CIVIL CODE OF THE PHILIPPINES– It merely being no fault/negligence but no

stresses the duty under the law of the contractual relation exists between the
debtor or obligor (he who has the duty of parties.
giving doing, or not doing) when it speaks of
Requisites:
obligation as a juridical necessity. It was
enacted on 1932. A. omission
OBLIGATION – juridical necessity to give, to B. negligence
do or not to do
C. damaged caused to the plaintiff
4 Requisitions of Obligation
D. direct relation of omission
1. ACTIVE SUBJECT (creditor/obligee) – The
E. no pre-existing contractual relations
party who has the right to demand
between parties
performance of the obligation
OBLIGATIONS OF THE OBLIGOR
2. PASSIVE SUBJECT (debtor/obligor) – has
duty to give, to do or not to do. One who is a. Preserve or take care of the things due
obliged to do perform something
Diligence of a good father- a good father
3. OBJECT/PRESTATION – subject or object does not abandon his family, he is always
matter ready to provide and protect his family;
ordinary care which an average and
4. JURIDICAL/LEGAL TIE (vinculum/efficient
reasonably prudent man would do.
cause) – reason
*Debtor is not liable if his failure to deliver
the thing id due to fortuitous events or
5 SOURCES OF OBLIGATION force majeure... without negligence or fault
in his part.
1. LAW
b. Deliver the fruits of a thing
2. CONTRACTS
c. Deliver the accessions/accessories
3. QUASI-CONTRACTS – arise from lawful,
voluntary acts; no one shall be unjustly d. Deliver the thing itself
enriched...
e. Answer for damages in case of non-
2Kinds fulfillment or breach
a. Solutioindebiti– something received
(delivered on a mistake), no right to
STAGES OF CARE
demand it
1. Utmost care
b. Negotiorumgestio– voluntary mgt of
property/affairs of another w/o his 2. Ordinary care - diligence of a good
knowledge/consent father
4. QUASI-DELICT/TORTS/CULPA 3. Slight/minimal care
AQUILIANA – arise from damage caused to
another through an act or omission, there
5. CRIMES/ACTS/OMISSIONS punished by
law – arise from civil liability that is a
consequence of a criminal offense
1. DEFAULT/MORA – delay
Generic and Determinate Thing
Generally:
1. DETERMINATE THING – particularly
designated or physical segregated from all a. Ordinary delay- failure to perform an
others of the same class (Plate No.) obligation on time
2. GENERIC THING– refers to a class or b. Legal delay or default or mora- failure to
genus (Ring,car,horse) perform an obligation on time which failure
constitutes a breach of obligation

Kinds of Fruits
3 Kinds of Delay
1. NATURAL – w/o human intervention
a. Mora solvendi – debtor’s delay to give
2. INDUSTRIAL – w/ human intervention
(real ob.), to do (personal ob.)
3. CIVIL – derived by virtue of juridical
b. Mora accipiendi – creditor’s delay to
relation
accept
Accessions and Accessories
c. Compensatio Morae – delay of both in
1. ACCESSIONS – additions/improvements reciprocal obligation
(Planted)
2. ACCESSORIES – joined/included with the
CONCEPT OF DELAY
principal (Key of the house)
General Rule: No demand, No delay
Exceptions:
TYPES OF PERSONAL OBLIGATION
1. Law states
A. POSITIVE PERSONAL OBLIGATION -
obligation to do or to render service 2. Obligation states
B. NEGATIVE PERSONAL OBLIGATION - 3. Time is the essence
obligation not to do
4. Demand be useless if delay
5. Debtor guilty of delay
4 GROUNDS; debtor liable for damages
1. Default/mora
2. Fraud/dolo
3. Negligence/culpa
4. Contrary to terms of obligation
 in certain
cases.

