Obligation and Contracts Reviewer

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OBLIGATIONS AND CONTRACTS REVIEWER
TITLE I – OBLIGATIONS
CHAPTER 1
GENERAL PROVISIONS
1156. An obligation is a juridical necessity to give, to do, or not to do. JURIDICAL NECESSITY – juridical tie; connotes that in case of noncompliance, there will be legal sanctions. - An obligation is nothing more than the duty of a person (obligor) to satisfy a specific demandable claim of another person (obligee) which, if breached, is enforceable in court.

- A contract necessarily gives rise to an obligation but an obligation does not always need to have a contract. KINDS OF OBLIGATION
A. From the viewpoint of “sanction” -
1. CIVIL OBLIGATION – that defined in Article 1156; an obligation, if not fulfilled when it becomes due and demandable, may be enforced in court through action; based on law; the sanction is judicial due process 2. NATURAL OBLIGATION – defined in Article 1423; a special kind of obligation which cannot be enforced in court but which authorizes the retention of the voluntary payment or performance made by the debtor; based on equity and natural law. (i.e. when there is prescription of duty to pay, still, the obligor paid his dues to the obligee – the obligor cannot recover his payment even there is prescription) the sanction is the law, but only conscience had originally motivated the payment. 3. MORAL OBLIGATION – the sanction is conscience or morality, or the law of the church. (Note: If a Catholic promises to hear mass for 10 consecutive Sundays in order to receive P1,000, this obligation becomes a civil one.) B. From the viewpoint of subject matter -

1. REAL OBLIGATION – the obligation to give
2. PERSONAL OBLIGATION – the obligation to do or not to do (e.g. the duty to paint a house, or to refrain from committing a nuisance)
C. From the affirmativeness and negativeness of the obligation - 1. POSITIVE OR AFFIRMATIVE OBLIGATION – the obligation to give or to do 2. NEGATIVE OBLIGATION – the obligation not to do (which naturally inludes not to give) D. From the viewpoint of persons obliged - “sanction” -

1. UNILATERAL – where only one of the parties is bound (e.g. Plato owes Socrates P1,000. Plato must pay Socrates.)
2. BILATERAL – where both parties are bound (e.g. In a contract of sale, the buyer is obliged to deliver) - may be:
(b.1) reciprocal
(b.2) non-reciprocal – where performance by one is non-dependent upon performance by the other ELEMENTS OF OBLIGATION
a)ACTIVE SUBJECT – (Creditor / Obligee) the person who is demanding the performance of the obligation; b)PASSIVE SUBJECT – (Debtor / Obligor) the one bound to perform the prestation or to fulfill the obligation or duty; c)PRESTATION – (to give, to do, or not to do) object; subject matter of the obligation; conduct required to be observed by the debtor; d)EFFICIENT CAUSE – the JURIDICAL TIE which binds the parties to the obligation; source of the obligation. PRESTATION (Object)

1.TO GIVE – delivery of a thing to the creditor (in sale, deposit, pledge, donation); 2.TO DO – covers all kinds of works or services (contract for professional services); 3.NOT TO DO – consists of refraining from doing some acts (in following rules and regulations). Requisites of Prestation / Object:

1)licit (if illicit, it is void)
2)possible (if impossible, it is void)
3)determinate or determinable (or else, void)
4)pecuniary value
•INJURY – wrongful act or omission which causes loss or harm to another •DAMAGE – result of injury (loss, hurt, harm)
1157. Obligation arises from – (1) law; (2) contracts; (3) quasi-contracts; (4) acts or omissions punished by law; (5) quasi-delicts.
(1) LAW (Obligation ex lege) – imposed by law itself; must be expressly or impliedly set forth and cannot be presumed - [See Article 1158]
(2) CONTRACTS (Obligation ex contractu) – arise from stipulations of the parties: meeting of the minds / formal agreement - must be complied with in good faith because it is the “law” between parties; neither party may unilaterally evade his...
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