COURSE SYLLABUS

I.

THE LAW ON OBLIGATIONS AND CONTRACTS

COURSE DESCRIPTION
A study of the concepts of law in general. It covers (a) obligations, their nature,
elements, sources, classification, effects and modes of extinction; and (b)
contracts, their nature, elements, effects, form, interpretation, rescission, nullity,
annulment and enforcement.
COURSE OBJECTIVES
At the end of the semester the students are expected:
To gain knowledge of the legal provisions governing business transactions in
general, and the law on obligations and contracts in particular
To prepare the students for advance studies on business law;
To develop analytical skills of applying the law on obligations and contracts on
certain situations or business transactions.
COURSE OUTLINE

I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.
XII.
XIII.
XIV.

Introduction to Law
General Provisions on Obligation
Nature and Effect of Obligations
Different Kinds of Obligations
Extinguishment of Obligations
General Provisions on Contract
Essential Requisites of Contracts
Forms of Contract
Reformation of Instruments
Interpretation of Contracts
Rescissible Contracts
Voidable Contracts
Unenforceable Contracts
Void or Inexistent Contracts
REQUIRED TEXT
De Leon, Hector S. The Law on Obligations and Contracts. Latest
Edition, Rex Bookstore.

COURSE REQUIREMENTS

Prelim examination: 15% (July 18, 2009)

Midterm examination: 15% (August 29, 2009)
Semi-Final examination: 10%
Class Participation: 40%
Final Exam: 20% (October 10, 2009)
Total 100%
A. READ, TAKE NOTES AND ASK QUESTIONS. This course requires
much reading and the student is expected to have read the required
materials when coming to class.
B. EXAM. The exam will consists of problem-solving and short answer
questions based on the class lectures and the assigned reading materials.
C. FINAL EXAM. Comprehensive of all lectures and selected required
reading materials.
D. There will be GRADED RECITATION (50% of final grade) based on the
required reading materials and assigned cases.
CLASSROOM POLICIES
1. Students must submit a 3x5 index card with their names, courses,
contact numbers, 1x1 ID color or BW picture by the second-class meeting.
2. A student is considered absent from class if s/he is not present within
the first third fraction (30 minutes) of the scheduled class time. The
students should be responsible for keeping tracks of their absences.
3. As a courtesy of the entire class, smoking and eating inside the
classroom shall be strictly prohibited. All electronic devices must be either
deactivated or at least silent.
CONSULTATION HOURS
If you wish to consult with me on matters relating to the course, please
set an appointment with me.
E-mail:
Website:
COURSE SCHEDULE AND READING MATERIALS

SESSION 2
JULY 4, 2009
Topics to be discussed:
Introduction to Law
a. Concepts and Definition
Law is defined as The body of rules and principles governing the affairs
of a community and enforced by a political authority

Legal System in Philippines

The Philippines legal system may be considered as
a unique legal system because it is a blend of civil
law (Roman), common law (Anglo-American), Muslim (Islamic) law and indigenous law.
There are two primary sources of the law:
Statutes or Statutory Law
Statutes are defined as the written enactment of the will of the legislative branch of the government rendered
authentic by certain prescribed forms or solemnities are more also known as enactment of congress. Generally they
consist of two types, the Constitution and legislative enactments.
In the Philippines, statutory law includes constitutions, treaties, statutes proper or legislative enactments, municipal
charters, municipal legislation, court rules, administrative rules and orders, legislative rules and presidential issuance.
Jurisprudence or Case Law
Jurisprudence or Case Law is cases decided or written opinion by courts and by persons performing judicial
functions. Also included are all rulings in administrative and legislative tribunals such as decisions made by the
Presidential or Senate or House Electoral Tribunals. Only decisions of the House of Representatives Electoral
Tribunal are printed as House of Representatives Electoral Tribunal Reports, volume 1 (January 28, 1988-October
3, 1990) to present. They will be available electronically at the Supreme Court E-Library.
Classification by Authority
"Authority is that which may be cited in support of an action, theory or hypothesis." Each of the three branches of
government, Legislature, Executive and Judiciary, promulgates laws.
The legislature promulgates statutes, namely: Act, Commonwealth Act, Republic Acts, Batas Pambansa. Executive
promulgates presidential issuances (Presidential Decrees, Executive Orders, Memorandum Circular, Administrative
Orders, Proclamations, etc.), rules and regulations through its various departments, bureaus and agencies. The
Judiciary promulgates judicial doctrines embodied in decisions.
Classification by Source
It is important for legal research experts to know the source where the materials were taken. One has to determine
whether they came from primary (official) sources or secondary (unofficial sources).
Primary sources are those published by the issuing agency itself or the official repository, the Official Gazette. Thus
for Republic Acts and other "laws" or statutes, the primary sources are the Official Gazette published by the National

