REVIEW OF OBLIGATIONS AND CONTRACTS as preparation for the subject CREDIT TRANSACTIONS
P A R T I
OBLIGATIONS:
Q: What is an
obligation?
A:
Art.
1156. An obligation is a juridical necessity to give, to do, or not
to do.
Q: Why an
obligation is a Juridical Necessity?
A:
Because there are obligations that cannot be enforced in courts. There is a
Juridical Necessity in able that these obligations (Civil Obligations) may be
enforced in courts.
Q: Is there
any obligations that cannot be enforced in the courts?
A:
Natural Obligations (See Book IV, Title III, Civil Code)
Q: Why the term “Not to Give” is not included in Art. 1156 (definition of an obligation)?
A:
Because the term “not to give” is already included in the negative performance
of an obligation (refers to Art. 1231 (1) or the “Payment
or Performance” as a mode of extinguishment of an obligation)
•
Payment – includes the term “to give”
•
Performance – includes the term “to do, not to do, and not to give”
Q: What are
the sources of an obligation?
A:
Art.
1157. Obligations arise from:
(1)
Law;
(2)
Contracts;
(3)
Quasi-contracts;
(4)
Acts or omissions punished by law; and
(5)
Quasi-delicts. (1089a)
Q: Give
examples of each.
A:
LAW: Promulgated. It cannot be
presumed because it must be expressly set forth in the law creating it. The law
must be the creator of the obligation itself. It stands even though there is no
consent from the obligor.
•
Law on Tax
CONTRACTS: Those
obligations arising from mutual agreements.
•
Art.
1305. A 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.
(My
professor clarifies that there must be at least two contracting parties/or two
or more contracting parties.)
QUASI-CONTRACTS:
Art. 2142. Certain
lawful, voluntary and unilateral acts give rise to the juridical relation of
quasi-contract to the end that no one shall be unjustly enriched or benefited
at the expense of another.
KINDS:
•
Negotiorum Gestio
Art. 2144. Whoever
voluntarily takes charge of the agency or management of the business or
property of another, without any power from the latter, is obliged to continue
the same until the termination of the affair and its incidents, or to require
the person concerned to substitute him, if the owner is in a position to do so.
This juridical relation does not arise in either of these instances:
*(1)
When the property or business is not neglected or abandoned;
*(2)
If in fact the manager has been tacitly authorized by the owner.
•
Solutio Indebiti
Art. 2154. If something
is received when there is no right to demand it, and it was unduly delivered
through mistake, the obligation to return it arises.
QUASI-DELICTS
•
Art.
2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this
Chapter.
•
Art.
2177. Responsibility for fault or negligence under the preceding
article is entirely separate and distinct from the civil liability arising from
negligence under the Penal Code. But the plaintiff cannot recover damages twice
for the same act or omission of the defendant.
My Professor’s
Example:
FACTS: The bus was
owned by a company which business deals with carrying passengers from point A
to point B or taking passengers to their respective destinations. In one of
their trips, there occurred an accident that causes injury to the passengers.
2. Obligation arises from Delict against the driver (Refers to Penal laws violated, which for example is the “Reckless Imprudence resulting to Serious Physical Injuries” on the passengers.
Q: What are
the different kinds of Obligations?
A:
1. Pure and Conditional Obligations
2.
Obligations with a Period
3.
Alternative Obligations
4.
Joint and Solidary Obligations
5.
Divisible and Indivisible Obligations
6.
Obligations with a Penal Clause
ON DELAY
(MORA)
Q: TRUE OR
FALSE: No demand, no delay.
A:
False, the rule is not absolute for it admits exceptions. No demand, no delay
is the general rule. The exception are as follows:
1.
When the law or obligation expressly so declares.
2.
When time is of the essence.
3.
Futility-when demand would be useless.
•
Another one is that when one of the parties is ready to comply, delay by the
other begins---this is in cases of Reciprocal Obligations.
Q: Is demand
through a phone call considered extrajudicial demand?
A:
Yes, Extrajudicial demand is not qualified.
Q: What are
the different modes of extinguishment of Obligations?
A:
Art.
1231. Obligations are extinguished:
(1)
By payment or performance:
(2)
By the loss of the thing due:
(3)
By the condonation or remission of the debt;
(4)
By the confusion or merger of the rights of creditor and debtor;
(5)
By compensation;
(6)
By novation.
>>Other
causes of extinguishment of obligations, such as annulment, rescission,
fulfillment of a resolutory condition, and prescription, are governed elsewhere
in this Code.
