OBLIGATIONS AND CONTRACTS II.

PRIMA FACIE/ DISPUTABLE/ REBUTTABLE

INTRODUCTION PRESUMPTION
● Possession of stolen property of another
LAW ● Rape act alleged against another
● Set of reasonable rules of conduct promulgated
by competent authority for the compliance of all CHAPTER 1: OBLIGATIONS
and for the promotion of the common good.
ARTICLE 1156. An obligation is a juridical necessity to
GENERAL CLASSES OF LAW: give, to do, or not to do.
I. DIVINE LAW
II. MORAL LAW OBLIGATION
III. NATURAL LAW ● Derived from the Latin word obligatio which
IV. PHYSICAL LAW means a tying or binding
V. STATE LAW ● A tie of law or a juridical bond by virtue of which
one is bound in favor of another to render
BRANCHES OF THE GOVERNMENT: something - may consist in giving a thing, doing
● All functions are equal and independent of each a certain act, or not doing a certain act
other ● Civil Code of the Philippines: Book 4
I. LEGISLATIVE ○ Main source general oblicon provisions
● Creates the law
● Approves presidential appointments ➜ JURIDICAL NECESSITY
● Congress, Senate, House of ● In case of non-compliance, the courts of justice
Representatives may be called upon to enforce its fulfillment
II. EXECUTIVE
● Enforces the law PRESTATIONS:
● Signs laws, appoints federal judges ● To give - real obligation
● President, Vice President, Cabinet ● To do - positive personal obligation
III. JUDICIAL ● Not to do - negative personal obligation
● Interprets the law
● Decide if laws are constitutional, can NATURE OF OBLIGATIONS
overturn rulings by other judges I. CIVIL OBLIGATION
● Supreme Court, Other federal courts ● The creditor/ obligee has a right of
action in courts of justice to enforce their
CLASSES OF POSITIVE LAW: performance
I. HUMAN POSITIVE LAW/ STATE LAW ● Obligations we assume as citizens
● NATIONAL LAW ● Enforceable by law through the courts
● ORDINANCES (LGUS) II. NATURAL OBLIGATION
● ADMINISTRATIVE REGULATIONS ● Based on natural law
(IRR) ● Do not grant a right of action to enforce
their performance
CLASSES OF NATIONAL LAW: ● When converted from Civil Obligation,
I. SUBSTANTIVE/ PROCEDURAL/ ADJECTIVE juridical necessity has been
LAW extinguished; will have to be voluntarily
● Provides and enumerates certain rights performed
and imposes obligations
● Source of our rights and obligations ➜ PRESCRIPTIVE PERIODS:
● How we can fight or assert our rights ● Period when the law allows creditor to enforce
● Ex. Civil Code, Family Code civil obligation
II. PUBLIC/ PRIVATE LAW ● If creditor does not go to court within the period,
● The relationship of the government to its the civil obligation is converted into a natural
citizens obligation
● Ex. Revised Penal Code, The ○ 10 Years - Written Contracts
Constitution ○ 10 Years - Obligation created by law
○ 6 Years - Oral Contract
LEGAL PRESUMPTIONS: ○ 5 Years - Not fixed by law
I. CONCLUSIVE PRESUMPTION ○ 4 Years - Negligence
● Knowledge of the law
○ Ignoratia Legis non Excusat
● Estoppel
○ The inability to deny what has
been
ESSENTIAL REQUISITES OF A VALID OBLIGATION: ARTICLE 1157. OBLIGATIONS ARISE FROM:
1. PASSIVE SUBJECT I. LAW
● Debtor/ Obligor ● Imposed by the law itself
● He who has a duty ● Ex: Obligations to pay taxes/ support
2. ACTIVE SUBJECT one’s family
● Creditor/ Obligee II. CONTRACTS
● He who has a right ● Arise from agreement/ stipulation of the
3. OBJECT OR PRESTATION parties
● Subject matter of the obligation; may ● Ex: Obligation to repay a loan
consist in giving, doing, or not doing III. QUASI-CONTRACTS
4. JURIDICAL/ LEGAL TIE/ EFFICIENT CAUSE ● Arise from lawful, voluntary, and
● Binds/ Connects the parties to the unilateral acts - which are enforceable;
obligation no party will benefit at the expense of
● Determined by knowing the source of another
the obligation ➜ SOLUTIO INDEBITI
● Payment of what is not owing
FORMS OF OBLIGATION: ● Ex: Overpayment must be returned
1. Oral ➜ NEGOTIORUM GESTIO
