Source: https://www.scribd.com/doc/46573964/23322108-Obligations-and-Contracts
Timestamp: 2017-12-17 13:23:25
Document Index: 727033980

Matched Legal Cases: ['Arts 1165', 'Art 1233', 'Art 1191', 'Art. 1344', 'Art 1170', 'Art. 2003', 'Art. 4', 'Art. 1191', 'Arts 1193', 'art 1241', 'Art 1314', 'ART 1312', 'arty 5', 'Art 1312', 'arty 6', 'Art 1331', 'Art 1338', 'art 1381', 'art 1526', 'Art 1191', 'Art 1381', 'art 1382']

23322108 Obligations and Contracts | Negligence | Bankruptcy
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Specific Performance: Performance by the debtor of the prestation itself 2. as a definite passive subject. or included with the principal thing for its better use. Causal Fraud (Dolo Causante): fraud employed 2..¶ ¶ .. fraud. (8 Manresa 72) O’leary Macondray & Co. Ex: air conditioner in a car. Voluntary – debtor in the performance of the obligation is guilty of: • fraud (Dolo) • negligence (culpa) • delay (mora) • contravention of the tenor of the obligation • NOTE: debtor is liable for damages 2. 45 Phil. To pay damages in case of breach of the obligation by reason of delay. To deliver the thing itself 5. the whole world equivalent performance X X Right pertaining to a person over a specific thing. 812 [1924[– It implies some kind of malice or dishonesty and it cannot cover cases of mistake and errors of judgment made in good faith. negligence or contravention of the tenor of the obligation. To deliver its accessions and accessories • Accessions – additions to or improvements upon a thing. in the execution of the contract 3. Involuntary – debtor is unable to comply with his obligation due to fortuitous event/s • NOTE: debtor is not liable for damages FRAUD (Dolo) • It is the deliberate or intentional evasion of the normal fulfillment of an obligation. It is synonymous to bad faith TYPES OF FRAUD 1.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 against a definite person or group of persons Right pertaining to a person to demand from another. Ex:key of a house. 1170 – 1174) 1. To pay damages in case of breach of the obligation by reason of delay. • Accessories – things joined to. without a definite passive subject against whom the right may be personally enforced Can only be dema nded if oblig ation is not very perso nal X X 3. To deliver the thing which is neither of superior nor of inferior quality 2. negligence or contravention of the tenor of the obligation. the fulfillment of the prestation to give. to do or not to do. possessing such capacity. pp. embellishment or completion. X X X undo the things already done Deleted: Corliss v. fraud. Manila Railroad – The law presumes or requires a man to possess ordinary capacity to avoid harming his neighbors unless a clear and manifest incapacity is shown and the law does not hold him liable for unintentional injury unless. Substitute Performance: someone else performs or something else is performed at the expense of debtor 3. frame of a picture (De Leon. DUTIES OF DEBTOR IN AN OBLIGATION TO GIVE A GENERIC THING 1. Equivalent Performance: damages substitute performance X Undo the things already done at debtor's expense rescission/ cancellation X X X BREACH OF OBLIGATIONS (See Arts. Incidental Fraud (Dolo Incidente): fraud in performance of obligation already existing because of a contract Page 106 of 297 Remedies Real Obligations Specific Gener Personal Obligations To do Not to do specific performance QuickTime™ and a ic TIFF (Uncompressed) decompressor are needed to see this picture. 2003 ed. 37-38) 4. REMEDIES OF THE CREDITOR IN CASE OF NONPERFORMANCE (See Arts 1165 – 1168) 1. he might and ought to have foreseen the danger.
1. Ordinary Delay – failure to perform an obligation on time 2. Liability cannot be mitigated. are needed to see KINDS OF NEGLIGENCE this picture. Waiver for future negligence may be allowed in certain cases NOTE: Future fraud cannot be waived. REMEDIES OF DEFRAUDED PARTY • Insist on specific performance (Art 1233) • Resolve contract (Art 1191) • Claim damages. EXCEPTIONS: Nature of Obligation of a Common carrier Purpose is to secure the consent of another to enter into the contract Results in the breach of an obligation Gives rise to a right in favor of the creditor to recover damages Results in vitiation of consent. DELAY (MORA) 1. in either case KINDS OF NEGLIGENCE. the law does not prohibit renunciation of the action for damages on the ground of fraud already committed.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 • Fraud in the Performance (Art. 1344) Present during the perfection of a contract • NOTE: Negligence can be waived except in cases where the nature of the obligation or public policy requires another standard of care. However. Quasi-Delict (Culpa aquiliana/culpa extra contractual). Negligence There is no deliberate intention to cause damage. Liability may be mitigated. Legal Delay/ Default – failure to perform an obligation on time which failure constitutes a Page 107 of 297 NEGLIGENCE • Consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons. DISTINGUISHED Culpa Aquiliana Culpa Contractual Negligence is Negligence merely an substantive and incident of performance independent of an obligation There may or may There is a pre-existing not be a pre-existing contractual relation contractual obligation Source of the Source of the obligation obligation is the is the breach of the negligence itself contractual obligation Negligence must be Proof of existing of the proved contract and its breach is prima facie sufficient to warrant recovery in the Diligence in the Diligence and selection and selection of the supervision of the supervision is not employees is a employees available as a defense defense EFFECTS OF CONTRIBUTORY NEGLIGENCE OF THE CREDITOR • GENERAL RULE: Reduces or mitigates the damages which he can recover • EXCEPTION: If the negligent act or omission of the creditor is the proximate cause of the event which led to the damage or injury complained of. Waiver for future fraud is void. voidable contract Gives rise to a right of an innocent party to annul the contract Purpose is to secure the consent of the other party but the fraud was not the principal inducement in making the contract Does not result in the vitiation of consent Gives rise to a right of an innocent party to claim for damages FRAUD V. NEGLIGENCE Fraud There is deliberate intention to cause damage.source of obligation 2. he cannot recover. 1338) Present during the perfection of a contract Incidental Fraud (Art. Contractual Negligence (Culpa Contractual)negligence in the performance of a contract QuickTime™ and a TIFF (Uncompressed) decompressor . of the time and of the place. 1170) Present during the performance of a preexisting obligation Purpose is to evade the normal fulfillment of the obligation Causal Fraud (Art.
There must be a demand. Responsibility of debtor is limited to fraud and gross negligence b. perform or comply with his obligation otherwise. Creditor refuses the performance without just cause • EFFECTS: a. unless demand is not required. there is no actionable default on the part of both parties • Rule in Reciprocal Obligations: In reciprocal obligations. Offer of performance by the debtor b.. If obligation bears interest. When the obligation or the law expressly so declare. Debtor may relieve himself of obligation by consigning the thing 3. • EXCEPTIONS (no demand necessary) a. Resolution (Art 1170. Debtor fails to perform his positive obligation on the date agreed upon. and 4. If no extra-judicial demand. breach of the is see this of obligation b. in proper cases) 2.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 breach of the obligation. Debtor is exempted from risk of loss of thing. 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. as when the obligor has rendered it beyond his power to perform • EFFECTS: QuickTime™ and a TIFF (Uncompressed) decompressor are a. interest runs from the filing of the complaint. Creditor liable for damages f. 42) REQUISITES OF DELAY 1. There must be non-performance. delay by the other begins. Offer must be to comply with the prestation as it should be performed c. • GENERAL RULE: 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. • REQUISITES: a. was inevitable Page 108 of 297 . KINDS OF DELAY 1. 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. he will be in default. 2215[4]) d. (De Leon. debtor does not have to pay from time of delay e. Obligations to deliver a determinate thing. If debtor can prove that loss would have resulted even if he had not been in default. Compensatio morae – both parties are in default (in reciprocal obligations). b. Performance must be simultaneous unless different dates for the performance of the obligation were fixed by the parties • CESSATION OF THE EFFECTS OF MORA: • renunciation (express or implied) • prescription • NOTE: There is no delay in negative obligations and natural obligations. and c. p. the court may equitably mitigate the damages (Art. 2003 ed. c. judicial or extra-judicial. 3. The obligation must be due. or b. Failure of the debtor to comply with such demand. liable for fortuitous events. Expenses by debtor for preservation of thing after delay is chargeable to creditor d. pay damages. made by the creditor upon the debtor to fulfill. creditor bears risk of loss c. or c. Mora Solvendi– default on the part of the debtor: • Mora Solvendi Ex re – default in real obligations • Mora Solvendi Ex persona – default in personal obligations • REQUISITES: a.must pay interest. or which though foreseen. demandable and liquidated. Obligation must be due. Mora Accipiendi – default on part of creditor when he unjustifiably refuses to accept the performance of the obligation. When demand would be useless. enforceable and already liquidated or determinate in amount. Debtor needed toguiltypicture. From the moment one of the parties fulfills his obligation. FORTUITOUS EVENT – An event which could not be foreseen. 2. A demand (not merely a reminder or notice). Liability: If obligation to pay money. In other obligations.
