315484575 PRE MID Obligations and Contracts 1156 1230 Lecture Notes PDF

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Obligations and Contracts – Lecture NotesGeneral ProvisionsArticle 1156 An obligation is a juridical necessity to give, to do or not to do.Q: What is an Obligation? A: It is a juridical necessity to give, to do, or not to do Failure to compel with the juridical necessity will subject the debtor to a...

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Obligations and Contracts – Lecture Notes General Provisions Article 1156 An obligation is a juridical necessity to give, to do or not to do. Q: What is an Obligation? A: It is a juridical necessity to give, to do, or not to do Failure to compel with the juridical necessity will subject the debtor to a sanction 4 essential elements of an obligation: 1. Active subject – creditor or obligee; person who can demand the fulfillment of an obligation 2. Passive subject – debtor or obligor 3. Object or prestation – object is any of to give, to do or not to do 4. Efficient cause – judicial tie or vinculum Example: X agreed to give his car to Y Active – Y Passive – X Object – obligation to give the car Efficient cause – agreement Giving (as prestation) Called real obligation 2 types of real obligation o To give or deliver a specific determinate thing (ex. MY car) o to give or deliver a generic indeterminate thing (ex. A car)

or or

Q: What is the importance of differentiating a specific and generic obligation? A: Effects of the laws for the two obligations are different. In case of fortuitous event (those which cannot be foreseen or can be foreseen but are inevitable), liability to deliver specific obligations are extinguished. However, this is not so in the case of generic obligations because you can still deliver any other thing to the creditor which falls under the same class of the obligation (genus does not perish) To Do or Not to DO (as prestation) called Personal obligation are either affirmative or negative Viewpoint of Person Obliged a. Unilateral – only 1 party has an obligation to perform b. Bilateral – 2 parties has an obligation to perform. Example: contract of sale (buyer and seller)

Article 1157 Obligations arise from: (1) Law; (2) Contracts; (3) Quasi-contracts; (4) Acts or omissions punished by law; and (5) Quasi-delicts. 1

Note: numbers 3-5 are also provided by law 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 establishes them; and as to what has not been foreseen, by the provisions of this Book. 1st source – LAW Those derived from law should not be PRESUMED Thus, you have to point out a specific provision of the law This is provided by the Civil law and Special Law (SL should prevail in case of conflict) Article 1159 Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.

Kinds of Obligation: • Viewpoint of Sanction a. Civil obligation – can be obtained in court b. Natural obligation – action has already prescribed but creditor failed to demand within the prescriptive period. Despite the prescription, debtor voluntary delivered payment. In this case, debtor cannot get back what he paid c. Moral obligation – ex. Hear mass

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Sources of Obligation (5) The list is exclusive. Thus if the source is not one of the 5, then there is no Obligation to speak of 1. Law 2. Contracts 3. Quasi-Contracts 4. Acts or omissions punished by law (delicts) 5. Quasi-Delicts

2nd source – CONTRATCTS Have the force of law between contracting parties This must be complied with in GOOD FAITH Requires consent from the parties; bound by the terms and conditions of contracts There are limitations for the right over the parties to stipulate (they should not be contrary to laws, public policy, good customs, morals, public order) Principle of Liberty or Freedom of Contracts Parties have the right to agree on terms and conditions as they may deem it convenient, provided that such are subject to limitation Q: What are the essential elements of a contract? A: meeting of the minds, consent of the cause and consideration a. Consent b. Cause c. Consideration

Good Faith – not by the sword that killeth it but by the spirit that giveth life (it does not make law inferior to a contract nor a contract superior than the law) Q: What are the difference of an obligation and a contract? A: OBLIGATIONS CONTRACT - Results to an obligation - Result of a contract presupposes a - Not necessary require - Always meeting of the mind meeting of the minds (consent of cause and consideration) NOMINATE AND INNOMINATE CONTRACTS • Nominate – law has given a particular name for that contract • Innominate – contracts with no specific name a. DO UT DES – I give that you may give b. DO UT FACIAS – I give that you may do angel‘s notes OBLIGATIONS & CONTRACTS Paras and Atty. Valencia’s Class Discussion

c. d.