2. In Writing ● A form of spontaneous voluntary agency
3. Partly Oral in which an intervenor acts on behalf
4. Partly in Writing and for the benefit of a principal, but
without prior consent
➜ GENERAL RULE ● Ex: Neighboring house on fire
● Law does not require any form in obligations IV. CRIMES/ ACTS/ OMISSIONS PUNISHED BY
arising from contracts LAW
○ Obligations arising from other sources ● Arise from civil liability which is the
do not have any form at all consequence of a criminal offense
● Ex: Obligation of a thief to return the car
RIGHT stolen by him
● Power a person has under the law ➜ CIVIL LIABILITY
● Demand from another any prestation ● Seeks to right the wrongful act
committed by one person against
WRONG another
● Cause of action ➜ SCOPE OF CIVIL LIABILITY:
● Omission of one party due to violation of legal ● Restitution (Restoration of something
rights lost or stolen)
● Term Injury is also used ● Reparation for damage caused
○ Violation of legal right of another ● Indemnification for consequential
damages (Payment for damages
ESSENTIAL ELEMENTS OF LEGAL WRONG/ suffered by the aggrieved as a result of
INJURY/ CAUSE OF ACTION: the crime)
● Legal right in favor of a person (Creditor/ ➜ CRIMINAL LIABILITY
Obligee/ Plaintiff) ● Involves the government taking action to
● Correlative legal obligation (Debtor/ Obligor/ punish an individual who violated the
Defendant) law
● Act/ Omission in violation of said right by the ● Every person criminally liable is also
defendant with resulting injury/ damage to the civilly liable
plaintiff V. QUASI-DELICTS OR TORTS
○ If any elements is absent, the complaint ● Arise from damage caused to another
becomes vulnerable to a motion to through an act or omission
dismiss on the grounds of failure to state ● Negligence resulting to harm/
a cause of action Unintentional
● Ex: You are still responsible for
OBLIGATION VS AGREEMENT accidentally injuring someone
● In OBLIGATION, there is already a juridical ➜ REQUISITES OF A QUASI-DELICT:
necessity, legal or juridical tie ● Act or omission
● In an ordinary AGREEMENT there is no juridical ● Fault or negligence
tie at all ● Damage caused
● Proximate cause
● No pre-existing contract
CLASSIFICATION OF OBLIGATION SOURCES:
CRIME VS. QUASI-DELICT
LAW AND CONTRACTS
● The only two sources since obligations arising
CRIME QUASI-DELICT
from quasi-contracts, crimes, and quasi-delicts
are really imposed by law.
Criminal/ Malicious intent/ Only Negligence
➜ EMANATING FROM LAW
Criminal negligence
➜ EMANATING FROM PRIVATE ACTS
● Licit Acts (Case of contracts and
Affects public interest Concerns private interest
quasi-contracts)
● Illicit Acts (Punishable by law in case of delicts,
Criminal and civil liability Only civil liability
or not punishable in case of quasi-delicts)
Purpose is punishment Purpose is
ARTICLE 1158. Obligations derived from law are not indemnification to the
presumed. offended party
ARTICLE 1159. Obligations arising from contracts have
the force of law between the contracting parties and Cannot be settled by the Compromised as any
should be complied with in good faith. parties themselves other civil liability
CONTRACTUAL OBLIGATIONS Guilt of accused must be Fault or negligence only
● Obligations arising from contracts or voluntary proven beyond need to be proved by
agreements reasonable doubt preponderance of
● Contracts are valid & enforceable evidence
CONTRACT
● Meeting of minds between two or more parties CHAPTER 2: NATURE AND EFFECT OF
● One binds himself with respect to the other, to OBLIGATIONS
give or to tender service
(1) OBLIGATION TO GIVE
COMPLIANCE IN GOOD FAITH
● Compliance in accordance to the agreement or ART. 1163. Every person obliged to give something is
terms of the contract also obliged to take care of it with the proper diligence of
a good father of a family unless the law or the stipulation
QUASI-CONTRACTUAL OBLIGATIONS of the parties requires another standard of care.
