OBLIGATIONS - delivery of a thing to the creditor (in

Chapter 1 sale, deposit, pledge, donation).

-one which the prestation consists in
Obligations in General the delivery of a movable or an
● An obligation is a juridical relation immovable thing, in order to create a
whereby a person (called the real right, or for the use of the
creditor) may demand from another recipient, or for its simple
(called the debtor) the observance of possession, or in order to return it to
a determinate conduct, and in case its owner.
of breach, may obtain satisfaction 2. TO DO
from the assets of the latter. - covers all kinds of works or
-Manresa services (contract for professional
services);
CREDITOR - The right to demand the 3. NOT TO DO
object of the obligation. - consists of refraining from doing
DEBTOR - The duty to give, to do or not to some acts (in following rules and
do it. regulations).

Efficient Cause or Juridical Tie

Article 1156. An obligation is a juridical 1. Law
necessity to give, to do, or not to do. 2. Bilateral acts - an agreement that
binds two or more parties legally on
ELEMENTS OF OBLIGATIONS pre-decided terms and conditions.
1. Active Subject (Creditor/Obligee) 3. Unilateral acts - legally enforceable
- the person who has the power to agreement in which one party,
demand the performance of the known as the offeror, makes a
obligation. promise in exchange for the
2. Passive Subject (Debtor/Obligor) performance of a specific act by the
- the one bound to perform the other party, known as the offeree.
prestation or to fulfill the obligation or
duty. EXAMPLE:
3. Prestation (to give, to do, or not to A wife was about to give birth to a child. Her
do) parents-in-law called the doctor. Who
- object should pay the doctor, the husband of the
- subject matter of the obligation parents?
- conduct required to be observed by
the debtor Answer: The husband should pay, even if
4. Efficient Cause or Juridical Tie he was not the one who called the doctor. It
- the JURIDICAL TIE which binds is his duty to support the wife under the law.
the parties to the obligation; source - Article 68 of the Family Code of
of the obligation. the Philippines states: The
husband and wife are obliged to live
PRESTATIONS: together, observe mutual love,
1. TO GIVE
 respect and fidelity, and render ● CONTRACT – meeting of minds
mutual help and support. between two persons whereby one
binds himself, with respect to the
Article 1157. Obligation arises from - (1) other, to give, to do something or to
law; (2) contracts; (3) quasi-contracts; (4) render some service; governed
acts or omissions punished by law; (5) primarily by the agreement of the
quasi-delicts. contracting parties.

SOURCES OF OBLIGATION: ● VALID CONTRACT – it should not

1. Law be against the law, contrary to
2. Contracts morals, good customs, public order,
3. Quasi-contracts and public policy.
4. Acts or Omissions punished by Law
5. Quasi-delicts ● OBLIGATIONS ARISING FROM
CONTRACTS – primarily governed
2 KINDS OF QUASI-CONTRACTS: by the stipulations, clauses, terms
1. Negotiorum Gestio and conditions of their agreements.
- unauthorized management; This
takes place when a person ● COMPLIANCE IN GOOD FAITH –
voluntarily takes charge of another’s compliance or performance in
abandoned business or property accordance with the stipulations or
without the owner’s authority terms of the contract or agreement.
2. Solutio Indebiti
- undue payment; This takes place ● FALSIFICATION OF A VALID
when something is received when CONTRACT – only the unauthorized
there is no right to demand it, and it insertions will be disregarded; the
was unduly delivered thru mistake original terms and stipulations
should be considered valid and
LAW subsisting for the partied to fulfill.
Article 1158. Obligations from law are not
presumed. Only those (1) expressly [NOTE: Whatever stipulations, clauses,
determined in this code or (2) in special terms and conditions are included in a
laws are demandable, and shall be contract, as long as they are not contrary to
regulated by the precepts of the law which law, morals, good customs, public policy, or
establishes them; and as to what has not public order, such contract is the law
been foreseen, by the provisions of this between the parties]
code.

