OBLIGATIONS AND

CONTRACTS
MR. SAM BARBO, JR.
 OBLIGATIONS
Luke 23:41 And we indeed justly; for we receive
the due reward of our deeds: but this man hath
done nothing amiss.
 "justly" meaning right, proper, or fair. This is the
adverbial form of the Greek dikaios, meaning "to
be conformed to that which is right,"
 OBLIGATIONS

Article 1156.

An obligation is a juridical necessity to give, to

do, or not to do.
 OBLIGATIONS
An obligation is a juridical necessity to give, to do, or not to
do.
The word obligation is the derived from the Latin word
“obligare” which means to bind.
As a legal relation established between one person and
another whereby the latter is bound to the fulfilment of a
presentation which the former may demand of him
(Manresa).
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Obligations may be either civil or natural.

1. Civil obligations give a right of action to compel their
performance (Art. 1423.) hence, the obligee or creditor has
a right to enforce the obligation against the obligator or
debtor in a court of justice. This is the obligation being
referred to in Art. 1156 of the civil code.
 OBLIGATIONS
Obligations may be either civil or natural.
2. Natural obligations, not being based on positive law but
an equity and natural law, do not grant a right of action to
enforce their performance, but after the voluntary
fulfilment by the obligator, they authorize the retention of
what has been delivered or rendered by reason thereof
(Art. 1423.)
 OBLIGATIONS
General Classification of Law.
1. Natural law – refers to the fundamental precepts of life
which are not promulgated but rather discovered by divine
inspiration or by the use of reason. It is said to be the true
law being the one that agrees with the law of nature.
 unchanging
 Everlasting
 true to all men everywhere at all times
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General Classification of Law.
1. Natural law
 Man knows naturally, by the light of his understanding,
that there are some things evil in themselves and some
things which are necessarily goods.
By his rational nature man is aware of a general law: Do
good and avoid evil.
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General Classification of Law.

1. Natural law – its subdivisions
a) Physical Law (Law of Physical Science) – the operation
or course of nature, there is uniformity of action or
order of sequence that we sense and feel. (Ex. Law of
gravity; laws of chemical combination.)
 OBLIGATIONS
General Classification of Law.
1. Natural law – its subdivisions
b) Moral Law – the totality of social norms regulating
human activity growing out of the collective
consciousness or public sense of right or wrong of the
people. It sets the pattern of good and exemplary
conduct. (Ex. Rule to do good and avoid evil.)
 OBLIGATIONS
General Classification of Law.
1. Natural law – its subdivisions
c) Divine Law – the system of rules which God laid down
to govern the operations of the universe. These rules are
according to the will and command of God. It is the law of
religious faith and concern itself with the concept of sin
and salvation (Ex. Ten Commandments.)
 OBLIGATIONS

General Classification of Law.

2. Positive law – consists of rules, more particularly referred
to as statutes, promulgated by a competent authority
known as the legislature and enforced by the state. It is
also called as municipal law, state law or imperative law, the
main function of which is the ordering of society.
 OBLIGATIONS
General Classification of Law.
2. Positive law – examples
a) Political and International Law
b) Labor and Social Legislations
c) Civil Law
d) Taxation
e) Mercantile Law
f) Criminal Law
g) Remedial Law
 OBLIGATIONS

 Elements of Obligations.
1. Active Subject – the obligee or creditor. He is the
possessor of a right. It is in his favor that the obligation is
constituted. He is the contracting party to whom the obligor
owes an obligation.
 OBLIGATIONS

 Elements of Obligations.
2. Passive Subject – is the obligor or debtor. He has the duty
of giving, doing or not doing. He is the party who is
obligated to deliver a promise or to undertake some act of
performance.
 OBLIGATIONS
 Elements of Obligations.
3. Object or prestation - it is the subject matter of the
obligation. The prestation may be to give, to do or not to
do.
4. Efficient cause - it is also known as the vinculum juris or
juridical tie. It is in the consideration that the obligation
exists.
 OBLIGATIONS
 Elements of Obligations.
Ex. Under an agreement, S obliges himself to render tutorial
services to B.
 S – obligor
 B – obligee
 rendering tutorial services – object or prestation
 agreement between S & B – efficient cause
 OBLIGATIONS
 Kinds of Obligations.
A. Viewpoint of Sanction
1. Civil obligations- there is juridical tie between the parties
enforceable by court action.
2. Natural obligations- there is juridical tie between the
parties which is not enforceable by court action. Voluntary
fulfilment of natural obligations by the obligor produces legal
effects which counts will recognize and protect.
 OBLIGATIONS

 Kinds of Obligations.
A. Viewpoint of Sanction
3. Moral obligations- there is no juridical tie between the
parties. Voluntary fulfilment of moral obligations does not
produce any legal effect which courts will recognize and
protect.
 OBLIGATIONS
 Kinds of Obligations.
B. Viewpoint of Performance
1. Positive obligation- the obligor is obliged to give or to
do something.
2. Negative obligation- - the obligor is not obliged to give
or not to do something.
 OBLIGATIONS
 Kinds of Obligations.
B. Viewpoint of Subject Matter
1. Real obligation- the obligation consists of something
giving.
2. Personal obligation- the obligation consists of in doing
or not doing something.
 OBLIGATIONS
 Kinds of Obligations.
B. Viewpoint of Persons Obligated to Perform
1. Unilateral obligation- only one party is bound in this
obligation.
2. Bicameral obligation- the two parties are mutually or
reciprocally bound in this obligation.
 OBLIGATIONS
Article 1157
Obligations arise from;
Law
Contracts
Quasi contracts
Acts or omissions punished by law
Quasi deceits
 OBLIGATIONS
 Sources of Obligations
Law (Art. 1158)
Contracts (Art. 1159)
Quasi contracts (Art. 1160)
Acts or omissions punished by law (Art. 1161)
Quasi deceits (Art. 1162)
 OBLIGATIONS

