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Blue = Verified w/ legal basis

Red = False/ Exception
Green = True/verbatim Atty T




I. True or False. State legal basis.

1. A custom can be a source of a legally demandable right
- False. Art. 1157, the law only prescribes 5 sources of obligations; (1) Law, (2)
Contracts, (3) Quasi-Contracts, (4) Acts or Omissions punished by law, and
(5) Quasi-delicts. A custom is not one of those which can be a source of a
legally demandable right.

2. Contracts can only be perfect be mere consent.

- False. As a general rule, Contracts are prefected by mere consent. However,
under Art. 1316, real contracts are perfect by delivery of the thing.

3. An accused who was acquitted from a criminal case can no longer be sued and held
liable for damages.
- False, Article 29 states that when the accused in a criminal prosecution is
acquitted on the ground that his guilt has not been proven beyond reasonable
doubt, a civil action for damages for the same act may be instituted.

4. An employer can be held civilly liable for the quasi-delict of his family driver.
- True, 2180(5) an employer can be held civilly liable for the damages caused
by their employees
- Jurisprudence: SILI v. CA

5. An employer can be held civilly liable for the crime committed by his driver.
- True, Article 100 of the RPC states that an employer can be subsidiarily be
liable for the actions of his employees provided that he has acted with
negligence upon employment.
- Jurisprudence: LRT v. Natividad

6. The obligor and obligee can stipulate for a standard of care lower than the diligence of
a good father of a family.
- False. Article 1173 Par (2). If a law or contract does not state the diligence
which is to be observed in the performance, that which is expected of a good
father of a family SHALL BE required. (- Atty. Taleon)

7. In determinate obligations, the debtory can compel the creditor to accept a different
prestation, specially if more valuable than what he promised to deliver.
- False, Article 1244 states that a creditor is not compelled to accept an object
which was not the prestation agreed upon even if the latter be more valuable.

8. The debtor cannot be held liable for breach of obligation if the breach is due to
fortuitous event.
- False, Article 1174. Upon stipulation, Nature of the obli when there is
assumption of risk, or by Law

9. If negligent act or omission of the obligee concurred with the negligence of the obligor
in causing the obligee’s injury, he can no longer recover damages.

10. If the obligee does not make any demand, the obligor will never incur in delay.
- False, Art. 1169. The debtor may be in delay if the following requisites occur
1.) stipulation or law states; 2.) when by the nature and circumstances of the
obligation, the determination of time waa the controlling motive of the
contract; 3.) demand would be useless as the obligor made it impossible to

II. State the essential conditions to be met in order to exempt the obligor from liability
in case of a fortuitous event
- Event is independent of the will of the obligor;
- Event is unforeseeable or inevitable
- Event has such a character that it would deem the obligation impossible to perform
- Free from aggravation of the injury the creditor will suffer

III. State the remedies of the creditor in case the debtor fails to comply with his
- Damages, art 1170
- In case of determinate thing, specific performance, art 1165 par 1
- In case of generic, ask for delivery, or it be at his cost
- Obligation to do, be performed at his cost 1167
- Obligation not to do, be undone at expense of debtor 1168

IV. Define.
1. Accion Pauliana
- Art. 1177, the right available to the creditor by virtue of which he can secure
the rescission of any act of the debtor which is in fraud and to the prejudice of
his rights as a creditor. it can only be availed of in the absence of any other
legal remedy to obtain reparation for the injury.

2. Accion Subrogatoria
- Art. 1177, the right to exercise all of the rights and bring all of the actions
which the debtor may have against third persons.

3. Obligation (by Arias Ramos)

- An obligation is a juridical relation whereby a person (called the creditor) may
demand from another (called the debtor) the observance of a determinative
conduct (the giving, doing or not doing), and in case of breach, may demand
satisfaction from the assets of the latter. (MSE v Campos)

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I. True or False. State legal basis.

1. In a credit card purchase, delay on the part of the credit card company in approving in
mora solvendi.

- False, Pantaleon vs Amexco (Resolution) highlighted that in every transaction

there is not valid obligation yet but an offer for an obligation. Hence in this
case, there is no mora solvendi, nor mora accipiendi since there is still no
obligation to accept the offer. Commented [1]: DI yan Mora Accipiendi
2. If the debtor binds himself to pay when he will have money, his obligation is one with Commented [2]: okay2
a condition.
- False; Article 1180, When the debtor binds himself to pay when his means
permit him to do so. The obligation shall be deemed one with a period.

3. If the obligation is subject to a condition, the obligor, prior to the fulfillment of the
condition, can still dispose the object of the obligation because the obligee doesn’t
have any right to it.
- False; Obligor has duty to take care of it, its loss, deterioration, or
improvements will have consequences subject to article 1189

4. If the obligation is subject to a potestative suspensive condition and the fulfillment of

the condition depends upon the will of the creditor, both the obligation and the
condition are void.
- False; only void if left to the will of the debtor; 1182
5. At the time of the constitution of the obligation, the condition imposed is against the
provision of an existing law. One year after, the new Congress repealed such law,
thereby allowing the performance of the condition. The obligation is valid.
- False; there is retroactive effect, article 1187

6. In case of breach of obligation, the obligee can ask for partial performance and
- False; obligee can only ask for one of the two remedies; 1191

