OBLIGATI
ONS AND
CONTRAC
TS
OUTLINE
Art.
1156. An
obligatio
n is a
juridical
necessit
y to give,
to do or
not to
do.
Civil Obligations distinguished from Natural (Art. 1423) and Moral
Obligations
Elements of an obligation
Complete DEFINITION of an obligation
Kinds of Obligations – real/personal, positive personal and negative
personal
Art. 1157. SOURCES of an obligation
Law - ex lege
Contracts (Art. 1305) ex contractu
Quasi contracts – ex quasi-contractu (Art. 2142)
Delicts - delicto or Obligation ex Maleficio
RP
C:
Art
.
10
0
Ev
ery
pe
rso
n
cri
mi
nal
ly
lia
ble
for
a
fel
on
y
is
als
o
civ
illy
lia
ble
.
SC
O
PE
OF
CI
VI
L
LI
AB
ILI
TY
:
1.
Re
stit
uti
on
2.
Re
pa
rati
on
for
da
ma
ge
ca
us
ed
3.I
nd
em
nit
y
for
Co
ns
eq
ue
nti
al
da
ma
ge
s
Quasi-Delicts - Obligation ex quasi-delicto/maleficio Art. 2176
NATURE
&
EFFECT
S OF
OBLIGA
TIONS
Arts.
1163 –
1178
Real Obligations (Obligations to give)
Determinate and Indeterminate thing
Real Obligation to give a Determinate thing:
1. To take care of it with the diligence of a good father of a family; (Art.
1163)
Art. 1173 – Defines Deligence
2. To deliver the thing;
3. To deliver its accessions and accessories (440, 447, 465, 445) though
nothing is mentioned in the contract; (1166)
“The obligation to give a determinate thing includes that of
delivering all its accessions and accessories, even though they may not
have been mentioned.”
4. To deliver the fruits (1164)
“The creditor has a right to the fruits of the thing from the time the
obligation to deliver arises.”
The obligation arises from the time it becomes binding; in contracts,
from the perfection (birth) thereof.
Hence, the creditor is entitled to the fruits of the thing promised from
the time the debtor became bound, not from the time stipulated for
delivery. See Art. 1537, 1589
Art. 1537. The vendor is bound to deliver the thing sold and its accessions
and accessories in the condition in which they were upon the perfection
of the contract.
All the fruits shall pertain to the vendee from the day on which
the contract was perfected.
The rule does not apply to obligations under a suspensive condition where
the fruits remain with the debtor by special provision of law (Art. 1189)
5. To answer for damages in case of non-fulfillment or breach of the
obligation.
O
BL
IG
AT
IO
N
T
O
GI
VE
A
G
EN
ER
IC
T
HI
N
G:
1.
Pri
nci
pal
Ob
lig
ati
on
–
the
de
bto
r
mu
st
del
ive
ra
thi
ng
of
the
qu
alit
y
spe
cifi
ed;
if
no
ne
wa
s
fix
ed,
he
can
not
del
ive
ra
thi
ng
of
inf
eri
or
(lo
we
st)
qu
alit
y.
Ar
t.
12
46.
W
he
n
the
obl
iga
tio
n
co
nsi
sts
in
the
del
ive
ry
of
an
ind
ete
rm
ina
te
or
ge
ne
ric
thi
ng,
wh
ose
qu
alit
y
an
d
cir
cu
ms
tan
ces
ha
ve
not
be
en
sta
ted
,
the
cre
dit
or
ca
nn
ot
de
ma
nd
a
thi
ng
of
su
pe
rio
r
qu
alit
y.
Ne
ith
er
ca
n
the
de
bto
r
del
ive
ra
thi
ng
of
inf
eri
or
qu
alit
y.
Th
e
pur
pos
e
of
the
obl
iga
tio
n
an
d
oth
er
cir
cu
ms
tan
ces
sha
ll
be
tak
en
int
o
co
nsi
der
ati
on.
2.