EFFECTS OF DELAY 4. Contrary to the terms of obligation

1. Damages
When to deliver determinate thing, STILL FORTUITOUS EVENT
LIABLE in fortuitous event. Fortuitous event - an occurrence or
happening which could not be foreseen or
2. FRAUD/DOLO – conscious, deliberate, even if foreseen, is inevitable; absolutely
intentional evasion of fulfillment independent of human intervention; act of
God.
2 Kinds
Requisites
a. Dolocausante/Causal fraud – fraud in
obtaining consent; consent is defective, 1. Independent of the human will
contract is voidable. Remedy: annulment 2. Unforeseen or unavoidable
b. Doloincidente/Incidental fraud – 3. Of such character as to render it is
fraud w/c vitiates consent. Remedy: impossible for the obligor to comply with
damages his obligation in normal manner
4. Obligor is free from any participation of
3. NEGLIGENCE/CULPA – voluntary the injury to the oblige
act/omission; no bad faith intended
3 Kinds
a. Culpa aquiliana/Civil negligence – Exceptions of Rule
quasi-delict/torts 1. When expressly specified by law
b. Culpa contractual/Contractual 2. The debtor is guilty of fraud, negligence,
negligence – breach delay or contravention of the tenor of
c. Culpa criminal/Criminal negligence – obligation
crime/delict 3. The debtor has promised to deliver the
FRAUD NEGLIGENCE same (specific) thing to two or more
There is deliberate There is no persons without same interest
intention to cause deliberate
4. The obligation to deliver a specific thing
damage. intention to cause
arises from a crime
damage.
5. The thing to be delivered is generic
Liability cannot be Liability
mitigated. may be 6. When declared by stipulation
mitigated. 7. When the nature of the obligation
requires the assumption of risk
Waiver for future Waiver may
fraud is void. be allowed
 3. Obligation is purely personal

USURY LAW Primary Classifications of Obligation

Usury - contracting for or receiving interest A. Pure and Conditional Obligation
in excess of the amount allowed by law for
B. Obligation w/ a period
the loan or use of money, good, etc.
C. Alternative and Facultative Obligation
Usury Law - makes the usurers criminally
liable if the interest charged on loans are D. Joint and Solidary Obligation
more that the limit prescribed by law.
E. Divisible and Indivisible Obligation
F. Obligation w/ a penal clause
PRESUMPTION
Conclusive presumption - one which cannot
A.Pure and Conditional Obligation
be contracted, like the presumption that
everyone is conclusively presumed to know PURE OBLIGATION CONDITIONAL
the law - W/o condition, OBLIGATION
demandable at - There is condition
Disputable (rebuttable) presumption - one once (pure has in performance;
which cannot be contradicted or rebutted resolutory future & uncertain
by presenting proof to the contrary condition/period)

2 Kinds
4 SUCCESSIVE RIGHTS OF CREDITOR to a. Suspensive
satisfy claim against DEBTOR condition –
happening of
1. Exact payment condition
2. Attach debtor’s properties gives RISE to
obligation
3. Accionsubrogatoria – exercise rights &
actions except inherent in person b. Resolutory
condition –
4. Accionpauliana – cancel acts/contracts happening of
by debtor to defraud creditor condition
EXTINGUISHES
obligation
TRANSMISSIBILITY OF RIGHTS
General Rule: ALL RIGHTS are transmissible.
Exceptions:
1. Law states
2. Contract states
 PERIOD CONDITION
RULES in case of Loss, Improvement, or certain uncertain
Deterioration of thingduring the pendency
of condition future only future/past but
unknown
* LOST
a. w/ debtor’s fault – damages (*influence upon (*) on the very
b. w/o debtor’s fault – extinguishes obligation) only upon existence of
obligation its demandability obligation itself

* DETERIORATION
a. w/ debtor’s fault - (1) cancel obligation FOR WHOSE BENEFIT IS THE PERIOD?
& damages; or (2) fulfill obligation w/
damages General Rule: Both the debtor & creditor.
b. w/o debtor’s fault – creditor suffer
Therefore, NEITHER of them can demand
impairment
performance of obligation.
* IMPROVEMENT Exception: If the term of obligation has to
a. By nature/time – benefit to creditor favor one of them.
b. at expense of debtor – debtor no right
than that granted to usufructuary
(debtorno right to compensate amount
5 INSTANCES WHEN DEBTOR LOSES RIGHT
for improvement)
TO USE “PERIOD”
1. Debtor is insolvent.
2. Debtor attempts to abscond.
B. OBLIGATION W/ A PERIOD
3. Impairment of guarantees/securities.
- Demandability/extinguishment subject to
the expiration of period 4. Failure to furnish guarantees/securities
promised.
PERIOD – interval of time; either
suspends demandability or produces 5. Violation of undertaking.
extinguishment
C. Alternative and Facultative Obligation
DAY CERTAIN – must come, not known ALTERNATIVE OBLIGATION
when
- w/ 2 or more prestations, only 1 is due.