•
Enumeration not exclusive because there are also other modes of extinguishing
an obligation in the Civil Code.
Q: What is the
only obligation that is extinguished by Loss?
A:
Obligation to deliver a determinate thing
Q: What is the
difference between condonation and remission?
|
CONDONATION |
REMISSION |
|
Act |
Omission |
|
Condone |
Remiss |
|
“a positive act” |
“a negative act” Failure to do
something |
Q: What is the
difference between Confusion and merger?
A:
In Confusion one of the entities loses its personality while in Merger personality
is not lost and still subsists.
Q: What is
Novation?
A:
* Extinguishment of an obligation by substituting it with another.
*
It is the change of an obligation by another, resulting in its extinguishment or
modification, either by changing the object or principal conditions, or by
substituting another in the place of the debtor or by subrogating a third
person to the rights of the creditor. (Pineda, Obligations and Contracts, 2000
ed, p. 298)
Q: What is
Dacion en Pago?
A:
Dacion en pago is the delivery and transmission of ownership of a thing by the
debtor to the creditor as an accepted equivalent of the performance of the
obligation. The property given may consist not only of a thing but also of a
real right. (Tolentino, Civil Code of the Philippines, Vol. IV, 2002 ed, p.
293) There must be consent from the creditor.
Q: Distinguish
Novation from Dacion en Pago.
A:
Dacion en pago fully extinguishes the obligation while novation merely assimilates
extinction as it creates a new one.
P A R T I I
CONTRACTS:
Q: What is a
Contract?
A:
Art.
1305. A 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.
Q: Is this
absolute?
A:
No, the definition is not absolute. There are times when three people’s minds
meet and the contact they entered is valid.
(My
professor clarifies that there must be at least two contracting parties/or two
or more parties.)
Q: What are
the Characteristics of a Contract?
A:
1. Freedom to Stipulate - Parties
may stipulate any conditions and term provided they are not contrary to law,
morals, good customs, public order and public policy.
2. Obligatory
Force –
Obligations have the force of the law between the contracting parties, should
be complied in good faith
3.
Privity/Relativity –
Take effect only between the parties, their assigns and heirs with exceptions
of those personal in nature.
*
Exceptions to Personal in Nature –
Stipulation of the Parties or by law)
4.
Consensuality – Perfection
by mere consent. Parties are bound not only to what was expressed but also the
consequences in keeping with good faith, usage and law.
5. Mutuality – Binds both
contracting parties, validity and compliance cannot be left to the will of one
of them.
Q: What are
the elements of a Contract?
A:
Art.
1318. There is no contract unless the following requisites concur:
(1)
Consent of the contracting parties;
(2)
Object certain which is the subject matter of the contract;
(3)
Cause of the obligation which is established.
Q: What is a
Formal Contract?
A:
Contracts which require special form for perfection.
Q: Is a real
contract a formal contract?
A:
Yes.
Q: CONSENSUAL
CONTRACTS VS. REAL CONTRACTS.
A:
Consensual Contracts – Perfected by
mere consent of the parties. Binding upon the contracting parties.
Real Contracts
–
Perfected by the delivery of the thing which is the object of the contract. If
not perfected there is no commenced right and obligations on the contract.
Q: TRUE OR
FALSE: Real
Contract involves Real Properties?
A:
FALSE, real contract pertains to the delivery of the thing for the perfection
of the contract so that rights may be acquired on the same. The object is not
the controlling factor.
Q: What are
the stages of Contract?
A:
1. Negotiation
2.
Perfection
3.
Consummation
4.
Extinguishment
•
When a contract is perfected it is given a life, therefore an obligation
exists.
KINDS OF
DEFECTIVE CONTRACTS:
1.
Rescissible Contracts
2.
Voidable Contracts
3.
Unenforceable Contracts
4.
Void or Inexistent Contract
|
DEFECTIVE
ELEMENT and CHARACTER |
DEFECT |
|
Consideration:
•
Due to damage or lesions caused to a party or third person. •
Ex: Fictitious sale. •
Valid until Rescinded |
Rescissible
|
|
Consent: •
Vice of Consent or legal incapacity. •
Valid until annulled |
Voidable
|
|
Object: Illicit
Objects/Subject matter. •
No need to have / obtain declaration from the court that the contract is void
– a matter of defense. •
Ex: When obtaining declaration of void contract for purposes of Remarriage. |
Void
|
|
Form: >>Lack
of Authority or incapacity of both parties. Statute of Frauds. •
No right of action is available. •
No need to go to court to have the contract declared as unenforceable, it is a matter of defense. |
Unenforceable
|
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