OBLIGATIONS

AND
CONTRACTS
 OBLIGATION DEFINED

Art. 1156. An obligation is a

juridical necessity to give,
to do or not to do.
it means the rights and duties
arising from obligation are legally
demandable and the courts of
justice may be called upon
through proper action to order
the performance.
 ESSENTIAL
REQUISITES CREDITOR /
OBLIGEE

ACTIVE SUBJECT DEBTOR /

OBLIGOR
One who has the
power to demand the PASSIVE SUBJECT
prestation.

One who is bound

The legal tietowhich constitutes the source
OBJECT / PRESTATION
perform the
of obligation—the coercive force which
prestation
makes the obligation demandable.

Act of giving, doing or JURIDICAL TIE

not doing something
SOURCES OF OBLIGATIONS
S. 1157

LAW
CONTRACTS

QUASI-CONTRACTS

DELICTS

QUASI-DELICTS
 LAW
Art. 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.
QUASI-CONTRACTS
The juridical relation resulting from
a lawful, voluntary and unilateral
act which has for its purpose the
payment of indemnity to the end
that no one shall unjustly enrich
or benefited at the expense of
another. (Art. 2142, NCC)
QUASI-CONTRACTS
Solutio Indebiti
(Payment by mistake)

It is the juridical relation which

arises when a person is obliged to
return something received by him
through error or mistake.
QUASI-CONTRACTS
Negotiorum Gestio
(management of another’s
property)

It is the voluntary management or

administration by a person of the
abandoned business or property
of another without any authority
or power from the latter.
 DELICTS
Acts or omissions punished by law.
Civil liability arising from delicts:
Restitution – which is the restoration of or
returning the object of the crime to the
injured party.
Reparation – which is the payment by the
offender of the value of the object of the
crime, when such object cannot be returned
to the injured party.
Indemnification – the consequential damages
which includes the payment of other
damages that may have been caused to the
injures party.
QUASI-DELICTS
One where whoever by act or
omission causes damage to
another, there being fault of
negligence, is obliged to pay for
the damage done. Such fault of
negligence, if there is no pre-
existing contractual relation
between the parties.
(Art. 2176)
QUASI-DELICTS
There must be fault of
negligence attributable to the
offender;

There must be damage or

injury caused to another;

There is no pre-existing
contract.
 CONTRACTS
Art. 1305. A contract is a meeting
of minds between two persons
Although contracts have the force of
whereby one binds himself, with
law, it does not mean that contract are
respect
over andto thetheother,
above to give
law. Contracts
are with the limitations imposed by
something or NCC,
law in Art. 1306, to render some
it states that
the contractingservice.
parties may establish
such stipulations, clauses terms and
Art. 1159. Obligations
conditions as, they may arising
deem from
convenient, provided that are not
contracts
contrary tohave thegood
law, morals, force of law
custom,
between the
public contracting
order or public policy. parties

and should be complied with in

good faith.
FORM OF OBLIGATION
As a general rule, the law
does not require any form
in obligations arising from
contracts for their validity
or binding force.

Obligations arising from

other sources do not
have any form at all.
 STATUTE OF FRAUDS
(a) An agreement that by its
terms is not to be
performed within a year
from the making thereof;

(b) A special promise to

answer for the debt,
default, or miscarriage of
another;
 STATUTE OF FRAUDS
(c) An agreement made in
consideration of marriage,
other than a mutual
promise to marry;
 STATUTE OF FRAUDS
(d) An agreement for the sale of goods,
chattels or things in action, at a price not
less than five hundred pesos, unless the
buyer accept and receive part of such
goods and chattels, or the evidences, or
some of them, of such things in action or
pay at the time some part of the
purchase money; but when a sale is
made by auction and entry is made by
the auctioneer in his sales book, at the
time of the sale, of the amount and kind
of property sold, terms of sale, price,
names of the purchasers and person on
whose account the sale is made, it is a
sufficient memorandum;
 STATUTE OF FRAUDS
(e) An agreement of the
leasing for a longer period
than one year, or for the
sale of real property or of
an interest therein;

