2 JRU LAW C201 - Lecture Slides With Audio - Week 02 - 2022-2023

Law on Obligations and Contracts
Essential Requisites of an Obligation

General Classifications of Obligations
Sources of Obligations
“obligation”
What is an obligation?
“An obligation is a juridical necessity to give, to do or not to do.”
- Article 1156, Civil Code

“obligation”
“juridical necessity”
There are legal consequences in case of compliance or non-

compliance with an obligation.
In case of non-compliance with an obligation, the proper party

may seek enforcement of the obligation through the proper court.
“to give, to do or not to do”
An obligation may involve the need to:
• deliver a thing;
• do something; or
• refrain from doing something.

Example of obligation to give:
G and H entered into a contract of sale where G promised to

deliver to H a brand new laptop in exchange for PhP20,000.00 to
be paid by H.
Example of obligation to give, continued:
In this case, the obligation of G to deliver a brand new laptop is

an obligation to give. The obligation of H to pay PhP20,000.00
is also an obligation to give.
Example of obligation to do:
J and K entered into a contract where J agreed to repair K’s car in

exchange for PhP5,000.00.
Example of obligation to do, continued:
In this case, the obligation of J to repair K’s car is an obligation

to do.
Example of obligation not to do:
L agreed to work as a programmer in a video game development

company.
Example of obligation not to do, continued:
For the protection of the company, L signed a non-disclosure

agreement where he promised not to share to anyone outside the
company any information he might get about the games being
developed by it.
Example of obligation not to do, continued:
In this case, the obligation of L not to disclose information about

games being developed by the company is an obligation not to do
something.
What are the essential requisites of an obligation?
1. passive subject
2. active subject
3. object or prestation
4. juridical tie or legal tie

What is “passive subject”?
The passive subject is the person who may be demanded to fulfill

the obligation.
The passive subject may also be called the debtor or obligor.

What is “active subject”?
The active subject is the person who may demand that the
obligation be fulfilled.
The active subject may also be called the creditor or obligee.

What is “object or prestation”?
The object or prestation is the subject matter of the obligation.
It is the behavior expected of the obligor, which may be to give a

thing, to do something, or to stop/avoid doing something.
What is “juridical tie” or “legal tie”?
The juridical tie or legal tie is the source of the obligation which
binds the obligor and the obligee.
It may also be called “efficient cause”.

Example No. 1:
Mr. J asked Ms. K if he could borrow PhP100,000.00 from her.

K lent J the money, and J promised to pay it back on December 1,
2015.
Example No. 1, continued:
In this case,
the obligor is J,
the obligee is K,
the prestation is to pay PhP100,000.00 on December 1, 2015, and
the juridical tie is the contract of simple loan between J and K.

Example No. 2:
X and Y entered into a written contract of sale, where X agreed to

deliver a car to Y, while Y agreed to pay X PhP500,000.00 in
exchange for the car.
With regard to the obligation to deliver a car,
the obligor is X,
the obligee is Y,
the prestation is to deliver a car, and
the juridical tie is the contract of sale between X and Y.

With regard to the obligation to pay PhP500,000.00,
the obligor is Y,
the obligee is X,
the prestation is to pay PhP500,000.00, and
the juridical tie is the contract of sale between X and Y.

Are obligations required to be in a particular form to be valid?
With regard to obligations arising from contracts, the law

generally does not require a specific form for these obligations to
be valid.
“Contracts shall be obligatory, in whatever form they may have

been entered into, provided all the essential requisites for their
validity are present.”

“However, when the law requires that a contract be in some form

in order that it may be valid or enforceable, or that a contract be
proved in a certain way, that requirement is absolute and
indispensable.”

General Classification of Obligations
What are the classes of obligations?
“Obligations are civil or natural.”

What are “civil obligations”?
“Civil obligations give a right of action to compel their

performance.”

What are “civil obligations”?
A civil obligation gives the creditor or obligee the right to have

its performance enforced through the courts.
What are “natural obligations”?
“Natural obligations, not being based on positive law but on

equity and natural law, do not grant a right of action to enforce
their performance,
but after voluntary fulfillment by the obligor they authorize the

retention of what has been delivered or rendered by reason
thereof.”

What are “natural obligations”?
A natural obligation cannot be enforced through the courts.
However, if an obligor voluntarily fulfills a natural obligation, he

may not recover what he has given or rendered.
Example of a natural obligation:
“When a right to sue upon a civil obligation has lapsed by

extinctive prescription, the obligor who voluntarily performs the
contract cannot recover what he has delivered or the value of the
service he has rendered.”