He may also seek rescission. the liability of the first infractor shall be equitably tempered by the courts. and each shall bear his own damages. (1111) . 1177 The creditors. When expressly declared by stipulation or contract 3. The debtor must be free from any participation in. The event must be either unforeseeable or unavoidable 3. The debtor's assets are insufficient to satisfy his claims. The injured party may choose between the fulfillment and the rescission of the obligation. shall give rise to the presumption that said interest has been paid. (1112) Art. they may also impugn the acts which the debtor may have done to defraud them. The creditor must be prejudiced by the inaction or failure of the debtor to proceed against the third person. The event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner 4. The power to rescind obligations is implied in reciprocal ones. all rights acquired in virtue of an obligation are transmissible. if there has been no stipulation to the contrary. In case both parties have committed a breach of the obligation. The creditor must have pursued first or exhausted all the properties of the debtor which are not exempt from execution. unless there be just cause authorizing the fixing of a period. 1729 and 1652):Right of the lessor to go directly to sublessee for unpaid rents of the lessee.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 REQUIREMENTS: (Nakpil and Sons vs. in case one of the obligors should not comply with what is incumbent upon him. Art. shall likewise raise the presumption that such installments have been paid. 3. save those which are inherent in his person. The receipt of a later installment of a debt without reservation as to prior installments. the same shall be deemed extinguished. This is understood to be without prejudice to the rights of third persons who have acquired the thing. Exact fulfillment of the obligation by specific or substitute performance with a right to damages in either case. b. When expressly declared by law ( bad faith. The debtor to whom the right of action properly pertains must be indebted to the creditor. QuickTime™ and a TIFF (Uncompressed) decompressor are needed to see this picture. may exercise all rights and bring all the actions of the latter for the same purpose. Pursue the leviable (not exempt from attachment under the law) property of the debtor. If it cannot be determined which of the parties first violated the contract. debtor is in delay ) 2. Accion directa (Arts. (1124) Art. 4. without reservation with respect to the interest. 1178 Subject to the laws. The cause of the breach of the obligation must be independent of the will of the debtor 2. CA): 1. subject matter is generic. and Page 109 of 297 PRINCIPLE IN ARTICLE 1176 • Before the presumption that a prior installment had been paid may arise. c. in accordance with Articles 1385 and 1388 and the Mortgage Law. When nature of obligation requires assumption of risk 4. Right of the laborers or persons who furnish materials for a piece of work undertaken by a contractor to go directly to the owner for any unpaid claims due to the contractor 5. (n) REMEDIES AVAILABLE TO CREDITORS FOR THE SATISFACTION OF THEIR CLAIMS 1. if the latter should become impossible. 1165[3]) EFFECT OF FORTUITOUS EVENT Determinate Generic Obligation Obligation is not Obligation is Obligation extinguished extinguished based on the rule that the genus never perishes (genus nunquam peruit) Art. 1191. Art. d. or aggravation of injury to the creditor RULE ON FORTUITOUS EVENT: • GENERAL RULE: No liability for fortuitous event • EXCEPTIONS: 1. In case of reciprocal obligations. The court shall decree the rescission claimed. Accion subrogatoria – to be subrogated to all the rights and actions of the debtor save those which are inherent in his person • REQUISITES: a. 2. with the payment of damages in either case. the receipt must specify the installment for which payment is made. after having pursued the property in possession of the debtor to satisfy their claims. even after he has chosen fulfillment. 1192. 1176 The receipt of the principal by the creditor. petition the court to resolve the contract. When the obligor is in default or has promised to deliver the same thing to two or more persons who do not have the same interest (Art.
with a period 2. DETERIORATION. if on part of debtor and suspensive – void 4. Effectivity retroacts to the day of the constitution of the obligation b. 1179 – 1190) PURE – one whose effectivity or extinguishment does not depend upon the fulfillment or non- Improvement If by nature or by time inures to the benefit of the debtor If at the expense of the debtor debtor’s right is only that of a usufructuary REQUISITES FOR THE APPLICATION OF ARTICLE 1189 a. Restore to each other what was received plus interest/fruits 3. The debtor's acts are fraudulent Without the fault of the debtor Obligation is extinguished Impairment borne by the creditor With the fault of the debtor Debtor obliged to pay damages Creditor may choose between rescission or its fulfillment with damages in either case fulfillment of a condition or upon the expiration of a period and is demandable at once CONDITIONAL – one whose effectivity is subordinated to the fulfillment or non-fulfillment of a future AND uncertain event or upon a past event unknown to the parties CONDITION . indivisible 5. Mixed – chance. 1. With term Page 110 of 297 . AND IMPROVEMENTS DURING PENDENCY OF A SUSPENSIVE CONDITION (Art. with a penal clause this picture. Accion Pauliana – asking the court to rescind or to impugn all the acts which the debtor may have done to defraud the creditors (Arts. The creditor has no other legal remedy e. There is loss. No retroactive effect b. Demandability a. Performance a.The obligation must be a real obligation b.The object is a specific or determinate thing c. 1179 . pure. Sanctions for breach QuickTime™ and a TIFF (Uncompressed) decompressor a.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 e.1230 PRIMARY CLASSIFICATION OF OBLIGATIONS UNDER THE CIVIL CODE 1. Joint c. Plurality of object a. 2. Resolutory – happening of condition extinguishes obligation EFFECTS: a. No retroactivity with reference to fruits or interest and prescription c. Obligation extinguished c. Divisible b. The right of account is not purely personal 6. without a penal clause PURE AND CONDITIONAL OBLIGATIONS (See Arts. Debtor – recovery of payment by mistake or even w/o mistake RULES ON LOSS. Casual – dependent on chance or hazard 5. deterioration or improvement of the thing during the pendency of the happening of the condition 2. conditional c. 1189) Loss Deterioration CHAPTER 3. simple b. The condition is fulfilled e. Creditor may preserve rights d. solidary 4. Plurality of subject a. The debtor has performed an act subsequent to the contract. giving advantage to other persons c. Simple b. The creditor is prejudiced by the debtor's act which are in favor of 3rd parties and rescission will benefit the creditor d. There is a credit in favor of plaintiff b. The obligation is subject to a suspensive condition d. b. Potestative – dependent on sole will of 1 party. facultative 3.DIFFERENT KINDS OF OBLIGATIONS See Arts. alternative c. . Suspensive – happening of condition gives rise to obligation • Effects: a. are needed to see b. 1380-1389) • REQUISITES: a.Future and uncertain event or a past event unknown to the parties 1. or any of parties 6.
Suspensive ( ex die ) –obligation becomes demandable on the day stipulated WHEN COURTS MAY FIX PERIOD: 1. it is presumed to have been established for the benefit of both creditor and debtor. when there is a just cause for fixing a period 4. pre-existing obligation b. If the debtor binds himself when his means permit him to do so PERIOD FOR WHOSE BENEFIT • GENERAL RULE: When a period is designated for the performance or fulfillment of an obligation. 1196) WHEN STIPULATION SAYS “PAYABLE WHEN ABLE” – IT IS WITH A PERIOD. unless security provided • Did not deliver security promised • Impaired security through his own acts or through fortuitous event unless he gives new securities equally satisfactory • Violates undertaking in consideration of extension of period • Attempts to abscond TERM Interval of time which is future and certain Time w/c must necessarily come although it may not be known when QuickTime™ and aan Exerts Exerts an influence sed) decompressor influence upon TIFF (Uncompres are upon the time needed to the very existence of the of see this picture. in simple or remuneratory donations d. Resolutory ( in diem ) – demandable at once but terminates upon arrival of the day certain • Day certain – that which must necessarily come. although it may not be known when 2. demandability or obligation itself extinguishment of an obligation Does not have any Has retroactive effect retroactive effect unless there is an agreement to the CONDITION Fact or event which is future or uncertain or a past event unknown to the parties Future and uncertain fact or event which may or may not happen Page 111 of 297 . the existence of the obligation is affected When it is left exclusively to the will of the debtor. Negative – effective from moment of time elapsed or evident it can't happen IMPOSSIBLE AND ILLEGAL CONDITIONS • GENERAL RULE: They shall annul obligation which depends upon them • EXCEPTIONS: a. but from its nature and circumstances it can be inferred that a period was intended by the parties 2. Positive – extinguished if time expires or indubitable of condition to happen b. • EXCEPTION: When it appears from the tenor of the obligation or other circumstances that the period has been established in favor of one or the other. PERIOD FOR THE BENEFIT OF THE CREDITOR • Creditor may demand the fulfillment of the obligation at any time but the debtor cannot compel him to accept before the expiration of the period PERIOD FOR THE BENEFIT OF THE DEBTOR • Debtor may oppose any premature demand of the creditor but he may renounce the benefit of the period by performing his obligation in advance (Manresa) WHEN DEBTOR LOSES RIGHT TO PERIOD: • Insolvency of debtor. if obligation is divisible c. conditions not to do an impossible thing contrary When it is left exclusively to the will of the debtor. REMEDY: 1. testamentary dispositions e. Agreement among parties 2. If the obligation does not fix a period.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 a. If the duration of the period depends upon the will of the debtor 3. the obligation is void the OBLIGATIONS WITH A PERIOD WITH A PERIOD – An obligation which depends on a future and certain event (See Arts 1193. Court shall fix period of payment when parties unable to agree KINDS: 1. In case of reciprocal obligations.