● No party will benefit at the expense of another
● Not a proper contract; No consent (A) SPECIFIC PROPERTY
● Physically segregated from others of the same
KINDS OF QUASI-CONTRACTS: class
I. NEGOTIORUM GESTIO ● Debtor cannot substitute it with another object,
● No consent but there’s an obligation although it is of the same kind and quality,
● Voluntary management without the without the consent of the creditor
knowledge/ consent of the latter ● Debtor must deliver fruits, accessions, and
II. SOLUTIO INDEBITI accessories even when not stipulated (from the
● Unduly done/ By mistake time of perfection to the time of delivery)
● No one shall enrich himself unjustly at
someone's expense DUTIES OF DEBTOR IN OBLIGATION TO GIVE A
➜ REQUISITES: DETERMINATE THING:
● No right to receive object delivers 1. Preserve or take care of the thing due
● Object was delivered by mistake 2. To deliver the fruits of the thing
III. OTHER EXAMPLES 3. To deliver its accessions and accessories
● Articles 2164 to 2175 4. To deliver the thing itself
● Recovery may be allowed on the basis 5. To answer for damages in case of non-fulfillment
of a quasi-contract or breach
ORDINARY DILIGENCE
● Diligence of a good father of a family
● No presumption of fault
● Damage or injury must be proved first
● Obligor must take care of the determinate thing
from the time of perfection until delivery;
preservation
● Standard diligence when there is no stipulation
between the parties
➜ CONTRACT OF DEPOSIT
● Safekeeping a property; no degree of diligence
prescribed by law (ordinary diligence)
EXTRAORDINARY DILIGENCE
● Another standard of care
● A higher degree of diligence
● Prima facie of fault
● Obligee does not need to prove the negligence
of obligor
● If the debtor exercises only ordinary diligence,
he will be liable.
➜ CONTRACT OF LOAN
● Deposits in the bank
➜ COMMON CARRIERS / TRANSPORTATION
● From the nature of their business and for
reasons of public policy, should observe
extraordinary diligence in the vigilance over the
goods and for the safety of the passengers
NOTE:
● Different degrees of diligence may be agreed
upon by parties (this is legally binding), but such
diligence cannot be underperformed.
➜ GENERAL RULE
● The debtor is NOT liable if his failure to preserve
the thing is not due to his fault or negligence but
to fortuitous events or force majeure.
ART. 1164. The creditor has a right to the fruits of the
thing from the time the obligation to deliver it arises.
However, he shall acquire no real right over it until the
same has been delivered to him.
PERSONAL RIGHT
● A right that may be enforced by one person on
another, such as the right of a creditor to
demand delivery of the thing and its fruits from
the debtor
● Has a definite active subject (the person who
has a right) and a definite passive subject (the
person who was the obligation)
● Cannot be demanded by anyone, only the
creditor
REAL RIGHT
● A right or power over a specific thing which is
enforceable against the whole world
● Interest over ownership or possession without a
definite passive subject
● There is a definite active subject (the person
who has a right)
OWNERSHIP ACQUIRED BY DELIVERY
● Transfer of the thing from one person to another
with transfer of rights
● Obligation to deliver arises from the time of the
perfection of the contract
● “He shall acquire no real right over it until the
same has been delivered to him.”