Example of a natural obligation, continued:
On January 1, 2008 Q borrowed PhP50,000.00 from S and signed

a note where he promised to repay the debt on April 1, 2008.
April 1, 2008 came and passed, but Q never paid S a single
centavo.
More than ten years have passed and S never made any demand
to Q for the payment of the debt. By now, because of
prescription, S has lost his right to have Q’s obligation enforced
through the courts.
However, if today Q voluntarily pays S the amount he borrowed,

Q may no longer take back what he paid.
What are the sources of obligations?
“Obligations arise from:

(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.”

What are the sources of obligations?
a. law
b. contracts
c. quasi-contracts
d. acts or omissions punished by law
e. quasi-delicts
Law
What is a “legal obligation”?
A legal obligation is an obligation that arises from law.

Law
Example of legal obligation, No.1:
The obligation to pay income tax is provided in Republic Act No.

8424 or the National Internal Revenue Code of 1997, as
amended.
Law
Example of legal obligation, No. 2:
A parent’s obligation to support his/her child is provided in

Executive Order No. 209 or the Family Code of the Philippines.
Law
Are legal obligations presumed?
“Obligations derived from law are not presumed. Only those

expressly determined in this Code or in special laws are
demandable”

Law
Which rule/s will govern a legal obligation?
According to Article 1158 of the Civil Code, a legal obligation

“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”.
Contracts
What is a “contractual obligation”?
A contractual obligation is an obligation that arises from a

contract.
Contracts
What is a contract?
“A contract 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.”

Contracts
Example of a contractual obligation:
B and C entered into a contract of sale. B promised to deliver

and transfer ownership of his car to C, while C agreed to pay
PhP300,000.00 to B.
Contracts
Example of a contractual obligation, continued:
In this case, B has the obligation to deliver and transfer

ownership of his car to C. For his part, C is obliged to pay
PhP300,000.00 to B.
Contracts
What is the effect of a contractual obligation?
“Obligations arising from contracts have the force of law

between the contracting parties and should be complied with in
good faith.”

Contracts
Are all agreements binding, regardless of their subject matter or
purpose?
“The contracting parties may establish such stipulations, clauses,

terms and conditions as they may deem convenient, provided
they are not contrary to law, morals, good customs, public order,
or public policy.”

Contracts
Are all agreements binding, regardless of their subject matter or
purpose? (continued)
According to Article 1409 of the Civil Code, a contract that has

an object or purpose that is “contrary to law, morals, good
customs, public order, or public policy” is “void from the
beginning”.
Quasi-contracts
What is a “quasi-contract”?
“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.”

Quasi-contracts
A quasi-contract is a juridical relation that results from certain

lawful, voluntary, and unilateral acts where the parties become
bound to each other so that no one will be unjustly enriched or
benefited at the expense of another.
Quasi-contracts
A quasi-contract is not a contract because the parties to the quasi-

contract did not enter into any agreement.
Nevertheless, the law binds them to prevent injustice.

Quasi-contracts
Which rule/s govern quasi-contracts?
“Obligations derived from quasi-contracts shall be subject to the

provisions of Chapter 1, Title XVII, of this Book.”

Quasi-contracts
Examples of quasi-contracts:
• solutio indebiti
• negotiorum gestio
Quasi-contracts
What is “solutio indebiti”?
Solutio indebiti is the juridical relation that is formed when

something is received by a person who has no right to demand it
and it was unduly delivered through mistake.
Quasi-contracts
What is the effect of solutio indebiti?
“If something is received when there is no right to demand it, and

it was unduly delivered through mistake, the obligation to return
it arises.”

Quasi-contracts
Example of solutio indebiti:
D owed E PhP5,000.00 and F PhP10,000.00. However, D got

confused and paid E PhP10,000.00 by mistake.
In this case, E has an obligation to return the excess PhP5,000.00,

based on solutio indebiti.
Quasi-contracts
What is “negotiorum gestio”?
Negotiorum gestio is the legal relation that is formed when a

person voluntarily manages the business or property of another
without the knowledge or consent of the latter.
Quasi-contracts
What is a “gestor” or “officious manager”?
A gestor or officious manager is a person who voluntarily

manages the business or property of another without the
knowledge or consent of the latter.
Quasi-contracts
What is the effect of negotiorum gestio?
According to Article 2144 of the Civil Code, the officious

manager is obliged to continue managing the property or
business “until the termination of the affair and its incidents”.
Quasi-contracts
What is the effect of negotiorum gestio? (continued)
According to Article 2150 of the Civil Code, the owner of the

property or business “shall reimburse the officious manager for
the necessary and useful expenses and for the damages which the
latter may have suffered in the performance of his duties”.
Quasi-contracts
Example of negotiorum gestio:
H travelled abroad without leaving anyone to look after his car.