If right of choice belongs to the creditor • If 1 of the things is lost through a fortuitous event. the substitute does not have to be given.only one prestation has been agreed upon but another may be given in substitution EFFECT OF LOSS OR DETERIORA0TION THRU NEGLIGENCE. the choice by the creditor shall fall REQUISITES FOR MAKING THE CHOICE: 1. ALTERNATIVE OBLIGATIONS (See Arts. through the fault of the former. the debtor shall perform the obligation by delivering that which the creditor should choose from among the remainder or that which remainsQuickTime™ 1 subsists if only and a TIFF of 1 of the things occurs through decompressor • If the loss (Uncompressed) this picture. debtor cannot be held liable for damages • If 1 or more but not all of the things are lost or one or some but not all of the prestations cannot be performed due to fortuitous event or fault of the debtor.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 upon the price of any 1 of them. the principal must still be given d) The right of choice is given only to the debtor d) Right to choose may be given either to debtor or creditor JOINT AND SOLIDARY OBLIGATIONS (See Arts. nullity of P remains carries with it nullity of S c) If it is impossible to give all except one. the debtor must comply by performing that which remain • If all were lost by fault of the debtor the later is liable for the value of the last thing or service which became impossible 2. Made properly so that creditor or his agent will actually know 2. 1207 – 1222) JOINT – presumption when two or more creditors or two or more debtors concur in one and the same obligation EXCEPTIONS TO THE PRESUMPTION 1. Made with full knowledge that a selection is indeed being made 3. were lost. except one. If the right of choice belongs to the debtor • If through a fortuitous event all were lost. the creditor may claim any of those subsisting or the price of that which. Made to all proper persons 6. if it is impossible to give the substitute. has disappeared with a right to damages • If all the things are lost through the fault of the debtor. when expressly stated that there is solidarity 2. are needed to see the fault of the debtor. Made voluntarily and freely 4.no liability • Of the substitute after substitution is made – with liability ALTERNATIVE – bound by different prestations but only one is due RIGHT OF CHOICE IN ALTERNATIVE OBLIGATIONS • As a general rule the right of choice belongs to debtor EFFECT OF LOSS OF OBJECTS OF ALTERNATIVE OBLIGATIONS 1. creditor cannot hold the debtor liable for damages because the debtor can still comply with his obligation • If all things. the last one must still be given c) If it is impossible to give the principal. FACULTATIVE ALTERNATIVE FACULTATIVE a) Only one thing is due a) Various things are due but but a substitute may be to render the giving principally given payment/fulfillment easy of one is sufficient b) If one of b) If principal obligations prestations is illegal. May be waived. also with indemnity for damages. expressly or impliedly ALTERNATIVE vs. DELAY OR FRAUD OF OBLIGOR: • Of thing intended as substitute . when a charge or condition is imposed upon heirs or legatees and the testament expressly makes the charge or condition in solidum (Manresa) Page 112 of 297 . Made w/o conditions unless agreed by the creditor 7. when the law requires solidarity 3. when the nature of the obligation requires solidarity 4. Made in due time – before or upon maturity 5. 1199 – 1206) FACULTATIVE . is void and there is no others may be valid necessity of giving the but obligation substitute.
although each for his own share. When there is liability on obligation is converted the part of the debtors into 1 of indemnity for because of the breach. 2. Bailees in commodatum • EFFECTS: a. indivisibility of the obligation is terminated debtors remains SOLIDARY – must be expressed in stipulation or provided by law or by nature of obligation 1. Insolvency of one – others are liable for share pro-rata c. INDIVISIBILITY SOLIDARITY Refers to the Refers to the legal tie and prestation which Time™ and a consequently to the Quick decompressor constitutes the TIFF (Uncompressed) this picture. Conventional – agreed upon by the parties 5. and accessories of a felony e. Interruption in payment by one does not benefit or prejudice the other 3.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 5. the fulfillment of or compliance with the obligation requires the concurrence of all the debtors. If there are 2 or more debtors. otherwise – interest can be charged b. although each for his own share. it is converted into one of indemnity for damages. Remission made after payment is made – codebtor still entitled to reimbursement f. accomplices. is also necessary for the enforcement of the obligation EFFECT OF BREACH • If one of the joint debtors fails to comply with his undertaking. Payment made before debt is due. Obligations arising from tort b. Effect of insolvency or death of co-debtor – still liable for whole amount g. damage and interest Page 113 of 297 . Each creditor can demand for the payment of his proportionate share of the credit. Demand on one produces delay only with respect to the debt 2. Liability of principals. later on collect from any d. No reimbursement if payment is made after prescription or became illegal e. Mixed – on the part of the obligors and obligees. Legal – imposed by law • Instances where law imposes solidary obligation: a. when a solidary responsibility is imputed by a final judgment upon several defendants (Gutierrez v. no interest can be charged. Fault of any debtor – every one is responsible – price. Active – on the part of creditor or oblige • EFFECTS: • Death of 1 solidary creditor transmits share to heirs (but collectively) • Each creditor represents the other in the act of recovery of payment • Credit is divided equally between creditors as among themselves • Debtor may pay any of the solidary creditors 2. If there are 2 or more creditors. Innocent joint debtor shall not contribute to the indemnity beyond their corresponding share of the obligation. If different terms and conditions – collect only what is due. The obligation can be enforced only by proceeding against all of the debtors. Legal provisions regarding obligation of devisees and legatees d. or the part of the debtors and the creditors 4. the concurrence or collective act of all the creditors. Gutierrez) EFFECTS OF JOINT LIABILITY 1. Passive – on the part of debtors or obligors • EFFECTS: • Each debtor may be requested to pay whole obligation with right to recover from codebtors • Interruption of prescription to one creditor affects all • Interest from delay on 1 debtor is borne by all 3. the obligation can no longer be fulfilled or performed. Insolvency of one debtor does not affect other debtors JOINT DIVISIBLE OBLIGATIONS 1. or parties of the object to subjects are needed see of the obligation obligation Plurality of subjects is Plurality of subjects is not required indispensable In case of breach. Vices of one debtor to creditor has no effect on the others 4. Obligations arising from quasi-contracts c. A joint creditor cannot act in representation of the other creditors while a joint debtor cannot be compelled to answer for the acts or liability of the other debtors JOINT INDIVISIBLE OBLIGATIONS 1. while each debtor can be held liable only for the payment of his proportionate share of the debt 2. Consequently. damages because of the solidarilty among the breach.
damage can only be demandedQuickTime™ff. Subsidiary . Payor . the repayment is only to the extent that the payment has been beneficial to debtor b. Exclusive . There is subrogation rd except if the 3 person intended it to be a donation iii.delivery of money and performance. can be anyone as long as it is with the creditor's consent RD ii. cases: in the and a TIFF decompresso a. Identity b. Complete/ personal defense – total or partial ( up to amount of share only ) if not personal to him EFFECT OF LOSS OR IMPOSSIBILITY OF THE PRESTATION: 1. Integrity or completeness c. needed to see b. or anyone interested in the fulfillment of the obligation. he can be the debtor himself or his heirs or assigns or his agent.if any of the ff. 3 person pays/performs . Indivisibility 2. Condonation or remission of debt 4.1304 MODES OF EXTINGUISHMENT OF OBLIGATION (Art. Loss of the thing due 3. Rescission 9.must be made by proper party to proper party a. Loss due to fortuitous event after default – there is liability (because of default) DIVISIBLE AND INDIVISIBLE OBLIGATIONS (See Arts. Partial/irregular performance 2. only penalty can be demanded. If with fault – there is liability (also for damage and interest) 3. or agent rd ii. With dolo ( not of creditor ) CAUSES FOR REDUCTION OF PENALTY: 1. Payee i. Payor i. Refusal to pay penalty c.EXTINGUISHMENT OF OBLIGATIONS See Arts. except: Penalty is joint or cumulative 2. Fulfillment of resolutory condition PAYMENT OR PERFORMANCE . 3rd person pays/performs with consent of creditor but not with debtor's consent.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 h. 1226 – 1230) WITH PENAL CLAUSE – One to which an accessory undertaking is attached for the purpose of insuring its performance by virtue of which the obligor is bound to pay a stipulated indemnity or perform a stipulated prestation in case of breach CHARACTERISTICS OF PENAL CLAUSES: 1. Penalty provided is iniquitous/ unconscionable . 1232 .only the creditor's consent. in any other manner of the obligation REQUISITES FOR PAYMENT/PERFORMANCE VALID INDIVISIBLE performance • • • • To give definite things Not susceptible of partial performance Provided by law Intention of parties OBLIGATIONS WITH A PENAL CLAUSE (See Arts. principal cannot be demanded.creditor or obligee or successor in interest of transferee. Stipulation(Uncompressed) this right r are– granting picture. Payment or performance 2. If performance is done also with debtor's consent .As a general rule. 1223 – 1225) DIVISIBLE . Confusion or merger of rights 5. Compensation 6.he takes the place of the debtor. Annulment 8. If without fault – no liability 2. Novation 7. With respect to parties .takes place of damage. Payee . With respect to prestation itself a.obligation that is capable of partial performance • • • Execution of certain no of days work Expressed by metrical units Nature of obligation – susceptible of partial fulfillment – one not capable of partial 1.the one performing. 3 person . 1231): 1. . concur: • It must have redounded to the obligee's • benefit and only to the extent of such benefit Page 114 of 297 CHAPTER 4.