No
leg
al
acc
ess
ory
obl
iga
tio
n
ari
se
unt
il
the
thi
ngs
to
be
giv
en
are
sep
ara
ted
fro
m
oth
ers
of
the
ir
kin
d
(in
div
idu
ali
zed
)
O
BL
IG
AT
IO
N
T
O
D
O
1.
Th
e
de
bto
r
mu
st
pe
rfo
rm
the
act
as
pr
om
ise
d
an
d
ca
nn
ot
su
bst
itu
te
an
oth
er
act
or
for
bea
ran
ce
(Ar
t.
12
44)
unl
ess
the
cre
dit
or
agr
ees
, or
the
rig
ht
is
res
erv
ed
(fa
cul
tati
ve
obl
iga
tio
ns)
Art
.
12
44.
Th
e
de
bto
r of
a
thi
ng
can
not
co
mp
el
the
cre
dit
or
to
rec
eiv
ea
dif
fer
ent
on
e,
alt
ho
ug
h
the
latt
er
ma
y
be
of
the
sa
me
val
ue
as,
or
mo
re
val
ua
ble
tha
n
tha
t
wh
ich
is
du
e.
(O
BL
IG
AT
IO
N
TO
DE
LI
VE
R
A
DE
TE
R
MI
N
AT
E
TH
IN
G)
In
obl
iga
tio
ns
to
do
or
not
to
do,
an
act
or
for
bea
ran
ce
can
not
be
sub
stit
ute
d
by
an
oth
er
act
or
for
bea
ran
ce
aga
ins
t
the
obl
ige
e’s
wil
l.
2.
Per
for
ma
nce
by
an
age
nt
is
per
mit
ted
,
unl
ess
the
obl
iga
tio
n is
stri
ctl
y
per
son
al.
O
BL
IG
AT
IO
N
N
O
T
T
O
D
O
1.
Th
e
de
bto
r
mu
st
hi
ms
elf
ab
sta
in
fro
m
the
co
nd
uct
pro
hib
ite
d.
He
ma
y
not
sub
stit
ute
an
oth
er
for
bea
ran
ce,
nor
the
for
bea
ran
ce
of
an
oth
er,
unl
ess
the
cre
dit
or
co
nse
nts.
2.
Per
for
ma
nce
ca
nn
ot
be
by
a
del
eg
ate
or
an
age
nt.
3.
No
leg
al
acc
ess
or
y
obl
iga
tio
n
ari
se
(un
lik
e
in
obl
iga
tio
ns
to
giv
e)
BR
EACH
OF
OBLI
GATI
ON
Kinds
Voluntary/involuntary
a. As to Extent
1. Total –nothing is performed
2. Partial – a part only is performed
3. Irregular – executed contrary to the terms of the obligation .
May be –
i. Irregular as to time of performance (called
“delay” or “default, mora) or
ii. Irregular as to other terms and conditions
b. As to TIME of breach
1. ORDINARY – the breach is committed on or after the
obligation falls due;
2. ANTICIPATORY – the breach is committed even before the
obligation falls due
A definite or unconditional repudiation of the contract by a party
thereto, communicated to the other, is a breach of the contract, creating
an immediate right of action and other legal effects, even
though it takes place long before the time prescribed for the promised
performance, and before conditions specified in the promise
have ever occurred. (Contracts by Corbin)
c. As to the GUILT of the party
1. MALICIOUS (in bad faith)
2. NEGLIGENT (by carelessness) – but a party may bind
himself to produce a given result at all events, waiving the excuse of
fortuitous event.
d. ACCOUNTABILITY (culpability or imputability)
The responsibility may arise from FRAUD (malice or bad faith) or
NEGLIGENCE (lack of care)
1. MALICE, FRAUD OR BAD FAITH
Malice or fraud is awareness that one’s conduct is improper and
violates the rights of others, and persistence in such conduct.
DINSTINGUISH: DOLO CAUSANTE (causal fraud- fraud
employed in the execution of the contract) from
DOLO INCIDENTE – fraud in the performance of an obligation
already existing)
DOLO CAUSANTE (1170, 1338, 1334)
Consequence of fraud - Liability for malice or bad faith extends not only
to results intended but also to their natural and probable consequences,
even if not foreseen, or even if they exceed the debtor’s intention
CU
LPA
(NEG
LIGE
NCE)
culpa
contra
ctual
from
culpa
aquili
ana
FO
RTUI
TOU
S
EVE
NTS
–
ART.