CONTRACTS
Article 1159. Obligations arising from QUASI-CONTRACT
contracts have the force of law between the Article 1160. Obligations derived from
contracting parties and should be complied quasi-contracts shall be subject to the
with in good faith. provisions of chapter 1, title 17 of this book.
 ★ QUASI-CONTRACT - juridical ACTS OR OMISSIONS PUNISHABLE BY
relation resulting from lawful, LAW
voluntary and unilateral acts by Article 1161. Civil obligations arising from
virtue of which, both parties become criminal offenses shall be governed by the
bound to each other, to the end that penal laws, subject to the provisions of
no one will be unjustly enriched or Article 2177, and of the pertinent provisions
benefited at the expense of the of Chapter 2, Preliminary in Human
other. Relations, and of Title 18 of this book,
regulating damages.
[Certain lawful, voluntary, and unilateral acts
give rise to the juridical relation of ★ ACTS OR OMISSIONS
quasi-contract to the end that no one shall PUNISHABLE BY LAW
be unjustly enriched or benefited at the
expense of the other.] 1. Article 2176 of the Civil Code -
“whoever by act or omission causes
Article 2142, Civil Code damage to another, there being fault
- A quasi-contract is a juridical relation or negligence, is obliged to pay for
which arises from certain lawful, voluntary, the damage done.”
and unilateral acts, to the end that no one 2. Article 29 of the New Civil Code -
may be unjustly enriched or benefited at the “When the accused in a criminal
expense of another. prosecution is acquitted on the
ground that his guilt has not been
EXAMPLE: proved beyond reasonable doubt, a
Obligation arising from quasi-contract: civil action for damages for the same
1. A person voluntarily takes charge of act or omission may be instituted.”
another’s abandoned business or
property without the owner’s [A person who is criminally liable is also
authority, also known as “negotiorum civilly liable (have to pay for the damages)]
gestio”
EXAMPLE:
Reimbursement must be made to A person found guilty of Violence Against
the gestor for necessary and useful Women and their Children (VAWC) may be
expenses as a rule. penalized with imprisonment and civil
liability for moral damages, actual damages,
2. Obligation to return what has been and exemplary damages.
obtained by mistake, also known as
“solutio indebiti” ● Moral Damages - Mental Health of
the Victim.
The Civil Code provides that if ● Actual Damages - Broken nose for
something is received when there is example (You have to pay).
no right to demand it, and it was ● Exemplary Damages - the amount
unduly delivered through mistake, of money you have to pay.
the obligation to return arises.
 REQUISITES OR ELEMENTS OF
OBLIGATIONS AND CONTRACTS QUASI-DELICTS:
1. There must be an act or omission;
1. Difference of Accessions and 2. There must be a fault or negligence;
Accessories 3. There must be a damage caused;
● Accessions - are the fruits 4. There must be a direct relation or
of a thing or additions to connection of cause and effect
improvements upon a thing; between the act or omission and the
while damage; and
● Accessories - are the things 5. There is no pre-existing contractual
joined to or included with the relation between parties
principal thing for the latter’s
embellishment, better use, or NATURE AND EFFECTS OF
completion. OBLIGATIONS
Chapter 2
2. The Right of the Creditor to
Accessions and Accessories Article 1163. Every person obliged to give
