OBLIGATIONS FRAUD [DOLO]

1. PRINCIPLE OF OBLIGATORY FORCE OF 1. DOLO: The deliberate and intentional evasion of the
CONTRACTS: Obligations arising from contracts normal fulfillment of obligations.
have the force of law between the contracting parties
and should be complied with in good faith. 2. DOLO CAUSANTE

2. PRINCIPLE OF RELATIVITY OF CONTRACTS: 3. DOLO INCIDENTE

Contracts are effective only between the parties,
including their heirs and assigns, except when the
rights and obligations arising therefrom are NEGLIGENCE [CULPA]
intransmissible by their nature, or by stipulation or
by provision of law.
1. CULPA: Negligence. The omission of that diligence
which is required by the nature of te obligation and
3. NEGOTIORUM GESTIO: A juridical relation which
corresponds with the circumstances of the persons,
arises when a person voluntarily takes charge of the
of the time and of the place.
agency or management of another’s abandoned or
neglected business or property without the owner’s
2. CULPA AQUILIANA [Culpa Extra Contractual]:
authority.
Quasi-Delict. The wrongful or negligent acts or
omission which creates a vinculum juris and gives rise
4. SOLUTIO INDEBITI: It is a juridical relation which
to an obligation between two persons not formally
arises when something is received when there is no
bound by any other obligation. Govern by Art. 2176,
right to demand it, and it was unduly delivered
NCC.
through mistake.
3. CULPA CONTRACTUAL: Breach of Contract. The
5. ACCION IN REM VERSO: A person who acquires or
fault or negligent incident in the performance of an
comes into possession of something at the expense of
obligation which already existed.
another without just or legal ground has the
obligation to return the same, and the action for such
4. TEST in determining existence of NEGLIGENCE:
recovery is called an accion in rem verso.
Did the defendant in the performance of the alleged
negligent act use reasonable care and caution which
6. ACCION PAULIANA: An action to impugn all acts
an ordinary person would have used in the same
which the debtor may have done to defraud the
situation?
creditor.

FORTUITOUS EVENT [CASO FORTUITO]

DELAY [MORA]

CASO FORTUITO: It is an event which could not be

1. MORA SOLVENDI: A delay in the fulfillment of an
foreseen, or which, though foreseen, is inevitable.
obligation, by reason of a cause imputable to the
debtor.
REQUISITES: I2FU
2. MORA ACCIPIENDI: A delay on the part of the
obligee in accepting the performance of the Independent of the will of the debtor;
obligation by the obligor. Impossible to perform obligation in normal manner;
Free from any participation or aggravation of injury;
3. COMPENSATION MORAE: A default on the part of
both parties because neither has completed their
Unforeseeable or unavoidable.
part in their reciprocal obligation.

SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM

 KINDS OF OBLIGATIONS
AS TO JUDICIAL EFFICACIOUSNESS
1. CIVIL OBLIGATIONS: Those that are based on
positive law and give a right of action to compel
their performance.
2. NATURAL OBLIGATIONS: Those that are based
on equity and natural law and which do not
grant a right of action to enforce their
performance, but after voluntary fulfillment by
the obligor, they authorize the retention of what
has been delivered/rendered by reason thereof.
AS TO KIND OF PRESTATION
3. REAL OBLIGATION: It involves an obligation to
give or to deliver.
4. PERSONAL OBLIGATION: It involves an
obligation to do or not to do.
AS TO PRESENCE/ABSENCE OF CONDITION
5. PURE OBLIGATION: The obligation not subject to
any condition or term (period).
6. OBLIGATION WITH A TERM/PERIOD: Those
whose effects are subjected in one way or another
to the expiration of said term.
7. CONDITIONAL OBLIGATION: One which is
subject to a condition.
***CONDITION: Every future and uncertain event
upon which an obligation or provision is made to
depend.
KINDS:
SUSPENSIVE: The happening of which gives rise
to an obligation.
RESOLUTORY: The happening of which
extinguishes an obligation.
POSITIVE: The condition refers to an act.
NEGATIVE: The condition refers to an omission.
POTESTATIVE: The fulfillment depends upon the
will of one parties to the juridical relation.
CAUSAL: The fulfillment depends exclusively
upon chance or other factors.
MIXED: The fulfillment depends partly upon the
will of one of the parties and partly upon chance
or other factors.
DIVISIBLE: If by its nature, by agreement or under
the law, it can be performed in parts.
INDIVISIBLE: If by its nature, by agreement or
under the law, it cannot be performed in parts.
CONJUNCTIVE: Requires the fulfillment of all
conditions.
DISJUNCTIVE: Requires the fulfillment of one
condition.
EXPRESS: The condition is stated.
IMPLIED: The condition is merely inferred.
POSSIBLE: The fulfillment is possible.
IMPOSSIBLE: The fulfillment is impossible,
either physically or legally.
***RECIPROCAL OBLIGATIONS: Those which
arise from the same cause, and in which each party
is a debtor and a creditor of the other.
REMEDIES IN CASE OF BREACH OF RO
SPECIFIC
RESCISSION + DAMAGES PERFORMANCE+
DAMAGES
Implied in RO, but, in the
nascence of a stipulation to
the contrary, it must be
invoked judicially.
Otherwise, the unilateral
termination of the contract
is premature and
unjustified. Prescribes in
10 or 6 years, for written or
verbal contracts,
respectively.
SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM

***TERM: Consists in a space of time which, having
an influence on obligations as a result of a juridical
act, and either suspends their demandableness or
produces their extinguishment.
AS TO NUMBER OF PRESTATIONS
8. SIMPLE: Only one prestation is involved.
9. COMPOUND: There are various prestations.

EX DIE: Suspensive Term. Obligation begins CONJUNCTIVE: Prestations are demandable

upon the arrival of the period jointly or both at the same time.

IN DIEM: Resolutory Term. Upon the arrival of DISTRIBUTIVE

the said date, the obligation is terminated.
ALTERNATIVE: There are various
DEFINITE: It refers to a known date or time. prestations which are due and the obligation
is fulfilled by (complete) performance of one
INDEFINITE: It refers to an event which will of them.
necessarily happen but the date of its happening is
unknown. FACULTATIVE: May provide for a substitute.

***CONCENTRATION: The act of making a

SUSPENSIVE choice in alternative obligations.

TERM CONDITION AS TO

The obligation may The obligation already

only be demanded exists even prior to the
upon the arrival of the arrival of the day
day certain fixed for its certain although the
performance. same becomes
demandable only upon
arrival of the said day.
RESOLUTORY
TERM CONDITION
Obligations take effect Obligation is
and are demandable at extinguished, upon
once but they happening of the
terminate upon the resolutory condition.
arrival of the term or
period specified. Annuls the fact of
existence of the
It does not annul the obligation. (With
fact of existence of the retroactive effect)
obligation.
10. JOINT OBLIGATION: One in which each
debtors is liable only for a proportionate part
of the debt, and the creditor is entitled to
demand only a proportionate part of the
credit from each debtor.
***PRESUMPTION in favor of JOINT
OBLIGATION: In case of plurality of subjects or
in case of concurrence of two or more creditors or
two or more debtors in one and the same
obligation, and in the absence of express and
indubitable terms characterizing the obligation as
solidary, the presumption is that the obligation is
only joint.
***EFFECTS: EXTINCTION, DELAY,
INTERRUPTION OF PRESCRIPTION, VICES
ARISING FROM PERSONAL DEFECT,
INSOLVENCY OF A DEBTOR, and DEFENSES OF
RES JUDICATA, do not affect the validity of the
other credits or debts.
11. SOLIDARY OBLIGATION: One in which each
of the debtors is liable for the entire obligation,
and each of the creditors is entitled to demand
the satisfaction of the whole obligation from
any or all of the debtors.

SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM

 KINDS: **PARTIAL DEFENSE: Special TERMS and
CONDITION affecting only his part of the
ACTIVE SOLIDARITY: Each of the creditors, obligation.
as regards his co-creditors, is the creditor only
as to his share in the obligation and, in regard **DEFENSES WHICH BELONG TO ANOTHER
to the common debtor, he represents all of DEBTOR: Available to co-debtors actually
them. MUTUAL AGENCY or sued, however, only as regards that part of the
REPRESENTATION. debt for which the debtor to whom the defense
belongs is responsible.
***Each creditor may do whatever may be
beneficial to the other solidary creditors. MIXED SOLIDARITY: Solidarity that exists on
the part of both creditors and debtors.
***PREJUDICIAL ACTS: Novation,
Compensation, Confusion or Remission of AS TO
debt.
PENAL CLAUSE: An accessory obligation which the
PASSIVE SOLIDARITY: Debtors are bound to parties attach to a principal obligation for the
the payment of the whole credit. MUTUAL purpose of insuring the performance thereof by
GUARANTY. imposing on the debtor a special prestation in case
the obligation is not fulfilled or is irregularly or
inadequately fulfilled.
SOLIDARY DEBTOR SURETY
EXTINGUISHMENT
SD may claim from his The surety who does
PAYMENT: Deliver of money or performance, in any
co-debtors only the pay the creditor has
share which the right to recover the manner, of an obligation.
corresponds to each, full amount paid, and REQUISITES: P3IC2
with the interest for not just any
the payment already proportional share, Complete
made. from the principal
debtor/s. Tendered by Proper Person
Tender made to Proper Person

DEFENSES: Tendered in Proper Place

***ARISING FROM THE NATURE OF THE
OBLIGATION:
Void or inexistent contracts;
Unenforceable (Statute of Frauds);
Voidable Contract due to vitiated consent;
Extinguishment of Obligation;
Non-fulfillment/non-arrival,condition/period
Other defenses which invalidate original
contract: Prescription, Res Judicata, etc.
Payor and payee have the Capacity to make and
receive payment
Identity of Prestation is preserved.
SPECIAL FORMS OF PAYMENT:
***DACION EN PAGO: Alienation of property to the
creditor in satisfaction of a debt in money. It required
delivery and transmission of ownership of a thing
owned by the debtor to the creditor as an accepted
equivalent of the performance of the obligation.

***PERSONAL DEFENSES REQUISITES: PAD

Performance of prestation in lieu of payment
**TOTAL DEFENSES: Minority, Insanity,
Fraud, Violence or Intimidation. Agreement between the creditor and debtor that
obligation will be extinguish by reason thereof.

SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM


Difference between prestation and substitute
***CESSION: Consists in the abandonment of the
totality of the property of the debtor in favor of the
creditors in order that the same may be applied for
the satisfaction of their credits.
***TENDER OF PAYMENT: Involves a positive and
unconditional act by the obligor of offering legal
tender currency as payment to the obligee for the
former’s obligation and demanding that the latter
accepts the same.
***CONSIGNATION: The act of depositing the thing
due with the court or judicial authorities whenever
the creditor cannot accept or refuses to accept
payment, and it generally requires a prior tender of
payment.
REQUISITES: DRAN2
Debt due;
Refusal to accept tender of payment by creditor
without justifiable cause;
Notice of consignation had been given;
Amount due was placed at disposal of the court; and
Notice after consignation had been made
***APPLICATION OF PAYMENT: The process of
designating the debt to which the payment made is
applied, when the debtor has different obligations in
favor of the same creditor.
REQUITES: PAVOS
Several obligations;
Only one debtor and creditor;
Various debts of the same kind;
All debts are due; and
Payment is insufficient to cover all obligations
***LOSS OF THE THING DUE
REQUISITES: DBPN
Delivery of a determinate thing;
Loss Posterior to constitution of obligation;
Loss occur Before delay; and
No obligation to deliver the same thing to two or
more persons who do not have the same interest.
EXCEPTION:
DELIMITED GENERIC OBLIGATIONS: Between the
specific obligations and generic ones, there exist a
class of obligations which partakes in a certain
manner of the character of the former, while
appearing more to be the latter, as when the same
embraces the genus, limiting the object of the
obligation to a specified group determined by special
qualities, within which the obligation concerned finds
its object among various things comprised by that
group but without specifying individually which it
has to be.
***CONDONATION OR REMISSION: An act of
liberality by which the obligee, who receives no price
or equivalent thereof, renounces the enforcement of
the obligation, which is extinguished in its entirety or
in part or aspect of the same to which the remission
refers.
REQUISITES: FANGED
Comply with the Forms of donation;
Accepted by obligor;
Not an inofficious donation;
Gratuitous;
Expressly made;
Demandable obligation at the time of remission.
***CONFUSION OR MERGER: The characters of the
creditor and debtor are merged in the same person.
REQUISITES: TaCo
Take place in the person of the principal creditor and
debtor; and
Complete and Definite.
***COMPENSATION: A mode of extinguishing to the
concurrent amounts the obligations of persons who
in their own right and as principals, are reciprocally
creditors and debtors of each other.
KINDS:
**LEGAL: Takes place ipso jure when all the
requisites of the law are present.
SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM
REQUISITES: P-MEND
Bound Principally;
Debts consists in a sum of Money or consumables;
Parties are creditors and debtors of Each other;
No retention or controversy commenced by 3rd
person.
Debts are Due, liquidated and demandable; and
**CONVENTIONAL/VOLUNTARY: The parties, who
are mutually creditors and debtors agree to
compensate their respective obligations, even though
not all the requisites for legal compensation are
present.
***NOVATION: The extinguishment of an obligation
by the substitution or change of the obligation by a
subsequent one which extinguishes of modifies the
first, either by changing the object or principal
conditions, or by substituting another in place of the
debtor, or by subrogating a third persons in the rights
of the creditor.
*REQUISITES: PAVO
Previous valid obligation;
Agreement to a new contract;
Valid new contract;
Old contract extinguished.
*KINDS:
EXTINCTIVE: Results either by changing the object
or principal conditions, or by substituting the person
of the debtor or subrogating a third person.
**OBJECTIVE: Change in the object or principal
conditions of an existing obligation.
**SUBJECTIVE: Change in either the person of the
debtor, or of the creditor in an existing obligation.
MODIFICATORY: The change brought about by any
subsequent agreement in the terms and condition is