7. In an obligation with a period, only parties can stipulate or fix the period within which
to fulfill the obligation
- False; Art 1197 courts may fix period provided that no period was fixed

8. The debtor, who is engaged in the business of buying and selling shrimps, borrowed
from the creditor the amount of P100,000 with interest of 2% per month and promised
to pay the creditor as soon as the shrimps are sold. This is an obligation with a period.
- True; Lim vs People

9. Miguel and Micheal solidarily bind themselves to deliver a specific horse, specific
carabao, or tricycle to Laida. The horse and carabao are lost due to the fault of
Miguel. The debtors are liable for damages.
- False; no damages yet, only damages if all are lost; art 1204. Ommission of
who has choice in the alt obli, we apply gen rule that it belongs to debtor,
1200, since only one is practicable, 1202

10. Miguel and Micheal solidarily bind themselves to deliver a specific horse, carabao,
or tricycle to Laida. Without the consent of Miguel, Micheal chose to deliver the
tricycle and communicated the choice to Laida. On due date of the obligation, Miguel
can fulfill the obligation by delivering the carabao.
- False; according to article 1201 of the new civil code, the choice shall make
no effect except from the time it was communicated. Based on the facts, as the
obligation is a solidary one, the communication of one makes the promise
binding. Hence miguel cannot deliver the carabao

11. In facultative obligation, if the principal obligation has become impossible, the
debtor can be held to perform the substitute.
- False; 1206, it is upom the choice of the debtor

12. In facultative obligation, if the principal obligation has been lost through fortuitous
event, the debtor is obliged to perform the substitute.
- False; 1206 obligor is only obliged to perform it after he has communicated
the same
13. In facultative obligation, the debtor is liable if the substitute is lost.
- True provided that he has communicated it already, 1206

II. Enumeration (with legal basis)

1. State the instances where the debtor is liable for damages in case of breach due to
fortuitous event.
- (1) By Law
- (2) By Stipulation
- (3) When the nature of the obligation requires the Assumption of Risk
- (4) When the loss of the thing is due partly to the fault of the debtor
- (5) Loss occurs after the debtor is in delay
- (6) Debtor promises to deliver the same thing to two persons who do not have
the same interest.
- (7) When the obligation is Generic
- (8) Debt of a certain and determinate thing proceeds from a criminal offense

2. State rules to be observed in case of improvement, loss or deterioration of the thing

during the pendency of the condition.
- 1189. Too lazy to enumerate - kiko
- O

3. State the limitation to the power of the injured party to rescind the obligation.
- He can only

4. State the limitations to the power of the court to fix a period in recession cases.

5. When may the debtor lose his right to make use of the period.
- When after the obligation has been contracted, he becomes insolvent, unless
he gives a guaranty or security for the debt.
- When he does not furnish to the creditor the guaranties or securities which he
has promised;
- When by his own acts he has impaired said guaranties or securities after their
establishment, and whn through a fortuitous event they disappear, unless he
immediately gives new ones equally satisfactorily;
- When the debtor violates any undertaking in consideration of which the
creditor agreed to the period
- When the debtor attempts to abscond

6. State the rules that govern the responsibility of the the debtor prior to the selection by
the creditor in alternative obligations
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I. True or False. State legal basis.

1. A debt is understood to have been paid only when the debtor delivers money to the

2. In all instances, an obligation is not extinguished if it is not totally paid.

- False, 1232

3. The father of Laida learned that his only daughter is laden of debt and her failure to
pay her debt as it becomes due has tarnished the family reputation. Thus, he went
Miguel, the creditor and tendered payment pf Laida’s debt.
a. The father’s tender of payment extinguishes the obligation because he can
compel Miguel to accept payment to save the family’s reputation.

b. The payment the father made can be recovered by him from the trust fund of

c. The payment made by the father is a donation and therefore, is not valid
payment when it is without the consent of Laida

6. Payment to the husband of the creditor extinguishes the obligation


7. For payment to be valid, it must be made by the debtor at the domicile of the creditor.

8. In determinate obligations, the creditor can receive a thing other than the specific thing
agreed upon and such acceptance of the different thing extinguishes the obligation.

9. You owe your classmate, P100. You can compel your classmate to accept your payment
consisting of 100 pieces of P1 coin.
10.the debtor can withdraw the thing consigned:
a. As a right.

b. As a privilege.

12. If the thing which the object of the obligation is lost through theft, the obligation is

13. A condonation must be in writing to be valid.

- True, A condonation follows the rules of donations. Under such, all donations, to be
valid, must be in writing.

14. When a debtor did not collect and instead abandoned his credit, the debt is extinguished
by condonation.

II. Enumeration.
1. Define and state 2 distinctions of Dacion En Pago and Payment by Cession.
- Dation en pago - a special form of payment whereby the property is alienated by the
debtor to the creditor in satisfaction of a debt in money.
- Payment by Cession - a special form of payment whereby debtor abandons all of his
property for the benefit of his creditors in order that the proceeds thereof the latter
may obtain payment of their credits.

2. State the requisites of Consignation. (1256-61)

- (1) There is a debt due
- (2) Creditor to whom tender of payment was made refused to accept payment without
just cause, or because any of the causes stated by law for effective consignation
without previous tender of payment exists.
- (3) Previous notice of the consignation had been given to the persons interested.
- (4) Thing or amount due had been placed at the disposal of judicial authority.
- (5) After consignation has been made, the persons interested in the fulfillment of the
obligation had been notified thereof.

