University of the Philippines College of Law OBLIGATIONS AND CONTRACTS Professor Eduardo A. Labitag 2ndSemester, AY 2008-2009 TitleI.

OBLIGATIONS Chapter I. General Provision CONCEPT OF OBLIGATION Definition Art 1156 Obligation is a juridical necessity to give, to do or not to do. OBLIGATORY RELATION IN ITS TOTALITY: The juridical relation, created by virtue of certain facts, between two or more persons, whereby the creditor or obligee, may demand of the debtor or obligor, a definite prestation. On PASSIVE SIDE: Where there is a right or power to demand, there is a correlative obligation or an imposition upon aperson of a definite conduct. Criticism of definition:It is one sided, reflects only the Roman Elements of Obligation 1. 2. Active subject - power to demand the prestation (obligee/creditor) Personal Passive subject - bound to perform the prestation (obligor/debtor) elements Temporary indefiniteness of a subject e.g. negotiable instrument payable to bearer or a promise of a prize ora reward for anyone performing a certain act Prestation or Object not a thing but a particular conduct of the debtor, but always a prestation KINDS OF PRESTATION. a. TO GIVE 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 its simple possession or in order to return to its owner. b. TO DO all kinds of work or services, whether mental or physical side of the agreement - Sanchez

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c. NOT TO DO consists in abstaining from some act, includes both being negative obligations REQUISITES OF PRESTATION

to

a. Physically and juridically possible b. Determinate or at least determinable according to pre-established elements or criteria c. Possible equivalent in money Pecuniary interest need not be for one of the parties, it maybe for the benefit of 3rd person/s distinct from the parties to the contract. Prestation need not be of economic character to have pecuniary value, if it does not have value thelaw attributes to it economic value e.g. moral and nominal damages 4. Efficient cause or juridical tie or vinculum juris - relation between obligor and oblige which is established: 5. By law (e.g. relation of husband and wife giving rise to the obligation to support) By bilateral acts (e.g. contracts giving rise to the obligations stipulated therein) By unilateral acts (e.g. crimes and quasi-delicts)

Form in which the obligation is manifested cannot be considered essential

Distinction between Natural and Civil Obligation NATURAL Not by court actions, but by good conscience of debtor Equity and natural justice CIVIL Court action or the coercive power of public authority Positive law

As to enforceability As to basis

SOURCES OF OBLIGATIONS A. LAW [Ex-Lege] Art 1158 Obligations derived from law are NOT PRESUMED. Only those expressly determined in this Code or inspecial laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as towhat has not been foreseen, by the provisions of this book.

- Governed by the law itself - Agreement of the parties is not necessary e.g. tax collection, Art 448 and Art 488 - Not presumed, only those expressly provided are enforceable B. CONTRACTS [Ex-Contractu, Culpa Contractual] Art 1159 Obligations arising from contracts have the force of law between the contracting parties and should becomplied with in good faith.

- Expresses principle of autonomy of will, presupposes that contract is valid and enforceable - PRE-CONTRACTUAL OBLIGATION: Damages can be recovered when contract is not perfected if: o Offers is clear and definite , leading offeree in good faith to incur expenses in expectation of entering into acontract o Withdrawal of the offer must be without any illegitimate cause. If offeror: Guilty of fault or negligence, li bility would be based on Art 2176 No fault or negligence, wihdrawal was in abuse of right ,liability would be based on Art 19 e.g .br eac hof promise to marry Ar t 1305 A c o nt r act i s a mee ting of m in ds be t wee n t w o pe r s o n s whe

r eby o n eb in ds h i mse l f ,w it h r espe ct t o t he o t he r , t o gi ve s o me t h ing or t o

r e n de r s o me se r v ic e.C. Q UASI-CONTRACTS or DELICTS [Quasi Ex-Contractu] Art 1160 Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title XVII. Art 2142 Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the endthat no one shall be unjustly enriched or benefited at the expense of another.Juridical relation which arises from certain acts that are:

LAWFUL (against crime),

VO LU NT ARY (against quasi-delict based on negligence or mere lack of foresight)

U NI LA TE RAL (against contract in which there are two parties)E .g. A

rt 2144 A rt 2150 A rt 2154 A rt 2164 A rt 2167 A rt 2168 A rt 2174 A rt 2175 K inds of Q uasi-contracts 1. N egotiorum gestio (officious management) Art 2144 Whoever voluntarily takes charge of the agency or management of the business or property of another,without any power from the latter, is obliged to continue the same until the termination of the affair and itsincidents, or to require the person concerned to substitute him, if the owner is in a position to do so. This juridicalrelation D O ES N O T arise in either of these instances:1) When the property or business is not ne gl e c ted or a b a ndoned2)

If in f ac t the m a n ag er h a s been t ac it l y a uthorized by the owner2. Solutio ind eb iti (payment not due) Art 2154 If something is received when there is no right to demand it, and it was undu l y de l ivered through mistake, the o b li ga tion to re tu r n it arises