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Obligations and Law - Lecture notes, Lecture notes of Law of Obligations

Capitol University (CU)Law of Obligations

These are lecture notes in Obligations and Law Subject. I hope i can help you.

Typology: Lecture notes

2022/2023

Available from 06/18/2024

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THE PHILIPPINE LAW ON
OBLIGATIONS & CONTRACTS
GOVERNING LAW
➢ Civil Code of the Philippines
Article 1156 to 1430
➢ Laws on Obligations
Article 1156 to 1304
➢ Laws on Contracts
Article 1306 to 1430
NECESSITIES AND FUNCTIONS
▪ Body of rules which deals with the
nature and sources of obligations
and the rights and duties arising
from agreements and the
particular contracts.
▪ Defines the Duties and
Responsibilities of each party and
provides for the remedy/ies in case
of breach thereof.
▪ Educate and guide every person of
any transactions entered into.
▪ Regulates the civil/commercial
relation of every citizen.
TITLE 1 GENERAL PROVISIONS:
OBLIGATIONS
Chapter 1 AIM
To provide answers on the following:
1. What is an Obligation?
2. How will an obligation arise, what
are its sources?
3. What are the different kinds of
obligation?
4. Who are parties to an obligation?
OBLIGATION DEFINED
IN GENERAL - Something a person must
do because of a certain law, rule, promise
or agreement, which includes civil and
natural obligations.
LEGAL - A juridical necessity to give, to
do, or not to do. (Art. 1156)
JURIDICAL NECESSITY - non-
compliance is sanctioned by law.
CIVIL VS. NATURAL OBLIGATIONS
Civil Obligation
▪ Gives the creditor or oblige a right
under the law to enforce their
performance in Courts of Justice.
▪ Based on Positive Law (Civil Code).
▪ Non fulfillment gives rise to an
action for damages.
Natural Obligation
▪ Do not grant a right of action to
enforce their performance.
▪ Based on equity and natural law.
▪ Cannot compel performance hence
the unavailability for the recovery
of damages.
PARTIES TO AN OBLIGATION
CREDITOR/OBLIGEE
Person in whose favour the performance
or non-performance of an action is made.
DEBTOR/OBLIGOR
Person required to perform an obligation.
Illustration: (Obligation to support)
Parents under the Family Code (law) are
obliged to support their Children.
Debtor/Obligor = Parents
Creditor/Obligee = Children
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THE PHILIPPINE LAW ON

OBLIGATIONS & CONTRACTS

GOVERNING LAW

➢ Civil Code of the Philippines Article 1156 to 1430 ➢ Laws on Obligations Article 1156 to 1304 ➢ Laws on Contracts Article 1306 to 1430 NECESSITIES AND FUNCTIONS ▪ Body of rules which deals with the nature and sources of obligations and the rights and duties arising from agreements and the particular contracts. ▪ Defines the Duties and Responsibilities of each party and provides for the remedy/ies in case of breach thereof. ▪ Educate and guide every person of any transactions entered into. ▪ Regulates the civil/commercial relation of every citizen. TITLE 1 GENERAL PROVISIONS: OBLIGATIONS Chapter 1 AIM To provide answers on the following:

  1. What is an Obligation?
  2. How will an obligation arise, what are its sources?
  3. What are the different kinds of obligation?
  4. Who are parties to an obligation?

OBLIGATION DEFINED

IN GENERAL - Something a person must do because of a certain law, rule, promise or agreement, which includes civil and natural obligations. LEGAL - A juridical necessity to give, to do, or not to do. (Art. 1156) JURIDICAL NECESSITY - non- compliance is sanctioned by law. CIVIL VS. NATURAL OBLIGATIONS Civil Obligation ▪ Gives the creditor or oblige a right under the law to enforce their performance in Courts of Justice. ▪ Based on Positive Law (Civil Code). ▪ Non fulfillment gives rise to an action for damages. Natural Obligation ▪ Do not grant a right of action to enforce their performance. ▪ Based on equity and natural law. ▪ Cannot compel performance hence the unavailability for the recovery of damages. PARTIES TO AN OBLIGATION CREDITOR/OBLIGEE Person in whose favour the performance or non-performance of an action is made. DEBTOR/OBLIGOR Person required to perform an obligation. Illustration: (Obligation to support) Parents under the Family Code (law) are obliged to support their Children. Debtor/Obligor = Parents Creditor/Obligee = Children

