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Title2630103-obligations-contracts-memory-aid-2001.doc
TagsDebt Bankruptcy United Kingdom Insolvency Law Assignment (Law) Debtor
File Size231.4 KB
Total Pages24
Table of Contents
                            PART I - OBLIGATION - An obligation is a juridical necessity to give, to do or not to do
EFFECTS OF OBLIGATION
Remedies
	FRAUD
	NEGLIGENCE
	Loss/ Impairment
	Improvement
	ALTERNATIVE
	FACULTATIVE
Modes of Extinguishment of Obligation:
REQUISITES:
(a) The event or change could not have been forseen at the time of the execution of the contract
	PART II - CONTRACTS -meeting of minds bet 2 parties whereby one binds himself with respect to other to give something or render some service
	ESSENTIAL ELEMENTS:
                        
Document Text Contents
Page 1

C I V I L L AW ( O B L I G AT I O N S A N D C O N T R A C T S )
MEMORY AID

ATENEO CENTRAL BAR OPERATIONS 2001

PART I - OBLIGATION - An obligation is a juridical necessity to give, to do or not to do

ELEMENTS:
1. Active subject ( obligee/creditor ) – the one in whose favor the obligation is

constituted
2. Passive subject ( obligor/debtor ) – the one who has the duty of giving, doing or not

doing
3. Object – prestation; the conduct which has to be observed by the debtor/obligor
4. Vinculum Juris – juridical/legal tie
5. Causa (causa debendi/causa obligationes) - why obligation exists

Requisites of Object:
a. licit - if illicit, it is void
b. possible - if impossible, it is void
c. determinate or determinable - or else, void
d. pecuniary value

SOURCES OF OBLIGATION:

1. LAW ( OBLIGATION EX LEGE ) - Must be expressly or impliedly set forth and
cannot be presumed

2. CONTRACT ( OBLIGATION EX CONTRACTU ) - Must be complied with in good
faith because it is the “law” between parties; neither party may unilaterally evade his
obligation in the contract, unless:

a) contract authorizes it
b) other party assents

Parties may freely enter into any stipulations, provided they are not contrary to law,
morals, good customs, public order or public policy

3. QUASI-CONTRACT ( OBLIGATION EX QUASI-CONTRACTU ) - That juridical
relation resulting from a lawful, voluntary and unilateral act, and which has for its
purpose, the payment of indemnity to the end that no one shall be unjustly enriched
or benefited at the expense of another

2 kinds:
a. Negotiorum gestio - unauthorized management; This takes place when a

person voluntarily takes charge of another’s abandoned business or property
without the owner’s authority

b. Solutio indebiti - undue payment ; This takes place when something is
received when there is no right to demand it, and it was unduly delivered thru
mistake

4. DELICTS ( OBLIGATION EX MALEFICIO OR EX DELICTO )
Governing rules:
1. Pertinent provisions of the RPC and other penal laws subject to Art 2177 Civil

Code
 Art 100, RPC – Every person criminally liable for a felony is also civilly

liable
2. Chapter 2, Preliminary title, on Human Relations ( Civil Code )
3. Title 18 of Book IV of the Civil Code – on damages

What civil liability arising from a crime includes:
a. restitution
b. reparation of damage caused
c. indemnity for consequential damages

Effect of acquittal in criminal case:



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C I V I L L AW ( O B L I G AT I O N S A N D C O N T R A C T S )
MEMORY AID

ATENEO CENTRAL BAR OPERATIONS 2001

cause to accept payment, he becomes in mora accepiendi & 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; generally requires prior tender of payment

REQUISITES OF VALID CONSIGNATION:
(1) Existence of valid debt
(2) Consignation was made because of some legal cause - previous valid

tender was unjustly refused or circumstances making previous tender
exempt

(3) Prior Notice of Consignation had been given to the person interested in
performance of obligation (1st notice)

(4) actual deposit/Consignation with proper judicial authorities
(5) subsequent notice of Consignation (2nd notice)


Effects: Extinguishment of obligation
(1) Debtor may ask judge to order cancellation of obligation
(2) Running of interest is suspended
(3) Before creditor accepts or before judge declares consignation has been

properly made, obligation remains ( debtor bears risk of loss at the
meantime, 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:
1. creditor absent or unknown/ does not appear at the place of payment
2. incapacitated to receive payment at the time it is due
3. refuses to issue receipt w/o just cause
4. 2 or more creditor claiming the same right to collect
5. title of obligation has been lost

2.LOSS OF THE THING DUE – partial or total/ includes impossibility of performance

WHEN IS THERE A LOSS:
1) When the object perishes (physically)
2) When it goes out of commerce
3) When it disappears in such a way that: its existence is unknown or it cannot be

recovered

WHEN IS THERE IMPOSSIBILITY OF PERFORMANCE
1) Physical impossibility
2) Legal impossibility :

(a) Directly – caused as when prohibited by law
(b) Indirectly – caused as when debtor is required to enter a military draft


OBLIGATION TO DELIVER A SPECIFIC THING

General Rule: Extinguished
Exceptions:

a) Debtor is at fault
b) Debtor is made liable for fortuitous event because of a provision of law,

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) if the generic thing is delimited
b) if the generic thing has already been segregated



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C I V I L L AW ( O B L I G AT I O N S A N D C O N T R A C T S )
MEMORY AID

ATENEO CENTRAL BAR OPERATIONS 2001

restitution
 Guilty party will be prosecuted
 Instrument of crime will be

confiscated in favor of govt

restitution

PARI DELICTO DOCTRINE -both parties are guilty, no action against each other;
those who come in equity must come with clean hands; applies only to illegal
contracts & not to inexistent contracts; does not apply when a superior public policy
intervenes

EXCEPTION TO PARI DELICTO RULE
1. If purpose has not yet been accomplished & If damage has not been caused to

any 3rd person
Requisites:
a) contract is for an illegal purpose
b) contract must be repudiated by any of the parties before purpose is

accomplished or damage is caused to 3rd parties
c) court believes that public interest will be served by allowing recovery

(discretionary upon the court ) – based on remorse; illegality is accomplished
when parties entered into contract; before it takes effect – party w/c is
remorseful prevents it

2. Where laws are issued to protect certain sectors: consumer protection, labor,
usury law
a) Consumer protection – if price of commodity is determined by statute, any

person paying an amount in excess of the maximum price allowed may
recover such excess

b) Labor – if law sets the minimum wage for laborers, any laborer who agreed
to receive less may still be entitled to recover the deficiency; if law set max
working hours & laborer who undertakes to work longer may demand
additional compensation

c) Interest paid in excess of the interest allowed by the usury law may be
recovered by debtor with interest from date of payment

3. If one party is incapacitated, courts may allow recovery of money, property
delivered by incapacitated person in the interest of justice; pari delicto cannot
apply because an incapacitated person does not know what he is entering into;
unable to understand the consequences of his own action

4. If agreement is not illegal per se but merely prohibited & 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

1. return object of contract & fruits
2. 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; except:

a. incapacitated – not obliged to return what he gave but may recover what
he has given

b. other party is less guilty or not guilty



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