● All accessions are something is also obliged to take care of it
considered included in the with the proper diligence of a good father of
obligation to deliver a a family, unless the law or the stipulation of
determinate thing although the parties requires another standard of
they may not have been care.
mentioned. This rule is based
on the principle of law that ● GENERIC THING - is one that is
the accessory follows the indicated only by its kinds, without
principal. In order that they being designated and distinguished
will be excluded there must from others of the same kind.
be stipulation to that effect.
When the generic objects are,
however, confined to a particular
QUASI-DELICTS class, we have a LIMITED
Article 1162. Obligations derived from GENERIC OBLIGATION.
quasi-delicts shall be governed by the
provisions of chapter 2, title 17 of this book, ● DETERMINATE THING - A
and by special laws. determinate or specific thing is one
that is individualized and can be
★ QUASI-DELICT - an act or omission identified or distinguished from
by a person which causes damage others of its kind.
to another giving rise to an obligation
to pay for the damage done, there
being fault or negligence but there is In an obligation to deliver a determinate
no pre-existing contractual relation thing, there are 3 INCIDENTAL OR
between parties. ACCESSORY OBLIGATIONS.
1. ARTICLE 1163
 The obligation to preserve the thing the liability for damages imposed upon the
with due care. debtor who fails to exercise the diligence of
2. ARTICLE 1164 a good father of a family in preserving the
The obligation to deliver the fruits. thing.
3. ARTICLE 1166
The obligation to deliver the Exception: If the failure of the debtor to
accessions and accessories. preserve the thing is due to no fault or
negligence of his, but to fortuitous events or
EXAMPLE: force majeure (exempted from
If the object is a computer, it does not responsibility)
involve any kind of computer but a very
particular computer such as the computer Article 1167. If a person obliged to do
with serial number 777. something fails to do it, the same shall be
executed at his cost. This same rule shall
Once the determinate thing becomes the be observed if he does it in contravention of
specified object of the prestation, the person the tenor of the obligation. Furthermore, it
who has the duty to give, must take care of may be decreed that what has been poorly
it in order that it can be delivered to the done be undone.
recipient in good condition.
(a) The court has not discretion to
“Proper diligence of a good father of a merely award damages to the
family” creditor when the act can be done in
- The reference point is the word spite of the refusal or failure of the
‘father’ because it is a debtor to do so.
commonly-accepted notion that a (b) This only applies when the act can
father will always do everything to be done by other people.
take care of his concerns.
- The law, however, states that the Article 1168. When the obligation consists
kind of diligence required can vary if in NOT DOING and the obligor does what
either “the law or the stipulation of has been forbidden him, it shall also be
the parties requires another undone at his expense.
standard of care.”
(a) When it can still be undone: UNDO +
[A good father of a family, or bonos DAMAGES
paterfamilias, means a person of ordinary or (b) When it can no longer be undone:
average diligence. Anyone who uses DAMAGES
diligence below this standard is guilty of
negligence.] Example: The typewriter case