○ Creditor does not become the owner
until the specific thing has been
delivered to him
● No Delivery
○ Proper action of creditor is not for
recovery but one for specific
performance or rescission of obligation
ART. 1166. The obligation to give a determinate thing
includes that of delivering all its accessions and
accessories, even though they may not have been
mentioned.
RIGHT OF CREDITOR TO THE FRUITS:
● From the time the obligation to make delivery
arises
FRUITS
● Product of something
TYPES OF FRUITS:
I. NATURAL FRUITS
● Spontaneous products of the soil,
young, and other products of animals
without human intervention
● Ex. Grass, Trees, Young animals
II. INDUSTRIAL FRUITS
● Product of by lands of any kind through
the cultivation of labor
● Ex. Sugar cane, Vegetables, Rice
III. CIVIL FRUITS
● Derived by virtue of a juridical relation
● Arising from the use or enjoyment of a
property
● Ex. Rent of buildings; Price of leases;
Life annuities or similar income
ACCESSIONS
● Produced by, incorporated, or attached to the
thing; naturally or artificially
● Things incorporated into the determinate thing
● Ex. House on a land; Rents of a building
● Not necessary to the principal thing
ACCESSORIES
● Attached to the thing as an ornament or to make
it complete
● Things joined or included with the principal thing
for embellishment, better use, or completion
● Also used in the sense of a right (right to the
fruits and/or accessories of a thing)
● Ex. Key of a house; Frame of a picture
● Accessory and principal must go together
(B) GENERIC PROPERTY:
● A thing cannot be pointed out with particularity
○ “Genus nunquam perit” (A generic thing
never perishes)
● Debtor can give anything of the same class as
long as it is of the same kind
○ Neither of superior nor of inferior quality
when not specified or implied from
purpose or intent of parties
● Fruits, accessions and accessories are NOT
included
● In case of debtor’s failure to deliver on time, the
creditor can demand delivery
● In case of debtor’s failure to comply with
demand, the creditor may ask another to deliver
at the expense of debtor with damages
DUTIES OF DEBTOR IN OBLIGATION TO GIVE A
GENERIC THING:
1. Deliver a thing of quality intended by parties
2. To be liable for damages in case of fraud,
negligence, or delay, in the performance of the
obligation, or contravention of tenor
REMEDIES OF CREDITOR IN REAL OBLIGATIONS
➜ SPECIFIC REAL OBLIGATION
● Demand specific performance/ fulfillment with a
right to indemnity for damages
● Demand rescission or cancellation with a right to
recover damages
● Demand payment of damages only
➜ GENERIC REAL OBLIGATION
● No necessity to compel delivery
● Right to recover damages in case of breach or
violation
ART. 1167. If a person obliged to do something fails to
do it, the same shall be executed at this cost. It may be
decreed that what has been done poorly be undone.
(2) OBLIGATION TO DO
● Course of action the debtor must perform
● OTHERWISE, converted to indemnity for
damages
○ Refuses or fails to do it
○ Poorly does it
○ Does it in contravention of tenor
PERFORMANCE BY A THIRD PERSON.
➜ COMPELLING PERFORMANCE BY DEBTOR
● Prohibited as per the 1987 Constitution:
Constitutional right against involuntary servitude
➜ INDEMNIFICATION OF CREDITOR FOR DAMAGES
○ An exemption from liability for damage
➜ RIGHT AGAINST INVOLUNTARY SERVITUDE
● No involuntary servitude in any form shall exist
except as a punishment for a crime whereof the
party shall have been duly convicted.
● Every condition of enforced or compulsory
service of one to another
RIGHTS OF CREDITOR:
● Request performance of obligations
● Demand payment of damages if refused
● Ask another person to do it for the account of
the debtor, with damages
○ If poorly done, be undone
ART. 1168. When the obligation consists in not doing,
and the obligor does what has been forbidden him, it
shall also be undone at his expense.
