Obligations and Contracts Consensuality is the prevailing

doctrine. As long as it can be

o Civil Code follows the Gaian order – 3 parts: manifest - and any kind of
Persons, Things and Obligations
manifestation will do - it is sufficient
o “Obligations and Contracts” – inaccurate;
should only be “Obligations” since Contract 2. The principle of autonomy of will of the
is one of the sources of obligation. parties is now subject to several
o “ob” and “ligare” - to bind or tie together restrictions.
o “Ligare” – source of words such as ligament - (Art. 1305) Restrictions: not contrary
and litigation to
o “Obligatio” - initially a physical act of being (1) Law
chained with shackles. (2) Morals
o As time passed, , “ligatio” doesn’t mean (3) Good customs
vinculum of chains but vinculum juris (bond (4) Public order
of law) (5) Public policy
Art. 1156. An obligation is a juridical necessity
- Those which are against these five
to give, to do or not to do.
restrictions are void (Art. 1409)
o incomplete; pov of debtor - However, now we have restrictions
o Obligations are bilateral. It should include such as social justice, environmental
what can be required, the remedy and the preservation, etc.. because of the
rising tide of social discontent,
means by which the creditor can take to
hence social legislation came to be
pursue the remedy.
for the underprivileged.
o An obligation is a juridical relation whereby
- ^rationale: social justice (those who
a person (called a creditor) may demand have less in life have more in law)
from another (called the debtor) the - Social justice is "neither communism,
observance of a determinate conduct, nor despotism, nor atomism, nor
and, in case of breach, may obtain anarchy," but the humanization of
satisfaction from the assets of the latter laws and the equalization of social
(Arias Ramos). and economic forces by the State so
that justice in its rational and
Characteristics of Obligations objectively secular conception may
1. It represents an exclusively private at least be approximated (Calalang
interest v. Williams)
2. It creates ties which are by nature
transitory 3. The mitigation of the principle that the
- obligations are extinguished, but the debtor should answer with all his
period is relative) property
3. It involves the power to make the - Before: debtor has to answer his
juridical tie defective in case of non- debts with ALL his property
fulfillment through satisfaction of the - Now: certain properties are exempt
debtor‘s property and these can be found in
o substantive law (i.e., family
Trends in the Modern Law of Obligations home)
o and in procedural law (i.e.
1. Progressive spiritualization of the law on
support – magtitira para
obligations
masupportahan ang anak)
- Before: very formal & ritualistic; If it’s
- the debtor may not be imprisoned
not in the proper form, no obligations
for non-payment of debts
will assume
- rationale: leave the debtor
- Now: emphasis is in the meeting of
something to live decently by
the minds, not on form.
 4. The weakening of the principle that Requisites of the Object of the obligation
liability arises from responsibility
- basically the principle in quasi-delicts a. Licit – Example: Can‘t validly enter
into a contract for sexual services
- a person may be held liable even if
not responsible b. Possible both in fact and in law –
- i.e. minor is responsible – guardian is physical and legal possibility
liable c. Determinate or determinable
d. Must have pecuniary value
5. The tendency of unity in modern
legislation 4. Vinculum juris (Juridical tie)
- can be manifest in the rise of a - consists of the enforceability of the
“global village” obligation
- seen particularly in trade laws - If the debtor does not conform, the
- tendency is to make things uniform creditor has the power to go to court
especially in commerce. Different to make the debtor perform
rules would impede commerce. (coercive force)
- Voluntariness goes into entering into
Essential Requisites of Obligations an obligation. But once you enter, it
becomes involuntary.
1. Active subject
- to give: creditor 5. Causa
- to do: obligee - causa debendi or causa
2. Passive subject obligationes
- to give: debtor - the why of an obligation
- to do: obligor
How can both subjects be determinate or 6. Form (not an essential requisite)
determinable? - general rule: no specific form for a
valid obligation.
a) Obligations where the subjects are - if form means that there is some
completely and absolutely determined at external manifestation, fine.
the birth of an obligation. However, there should still be no
b) Obligations where one subject is specific form.
determined at the moment of the birth of
the obligation and the other subject is to be Sources of Obligations
determined subsequently at some fixed Art. 1157. Obligations arise from:
criterion, which criterion is fixed at the start (1) Law;
of the obligation. (i.e. promissory note (2) Contracts;
endorsement) (3) Quasi-contracts;
c) Obligations in which subjects are (4) Acts or omissions punished by law; and
determined in accordance with its relation (5) Quasi-delicts.
to a thing. (i.e. mortgage attached to a  Is this exclusive? AFFIRMATIVE (Sagrada
purchased property can be demandable Orden v. NACOCO) However, this is only
from the new owner) by implication or indication.
 Many believe that the list is not exclusive
3. Object/Prestation  one more possible source - public offer.
- always consists in an activity or
conduct to be observed by the 1. Law
debtor towards the creditor Art. 1158. Obligations derived from law are not
- prestation = object of obligation – to presumed. Only those expressly determined
deliver car in this Code or in special laws are
- car = object of the prestation demandable, and shall be regulated by the
precepts of the law which
- There is only 1 ultimate source of
obligations – law
 owner is in a position to do so. (Art.