What happens when there is failure to Article 1169. Those obliged to deliver or to
preserve the thing to be delivered? do something incur in delay from the time
the obligee judicially or extrajudicially
General Rule: The obligation to preserve demands from them the fulfillment of their
the thing to be delivered has its sanction in obligation.
 present. Default generally begins from
However, the demand by the creditor shall the moment the creditor demands the
not be necessary in order that delay may performance of the obligation.]
exists: (Exceptions)
1. When the obligation or the law EFFECTS OF MORA SOLVENDI:
expressly so declare; or 1. When it has for its object a
2. Where the obligation expressly so determinate thing, the delay places
provides the risks of the thing on the debtor
3. When time is of the essence of the 2. He becomes liable for damages for
contract the delay
4. When demand would be useless.
REQUISITES OF MORA ACCIPIENDI
EXAMPLE: Wedding gown should be 1. An offer of performance by the
delivered for the wedding. Time is no longer debtor who has the required
necessary and the debtor should deliver. capacity
2. The offer must be to comply with the
3 CLASSES OF MORA: prestation as it should be performed
1. Mora Solvendi 3. The creditor refuses the
2. Mora Accipiendi performance without just cause
3. Compensatio Morae (When the creditor refuses without a
just cause. He is at fault)
[Note: The effects of mora arises only when
the delay is due to causes imputable to the COMPENSATIO MORAE:
debtor; hance there is legally no delay if this 1. Neither party incurs in default if the
is caused by factors not imputable to the other does not comply or is not
debtor] ready to comply in a proper manner
with what is incumbent upon him.
REQUISITES OF MORA SOLVENDI: 2. The fulfillment must be
1. That the obligation be demandable simultaneous.
and already liquidated
2. That the debtor delays performance EXAMPLE:
3. That the creditor requires the A tenant leased a land on the landlord’s
performance judicially or promise that the latter would make
extrajudicially improvements on the property leased.
When the landlord did not make the
[Note: But mere delinquency in payment improvements, the tenant sued for specific
does not necessarily mean delay in the performance, that is, to make the landlord
legal concept. To be in default “xxx is do the improvements. Three days later, the
different from mere delay in the grammatical landlord sued the detainer for non-payment
sense, because it involves the beginning of of rent. CAN THE LANDLORD SUE?
a special condition or status which has its
own peculiar effects or results.” In order Answer: Compensatio morae
that the debtor may be in default, it is
necessary that the requisites MUST be
Article 1170. Those who in the performance 2. Mutuality
of their obligations are guilty of fraud, - Bind both contracting parties.
negligence, or delay, and those who in any - Can’t be left with the will of
manner contravene the tenor thereof, are one of them.
liable for damages. 3. Relativity
- Contracts take effect only
Obligations must be complied with so as not between the parties and their
to prejudice persons who are directly heirs except when there are
interested therein. The law specifically rights and obligations not
provides that damages can be awarded to transmissible:
any person who may have been prejudiced a. By their nature
in the performance of the obligation as a b. By stipulation
result of fraud, negligence, delay or c. By provision of law
contravention of the tenor of the 4. Consensual
obligation. Significantly, if any of these four - Contracts are perfected by
bases of liability co-exist with a fortuitous mere consent.
event or aggravates the loss caused by a
fortuitous event, the obligor cannot be Article 1306. The contracting parties may
excused from being liable on his obligation. establish such stipulations, clauses, terms &
(The presence of this four even with the conditions as they may deem convenient,
fortuitous event can be liable) provided they are not contrary to law,
morals, good customs, public order, or
CONTRACTS public policy.
Chapter 2
KINDS OF DEFECTIVE CONTRACTS:
Article 1305. A contract is a meeting of the In the order of their defectiveness:
minds between two persons whereby one 1. Rescissible contracts
binds himself, with respect to the other, to 2. Voidable Contracts
give something or to render some service. 3. Unenforceable contracts
4. Void or inexistent contracts
ELEMENTS OF CONTRACTS:
RESCISSIBLE CONTRACTS
KINDS OF CONTRACTS: - are valid because all the essential
requisites of a contract exist but by
reason of economic injury or
damage to one of the parties or to
third persons, such as creditors, the
contract may be rescinded. (De
CHARACTERISTICS OF CONTRACTS: Leon book)
1. Obligatory Force - Contract that has caused a particular
- The contract, once perfected, damage to one of the parties to a
has the force of law between third person, and which for equitable
parties which are bound to reason.
comply with good faith.
VOIDABLE CONTRACTS
May be demanded May only be
- are also valid until annulled unless only by a party to demanded by the
there has been a ratification. In a the contract. 3rd party/person
voidable contract, the defect is prejudiced by the
caused by vice of consent. (De Leon contract.
book)
May be denied by Such a reason
- the consent of one party has a
the court when does not affect the
defect. there is a sufficient right to ask for
- valid until annulled by reason of reason to justify rescission of
defective consent. extension of time to contracts.
the defendant in
UNENFORCEABLE CONTRACTS which to perform.
- cannot be sued upon or enforced
Non-performance is There may be lots
unless they are ratified. the only ground. of grounds.
- occupies an intermediate ground
between a voidable and a void Applies only to Applies whether the
contract. reciprocal contract prejudices
obligations unilateral or
(Rescission is not reciprocal
VOID OR INEXISTENT CONTRACTS
applicable to obligations and
- they are absolutely null and void. quasi-contract even when the
- have no effect at all and cannot be because there is no contract has been
ratified. meeting of minds) fully fulfilled.

