OBLIGATIONS &

CONTRACT
ATTY. MAREZA GLINOGA AMBAT
DEFINITION
An obligation is a juridical necessity to give, to do, or
not to do (Art. 1156, NCC).

It is also defined as a juridical relation whereby a

person (Creditor) may demand from another (Debtor)
the observance of a determinate conduct, and in case
of breach, may obtain satisfaction from the asset of the
latter (Makati Stock Exchange Inc. v. Campos)
DEFINITION
The term juridical necessity in Article 1156 of the Civil
Code implies the existence of legal sanctions that may
be imposed upon the obligor (debtor) in case of
breach of the obligation.
the obligee (creditor) may seek appropriate reliefs
from the courts in case of such breach
AS TO FORM
General Rule: The law does not require any form in
obligations arising from contracts for their validity or
binding force. (Art. 1356, NCC)

EXP:
When the form is essential to the validity of the
contract as required by law (Art. 1346, NCC);
When the contract is unenforceable unless it is in
a certain form, such as those under the Statute of
Frauds as formulated in Art. 1403.
ELEMENTS OF AN OBLIGATION
Active subject (obligee or creditor);
The person demanding the performance of the
obligation. It is he in whose favor the obligation is
constituted, established or created

Passive Subject (obligor or debtor)

The one bound to perform the prestation to give,
to do, or not to do.
ELEMENTS OF AN OBLIGATION
Object
the prestation or the particular conduct required to
be observed by the debtor (to give, to do or not to do);

Juridical tie (vinculum juris)

the efficient cause between the two subjects by
reason of which the debtor is bound in favor of the
creditor to perform the prestation
 DIFFERENT KINDS OF
OBJECT OR PRESTATIONS
To give - prestation consists in the delivery of a movable or an
immovable thing in order to create a real right, or for the use
of the recipient, or for possession, or to return to it to the
owner
To do - includes all kinds of work or services.
Not to do - consists in abstaining from some act
 DIFFERENT KINDS OF
OBJECT OR PRESTATIONS
Real
if the prestation involved is that of giving or the
obligation to give.

Personal
if the prestation involved is that of doing or not doing,
i.e. obligation to do or not to do
KINDS OF OBLIGATIONS
Civil Obligations – those that give a right of action to
compel their performance.

Natural Obligations – those not being based on

positive law but on equity and natural law, do not
grant a right of action to enforce their performance by
the obligor, authorize the retention of what has been
delivered or rendered.
 ART. 1423 – NATURAL
OBLIGATION
Article 1423.
Obligations are civil or natural. Civil obligations give a right
of action to compel their performance. Natural obligations,
not being based on positive law but on equity and natural
law, do not grant a right of action to enforce their
performance, but after voluntary fulfillment by the obligor,
they authorize the retention of what has been delivered or
rendered by reason thereof. Some natural obligations are
set forth in the following articles.
 ART. 1423 – NATURAL
OBLIGATION
Not being based on positive law but on equity and natural
law, do NOT grant a right of action to enforce their
performance, but voluntary fulfillment by the obligor, they
authorize the retention of what has been delivered or
rendered by reason thereof.
ART. 1157, CIVIL CODE
Sources of Obligation

Law
Contracts
Quasi contracts
Acts or omissions punishable by law, and
Quasi delict
 ARTICLE 1158 : LAW
Article 1158.

Obligations derived from law are not presumed.

Only those expressly determined in this Code or in
special laws are demandable, and shall be regulated
by the precepts of the law which establishes them;
and as to what has not been foreseen, by the
provisions of this Book.
 ARTICLE 1158 : LAW
Governed by the precepts of Law
An obligation that arises from law is NEVER
PRESUMED
It is expressly provided in the Code or Special
Laws
If the Law is ambiguous, it is susceptible of two
or more interpretations
IT IS CONSTRUED AGAINST THE OBLIGATION
BECAUSE IT IS NEVER EVER PRESUMED
 ARTICLE 1159 : CONTRACTS
Obligations arising from contracts have the
force of law between the contracting parties
and should be complied with in good faith.