3. What are the effects of the loss of the thing due.

a. Determinate Obligations to give.
b. Obligations to deliver a generic thing.
- Obligation is not extinguished
c. Obligation to do.
- Obligor is released, provided that such impossibility is not due to his fault and
that it took place before he has incurred in delay.
- Obligation is extinguished

4. State the instances of implied remission under the New Civil Code.
- Art. 1271. The delivery of a private document evidencing credit, made
voluntarily by the creditor to the debtor.
- Art. 1272. Whenever the private document on which the debt appers is found
in the possession of the debtor

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I. True or False. State legal basis.

1. There is novation if parties agree to the reduction of price.
- False, there must be a clear case of incompatibility between the 2 obligations
neither is there a change in the obligatory relations between the parties which
alter the essence of the old obligation.

2. The insolvency of the new debtor in delegacion will render the old debtor liable.
- False, Art. 1293.

3. The non-fulfillment of the obligation by the new debtor in delegacion will render the
old debtor liable.
- False, Art. 1295

4. Conventional Subrogation is the same as Assignment of Credit.

- False, They are different as to effect, _____, and ______.

5. Contracts are perfected by mere consent.

- True, as a general rule, contracts are perfected by mere consent. However,
Real Contracts are perfected when they are coupled with the delivery of the

6. A contract may be entered into in the name of another.


7. The validity and fulfillment of a contract can be left to chance.

8. The parties can stipulate to limit their liability in case of breach.

9. The parents of a college student who died by reason of accident can bring a case
against the insurance company, with which their only son has an existing insurance

10. A contract is valid if an accidental element is absent.


II. Distinctions
1. Expromision v. Delegacion

2. Conventional v. Legal Subrogation.


3. Doctrine of Contractual Interference v. Stipulation Pour Autrui.


III. Enumeration.
1. How are obligations modified?
- Remission
- Confusion
- Merger
- Compensation
- Novation

2. What are the effects of novation on:

a. Accessory Obligations
b. Stipulations Pour Autrui
c. Original Conditions Imposed
d. Non-Fulfillment of the suspensive condition imposed on the new obligation.
e. Prescribed Obligation

3. When is there legal subrogation?

- (1) When a creditor pays another creditor who is preferred, even without the
debtor's knowledge;
- (2) When a third person, not interested in the obligation, pays with the express
or tacit approval of the debtor;
- (3) When, even without the knowledge of the debtor, a person interested in the
fulfillment of the obligation pays, without prejudice to the effects of confusion
as to the latter's share.

4. What are common essential and special elements of Contracts.


5. When may a contract produce effect on 3rd persons?

- (1) Art. 1311. When the contracts contains a beneficial stipulation in favor of
a 3rd person, provided that such 3rd person has communicated his acceptance
to the obligor before it is revoked.
- (2) Art. 1312. Where a 3rd person comes into possession of the object of a
contract creating a real right.
- (3) Art. 1313. Where a contract is entered into in order to defraud a 3rd
- (4) Art. 1314. Where a 3rd person induces a contracting party to violate his

IV. State the legal basis/bases of the following:

1. Relativity of Contracts
- Art. 1311 - Contracts take effect only between the parties, their assigns and
heirs, except in case where rights and obligations arising from the contract are
not transmissible by their nature, or by stipulation, or by provision of law. The
heir is not liable beyond the value of the property he received from the

2. Autonomy of Contracts
- Art. 1306 - The contracting parties may establish such stipulations, clauses,
terms, and conditions as they may deem convenient, provided they are not
contrary to law, morals, good customs, public order, or public policy

3. Mutuality of Contracts
- Art. 1306 - The contracts must bind both contracting parties; its validity or
compliance cannot be left to the will of one of them.

4. Obligatory Character of Contracts

- Art. 1315. Contracts are perfected by mere consent and from that moment the
parties are bound not only to the fulfillment of what has been expressly
stipulated but also to all consequences which, according to their nature, may
be in keeping with good faith, usage, and law.

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MIDTERMS (Arts. 1156 - 1304)

Questions are taken from the Jurado Civil Reviewer.

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I. True or False. State legal basis.

1. The offeror can still withdraw his offer even after the offeree has communicated his
- False. Art. 1324. The offeror can no longer withdraw his acceptance once the
same has been communicated, unless when the option is founded upon a
consideration, as something paid or promise.

2. The offeree can still withdraw his acceptance even after he communicated it.
- True, Art. 1319, Acceptance made by letter or telegram does not bind the
offerer except from the time it came to his knowledge.

3. Nars offered to sell his bike to Michael in the amount of 5,000, payable in cash coin at
4:30pm at the Dean’s office. Michael brought and tendered to Nars 5,000 pieces of 1p
coin at 4:00pm. Since Michael already accepted the offer, there is already a perfected
contract of sale.
- False. According the Bangko Central Circular 2007. Tender of payment of
coins shall be valid up to P1,000. Excess thereof shall not be considered legal
tender. Since Michael has yer to pay the P4,000, the contracts of sale has not
been perfected.

