Вы находитесь на странице: 1из 10

Laws and Ethics

Obligations
OBLIGATION is a juridical necessity to give, to do or not to do. it comes from the Latin word "obligare" which
means to bind.

General Provisions

Nature of Obligations under Civil Code

o Civil Obligations - legally dembndable and the courts of justice may compel their performance.
o Natural Obligations - based on morality, natural law and conscience, they are not legally demandebe.

Requisites of Obligations

o Juridical or legal fie- the vinculum or the link that binds the party
o Prestation - consist in giving, doing or not doing something
t Active subject - person who can demand the performance of the obligation or known as the creditor or oblige.
t Passive subject- the person from whom prestation is demandable or known as the debtor or obligor.

lllustration:
A entered into a contract with B hereby A ogreed to deliver to B o woshing mochine on Mondoy. The juridicol tie is the controct, the
prestotion is the detivery oi the woshing machine, the active subject is B, and the possive subiect is A.

Sources of Obligation

t Low -imposed by the law itself


Illustration:
By provision of law, s husband and wife are obliged to lived together, observe mutusl respect and fielelity' and render
mutual help and support

Controcts - the meeting of minds between two person whereby one binds himself with respect to the other to give
something or to render service.
Quasi-contracts - the act of a person, permitted by law, by which he obligates himself towards another, or by
which another binds himself to him, without any agreement between them.

lllustration;

Suppose A owes B the sum of P50.00, but by mistake A pays B the amounts of P100.00. ln this case, B must
return to A the P50.00 because as to the excess, that is payment of something not owing (Solutio lndebiti)'

Acts or omissions punished by law - refers to a crime or a penal offense, like murder.

lllustration:
Supposing A kills B. lf the eourt finds that A is guilty, A will be senteneed either to imprisonment or death,
depending on the gravity of the offense.

o Quasi-delicts - a legal wrong, committed through fault or negligence, on a person or property, independent of
contract,

lllustration:
Supposing Maria, while watering her flower pot in her house, negligently caused the same to fall, hitting Jose
who suffered injuries. Maria is then obligated to pay for the damage sustained by Jose.

Requisites of Quasi-delictc
o An act or omission;
o Accompanied by fault or negligence;
o Causing damage to another;
o There must be no pre-existing contractual relation between the parties.

DIFFERENT KIND OF OBLIGATIONS

* Pure and ConditionalObligations

Pure Obligations- one which is not subjected to conditions nor does it mention a specific date for its fulfillment

lllustration:
Juan obliged himself to deliver a refrigerator to Pedro.

Conditional Obligations- is one which is subjected to a condition

Two Kinds of Conditions


o Suspensive Condition- a condition which suspends the demandability of the obligation until the
fulfillment of the condition.

lllustration:
I will give you a car if you pass the ECE examinations,

o Resolutary Conditions- produces the extinguishment of an obligation upon the happening event.

lllustration:
I will let you use my car until you finish your course in business administration.

.E Obligation With a Period-those whose consequences are subjected in one way or the other to the
expiration of said term.
lllustration:
A borrowed money from B in the amount of P50.00 promising to pay the amount "as soon as possible". lf we
later on, they cannot agree on the specific date of payment, the remedy of b is to go to court and ask the court
to fix the date when the dept is to be paid.

Kinds of Period
o Ex die- a period with suspensive effect
o In diem- a period with a resolutory effect and the validity of obligation is up to a certan date
o Other Kinds:
. Legal period- period established by law
. Voluntary period- period agreed to by the parties
, Judical period- period authorized by the court
* Alternative Obligations- is one wherein various things are due, but the payment of one of them is
sufficient, determined by the choice which as general rule belongs to the obligor.

lllustration:
Marc obliged himself to deliver to Edwin either a piano or a refrigerator. The delivery of the piano or the
refrigerator is sufficient compliance with obligation. Marc could not compel Edwin to accept only a part of the
piano or a part of the refrigerator because in alternative obligations complete performance of one of the
prestation is necessary.

* Joint and Solidary Obligations

Joint Obligations- is one which each of the debtor is answerable only for proportionate part of the debt and each
one of the creditors is entitled to a proportionate part of the credit.

lllustration:
Juan and Pedro are jointly indebted to Jose the amount of P100.00. As such, Juan is liable to Jose for the amount
of P50,00 only, while Pedro is also liable to Jose for the same amount of P50.00, Jose, the creditor; is entitled to
demand from Juan and Pedro P50.00 each.