ESSENTIAL REQUISITES OF AN

OBLIGATION

Passive Subject - debtor or obligor. The person who has a duty. Active Subject - Creditor or oblige. He who has a right. Object or prestation - Subject matter of the obligation. It may consist of giving, doing, or not doing, Juridical or legal ties - efficient cause. The tie that binds the parties. ILLUSTRATION Obligation to support Passive subject – parent Active subject – children Object or Prestation – to support Juridical or Legal tie – law KINDS OF OBLIGATIONS AS TO SUBJECT MATTER

1. Real Obligation – ( To give) A. Specific Thing - Particularly designated B. Generic Thing – refers only to a class or genus 2. Personal Obligation – ( To do, not to do) A. Positive – Obligation to do B. Negative – Obligation not to do SOURCES OF OBLIGATION (ART. 1157)

  1. Law
  2. Contracts
  3. Quasi-contracts
  4. Acts or Omissions punishable by law
  5. Quasi-delict SOURCES OF OBLIGATIONS: LAW The birth and performance of the obligation is premised upon the existence of a valid law. Requirements:
  6. There must be an existing law
  7. It must be a valid law Illustration: The obligation of the parents to financially support their children arises because there is an existing law, the Family Code of the Philippines that impose upon each parent to support their children. SOURCES OF OBLIGATIONS: CONTRACT The birth and performance of the obligation is premised upon the agreement (contract) of the parties. Requirements:
  8. Agreement of the parties
  9. Must not be contrary to law, morals, public policy, and good customs. Illustration: Juan and Pedro mutually agreed that Pedro will buy the motorcycle of Juan for P30, 000. The obligation of Pedro to pay the purchase price and the obligation of Juan to deliver the motorcycle arises because of their agreement. SOURCES OF OBLIGATIONS: QUASI- CONTRACT The birth and performance of the obligation is premised upon the principle that no person shall unjustly enriched himself at the expense of the other. Kinds of Quasi-contracts:
  10. Negotiorum gestion – voluntary management of the property of another without the latter’s consent.
  11. Solution Indebiti – juridical relation created when something is received when there is no right to demand it but only through mistake.

DUTIES (DEBTOR): 2. DELIVERY OF

THE THING INCLUDING ALL

ACCESSION AND ACCESSORIES

ACCESSIONS - Fruits of the thing, or additions to or improvements upon a thing. ACCESSORIES - Things joined or include with the principal for the latter’s embellishment, better use, or completion. Illustrations:

  1. Delivery of a purchased car should also include its air-conditioners even if not included in the contract of sale.
  2. When a watch is purchased, it is deemed to include the bracelet/strap, and the seller should also deliver this item despite the non-agreement of the parties. DUTIES (DEBTOR): 3. NOT TO INCUR IN DEFAULT Default – Failure of the debtor to fulfil his obligation on the date agreed upon and there was a demand made by the creditor for the fulfillment except when demand shall not be necessary.
  • Delay - Mere failure to perform an obligation on time.
  • Default - Mere failure to perform an obligation on time and after demand made by the Creditor. REQUISITES TO RENDER DEBTOR IN DEFAULT:
  1. Failure to perform obligation on date agreed upon
  2. Demand made by the creditor
  3. Failure of the debtor to comply the demand Kinds of Delay
  4. Mora Solvendi – delay on the part of the debtor to fulfill his obligation.
  5. Mora Accipiendi – delay on the part of the creditor to accept the performance of the obligations.
  6. Compensation morae – delay of the obligors in reciprocal obligations. ILLUSTRATIONS: (DELAY & DEFAULT) Juan borrowed the book of Pedro and obliged himself to return and deliver the same on November 30. If Juan does not deliver the book on November 30 in the absence of any demand coming from Pedro for the delivery of the book, Juan merely incurred an ordinary delay. However, if Pedro made a demand against Juan to deliver the book on December 5 and still Juan failed to deliver, Juan is considered in default on from the date. Effect: Failure to give demand will result in the presumption of law that creditor is giving an extension of time within which debtor may comply his obligation. DEMAND IS NOT NECESSARY TO RENDER DEBTOR IN DEFAULT:
  7. When the Obligation so provides
  8. When the law so provides
  9. When time is of the essence
  10. When demand would be useless
  11. When there is performance by a party in reciprocal obligations DUTIES (DEBTOR): 4. NOT TO COMMIT FRAUD OR NEGLIGENCE, DELAY, OR CONTRAVENE THE TENOR.
  • Fraud (deceit or dolo) – Deliberate or intentional evasion of normal fulfillment of an obligation. Implies some king of malice or dishonesty.
  • Negligence – Voluntary act or omission without malice or bad faith which prevents the normal fulfillment of the obligations.
  • Delay – (art. 1169)
  • Contravention of the terms – Violation of the terms and conditions stipulated in the obligation. EFFECT:

Entitles the creditor for damages. **DUTIES, RIGHTS, AND REMEDIES

  1. Real obligation – (To give)** Specific Thing – Particularly designated A. Duties (Debtor)
  2. Preservation of the Thing which results in requiring the debtor to exercise diligence of a good father of a family in taking care of the thing. (Art. 1163). a. Delivery of the thing including all accessions and accessories (Art. 1166).
  3. Not to incur in default (1169)
  4. Not to commit fraud, negligence, or delay (Art. 1170) B. Rights (Creditor)
  5. Right to the fruits of the thing from the time the obligation to deliver arises. (Art.1164)
  6. Right to ask damages for fraud, negligence, delay or in contravention of the stipulation.
  7. Right to avail all remedies available against the debtor. RIGHTS (CREDITOR):1.RIGHTS TO THE FRUITS ACCRUED ➢ Right only arises when there is obligation to deliver. Types of Fruits: A. Natural Fruits – Spontaneous products of the soil including animals and the young. B. Industrial Fruits – Produced by lands of any kind through cultivation or labour. C. Civil Fruits – Those derived by virtue of juridical relation.

DUTIES, RIGHTS, AND REMEDIES

1. Real obligation – (To give) Specific Thing – Particularly designated B. Duties (Debtor)

  1. Preservation of the Thing which results in requiring the debtor to exercise diligence of a good father of a family in taking care of the thing. (Art. 1163). b. Delivery of the thing including all accessions and accessories (Art. 1166).
  2. Not to incur in default (1169)
  3. Not to commit fraud, negligence, or delay (Art. 1170) B. Rights (Creditor)
  4. Right to the fruits of the thing from the time the obligation to deliver arises. (Art.1164)
  5. Right to ask damages for fraud, negligence, delay or in contravention of the stipulation.
  6. Right to avail all remedies available against the debtor. C. Remedies (Creditor)
  7. Specific performance
  8. Damages
  9. Recession **DUTIES, RIGHTS, AND REMEDIES – DUTIES
  10. Real obligation – (To give)** II. Generic Thing – Designated by class A. Duties (Debtor)
  11. Not to incur in default (1169)
    1. Not to commit fraud, negligence, or delay (Art. 1170) B. Rights (Creditor)
  13. Right to ask damages for fraud, negligence, delay or in contravention of the stipulation.

Contravention of the terms

  • Violation of the terms and conditions stipulated in the obligation. Illustration; FRAUD Contract or Sale: Juan sold his bag to Pedro misrepresenting that it was a genuine Louis Vuitton brand. By reason of such assurance, Pedro bought and paid the purchase price. It was found later on that the subject item was a Class “A” imitation. Juan very well knew this fact. On damages: Juan can be held liable for damages by reason of his deliberate intention to defraud Pedro. Illustration: DELAY Ally borrowed the book of Zabee and promised to return the book on December
  1. Came the said date, Ally failed to return the said book prompting Zabee to send her a demand letter to return the book on or before December 30. Came the date and Ally still failed to return the book. On damages: Ally can be held liable for damages after failing to comply the demands made by Zabee, she being “in default”. Illustration: CONTRAVENTION Ally and Zabee agreed that the former will construct a particular house of the latter. Part of the construction agreement was that Ally should only use Narra woods in all window and door jambs. Ally however used Gemilina woods as materials for the door and window jambs in order to maximize his profits. On Damages: Ally can be held for damages by reason of performing his personal positive obligation in contravention of the tenor agreed upon. Illustration: NEGLIGENCE Ally borrowed the book of Zabee and promised to return the book on December
  2. Came the said date, Ally failed to return the said book prompting Zabee to send her a demand letter to return the book on or before December 30. Came the date and Ally still failed to return the book. It was found out that Ally had in fact lost the book when she intentionally left the same outside of her classroom. On damages: Ally can be held liable for damages by reason of her negligence in losing the book and her failure to exercise diligence of a good father in the preservation of the book SPECIAL RULES FORTUITIOUS EVENT
  • Any event which cannot be foreseen or which, though foreseen, is inevitable. Rule:
  • Loss caused by fortuitous event shall exempt the debtor from liability except when: A. Expressly specified by the law B. When it is otherwise declared by stipulation. C. Nature of the obligation requires assumption of risk D. Debtor is in delay