Printing Office and the Laws and Resolutions published by Congress. For Supreme Court decisions, the primary
sources are the Philippines Reports, the individually mimeographed Advance Supreme Court decisions and the
Official Gazette. Publication of Supreme Court decisions in the Official Gazette is selective. Complete court reports
for Supreme Court decisions is the Philippines Reports.
The Secondary Sources are the unofficial sources and generally refer to those commercially published or those that
are not published by government agencies or instrumentalities. Vital Legal Documents contains a compilation of
Presidential Decrees (1973) to the present Republic Acts, published by Central Book Supply.

Who creates the law? Legislative. Delegated to the local legislative body.
When does the law take effect? Article 2 Civil Code
What is the effect if there is no publication of the law? Not enforceable.
Who has the power to enforce the law? Executive.
Who has the power to interpret the law? Judiciary. Article XIII.

b. Kinds, Classification and Divisions

Kinds:
Public Law - is that part of law which governs relationships between
individuals and the government, and those relationships between individuals
which are of direct concern to the society.

Constitutional law, administrative law, tax law, criminal law,

procedural law

Private Law - that involves relationships between individuals/persons

(natural or artificial)

Laws in Obligations, contracts, torts, sales

Labor Law - mediates the relationship between workers, employers, trade

unions and the government.

c. State Law
d. Definition: Law on Obligations and Contracts

General provisions on Obligations

1. Definition of Obligation (Art. 1156, NCC)
2. Essential Requisites of Obligation
3. Natural Obligations (Arts. 1423-1430, NCC)
4. Concepts and Sources of Obligations (Arts. 1157-1162, NCC)
4.1 Law (Art. 1158)
4.2 Contracts (Art. 1159)
4.3. Quasi-contracts (Art. 1160, NCC) Definition; kinds
4.4. Crimes or delict (Art.1161, NCC) Scope of liability
4.5. Quasi-delict (Art. 1162, NCC)Definition; Crimes vs. Quasi delict
5. Concepts of obligor and obligee

SESSION 3
JULY 11, 2009
Nature and Effect of Obligations
a. Rights of Creditor and Duties of Debtor
a.1 Obligation to give (Arts. 1163-1166, NCC)
a.2 Obligation to Do (Art. 1167, NCC)
a.3 Obligations not to do (Arts. 1168)
b. Grounds for liability for damages (art.1170, NCC)
b.1 Delay (Art. 1169, NCC) Definition; Kinds; Effects; Rule and Exceptions
(When demand is not necessary to put debtor in delay)
b.2 Fraud (Art. 1171) Definition; Kinds
b.3 Negligence (Arts. 1172-1173, NCC) Definition; kinds; Negligence vs.
Diligence; Kinds of diligence
b.4 Contravention of the tenor of the obligation (Art. 1170, NCC)
Meaning
b.5 Fortuitous event (Art. 1174, NCC) Definition; kinds; requisites; rule
and Exceptions
c. Usurious transactions (Art. 1175, NCC) Meaning of Loan or Mutuum
d. Presumptions (Art. 1176, NCC) Definition; Kinds; When not applicable
e. Remedies available to creditors for the satisfaction of their claims (Art.
1177, NCC)
f. Transmissibility of rights (Art. 1178, NCC) Rule and Exceptions
SESSION 4
PRELIMINARY EXAM JULY 18, 2009

