Obligation in Contracts (ObliCon Exercise 3)

Obligation on Law and Contracts
EXERCISES 3
Name: Alexa Luz S. Perida
Program and Section: BS Management Accounting 1-6
Subject Professor: Mr. Ritchie Esponilla
Exercise No. 3.
1. How a valid payment is made to extinguish an

obligation?
In the Civil Code of Obligations, making a valid payment is the
primary way to end an obligation. Certain rules ensure the
payment is effective, including considerations about who pays,
who receives the payment, and how, when, and where it is made.
The debtor is typically responsible for making the payment, but
someone else can do it on their behalf if it benefits the creditor or
if the creditor agrees. For instance, a third party such as a friend
or relative might settle a debt for the debtor.
To be valid, the payment must go to the creditor or someone
authorized to receive it, like an agent. If mistakenly given to the
wrong person, the payment can still be valid if the creditor
ultimately benefits from it. The payment must match what was
agreed upon in the contract. For example, monetary obligations
must be paid in money, and substitutions are only allowed if the
creditor consents. Partial payments may not fully settle the
obligation unless the creditor accepts them. Timing and location
are also important. Payments should be made when they are due,
as specified in the agreement. If there is no specific date, they
should be made within a reasonable timeframe. Paying late might
result in penalties or interest. Payments are generally made at the
creditor’s business address or another agreed, upon location.
Proof of payment, such as a receipt, helps confirm that the
obligation has been fulfilled. Payments must also be made in good
faith, with a genuine intent to settle the debt.
A valid payment fulfills the agreed terms of an obligation and
releases the debtor from further responsibility, ensuring fairness
and clarity for both parties.
2. X is indebted to Y for Php1,000.00. X then alienated

to Y his brand new bag as payment. Will this
alienation immediately takes effect of payment?
X owes Y Php1,000. Instead of paying the money, X offers Y a
brand-new bag as payment. In this situation, the Civil Code of the
Philippines considers this as dation in payment, where a debtor
gives something other than money to settle their debt. However,
for this to be valid, certain conditions must be met. Both X and Y
must agree that the bag will replace the Php1,000 payment.
Without Y’s consent, the bag cannot be considered valid payment.
It is also important that the bag is worth the same as the amount
owed. If the bag is not equal in value to Php1,000, they need to
agree on how to address the difference. The bag must also be
delivered to Y, and Y must accept it as payment. X’s intention to
give the bag is not enough. Actual delivery and acceptance are
necessary for the debt to be considered settled.
If these conditions are met, the transfer of the bag will count as
payment, and X’s debt will be cleared. But if Y does not agree or
the bag is not delivered, the Php1,000 obligation remains.
3. X obliges himself to give Y a particular car on January

5, 2020. However, the said car was totally wrecked in
an accident involving X on January 2, 2020. What is
the implication of the total loss of the car as to the
obligation of X?
Since X had an obligation to deliver a specific car to Y on
January 5, 2020. However, on January 2, 2020, the car was
destroyed in an accident involving X. According to the Civil Code
of the Philippines, when an obligation involves a specific item
(called a determinate thing), the total loss of that item can affect
the obligation. If the car was destroyed without X’s fault, the
obligation is extinguished. The law states that if the object of the
obligation is lost or destroyed due to circumstances beyond the
debtor’s control and before the obligation is due, the debtor is no
longer required to fulfill the obligation. For example, if the
accident happened because of a natural disaster or the actions of
someone else, X would not be held responsible.
However, if the accident happened because of X’s negligence
or fault, the obligation is not automatically extinguished. In this
case, X may still be liable to Y for damages. Fault could include
careless driving or breaking traffic rules that caused the accident.
Therefore, If the car was destroyed without any fault on X’s part,
he is no longer required to deliver the car to Y. But if X was at
fault, Y can demand compensation for the loss of the car.
4. X is indebted to Y for Php1 Million. Y, being a good

friend, informed X that he is condoning the debt of
X. Will this unilateral offer of condonation of Y
immediately result in the extinguishment of
obligation of X?
If X owes Y Php1 million, and Y, out of generosity, tells X that
the debt is forgiven. However, this act does not immediately
cancel the obligation. Under the Civil Code of the Philippines,
condonation, or the forgiveness of a debt, is a recognized way to
extinguish an obligation, but it must meet specific conditions to
be valid. For the condonation to take effect, both parties must
agree to it. While Y can offer to forgive the debt, X must also
accept this act. Without X’s acceptance, the debt remains, and
the obligation is not extinguished. Large amounts like Php1 million
require the condonation to follow legal formalities. Because it is
treated as a donation, the forgiveness must be put in writing and
may also need to be notarized to ensure it is enforceable. If these
formalities are not followed, the condonation may not be legally
binding. The promise to forgive the debt is a generous act, but it
will only extinguish the obligation if X agrees, and the proper legal
requirements are satisfied. Until these steps are completed, the
debt still exists.
5. Is death a mode of extinguishing obligation?

Under the Civil Code of the Philippines, death can end an
obligation. When a debtor dies, the obligation is generally
extinguished, as stated in Article 1231. However, this rule does
not apply to every type of obligation. For obligations that involve
money or property, the responsibility can be passed on to the
debtor’s heirs. This means the family members or those who
inherit the debtor’s estate may still need to fulfill the obligation,
even though the original debtor is no longer alive.
In contrast, if the obligation is personal and requires the debtor
to perform a task that only they can do, the obligation ends with
the debtor’s death. For example, a promise to carry out a service
that only the debtor could perform becomes void when the debtor
dies. Death may end an obligation, but whether the responsibility
is passed to the heirs or canceled depends on the nature of the
obligation.

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Obligation on Law and Contracts

1. How a valid payment is made to extinguish an

2. X is indebted to Y for Php1,000.00. X then alienated

3. X obliges himself to give Y a particular car on January

4. X is indebted to Y for Php1 Million. Y, being a good

5. Is death a mode of extinguishing obligation?

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