FACIO UT DES – I do that you may give FACIO UT FACIAS – I do that you may do

Ex. Is an employer obliged to provide for legal service to his employee? No, for the law does not require for such.

Article 1160 Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title XVII, of this Book.

Dammum absque injuria (Damage without injury) damage without legal injury There is damage but there is no injury There is no liability in this case

3rd Source – QUASI – CONTRACTS Also provided for by Law (Chapter I, Title XVII of Civil Code) No meeting of the minds Q: What is a Quasi-Contract? A: Juridical relation resulting from a lawful, voluntary and unilateral and which has for its purpose the payment of indemnity to the end that no one shall unjustly enrich himself at the expense of another

a.

b.

2 common kinds: Negotorium Gestio – unauthorized management Ex. Neighbor saved you properties thus expenses Solution Indebiti – undue payment

had

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 Title XVIII of this Book, regulating damages.

Injury – illegal invasion of a legal right. You associate it with a wrongful act or omission which will result to loss or damage Damage – the loss or the hurt or harm done to another which usually results from the injury Nature and Effect of Obligations Real Obligation – obligation to deliver a specific and indeterminate thing Article 1163 Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a family, unless the law or the stipulation of the parties requires another standard of care. -

4th Source – ACTS OR OMISSIONS PUNISHED BY LAW or DELICT Criminal liability carries civil liabilities o Restitution – return the exact thing o Reparation – pay equivalent price o Indemnification – consequential damage Article 1162 Obligations derived from quasi-delicts shall be governed by the provisions of Chapter 2, Title XVII of this Book, and by special laws. 5th Source – QUASI DELICT Chapter 2 Title XVII of CC or Special Laws Torts and damages Basis: act of negligence or omission of care causing damage to another with no pre-existing contractual relations Q: When is there negligence? A: Omission of that diligence which is required by the circumstances of person, place and time Q: When can an obligation arise from a quasi-delict? A: The requirements are as follows: 1. There must be fault or negligence 2. There must be damage or injury 3. There must be a direct relation of cause and effect between the fault or negligence and damage and injury (the act of negligence is the proximate cause of the damage) What is important in quasi-delict is that you have to show that there is no pre-existing contract between the parties Take note: If the source is not any of the five sources stipulated, then in it is not considered an obligation (article 1158) 2

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There is an obligation to give something: contemplates on DETERMINATE OBJECTS ONLY Purpose: ensure that the creditor will receive the object. Thus debtor should take care of the object so as to deliver it to the creditor If generic, there is no need to practice good diligence of a father In an obligation to deliver a specific thing, while still in the possession of the obligor, he has the responsibility to take care of such using ordinary diligence (diligence required in the absence of any stipulation in law or contract)

Relate to art. 1173 – the diligence needed is that which is required by the NATURE of the obligation and corresponds with the circumstances of person, time and place EXCEPTIONS If the law or contract provides for a DIFFERENT standard of care, said law or stipulation must prevail (Art. 1163) Extraordinary diligence –required only if expressly provided by law or parties expressly provided this in their contract Good Father of a Family: Standard Care or Diligence given Q: What are the other types of standards? A: a. Slight –by contract, this can be imposed b. Extraordinary – diligence of very cautious persons; ex. Common carrier custody (airplanes, bus, etc.) c. Utmost Diligence – ex. imposed on banks Article 1164 The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. However, he shall acquire no real right over it until the same has been delivered to him. Delivery of fruits is only applicable to SPECIFIC obligations Fruits – three types contemplated in this article a. Natural – spontaneous product of soil and young of animals b. Industrial – acquire through industry or labor c. Civil – rent, lease, interest

angel‘s notes OBLIGATIONS & CONTRACTS Paras and Atty. Valencia’s Class Discussion