Solidary Obligation- is one which each of the debtors is liable for the whole obligation and each of the creditors
may demand compliance of the entire obligation.

lllustration:
Juan and Pedro are the solidary debtors of Jose for the amount of P100,00. Hence either of them may be
compelled by Jose to pay the whole amount of P100.00. So Jose can demand from Juan the amount of P100.00.
Jose can also demand from Pedro the amount off P100.00. However, if Juan pays P100.00, then the obligator is
extinguished and the paying debtor (Juan) is entitled to be reimbursed by his co-debtor (Pedro) for his part of
the debt, which is P50.00.

Kinds of Solidarity
r Active Solidarity- when the solidarity exists among the creditors only.
o Passive Solidarity- when the solidarity takes place among the debtors only.
o Mixed Solidarity- When the solidarity exists both among the creditors and the debtors at the same
time,
* Divisible and Indivisible Obligations

Divisible Obligation- is one which is capable of partial performance.

lllustration:
Juan obliged himself to deliver to Pedro six sacks rice as follows: Three sacks of rice to be delivered by Juan on
May tr't, and Pedro to pay Juan the amount of P150.00. Another three sae ks of riee to be delivered by Juan on
June 1't, and Pedro to pay Juan the same amount of P150.00. The obligation of Juan to Pedro to deliver rice is
divisible because the parties intended partial performance.

lndivisible Obligation- is on which is not capable of partial performance.

lllustration:
In the preeeding example, if Juan and Pedro agreed that all the six sacks of rice should be deliver on May 1't,
then notwithstanding that the object of the obligation is physically divisible. Nevertheless, it is indivisible
because the parties intended complete performance at one given time. Juan, therefore, must deliver all the six
sacks of rice on May 1't. he cannot deliver two or three or even five, because that case the delivery still
constitutes partial performance.

Three Classes of Divisions


r Qualitative-depends on the quality rather than the quantity.
o Quantitative- depends on the quantity rather than the quality
r ldeal- also known as moral, intellectual or mental division

* Obligation with a penalClause


Definition of Penal Clause- an accessory undertaking to assume greater liabili$ in case of a breach.

lllustration:
A stipulation in the contract for the sale of a residential lot, that the vendee would complete within two years
from the date of the sale 50% his residence on the lot, and, in the event of the failure to do so; the vendee
would pay the vendor the sum of P10,000.00.

Two Classifications of Penal Clause


o Subsidiary- when only the penalty can be demanded

lllustration:
A binds himself to deliver to B a Honda Civic car at the end of the current year. They agree in writing that
should A fail to deliver the car on the a specified date, A shall pay B as penalty P10,000.00. A fails to make
the delivery. B could demand the payment of P10,000.00 against A. B, however could not compel A to
deliver the ear and the pay the penalty at the same time, The payment sf the penalty takes the plaee of the
principal obligation.

o Joint- when both the principal contract and the penal clause can be enforced

lllustration:
A borrowed from B the amount of P100.00 payable on October IO,2OO7. They agreed further that
should A fail to pay the amount on the said date, a shall pay B the amount of P10.00 as penalty. On
October LO,2O07 , A failed to pay B. In such case, B could go to the court and demand payment of the
principal amount P100.00 and also the penalty of P10.00. However, if the penalty is iniquitous,
merciless and shocking to conscience, it shall not be enforced, Instead it may be reduced by the court,

EXTI NGUISHMENT OF OBLIGATIONS

* By Payment or Performance- payment means not only the delivery of money but also the performance,
in any other manner, of an obligation.

* By the loss of thing due-when it perishes or goes out of commerce or disappears in such way that its
existence is unknown or it cannot be recovered .

* By the condition or remission of the debt- it is an act of liberality by which the oblige, who receives no
price or equivalent thereof, renounces the enforcement of the obligation, which is extinguished in its entirely or
in that paft or aspeet of the same to whie h the remissioii refcrs.

Kinds of Condonation or Remission


o Complete- when the enforcement of the obligation is waived or renounced totally
r Partial- when the waiver or renunciation refers only to a part of the obligation.
o Express- when it is shown by words or declaration of the obligee.
o lmplied- when it is inferred from the acts or conduct of the oblige.

* By the confusion or merger of the rights of creditor and debtor- it is the meeting in one person of the
qualities of the qualities of oblige and obligor with respect to the same obligation.