4. Nancy offered to sell her farm to Linda for 100,00 and has given the latter 10 days
within which to decide whether she will buy the same. To show her appreciation for
the time given to her, Linda gave Nancy P1,000. The following day, Michael made an
offer to buy Nancy’s farm for P150,000. Thus, she immediately called Linda that she
is no longer selling her farm. Nancy can always withdraw her offer prior to
acceptance of Linda.

5. Michael caused the publication of his advertisement in FORSALE.COM that he is

selling a Toyota Vios, 2010 model, motor number 123456 and with plate number
POGI77 on a “where is as is” basis for P350,000. Cres called called up Michael and
informed him that he is buying the said Toyota Vios and five minutes after, Michael
received and read a text from Nars that he is buying the car for P360,000. Micheal
can choose whether to sell his car to Cres or Nars.

6. A contract entered into by parties who are incapacitated is voidable.


7. A minor can enter into a contract which has valid effects.

- True,

8. Lesion shall invalidate a contract for lack of cause.

- False. Art. 1355, Lesion or inadequacy of cause shall not invalidate a contract,
unless there has been fraud, mistake or undue influence or in cases specified
by law.

9. A natural obligation is a sufficient cause of a contract

- True. Since a natural obligation simply has all the requisites of a valid cause of
contract. That it exists, is legal and true. (Atty. Taleon simply said so)

10. In order that a cause is considered existing, it must be stated in the contract.
- False. Art. 1354, Although the cause is not stated in the contract, it is
presumed that it exists, and is lawful, unless the debtor proves contrary.

11. Cres obliged himself to deliver an animal to Nancy for P5,000 on March 23, 2017 to
which Nancy agreed. Nancy can demand the delivery of the animal on March 23,
2017 because there is a valid contract.

12. An absolutely simulated contract is void because it is prohibited by law.

- True

13. A contract of adhesion is voidable because the consent is vitiated.

- False,

14. “Dealers Talk” constitute fraud and therefor makes a contract entered by reason of it
- False,

15. Mistake of Law dies not vitiate consent .

- False

II. Enumeration
1. What are the requisites of consent?
- Manifested by concurrence of the offer and the acceptance. (Art. 1319-1326)
- Parties must possess the necessary legal capacity (Art. 1327-1329)
- Must be Intelligent, Free, Spontaneous, and Real. (Art. 1330-1346)

2. State those who do not have legal capacity to enter into a contract.
- (1) Minors
- (2) Insane or Demented Persons, and Deaf-Mutes who do not know how to
read or write (Art. 1327)
- (3) Married Women of Age in specific cases
- (4) Persons suffering Civil Interdiction
- (5) Incompetents under guardianship

3. What are the requisites in order that a thing, right, or service can be the object of a
- (1) Within the Commerce of Man. Susceptible of appropriation and
transmissible from one person to another
- (2) Real or Possible. Should exist at the moment of celebration of the
contract, or atleast in the future
- (3) Licit. Should not be contrary to law, public morals, good customs, public
order, or public policy.
- (4) Determinate as to its kind, and not necessarily quantity.

4. What are the essential requisites of cause?

- (1) Existent
- (2) Licit or Lawful
- (3) True

5. In a contract of loan with real estate mortgage, what is the cause and what is the object?

6. What are the effects of a simulated contract?

- Void
- Parties may recover what they have given under the contract, unless recovery
may prejudice 3rd persons
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I. True or False. State legal basis.

1. A contract is require to be in a certain form to be obligatory.
- False, Art. 1318, A contract merely requires that all essential requisites be
complied with such as; (1) Consent of the contracting parties, (2) Object
Certain, which is the subject matter of the contract, (3) Cause of the

2. A contract of sale must be is a public instrument in order to be valid as required by

Art. 1358.
- False, Art. 1358 does not require a contract of sale to be in a public
instrument, unless in involves the creation, transmission, modification, or
extinguishment over sales of real property.

3. If a defect in the contract is due to fraud or mistake, the remedy of the parties is to file
for reformation of the contract.

4. It is not legitimate for a bilateral contract to b embodied in 2 or more separate writings.

- False,

5. A sale made in violation of the right of first refusal is void.

- False

6. All contracts entered into in behalf of a ward are rescissible.


7. The inadequacy of the price in a contract of sale is sufficient ground to rescind the

8. The remedy to set aside the transfer or assignment of a property made by the
debtor/seller to his son in order to shield said property from the creditor is Accion
- False, MB v Silverio, Accion Pauliana is a last resort to rescind contracts in
order to protect a creditor from being defrauded
II. Enumeration
1. What are the contracts that are required to be in a public document under Article 1358.
- (1) Acts and contracts which have for their object the creation, transmission,
modification or extinguishment of real rights over immovable property; sales
of real property or of an interest therein are governed by articles 1403, No. 2,
and 1405
- (2) The cession, repudiation or renunciation of hereditary rights or of those of
the conjugal partnership of gains;
- (3) The power to administer property, or any other power which has for its
object an act appearing or which should appear in a public document, or
should prejudice a third person;
- (4) The cession of actions or rights proceeding from an act appearing in a
public document.
- (5) All other contracts where the amount involved exceeds five hundred pesos
must appear in writing, even a private one.