While he was away, a storm caused a flood which threatened to
damage it.
Quasi-contracts
Example of negotiorum gestio, continued:
G, the neighbor of H, saved the car from the flood but incurred
expenses amounting to PhP2,000.00 in the process.
Quasi-contracts
Example of negotiorum gestio, continued:
In this case, H has an obligation to reimburse G the PhP2,000.00

he spent, even if H did not ask G to save the car, based on
negotiorum gestio.
Quasi-contracts
Are there other quasi-contracts?
Other quasi-contracts are provided in Articles 2164 to 2175 of the

Civil Code.
Quasi-contracts
Another example of a quasi-contract:
“When through an accident or other cause a person is injured or

becomes seriously ill, and he is treated or helped while he is not
in a condition to give consent to a contract, he shall be liable to
pay for the services of the physician or other person aiding him,
unless the service has been rendered out of pure generosity.”

Quasi-contracts
Are there other quasi-contracts?
“The provisions for quasi-contracts in this Chapter do not

exclude other quasi-contracts which may come within the
purview of the preceding article.”

Crimes or Delicts
What is a “crime” or “delict”?
A crime or delict is an act or omission punished by law.

Crimes or Delicts
Which rule/s will govern an obligation arising from a crime?
“Civil obligations arising from criminal offenses shall be

governed by the penal laws,
Crimes or Delicts
Which rule/s will govern an obligation arising from a crime?
(continued)
subject to the provisions of Article 2177, and of the pertinent

provisions of Chapter 2, Preliminary Title, on Human Relations,
and of Title XVIII of this Book, regulating damages.”

Crimes or Delicts
What is a “penal law”?
A penal law is a law which defines an act or omission as a

criminal offense and provides the penalty for it.
Example of a penal law:

Act No. 3815 or the Revised Penal Code
Crimes or Delicts
How is an act or omission punished by law a source of

obligations?
Aside from being criminally liable, a person found guilty of a

crime may also be civilly liable.
Crimes or Delicts

obligations? (continued)
“Every person criminally liable for a felony is also civilly liable.”
- Article 100, Revised Penal Code

Crimes or Delicts

As a general rule, crimes have criminal and civil aspects.
The criminal aspect concerns public order while the civil aspect
concerns private rights.
Crimes or Delicts
The criminal aspect’s purpose is to punish or correct the offender.
The civil aspect’s purpose is to repair the damage suffered by the

aggrieved party.
Crimes or Delicts
Example of civil aspect of a delict:
J stole the taxi cab of K, dismantled it, and sold its parts. As a
result, K could not continue working as a taxi driver.
Crimes or Delicts
Example of civil aspect of a delict, continued:
In this example, J caused damage to K equivalent to the value of

the taxi cab plus the value of earnings that K lost because he
could not work.
Crimes or Delicts
What does civil liability for a delict involve?
According to Article 104 of the Revised Penal Code, the civil

liability for a felony includes:
a. restitution;
b. reparation of the damage caused; and
c. indemnification for consequential damages.
Crimes or Delicts
Example of civil liability arising from a delict:
L stole the laptop of M from the latter’s house after breaking one
of its windows.
With the laptop gone, M could not work as an online tutor.

Crimes or Delicts
Example of civil liability arising from a delict, continued:
L was later caught, charged, and found guilty of robbery by final

judgment.
Crimes or Delicts
Example of civil liability arising from a delict, continued:
In this case, L has the obligation to:

1. return the laptop to M;
2. pay for the repair of the damage to M’s house; and
3. to pay damages to M for the latter’s lost earnings.
Crimes or Delicts
Can there be criminal liability without civil liability?
In some delicts where no damage is caused, no civil obligation

arises.
Examples:
• illegal possession of firearms
• possession of dangerous drugs
Quasi-delicts
What is a “quasi-delict”?
A quasi-delict is an act or omission which causes damage to

another, there being fault or negligence, giving rise to an
obligation to pay for the damage done, but independent of any
contract between the parties.
Quasi-delicts
What is a “quasi-delict”? (continued)
“Whoever by act or omission causes damage to another, there

being fault or negligence, is obliged to pay for the damage done.
Quasi-delicts
What is a “quasi-delict”? (continued)
Such fault or negligence, if there is no pre-existing contractual

relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.”