{. By compensation-takes place when two persons, in their own right, are creditors and debtors of each other.

Kinds of Compensation
Legal Compensation- takes place when compensation extinguishes the two debts in their own
concurrent amounts even without the express agreement of the parties.
Voluntary Compensation- takes place when there is compensation by agreement of the parties as in the
case of mutual set off accounts.
Judicial Compensation- takes place when the court permits the counterclaim of the defendant as against
the claim of the plaintiff.
Partial Compensation- takes place when the two obligations are of different amounts and a balance
remains unextinguished after the compensation.
o Total Compensation- takes place when the obligations are the same amount and compensation
extinguished the obligations entirely.
lllustration:
A is indebted to B in the amount of P100.00 On the other hand, B is also indebted to A in the amount of
P100.00. Both debts are due. Compensation will take place because both are, in their own right,
creditors and debtors of each other.
* By novation- it is the change,substitution, or renewal of an obligation or obligatory relation, with the intention of
extinguishing or modifying essentially the the former,debitum pro debitoflnew debt for old debt).

Kinds of Novation
o Real novation- the cfiange in the object or principalconditions of the obligations.
lllustration:
A obliged himself to deliver to B a car. Subsequently, they entered into another contract whereby
instead of a delivering a car, A would deliver a truck. The object of the obligation was changed, so the
novation was a real novation.
r Personal novation- another person is sustained in the place of the debtor or he is subrogated to the
rights of the creditor.
lllustration:
A is indebted to B in the amount of P100.00. A now requests B to accept C as debtor in his (A's) place. lf
B accepts C as his new debtor, who assumes the obligation of A, then there is a novation by the
' substitution of the person of the debtor. lf it is B who request that he be changed by C and A agrees,
then there is also novation - this time by the subrogation of the third person in the place of the
creditor.
r Mixed novation- the changed in the person of the parties and the objects or modification of principal
condition.
lllustration:
A obliged himself to deliver to B a carabao. Subsequently, A proposed the C would take his place but
instead of delivering a carabao he would deliver a horse. lf B and C agreed, then there was a mixed
novation because the object of the obligation and the person of the obligor were changed.

Contracts
CONTRACT is the meeting of the minds between two persons whereby one binds himself with respect to the other to
give something or to render a service. lt comes from the Latin word "contractus" which signifies an agreement.

General Provisions
Elements of Contracts

* EssentialElements
o Consent of the parties
r Object or subject matter
o Cause or consideration
+ Natural Elements - are those the existence of which is presumed by law unless there is an agreement to the
contrary
t' Accidental Elements - consist of the unusual stipulation of the parties such as conditions, terms, etc,

Stages of o Contract:

* Preparation or Conception - includes all the initial stages up to the time the parties agree upon the terms of the
contract.
lllustration:
Juan offers to sell his horse to Pedro for P2,000.00. Pedro asks Juan to bring his horse to his place to enable him
to see whether the horse is fit for carretela purposes. Juan brings the horse to Pedro's place and the latter is
allowed by Juan to use his horse in pulling Pedro's carretela to enable the latter to see whether the horse has
sufficient speed, is physically fit, etc. after trying the horse, Pedro bargains with Juan as to the price. Up to this
stage, the parties are doing things leading to the meeting of the minds.
{' Perfection or Birth - the time when the minds of the parties meet in agreement upon the object or subject
matter as well as to the price or consideration.
lllustration:
Juan agrees to receive P2, 000.00 for his horse and Pedro agrees to take the horse for that amount. The contract
here is perfected because there is already a meeting of the minds.
{. Consummation or Termination
lllustration:
Juan delivers the horse to Pedro and the same is accepted. Pedro gives the amount P2, 000.00 as purchased
price and the latter receives it. ln here, the contract is consummated and terminated.

Clo ss ificatio n s of Contracts

.... Express and lmplied Contracts - is one written in the intent of the parties is shown by words, oral or written.
* Executed and Executory Contracts
Executed Contract = that has already been performed.
is one
Executor Contract - is one that is not yet performed.
* Consensual and Real Contracts
Consensual Contract - is one perfected by mere consent.
Real Contract - is one perfected by the delivery of the thing which is the object of the contract
* Unilateral and Bilateral Contracts
Unilateral Contract - only one of the parties has an obligation
Bilateral Contract - both parties has an obligation

Limitations upon the right to contract

* Contrary by Law - the parties to a contract cannot agree to an object or purpose which is against the law.
lllustration:
A, for and in consideration of P1, 000.00, entered into a contract with B whereby the latter agreed to murder C.

