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198853914 Obligations and Contracts Hector de Leon

Reviewer
Obligations and Contracts (De La Salle University)

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OBLIGATIONS AND CONTRACTS

by: Hector S. de Leon

 Obligation – is a JURIDICAL NECESSITY  Wrong/ Cause of Action – ACT OR OMISSION of one party in
to give, to do or not to do (a.115) violation of the legal right(s) of another, causing injury to the
latter. Example: breach of contract
 “Obligatio” – Latin word meaning tying or binding
ESSENTIAL ELEMENTS OF THE CAUSE OF ACTION:
 “Obligation is a LEGAL RELATION established between one 1. Essential Elements:
party and another whereby the latter is bound to the a. There is a LEGAL RIGHT in favor of a person
fulfillment of a PRESTATION (the conduct which has to be b. There is a LEGAL OBLIGATION on the part of
observed by the Debtor/Obligor) which the former may another
demand from him c. There is an ACT or OMISSION in breach or
violation of the said right by the defendant
 Juridical Necessity – in case of non-compliance the courts may (one being sued in civil action or prosecuted
call upon to enforce its fulfillment or, the economic value it in a criminal action) with consequential
represents. injury or damage to the plaintiff (one who
brings an action at law) for which he may
 Damages – represents the SUM OF MONEY given as a maintain an act for damages or appropriate
compensation for the injury or harm suffered by the relief (assistance)
creditor/oblige for the violation of his rights. 2. If any element is absent, complaint becomes vulnerable
to motion to dismiss on the ground of failure to state a
cause of action
 Creditor or Obligee – he who has the RIGHT TO THE
3. A cause of action only arises when the last element
PERFORMANCE of the Obligation.
occurs the moment a right has been transgressed
(trespassed).
 Debtor or Obligor – he who has the Obligation to comply a. Right of action distinguished from maintain
otherwise shall be visited by Harmful/ Undesirable Legal b. Right of action/Right to commence
Consequences <procedural law – laws which establish
procedure and rules of court and the court
NATURE OF OBLIGATIONS (CC): system and which matters are conducted>
1. Civil Obligations – obligations which give to the ii. Right to maintain an action <substantive law
creditor/obligee a RIGHT OF ACTION in courts of justice to – written law controlling rights and actions
enforce their performance. of persons within jurisdiction>
2. Natural Obligations – b. For every Right enjoyed by a person, there is a
 NOT based on Positive Law (Law recognized by gov’t
authority); but on EQUITY and NATURAL LAW
(derived from nature and binding upon society);
Action per Contracts should be brought within 10 YEARS from the time
 does NOT grant a Right of Action to enforce their
performance; if voluntary fulfillment by debtor, the Right of Action Accrues <to exist as legally enforceable claim>
cannot recover what has been delivered

ESSENTIAL ELEMENTS OF OBLIGATIONS:

corresponding obligation on the part of another
(1) Active Subject (Creditor/Obligee) – or the person
to respect such right.
who is entitled to DEMAND the fulfillment of the
 (Contracts) accrues only when an actual breach or
obligation; he who has the RIGHT <power a person
violation occurs
has under the law to demand from another any
 Period of Prescription – from the occurrence of breach
prestation>
(2) Passive Subject (Debtor/Obligor) – person who is
 Injury – the ILLEGAL INVASION of a legal right; wrongful
bound to the fulfillment of the obligation; he who has
act or omission which causes loss or harm to another
the DUTY/OBLIGATION <act or performance which
the law will enforce>
(3) Object/Prestation – SUBJECT MATTER of the  Damage – Is the LOSS, HURT, or HARM which results from
obligation or the CONDUCT required to be observed the injury
by the debtor (giving, doing, or not doing)
(4) Juridical Tie/Legal Tie – EFFICIENT CAUSE or that  Damages – denotes the SUM OF MONEY recoverable as
which BINDS OR CONNECTS the parties to the amends <compensation for loss or injury> for the
obligation. The tie can be be easily determined by wrongful act or omission
knowing the source of obligation.
Example:  Injury – is the LEGAL WRONG to be redressed
X bound himself to construct a house for Y for 1M, contract <remedied/compensated>
X – is the debtor/obligor/passive subject
Y – is the creditor/oblige/active subject  PROOF OF LOSS FOR INJURY:
House – object/prestation  There must be
Contract – juridical tie (1) Wrongful Violation of a legal right/ Injury;
(2) Loss or Damage caused to him by such violation

As a General Rule, the Law does not require any FORM in * One who makes use of his legal right does no injury
Obligations arising from contract nor from other sources * Qui jure suo utitur mullum damnum facit
* If damages result from a person’s exercise of legal right
* Damnum absque injuria (damage without injury)
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OBLIGATIONS AND CONTRACTS

by: Hector S. de Leon

Art.19. Every Person must in the exercise of his rights and in

the performance of his duties, act with justice, give everyone
his due and observe honesty and good faith.

KINDS OF OBLIGATIONS (SUBJECT MATTER):

(1) Real Obligations (obligation to give)
The subject matter is a thing which the obligor must
deliver to the oblige;

(2) Personal Obligation (obligation to do or not to do)

The subject matter is an act to be done or not to be done;
a. Positive Personal Obligation – Obligation
to do or to render service;
b. Negative Personal Obligation – Obligation
not to do, includes “not to give”

SOURCES OF OBLIGATIONS:
 Obligations arise from:
1. Law – statutes, legislative enactments;

2. Contracts – meeting of minds between two

persons whereby one binds himself, with respect
to the other to give something or to render
service;

3. Quasi-contracts – obligation arising not from an

agreement between them but from some
relationship between them;

4. Acts/Omissions punished by law – when they

arise from a civil liability as a consequence of
some criminal offense;

5. Quasi-delicts – when they arise from damage

caused to another through an act or omission,
there being fault or negligence, but there’s no
contractual relation

CLASSIFICATIONS OF SOURCES:
(1) Those emanating from LAW
(2) Those emanating from PRIVATE ACTS:
a. Licit Acts – Contracts & Quasi-contracts
b. Illicit Acts –
Punishable-delicts;
not punishable-quasi-delicts

Art. 1158. Obligations derived from LAW are not presumed.

Only those expressly determined in the CC or in special laws
<other laws no in CC> are demandable and shall be
regulated by the percepts of the law which establishes
them; as to what has not been foreseen, by the provisions
of this book.

 LAW (OBLIGATION EX LEGE)

 Legal Obligations or Obligations arising from law: are
not presumed because they are considered a burden
upon the obligor.
 Must be expressly <explicit, defined, clear> set forth
and cannot be presumed.

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