Parties so stipulate b. less damages suffered by the obligee. is made by operation of law WHERE PAYMENT SHOULD BE MADE 1. par 1. 1234. Various debts of the same kind b. When application of payment is made by the party for whose benefit the term has been constituted c. knowing its incompleteness or irregularity.must be according to the obligation RD • Art. or 2. Payment is not enough to extinguish all debts HOW APPLICATION IS MADE: a. By creditor’s conduct. If there is no express stipulation and the undertaking is to deliver a specific thing – at the place where the thing might be at the moment the obligation was constituted 3. and without expressing any protest or objection. A debt(Uncompressed) decompressor shall not bea understood to have TIFF needed to see or service in which the been paid unlessarethe thingthis picture. PRESUMED IF 1. less damages suffered by the oblige • Right to rescind cannot be used for slight breach SPECIAL RULES/FORMS OF PAYMENT 1. All debts must be due • EXCEPTION: there may be application of payment even if all debts are not yet due if: a. 3rd person acquires the creditor’s rights rd 2. (1157) Art. (n) WHO MAKES APPLICATION OF DEBTS Page 115 of 297 .3 . debtor has been led to make the payment (estoppel) PAYMENT MADE IN GOOD FAITH TO A PERSON IN POSSESSION OF CREDIT SHALL RELEASE DEBTOR. creditor makes it by so stating in the receipt that he issues – unless there is cause for invalidating the contract c. Creditor must be in possession of the credit and not merely the evidence of indebtedness • NOTE: With respect to time and place of payment . If not. then application. Payment by debtor must be made in good faith 2. 1233. performance is total iii.the benefit is total so. Incapacitated person kept the thing delivered. (n) • • • • Attempt in Good Faith to perform without willful or intentional departure Deviation is slight Omission/Defect is technical or unimportant Must not be so material that intention of parties is not attained EFFECT OF SUBSTANTIAL PERFORMANCE IN GOOD FAITH • Obligor may recover as though there has been strict and complete fulfillment. APPLICATION OF PAYMENTS – the designation of the debt which payment shall be made. REQUISITES: 1. If neither the debtor nor creditor has made the application or if the application is not valid. the obligation is deemed fully complied with. Same debtor c. When the obligee accepts the performance. In other case – in the place of the domicile of the debtor • Time of payment . as the case may be. Insofar as the payment has been beneficial to him PAYMENT TO 3 PARTY NOT AUTHORIZED. out of 2 or more debts owing the same creditor: stipulation or application of party given benefit of period – OK. the obligor may recover as though there had been a strict and complete fulfillment.time stipulated • Effect of payment – extinguish obligation Except: order to retain debt SUBSTANTIAL PERFORMANCE QuickTime™ and Art. Debtor makes the designation b. to be valid: must be debtor’s choice or w/ consent of debtor REQUISITES FOR THE APPLICATION OF PAYMENT: a.2. In the place designated in the obligation 2. Creditor ratifies payment to 3 person 3. 1235. obligation consists has been completely delivered or rendered. If the obligation has been substantially performed in good faith. Anyone in possession of the credit .Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 It falls under art 1241. VALID IF PROVED AND ONLY TO THE EXTENT OF BENEFIT.but will apply only if debt has not been previously garnished PAYMENT MADE TO AN INCAPACITATED PERSON. After payment. Same creditor d. VALID IF 1.
DACION EN PAGO DACION EN PAGO – mode of extinguishing an obligation whereby the debtor alienates in favor of the creditor property for the satisfaction of monetary debt. they are merely assignees with authority to sell b. extinguish up to amount of net proceeds ( unless w/ contrary stipulation ) 4. Debtor is released up to the amount of the net proceeds of the sale. When monthly statements were made by the bank specifying the application and the debtor signed said statements approving the status of her account as thus sent to her monthly by the bank d. Complete or partial insolvency of debtor QuickTime™ and a TIFF (Uncompressed) decompressor are needed to see this picture. .Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 • • GENERAL RULE: Debtor EXCEPTION: Creditor a. Acceptance or consent on the part of the creditors EFFECTS OF ASSIGNMENT: a. unless there is a stipulation to the contrary c. Debtor without protest accepts receipt in which creditor specified expressly and unmistakably the obligation to which such payment was to be applied – debtor in this case renounced the right of choice b. Abandonment of all debtor’s property not exempt from execution e. unless there is a contrary intention 2. In case no application is made: • Apply payment to the most onerous • If debts are of the same nature and burden. generally requires prior tender of payment REQUISITES OF VALID CONSIGNATION: a. A special form of payment because 1 element of payment is missing: IDENTITY CONDITIONS FOR A VALID DACION: a. CONSIGNATION TENDER -the act of offering the creditor what is due him together with a demand that the creditor accept the same (When creditor refuses w/o just cause to accept payment. application shall be made to all proportionately d. in the order ordinarily established by law DATION IN PAYMENT One creditor Not necessarily in state of financial difficulty Thing delivered is considered as equivalent of performance Payment extinguishes obligation to the extent of the value of the thing delivered as agreed upon. Voluntary – agreement of creditors REQUISITES OF VOLUNTARY ASSIGNMENT: a. CESSION or ASSIGNMENT CESSION/ASSIGNMENT IN FAVOR OF CREDITORS – the process by which debtor transfer all the properties not subject to execution in favor of creditors is that the latter may sell them and thus. or in default of agreement. he becomes in mora accepiendi and debtor is released from responsibility if he consigns the thing or sum due) CONSIGNATION – the act of depositing the thing due with the court or judicial authorities whenever the creditor cannot accept or refuses to accept payment. apply the proceeds to their credits. Creditors do not become the owner. More than one debt b. Consignation was made because of some legal cause . for a sale presupposes the consent of both partie b. Creditors will collect credits in the order of preference agreed upon. extinguish up to amount of property unless w/ contrary stipulation. assigned. If dacion will not prejudice the other creditors c. If creditor consents. More than one creditor c. Legal – governed by the insolvency law b. proved or implied from the conduct of the creditor CESSION IN PAYMENT Plurality of creditors Debtor must b partially or relatively insolvent Universality of property of debtor is what is ceded Merely releases debtor for net proceeds of things ceded of.previous valid tender was Page 116 of 297 KINDS OF ASSIGNMENT: a. Existence of valid debt b. If debtor is not judicially declared insolvent • NOTE: DACION is governed by the law on sales 4.
When it disappears in such a way that: its existence is unknown or it cannot be recovered WHEN IS THERE IMPOSSIBILITY OF PERFORMANCE: a. after acceptance by creditor or after judge declares that consignation has been properly made – risk of loss is shifted to creditor) CONSIGNATION W/O PRIOR TENDER – allowed in: a. obligation remains ( debtor bears risk of loss at the meantime. The event was not due to the act of any of the parties d. The event or change could not have been foreseen at the time of the execution of the contract b.agreement is valid only if the same conditions prevailing at time of contracting continue to exist at the time of performance. Obligor may be released in whole or in part based on this ground. Running of interest is suspended c. Before creditor accepts or before judge declares consignation has been properly made. REQUISITES a. Creditor absent or unknown/ does not appear at the place of payment b. flood.when prohibited by are – caused as law ii. Debtor is at fault b. Incapacitated to receive payment at the time it is due c. The performance is extremely difficult. Actual deposit/Consignation with proper judicial authorities nd e. Debtor may ask judge to order cancellation of obligation b. it is extinguished by impossibility) c. When the object perishes (physically) b. REBUS SIC STANTIBUS REBUS SIC STANTIBUS . Directlyneeded to see this picture. Title of obligation has been lost 5. If the generic thing has already been segregated c. When it goes out of commerce c. Legal impossibility and a QuickTime™ TIFF (Uncompressed) decompressor i. 2 or more creditor claiming the same right to collect e. Monetary obligation OBLIGATION TO DO • GENERAL RULE: Debtor is released when prestation becomes legally or physically impossible without fault on part of debtor EFFECT OF PARTIAL LOSS a. Physical impossibility b. Refuses to issue receipt w/o just cause d. CONDONATION Page 117 of 297 . contractual stipulation or the nature of the obligation requires assumption of risk on part of debtor OBLIGATION TO DELIVER A GENERIC THING • GENERAL RULE: Not extinguished • EXCEPTIONS: a. earthquake. but not impossible (because if it is impossible. If the generic thing is delimited b. LOSS OF THE THING DUE LOSS OF THE THING DUE – partial or total/ includes impossibility of performance WHEN IS THERE A LOSS a. The contract is for a future prestation 6.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 unjustly refused or circumstances making previous tender exempt c. When loss insignificant – not enough to extinguish obligation NOTE: judicial determination of extent is necessary WHEN THING IS LOST IN THE POSSESSION OF THE DEBTOR • Presumption: Loss due to debtor’s fault (disputable) • Exception: natural calamity. storm 5. Debtor is made liable for fortuitous event because of a provision of law. Indirectly – caused as when debtor is required to enter a military draft OBLIGATION TO DELIVER A SPECIFIC THING • GENERAL RULE: Extinguished • EXCEPTIONS: a. When loss is significant – may be enough to extinguish obligation b. Subsequent notice of Consignation (2 notice) EFFECTS: EXTINGUISHMENT OF OBLIGATION a. Prior Notice of Consignation had been given to the person interested in performance of st obligation (1 notice) d.
