OBLIGATIONS & CONTRACTS
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CHAPTER 1 – GENERAL PROVISIONS
ARTICLE 1156. An obligation is a juridical
necessity to give, to do or not to do.
OBLIGATION – “to do” includes all kinds of work
service; while an obligation “to give” is a
prestation which consists in delivery of a movable
thing in order to create a real right, or for the use
of the recipient, or for its simple possession, or in
order to return it to its owner.
RIGHT – is a claim or title to an interest in
anything whatsoever that is enforceable by law.
- For every right enjoyed by any person,
there is a corresponding obligation on the
part of another person to respect such
right.
- An obligation is a juridical relation
whereby a person (called creditor) may
demand from another (called the debtor)
the observance of a determinative
conduct (the giving, doing or not doing),
and in case of breach, may demand
satisfaction from the assets of the latter.
* Real Obligation (Obligation to give)
Obligation of the debtor or obligor to
deliver a thing, movable or immovable to the
creditor or oblige for the purpose of transferring
ownership or for the use or possession of the
recipient.
Kinds of Real Obligation
1) Determinate of Specific Real Obligation
A thing is determinate when it is
particularly segregated from all others of
the same class.
2) Indeterminate or Generic Real Obligation
A thing is indeterminate when it is
designated merely by its class or genus.
* Personal Obligation (Obligation to do/not to
Kinds of Personal Obligation
1) Positive Personal Obligation (to do)
Obligation of the debtor to
perform some work or service for the
creditor.
2) Negative Personal Obligation (not to do)
Obligation of the debtor not to
perform some work or service for the
creditor.
ELEMENTS OF AN OBLIGATION
1) PASSIVE SUBJECT / DEBTOR OR OBLIGOR
2) ACTIVE SUBJECT / CREDITOR OR OBLIGEE
3) OBJECT
4) JURIDICAL OR LEGAL TIE / VINCULUM
JURIS
ARTICLE 1157. Sources of Obligations:
1) Law
2) Contracts
3) Quasi-contracts
4) Delicts / Acts or omissions punished by
law
5) Quasi-delicts
LAW – A rule of conduct, just, obligatory,
promulgated by legitimate authority, and of
common observance and benefit.
CONTRACT – It is a meeting of minds between
two persons whereby one binds himself, with
respect to the other, to give something or to
render some service.
Stages of Contract:
 Negotiation / Preparation
Contracting parties indicate an
interest in the contract to the time the
contract is perfected

 Perfection
It takes place upon the
concurrence of the essential element of
(Consent, Object, Cost)
 Consummation
It begins when the parties
perform their respective undertakings
under the contract.
QUASI-CONTRACT – Quasi means “as if”; Certain
lawful, voluntary and unilateral acts give rise to
the juridical relation of quasi-contract to the end
that no one shall be unjustly enriched or
benefited at the expense of another.
Kinds of Quasi-Contracts:
1) Negotiorum Gestio
 The property or business is
neglected of abandoned; and
 If in the fact the manager has not
been tacitly authorized by the
owner.
2) Solutio Indebiti
 There is the absence of a right to
collect the excess sums; and
 The payment was made by
mistake.
DILECT / ACT OR OMISSIONS PUNISHED BY LAW –
A violation of the law; especially, a wrongful act or
omission giving rise to a claim for compensation.
Every person criminally liable for a felony
is also civilly liable (Art. 100, Revised Penal Code)
Civil Liabilities in Delict:
1) Restitution
The restitution (act of returning)
of the thing itself must be made whenever
possible, with allowance for any
deterioration, or diminution of value as
determined by the court.
2) Reparation of the damage caused
The court shall determine the
amount of damage, taking into
consideration the price of the thing,
whenever possible, and its special
sentimental value to the injured party, and
reparation shall be made accordingly.
3) Indemnification for consequential
damages
It shall include not only those
caused the injured party, but also those
suffered by his family or by a third person
by reason of the crime.
Article 89 (1) of the Revised Penal Code. “How
criminal liability is totally extinguished”
1) By the death of the convict, as to the
personal penalties; and as to pecuniary
penalties, liability therefor is extinguished
only when the death of the offender
occurs before final judgement;
QUASI-DELICTS – also known as “Culpa
Aquiliana”; Whoever by act or omission causes
damage to another, there being fault or
negligence, is obliged to pay for damage done.
Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called
quasi-delicts.
Elements of Negligence:
1) The fault or negligence of the defendant;
2) The damage suffered or incurred by the
plaintiff; and
3) The relation of cause and effect between
the fault or negligence of the defendant
and the damage incurred by the plaintiff.
Kinds of Negligence:
1) Culpa Aquiliana / Quasi-Delict
2) Culpa Contractual
3) Culpa Criminal
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
(1090)