Obligations

GENERAL PROVISIONS

Introduction: The Law on Obligations and Contracts is a kind of positive law which deals with the nature and sources of obligations, as well as the rights and duties arising from agreements in contracts. It is important for everyone to know that in every obligation, there is a general principle on human relations, that i : “Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.”

Art. 1156. An obligation is a juridical necessity to give, to do or not to do. (n)

Concept of Obligation:

Obligatory in its totality – The juridical relation, generated from facts, between two parties, one of which is the creditor who can demand from the other, the debtor, a definite prestation

Correlative of Right:

Passive aspect of obligation – The definition of obligation is in its passive aspect. Meaning, that are law merely stresses the duty of the debtor when it speaks of obligation as a juridical necessity.

Four Definite Elements of Obligation

• An active subject – (creditor/obligee) who has the power to demand the prestation

• A passive subject – (debtor/obligor) who is bound to perform the prestation; has the juridical necessity of adjusting his conduct to the demand of the creditor in accordance with the efficient cause

• An object – (the prestation) is the conduct in which the debtor should act upon

1. To give – the delivery of a movable or immovable thing

2. To do – includes all kinds of work or services

3. Not to do – ceasing form doing acts; includes not to give

Requisites of Prestation:

1. Physically and juridically possible

2. Determinate or at least determinable according to pre-established elements or criteria

3. Must have a possible monetary value

Pecuniary Value. Traditionally, the prestation is subject of monetary appreciation. However, the prestation need not to be of economic character to have a pecuniary value because all interests, even moral ones, as long as it is acceptable by the law, have some pecuniary value.

• Juridical tie – Efficient Cause (Judicial cause/vinculum juris) is that of which binds or connects the parties to the obligation. It is based on the sources of obligation arising from:

1. Law must be expressly and impliedly set forth and cannot be presumed. Agreement of parties is not necessary. Example: duty of paying taxes (Internal Revenue Code)

2. Bilateral acts. Contracts arise from the stipulation of parties; it is the “law” between parties. Also, contract is a meeting of two minds between two parties whereby one binds himself with respect to the other, to give something or render some services (Art.1305). Example: settlement of a loan with interest by virtue of an agreement. (Art.1315)

3. Unilateral acts

4. Quasi-contracts are those that arise from lawful, voluntary and unilateral act based on the maxim that no one shall unjustly enrich himself at the expense of another (Art. 2142) Example: duty of returning an item he mistakenly received (solution indebiti)

5. Quasi delicts arise from damage caused to another through an act or omission, there being by fault or negligence, but no contractual relation exists between the parties. Example: road accident

Distinguished from Natural Obligation.

1. Civil obligations grant a person a right of action to compel their performance.

1. Natural obligations do not grant such right, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof.