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Velasco, Khristine B.

Law on Obligations & Contracts

4th Year/BSBM-I601 November 24, 2017


1. Definition of Law

Law is the principles and regulations established in a community by some authority and

applicable to its people, whether in the form of legislation or of custom and policies recognized

and enforced by judicial decision.

2. Classifications of Law

 Public Law – a body of law governing relations between a state and its citizens, and

dealing with the structure and operation of the government.

 Constitutional Law – rights carved out in the federal and state contributions.

 Administrative Law – is the body of law created by the agencies and departments of the

government, which carry out the laws passed by Congress or a state legislature.

 Criminal Law – refers to a body of laws that apply to criminal acts.

 Civil Law – is the law of private rights and duties.

 Private Law – affects the rights and obligations of individuals, families, businesses and

small groups and exists to assist citizens and disputes that involve private matters.

 Contract Law – governs the rights and obligations of those entering into contracts.
 Tort Law – rights, obligations and remedies provided to someone who has been

wronged by another individual.

 Property Law – governs forms of property ownership, transfer and tenant issues.

 Succession Law – governs the transfer of an estate between parties.

 Family Law – governs family-related and domestic-related issues.

 Substantive Law – a law that creates and controls the rights and duties of parties.

 Procedural Law – a law that creates and controls the process of enforcing the rights and

duties under substantive law.

 Municipal Law – is the law specific to a particular city or country (known legally as a

“municipality”), and the government bodies within whose cities or countries.

 International Law – a law that governs the legal relations between or among states or


 Written Law – laws deriving their force from express legislative enactment, as

contradistinguished from unwritten or common law.

 Unwritten Law – refers to the law based upon custom, usage, and judicial decisions. It is

distinguished from the enactments of a legislature, orders or decrees in writing.

 Common Law – the principles and rules of action, embodied in case law rather than

legislative enactments, applicable to the government and protection of persons and

property that derive their authority from community customs and traditions that

evolved over centuries as interpreted by judicial tribunals.

 Equity – refers to a particular set of remedies and associated procedures. These

equitable doctrines and procedures are distinguished from “legal” ones.

3. Definition of Obligation

Obligation – is a juridical necessity to give, to do or not to do. A legal requirement established

by law, contract or as a result of unlawful harm caused to the person or property of another.

4. Sources of Obligations and Examples

1. Law (Obligation Ex Lege) – must be expressly or impliedly set forth and cannot be


Example: Obligation to pay taxes; Obligation to support one’s family

2. Contract (Obligation Ex Contractu) – must be complied with in good faith because it is

the “law” between parties; neither party may unilaterally evade his obligation in

contract, unless: a) contract authorizes it; and b) other parties assent.

Example: The obligation to repay a loan or indebtedness by virtue of an agreement

3. Quasi-Contract (Obligation Ex Quasi Contractu) – a juridical relation resulting from a

lawful, voluntary and unilateral act, and which has for its purpose, the payment of

indemnity to the end that no one shall be unjustly enriched or benefited at the expense

of another.

Example: The obligation to return money paid by mistake or which is not due.
4. Delict (Obligation Ex Maleficio/Ex Delicto/Culpa Criminal) – a term used in civil law

whereby an act of negligence or a willful wrong gives rise to a legal obligation between

the parties, even though there is no written or verbal contract.

Example: A group of children comes to your house and play with your child and one of

them falls into the pool and drowns. You and will be held liable for damages if the

claimant can prove you were negligent by not having adequate fencing around the pool,

or by not insisting an adult present at the poolside.

 Quasi-Delict/Acts or Ommission punished by law (Obligation Ex Quasi Delicto/Ex

Quasi Maleficio/Tort/Culpa Aquilana) – it is a fault or act of negligence (or omission of

care) which causes damage to another, there being no pre-existi9bg contractual

relations between the parties.

Example: If Ethan drives his car negligently and because of his negligence, he hits

someone who’s walking on the sidewalk of the street, inflicting upon him physical

injuries. Therefore, he becomes liable for the damages he caused.

5. Characteristics/Elements of Obligation

1. Active Subject – power to demand the prestation (obligee/creditor)

2. Passive Subject – bound to perform the prestation (obligor/debtor)

3. Prestation/Object – not a thing but a particular conduct of a debtor, but always a

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.

c. NOT TO DO - consists in abstaining from some act, includes “not to give,” both being

negative obligations.

4. Efficient cause or juridical tie or vinculum juris – relation between obligor which is


 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)

5. Form in which the obligation manifested – cannot be considered essential.