributed to the loss of the thing.

Art. 1176.

Presumtion, meant the inference of a fact not actually known arising from its usual connection with
another ehich is known or proved.

Conclusive presumption, one which cannot be contradicted, like the presumprtion that everyonw is
conclusively presumed to know thw law.

Disputable or rebuttable presumption, one which can be contradicted or rebutted by presenting

proof to the contrary, like the presumption established in art 1176.

Art. 1178

EXCEPTIONS:
a) Those not transmissible by their nature like
purely personal rights;
b) Those not transmissible by provision of
law;
c) Those not transmissible by stipulation of
parties.
EXCEPTIONS:
a) Those not transmissible by their nature like
purely personal rights;
b) Those not transmissible by provision of
law;
c) Those not transmissible by stipulation of
parties.
EXCEPTIONS:

a) Those not transmissible by their nature like purely personal rights;

b) Those not transmissible by provision of law;

c) Those not transmissible by stipulation of parties.

Art. 1179.
PURE OBLIGATION – an obligation which does not contain any condition or term upon which the
fulfillment is made to depend; immediately demandable by the creditors and the debtor cannot be
excused from not complying with his prestation.

CONDITIONAL OBLIGATION – an obligation which depends upon a future or uncertain event, or upon
a past event unknown to the contracting parties.

– an obligation subject to a condition.

a) Suspensive Obligation – its fulfillment gives rise to an obligation; the demandability of the
obligation or the effectivity of the contract can take place only after the condition has been fulfilled.

b) Resolutory Obligation – its happening extinguishes the obligation which is already existing;