2. What is the doctrine of Reformation of Contracts and state the requisites of the
- Article 1359. When, there having been a meeting of the minds of the parties to
a contract, their true intention is not expressed in the instrument purporting to
embody the agreement, by reason of mistake, fraud, inequitable conduct or
accident, one of the parties may ask for the reformation of the instrument to
the end that such true intention may be expressed.
- (1) There must be a meeting of the minds of the parties.
- (2) Their true intention is not expressed in the instrument.
- (3) Such failure to express true intention is due to mistake, fraud,. Inequitable
conduct, or accident.

3. State atleast 4 rules of Interpretation of Contracts. (1370-78)

- Article 1370. If the terms of a contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its stipulations shall
control. If the words appear to be contrary to the evident intention of the
parties, the latter shall prevail over the former.
- Article 1371. In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered.
- Article 1372. However general the terms of a contract may be, they shall not
be understood to comprehend things that are distinct and cases that are
different from those upon which the parties intended to agree.
- Article 1373. If some stipulation of any contract should admit of several
meanings, it shall be understood as bearing that import which is most adequate
to render it effectual.
- Article 1374. The various stipulations of a contract shall be interpreted
together, attributing to the doubtful ones that sense which may result from all
of them taken jointly.
- Article 1375. Words which may have different significations shall be
understood in that which is most in keeping with the nature and object of the
- Article 1376. The usage or custom of the place shall be borne in mind in the
interpretation of the ambiguities of a contract, and shall fill the omission of
stipulations which are ordinarily established.
- Article 1377. The interpretation of obscure words or stipulations in a contract
shall not favor the party who caused the obscurity.

4. State atleast 4 distinctions of Rescission of Contracts in general under Article 1380 and
Rescission under Article 1191.

5. What contracts are rescissible? (Art. 1381-82)

- Those entered into by guardians whenever the wards whom they represent
suffer lesion by more than ¼ of the value of the thing
- Agreed upon in representation of absentees, if the latter suffer lesion of ¼ of
the value of the thing
- Undertaken in Fraud of creditors when the latter cannot in any other manner
collect the claims due them.
- Refer to things under litigation if they have been entered into by defendant
without the knowledge and approval of the litigants or of the competent
judicial authority
- Payments made in a state of insolvency for obligations to whose fulfillment
the debtor could not be compelled at the time they were effected
- All other contracts specially declared by law.

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I. True or False. State legal basis.

1. A voidable contract which has been consummated can no longer be annulled.

2. Miguel, 20 y.o., sold an iPhone X to 17 y.o. Miguelito for the sum of P15,000 at the
time when he was badly in need of money to pay his tuition fee. Miguel can file an
action to annul the contract.
- False. Art. 1397.
3. Ratification of a voidable contract requires the consent of the guilty party.

4. The prescriptive period to file an action for annulment is four years from the execution
of the contract.

5. The Statute of Frauds is applicable to all kinds of contracts and in Art. 1403(2),
whether executory and consummated.

6. The Statute of Frauds requires a contract to be notarized to be enforceable.

- False, the Statute of Frauds merely requires the an obligation be in written
form to be enforceable.

7. The principle of the contract which fails to comply with the Statute of Frauds cannot be
enforced means that the parties cannot execute and get what is due them under the

8. A void contract is the same as inexistent contracts.

- False

II. Enumeration
1. Voidable Contracts (Art. 1390)
- Where one of the parties is incapable of giving consent.
- Where the consent is vitiated by mistake, violence, intimidation, undue
influence or fraud.

2. Unenforceable Contracts (Art. 1403)

- Those entered into the name of another person by one who has been given no
authority or legal representation, or who has acted beyond his powers.
- Those that do not comply with the Statute of Frauds
- There where both parties are incapable of giving consent

3. Contracts covered by the Statute of Frauds

- An agreement that by its terms is not to be performed within a year from the
making thereof;
- A special promise to answer for the debt, default, or miscarriage of another
- An agreement made in consideration of marriage, except a mutual promise to
- An agreement for the sale of goods, chattels or things in action, at a price not
less than five hundred pesos, unless the buyer accept and receive part of such
goods and chattels, or the evidences, or some of them, of such things in action
or pay at the time some part of the purchase money; but when a sale is made
by auction and entry is made by the auctioneer in his sales book, at the time of
the sale, of the amount and kind of property sold, terms of sale, price, names
of the purchasers and person on whose account the sale is made, it is a
sufficient memorandum;
- An agreement for the leasing for a longer period than one year, or for the sale
of real property or of an interest therein
- A representation as to the credit of a third person

4. Void and Inexistent Contracts

- Those whose cause, object or purpose is contrary to law, morals, good
customs, public order or public policy;
- Those which are absolutely simulated or fictitious;
- Those whose cause or object did not exist at the time of the transaction;
- Those whose object is outside the commerce of men;
- Those which contemplate an impossible service;
- Those where the intention of the parties relative to the principal object of the
contract cannot be ascertained;
- Those expressly prohibited or declared void by law.

III. Distinctions
1. Void v. Inexistent Contracts

2. Distinguish the 4 Classes of Defective Contracts.

- Rescissible Contracts
- Voidable Contracts
- Unenforceable Contracts
- Void and Inexistent Contracts

3. Who may ratify a defective contract.

- Art. 1394. Guardian of the incapacitated person
- Art. 13

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I. True or False. State legal basis.

1. Contracts infringing the Statute of Frauds cannot be ratified.
- False. Art. 1405. Contracts infringing the Statute of Frauds are ratified by the
failure to object to the presentation of oral evidence to prove the same, or by
the acceptance of benefits under them.