Quasi-delicts
Which rule/s will govern an obligation arising from a quasi-
delict?
“Obligations derived from quasi-delicts shall be governed by the

provisions of Chapter 2, Title XVII of this Book, and by special
laws.”
- Article1162, Civil Code

Quasi-delicts
What are the requisites of a quasi-delict?
1. an act or omission
2. fault or negligence
3. damage caused
4. a connection of cause and effect between the act or omission

and the damage
Quasi-delicts
What is “negligence”?
“The fault or negligence of the obligor consists in the omission of

that diligence which is required by the nature of the obligation
and corresponds with the circumstances of the persons, of the
time and of the place.”

Quasi-delicts
What is “negligence”? (continued)
Negligence is the failure to exercise the diligence or care that is

required by the situation, depending on the circumstances of the
persons, of the time, of the place.
Quasi-delicts
What does “if there is no pre-existing contractual relation

between the parties” mean?
This just means that an obligation may arise from a quasi-delict

even if there is no contract between the party causing the damage
and the party suffering it.
Quasi-delicts
What does “if there is no pre-existing contractual relation

between the parties” mean? (continued)
The act or omission causing the damage may or may not be

connected with a contract. The obligation to pay for the damage
comes from a source that does not depend on a contract.
Quasi-delicts
Example of a quasi-delict:
N lives on the 22nd floor of a condominium building. N’s

condominium unit has a window that faces a busy road.
Quasi-delicts
Example of a quasi-delict, continued:
One night, N drank a bottle of beer and threw the bottle out the
window. The bottle hit and broke the windshield of Q’s car.
Q had to spend PhP10,000.00 to have the damage to his car

repaired.
Quasi-delicts
Is there a quasi-delict in this case?
First Requisite (an act or omission):
N threw a bottle out of his window, hitting the car of Q.

Quasi-delicts
Is there a quasi-delict in this case? (continued)
Second Requisite (fault or negligence):
N was negligent for throwing the bottle out of his window, given
the location of his residence.
Quasi-delicts
Third Requisite (damage caused):
The bottle thrown out by N hit and broke the windshield of Q’s
car. Q then had to spend money to have it repaired.
Quasi-delicts
Fourth Requisite (causal connection between the act or omission

and the damage):
N’s negligent act caused the damage. It would not have

happened if N just disposed of the bottle properly in a
wastebasket.
Quasi-delicts
In this case, N has the obligation to pay Q for the damage caused
to the latter’s car, based on a quasi-delict.
Quasi-delicts
Is it possible for a person to be held civilly liable for the
negligence of another?
“The obligation imposed by article 2176 is demandable not only

for one's own acts or omissions, but also for those of persons for
whom one is responsible.”

Quasi-delicts
Example of vicarious liability, No.1:
“The owners and managers of an establishment or enterprise are

likewise responsible for damages caused by their employees in
the service of the branches in which the latter are employed or on
the occasion of their functions.”

Quasi-delicts
Example No. 2 of vicarious liability:
“Employers shall be liable for the damages caused by their

employees and household helpers acting within the scope of their
assigned tasks, even though the former are not engaged in any
business or industry.”

Quasi-delicts
Is it possible for a person to be liable based on a quasi-delict for

an act that may also be punished by law?
The concept of quasi-delict also covers acts punishable by law,

whether intentional or negligent (Elcano v. Hill, G.R. No. L-
24803, May 26, 1977).
Quasi-delicts
How is a delict different from a quasi-delict?
A crime affects public interest, while a quasi-delict affects private

interests only.
Quasi-delicts
How is a delict different from a quasi-delict? (continued)
The aim of the law when it comes to crimes is to punish or

correct the offender. For quasi-delicts, the goal of the law is
repair the damage caused only.
Quasi-delicts
In case of a crime, there can be both criminal and civil liability.

In case of a quasi-delict, there is only civil liability.
Quasi-delicts
In case of a crime, proof beyond reasonable doubt is required. In

case of a quasi-delict, only preponderance of evidence is needed.
Is it possible for a person to be held responsible for an obligation

even if he/she has been found to be not criminally liable?
If a person is found to be not criminally liable for a particular act

or omission, he/she may still be held civilly liable based on
another source of obligation like a contract or a quasi-delict.