1174 ;
eleme
nts
FORTUITOUS EVENT
1. Requisites:
a. The event must be INDEPENDENT of the HUMAN WILL (or
rather, of the WILL OF THE DEBTOR)
b. The event must be impossible to foresee (unforeesable, not
merely unforeseen( or if it can be foreseen, it must be impossible to avoid;
Includes “caso fortuito” both accident and force majeure (Act of God)
EXCEPT in certain provisions i.e. Art. 2000 (innkeepers)
c. The occurrence must render it impossible for the debtor to fulfill
the obligation in a normal manner
d. The obligor (debtor) must be free of participation in the
aggravation of the injury to the creditor (no concurrent fault)
Where the injury is partly due to fortuitous event and partly to dolo
or culpa of the debtor, the debtor is liable.
The debtor is also liable if already in default when the fortuitous
event took place.
GENERAL RULE IN FORTUITOUS EVENTS: The effect of Fortuitous event is to
exonerate the debtor and relieve him of liability for the breach of the
obligation.
Art. 1174. “Except in cases expressly specified by the law, or when it is
otherwise declared by stipulation, or when the nature of
the obligation requires the assumption of risk, no person
shall be responsible for those events which, could
not be foreseen, or which, though foreseen, were
inevitable.”
EXCEPTIONS: the debtor answers for fortuitous events:
1. Where expressly specified by law
Art. 1942. The bailee is liable for the loss of the thing, even if it should be
through a fortuitous event:
a. If he devotes the thing to any purpose different from that
which it has been loaned;
b. If he keeps it longer than the period stipulated, or after the
accomplishment of the use for which the commodatum has been
constituted;
c. If the thing loaned has been delivered with appraisal of its
value, unless there is a stipulation exempting the bailee from responsibility
in case of a fortuitous event;
d. If he lends or leases the thing to a third person, who is not a
member of his household
Art. 2001. The act of a thief or robber, who has entered the hotel is not
deemed a force majeure, unless it is done with the use of arms or through
an irresistible force.
Art. 2147.The officious manager shall be liable for any fortuitous event:
a. If he undertakes risky operations which the owner was not
accustomed to embark upon;
b. If he has preferred his own interest to that of the owner;
c. If he fails to return the property or business after demand by
the owner;
d. If he assumed the management in bad faith
2. Where expressly declared by stipulations (waiver of fortuitous event
as a defense)
3. Where the nature of the obligation requires the assumption of
risks
Art. 1717. If the contractor bound himself to furnish the material, he
shall suffer the loss if the work should be destroyed before its delivery,
save when there has been delay in receiving it.
Art. 1724. If the contractor who undertakes to build a structure or
any other work for a stipulated price, in conformity with plans and
specifications agreed upon with the landowner, can neither withdraw from
the contract or demand an increase in the price on account of the higher
cost of labor materials, save when there has been a change in the plans
and specifications, provided: X x x”
4. Where the debtor is guilty of malice (dolo) or fraud as when he
promises the same thing to two different persons (Art. 1165, p. 3)
5. Where the debtor is already in delay (mora) when the event
happens
6. Where the debtor is guilty of concurrent negligence or fault in
producing the loss of the breach;
7. Where the liability arises from a criminal act; unless the debtor
tenders the thing and the creditor refuses to accept it without justification.
Art. 1268. When the debt of a thing certain and determinate
proceeds from a criminal offense, the debtor shall not be exempted from
the payment of its price, whatever may be the cause for the loss, unless
thing having been offered by him to the person who should receive it, the
latter refused without justification to accept it.
But the defense or excuse of fortuitous event can be waived in
advance; the debtor is then said to be an “insurer” of the performance of
the obligation/.