FACULTATIVE OBLIGATION
- w/ ONLY 1 prestation but can be
substituted.
ALTERNATIVE prestations LOST w/ debtor’s RULES on LOSS/DETERIORATION of the
fault thing intended as SUBSTITUTE in
FACULTATIVE OBLIGATION
Creditor entitled to damages but needs
followingrequisites: 1. If there is a loss/deterioration of thing
intended as substitute, debtor is NOT liable
1. Debtor can choose.
if NOT HIS FAULT.
2. All prestations lost/become impossible
2. But if substitution is already made,
due to debtor’s fault.
debtor is liable for loss of substitute when
ALTERNATIVE FACULTATIVE in DELAY, NEGLIGENCE, or FRAUD.
OBLIGATION OBLIGATION

several prestations one prestation due, RULES on LOSS/DETERIORATION of the

due, giving one is but can be thing intended as SUBSTITUTE in
sufficient substituted FACULTATIVE OBLIGATION
right to choose right to choose 1. If there is a loss/deterioration of thing
(debtor) unless DEBTOR ONLY intended as substitute, debtor is NOT liable
granted to creditor if NOT HIS FAULT.
If 1 of the prestation nullity of principal But if substitution is already made, debtor is
is illegal, others may carries w/ it nullity liable for loss of substitute when in DELAY,
be valid, obligation of accessory/ NEGLIGENCE, or FRAUD.
remains
substitute

loss/impossibility of loss/impossibility of D. Joint and Solidary Obligation

ALL prestations due, presta-tion due, w/o
w/o debtor’s fault, debtor’s fault, JOINT OBLIGATION
extinguishes extinguishes - Obligation is to be
obligation obligation paid proportionately by debtors or to be
(3) SUMMARY OF RULES, OBLIGATIONS, & demanded proportionately by creditors
RIGHTS OF DEBTOR IN ALTERNATIVE
OBLIGATION SOLIDARY OBLIGATION
1. If 1 of prestations lost through fortuitous - each one of debtors has right to render
event, shall still be perform by choosing or each one of creditors has right to
(creditor) from the remainder. demand the entire compliance w/
prestation
2. If 1 of prestations lost through debtor’s
fault, creditor may claim any of remainders
w/ damages.
3. If ALL prestations lost through debtor’s
fault, creditor choose price w/ damages.

MAXIMS & SYNONYMS

 MAXIMS SYNONYMS PENAL CLAUSE

JOINT “To each proportionate - One w/ accessory undertaking attached

Obligation his own” to obligation to assume greater liability in
case of breach/non-fulfillment of
SOLIDARY “One for individually & obligation
Obligation all, all for collectively
one”

3 PURPOSES OF PENAL CLAUSE

(3) SOLIDARY OBLIGATION EXIST ONLY IF:
*RULES 1. Ensure performance of obligation

1. Law states 2. Substitute for damages & interest in case

of noncompliance
2. Stipulation states
3. Penalize debtor in case of breach
3. Nature of obligation requires

In case obligation has a PENAL CLAUSE

2 PRESUMPTIONS THAT OBLIGATION IS
JOINT General Rule: Penalty takes the place of
damages & interest in case of non-
1. The debts be divided as many shares as compliance.
there are debtors/creditors.
Exceptions:
2. The debtors/creditors are distinct from
one another. 1. Stipulation states.
2. Debtor refuse to pay penalty.

E. Divisible and Indivisible Obligation 3. Debtor guilty of fraud in performance of

obligation.
DIVISIBLE OBLIGATION
- prestation is capable of partial
performance NULLITY OF PRINCIPAL OBLIGATION OR
THE PENAL CLAUSE

INDIVISIBLE OBLIGATION Nullity of principal obligation = nullity of

penal clause
- prestation incapable of partial
performance Nullity of penal clause = NOT nullity of
principal obligation

F. Obligation w/ a penal clause

EXTINGUISHMENT OF OBLIGATIONS -Substituting the person of the debtor
PRIMARY: -Subrogating a third person in the rights of
the creditor.
 Payment or performance
 Loss of the thing due Kinds of Novation
 By Condonation or Remission of According to:
debt
 By Confusion or Merger of the rights Legal - operation of law
of creditor and debtor Conventional - agreement of parties
 By Compensation
[[ constituted ]]
 By Novation
Express – declared in unequivocal terms
SECONDARY:
Implied - old and new are essentially
 Annulment incompatible
 Rescission
[[ effect ]]
 Fulfillment of resolutory condition
 Prescription Total or Extinctive – old obligation; extinguished

Partial/ Modificatory – old obligation; modified

SPECIAL FORMS OF PAYMENT [[ subject ]]

 Dation in Payment Real - objective; change may involved the

principal terms of the obligation
 Application of Payment.
 Payment by cession Personal - subjective; debtor substituted
 Tender of payment and consignation Mixed - both are changed( the object of the
obligation and the person of the creditor
changed.
WHEN WE CAN APPLY
COMPENSATION
KINDS: Personal Novation
1. The parties are principal creditors and
principal debtors of each other Substitution - person of debtor substituted

Subrogation - third person is subrogated in the

2. Both debts consist in a sum of money, or
rights of creditor
consumable things of the same kind
KINDS: Substitution
3. Two debts are due and demandable 4.
Two debts are liquidated Expromision - take place when aa third person
of his own initiative and without the knowledge
5. No Retention or Controversy commenced of original debtor.
by a third person.
Delegacion - take place when creditor accepted
KINDS OF NOVATION the third person to take place of the debtor.