2. The ratification by the parent of one of the incapacitated parties will not make the
contract perfectly valid.
- True. Art. 1407. In a contract where both parties are incapable of giving
consent, express or implied ratification by the parent, or guardian, of one of
the contracting parties shall give the contract the same effect as if only one of
them were incapacitated.

3. The buyer in a contract of sale entered into by an agent without authority from the
principal cannot set up the defense of unenforceability.
- True. The capacitated party to a contract cannot set up the defense of
unenforceability on the incapacity of the incapacitated party.

4. An incapacitated person is not obliged to make a restitution should his contract be

- False; 1399 except of what has benefited him

5. In case the consent is vitiated by fraud or mistake, the prescriptive period commences
from discovery, which is the time of actual knowledge.
- False, MWSS VS CA, Commences from the time there is constructive notice
to the world (in such case, when it was registered)

6. The principle of In Pari Delicto is applicable to to void and inexistent contracts.

- False; only in void contracts; DOH CASE (accordning to atty. but it was
originally in menchavez case. Si attorns nalang sundin natim kasi siya mag

7. The principle of In Pari Delicto is not applicable to simulated or fictitious contracts.

- True; 1411 and 1412

8. A natural obligation constitutes a sufficient cause or consideration.

- True, because Atty said so.
9. Miguel has paid his debt he contracted 15 years ago to Laida not knowing the it has
prescribed. Miguel cannot recover what he has paid because this is a natural
- False; 1423; it must voluntary, hence; he needs some milk.
- Jk. He needs to know that there was presciption

10. The Government is bound by Estoppel.

- False. NHA v GBC the principle of estoppel does not operate against the
Government for the act of its agents, or, as in this case, their inaction.

II. Objectives
1. What are the characteristics of Void or Inexistent Contracts.
- Not Susceptible of Ratification
- Cannot be assailed by 3rd person
- Do not produce any legal effects (quod nullum est nullum producil effectum)
- Action or defense of nullity or inexistence is imprescriptible
- Defect consists in fact that they lack absolutely wither in law one or some of
the elements of a valid contract

2. What are the effects of nullity of contracts:

a. Article 1411 (2pts.)
- They shall have no Action against each other
- Both shall be prosecuted

b. Article 1412 (2pts.)

- When both at fault. Neither party may recover what he has given by virtue of
the contract, or demand the performance of the other’s undertaking.
- When only one is at fault. He cannot recover what he has given by reason of
the contract, or ask the fulfillment of what has been promised. The innocent
party may demand return of what he has given without obligation to comply
with the promise.

3. State at least 3 exceptions to the principle of In Pari Delicto.

- Agreement or contract which is not illegal per se but is merely prohibited by
law, and the prohibition is designed for the protection of the plaintiff.
- Payment of money or delivery of property for an illegal purpose, where the
party who paid or delivered repudiates the contract before the purpose has
been accomplished, or before any damage has been cause to a third person.
- Payment of money or delivery of property by an incapacitated person.
- Contract whereby a laborer undertakes to work longer than the maximum
number of hours fixed by law.
- Contract whereby a laborer accpets a wage lower than the minimum wage
fixed by law.
4. What are Natural Obligations; State 4 Kinds of Natural Obligations.
- Natural Obligations are those based on equity and natural law which are not
enforceable by means of court action, but which after voluntary fulfillment by
the obligor, authorize the retention by the obligee of what has been delivered
or rendered by reason thereof.
- Article 1424. When a right to sue upon a civil obligation has lapsed by
extinctive prescription, the obligor who voluntarily performs the contract
cannot recover what he has delivered or the value of the service he has
- Article 1425. When without the knowledge or against the will of the debtor, a
third person pays a debt which the obligor is not legally bound to pay because
the action thereon has prescribed, but the debtor later voluntarily reimburses
the third person, the obligor cannot recover what he has paid.
- Article 1426. (No longer applicable, No points for citing)
- Article 1427. (No longer applicable, No points for citing)
- Article 1429. When a testate or intestate heir voluntarily pays a debt of the
decedent exceeding the value of the property which he received by will or by
the law of intestacy from the estate of the deceased, the payment is valid and
cannot be rescinded by the payer.
- Article 1430. When a will is declared void because it has not been executed in
accordance with the formalities required by law, but one of the intestate heirs,
after the settlement of the debts of the deceased, pays a legacy in compliance
with a clause in the defective will, the payment is effective and irrevocable.

5. Define:
a. Estoppel
- Art. 1431. A condition or state by virtue of which an admission or
representation is rendered conclusive upon the person making it, and cannot be
denied or disproved as against the person relying thereon.

b. Estoppel in Pais
- Estoppel by Conduct or Silence. When one by his acts, representation or
admissions, or by his silence when he ought to speak out, intentionally or
through culpable negligence, induces another to believe certain facts to exist
and such other rightfully relies and acts on such belief, as a consequence of
which he would be prejudiced if the former is permitted to deny the existence
of such facts. (Jurado)

c. Estoppel by Deed
- Technical Estoppel. When a party to a deed and his privies are precluded
from asserting as against the other party and hid privies any right or title in
derogation or from the deed, or from denying any material fact asserted
therein. (Jurado)
d. Estoppel by Laches
- Barred from setting an action against another person due to the capability to
set it up but did not do so within the reasonable amount of time the action
aroused and it would be injurious to the defendant if such case pushed
through. Furthermore it gives a presumption of abandoning the action

6. What are the 4 elements of the doctrine of laches.

A. Conduct on the part of the defendant, or of one under whom he claims, giving
rise to the situation of which the complaint seeks a remedy
B. Delay in asserting the complainant’s rights, the complainant having had
knowledge or notice of the defendant’s conduct and having been afforded an
opportunity to institute a suit
C. Lack of Knowledge or Notice on the part of the defendant that the
complainant would assert the right on which he bases his suit
D. Injury or Prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held to be barred.