accessory – principal still outstanding c. Express – formalities of donation b. Waivers or remission are not to be presumed generally 6. Neither debt must be retained in a rd controversy commenced by 3 person and communicated w/ debtor (neither debt is garnished) KINDS OF COMPENSATION a. Revocable – subject to rule on inofficious donation ( excessive. even if not equal debts – only up to concurring amount b. claim for future support. Principal – accessory also condoned b. express or implied REQUISITES: a. Revocable. if reason for confusion ceases.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 CONDONATION/REMISSION OF THE DEBT – gratuitous abandonment of debt. The obligation involved must be same and identical – one obligation only d. Both debts must consist in sum of money or if consumable . criminal offense. otherwise there would be nothing to condone) c.even if unknown to parties and if payable in diff places. Conventional – agreement of parties is enough. an act of liberality ) d. There must be an agreement b. made to prescribe w/o demanding Page 118 of 297 . Both debts are due d. forget other requirement as long as both consented c. Legal – by operation of law. of the same kind or quality c. Depositum. Implied – conduct is sufficient Extent: a. If in hands of solidary debtor . COMPENSATION COMPENSATION – Set off. as long as 5 requisites concur. Parties must be capacitated and must consent. implied in mortis causa and expressed inter vivos e. right to claim. partial REQUISITES OF IMPLIED CONDONATION 1. when evidence of indebtedness is w/ debtor – presumed voluntarily delivery by creditor. Effect of deliveryQuickTime™ and a of indebtedness of evidence TIFF (Uncompressed) decompressor is conclusion that debt is are needed to see this picture. Merger must be clear and definite c. CONFUSION OR MERGER CONFUSION OR MERGER OF RIGHTS– character of debtor and creditor is merged in same person with respect to same obligation REQUISITES: a. taxes Forms: a. Tacit – voluntary destruction of instrument by creditor. There must be a subject matter (object of the remission. total Kinds: a. Obligation remitted must have been demandable at the time of remission h. Both parties must be mutually creditors and debtors . requires acceptance by obligor. rules of donation applies. indemnity for expense of exchanges. donation. the obligation is revived 7. Facultative – one party has choice of claiming/opposing one who has benefit of period may choose to compensate: i.in their own right and as principals b. Not all requisites are present ii. accessory obligation of pledge – condoned. condoned – already conclusion. Formalities of a donation are required in the case of an express remission f. If in hands of joint debtor – only his share is condoned b.whole debt is condoned c. Cause of consideration must be liberality (Essentially gratuitous. it is a mode of extinguishment to the concurrent amount the obligation of persons who are in their own right reciprocally debtors or creditors REQUISITES: a. commodatum. It must take place between principal debtor and principal creditor only b. Both debts are liquidated and demandable (determined) e. rebuttable b. voluntary delivery of private document a. Voluntary delivery – presumption. rebuttable 2. presumption only. legitime is impaired ) and ingratitude and condition not followed g.
Stipulation to see this picture. With knowledge but w/o consent of debtor – compensation may be set up as to debts maturing prior to assignment iii. needs pleading and proof. Delegante – old debtor 2. Capacity and consent of parties to the new obligation d. initiative is from 3rd person or new debtor.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 d. initiative of old debtor. upon order of the court. ii. old debtor released from obligation. Delegado – new debtor rd ii. also nothing to novate d. If new obligation has condition i. no need for consent. Old obligation subsists if new obligation is void or voidable but annulled already (except: intention of parties) c. new debtor and creditor to consent. If made after compensation took place – no effect. If old obligation has condition i. If made before compensation took place – depends i. Judicial – set off. no new obligation since nothing to novate ii. If Resolutory and it occurred – old obligation already extinguished. clearly established 2.(Uncompressed) decompressor except: and a TIFF are needed to contrary i. Stipulation pour autrui unless beneficiary consents iii. if w/o consent or against will . if new is w/o condition – deemed attached to new e. Valid obligation b. Modificatory novation only. all parties to consent. obliged to w/c is less onerous iv. REAL/OBJECTIVE – change object. Subrogating 3 person to rights of creditor ( active ) 1. Total – when 2 debts are of the same amount f. only beneficial reimbursement. all requirements must concur except liquidation e. Partial – when 2 debts are not of the same amount EFFECT OF ASSIGNMENT OF CREDIT TO 3RD PERSON. full reimbursement. cause/consideration or principal condition b. With consent of debtor – debtor is estopped unless he reserves his right and gave notice to assignee ii. CAN THERE STILL BE COMPENSATION a. W/o knowledge – compensation may be set-up on all debts prior to his knowledge 8. Legal . Intent to extinguish old obligation – expressed or implied: completely/substantially incompatible old and new obligation on every point c. If resolutory: valid ii. If old obligation has condition.creditor 3. If suspensive and did not materialize: old obligation is enforced KINDS OF NOVATION: a.takes place by operation of law. compensation already perfected b.agreement and consent of all parties. subject to full reimbursement and subrogation if made w/ consent of old debtor. Substituting person of debtor (passive) • EXPROMISION. must be compatible with the new obligation. if new debtor is insolvent. Delegatario . Valid new obligation EFFECTS OF NOVATION: a. not presumed except as provided for in law: PRESUMED WHENPage 119 of 297 NOVATION – extinguishment of obligation by creating/ substituting a new one in its place • • • Changing object or principal conditions Substituting person of debtor rd Subrogating 3 person in right of creditor REQUISITES: a. PERSONAL/SUBJECTIVE i. if insolvent new debtor – not responsible old debtor because obligation extinguished by valid novation unless: insolvency already existing and of public knowledge or know to him at time of delegacion 1. not responsible since w/o his consent • DELEGACION. Old obligation is void . If Suspensive and it never occurred –as if no obligation. Extinguishment of principal carries QuickTime™ accessory. NOVATION b. Conventional .
etc. needs consent of creditor – express or implied 3. debtor is not necessarily released from debt 2. Parties must have clearly and deliberately conferred a favor upon a 3rd person 2. can be done w/o consent of creditor 3. their assigns.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 a. As to importance or dependence of one upon another a. takes effect upon notification TITLE II – C O N T R A C T S CHAPTER 1. Accessory – depends on another contract for its existence. b. The third person communicates his acceptance before revocation by the original parties 6. Gratuitous – founded on liberality c. one is extinguished and new one created 4. pledge. Existence of a valid contract 2. a means through which future contracts may be made 4. Unilateral – only one of the parties has an obligations Page 120 of 297 1. Formal/solemn – perfected by conformity to essential formalities (donation ) 2. new debtor is obliged to pay CONVENTIONAL SUBROGATION governed by Arts. may not exist on its own c. two obligations. 6. GENERAL PROVISIONS See Arts. As to cause a. As to parties obliged a. Obligatory Force – parties are bound from perfection of contract: . deposit ) c. Remunerative – prestation is given for service previously rendered not as obligation 3. Stipulation pour autrui REQUISITES OF STIPULATION POUR AUTRUI 1. Accion pauliana 2. not the whole contract 3. Art 1314 REQUISITES OF ART 1312: 1. not left to will of one of parties 3. 3rd person has no obligation to pay if insolvent EXCEPTION TO RELATIVITY: 1. 1624 to 1627 debtor’s consent is not required transmission of right of the creditor to third person without modifying or extinguishing the obligation defects and vices in the old obligation and not cured as far as the debtor is concerned. immoral. Neither of the contracting parties bears the legal rd representation or authorization of 3 party 5. Knowledge of the contract by a 3rd person rd 3. one obligation 4. Art 1312. Creditor pays another preferred creditor even w/o debtor’s knowledge rd 3 person not interested in obligation pays w/ approval of debtor Person interested in fulfillment of obligation pays debt even w/o knowledge of debtor Change of debtor 4. The stipulation in favor of a 3rd person should be a part of. PRINCIPAL CHARACTERISTICS: 1. Accion directa 3. Interference by the 3 person KINDS OF CONTRACTS 1. As to perfection or formation a. Fulfill what has been expressly stipulated All consequences w/c may be in keeping with good faith. Autonomy of wills – parties may stipulate anything as long as not illegal. Principal – contract may stand alone b. heirs. c. That the favorable stipulation should not be conditioned or compensated by any kind of obligation whatsoever 4. 1300-1304 debtor’s consent is required extinguishes the obligation and gives rise to a new one defects and vices in the old obligation are cured takes effect upon moment of novation or subrogation ASSIGNMENT OF RIGHTS governed by Arts. Onerous – with valuable consideration b. strangers cannot demand enforcement Difference from payment by 3rd person 1. usage and law Relativity – binding only between the parties. Preparatory – not an end by itself. Consensual – perfected by agreement of parties b. 2. Real – perfected by delivery ( commodatum. Mutuality – performance or validity binds both parties. debtor is released 2. 5. 1305 -a1317 QuickTime™ and TIFF (Uncompressed) decompressor are needed to see this picture.