Article 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 established them, and as to what has been
foreseen, by the provisions of this Book.
 OBLIGATIONS
 Obligations Derived from Law
Obligations derived from law (ex lege) are not presumed. The
civil code and special laws are specific as to which obligations
are demandable. The rules set forth under special laws regulate
obligations established therein. Obligations are not foreseen in
the special laws, however, shall be regulated by the provisions
of Book IV of the Civil Code, Obligations, and Contracts.
 OBLIGATIONS

 Obligations Derived from Law

If regarding an obligation ex lege, there is a conflict between
the new civil code and a special law, the latter prevails
unless the contrary has been expressly in the new civil code
(Art. 18.)
 OBLIGATIONS
 Obligations Derived from Law
Example:
1. The husband and wife are obliged to live together,
observe mutual love, respect and fidelity, and render
mutual help and support. (Art. 68 – FC)
2. Obligation of the Taxpayers to pay their taxes to the
government (NIRC)
 OBLIGATIONS

Article 1159
Obligations derived from contracts have the force of
law between the contracting parties and should be
complied with in good faith.
 OBLIGATIONS

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.
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Freedom of contract
Obligations arising from contracts can be enforced between the
contracting parties provided such contract is not contrary to law.
Although the contracting parties have the right to establish terms
as may be convenient to them, this right is limited.
For a contract to be valid, stipulations therein must not be
contrary to law, morals, good customs, public order, or public
policy (Art. 1306).
Contracting parties of a valid contract must comply with its terms
and conditions in good faith.
 OBLIGATIONS

Article 1160
Obligations derived from quasi-contracts shall
be subject to the provisions of Chapter 1, title
XVII, of this Book.
 OBLIGATIONS
 Quasi contract
is the juridical relation that arises from certain lawful, voluntary and
unilateral acts to end that no one shall be unjustly enriched or
benefited at the expenses of another (Art. 1160)
a quasi-contract can be imposed by a court when someone is unjustly
enriched. It is used when a contract cannot be enforced or when there
is no actual written or oral agreement. Applying reasons of justice and
fairness, a court may obligate one who has unfairly benefited at the
innocent expense of another.
In a quasi- contract, there is no meeting of the minds between two
persons. It may be distinguished from a contract where there is mutual
consent.
 OBLIGATIONS
 Kinds of Quasi Contract
1. Negotiorum gestio - In this case, a person voluntarily takes charge of the
agency or management of the business or property of another, without any
power or authorize from the latter (Art. 2144.) here, there is unauthorized
management. The owner of the business or property must reimburse the
officious manager necessary and useful expenses, and for the damages which
the manager may have suffered in the performance of his duties (Art. 2150.)
 OBLIGATIONS
 Kinds of Quasi Contract
2. Solutio Indebiti - In this case, a person receives
something when has no right to demand it. Here, there is
undue payment or undue delivery resulting from a
mistake. The recipient, therefore, is obliged to return the
thing (Art. 2154.)
 OBLIGATIONS
 Liability in Case of Undue Payment or Delivery
In an undue payment, the person who accepts such payment in bad
faith shall be liable for legal interest; while in an undue delivery of a
thing that produces fruit, the person shall be liable for fruits received
or fruits which should have been received. Furthermore, he shall also
be answerable for any loss or impairment of the thing from any cause
and for damages to the person who delivered the thing, until is
recovered (Art. 2159).
 OBLIGATIONS
 Liability in Case of Undue Payment or Delivery
In quasi-contracts, the damages for which the obligor who acted in
good faith is liable shall be those that are the natural and probable
consequences of the breach of the obligation, and which the parties
have foreseen or could have reasonably foreseen at the time the
obligation was constituted.
In case of fraud, bad faith, malice, or wanton attitude, the obligor
shall be responsible for all damages which may be reasonably
attributed to the non-performance of the obligation (Art. 2201.)
 OBLIGATIONS

Article 1161
Civil obligations arising from criminal offenses shall be
governed by the penal laws, subject to the provisions of
Article 2177 and of the pertinent provisions of Chapter 2,
Preliminary Title, on Human Relations, and of the Title XVIII
of this Book, regulating damages.
 OBLIGATIONS
Felony and Crime
Felony is an act or omission punishable by law. Felonies are
committed not only by means of deceit (dolo) but also by means
of fault (culpa).
There is deceit when the act is performed with deliberate intent;
and
There is fault when the wrongful act results from imprudence,
negligence, lack of foresight or lack of skill (Art. 3.)
 OBLIGATIONS

Felony and Crime

a violation of the Revised Penal Code (RPC) is
called a felony.
Violation of any other penal statue is a crime.
 In practice of terms are used interchangeably.
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When a person liable for felony is civilly liable
As a rule, every person liable for felony is also civilly liable (Art. 100,
RPC).
The general rule that a person criminally liable is also civilly liable
stems from the fact that a crime does not only cause moral evil but
material damage as well. But not every felony or crime carries with it
civil liability.
When a crime did not cause material damage, no civil action may be
brought because there is no civil liability in the first place. Generally
crimes against persons, property, and chastity results in civil liability.
 OBLIGATIONS
Assignment
1. What is quasi-delict? Distinguished from crime.
2. Kinds of Negligence
3. Persons Civilly Liable in Quasi-delict