(3) OBLIGATION NOT TO DO
● Duty of an obligor to abstain from an act
● No delay in negative personal obligation
RIGHTS OF CREDITOR:
● Request to undo what has been done
● Demand payment of damages if refused
● Ask the Court to task another person to undo it
for the account of the debtor, or if cannot be
undone, obligation is converted to an indemnity
for damages
CHAPTER 2: NATURE & EFFECT OF OBLIGATIONS
(1) PERFORMANCE OF OBLIGATIONS
➜ IRREGULAR
● Obligation has been performed but it was not in
accordance with the tenor of obligation; liability
is not absolved
● Ex. Delivered incorrect subject
➜ INCOMPLETE
● Obligation was incompletely performed
● Debtor is not excused from any liability, still, the
obligation is not faithfully performed
(2) FRAUD OR ‘“DOLO”
● Deliberate or intentional act of evading the usual
performance of an obligation
● Liability for fraud when already committed can
be waived or forgiven, but liability for future fraud
CANNOT be waived
➜ CAUSAL FRAUD
● Cause of defect in obligation is fraud itself;
deception to secure consent
● Committed in the perfection of contract
● Voidable Contract
● Ex. Fraudulent claims, Insidious words
● Remedy: Annul Contract and claim damages
➜ INCIDENTAL FRAUD
● Midleading but deceit was not serious
● Committed in the performance of an obligation
to another resulting in breach
● Valid Contract
● Remedy: Specific performance, Compel the
debtor to do what is obliged, Claim damages
WAIVER OF LIABILITY FOR PAST FRAUD
● Valid as the law encourages forgiveness
WAIVER OF LIABILITY FOR FUTURE FRAUD
● Void as the law won’t encourage bad faith
(3) NEGLIGENCE OR “CULPA”
● Failure to observe the ‘diligence of a good father
of a family,’ unless otherwise required
● Unlike fraud, negligence is unintentional due to
lack of skills or foresight
● Future negligence can be waived as long as
NOT done in bad faith
➜ CONTRACTUAL NEGLIGENCE/ CULPA
CONTRACTUAL
● Negligence resulting in non-performance of a
pre-existing obligation (Breach of Contract:
Liability for damages)
➜ CRIMINAL NEGLIGENCE/ CULPA CRIMINAL
● Negligence resulting in commission of a crime
(Imprisonment, Fine, or both, with Liability for
damages)
➜ CIVIL NEGLIGENCE/ CULPA AQUILIANA
● Negligence which by itself is the source of an
obligation
● Quasi-delict or tort (Liability for damages)
(4) DELAY/ DEFAULT OR “MORA”
ORDINARY DELAY
● Mere failure to perform an obligation on time
LEGAL DELAY
● Failure to perform an obligation on time, which
constitutes a breach of obligation
KINDS OF DELAY
➜ MORA SOLVENDI
● Default committed by debtor in performing his
obligation (Breach of Contract: Liability for
interest and/or damages)
➜ MORA ACCIPIENDI
● Default committed by creditor in accepting the
debtor’s performance of obligation (Liability for
damages sustained by debtor as a result)
➜ COMPENSATIO MORAE
● Both debtor and creditor are in default (No one
is liable to another)
REQUISITES OF DELAY
● Failure to perform on time, Demand made by
creditor, Failure to comply
● General Rule: No Demand, No Delay
EXCEPTIONS OF DEMAND
● Law provides so (Paying Taxes)
● Stipulation says so (If not done by _,
automatically debtor is in default)
● Time is of the essence (Deadline was given)
● Demand would be useless (Obligation was
spoiled; determinate thing cannot be delivered
anymore)
● In reciprocal or bilateral obligations, when one
party performs his part (In a contract of sale,
when one part of obligation is done delay
begins)
(5) CONTRAVENTION OF TENOR OF OBLIGATION
● Defective performance of an obligation
EXEMPTING OR JUSTIFYING CIRCUMSTANCES FOR
NON PERFORMANCE:
I. FORTUITOUS EVENT OR ‘CASO FORTUITO’
