Module 1.1 (Definition, Elements, and Sources of Obligations) PDF

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HANDOUT FOR MODULE 1:DEFINITION, ELEMENTS, & SOURCES OF OBLIGATIONSLLAW 113: OBLIGATIONS AND CONTRACTSOBLIGATION DEFINED (Art. 1156) An obligation is a juridical necessity to give, to do, or not to do.ELEMENTS OF AN OBLIGATION (a) Active Subject – The creditor or obligee; this is the person ...

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HANDOUT FOR MODULE 1.1: DEFINITION, ELEMENTS, & SOURCES OF OBLIGATIONS LLAW 113: OBLIGATIONS AND CONTRACTS OBLIGATION DEFINED (Art. 1156) An obligation is a juridical necessity to give, to do, or not to do.

CONTRACT (Art. 1159) • Has the force of law between the parties. • Should be complied with in good faith.

ELEMENTS OF AN OBLIGATION (a) Active Subject – The creditor or obligee; this is the person who has the right to demand an obligation; the two terms are often interchanged now, but technically speaking, creditor is used in obligations to give, while obligee is used in obligations to do. (b) Passive Subject – The debtor or obligor; this is the person who must fulfill or perform the obligation; similar to the active counterpart, the two terms are often interchanged now, but technically speaking, debtor is used in obligations to give, while obligor is used in obligations to do. (c) Object or Prestation – To give, to do, or to not do (to not give is included in to not do). (d) Juridical Tie – This is known as the vinculum juris (bond of law); this is the reason that causes an obligation to arise; 1 this creates the legal relationship between the parties, one that is forged in law that grants all the rights and remedies to the parties with respect to the obligation.

QUASI-CONTRACT (Art. 1160) • Negotiorum Gestio – Whenever someone voluntarily but with no authority takes charge (officious manager) of the abandoned business or property of another, the owner is responsible for the obligations incurred and must reimburse the officious manager for expenses. • Solutio Indebiti – When you receive any payment by mistake, you have the obligation to return it. • Others: a) Support given by stranger (Art. 2164); b) Third person bears funeral expenses (Art. 2165); c) Properties saved during calamities (Art. 2168).

UNDERSTANDING JURIDICAL NECESSITY In a nutshell, it’s the fact that the creditor or obligee can resort to legal or court action that makes it necessary for the debtor or obligor to perform an obligation. It is the “invisible” threat of being sued that compels one to fulfil the obligation. SOURCES OF OBLIGATIONS (a) Law - e.g. Tax Code, Family Code, Labor Code. (b) Contracts - Binding agreements. (c) Quasi-Contracts - No contract, but obligation exists nonetheless. (d) Acts or omissions punished by law – Criminal liability= Civil obligations (e) Quasi-Delicts - Negligent acts not punished as crime, but caused damage. LAW (Art. 1158) • Not presumed; must be expressly determined in the law to be demandable (e.g. 13th mo. & overtime pay)

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Danny Chan, et. al., Essentials of Philippine Business Law, 2018 p. 4 citing Arturo M. Tolentino, IV Commentaries and Jurisprudence on the Civil Code of the Philippines, 1991. P. 56.

CRIMINAL OFFENSES (Art. 1161) • Governed by the Art. 100 of the Revised Penal Code – if you commit a crime, not only will you be punished with imprisonment and/or fine, but you’re also civilly liable to the victim for damages. • Every person criminally liable is also civilly liable (i.e. damages) which includes: Restitution (return or restore the thing), Reparation (if cannot be returned, price of the thing + sentimental value if any), and Indemnification (collateral damages for injury to other persons or other property). • Thus, even if one is declared innocent of the crime charged, one can still be made to pay damages (ex. OJ Simpson Case). o This is due to the difference in the BURDEN OF PROOF required in criminal cases (proof beyond reasonable doubt) vs. civil cases (preponderance of evidence). QUASI-DELICT (Art. 1162) • Fault or negligence causing damage, but not a crime. • No pre-existing contractual obligation. • Also known as culpa aquiliana. • Culpa contractual = negligence in contract obligation....