Requisites of a Contract:
1. Consent – meeting of minds
2. Object
3. Cause
 CONSENT
TWO ELEMENTS OF CONSENT:
a. OFFER
definite – determined – prestation will concur ; the object
of the prestation
Complete – offer must have brought out ALL aspects that
will for the offeree ; just accept or offer
b. ACCEPTANCE
UNCONDITIONAL – if there is at least a slight deviation to
an offer, it is not acceptance but creates a new tie: a
COUNTER OFFER – counter proposal – no juridical tie
This would result to the consent
 OBJECT
Article 1347. All things which are not outside the commerce of
men, including future things, may be the object of a contract.
All rights which are not intransmissible may also be the object
of contracts. No contract may be entered into upon future
inheritance except in cases expressly authorized by law. All
services which are not contrary to law, morals, good customs,
public order or public policy may likewise be the object of a
contract
 OBJECT
Article 1348. Impossible things or services cannot be the
object of contracts. (1272)

Article 1349. The object of every contract must be determinate

as to its kind. The fact that the quantity is not determinate
shall not be an obstacle to the existence of the contract,
provided it is possible to determine the same, without the
need of a new contract between the parties. (1273
 CAUSE
In a reciprocal obligation, causes are: payment
and to deliver the thing

Motive may be regarded as cause when the

contract is conditioned upon the attainment of
the motive of either contracting party.
ARTICLE 1160 : QUASI –CONTRACTS
Obligations derived from quasi-contracts shall be subject
to the provisions of Chapter 1, Title XVII, of this Book.
The provision tells you nothing
It leads you to Art. 2142-2175
Def’n: certain lawful, voluntary, and unilateral acts
Objective: integrating the natural law to positive law
 ARTICLE 1160 : QUASI –CONTRACTS
Quasi Contracts are certain lawful, voluntary and unilateral acts give
rise to the juridical relation of a quasi-contract to the end that no one
shall be unjustly enriched or benefitted at the expense of another.

Negotiorum Gestio(unauthorized management);

arises when a person voluntarily takes charge of the
management of the business or property of another without any
power from the latter.
Solutio indebiti (unjust enrichment)
takes place when a person receives something from another
without any right to demand for it, and the thing was unduly
delivered to him through mistake.
 ART. 2176,: QUASI- DELICTS
Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage
done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-
delict

Elements of a quasi-delict
1. Negligent or wrongful act or omission;
2. Damage or injury caused to another;
3. Causal relation between such negligence or fault and damage; and
4. No pre-existing contractual relationship between the parties(Art. 2176,
NCC)
DISTINGUISH A QUASI-CONTRACT
FROM A CONTRACT.
Quasi-Contract Contract

Created by law to avoid unjust Created by the meeting of minds of

enrichment two or more persons

Unilateral Acts Bilateral Acts

No meeting of minds Meeting of minds is required

 ELEMENTS TO MAKE A
PERSON LIABLE FOR A
QUASI-DELICT
There is an act or omission;
Such act or omission causes damage or injury;
01
There is no contributory negligence on the part of the
injured party;
The act or omission is the proximate cause of the
damage or injury to the injured party;
There is no pre-existing contract between the parties
 DISTINGUISH A QUASI-
DELICT FROM A DELICT.
Quasi-Delict Delict

There is only negligence. There is intent or negligence.

The purpose is indemnification. The purpose is punishment.

01 Affects private interest. Affects public interest.

Civil Liability Criminal and Civil Liability

Can Compromise Cannot Compromise

Fault or negligence is proved by Guilt must be proved beyond

preponderance of evidence. reasonable doubt.
2 PRINCIPAL KINDS OF QUASI-
CONTRACT
Negotiorum Gestio (unauthorized management);
arises when a person voluntarily takes charge of the
management of the business or property of another
Lawyer
without any power from the latter.