● Any event impossible to foresee or
impossible to avoid
● Obligation considered as performed or
cancelled; extinguished obligation
II. PRESUMPTION OF PERFORMANCE OR
PAYMENT
● Prima Facie: Law presumes that the
possession of a collateral or pawned
property means payment was made
III. USURIOUS TRANSACTION/ INTEREST
● Usury means collecting or charging
interest in excess of what the law allows
● A stipulation for the payment of usurious
interest is void
● Usury is now legally non-existent
➜ REQUISITES TO COLLECT INTEREST
● Payment of interest must be expressly
stipulated
● The agreement must be in writing
● The interest must be lawful
IMPORTANT
● Unlike fraud, negligence is unintentional due to
lack of skills or foresight
● Gross Negligence shows bad faith and amounts
to malice; Rules on Fraud shall apply
OBLIGATIONS AND CONTRACTS
CHAPTER 3: KINDS OF OBLIGATIONS
(1) PURE & CONDITIONAL OBLIGATIONS
➜ PURE OBLIGATION
● One that does NOT have a condition or a period
● Immediately demandable
➜ CONDITIONAL OBLIGATION
● One that has a condition attached to the
obligation
● Applicable to uncertain events
● Not immediately demandable prior to condition;
Debtor cannot be expected to perform the
obligation until the condition arises
➜ CONSTRUCTIVE FULFILLMENT
● If the debtor prevented the fulfillment of the
condition, the law will consider the condition
fulfilled
● Ex. Debtor did not buy a lottery ticket
➜ CONDITION
● Future and uncertain event
● Past event unknown to the parties
● If at the time of the constitution of the past event
is unknown, then it is a condition IF verifiable
● Causes the obligation to arise/ cease
● Ex. If I win the lottery I will give you 1M
➜ KINDS OF CONDITIONS E. MIXED CONDITION
A. SUSPENSIVE CONDITION ● Depends partly upon the will of one of
● No obligation until the condition the parties AND partly upon chance or
happens the will of a third person
● Suspends the creation of the obligation ● Valid unless an impossible condition is
● Not immediately demandable attached
● Ex. If I win the lottery I will give you 1M F. IMPOSSIBLE CONDITION
➜ LID RULES IN SUSPENSIVE CONDITIONS ● An impossible condition would make an
obligation null & void
● Impossible if physically impossible or
LOSS
legally impossible (contrary to law)
● Ex. I will give you 1M if you can go to
No Debtor Fault Extinguished obligation
the moon by foot
● Ex. I will give you 10K to find me a meth
Debtor Fault Damages
supplier
➜ COMPOUND OBLIGATION
IMPROVEMENT
● In one obligation there are several
smaller obligations
By Nature/ Time Inure to Creditor’s Benefit
● Obliging in different ways
Debtor’s Expense No reimbursement; ➜ Apply to Divisible & Indivisible Obligation
Subject to removal G. POSITIVE CONDITION
● Occurrence before a designated time
DETERIORATION ● Ex. I’ll give you 10k if I earn 1M in a
month
No Debtor Fault Creditor suffers H. NEGATIVE CONDITION
● Non-occurrence before a designated
Debtor Fault Rescission + Damages time
(or Damages only) ● Ex. I’ll give u 1M if I do not get sick in a
span of 10 years

B. RESOLUTORY CONDITION (2) OBLIGATIONS WITH A PERIOD

● Existing obligation until the condition
happens
● Extinguishes the obligation and
terminates the rights upon fulfillment of
the condition
● Immediately demandable
● Ex. I will give you a weekly allowance
until you finish your first degree
C. POTESTATIVE CONDITIONS
● Dependent exclusively to the will of one
of the parties
➜ DEPENDENT ON WILL OF CREDITOR
● Valid & Enforceable
● Retains the juridical necessity
● Ex. I will give you 10k if you want it
➜ DEPENDENT ON WILL OF DEBTOR
● Null & Void
● As if parties did not agree on anything;