merely incidental to the main obligation.
EXPRESS: The new obligation declares in
unequivocal terms that the old obligation is
extinguished.
IMPLIED: The new obligation is on every point
incompatible with the old on.
*FORMS OF SUBSTITUTION IN THE PERSON OF
THE DEBTOR:
EXPROMISSION: Initiative for the change does not
come from the debtor and may even be made
without his knowledge or against his will. Requires
the consent of the 3rd person and the creditor.
DELEGACION: The debtor offers, and the creditor
accepts, a third person who consents to the
substitution and assumes the obligation, thereby
releasing the original debtor from the obligation.
Requires the consent the three person.
**SUBROGATION: The transfer of all the rights of the
creditor to a third person, who substitutes him in all
his rights.
KINDS:
LEGAL: Takes place without agreement but by
operation of law because of certain acts.
CONVENTIONAL: A new contractual relation based
on the mutual agreement among all the necessary
parties.
CONTRACTS
CONTRACT: A meeting of the minds between two
persons whereby one bonds himself, with respect to
the other, to give something or to render some
service.
CLASSIFICATIONS
AS TO DEGREE OF DEPENDENCE
PRINCIPAL: Exist independently of other contracts.
ACCESORT: Cannot exist without a valid principal
contract.
PREPARATORY: Not an end by itself but only a
means for the execution of another contract.
SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM
 AS TO MANNER OF PERFECTION
CONSENSUAL: Perfected by mere consent.
REAL: Perfected by consent and delivery of the object
of the contract.
AS TO NATURE OF OBLIGATION PRODUCED
BILATERAL: Creates obligations on both sides or on
both parties.
UNILATERAL: Creates obligations only on one side
or on the part of only one of the contracting parties.
AS TO THEIR NAME
NOMINATE: Distinguished by a particular or special
name in the Civil Code.
INNOMINATE: Recognized by the Civil Code, but not
specially named or classified in the said Code.
AS TO CAUSE
ONEROUS: The where the cause is understood to be,
for each contracting party, the prestation or promise
of a thing or service by the other.
REMUNATORY: That where the cause if the service
or benefit for which the remuneration is given.
GRATUITOUS: That where the cause is the mere
liberality of the benefactor.
AS TO RISK INVOLVED
COMMUTATIVE: Mutual exchange of relative values
between the contracting parties.
ALEATORY: Each of the parties reciprocally bind
themselves to give or to do something in
consideration of what the other shall give or do upon
the happening of an event which is uncertain, or
which is to occur at an indeterminate time.
AS TO FORM OR SOLEMNITY
COMMON: Does not require any form.
SPECIAL/SOLEMN: Requires certain formalities
either for its validity or enforceability.
AS TO DEFECTS
PERFECTLY VALID
RESCISSIBLE
VOIDABLE
UNENFORCEABLE
VOID or INEXISTENT
CHARACTERISTICS
PRINCIPLE OF OBLIGATORY FORCE OF
CONTRACTS: Obligations arising from contracts
have the force of law between the contracting parties
and should be complied with in good faith.
REQUISITES: PEV
Perfected;
Enforceable; and
Valid.
PRINCIPLE OF AUTONOMY OF CONTRACTS: The
contracting parties are accorded the liberality and
freedom to establish such stipulations, clauses, terms
and conditions as they may deem convenient,
provided the same are not contrary to law, morals,
good customs, public order or public policy.
*Non-impairment Clause
PRINCIPLE OF MUTUALITY OF CONTRACTS: The
contract must bind both the contracting parties; its
validity or compliance cannot be left to the will of one
of them.
*Contract of adhesion
*Acceleration Clause
PRINCIPLE OF RELATIVITY OF CONTRACTS:
Contracts can only bind the parties who entered into
it, or their successors who assumed their
personalities or juridical positions, and that,
concomitantly, a contract can neither favor nor
prejudice a third person, even if he is aware of such
contract and has acted with knowledge thereof.
(Res inter alios acta aliis neque nocet prodes.)
SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM
EXCEPTIONS: NATURAL: Elements that are not essential for the
existence of a contract but they are presumed to
Rights and Obligations not transmissible by nature, exist in certain contracts unless there is an express
stipulation, or provision of law. stipulation to the contrary.