Article 1380. Contracts validly agreed upon

may be rescinded in the cases established
by law. Article 1381. The following contracts are
rescissible:
- Rescission is a remedy granted by 1. Those which are entered into by
law to the contracting parties or to guardians whenever the wards
third person who was injured by whom they represent suffer lesion by
another. more than one-fourth of the value of
the things which are the object
SIMILARITIES thereof;
Rescission of Rescission of 2. Those agreed upon in
Reciprocal Contracts representation of absentees, if the
Obligation latter suffer the lesion stated in the
preceding number;
3. Those undertaken in fraud of
Both presuppose contracts validly entered
creditors when the latter cannot in
into and existing.
any other manner collect the claims
Both require mutual restitution when due them;
declared proper. 4. Those which refer to things under
litigation if they have been entered
DIFFERENCES into by the defendant without the
 knowledge and approval of the - If the purchaser is in good faith, you
litigants or of competent judicial cannot return.
authority;
5. All other contracts specially declared
by law to be subject to rescission.
Article 1385. Rescission creates the
REQUISITES OF RESCISSION: obligation to return the things which were
1. The contract must be a rescissible the object of the contract, together with their
contract. fruits, and the price with its interest;
2. The party asking for rescission must consequently, it can be carried out only
have no other legal means to obtain when he who demands rescission can
reparation for the damages. return whatever he may be obliged to
3. The person demanding rescission restore.
must be able to return whatever he
may be obliged to restore. Neither shall rescission take place when the
4. The thing which are the object of the things which are the object of the contract
contract must not have passed are legally in the possession of third
legally to the possession of a third persons who did not act in bad faith.
person acting in good faith.
5. The action for rescission must be In this case, indemnity for damages may be
brought within the perspective of 4 demanded from the person causing the
years. loss.

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¼ of the value.
2. Those undertaken in fraud of the
creditors. (Fraud/misrepresentation)
3. Things under litigation if entered
without the knowledge and approval
of the litigations or of a competent Article 1389. The action to claim rescission
judicial authority. must be commenced within four years.
4. All other contracts specially declared
by law to be the subject to For persons under guardianship and for
rescission. absentees, the period of four years shall not
begin until the termination of the former's
- Rescission will not take place when incapacity, or until the domicile of the latter
the things which are the object of the is known.
contract are legally in the
possession of third persons who did Article 1390. The following contracts are
not act in bad faith. voidable or annullable, even though there
may have been no damage to the ● Ratification means that one
contracting parties: voluntarily adopts or approves some
(1) Those where one of the parties is defective or unauthorized act or
incapable of giving consent to a contract; contract which, without his
subsequent approval or consent,
(2) Those where the consent is vitiated by would not be binding on him.
mistake, violence, intimidation, undue
influence or fraud. 1. Confirmation – to cure a defect in a
voidable contract.
These contracts are binding, unless they 2. Ratification– to cure the defect of
are annulled by a proper action in court. lack of authority in an authorized
They are susceptible of ratification. contract (entered into by another).
3. Acknowledgment– to remedy a
deficiency of proof (thus, an oral
● Annulment - Remedy provided by loan may be put in writing, or when a
law, for reason of public interest, for private instrument is made a public
the declaration of the inefficacy of a instrument).
contract based on a defect or vice in
the consent of one of the contracting Requisites of Ratification to be effective:
parties in order to restore them to 1. There must be a voidable or
their original position in which they annullable contract.
were before the contract was 2. Ratification is made with the
executed. knowledge of the cause of nullity.
3. At the time of ratification, the cause
of nullity has already ceased.
Article 1391. The action for annulment shall 4. The ratifying party is the injured
be brought within four years. party, or the prejudiced party.
5. The ratification is accomplished
This period shall begin: expressly or impliedly by a waiver of
● In cases of intimidation, violence or action to annul.
undue influence, from the time the
defect of the consent ceases. The right to ratify is transferable to the heirs
● In case of mistake or fraud, from the of the party who has the right to ratify.
time of the discovery of the same.
● And when the action refers to
contracts entered into by minors or
other incapacitated persons, from
the time the guardianship ceases.
1318: There is no contract unless the
following requisites concur:
Article 1392. Ratification extinguishes the 1. Consent of the contracting parties
action to annul a voidable contract. 2. Object certain which is the subject
matter of the obligation
 3. Cause of the obligation which is Both parties are not liable. No one is liable
established at anyone but both of you is at fault
Both of us don’t comply with the obligations
1320: An acceptance may be express or so none of you is liable to each other.
implied
Form of acceptance of offer:
- An express acceptance in the form
of a promise to pay a certain amount
or to do something, may be oral or
written.
- An implied acceptance is one that is
inferred from act or conduct. A mere
silence cannot be construed as
acceptance.

Art 1168: When the obligation consists in

not doing and the obligor does what has
been forbidden, it shall also be undone at
his expense.
a.) When it can still be undone: UNDO +
DAMAGES
b.) When it can no longer be undone: ANS: COMPENSATIO MORAE
DAMAGES
Moral damages exemplary damages