(continued)
“When the accused in a criminal prosecution is acquitted on the

ground that his guilt has not been proved beyond reasonable
doubt,

(continued)
a civil action for damages for the same act or omission may be
instituted. Such action requires only a preponderance of
evidence.”


(continued)
“Responsibility for fault or negligence under the preceding article

is entirely separate and distinct from the civil liability arising
from negligence under the Penal Code.

(continued)
But the plaintiff cannot recover damages twice for the same act or
omission of the defendant.”

Example:
T is a taxi driver. One day, V boarded the taxi cab of T and asked
to be driven to his school. T agreed to drive V to his destination.
For his part, V agreed to pay the proper fare as indicated by the
taxi’s meter upon reaching the school.
Example, continued:
T drove for V while drunk. Because of this, T drove the taxi off
the road and hit a tree.
V was injured and needed hospitalization. He spent a total of

PhP50,000.00 on his medical treatment.
Example, continued:
In this case, T may be held criminally and civilly liable for

violating Republic Act No. 10586 or the Anti-Drunk and
Drugged Driving Act.
Example, continued:
Even if T is acquitted, he may still be held civilly liable based on

a quasi-delict. V may sue T for damages because T drove the taxi
cab negligently, causing injury to V.
Example, continued:
If V does not want to recover from T based on a quasi-delict, he

may still choose to sue T for damages based on breach or
violation of their contract of carriage.
Example, continued:
By taking V as his passenger, T bound himself to carry V safely

to his destination. For his part, V agreed to pay the fare for the
service of T. T violated their contract when he drove carelessly
and caused injury to V.
References
De Leon, H. S. & De Leon, H. M. (2014). The Law on

Obligations and Contracts. Manila: Rex Book Store.
Jurado, Desiderio P. (2010). Comments & Jurisprudence on

Obligations and Contracts. Manila: Rex Book Store.
Assignment
Read the following provisions of law:
Civil Code
Articles 441, 442, 1163, 1164, 1165, 1166, 1167, 1168, 1169,
1170, 1171, 1172, 1173, 1174, 1176, 1191, 1244, 1246, 1263,
1268, 1460, 2179, 2201
1987 Philippine Constitution

Article III, Section 18 (2)

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Law on Obligations and Contracts

Essential Requisites of an Obligation

“An obligation is a juridical necessity to give, to do or not to do.”

- Article 1156, Civil Code

There are legal consequences in case of compliance or non-

In case of non-compliance with an obligation, the proper party

“to give, to do or not to do”

An obligation may involve the need to:

• refrain from doing something.

“to give, to do or not to do”

Example of obligation to give:

G and H entered into a contract of sale where G promised to

“to give, to do or not to do”

Example of obligation to give, continued:

In this case, the obligation of G to deliver a brand new laptop is

“to give, to do or not to do”

Example of obligation to do:

J and K entered into a contract where J agreed to repair K’s car in

“to give, to do or not to do”

Example of obligation to do, continued:

In this case, the obligation of J to repair K’s car is an obligation

“to give, to do or not to do”

Example of obligation not to do:

L agreed to work as a programmer in a video game development

“to give, to do or not to do”

Example of obligation not to do, continued:

For the protection of the company, L signed a non-disclosure

“to give, to do or not to do”

Example of obligation not to do, continued:

In this case, the obligation of L not to disclose information about

What are the essential requisites of an obligation?

4. juridical tie or legal tie

What is “passive subject”?

The passive subject is the person who may be demanded to fulfill

The passive subject may also be called the debtor or obligor.

What is “active subject”?

The active subject may also be called the creditor or obligee.

What is “object or prestation”?

The object or prestation is the subject matter of the obligation.

It is the behavior expected of the obligor, which may be to give a

What is “juridical tie” or “legal tie”?

It may also be called “efficient cause”.

Mr. J asked Ms. K if he could borrow PhP100,000.00 from her.

Example No. 1, continued:

Example No. 1, continued:

the prestation is to pay PhP100,000.00 on December 1, 2015, and

the juridical tie is the contract of simple loan between J and K.

X and Y entered into a written contract of sale, where X agreed to

Example No. 2, continued:

With regard to the obligation to deliver a car,

Example No. 2, continued:

the prestation is to deliver a car, and

the juridical tie is the contract of sale between X and Y.

Example No. 2, continued:

With regard to the obligation to pay PhP500,000.00,

Example No. 2, continued:

the prestation is to pay PhP500,000.00, and