Stipulation Pour Autrui: Stipulation in favor of a ACCIDENTAL: Elements that exist only when the
third person conferring a clear and deliberate favor parties expressly provide for them.
upon him, and which stipulation is merely a part of a
contract entered into by the parties, neither of whom ESSENTIAL: Elements that are necessary for the
acted as agent of the third persons, and such third very existence of the contract itself.
person may demand its fulfillment provided that he
communicates his acceptance to the obligor before it CONSENSUAL: Consent + Object + Cause
is revoked.
REAL: Consent + Object + Cause + Delivery
***TORT INTERFERENCE: Any person who induces
another to violate his contract shall be liable for
damages to the other contracting party.
ESSENTIAL REQUISITES OF CONTRACTS

REQUISITES: ValKIn 1. CONSENT: The conformity of the parties on the

terms of the contract, the acceptance by one of
Valid contract; the offer made by the other.
Knowledge of 3rd person of the existence of contract; ELEMENTS: PECTIC
Interference of 3rd person without legal justification Plurality of subjects;
or excuse.
Express or Tacit manifestation of the will;
PERFECTION OF CONTRACTS
Capacity;
STAGES Intelligent and Free will; and

Conformity of the internal will and its manifestations.

NEGOTIATION: It begins from the time the
prospective contracting parties manifest their
***OFFER: An expression of willingness to
interest in the contract and ends at the moment of
contract on certain terms, made with the intention
agreement of the parties.
that it shall become binding as soon as it is accepted
by the person to whom it is addressed.
PERFECTION: Birth of the contract. Takes place
when the parties agree upon essential elements of the
REQUISITES: SeT-Off
contract.
Serious intention to be bound by the offeror;
MANNER OF PERFECTING CONTRACTS:
*Objective Theory of Contracts: The
CONSENSUAL: Meeting of the minds.
seriousness of the intention of the offeror is
to be determined by what a reasonable
REAL: Meeting of the minds + Delivery.
person in the offeree’s position would
conclude the offeror’s words and actions
CONSUMMATION: The parties fulfill or perform the
meant.
terms agreed upon in the contract, culminating the
extinguishment thereof.
Terms are reasonable, certain, definite and complete;

ELEMENT OF CONTRACTS Offer is communicated by offeror to the offeree.

SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM

 *Cognition Theory: The contract is perfected
only from the time an acceptance of an offer
is made known to the offeror.
**TERMINATION OF OFFER: Re2D2 SLap
Revocation or Withdrawal of Offer by the Offeror;
Rejection of the Offer by the Offeree;
*Counter-offer: Rejection of the original
offer and the simultaneous making of a new
offer.
GR: The burden of proof is on the individual
asserting a lack of capacity to contract, and it
requires, for its satisfaction, clear and convincing
evidence.
EXCEPTION: Where a party to a contract is illiterate,
or cannot read nor understand the language in
which the contract is written, the burden is on the
party interested in enforcing the contract (Art. 1332,
NCC).
MISREPRESENTATION OF MINOR

Death, Civil Interdiction, Insanity or Insolvency;

ACTIVE CONSTRUCTIVE/PASSIVE
Destruction of Subject Matter;
The document The document signed by
Supervening Illegality of Proposed Contract; and signed by the the minor did not contain
minor specifically such statement.
Lapse of Time. stated that he was
of age.

***OPTION CONTRACT: A preparatory contract in

which one party grants to the other, for a fixed period 2. OBJECT OF CONTRACTS
and under specified conditions the power to decide,
whether or not to enter into a principal contract.
All THINGS within commerce of men;

OPTION MONEY EARNEST MONEY All transmissible RIGHTS; and

All licit SERVICES.

The money given as a Something of value, to
distinct consideration show that the buyer
REQUISITES: WiReLiD
for an option contract. was really in earnest,
The same applies to a and given to the seller
Within the commerce of men;
sale not yet perfected; to bind the bargain,
and the would-be and whenever given in
*Commerce of man = Susceptible of
buyer, is not required, a contract of sale, it is
appropriation + Transmissible from one
thereafter, to buy the considered as part of
person to another
thing subject of the the purchase price and
offer. proof of the perfection
Real or possible, physically or legally;
of the contract.
Licit; and

***MIRROR-IMAGE RULE: The acceptance must be
identical in all respects with that of the offer so as to
produce consent or meeting of the minds.
***PRESUMPTION OF CAPACITY: The law presumes
that every person is fully competent to enter into a
contract until satisfactory proof to the contrary is
presented.
*NOT contrary to laws, morals, good customs,
public order and public policy.
Determinate or determinable, as to its kind.
3. CAUSE or CONSIDERATION: The immediate,
direct and proximate reason which justifies the
creation of an obligation through the will of the
contracting parties.

SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM

 REMEDIES INTERPRETATION OF CONTRACTS

CARDINAL RULE: The intention of the contracting

REFORMATION OF INSTRUMENTS parties should always prevail because their will has
the force of law between them.
DOCTRINE OF REFORMATION: A remedy in equity
by means of which a written instrument is made or
In relation thereto, the contemporaneous and
construed so as to express or conform to the real
subsequent acts of the contracting parties shall be
intention of the parties.
principally considered in order to judge their real
intention.
REQUISITES: FM2ifia
PRINCIPLE OF EFFECTIVENESS IN CONTRACT
Meeting of the minds of the contracting parties;
INTERPRETATION: What will prevail is that
interpretation which is most adequate to render the
Failure of instrument to express the true intention of
contract effective.
the parties; and
**Application: Where two interpretations of
Such failure is due to Mistake, fraud, inequitable
the same contract language are possible, one
conduct or accident.
interpretation having the effect of rendering
the contract meaningless, while the other
*Elements of Mutual Mistake: CEF
would give effect to the contract as a whole,
Mistake of Fact;
the latter interpretation must be adopted.
Proved by Clear and Convincing
Evidence; and
COMPLEMENTARY-CONTRACTS-CONSTRUED-
Mistake is Common to both parties.
TOGETHER DOCTRINE: An accessory contract must
be read in its entirety and together with the principal
*Simulation: Declaration of a fictitious will,
agreement.
deliberately made by agreement of the
parties, in order to produce, for the purpose
of deception, the appearance of a juridical act ART. 1357, NCC
which does not exist or is different from that
which was really executed. For contracts which are required to be in a certain
form, the contracting arties may compel each other
ABSOLUTE RELATIVE to observe that form and this right may be exercised
simultaneously with the action upon contract.
The parties do not The parties simply REQUISITES: PerVE
have any intention to conceal their true
be bound at all. agreement. Perfected contract;
It implies that there is When it does not Valid contract, as to its Form; and
no existing contract, prejudice a 3rd person
no real act executed, and is not intended for Enforceable under the Statute of Frauds.
hence, the remedy is any illicit purposes, the
an action to declare contract binds the DEFECTIVE CONTRACTS
the contract void or parties to the real
inexistent agreement, and the
remedy is RESCISSIBLE CONTRACTS
reformation of
instrument. RESCISSION: A remedy granted by law to the
contracting parties and even to third persons, to
secure the reparation of damages caused to the, by a
contract, even if this should be valid, by restoration of
things to their condition at the moment prior to the
celebration of the contract.

SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM

 ***ACCION PAULIANA: A subsidiary remedy
ART. 1191 ART. 1381 available when the subject matter is a conveyance,
otherwise valid, undertaken in fraud of creditors.
RESOLUTION RESCISSION REQUISITES: C3A2N
Rescission applicable Plaintiff has a Credit prior to alienation;
to reciprocal
obligation or those Debtor Conveyed patrimonial benefit to a 3rd person;
which arise from the
same cause, and in Creditor has No other legal remedy to satisfy claim;
which each party is a
debtor and a creditor Act being impugned is fraudulent;
of the other.
3rd person has been an Accomplice in the fraud; and
It is a principal remedy It is a subsidiary
based on breach of action limited to cases Conveyance not absolutely simulated.
faith, and which may of rescission for lesion
be availed of only by a enumerated under Art. CAVEAT: If the contract is absolutely simulated albeit
party to the contract. 1381; and which, may undertaken as well in fraud of creditors, it is
be availed of even by a inexistent, as such, the remedy is an action to
Prescriptive period: third party, as in the declare the contract inexistent which action is
Either 10 or 6 years case of accion imprescriptible.
from accrual of the pauliana.
right of action, for ***BADGES OF FRAUD: See ORIA v. McMICKING 21
written and verbal Prescriptive period: 4 PHIL 243, 250-51 (1912)
contracts, respectively. years.
***RIGHT OF FIRST REFUSAL: A contractual grant,
The Courts, however, The Court has no not of sale of a property, but of the first priority to buy
has discretionary discretionary power the property in the event the owner sells the same.
power not to grant the not to grant the
rescission, if there be rescission, so long as EFFECT: A Contract of Sale entered into in violation
just cause for the any of the aforesaid of a right of first refusal of another person is
fixing of the period grounds exists. rescissible, because it is in fraud of creditor.
for the performance of
the obligation. The status of creditors can be validly accorded to
grantees of right of first refusal for they have
substantial interest that will be prejudiced by the
REQUISITES: A3NO property subject matter of their RFR.

Action originate from any causes in Art. 1381-1382;

VOIDABLE CONTRACTS
No other legal means to obtain reparation for
All of the essential requisites for the perfection of the
damages;
contract are present but the element of consent is
defective either because of want of capacity to
Ability to return what he may be obliged to restore;
contract with respect to one of the parties thereto or
because of vitiation of consent by reason of mistake,
Object thereof is not legally in the possession of 3rd
violence, intimidation, undue influence, or fraud.
person in good faith; and
ANNULMENT: It declares the inefficacy which the
Action filed within 4 years from accrual of right of
contract already carries in itself, even if there is
action.
damage or prejudice.

SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM

REQUISITES: DIES
Employed by one upon the other;
It must have Induced the other to enter into the
contract;
Must have been Serious; and
Resulted in Damage and injury to the plaintiff.
*EFFECT: Mutual Restitution
*GROUNDS: IV
One of the parties is Incapable of giving consent; and
Consent is Vitiated by MVIUF.
**MISTAKE: In order to invalidate consent, the same
should either refer to the substance of the thing
which is the object of the contract; or those
conditions which have principally moved the
party/ies to enter into the contract; or those mistake
as to the identity or qualifications of one of the
parties. The same connotes absence of knowledge
with respect to a thing or belief in the existence of
some circumstances, fact, or event, which in reality
does not exist.
**FRAUD: It must be the determining cause of the
contract, or must have caused the consent to be given.
DOLO CAUSANTE/CAUSAL FRAUD:
Insidious words or machinations resorted to
by one of the contracting parties to induce
the other to enter into a contract without
them, he would not have agreed to.
**INTIMIDATION: One of the contracting parties is
compelled by a reasonable and well-grounded fear of
an imminent and grave peril upon his person or
property, or upon the person or property of his
spouse, descendants or ascendants, to give his
consent.
REQUISITES: De-FAT
It is the Determining cause of the contract;
Threatened Act be unjust or unlawful;
Threat is real and serious; and
It produces a reasonable and well-grounded Fear.
**VIOLENCE: In order to wrest consent, serious or
irresistible force is employed.
**UNDUE INFLUENCE: A person takes advantage of
his power over the will of another, depriving the
latter of a reasonable freedom of choice.
REQUISITES: PImpS
Person;
Improper influence; and
Submission to overwhelming effect of unlawful
conduct.
*RATIFICATION/CONFIRMATION: The act of or
means by virtue of which efficacy is given to a
contract which suffers from a vice of curable nullity.
EFFECT: Cleanses the contract from all its defect
from the moment it was constituted.
REQUISITES: RECK
Contract has all the essential Requisites, but tainted
with vice susceptible of being cured;
Effected by a person Entitled to so under the law;
Effected with the Knowledge of the vice/defect; and
Cause of the nullity or defect should have already
disappeared.
UNENFORCEABLE CONTRACTS
KINDS:
Entered into in the name of another person by one
who has been give no authority or legal
representation, or who has acted beyond his
powers;
Do not comply with the Statute of Frauds; and
Both parties are incapable of giving consent to a
contract.
SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM
 VOID OR INEXISTENT CONTRACTS

VOID CONTRACT: A perfected contract because all

the requisites for the existence of a contract are
present, but the contract is invalid from its inception.

*Cause, object or purpose contrary to LMGP2.

*Object is outside the commerce of men.

*Contemplate an impossible service.

*Expressly prohibited/declared void by law.

INEXISTENT CONTRACT: A contract which does not

exist because any of the requisites for the existence of
a contract is totally wanting.

*Absolutely simulated or fictitious.

*Cause or object did not exist at the time of

transaction.

*Intention of the parties relative to the

principal object of the contract cannot be
ascertained.

**EFFECT OF DECLARATION OF NULLITY OR

INEXISTENCE:

GR: The parties are entitled to recover what they may

have been given by virtue of the contract in an action
to declare its absolute nullity or inexistence.

EXCEPTIONS:

***PARI DELICTO RULE: In void contracts where

the nullity proceeds from the illegality of the cause
or the purpose of the contract, whether the
attendant facts constitute an offense or misdemeanor
or whether the consideration involved is merely
rendered illegal, and the two parties are equally at
fault, the law leaves them as they are and denies
recovery by either one of them.

Barred by LACHES.

SISON YC [2018]| CIVIL LAW - 2018 BAR EXAM