No juridical necessity
● Ex. I will give you 10k if I want to
D. CASUAL CONDITION
● Depends on chance or the will of a third
person
● Valid
● Ex. I will give you 10k if our candidate
wins a major award in the Miss Universe
● One that has a period attached to the obligation
● Fixes the efficaciousness/ time of the obligation
● Period is presumed to be for the benefit of both
debtor and creditor unless otherwise provided
● Courts can fix the period if uncertain
● “LID” Rules apply to suspensive period
● Ex. I will give u 10k on December 31, 2023
● Ex. I will give u 50k when X dies
➜ PERIOD
● A future and certain event
● Fixes the time of the obligation
➜ DEBTOR “INIVA”
➜ Benefit of a period is lost
● Insolvency or bankruptcy
● Not furnish the creditor the guaranties/ securities
promised (collateral)
● Impaired the guaranties/ securities
● Violates any undertaking in relation to the period
● Attempts to abscond (evade/ flee)
(3) DISTRIBUTIVE OBLIGATIONS ➜ GENERAL RULE
➜ ALTERNATIVE OBLIGATION ● Penal clause shall substitute indemnity for
● Only one out of various things is due or damages
demandable (Either/ or)
● A distributive obligation, compound in nature WHEN DAMAGES + PENAL CLAUSE CAN BE
● Choice between the prestations given belongs to DEMANDED:
the obligor ● Contrary stipulation of the parties
● Creditor cannot be compelled to part of one and ● Debtor’s refusal to pay penalty
part of another ● Debtor is guilty of fraud
● If creditor’s acts prevent the debtor from making
a choice - Debtor may rescind with damages IMPORTANT
➜ FACULTATIVE OBLIGATION ● An obligation can only be pure, conditional, or
● Original obligation may be substituted; Valid with a period
● Only one have been agreed upon ○ It may fall into more than one
● Substitution classification
● In law, always assume the good facts of life
(4) JOINT & SOLIDARY OBLIGATIONS
➜ JOINT OBLIGATION PERIOD VS CONDITION
● Whole obligation is to be paid or fulfilled ➜ PERIOD
proportionately by the different debtors and/or is ● Certain Event (Certain Fulfillment)
to be demanded proportionately by the different ● Future Event
creditors. ● Fixes the time of the obligation
➜ CONDITION
➜ SOLIDARY OBLIGATION ● Uncertain Event (Uncertain Fulfillment)
● Each one of the debtors is bound to render, ● Past/ Future Event
and/or each one of the creditors has a right to ● Causes the obligation to arise/ cease
demand entire compliance with the prestation

(5) DIVISIBLE & INDIVISIBLE OBLIGATIONS

● Recall that an impossible condition would make
an obligation null & void
➜ Apply to Compound Obligations
➜ DIVISIBLE OBLIGATION
● Can be performed separately and independently
of each other
● IF there is an impossible condition in one of the
obligations, the remaining obligations (without
the impossible condition) stand to be valid
➜ INDIVISIBLE OBLIGATION
● The obligations comprising it cannot be
separated from one another
● IF there is an impossible condition, the entire
obligation is considered null & void

(6) OBLIGATION WITH A PENAL CLAUSE

● Accessory undertaking/ obligation, in case of
breach, to insure performance = penal clause
● Created to insure respect & commitment of
performance on time
➜ PENAL CLAUSE
➜ EQUITABLE REDUCTION OF THE COURTS
● Irregular/ partial performance or penalty is
unconscionable
● Despite agreement by parties, courts may see
unfairness in the created obligation
● In unconscionable penalties, courts may
equitably reduce the penalty if there is irregular
or partial performance because INTENTION to
comply is there
● Ex. I borrowed 10k, and in case of a breach I will
pay 1M as a penalty in addition to the principal