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The document provides a comprehensive overview of the Law on Obligations and Contracts (ObliCon) in the Philippines, detailing the definitions, elements, sources, and types of obligations and contracts as governed by the Civil Code. It outlines the conditions for the extinguishment of obligations and the classification of contracts, including their essential elements and potential defects. Additionally, it addresses breach of contract and remedies available, along with a summary of key legal provisions.

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12 views5 pages

law1 (1)

The document provides a comprehensive overview of the Law on Obligations and Contracts (ObliCon) in the Philippines, detailing the definitions, elements, sources, and types of obligations and contracts as governed by the Civil Code. It outlines the conditions for the extinguishment of obligations and the classification of contracts, including their essential elements and potential defects. Additionally, it addresses breach of contract and remedies available, along with a summary of key legal provisions.

Uploaded by

ayef798365
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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In-Depth Guide to Law on Obligations and Contracts

(ObliCon) in the Philippines


The Law on Obligations and Contracts (ObliCon) is governed by Book IV, Title I and II of
the Civil Code of the Philippines. It serves as the legal foundation for agreements,
responsibilities, and liabilities between individuals or entities.

I. OBLIGATIONS
A. Definition of Obligation

Under Article 1156 of the Civil Code:

“An obligation is a juridical necessity to give, to do, or not to do.”

This means an obligation is a legal duty that must be fulfilled, and failure to comply can
result in legal consequences.

B. Elements of an Obligation

An obligation consists of four essential elements:

1.​ Active Subject – The creditor or obligee (the person who has the right to demand
fulfillment).
2.​ Passive Subject – The debtor or obligor (the person who is bound to perform the
obligation).
3.​ Prestation (Object) – The subject matter of the obligation (to give, to do, or not to
do).
4.​ Juridical Tie (Vinculum Juris) – The legal bond that binds the parties, arising from
law, contracts, quasi-contracts, delicts, or quasi-delicts.

C. Sources of Obligations (Article 1157)

Obligations arise from five sources:

1.​ Law – Imposed by legal provisions (e.g., obligation to pay taxes).


2.​ Contracts – Agreements between parties with legal force.
3.​ Quasi-Contracts – Legal obligations arising from lawful, voluntary, and unilateral
acts (e.g., solutio indebiti and negotiorum gestio).
4.​ Delicts (Crimes) – Arising from criminal acts that require indemnification (e.g.,
damages from theft, fraud, or homicide).
5.​ Quasi-Delicts (Torts) – Acts or omissions causing damage due to fault or
negligence, without a prior contract (e.g., reckless driving leading to injury).

D. Kinds of Obligations

1. As to Performance

●​ Real Obligation – Obligation to give (e.g., delivery of goods).


●​ Personal Obligation – Obligation to do or not to do (e.g., rendering services).

2. As to Subject Matter

●​ Simple Obligation – A single prestation.


●​ Compound Obligation – Multiple prestations.
○​ Conjunctive – All prestations must be performed.
○​ Alternative – Any one prestation may be performed.
○​ Facultative – One prestation is due, but the debtor may substitute it.

3. As to Demandability

●​ Pure Obligation – No conditions, immediately demandable.


●​ Conditional Obligation – Depends on a future uncertain event.
○​ Suspensive – Obligation arises only if a condition happens.
○​ Resolutory – Obligation is extinguished if a condition happens.

4. As to Legal Enforceability

●​ Civil Obligation – Legally enforceable by courts.


●​ Natural Obligation – Not legally enforceable, but may be voluntarily fulfilled (e.g.,
moral debts).

E. Extinguishment of Obligations (Article 1231)

Obligations may be extinguished through:

1.​ Payment or Performance – Proper fulfillment of the obligation.


2.​ Loss of the Thing Due – When the object is lost or destroyed.
3.​ Condonation or Remission – Voluntary forgiveness by the creditor.
4.​ Confusion or Merger – When debtor and creditor become the same person.
5.​ Compensation – When two parties owe each other and the debts are offset.
6.​ Novation – Replacing an old obligation with a new one.

II. CONTRACTS
A. Definition of Contract

Under Article 1305 of the Civil Code:

“A contract is a meeting of minds between two persons whereby one binds


himself, with respect to the other, to give something or to render some service.”

Contracts are agreements that create binding and enforceable obligations.

B. Essential Elements of a Contract

A contract must have the following elements:

1.​ Consent – Mutual agreement between parties.


2.​ Object – Subject matter of the contract (must be lawful and possible).
3.​ Cause or Consideration – The reason or motive behind the contract (must be
legal).

C. Classification of Contracts

1. As to Perfection

●​ Consensual – Perfected by mere agreement (e.g., sale, lease).


●​ Real – Perfected by delivery of the object (e.g., pledge, deposit).
●​ Formal or Solemn – Requires compliance with formalities (e.g., donation of land
must be in a public instrument).

2. As to Cause

●​ Onerous – Each party gives something (e.g., sale, barter).


●​ Gratuitous – One party benefits without consideration (e.g., donation).

3. As to Binding Force

●​ Valid – Meets all legal requirements.


●​ Voidable – Valid but can be annulled due to defect in consent.
●​ Unenforceable – Cannot be enforced due to lack of form or authority.
●​ Void (Inexistent) – Produces no effect (e.g., contracts against law or morals).

D. Defective Contracts

1.​ Rescissible Contracts – Legally valid but can be rescinded due to economic
damage.
2.​ Voidable Contracts – Defective due to vitiated consent (e.g., fraud, mistake,
intimidation).
3.​ Unenforceable Contracts – Cannot be enforced due to legal defects (e.g.,
unauthorized contracts).
4.​ Void or Inexistent Contracts – Invalid from the beginning due to illegality.

E. Breach of Contract

Contracts may be breached in two ways:

1.​ Voluntary Breach – Failure to perform obligations due to fault or intent.


2.​ Involuntary Breach – Failure due to force majeure or unforeseen events.

Remedies for Breach

●​ Specific Performance – Demanding fulfillment of the obligation.


●​ Rescission – Cancellation of the contract.
●​ Damages – Claiming compensation for losses.

III. QUASI-CONTRACTS
Quasi-contracts arise from acts performed without an agreement but create legal
obligations. The two main types are:

1.​ Negotiorum Gestio – When a person voluntarily manages another’s affairs without
consent but must be reimbursed for necessary expenses.
2.​ Solutio Indebiti – When a person mistakenly pays another without obligation, the
recipient must return it.

IV. SUMMARY OF KEY LEGAL PROVISIONS


Concept Legal Basis (Civil Code
Articles)

Definition of Obligation Art. 1156

Sources of Obligations Art. 1157

Kinds of Obligations Art. 1179-1192

Extinguishment of Obligations Art. 1231-1304

Definition of Contract Art. 1305


Essential Elements of a Art. 1318
Contract

Types of Contracts Art. 1319-1357

Defective Contracts Art. 1380-1422

Breach of Contract & Art. 1170, 1191


Remedies

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