':' Against Moral- no contact may be entered into which is against virtuous conduct and ethical precept.
lllustration:
A entered into a contract with B whereby for and in consideration of P1, 000.00 the latter agrees to live with A
without the benefit of marriage.
* contrary to good customs - the contracting parties are prohibited from entering into contracts which conflict
with good and established practice or customs.
lllustrations:
pedro and Maria decided to get married on October LO,2OO7.Invitations were printed and distributed to
relatives and friends and apparel were purchased including matrimonial bed. Pedro, however walked out of it
and was never heard of again.
* Contrary to Public Order - signifies the public weal which are permanent and essential in institutions.
lllustration:
An agreement that the creditor can use force or violence to compel the debtor to pay is contrary to public order.
* Contrary to Public Poliry - refers no to only "public safety'' but also to considerations which are moved by the
common good.
lllustration:
A entered a contract with B whereby A will not enter into any enterprises whatever in the Philippines' This is
against the public policy as it is a contract in restraint of trade.

Essential Requisites of Contracts

* Consent -manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to
constitute the contract.
* Objects of contracts - it may be things, rights and services.
r Things - must be within the commerce of men, must not be impossible, either physical or legally and
must be determinate as to their kind.
e Rights - may be transmissible or not transmissible. Examples of these rights are the right to vote, rights
flowing from a contract of marriage, parental authority, etc'
* Cause of Contracts - the immediate, direct and proximate reason which justifies the creation of an obligation
thru the will of the contracting parties.
lllustration:
Juan offers to sell to Jose his only white horse for P500.00. Jose accepts the offer. Here, the consent of the
parties is manifested by the concurrence of their wills as to the white horse and as to the price' The object is the
white horse and the cause is the 500.00.

Clossificotion of Contracts as to its Cause

{. Onerous Contract - the cause is the mutual undertaking or promise of either the contracting parties'
lllustration:
Juan sells his carto pedro for P10, 000.00. This contract of sale creates a reciprocal obligation in both parties'
Juan is obliged to deliver the car to Pedro and the latter is obliged to pay Juan the purchase price of P10, 000.00.
* Remunetory Contract - the cause is the service or benefit for which the remuneration is given.
lllustration:
Juan is accused for a crime in court. He retains the services the Atty. Dela Cruz as his defense counsel for P5,
000.00. The p5, 000.00 to be given by Juan to Atty. Dela Cruz is for the professional services of Atty. Dela Cruz'
* Gratuitous Contract - the cause is the pure liberality of the giver.
lllustration:
Pedro donated a parcel of land to the municipality of Naiq Cavite, to be used as the
municipal cemetery without
receiving any valuable consideration for the same. Here, the cause of the contract of donation
is the mere
liberality of pedro, the benefactor.

Requisites of a volid couse or consideration

r The cause must be in existence.


r That the cause must be lawful and not contrary to law, morals, good customs, public poliry,
and
o The cause must be true because the statement of a false cause renders the contract void.

Reformation of Instruments

REFORMATIoN is a remedy in equity by means of which a written instrument is made or construed so as to express or
conform to the real intention of the parties when some error or mistake has been committed.

Req uisites of Reformotion

o There is a valid contract;


o The contract is in writing;
r The written contract fails to express the true intention of the parties
r The failure of the written contract to express the true intention is due to mutual mistake, fraud,
inequitable conduct, or accident.

Defective Contracts

Types of Defective Controcts

* Rescissible Contract -
it has all the essential requisites of a contract and the contract itself is valid, but by reason
of injury or damage to third persons, such as creditors, the contract may be rescinded.

Example of Rescissible Contracts


r Those which are entered into by guardians whenever the wards whom they represent suffer lesion by
more than one- fourth of the value of the things which are the object thereof;
o Those agreed upon in representation of absentees if the latter suffer the lesion stated in the preceding
number;
o Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims
due them;
o Those which refer to things under litigation if they have been entered into by the defendant without the
knowledge and approval of the litigants or of competent judicial authority;
o All other contracts specially declared by law to be subject to rescission.

Lesion - damage or injury suffered by the party seeking rescission by reason of the fact that the prize is unjust or
inadequate.

