OBLIGATIONS AND CONTRACTS

I. Obligations – Arts. 1156-1304

A. In General
1. Definition – Art. 1156
2. Kinds of Obligations as to basis and enforceability – Art. 1423-1430;
RA 6809
3. Prescription of Actions – Arts. 1139-1155

B. Sources of Civil Obligations – Art. 1157

1. Law – Arts. 1158
2. Contracts – Ats. 1159, 1305
3. Quasi-contracts – Arts. 1160, 2142-2175
a. Negotiorum Gestio
b. SolutioIndebiti
4. Acts or omissions punished by law – Arts. 1167, 2177 Arts. 100&104
RPC
5. Quasi-delicts – Arts. 1162,2176
C. Compliance with Obligations – Arts. 19, 1163-1166, 1244, 1246,
1460, 442, 440
D. Kinds of Civil Obligations
1. As to Perfection and Extinguishment
a. Pure - Arts. 1179, 1197
b. Conditional- Arts. 1181-1190
c. With a term or period - Arts. 1180, 1193-1198
2. As to Plurality of Prestation
a. Conjunctive
b. Alternative - Arts. 1199-1205
c. Facultative – Art. 1206
3. As to rights and obligations of multiple parties
a. Joint
b. Solidary - Arts. 927, 1824, 1911, 1915, 1945, 2157, 2194,
2146, 94, 121 FC; Art. 90 RPC
c. Disjunctive
4. As to performance of prestation - Arts. 1221-1225, 1209-1210
a. Divisible
b. Indivisible
c. Joint indivisible
d. Solidary indivisible
5. As to the presence of an accessory undertaking in case of breach
a. With a Penal Clause - Arts. 1226-1230
Distinguish from Liquidated Damages
E. Breach of Obligations – Art. 1170
Manner of Breach
1. Fraud – Arts. 1171, 1338, 1344
2. Negligence - Arts. 1171-1173
3. Delay - Arts. 1169, 1165, 1786, 1788, 1896, 1942
4. Any other manner of contravention

Excuses for non-performance

1. Fortuitous Event - Arts. 1174, 552, 1165, 2147, 2159
2. Act of creditor
F. Remedies for Breach of Obligations – Arts. 1165-1168, 1170, 1177-
1178, 1191-1192, 2236, 302, 1708; Arts. 153, 155 FC; Rule 39 Sec
13
1. Extra-judicial remedies
 a. Expressly granted by law - Arts. 1786, 1788, 1526
b. Stipulated
2. Judicial remedies
a. Principal remedies - Arts. 1191, 1170
b. Subsidiary remedies - Arts. 1380, 1177
c. Ancillary remedies – Rules of Court
G. Modes of Extinguishment of Obligations – Art. 1231
1. Payment or Performance – Arts. 1232-1244, 1246-1251, 1302; RA
529, RA 8183; PD 72, Secs. 31-32
Special forms of Payment
a. Dation in Payment - Arts. 1245
b. Application of Payments – Arts. 1252-1254, 1248
c. Payment by Cession or Assignment - Arts. 1255
d. Tender of Payment and Consignation - Arts. 1256-1261
2. Loss of the thing due or Impossibility of Performance - Arts. 1262-
1269, 1189, 1174, 1165, 1268, 1942, 1979, 2147, 2159
3. Condonation or remission of the debt – Arts. 1270-1274, 748, 749
4. Confusion or Merger of Rights - Arts. 1275-1277, 1215, 1217
5. Compensation - Arts. 1278-1290, 1243, 1215
Kinds of Compensation
a. Legal
b. Conventional
Facultative
c. Judicial
6. Novation – Arts. 1291-1304, 1215
Kinds of Novation
a. As to its nature
i) Subjective or personal
ii) Objective or real
b. As to its form
i) Express
ii) Implied

II. Contracts – Arts. 1305-1422

A. In General
1. Definition – Arts. 1305
Auto-contract - Arts. 1491, 1646, 1890
2. Elements of Contracts
a. Essential
b. Natural
c. Accidental
B. Fundamental Characteristics/Principles of Contracts
1. Consensuality of Contracts - Arts. 1305, 1317
Contract of Adhesion