Q: what kind of right does the creditor have over the fruits? A: distinguish personal right from a real right. Personal – enforceable only against another party Real right – enforceable against the whole world Q: When does the obligation to deliver it arises? A: This is qualifiable. It will depend on what is the source of obligation. • If pure obligation (not subject to any condition or term)- from the time the agreement is entered into or is perfected (it is demandable at once) • If the obligation has a term (X obliged himself to deliver a land to Y on Nov. 15) – the obligation arise upon the arrival of the term • If there is a conditional obligation- obligation arise when the condition is fulfilled -

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This article contemplates on a situation where the debtor has not yet delivered the obligation but that contract was already perfected. In this case, you only have a PERSONAL right that will compel the seller to deliver such obligation to the creditor. The buyer thus asks what is due to him. The moment the obligation arises, it is only a personal right. The real right only happens upon delivery.

ILLUSTRATION Sam is obliged to give Ben on December 1, 2008, a particular parcel of land • Prior to December 1 – the creditor does not have any right over the fruits • December 1 (without delivery yet) – from Dec 1 to 15: he is entitled to the fruits. However, this is only a personal right • December 15 (actual or constructive receipt) onwards – he becomes the owner of the fruits and the land only AFTER the date of receipt (Real Right) KINDS OF DELIERY 1. Actual Delivery the property changes hands ex. The moment the book is given to you (buying of book: transfer of possession) 2. Constructive Delivery The physical delivery is implied Kinds of Constructive Delivery a. Tradition simbolica – when you buy a house and the key of the house is given to you b. Tradition longa manu – the object is pointed to you c. Tradition brevi manu – illustrated in a situation where the person is occupying the property as a lessee or tenant. Such property is bought by the tenant from the lessor. His possession is thus changed from a lessee to an owner d. Tradition constitutum possesorium – opposite of brevi manu. Selling your own property to another but after the sale you enter into a contract with the owner for you to occupy the property as a lessee. e. Tradition by the execution of legal forms and solemnities – when you buy a parcel of land, you don’t have to be physically placed on the land. The documents will be considered as a delivery Article 1165 When what is to be delivered is a determinate thing, the creditor, in addition to the right granted him by Article 1170, may compel the debtor to make the delivery.

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If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the debtor. If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the same interest, he shall be responsible for any fortuitous event until he has effected the delivery. -

The distinction between generic and specific obligation is presented. Specific – if lost during fortuitous event, the obligation is extinguished Generic – not extinguished because genus does not perish

1st par – compel the specific thing which was to be delivered Debtor cannot compel the creditor to receive another thing other than that which was specified nd 2 par – debtor should deliver what belongs to the class not inferior or superior of quality You just deliver the regular type If A lost the horse, B can buy to C and A will pay C rd 3 par – the term INTEREST refers to RIGHT Even if the obligation is determinate, if two or more persons who do not have the same interest is to receive such, the liability will not be lost Applies only to DETERMINATE THINGS The third paragraph is an exception to the rule on specific obligations which is lost due to fortuitous event 1. If he incurs delay (obligor delays) Q: When is there delay? A: first distinguish ordinary delay and legal delay or default. What is contemplated in delay here is the legal delay or default MORA (debtor fails to comply with the obligation on the designated time). Delay happen when you still fail to deliver after there has been a demand whether judicial or extra judicial Ordinary – merely non performance at the stipulated time Legal delay – delay which amounts to a virtual non-fulfillment of the obligation (principle behind is “there is no delay if there is no demand”) Take note: A mere reminder with respect to the due date is not a demand. From the time the demand is made, that is only when the debtor will be liable for damages. 2.