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FINALS Samplex (Cover 2 Cover)

Questions and Answers found in Jurado Civil Reviewer

I. Bino sued Ben for damages because the latter had failed to deliver the antique
Mercedes Benz car Bino purchased from Ben which was — by agreement — due
for delivery on Dec. 31. 1993. Ben, in his answer to Bino’s complaint, said Bino’s
claim has no basis for the suit, because as the car was being driven to be
delivered to Bino on Jan. 1, 1994, a reckless truck driver had rammed into the
Mercedes Benz. The trial court dismissed Bino’s complaint, saying Ben’s
obligation had in indeed been extinguished by force.

Is the trial court correct?

- Nope. Generic thing, 1246

II. In 1960, the Bureau of Lands issued a Homestead patent to Elias Palos. Under the
Public Land Law, any sale or conveyance made involving said Homestead is
void. Three years later, Elias sold the homestead to Enrico Fernando. Elias died
on March 15, 1990 and his heirs filed an action to recover the homestead from
Enrico on the ground that its sale by their father to the latter is void under the
Public Land Law. Enrico contended, however, that the heirs of Elias Palos
cannot recover the homestead from him anymore because:
a) The action has prescribed
- No. 1410. Void contracts do not prescribe
b) Elias was in In Pari Delicto
- Yes

c) Heirs are guilty of Laches

- No

III. Totoy Bato, a citizen and resident of New Jersey, USA. under whose law he
was still a minor, being only 20 years of age. He was hired by ZTE Corp. of
Manila to serve for two years as its chief computer programmer. However, after
serving only one (1) year, he resigned from ZTE, because he was enticed by
GMA Corp., by offering advantageous terms. ZTE sued him and GMA for
damages arising from breach of his contract of employment. He interposed his
minority as a defense and asked for annulment of the of the contract on the
ground that ZTE disputed this by alleging that since the contract was executed in
PH under whose law the age of majority is 18. He was no longer a minor at the
time of perfection of the contract.
1. Will the suit against Totoy Bato prosper?
- No capacity to act. Cannot prosper on the grounds that totoy bato is
still a minor under us law. Article 15 of the NCC shall govern the
nationality principle

2. Will the suit against GM prosper? What is the basis of their liability?
- Yes. Article 1314

IV. Laida and Miggy entered into a lease contract over MONTE Building on
Feb. 1, 2005 where Miggy is expressly granted a right of first refusal should the
lessor, Laida, decide to sell both the land and building. However, on March 30,
2007, Laida sold the property to Mackoy who knew about the lease and in fact
agreed to respect it. Thereafter, after being informed of the new lessor, Miggy
made a demand and subsequently filed an action against both the lessor-seller,
Laida and the buyer, Mackoy (a) rescind the sale and (b) to compel the specific
performance of his right of first refusal in the sense that the lessor should be
ordered to execute a deed of absolute sale in favor of the lessee at the same price.
The defendants contended that the plaintiff can neither ask rescission of thecsale
not compel specific performance of a right of first refusal.

Decide the case.


V. In two separate documents signed by him , Miguel Tonto “obligated” himself

each to Glow Landera and to Parlie Estrada, thus —
1st. - “To Glow my true love, I obligate myself to give you my one and only
horse... when I feel like it”

2nd - “To Perlie, my true sweetheart, I obligate myself to pay you the
P500,000 I owe you... when I feel like it”

Months passed but, Miguel never bothered to make good his promises. Glow and
Perlie came to consult you on whether they could recover on the basis of the
foregoing documents.

Advise them!
- Yes, Glow and Perlie can still recover because the obligation is one
with a period. According to Article 1193 of the New civil code an
obligation with a period is one where the execution of the obligation is
dependent upon the happening of an event that will surely happen, and
additionally, as substantially provided by article 1197 paragraph 2 of
the New Civil Code, the courts may fix a specific period when the
obligation with a period depends upon the will of the debtor. Based on
the facts, the two promissory notes given by Miguel Tonto both give
the indication of the word “when” indicating that it will happen
dependent upon the will of Miguel, the debtor. Thus, since it is an
obligation with a period and it is dependent upon the sole will of
Miguel, the courts may nonetheless fix a period for the performance of
the obligation as provided by the new civil code. Hence; Yes, Glow
and Perlie may still recover because the obligation is one with a period

VI. A) Suppose that under an obligation imposed by a final judgement, the liability
of the judgement debtor is to pay the amount of P6,000 but both the judgement
debtor and the judgement creditor subsequently entered into a contract reducing
the liability of the former to only P4,000, is there an implied novation which will
have the effect of extinguishing the judgement obligation and creating a modified
obligatory relation? Decide!