':. Voidable Contracts - that possesses all the essential requisites of a valid contract, namely, consent, object
is one
and cause or consideration. lt is a valid contract until it is annulled.

Contracts thdt is voidabte even though there moy have been no domoge to the contra(ting porties
o Those where one of the parties is incapable of giving consent to a contract;
o Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.
* Unenforceable Contracts - a contract is said to be unenforceable when it cannot be sued upon or enforced in
court unless it is ratified.

The following contracts ore unenforceoble unless they ore ratilied

r 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 power;
r Those that do not comply with the statute of frauds as set forth in this number. In the following cases an
agreement hereafter made shall be unenforceable by action, unless the same, or some note or
memorandum thereof, be in writing, and subscribe by the party charged, or by his agenU evidence,
thereof, of the agreement cannot be received without the writing, or a secondary evidence of its
contents.
r Those were both parties are incapable of giving consent to a contract.
{. Void or Inexistent Contracts - one which is absolutely without legal force or effect. lt is not susceptible of
ratification.
Controcts that ore inexistent and void from the beginning
r Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public
policy;
: . j Those which are absolutely simulated or fictitious;
o Those whose cause or object did not exist at the time of the transaction;
o Those whose object is outside the co.mmerce of men;
r Those which contemplate an impossible service;
o Those where the intention of the parties relative to the principal object of the contract cannot be
ascertained;
r Those expressly prohibited or declared void by law.

Charocteristics of void controcts

o Void or inexistent contracts produce no legal effects whatsoever


o Void or inexistent contracts cannot be ratified'
r The right to set up the defense of inexistence or absolute nullity cannot be waived or renounced.
o The action or defense or the declaration of their inexistence or absolute nullity is imprescriptible'
r The inexistence or absolute nullity of a contract cannot be invoked by a person whose interests are not
directly affected.

Damage

Damage is the sum of money which the law awards or imposes as percuniary compensation, recompense, or satisfaction
for an injury done or a wrong sustained as a consequence either of a breach of a contrastual obligation or a tortuous act.

lnjury - denotqs the illegal act

Types of Damages

* Actual or Compensatory Damages - damages that cover actual injury or economic loss. lt is intended to put the
injured party in the position he was in prior to the injury. lt typically includes medical expenses, lost wages and
the repair or replacement of property.
* Moral Damages - includes physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
. wounded feelings, moralshock, social humiliation, and similar injury.
.!. Nominal Damages - these are small and trivial sums awarded for a technical injury due to a violation of some
legal right, and as a consequence of which some damages must be awarded to determine the right.
* Temperate or Moderate Damages - temperate damages are such damages as are reasonable compensation for
the injury. They are more than nominal damages but less than compensatory damages and may be recovered
when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the
case, be proved with certaintY.
* Liquidated damages - the amount of which has been agreed upon by the parties or fixed by the judgement of a
competent court.
* Exemplary or Corrective Damages - damages which are given in enhancement merely of the ordinary damages
on account of wanton, reckless, malicious, or oppressive character of the acts complained of'

Law Merchant

Low Merchant is a branch of the unwritten law which was originally founded on the customs of merchants, mariners and
business men generally in their dealings with one another throughout the civilized countries of the world.

The lollowing are considered to be merchonts

o Those who, having legal capacity to engage in commerce, habitually devote themselves to it.
r Commercialor industrial companies which may be created in accordance with law.

Legal qualifications of merchonts

Those who have completed the age of 21;


o Not being subject to the authority of the father or the mother, nor to marital authority and;
r Have the free disposition of their property.

Persons not quolified to engage in cammerce

r Persons sentenced to civil interdiction;


r Persons who have been declared bankrupts and;
r Persons who are prohibited from trading under special laws.

Persons not quolified to engage in business

r Officers and employees in the civil service, whether classified or unclassified, shall not engage in any
private business, vocation, or profession, or be connected with any commercial undertaking, without
written permission from the chief of the bureau or office in which they are serving, and of the President
of the Republic or proper department head.
r The heads of departments and chiefs of bureaus or offices and their assistants shall not, during
their
in the
continuance in office, engage in the practice of any profession or intervene, directly or indirectly,
management or control of any private enterprises which in any way may be affected by the functions of
their office; nor shall they, directly or indirectly, be financially interested in any contract with the
Government, or any subdivision or instrumentality thereof'

Вам также может понравиться