If obligor is in bad faith because he promised to deliver the same thing to two persons with different interest

Remedies of the Creditor when the Debtor fails to comply with his obligation 1. Demand SPECIFIC PERFORMANCE of the obligation 2. Demand RESCISSION or CANCELLATION 3. Demand DAMAGES either with or without either of the first two Article 1166 The obligation to give a determinate thing includes that of delivering all its accessions and accessories, even though they may not have been mentioned. -

Accessions and Accessories: are included even if not specified in the contract Applicable only to DETERMINATE obligations

Accessions – attachment that you can no longer separate unless you will cause damage; additions to or improvements upon a thing angel‘s notes OBLIGATIONS & CONTRACTS Paras and Atty. Valencia’s Class Discussion

1. Accessories – not attached but are necessary; those joined to or included with the principal for the latter’s better use, perfection, or enjoyment Take Note: So as to not violate this provision – you shall stipulate in your contract what are those accessories or accessions that you wish to exclude in your sale.

Summary Rights of Creditor in Determinate Obligation (both can be availed by the Creditor) 1. Compel specific performance – includes delivery of accessions Compel debtor to deliver the thing agreed upon 2. Recover damages in case of Breach (article 1170) Rights of Creditor in Generic Obligations 1. Compel performance of obligation 2. In case he refuses to comply or cannot comply, obligation may be complied by another person at the debtor’s expense 3. Recover damages in case of Breach (Mental damages)

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Article 1168 When the obligation consists in not doing, and the obligor does what has been forbidden him, it shall also be undone at his expense. -

(1) When the obligation or the law expressly so declare; or (2) When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or (3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.

Obligations of Debtor in Generic Obligations 1. Deliver a thing of its class which is neither of superior or inferior 2. Pay for damages in case of breach

This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it may be decreed that what has been poorly done be undone. -

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Is not in relation to article 1166 Contemplates on obligation TO DO or a PERSONAL OBLIGATION Debtor cannot be compelled to do something he is asked because this will result to INVOLUNTARY SERVITUDE (violation of constitutional right; will result to act of violence REMEDY: ask someone to do it but at the expense of the debtor Example: if construction is ugly, you can have it undone

POSITIVE PERSONAL OBLIGATION Remedies of the Creditor if the debtor fails to do • To have the obligation performed (by himself or by another) at the debtor’s expense • Plus damages When the thing may be ordered undone • If made poorly • If the obligation is a negative one (you are not suppose to do such act but you do it) – Art 1168 Q: When is 1167 NOT applicable? A: 4

Self explanatory Similar with article 1167 on the inapplicability If the obligation is not to do and something is done, the creditor has the right to have it undone at the expense of the debtor

Article 1169 Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation. However, the demand by the creditor shall not be necessary in order that delay may exist:

Obligations of Debtor in Determinate Obligations 1. Give the very same thing they agreed upon 2. Take care of the thing with proper diligence (article 1163; applicable only to determinate because generic things can never be lost) 3. Deliver accessions and accessories (article 1166) 4. Pay for damages in case of Breach (1170)

Article 1167 If a person obliged to do something fails to do it, the same shall be executed at his cost.

If debtor posses special qualifications which is the very reason you agreed in a contract (ex. Concert singers); REMEDY: damages If you tried to undo and in doing so, it will result to more damage; REMEDY: you have to be logical and just ask for damages

In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other begins. -

Talks about DEFAULT and DELAY Covers the provision of no delay if no demand Also provides for the exception of the need for the demand

Kinds of Default 1. Mora Solvendi – default on the part of the debtor - Note: there is no default in negative and natural obligations - Effects: (1) debtor may be liable for interest and damages; (2) may bear the risk of loss; (3) may be liable even for fortuitous event 2. Mora Accipiendi – creditor is guilty of default when he unjustifiable refuse to accept the payment or performance at the time such can be done 3. Reciprocal Obligation – depends upon each other for performance

Q: Why is it important to know the Delay? A: so that you would know when to ask for damages Q: When does Delay come in? A: It comes in at the time the creditor makes a demand Q: What is the purpose of setting the due date? A: The due date will determine when the obligation is demandable angel‘s notes OBLIGA...