2. Contract 2144)
Art. 1159. Obligations arising from contracts - Requisites:
have the force of law between the contracting (1) Business/property must be
parties and should be complied with in good neglected or abandoned
faith. (2) Officious manager must not
- combines two concepts of Roman law - have been authorized by the
equity or good faith and strict owner
compliance by the parties - Obligation to reimburse belong to
- A contract is a meeting of minds the owner of the property
between 2 persons whereby one binds - It is not necessary that some benefit
himself, with respect to the other, to has been given. There may be no
give something or to render some actual benefit. As long as benefit
service (Art. 1305) could have possibly accrued
- The contracting parties may establish - Rules:
such stipulations, clauses, terms and (1) There must be no ratification.
conditions as they may deem Otherwise, it may fall under the
convenient, provided they are not contract of agency
contrary to law, morals, good customs, o If there was no ratification, the
public order, or public policy (Art. 1306) owner must reimburse the
- Contracts are perfected by mere inofficious of the useful and
consent, and from that moment the necessary expenses as well as
parties are bound not only to the the damages he suffered in
fulfillment of what has been expressly discharge of his functions
stipulated but also to all the
consequences which, according to b. Solutio Indebiti
their nature, may be in keeping with - Juridical relation which takes place
good faith, usage and law (Art. 1315) when somebody receives something
- In case of doubt, the interpretation from another without any right to
consistent with good faith is followed demand for it and the thing was
- Party cannot excuse themselves on unduly delivered to him through
the ground that it has become mistake
unprofitable - Not applicable when there is a
motivation by an act of liberality
3. Quasi-contract - Does mistake include mistake of
Art. 1160. Obligations derived from quasi- law? If payment by mistake includes
contracts shall be subject to the provisions of it, we are deviating from provisions of
Chapter 1, Title XVII, of this Book. art. 3 (ignorance of the law excuses
- Juridical relation which arises from no one of compliance therewith.)
lawful, voluntary, and unilateral acts No one can ever claim a mistake of
which are enforceable to the end that law as a defense.
no one shall be unjustly enriched or - Payment by a mistake in
benefited at the expense of another. interpretation of a difficult question
a. Negotiorum Gestio of law qualifies as a mistake that can
- Whoever voluntarily takes charge of justify an act of recovery of what
the agency or management of the have been paid under the principle
business or property of another, of solutio indebiti.
without any power from the latter, is - (Art. 2155) Payment by reason of a
obliged to continue the same until mistake in the construction or
the termination of the affair and its application of a doubtful or difficult
incidents, or to require the person question of law may come within the
concerned to substitute him, if the scope of the preceding article.
4. Delict
Art. 1161. Civil obligations arising from criminal Kinds of Obligations
offenses shall be governed by the penal laws, 1. To give (Articles 1163-1166)
subject to the provisions of article 2177, and of
the pertinent provisions of Chapter 2, a. To give a determinate thing
Preliminary Title, on Human Relations, and of - Primary Obligation: Giving what is
Title XVIII of this Book, regulating damages. supposed to be given
- General Rule: If you commit a crime, you - 3 Accessory Obligations:
are liable both criminally and civilly. (1) to take care of it with the proper
- Exception: No private offended party (i.e. diligence of a good father of the
contempt) family (Art. 1163)
o General Rule: Diligence of a
5. Quasi-delict good father of the family
Art. 1162. Obligations derived from quasi- o Exception: Law or stipulation
delicts shall be governed by the provisions of requires different standard of
Chapter 2, Title XVII of this Book, and by care
special laws. (2) To account and deliver to the
- Art. 2176. Whoever by act or omission creditor the fruits if the thing
causes damage to another, there being bears fruits upon the time the
fault or negligence, is obliged to pay for obligation to deliver it arises (Art.
the damage done. Such fault or 1164)
negligence, if there is no pre-existing (3) To deliver the accessions and
contractual relation between the parties, accessories (Art. 1166)
is called a quasi-delict. o Don‘t take accession in the
- Requisites: technical sense. Understand it
(1) There is fault or negligence of the to mean things that go with
defendant resulting to a wrongful the thing to be delivered (i.e.
act or omission, whether voluntary or car radio)
not, whether criminal or not. - Remedies Available to the Creditor
(2) There is damage or injury suffered by o Specific performance - the
another debtor must perform it
(3) There is a direct causa relation personally
between the fault or negligence o Equivalent performance –
and the resulting damage and injury damages (may be obtained
(proximate cause) exclusively or in addition to
- a civil law term while tort is a common other remedies)
law term
- Difference between Contractual Liability
and Quasi-Delict
o QD: the obligation arises only when
there is a violation. Without violation,
there is no obligation. It is the breach
itself which gives rise to the obligation.
o Contracts: there is already an
obligation which exists prior to or even
without a breach. The breach of the
contract is immaterial to the legal
obligation.
- Breach and quasi-delict are inseparable.
But contract and breach may be
separable.
- Are contracts and quasi-delicts mutually
exclusive? NO