-Changing their object or principal

conditions
Contracts WHAT MAY BE THE OBJECT OF CONTRACTS

-meeting of minds between 2 persons to 1.it must be within the commerce of men
give something or to render service. 2.It must be transmissible
Requisities: 3.It must not be contrary to the
3 ELEMENTS OF CONTRACT law,morals,customs,public order and public
policy
1. ESSENTIAL – w/o them, contract cannot exist
4.It must not be impossible
a. CONSENT of contracting parties
5.It must be determinate as to its kind
b. OBJECT CERTAIN – subject matter
CONSENT
c. CAUSE/CONSIDERATION
meeting of offer (certain) & acceptance upon
In some contracts, ff are also essential: the thing (absolute) amd the cause which are
constitute the contracts.
d. FORM

e. DELIVERY FORMS OF CONTRACTS

2. NATURAL – found in certain contract, Oral , Writing-Private writing and public

presumed to exist unless stipulated writing(document)

3. ACCIDENTAL – various particular stipulations Express and Implied

that may be agreed upon by contracting parties
(terms of payment, interest rate, place of
Exceptions: Law requires that a contract be
payment) in some form

INOMINATE CONTRACTS -For Validity

• Do ut des - I give, u may give -For Enforceability

• Do ut facias - I give, u may do -For convenience of 3rd party.

• Facto ut des - I do, u may give REFORMATION CAN APPLY TO WHAT KIND
OF CONTRACTS
• Facto ut facias - I do, u may do
Reformation-is REMEDY in equity in w/c a
Stipulation pour atrui - in contract clearly and
written instrument is made/construed to the
deliberately conferring a favor
REAL intention of parties when there is
EFFECTIVITY OF CONTRACTS an error/mistake.

1. Mutual mistake of parties.1

2. One party was mistaken & the other acted
fraud.
3. One party was mistaken & the other
knew/believed that the instrument did not
state their REAL agreement.
4.Through Ignorance, lack of skill, negligence,
or bad faith of person drafting the instrument
DOES NOT state the TRUE INTENTION of parties
5. Two parties agree on mortgage/pledge of
personal/real property BUT the instrument
3 UNENFORCEABLE CONTRACTS
states the property is sold ABSOLUTELY, or w/
the right to repurchase. 1. Those entered in name of other person, or
who acted BEYOND his powers.

4 Defective Contracts 2. Those who do not comply w/ the Statute of

Frauds.
1. RESCISSIBLE – valid until rescinded; has ALL
essential requisites but because 3. Both parties are incapable of giving consent
of injury/damage to one of the parties, the to a contract.
contract may be rescinded.

2. VOIDABLE – valid until annulled; has ALL

7 VOID/INEXISTENT CONTRACTS
essential requisites but because of defect in
consent, contract may be annulled. 1. Those w/c are ABSOLUTELY
simulated/fictitious.
3. UNENFORCEABLE – cannot be
sued/enforced unless ratified; no effect NOW 2. Those w/c contemplate an impossible
but may take effect upon ratification. service.

4. VOID – NO effect at all; cannot be 3. Those whose OBJECT is outside the

ratified/validated. commerce of man.

RESCISSIBLE CONTRACTS 4. Those whose CAUSE/OBJECT did not exist at

time of tran-saction.
1. Those entered by guardians & suffered
LESION by more than ¼ of value of the value 5. Those whose CAUSE/OBJECT/PURPOSE is
that is the OBJECT. contrary to law, morals, good customs, public
order, or public policy.
2. Those agreed upon in representation of
absentees, if the absentees suffered LESION. 6. Those where INTENTION of parties to
principal object CANNOT be ascertained.
3. Those undertaken in FRAUD of creditors
when the creditors cannot further claim. 7. Those expressly prohibited/declared VOID by
law.
4. If entered into contract w/o
knowledge/approval of litigants under litigation.

5. Contracts subjected to rescission declared by

law.

3 VOIDABLE CONTRACTS

1. One of the parties INCAPABLE of giving

consent to a contract.

2. Those where consent vitiates by vices of

consent. (MFVIU)

3. Those agreed in the state of

drunkenness/hypnotic spell.