2. Autonomy of Contracts - Arts. 1306, 1799, 2088, 2130

3. Mutuality of Contracts - Arts. 1308-1310, 1182

Acceleration Clause
Escalation Clause
4. Obligatory Force of Contracts - Arts. 1159, 1315-1316, 749
5. Relativity of Contracts - Arts. 1311-1314, 1177-1178, 1381(3)
Privity of Contracts
C. Classification of Contracts
1. According to degree of dependence
a. Preperatory - Arts. 1479, 1767, 1868
b. Principal - Arts. 1458, 1638, 1642, 1933, 1962
 c. Accessory - Arts. 2047, 2085
2. According to perfection
a. Consensual - Arts. 1315, 1475
b. Real - Arts.1316, 1934
c. Formal - Arts. 1356
3. According to solemnity or form - Arts. 1356
a. Any form
b. Special form
4. According to purpose
a. Transfer of ownership - Arts. 725, 1458, 1638
b. Conveyance of use - Arts. 562, 1642, 1933
c. Rendition of service - Arts. 1642, 1868
5. According to nature of obligation produced
a. Bilateral - Arts. 1642, 1458
b. Unilateral - Arts. 2047, 2093
6. According to cause - Arts. 1350
a. Onerous - Arts. 1458, 1638, 1642
b. Gratuitous or lucrative - Arts. 725, 1933
c. Remuneratory
7. According to risk
a. Commutative
b. Aleatory - Arts. 2010
8. According to name
a. Nominate
b. Innominate - Arts. 1307
9. According to subject matter
a. Thing
b. Right
c. Service
D. Stages of Contracts
1. Negotiation
Contract of Option – Arts. 1324, 1479, 1482
2. Perfection
3. Performance
4. Consummation
E. Essential Elements of Contracts – Arts. 1318
1. Consent of the contracting parties - Arts. 1319-1346, 37-42, 739,
1476(4), 1490-1491, 1533(5), 1646, 1782, 1409(7); Arts. 87, 124,
234 FC; RA6809; Art. XII, Secs. 7 & 8 1987 Constitution
Cognition Theory
Manifestation Theory
2. Object certain which is the subject matter of the contract - Arts.
1347-1349, 1311, 1178
3. Cause of the obligation - Arts. 1350-1355
4. Delivery
5. Due observance of prescribed formalities
F. Form of Contracts - Arts. 1356-1358
1. Any form – oral
2. Special form
a. Validity - Arts. 748, 749, 1744, 1773, 1874, 1956, 2134, Act
1147, Sec. 22
b. Enforceability - Arts. 1403, 1878
c. Greater efficacy or convenience - Arts. 1358
G. Reformation of Contracts - Arts. 1359-1369
H. Interpretation of Contracts – Arts. 1370-1379
I. Kinds of Contracts as to Validity
1. Valid and binding
 2. Valid but defective
i) Rescissible Contracts – Arts. 1380-1389, 1191
ii) Voidable Contracts – Arts. 1390-1402, 1327-1328, 1330
iii) Unenforceable Contracts – Arts. 1403-1408, 1317, 1878
3. Void or Inexistent – Arts. 1409-1422, 1318, 1353, 1378, 1491,
1898

Rescissible Contracts
Voidable Contracts
Unenforceable Contracts
Void or Inexistent
SPECIAL CONTRACTS

SALES
A. In General
Definition – Arts. 1458, 1488
Characteristics - Arts. 1458, 1475
Kinds of Sale - Arts. 1458, 1463
Distinguished from other transactions - Arts. 1245, 1466, 1467, 1468

B. Elements of a Contract of Sale

Essential Elements - Arts. 1459-1465, 1469-1474, 1489, 1327, 1390,
1403, 1489, 1490, 1491, 1492, 1348, 1347, 1624-1627
1. Consent of the contracting parties
2. Determinate subject matter (thing or right)
3. Price certain in money or its equivalent
Natural Elements
Accidental Elements

C. Perfection of the Contract

Contract of Option
Formalities of Contract of Sale – Art. 1483

D. Rights and Obligations of the Vendor

To transfer ownership – Arts. 1459, 1477-1478
- Double Sales
- Risk of Loss – Art. 1480
To deliver the object
Warranties

E. Rights and Obligations of the Vendee

Payment of Price
Right of Inspection
Acceptance

Maceda Law – Realty Installment Buyer Act (RA 6552)

F. Remedies for Breach of Contract

Remedies of an Unpaid Seller
Remedies of the Buyer – Art. 1481

Recto Law – Sale of Movables on Installment – Arts. 1484, 1486

G. Extinguishment of Sale
Causes
Redemption (Conventional and Legal)
 BARTER OR EXCHANGE
LEASE
I. Nature
A. Kinds of Lease
1. Lease of things – Art. 1642
2. Lease of work or service – Art. 1642
a. Household services
b. Contract of labor (employment contract)
c. Contract for a piece of work
d. Contract with common carriers (contract of carriage)
3. Lease of right – License/Franchise
B. Definitions
C. Characteristics
D. Distinguished from other contracts/legal relations
II. Essential Elements
A. Consent
B. Object/Purpose: Period
C. Cause
Formalities
III. Rights and Obligations of the Lessor and Lessee
A. Necessary repairs
B. Improvements
C. Collapse of a building
D. Reduction of the Rent
E. Extension of the Lease
F. Right of First Refusal
G. Sublease and Assignment of the Lease
IV. Rights and Obligations of Third Persons
A. Suppliers
B. Buyers
V. Termination of the Lease
A. Loss of the thing
B. Death of either party
C. Expiration of the period
Implied New Lease or TacitaReconduccion

AGENCY
I. In General: Nature
A. Definition
B. Characteristics
C. Distinguished from/compared with other relations
[Features of a contract of agency]
II. Kinds of Agency
A. Actual agency
Kinds of Actual Agency
1. As to manner of creation: express and implied
2. As to compensation
3. As to scope of authority
B. Apparent or Ostensible Agency - Arts. 1473
C. Agency by Estoppel - Arts. 1431
III. Essential Elements of a Contract of Agency
(1) Consent of the contracting parties: principal and agent only
(2) Object: execution of a juridical act
(3) Cause: presumed to be for compensation
Form - Arts. 1869, 1874, 1878
IV. Obligations of the Agent
 A. To carry out the agency
1. To act within the scope of his authority - Arts. 1881
2. To act on behalf of his principal - Arts. 1868
Liability of two or more agents
B. To render an accounting of his transactions and to deliver… -
Arts. 1891
C. To be responsible for the acts of the substitute - Arts. 1891
D. Rules applicable to a commission agent
Rules applicable to a guarantee commission agent: Del credere
agent
V. Rights and Obligations of the Principal
A. To comply with all the obligations which the agent may have
contracted within the scope… and in representation of the
principal - Arts. 1910
B. To advance to the agent the sums necessary - Arts. 1912
C. To reimburse the agent the sums advanced - Arts. 1912, 1918

Liability when there are two or more principals: solidary Arts. 1915
Rights of Third Persons in Incompatible contracts with agent and
principal
VI. Modes of Extinguishment of Agency – Arts. 1919

PARTNERSHIP
I. In General
A. Defintion
B. Characteristics of Partnership as a Contract
C. Distinguished from other Combinations and Relations
II. Essential Requisites
A. Consent of the contracting parties
B. Object certain: to engage in lawful activity
C. Cause
Formal Requirements
III. Classes of Partnerships
A. As to its Object: Universal and Particular Partnership
B. As to its Liability of Partners: General and Limited Partnership
C. As to term: Fixed Term, Particular Undertaking and Partnership
at Will
IV. Classes of Partners
A. According to their liability: General and Limited Partners
B. According to their contribution: Capitalist Partner and Industrial
Partner
C. According to the time they join the partnership: Incoming
D. According to Special Duties: Managing – Arts. 1792
V. The property rights of a partner – Arts. 1800-1814
A. His rights in specific partnership property
B. His interest in the partnership
C. His right to participate in the management
VI. Obligations of Partners Among Themselves
A. To make good his promised contribution
B. Fiduciary Duty
C. To participate in the losses
Nature of Liability of individual partners:
Pro-rata, Subsidiary, Joint or Solidary
VII. Obligations of Partners with Regard to Third Persons
VIII. Dissolution, Winding Up and Termination
 A. Nature and Effect of Dissolution
B. Causes of Dissolution
C. Distribution of Assets
IX. Limited Partnership
TRUSTS
1. In General
2. Kinds of Trusts
a. Express
b. Implied
CREDIT TRANSACTIONS: LOAN, DEPOSIT, GUARANTY AND
SURETYSHIP
I. Nature of Credit Transactions
A. Definition
B. Scope
C. Distinguished from Bailments
II. Loans
A. Definition: Purpose
B. Kinds of Loan
1. Commodatum: Precarium
2. Mutuum or Simple Loan
C. Characteristics
D. Essential Elements: Consent, Object, Cause
Formalities
E. Rights and Obligations of Bailor and Bailee in Commodatum
Liability for loss/deterioration due to a fortuitous event – Arts.
1942-1943
F. Rights and Obligations of Bailor and Bailee in Mutuum
To pay interest: Kinds: Rate