concurrence of offer and acceptance REQUIREMENTS: 1. Preparation . Manifestation of intent of parties 5. Intentional WHEN OFFER BECOMES INEFFECTIVE: 1. Do ut facias – I give that you may do III. Consent 2. Offer is made to a person absent – acceptance may be made within such time that.Offer inter praesentes must be accepted IMMEDIATELY. Express or implied revocation of the offer by the offeree 3. containingtothedecompressor stipulations he desires. Stated fixed period in the offer 2. Capacity 3. CA 2003 G. Intelligence and free will 4. the contract will be perfected only upon knowledge by the offeror of the express acceptance by the offeree of the offer.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 b. Facio ut des – I do that you may give IV. Consummation – performance CHAPTER 2. Malbarosa vs. plus a new offer which is contained in the amplification. AMPLIFIED ACCEPTANCE • under certain circumstances. Offer is made to a person present – acceptance must be made immediately b. Plurality of subject 2.negotiation 2. an answer can be received from him • NOTE: Acceptance may be revoked before it comes to the knowledge of the offerror. Offers are interrelated – contract is perfected if all the offers are accepted 2. As to name or designation a. RULE ON COMPLEX OFFERS 1.1355 ESSENTIAL ELEMENTS: 1. and he simply asks the other party to agree to them if he wants to enter into the contract • NOTE: We follow the theory of cognition and not the theory of manifestation. 1318 . under normal circumstances. civil interdiction.12576 . Do ut des – I give that you may give II. Definite--unequivocal 2. If the parties intended that there should be an express acceptance. the offer and acceptance concur only when the offeror comes to know. Subject matter becomes illegal or impossible before acceptance is communicated PERIOD FOR ACCEPTANCE 1. a mere amplification on the offer must be understood as an acceptance of the original offer.R. Offers are not interrelated – single acceptance of each offer results in a perfected contract unless the offeror has made it clear that one is dependent upon the other and acceptance of both is necessary. are needed see this picture. and not when the offeree merely manifests his acceptance ELEMENTS OF VALID OFFER / ELEMENTS OF VALID ACCEPTANCE 1. Complete--unconditional 3. Perfection/birth 3. Under our Civil Law. Qualified or conditional acceptance of the offer. An acceptance which is not made in the manner prescribe by the offeror is NOT EFFECTIVE. Subject Matter 3. Nominate b. Innominate I. Facio ut facias – I do that you may do STAGES IN A CONTRACT: 1. insanity or insolvency of either party before acceptance is conveyed 2. Consideration CONSENT CONSENT – meeting of minds between parties on subject matter and cause of contract. – ESSENTIAL REQUISITES OF A CONTRACT See Arts. No stated fixed period a. Bilateral – both parties are required to render reciprocal prestations 5. Cognition by the other party 6. Conformity of manifestation and cognition AUTO CONTRACTS • made by a person acting in another’s name in one capacity COLLECTIVE CONTRACTS • will of majority binds a minority to an agreement notwithstanding the opposition of the latter CONTRACTS OF ADHESION • one party has already a a QuickTime™ and prepared form of a TIFF (Uncompressed) contract. Death. which becomes a counter-offer 4. BUT A COUNTER-OFFER which Page 121 of 297 .
CA (1994) states that a unilateral promise to buy or sell.Padilla to the effect that the minor cannot be estopped if he is too young to give consent. Determining cause for the contract b. Threatened act is unjust and unlawful c.option may be withdrawn anytime before acceptance is communicated but not when supported by a consideration other than purchase price: option money c. They were entered unto by a guardian and the court having jurisdiction had approved the same Based upon public policy and morality Contracts are void entered into CAUSES WHICH VITIATE FREEDOM 1. but mere invitation to make an offer. Those who by reason of age. Illiterates/ deaf-mutes who do not know how to write 4. RULE ON ADVERTISEMENTS AS OFFERS • Business advertisements – Not a definite offer. Minors could not be estopped. Mayfair(264 SCRA 483) held that an option clause in order to be valid and enforceable must indicate the definite price at which the person granting the option is willing to sell. Hospitalized lepers 3. weak mind and other similar causes.person induced by fraud (dolo causante) • NOTE: Dolus bonus (usual exaggerations in trade) are not in themselves fraudulent RULE ON CONTRACTS ENTERED INTO BY QuickTime™ and a MINORS TIFF (Uncompressed) decompressor are needed to see this picture. if not supported by a distinct consideration. mistake may deprive intelligence 6. Equatorial v. guardian or legal represemtative Based upon subjective circumstance of certain person Contracts entered into are merely voidable Disqualification Restrains the very right itself Absolutely disqualified *Ang Yu v. Violence • REQUISITES a. the dissent became the ruling. Minor is estopped for having misrepresented his age and misled the other party (when age is close to age of majority as in the Mercado v Espiritu and Sia Suan v Alcantara cases. Those under civil interdiction 2. DISQUALIFIED TO ENTER INTO CONTRACTS: (contracts entered into are void) 1. Upon reaching age of majority – they ratify the same b. the right of the grantee here is damages and not specific performance. but here the persons who are bound to give them support should pay therefor d. Insane or demented persons 3. take care of themselves and manage their property. in Braganza v Villa-Abrille.person under mistake. Deaf and dumb who are unable to read and write 5. Intimidation • REQUISITES: a. Art 1331 . may be withdrawn but may not be done whimsically or arbitrarily. unless appears otherwise OPTION . *In the Sia Suan v Alcantara case. Such force is the determining cause for giving consent 2. Art 1338 . there is a strong dissent by J. Irresistible physical force b. Minors 2. Subsequently. • GENERAL RULE: VOIDABLE • EXCEPTIONS: a.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 the offeror may accept or reject. contract can be enforced and not only damages. cannot without outside aid. becoming an easy prey for deceit and exploitation Incapacity Restrains the exercise of the right to contract May still enter into contract through parent. Real and serious Page 122 of 297 . unless it appears otherwise • Advertisement for Bidders – only invitation to make proposals and advertiser is not bound to accept the highest or lowest bidder. Paranaque Kings V CA (1997) states that right of PERSONS WHO CANNOT GIVE CONSENT TO A CONTRACT: 1. disease. one that is too young to give consent is too young to be estopped. Intoxicated and under hypnotic spell 5. They were contracts for necessities such as food. Prodigals 4.
contracts entered when ward suffers lesion of more than 25% • immediate.burden of proof is on the person assailing its existence Does not Invalidate Contract per se Exceptions: • fraud • mistake • undue influence • cases specified by law .either existing or in potency 2. Possible 4. Relative – there is intention to be bound but concealed. Undue influence SIMULATED CONTRACTS 1. the loan which it derived its life and existence (ex: mortgage or pledge) THINGS WHICH CANNOT BE THE OBJECT OF CONTRACT: 1. object and cause 2. No prejudice to 3rd persons b. 1356 . form is a manner in which a contract is executed or manifested 1. It must be true 3. sale of land thru agent. Legality or illegality of motive does not affect the existence or validity of contract CAUSA IN SOME CONTRACTS: 1. good customs 3. Licit or not contrary to law. things which are outside the commerce of men 2. objects which are not possible of determination as to their kind CAUSA CAUSA CHAPTER 3. Onerous contracts – the prestation of promise of a thing or service by the other 2. contract of partnership.1358 FORM – in some kind of contracts only as contracts are generally consensual. It must be licit MOTIVE • purely private reason. Accessory – identical with cause of principal contract. morals. contract of antichresis. OBJECT REQUISITES: 1.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 d. Informal – may be entered into whatever form as long as there is consent. – FORM OF CONTRACTS See Arts. etc. presumption of validity but rebuttable Presumed to Exist .produce no legal effect Void . except in cases expressly authorized by law QuickTime™ and a 4. Transmissible Absence Of Causa Illegality Of Causa Falsity Of Causa Causa Not Stated In Contract Inadequacy Of Causa Void . stipulation to pay interest. transfer of large cattle. It must exist 2. Pure Beneficence – mere liberality of the donor or benefactor 4. illegality does not invalidate contract except when it predetermines purpose of contract. impossible things or services 6. concealed contract binds: a.produce no legal effect Voidable – party must prove that cause is untruthful. services which(Uncompressed) decompressor TIFF are contrary to law. public needed to see this picture. direct and most proximate reason why parties enter into contract • REQUISITES: 1. good are customs. Within the commerce of man . fictitious only – void from beginning 2. Remuneratory contracts – the service or benefit remunerated 3. morals. when merged into one Cause Direct and most proximate reason of a contract Objective and juridical reason of contract Cause us always same for each contracting party • Motive or Indirect reasons remote Psychological or purely personal reason The motive differs for each contracting party NOTE: Legality or illegality of cause affects the existence of validity of the contract. policy order or public 5. Absolute – no intention to be bound at all. Not contrary to law. intransmissible rights 3. registration of chattel Page 123 of 297 . future inheritance. Formal – required by law to be in certain specified form such as: donation of real property. Produces a well grounded fear that the person making it will carry it over 3. Determinate as to its kind or determinable w/o need to enter into a new contract 5.