(f) A representation as to the

credit of a third person.
 Freedom or Autonomy
of Contracts
- The parties may establish such
LIMITATIONS:
stipulations, clauses, terms and
1.Law
conditions as they may deem
2.Police Power
convenient, provided, they are
not contrary
3.Not contrary totolaw, morals,
morals,
good
goodcustoms,
customs public
andorder,
publicand
public policy.
policy
 Obligatoriness of
Contracts
Obligations arising from contracts
have the force of law between
the contracting parties and
should be complied with in good
faith.
 Mutuality of Contracts

Contracts must bind both and not

one of the contracting parties;
their validity or compliance
cannot be left to the will of one
of them.
 Consensuality of
Contracts
Contracts are perfected, as a
general, by mere consent, and
from that moment the parties are
bound not only by the fulfilment of
what has been expressly
stipulated but also to all the
consequences which, according
to their nature, may be in keeping
with good faith, usage and law;
 Relativity of
Contracts
Contracts take effect only between
the parties, their assigns and
heirs, except in cases where the
rights and obligations arising from
the contract are not transmissible
by their nature, or by stipulation,
or by provision of law.
According to name or
designation:

NOMINATE

INNOMINATE
According to perfection:

CONSENSUAL

REAL
According to cause:
ONEROUS

REMUNERATORY
OR
REMUNERATIVE

GRATUITOUS
 According to form:

INFORMAL OR
COMMON

FORMAL OR
SOLEMN
According to obligatory
force:
VALID
RESCISSIBLE
VOIDABLE
UNENFORCEABLE
VOID OR INEXISTENT
According to person
obliged:
UNILATERAL

BILATERAL
According to dependence
to another contract:

PREPARATORY

ACCESSORY

PRINCIPAL
 According to risks:

COMMUTATIVE

ALEATORY
According to liability:

UNILATERAL

BILATERAL
X saw at about 1 in the afternoon a
child alone in a shopping mall. The
child who strayed from Y, his
mother, was in tears and appeared
very hungry. Out of pity, X took him
to a restaurant to eat for which he
spent P200.00. Y did not give her
consent to the good deed of X.
Furthermore, they were on their way
home before the child got lost. Is X
entitled to be reimbursed by Y for
the amount of P200.00? Why or why
not?
While the car of X was parked by
the roadside, it was bumped at
the rear by a jeep belonging to
Y. Only the car of X suffered
damage. Under the
circumstances, does it follow
that Y is liable to X for the
damage? Why or why not?
D (debtor) borrowed P100,000
from C (Creditor). On the due
date of the loan, D could not
pay C because he lost to a
robber the P100,000 intended
for C. In addition, he suffered
financial reverses, and he was
short of cash even for his
current family’s needs. Is D
legally justified to refuse to pay
C? Why or why not?
S (seller) sold to B (buyer) on
September 5 a specific
motor vehicle to be
delivered on September 20.
However, on September 15,
S sold again and delivered
the same motor vehicle to T
(third person). Who has a
better right over the motor
vehicle? Why?
 D (Debtor) borrowed
P100,000 from C (Creditor)
payable after one month. On
due date, D tendered a
manager’s check showing
the amount of the debt to C.
However, the latter refused
to accept. Is C justified in
rejecting the payment? Why
or why not?
1. Orient Freight International,
Inc. vs. Keihin-Everett
Forwarding Company, Inc.,
GR No. 191937, August 9,
2017
2. Chan, Jr. vs. Iglesia Ni Cristo,
Inc., GR No. 160283, October
14, 2005
3. Rosencor Development Corp.
and Rene Joaquin vs.
Paterno Inquing, et.al., GR
No. 140479, March 8, 2001
4. Emilio Calma vs. Atty. Jose
M. Lachica, Jr., GR No.
222031, November 22,
2017
5. Hospicio D. Rosaroso et.al.
vs. Lucila Laborte Soria, GR
No. 194846, June 19, 2013
6. Leonides C. Diño vs. Lina
Jardines, GR No. 145871,
January 31, 2006