G. Modes of Extinguishment
III. Deposit
1. Nature: Definition: Purpose
2. Kinds of Deposit
1. Extra-judicial: Conventional and Necessary: Irregular
Deposit
2. Judicial
3. Characteristics
4. Essential Elements: Subject Matter
5. Rights and Obligations of Depositor and Depositary
6. Modes of Extinguishment
IV. Aleatory Contracts – Insurance, Gambling, Life Annuity
V. Guaranty and Suretyship: Distinctions
A. Nature: Definition: Purpose
B. Characteristics
C. Effects of Guaranty
1. Between the Guarantor and the Creditor: Benefit of Excussion
2. Between the Guarantor and the Debtor: Subrogation
3. Between the Co-Guarantors: Benefit of Division
D. Modes of Extinguishment
CREDIT TRANSACTIONS: PLEDGE, MORTGAGE AND
ANTICHRESIS
I. Provisions common to Pledge and Mortgage – Arts. 2085-2092
A. Nature: Definition: Purpose
B. Essential elements
C. Indivisibility of the Contract
 D. Pactum Commissorium
E. Right to recover deficiency: Who is entitled to excess?
F. Equity and Right of Redemption
II. Pledge – Arts. 2093-2123 NCCC
A. In general
a. Kinds of Pledge
b. Characteristics of Pledge
c. Extent/Coverage of the Pledge
B. Rights and Obligations of the Pledgor [Debtor or Third Person]
C. Rights and Obligations of the Pledgee [Creditor]
D. Modes of Extinguishment
III. Chattel and Real Estate Mortgage – Arts. 2140-2141, 1484-1485
NCC, Act No. 1508, Chattel Mortgage Law, Art. 319 RPC, Arts. 2124-
2131 NCC, Rule 68, Act No. 3135
A. In general
a. Characteristics
b. Subject Matter
c. Extent/Coverage of the Mortgage
B. Essential Requisites
Formal Requisites; Affidavit of Good Faith
C. Rights and Obligations of the Mortgagor [Debtor or Third Person]
D. Rights and Obligations of the Mortgagee [Creditor]
E. Modes of Extinguishment

IV. Antichresis – Arts. 2132-2139 NCC

A. Nature and Characteristics
B. Rights and Obligations of the Debtor and Creditor
V. Concurrence and Preference of Credits – Arts. 2236-2251 NCC;
Act No. 1956, as amended, Insolvency Law)
A. General Provisions
B. Classification of Credits
C. Order of Preference of Credits
TORTS AND DAMAGES
I. Introduction
A. Nature of Quasi-delict
B. Quasi-delict distinguished from Tort, Crime, Contract
C. Scope/Sources of Law
II. Elements of Quasi-Delict
A. Act or Omission, there being Fault or Negligence
1. Concept of Negligence
2. Standard of Care: Degree of Diligence
3. Proof of Negligence: Burden of Proof

Presumption of Negligence
Doctrine of Res Ipsa Loquitur
B. Damage or Injury
C. Causal Connection Between the Act or Omission and the
Damage
III. Persons liable
A. The Tortfeasor
B. Vicarious Liability: Persons liable for Tortious Acts of another
C. Nature of Liability
 D. Defenses
1. Absence of an element
2. Fortuitous Event
3. Contributory Negligence
4. Prescription
5. Doctrine of Last Clear Chance
6. Double Recovery
7. Lack of Jurisdiction
IV. Liability for Torts: Damages
A. In General
B. Kinds of Damages
1. Actual or Compensatory
2. Moral
3. Nominal
4. Temperate or Moderate
5. Liquidated
6. Exemplary or Corrective