000 3. Facts put in issue in pleadings • NOTE: prescribes in 10 years from date of execution of instrument WHEN REFORMATION NOT AVAILABLE: 1.1422 KINDS OF DEFECTIVE CONTRACTS: 1. . There is meeting of minds c. transmission or reformation of real rights over immovables ii. Estoppel when party has brought suit to enforce it CHAPTER 5. Cession. donation of personal prop in excess of 5.1379 • CHAPTER 6. one party was mistaken b. Clear and convincing proof e.contract is valid and enforceable.donation and acceptance of real property b. Simple donation inter vivos 2. accident . Cession of action of rights proceeding from an act appearing in a public inst. needed only to bind 3rd parties Ex: public documents needed for the ff: i. clerk. Real – creation of real rights over immovable prop must be written WHEN FORM IS IMPORTANT: 1.Statute of Frauds. repudiation. For convenience • • GENERAL RULE: contract is valid and binding in whatever form provided that 3 essential requisites concur EXCEPTIONS a. 1370 . Law requires contract to be in some form for convenience . CAUSES/GROUNDS: 1. Under art 1381: Contracts entered into by persons exercising fiduciary capacity: Page 124 of 297 CHAPTER 4. Law requires contract to be in some form for validity . RESCISSIBLE CONTRACTS – Those which have caused a particular economic damage rd either to one of the parties or to a 3 person and which may be set aside even if valid. to the extent of the damage caused' REQUISITES: a. Others specified by law – to avoid frustration of true intent • Requisites: a. When real agreement is void 4. Wills 3. party in good faith may ask for reformation 3. It may be set aside in whole or in part. All other docs where amount involved is in excess of 500 ( must be written even private docs ) NOTE: RA 8792 (E-COMMERCE ACT) – formal requirements to make contracts effective as against third persons and to establish the existence of acontract are deemed complied with provided that the electronic document is unaltered and can be authenticated as to be useable for future reference. 1370 . True intention not expressed in instrument d. negligence . renunciation of hereditary rights/CPG iii. Mutual: instrument includes something w/c should not be there or omit what should be there a. – REFORMATION OF INSTRUMENTS See Arts.DEFECTIVE CONTRACTS See Arts.a QuickTime™ and TIFF (Uncompressed) decompressor are needed to see this picture. typist 4. fraud. Contract must be rescissible i. – INTERPRETATION OF CONTRACTS See Arts. Unilateral a. Law requires contract to be in some form to be enforceable . inequitable conduct.1369 REFORMATION OF CONTRACTS – remedy to conform to real intention of parties due to mistake. Contracts w/c object is creation. need ratification to be enforceable c. Power to administer property for another iv. For validity (formal/solemn contracts) 2. bad faith of drafter. There is a written instrument b. Mutual b. contract is valid but right to enforce cannot be exercised. Mistake by 3rd persons – due to ignorance. clear and convincing proof d. For enforceability (statute of frauds) 3. v.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 mortgage. 1359 . lack of skill. causes failure of instrument to express true intention 2. Mistake of fact c. other either acted fraudulently or inequitably or knew but concealed c.
sale upon credit by an insolvent debtor d. Objects of litigation. 1542. Can be assailed only by the party whose consent was defective or his heirs or assigns WHAT CONTRACTS ARE VOIDABLE: a. contract entered into by defendant w/o knowledge or approval of litigants or judicial authority 5. 1556. 2. consideration toof this the conveyance is are needed see picture. In state of hypnotic spell Page 125 of 297 civil . creditor did not receive anything from contract b. VOIDABLE CONTRACTS – intrinsic defect. prejudices claim of others 6. 1538. The things must not have been passed to 3rd parties who did not act in bad faith 4. Can be confirmed ( NOTE: confirmation is the proper term for curing the defect of a voidable contract) d. subject to indemnity only. Nonperformance by the other is not important Applies to both unilateral and reciprocal obligations Even a third person who is prejudiced by the contract may demand the rescission of the contract.art 1526. 1539. Court cannot grant extension of time for fulfillment of the obligation Its purpose is to seek reparation for the damage or injury caused. Entered into by guardian whenever ward suffers damage by more than 1/4 of value of object 2. if absentee suffers lesion by more than ¼ of value of property 3. It must be made within the prescribed period (of 4 years) e. Minors ( below 18 ) b.Payments made in a state of insolvency 1. thing already in possession of party in good faith. Payment by an insolvent – on debts w/c are not yet due. 1567 and 1659 ii. Contracts where rescission is based on fraud committed on creditor (accion pauliana) 4. transfer made between father and son where there is present any of the above circumstances g. failure of the vendee to take exclusive possession of the property Rescission in Art 1191 It is a principal action retaliatory in character Only ground is nonperformance of one’s obligation or what is incumbent upon him Applies only to reciprocal obligation Only a party to the contract may demand fulfillment or seek the rescission of the contract Court may fix a period or grant extension of time for the fulfillment of the obligation Its purpose is to cancel the contract Rescission Proper in Art 1381 it is a subsidiary remedy There are 5 grounds to rescind. 1534. Provided for by law . evidence of indebtedness or complete insolvency 2. Insane unless acted in lucid interval c. defect is due to vice of consent or legal incapacity • CHARACTERISTICS: a. Things w/c are the objects of the contract and their fruits b. if there are 2 st or more alienations – liability of 1 infractor BADGES OF FRAUD QuickTime™ and a TIFF (Uncompressed) decompressor a. transfer was made by a debtor after a suit has been begun and while it is pending against him c. Plaintiff has no other means to obtain reparation. May be assailed or attacked only in an action for that purpose c. valid until annulled. Effective until set aside b. Price with interest MUTUAL RESTITUTION NOT APPLICABLE WHEN a. thus allowing partial rescission of the contract OBLIGATION CREATED BY THE RESCISSION OF THE CONTRACT: Mutual Restitution a.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 1. 1560. inadequate or fictitious b. In state of drunkenness f. Deaf mute who can’t read or write d. Under art 1382 . Agreed upon in representation of absentees. Persons specially disqualified: interdiction e. Plaintiff must be able to return whatever he may be obliged to return due to rescission 3. transfer of all his property by a debtor when he is financially embarrassed or insolvent f.
Refers to the principal conditions in an agreement d. FRAUD • thru insidious words or machinations of contracting parties. holds the guilty party liable for DAMAGES (Art. Incidental Fraud (dolo incidente) – deception which are not serious and without which the other party would still have entered into the contract. Intimidation. the injured party must have executed an act which expressly or impliedly conveys an intention to waive his right c. Hongkong and Shanghai Bank. except in case of ratification effected by the guardian to contracts entered into by an incapacitated. • • • CAUSES OF EXTINCTION OF ACTION TO ANNUL a. violence. fraud – 4 years from time of discovery iii. but the person obliged to return the same can be held liable only for the value of the thing at the time of the loss. 12 Phil 252. iii. 76 SCRA 514. RATIFICATION • REQUISITES i. Page 126 of 297 Deleted: (9a) Formatted: Font: 10 pt Formatted: Font: 10 pt . The doctrine on reluctant consent provides that a contract is still valid even if one of the parties entered it against his wishes or even against his better judgment. Causal Fraud (dolo causante) – deception of serious charcter without which the other party QuickTime™ and a would TIFF (Uncompressed) decompressor into. but without interest thereon. undue influence 4 years from time defect of consent ceases ii. Contracts are also valid even though they are entered into by one of the parties without hope of advantage or profit.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 MISTAKE • false belief into something • REQUISITES: a. PRESCRIPTION . spouse. ascendants or descendants (moral coercion) UNDUE INFLUENCE • person takes improper advantage of his power over will of another depriving latter of reasonable freedom of choice Martinez vs. discovery of fraud must be reckoned to have taken place from the time the document was registered in the office of the register of deeds. VOIDABLE needed to1338) b. or resulted to substantial mistake. Registration constitutes constructive notice to the whole world b. contract is not have entered are (Art.when mistake is mutual and frustrates the real purpose of parties VIOLENCE • serious or irresistible force is employed to wrest consent INTIMIDATION • one party is compelled by a reasonable and wellgrounded fear of an imminent and grave danger upon person and property of himself. other is induced to enter into contract w/o w/c he will not enter (dolo causante) KINDS OF FRAUD IN THE PERFORMANCE OF OBLIGATION OR CONTRACTS a.From time guardianship ceases Carantes vs. CA. only action for damages except if there is collusion between one party and the third person. • Ratification cleanses the contract of its defects from the moment it was constituted. Error as to person . Refers to the subject of the thing which is the object of the contract b. such reason must have ceased. LOSS OF THE THING which is the object of the contract through fraud or fault of the person who is entitled to annul the contract • NOTE: Object is lost through a fortuitous event. UNENFORCEABLE CONTRACT – valid but cannot compel its execution unless ratified. Incapacity . see this picture. Tolerated Fraud – includes minimizing the defects of the thing. LAWFUL misrepresentation NOTE: Expression of an opinion – not fraud unless made by expert and other party relied on the former’s special knowledge Fraud by third person – does not vitiate consent. the contract can still be annulled. mutual between parties.Period to bring an action for Annulment i. Refers to the nature of the contract c. exaggeration of its god qualities and giving it qualities it does not have. Mistake. knowledge of reason rendering contract voidable ii. 3. 1344) c. Error as to legal effect .when it is the principal consideration of the contract e.
Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 extrinsic defect. exception: auction when recorded sale in sales book v. It cannot be confirmed. Prohibited by law c. no object. In excess of authority conferred ( ultra vires) b.Both parties incapable of giving consent -2 minor or 2 insane persons c. except if pari delicto will apply e. Curable by Ratification . Those w/c contemplate an impossible service – no object v. default or miscarriage of another iii. produce legal effects only after ratified KINDS: a. no cause (inexistent ones) – essential formalities are not complied with ( ex: donation propter nuptias – should conform to formalities of a donation to be valid ) i.Failure to comply with Statute of Frauds i. Failure of defendant to object in time. No authority conferred ii. The right to set up the defense of nullity cannot be waived f. good customs. restoration is in order. whether it amounts to a crime or not d. object or purpose is contrary to law. Anyone may invoke the nullity of the contract whenever its juridical effects are asserted against him KINDS OF VOID CONTRACT: a. A judicial declaration to QuickTime™ and a TIFF is merely decompressor that effect (Uncompressed) this declaration a picture. morals. public order or public policy . Acceptance of benefits under the contract. Those expressly prohibited or declared void by law . also estoppel sets in by accepting performance. There is no action for annulment necessary as such is ipso jure. Special promise to answer for debt. It produces no effect whatsoever either against or in favor of anyone b. Agreement to be performed within a year after making contract ii. ratified or cured d. are needed to see c. Curable by Acknowledgment . the defect is waived 4. Illegal/Illicit ones – Those whose cause. If performed. Those which cause or object did not exist at the time of the transaction – no cause/object iii. Agreement made in consideration of promise to marry iv.Contracts w/c violate any legal provision. Ex: Contract to sell marijuana . Those w/c intention of parties relative to principal object of the contract cannot be ascertained b. Those whose object is outside the commerce of man – no object iv. VOID OR INEXISTENT – of no legal effect CHARACTERISTICS: a. Agreement for lease of property for more than one year and sale of real property regardless of price vi. the defect of unenforceability is cured b. chattels or things in action at price not less than 500. Unauthorized or No sufficient authority – entered into in the name of another when: i. Those w/c are absolutely simulated or fictitious – no cause ii. to the presentation of parole evidence in court. it takes it out of unenforceable contracts. Those lacking in essential elements: no consent. Representation as to credit of another TWO WAYS OF CURING UNENFORCEABLE CONTRACTS: a. If there is performance in either part and there is acceptance of performance. Agreement for sale of goods. Imprescriptible Page 127 of 297 g.
The law will leave you where you are i. No action for specific performance b. Court believes that public interest will be served by allowing recovery (discretionary upon the court ) – based on remorse. applies only to illegal contracts and not to inexistent contracts. Interest paid in excess of the interest allowed by the usury law may be recovered by debtor with interest from date of payment EFFECTS OF ILLEGAL CONTRACTS a. Both shall be prosecuted j. payment of money or delivery of property made by an incapacitated person d. Innocent party is entitled to restitution c. No action for restitution on either side. where the party who paid or delivered repudiates the contract before . courts may allow recovery of money. does not apply when a QuickTime™ and a superior public(Uncompressed) decompressor policy intervenes TIFF • EXCEPTION are neededPARI picture. or before any damage has been caused to a 3rd person c. Contract must be repudiated by any of the parties before purpose is accomplished or damage is caused to 3rd parties c. REQUISITES OF ILLEGAL CONTRACTS: a. contract whereby a laborer undertakes to work longer than the maximum number of hours fixed by law g. No action for specific performance b. 313 RPC) even if gambling is prohibited. No action for specific performance b. if law set max working hours and laborer who undertakes to work longer may demand additional compensation c. those who come in equity must come with clean hands. TO to see this DELICTO RULE . No confiscation a. property delivered by incapacitated person in the interest of justice. payment of money or delivery of property for an illegal purpose. pari delicto cannot apply because an Page 128 of 297 CONTRACT CONSTITUTE CRIMINAL OFFENSE DOES NOT CONSTITUTE CRIMINAL OFFENSE but is ILLEGAL /UNLAWFUL PER SE Parties are in pari delicto Only one party is guilty a. Guilty party is not entitled to restitution KINDS OF ILLEGAL CONTRACTS PARI DELICTO DOCTRINE • Both parties are guilty. No action for specific performance h. illegality is accomplished when parties entered into contract. any person paying an amount in excess of the maximum price allowed may recover such excess b. Guilty party is not entitled to restitution d. If one party is incapacitated.If purpose has not yet been accomplished and If damage has not been caused to any 3rd person OTHER EXCEPTIONS: a. Consumer protection – if price of commodity is determined by statute. Payment of Usurious interest b. agreement or contract which is not illegal per se and the prohibition is esigned for the protection of the plaintiff e. No action for restitution on either side. USURY LAW a. Guilty party will be prosecuted e. Thing/price to be confiscated in favor of government a. any laborer who agreed to receive less may still be entitled to recover the deficiency. payment of any amount in excess of the maximum price of any article or commodity fixed by law or regulation by competent authority f. Contract is for an illegal purpose b. no action against each other. LABOR. Instrument of crime will be confiscated in favor of gov’t. The law will leave you where you are c. Labor – if law sets the minimum wage for laborers. a. one who lost in gambling because of fraudulent schemes practiced on him is allowed to recover his losses (Art.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 the purpose has been accomplished. Innocent party is entitled to restitution c. before it takes effect – party w/c is remorseful prevents it WHERE LAWS ARE ISSUED TO PROTECT CERTAIN SECTORS: CONSUMER PROTECTION.
the complainant having knowledge or notice. Performance after the civil obligation has prescribed 2. or the suit in not held to be barred. Estoppel by deed b. restitution by minor after annulment of contract 4. other party is less guilty or not guilty TITLE 3. 1423 . Estoppel by judgment d. conduct on part of the defendant. by exercising due diligence. Estoppel by record c. Performance after actiona to enforce civil QuickTime™ and TIFF (Uncompressed) decompressor obligation hasare needed to see this picture. except: a. for under the law. payment of legacy after will have been declared voi 1. payment by heir of debt exceeding value of property inherited 7. reimbursement of a third person for a debt that has prescribed 3. failed 6. • It is patrimonial. incapacitated – not obliged to return what he gave but may recover what he has given b. delay in asserting the complainant’s rights. and presupposes a prestation. estoppel by silence d. Estoppel by laches LACHES OR STALE DEMANDS LACHES • Failure or neglect. lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit 4. return price plus interest • EXCEPTION: No recovery can be had in cases where nullity of contract arose from illegality of contract where parties are in pari delicto.1430 NATURAL OBLIGATIONS • they are real obligations to which the law denies an action. or of one under whom he claims. giving rise to the situation of which complaint is made and for which the complaint seeks a remedy 2. unable to understand the consequences of his own action b. it is negligence or omission to assert a right within reasonable time warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it • ELEMENTS 1. estoppel by acceptance of benefits 2. Technical estoppel a. Delivery by minor of money or fungible thing in fulfillment of obligation 5. could or should have been done earlier. injury to the defendant in the event relief is accorded to the complainant. EXAMPLES OF NATURAL OBLIGATIONS ENUMERATED UNDER THE CIVIL CODE: 1. of the defendant’s conduct and having been afforded the opportunity to institute a suit 3. – NATURAL OBLIGATIONS See Arts. estoppel in pais (by conduct) c.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 incapacitated person does not know what he is entering into. they do not have the necessary efficacy to give rise to an action. If agreement is not illegal per se but merely prohibited and prohibition is designated for the protection of the plaintiff – may recover what he has paid or delivered by virtue of public policy MUTUAL RESTITUTION IN VOID CONTRACTS • GENERAL RULE: parties should return to each other what they have given by virtue of the void contract in case • Where nullity arose from defect in essential elements a. • The binding tie of these obligations is in the conscience of man. LACHES Concerned with effect of delay Question of inequity of permitting the claim to be enforced Not statutory Applies in equity Not based on a fixed time PRESCRIPTION Concerned with fact of delay Question or matter of time Statutory Applies at law Based on a fixed time KINDS Page 129 of 297 . return object of contract and fruits b. but which the debtor may perform voluntarily. for an unreasonable and unexplained length of time to do that which.
Page 130 of 297 .Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 TITLE 4. 1431 . – ESTOPPEL See Arts.a condition or state by virtue of which an admission or representation is redered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon. QuickTime™ and a TIFF (Uncompressed) decompressor are needed to see this picture.1439 ESTOPPEL .