INJURY OR LOSS TO THE CREDITOR – (1) the injury must be
SUBSTANTIAL - If the obligation has been substantially performed in
good faith, the obligor may recover as though there had been a strict and
complete fulfillment, less damages suffered by the oblige. (Art. 1234), and
(2) and must be the result of the breach.
FORTUITOUS EVENT – An event which could not breach of the obligation. (De
Leon, 2003 ed., p. 42)
REQUIREMENTS: (Nakpil and Sons vs. CA):
1. The cause of the breach of the obligation must be independent of
the will of the debtor
2. The event must be either unforeseeable or unavoidable
3. The event must be such as to render it impossible for the debtor to fulfill
his obligation in a normal manner
4. The debtor must be free from any participation in, or aggravation of injury
to the creditor
RULE ON FORTUITOUS EVENT:
• GENERAL RULE: No liability for fortuitous event
• EXCEPTIONS:
1. When expressly declared by law (bad faith, subject matter is generic,
debtor is in delay )
2. When expressly declared by stipulation or contract
3. When nature of obligation requires assumption of risk
4. 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. 1165[3])
EFFECT OF FORTUITOUS EVENT
Determinate
DETERMINATE OBLIGATION GENERIC OBLIGATION
Obligation is extinguished Obligation is not extinguished based
on the
rule that the genus never perishes
(genus nunquam peruit)
DELAY OR MORA- mora or delay is the failure to perform the obligation in due
time, because of dolo (malice) or culpa (negligence)
REQUISITES OF DELAY
1. Obligation must be due, demandable and liquidated;
2. Debtor fails to perform his positive obligation on the date agreed
upon;
3. A demand (not merely a reminder or notice),judicial or extra-judicial, made
by the creditor upon the debtor to fulfill, perform or comply with his obligation
otherwise, he will be in default; and
4. Failure of the debtor to comply with such demand.
KINDS OF DELAY
No mora in obligations not to do
1. 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. The obligation must be due, enforceable and already
liquidated or determinate in amount;
b. There must be non-performance; and
c. There must be a demand, unless demand is
not required.
• 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.
• EXCEPTIONS (no demand necessary)
a. When the obligation or the law expressly so declare; or
b. When from the nature and the circumstances of the obligation it appears
that the designation of the time when the thing is to be delivered or the
service is to be rendered was a controlling motive for the establishment of
the contract; or
c. When demand would be useless, as when the obligor has rendered it
beyond his power to perform;
d. in reciprocal obligations, where delay begins only from the moment the
other party fulfills (or tenders fulfillment) of his obligation in a proper manner (Art. 1169)
• EFFECTS:
a. Debtor is guilty of breach of the obligation
b. Liability: If obligation to pay money- must pay interest. If no extra-judicial
demand, interest runs from the filing of the complaint. In other obligations,
pay damages.
c. Obligations to deliver a determinate thing, liable for fortuitous events. If
debtor can prove that loss would have resulted even if he had not been in
default, the court may equitably mitigate the damages (Art. 2215[4])
d. Resolution (Art 1170, in proper cases)
2. Mora Accipiendi – default on part of creditor when he unjustifiably refuses to
accept the performance of the obligation.
• REQUISITES:
a. Offer of performance by the debtor
b. Offer must be to comply with the prestation as it should be
performed
c. Creditor refuses the performance without just cause
• EFFECTS:
a. Responsibility of debtor is limited to fraud and gross
negligence
b. Debtor is exempted from risk of loss of thing; creditor bears
risk of loss
c. Expenses by debtor for preservation of thing after delay is
chargeable to creditor
d. If obligation bears interest, debtor does not have to pay from
time of delay
e. Creditor liable for damages
f. Debtor may relieve himself of obligation by consigning the
thing
3. Compensatio morae– both parties are in default (in reciprocal obligations); there
is no actionable default on the part of both parties
• Rule in Reciprocal Obligations: In reciprocal obligations, neither party incurs in
delay if the other does not comply or is not ready to comply in a proper manner
with what is incumbent upon him. From the moment one of the parties fulfills his
obligation, delay by the other begins.
• Performance must be simultaneous unless different dates for the performance of
the obligation were fixed by the parties
