Ramon Magsaysay Memorial Colleges, General Santos City LAW ON OBLIGATION & CONTRACTS

CHAPTER 1. GENERAL PROVISIONS

1. DEFINITION OF OBLIGATION (ARTICLE 1156)

1.1. An obligation is a juridical necessity to give, to do or not to do.
1.1.1. Obligation is a juridical necessity because in case of non-compliance, the courts of justice
may be called upon to enforce its fulllment or, in default thereof, the economic value that
it represents.

2. ESSENTIAL REQUISITES OF AN OBLIGATION

2.1. A passive subject (called debtor or obligor) or the person who is bound to the fulllment of the
obligation; he who has a duty;
2.2. An active subject (called creditor or obligee) or the person who is entitled to demand the
fulllment of the obligation; he who has a right;
2.3. Object or prestation (subject matter of the obligation) or the conduct required to be observed
by the debtor. It may consist in giving, doing, or not doing.
2.4. A juridical or legal tie (also called efcient cause) or that which binds or connects the parties to
the obligation.

3. SOURCES OF OBLIGATION (ARTICLE 1157)

3.1. Law is a rule of conduct, just, obligatory, promulgated by legitimate authority, and of common
observance and benefit.
3.2. 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. (Art. 1305.)
3.3. A quasi-contract is that juridical relation resulting from certain lawful, voluntary and unilateral
acts by virtue of which the parties become bound to each other to the end that no one will be
unjustly enriched or beneted at the expense of another. (Art. 2142.)
3.3.1. Kinds of Quasi-Contracts
3.3.1.1. Negotiorum gestio is the voluntary management of the property or affairs of
another without the knowledge or consent of the latter.
3.3.1.2. Solutio indebiti is the juridical relation which is created when something is
received when there is no right to demand it and it was unduly delivered through
mistake.
3.4. Acts or omissions punished by law
3.4.1. Two-pronged Effect
3.4.1.1. Criminal Liability as it breaches the social order
3.4.1.2. Civil Liability as it causes personal sufferings or injury, each of which is addressed,
respectively, by the imposition of heavier punishment on the accused and by an
award of additional damages to the victim.
3.5. A quasi-delict is an act or omission by a person (tort feasor) which causes damage to another in
his person, property, or rights giving rise to an obligation to pay for the damage done, there
being fault or negligence but there is no pre-existing contractual relation between the parties.
3.5.1. Requisites of Quasi-Delict
3.5.1.1. There must be an act or omission by the defendant;
3.5.1.2. There must be fault or negligence of the defendant;
3.5.1.3. There must be damage caused to the plaintiff;
3.5.1.4. There must be a direct relation or connection of cause and effect between the act
or omission and the damage; and
3.5.1.5. There is no pre-existing contractual relation between the parties.

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