Solutio indebiti (unjust enrichment)

takes place when a person receives something from
another without any right to demand for it, and the
thing was unduly delivered to him through mistake.
 NATURE AND EFFECT OF
OBLIGATIONS
Real Obligation – to give
Specific – Real obligation to give a specific thing.
Generic – Real obligation to give a generic thing.
**This is based on the nature of the thing delivered***
Lawyer

Personal Obligation – To do or not to do

Positive – Personal Obligation to do.
Negative – Personal Obligation not to do.
 REAL OBLIGATION
(OBLIGATION TO GIVE)
An obligation to give may either involve a determinate or
generic thing.
It is determinate when the object is particularly
designated or physically segregated from all others of the
same class (Art. 1460[1], NCC).
It is generic when the object is designated merely by its class
or genus.
It is delimited generic when confined to a particular
class e.g. An obligation to deliver one of my horses.
 DIFFERENCE OF GENERIC TO
SPECIFIC THING

Generic Thing Specific Thing

Separated from its class or

Meaning Referred based on its class or genus
genusDistinctively Unique

Ex. To deliver a 500 ml Nature Spring Green

Lawyer
Example Ex. To deliver a bottle of water Mineral Water, touched and drank by Dean
Ulan last January 21, 2016

1246. When the obligation consists in the delivery of a

generic thing, whose quality and circumstances have not been 1244. The debtor of a thing cannot compel
Principal stated, the creditor cannot demand a thing of superior quality. the creditor to receive a different one,
Obligation Neither can the debtor deliver a thing of inferior quality. although the latter may be of the same value
The purpose of the obligation and other circumstances shall as or more valuable that which is due.
be taken into consideration.
 The law does not require the Art. 1163. Every person obliged to give
debtor to exercise something is also obliged to take care of it with
Supplemetal
DOAGFOAF because the the proper diligence of a good father of a
Obligation
genus of the thing never family, unless the law or the stipulation of the
perishes. parties requires another standard of care.

Default, Fraud, Negligence Default, Fraud, Negligence, Any other manner

and Any other manner that that Contravenes the Tenor of the Obligations
Grounds for Damages
Contravenes the Tenor of the and Fortuitous Events (Genus of the thing
Lawyer
Obligations never perishes)

The obligation to give a determinate thing

Delivery of its
includes that of delivering all of its accessions
Accessions and Substitution is allowed.
and accessories, even though they may not
Accessories
have been mentioned.
OBLIGATION TO GIVE A
DETERMINATE OR
SPECIFIC THING
Obligation to take care of the thing with the
proper diligence of a good father of a family,
Lawyer

unless the law or the stipulation of parties

requires another standard of care (Art. 1163, NCC).
OBLIGATION TO GIVE
INDETERMINATE OR
GENERIC THING
A thing is indeterminate if it is designated
merely by its class or genus without any
Lawyer

particular designation or segregation from

allothers of the same class
PERSONAL OBLIGATION
(OBLIGATION TO DO OR NOT TO DO)
Two kinds:
1. Positive obligation (Obligations to do)
Considered breached if:
If the debtor fails to do the obligation; or
Even in case of performance but the same is
done either in a poor manner or in
contravention of the tenor of the obligation.
2. Negative obligation
if the prestation consists of not doing
 TRANSMISSIBILITY OF
OBLIGATIONS
Subject to the laws, all rights acquired in virtue of an obligation are
transmissible, if there has been no stipulation to the contrary (Art. 1178, NCC)

General Rule: Rights are transmissible which can be alienated and

transferred to third persons.
Exceptions:
Lawyer
1. When they are intransmissible by their very nature, such as in the case of
a personal right;
2. When there is a stipulation of the parties that they are not transmissible;
3. When they are not transmissible by operation of law
 PERFORMANCE OF
OBLIGATIONS
Payment means not only the delivery of money but also the
performance, in any manner of an obligation (Art. 1232, NCC).

Obligations To Give:
It shall be understood to have been paid when the debtor has completely
delivered the thing which he obligated himself to deliver.
Obligations
Lawyer
To Do:
It shall be understood to have been performed when the debtor has
completely rendered the service which he has obligated himself to render.
Obligations Not to Do:
It shall be understood to have been complied with when the debtor has
completely refrained from doing that which he had obligated himself to to
do
BREACH OF
OBLIGATIONS
THANK
YOU