B) How is a Civil Obligation distinguished from a natural obligation? Give an

example of a Natural Obligation.

VII. Beauty La Fea offered to sell her BMW to Regina Bilog for P600,000. After
inspecting the car, Regina offered to buy it for P500,000. This offer was accepted
by Beauty. The next day, Beauty offered to deliver the car, but Regina being
short of funds, secured postponement of delivery, promising to pay the price
“upon the arrival of the steamer, Ogle de Pogi”. The steamer however never
arrived because it was wrecked by a typhoon and sank somewhere off the coast
of Samar.
A) Can Beauty compel Regina to pay the purchase price?
- Yes, since there is already a perfected contract because there is concurrance of
offer and acceptance. Beauty may compel Regina, however, she will have to
wait for the arrival of the steamer, which would have arrived if not for the

B) Is the promise to pay made by the conditional or with a term?

- The promise to pay is made by a term. The arrival of the steamer is a “day
certain”. Under the New Civil Code, when an obligation is weighted on the
condition that a “day certain” arrives, it shall be deemed as an obligation with
a period.

VIII. Ian and Asha met on the plane to Cebu. Ian offered Asha to stay in his resort
in Bohol. Asha was so impressed with the place that she hinted a desire to lease
the same. On March 5, 2007, Ian e-mailed Asha offering to lease the resort. Asha
opened her e-mail on March 6, 2007 but only sent the telegram of acceptance on
March 8, 2007. On March 7, Ian had a change of heart and withdrew his offer,
Asha read the e-mail right after sending the telegram to Ian.

Was the contract perfected?


IX. Ismael is married to Marta. In 1999, Ismael met Tisay, a 17 y.o. GRO and went
crazy rabid with desire. Ismael donated to Tisay a house and lot which he and
Marta previously occupied with their 3 children. The donation was subject to the
condition that Tisay becomes Ismael’s mistress. Tisay accepted the donation but
demanded to have a condominium as their love nest. In 2006, Ismael died of a
heart attack. Marta and her 3 children went back to the house donated to Tisay
and decided to live there.

Advise Tisay.
- Tisay has no cause of action. The donation is void. Under Art. 1183, Tisay is
also a minor and incapable of giving consent.

X. Contract to sell. Sale of one lot among the 5 lots owned by the vendor, without
stating which of the lots was the subject of the sale. The parties subsequently
couldn’t agree which lot was sold.
What the status of the contract?
- There is no contract of sale because it was never perfected. According
to Article 1319, consent is manifested by the meeting of the offer and
the acceptance of the thing and the cause which constitutes the
ACCEPTANCE ABSOLUTE, a qualified acceptance constitutes no
counter offer. Case at bar, they never specified which lot it was, hence;
from the creation of the contract there was no perfection due to the
absence of certainty of the offer.

XI. The husband assumed sole administration of the family’s mango plantaion
since his wife worked abroad. Subsequently, without his wife’s knowledge, the
husband entered into an agreement with a company, giving it possession and
management of the plantation with power to harvest and sell the fruits and apply
the proceeds to the payment of a loan he got.
What is the standing of the contract?

XII. Contract of Sale. Delivery within 30 days but not guaranteed. Obligor
delivered after 30 days because of transportation troubles and the government
red-tape. Obligee refuse to accept the delivery.
Is the refusal justified?

XIII. (A) Contract of Loan. To be paid within 2 years from the date of execution.
Obligor promised to deliver a car as security/guarantee. Obligor failed to deliver
the car. Obligee now demands immediate payment of loan.
Can the obligee demand immediate payment?
- Article 1198. He shall lose the right to make use of a period. When he
does not furnish to the creditor the guaranties and securities he

(B) Contract of Loan. Obligor failed to pay on due date. Obligee gave a grace
period of 5 days. Obligor tendered payment using a manager’s check. Obligee
refused to accept the check. Grace period expired.
May the obligation be considered extinguished?
- No. Article 1256. If the creditor to whom tender of payment has been
made refuses without just cause to accept it, the debtor shall be
released from responsibility by the consignation of the thing, or sum

XIV. Lease contract for 18 months. Agreement was not made in writing. Lessee
paid 2-months deposit and issued post-dated check to lessor. Because of the
showing of good faith and immediate payment by the lessee, lessor said that
should he decide to sell the property, he would offer it first to the lessee. Lessee
occupied the property.
(A) Lessee received a scholarship grant abroad. Lessee decided to study
abroad. Lessee filed a case for the return of the post-dated checks. Lessor
filed a motion to dismiss on the ground that the contract is unenforceable.
You’re the Judge. Will you grant the dismissal?

(B) Lessee decided to stay and declined the scholarship grant. Lessor sold the
property to Jun. Lessee filed a case asking for damages and cancellation
of the sale. Lessee wants to exercise his right to buy the property.
Is the case meritorious?

XV. Novation. At the instance of a 3rd person, new debtor substituted old debtor
without latter’s knowledge but with consent of the creditor. New debtor became
insolvent. What is the effect of insolvency of the new debtor to the obligation of
the old debtor?
- This is expromision. Under Article 1294. If the substitution is without
the knowledge or against the will of the debtor, the new debtor’s
insolvency or non-fulfillment of the obligation shall not give rise to
any liability on the part of the original debtor.