SESSION 5
JULY 25, 2009
NATURE AND EFFECTS OF OBLIGATION
Different kinds of obligations
a. Secondary Classifications under the Civil Code
a.1 Unilateral vs. bilateral (Arts. 1168-1169, NCC)
a.2 Real vs. Personal (Arts. 1163-1168, NCC)
a.3 Determinate vs. Generic (art. 1165, NCC)
a.4 Civil vs. Natural (Art. 1423, NCC)
a.5 Legal, Conventional and Penal (Arts. 1157, 1159, 1161, NCC
b. Primary Classifications under the New Civil Code
b.1 Pure and Conditional (Arts. 1179-1192)
b.2. Obligations with a period (Arts. 1180, 1193-1198, NCC)
b.3. Alternative vs. Facultative Obligations (Arts. 1199-1206, NCC)
b.4. Joint and Solidary Obligations (Art. 1207-1222, NCC)
b.5. Divisible vs. Divisible Obligations (Arts. 1223-1225, NCC)
b.6 Obligations with a Penal Clause (Arts. 1126-1304, NCC)

SESSION 6
AUGUST 1, 2009
Extinguishment of Obligations (Art. 1231, NCC)Cause of Extinguishment
not under Art. 1231.
1. Payment or performance (Art. 1232-1254)
1.a. Payment by Cession (Art. 1255)
1.b. Tender of payment and consignation (Arts. 1256-1261, NCC)
2. Loss of the thing due (arts. 1262-1269, NCC)
3. Condonation or remission of debt (Arts. 1270-1274)
4. Confusion or merger of rights (Arts. 1275-1277, NCC)
5. Compensation (Arts. 1278-1304, NCC)
6. Novation (Arts. 1291-1304, NCC)

SESSION 7
AUGUST 8, 2009
Contracts
1. Definition (Art. 1305, NCC), Nature and Concepts
2. General Provisions (Arts. 1306-1317, NCC)
3. Essential requisites of Contracts (Art. 1318, NCC)
a. Consent (Arts. 1319-1346)

b. Object (Arts. 1347-1349, NCC)

c. Cause (Arts. 1350-1355,NCC)
SESSION 8
AUGUST 15, 2009
4. Form of Contracts (Arts. 1356-1358)
5. Reformation of Instruments (Arts. 1359-1369)
6. Interpretation of Contracts (Arts. 1370-1379)
SESSION 9
AUGUST 22, 2009
Defective Contracts under the Civil Code:
Rescissible Contracts (Arts. 1380-1389, NCC)
Meaning: Rescissible Contract
Rescission: Definition, requisites, nature and extent, period for filing,
persons entitled to bring action
Payments made in state of insolvency
When alienation presumed in fraud of creditors (Art. 1387, NCC)
SESSION 10
AUGUST 29, 2009
MIDTERM EXAM
SESSION 11
SEPTEMBER 5, 2009
Voidable Contracts (Arts. 1390-1402, NCC)
Definition, nature and effects
Annulment: Meaning and the period for filing action for annulment;
persons entitled and those not entitled to filing such actions;
extinguishment of action for annulment
Ratification: definition; requisites; effects; persons who can ratify
SESSION 12
SEPTEMBER 12, 2009
Unenforceable Contracts (Art. 1403-1408, NCC)
Meaning; kinds
Unauthorized contracts: definition
Agreements within the scope of the statute of frauds
Modes of ratification under the statute of frauds
When unenforceable contract becomes a voidable contract

When unenforceable contract becomes a valid contract

Right of third persons to assail an unenforceable contract

SESSION 13
SEPTEMBER 19, 2009
Void or Inexistent Contracts (Arts. 1409-1422, NCC)
Meaning, characteristics
Instances of void or inexistent contracts
Rules where contract is illegal and the act constitutes a criminal offense
Rules where contract is illegal but the act does not constitute a criminal
offense
Persons entitled to raise defense or illegality or nullity.
Definition of in pari delicto
SESSION 14
FINAL EXAM