LAWS ON OBLIGATIONS AND CONTRACTS

COURSE: LAW301M
SCHEDULE: 1930-2030 | Monday
1930-2130 | Friday
1000-1200 | Saturday
ROOM: Not Applicable
INSTRUCTOR: JUSTIN D.J. SUCGANG, Ll.M.
CONSULTATION: 1200-1300 | Saturday

COURSE DESCRIPTION:
This course is an in-depth study of the nature, kinds and effect of obligations and their
extinguishment; contracts in general, their requisites, form and interpretation; defective
contracts, quasi contracts, natural obligations, and estoppel (Legal Education Board
Memorandum Order No. 1 [s. 2011], §58).

COURSE OBJECTIVES:
The course objectives hereunder are adopted from the enumeration of the general and specific
objectives of legal education under Republic Act (RA) No. 7662 or the “Legal Education Reform
Act of 1993”, as well as the identified cornerstones of the De La Salle University College of Law,
and the Expected Lasallian Graduate Attributes (ELGA) for the general education curriculum.
GENERAL SPECIFIC LEARNING
OBJECTIVE (GO) OBJECTIVES (SO) OUTCOMES (LO)
SO1: To impart among law students a LO1: Identify
broad knowledge on the law on relevant laws and
obligations and contracts. principles.
SO2: To enhance legal research abilities LO2: Ability to
of law students, thereby enabling them to understand further
analyze, articulate and apply relevant laws Philippine obligation
effectively, as well as to allow them to and contract laws and
GO1: To prepare students have a holistic approach to legal jurisprudence, and
for the practice of law, and problems and issues related thereto. explain these
impart the knowledge and empathically to
provide support to prepare SO3: To prepare law students for others.
students to pass the bar advocacy, counselling, problem-solving
examinations, particularly and decision-making needed in the legal LO3: Communicate
Civil Law. practice concerning obligations and effectively and
contracts. confidently a
synthesized
SO4: To develop competence in the field
knowledge of law in a
of obligation and contract law as is
range of contexts and
necessary for gainful employment or
many different
sufficient as a foundation for future
audiences.
training beyond the basic professional
degree. LO4: Ask relevant

1

GO2: To contribute
towards the promotion and
advancement of justice and
the improvement of its
administration, the legal
system and legal institutions
in the light of the historical
and contemporary
development of law in the
Philippines and in other
countries.
SO7: To inculcate in law students the
GO3: To train persons for
ethics and responsibilities of the legal
leadership.
profession.
and critical questions
about key issues in
obligation and
contract law and
jurisprudence.
LO5: Develop the
ability to relate the
subject to actual
situations or current
events.
LO6: Identify, relate
SO5: To develop the ability of law and present solutions
students to deal with recognized legal to the problems
problems associated with obligations and besetting Philippine
contracts, of the present and the future, obligation and
and to identify potential legal and policy contract laws and
recommendations to address the same; jurisprudence.
SO6: To produce lawyers who LO7: Develop the
conscientiously pursue the lofty goals of
ability to appreciate
their profession and to fully adhere to its
the law from a
ethical norms. multidisciplinary
perspective
LO8: Engage relevant
stakeholders in the
promotion and
further development
of Philippine
obligation and
contract laws and
jurisprudence.

METHOD OF INSTRUCTION
The instructor will primarily use the modified Socratic-Langdellian method (oral
recitation/dialectics), and shall call students randomly. He reserves the right to employ other
teaching methods to accommodate various learning styles, such as the lecture method and/or
online tools.

CLASS POLICIES:
1. The instructor reserves the right to modify and supplement the course outline and
required readings enumerated above.
2. Students are expected to have, at the very least, photocopies or soft copies of the
required readings every meeting. Also, these readings must have been read and
understood beforehand.
3. As long as the student is present during class, the lowest recitation grade that the
instructor may give is 50%. However, students who are absent or are not inside the
classroom when called for the recitation will automatically get a grade of 0%.
4. Gadgets are allowed during class. However, these must be kept silent during class hours.
5. No make-up quizzes/examinations will be given. All missed quizzes will be equivalent to
0%.

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6. Anyone caught cheating or trying to cheat in any manner will be given a final grade of
0.0.
7. All students are required to regularly monitor the AnimoSpace (Canvas), and/or join the
online/Facebook group.
8. The professor guarantees transparency in grading at all times.

GRADING SYSTEM:
The student will be graded according to the following:
• Module Performance Grade (MOG) 35%
• Midterm Exam Grade (MEG) 30%
• Final Exam Grade (FEG) 35%
Total (Final Grade [FG]) 100%

LEARNING PLAN:

LEARNING OUTCOME TOPIC
1. Orientation
LO7: Develop the ability to appreciate the 2. Introduction to
law from a multidisciplinary perspective. Philippine Civil Law
3. General Provisions on
Obligations
4. Essential Requisites,
LO1: Identify relevant laws and principles.
Nature, and Effects of
Obligations
LO2: Ability to understand further
Philippine obligation and contract laws and 5. Kinds of Obligations
jurisprudence, and explain these 6. Extinguishment of
empathically to others.
Obligations
LO3: Communicate effectively and
MIDTERM EXAM
confidently a synthesized knowledge of law
in a range of contexts and many different
7. General Provisions on
audiences.
Contracts
LO4: Ask relevant and critical questions 8. Essential Requisites of
about key issues in obligation and contract Valid Contracts
law and jurisprudence. 9. Reformation and
Interpretation
LO5: Develop the ability to relate the 10. Kinds of Defective
subject to actual situations or current events. Contracts
11. Quasi-Contracts and
Estoppel
FINAL EXAM
LO6: Identify, relate and present solutions to
the problems besetting Philippine obligation
and contract laws and jurisprudence.
12. Integration
LO8: Engage relevant stakeholders in the
promotion and further development of
Philippine obligation and contract laws and
jurisprudence.
LEARNING
WEEK
ACTIVITIES
1
Modified Socratic-
1
Langdellian Method
Modified Socratic-
1-2
Langdellian Method
Modified Socratic-
2-3
Langdellian Method
Modified Socratic-
3-5
Langdellian Method
Modified Socratic-
6-8
Langdellian Method
9 Written Exam
Modified Socratic-
10
Langdellian Method
Modified Socratic-
11-12
Langdellian Method
Modified Socratic-
13
Langdellian Method
Modified Socratic-
13-16
Langdellian Method
Modified Socratic-
16
Langdellian Method
18 Written Exam
Modified Socratic-
17 Langdellian Method/
Lecture Method

COURSE OUTLINE:

I. Introduction to Philippine Civil Law A. General Provisions

II. Law on Obligations 1. Kinds of Obligations

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 a. Moral d. Relativity
b. Civil e. Consensuality
c. Natural 2. Stages of a Contract
2. Essential Requisites of Civil a. Negotiation
Obligations b. Perfection
a. Subject c. Consummation
b. Valid Prestation or Object 3. Innominate Contracts
c. Juridical Tie or Efficient 4. Elements of a Contract
Cause a. Essential
3. Sources of Civil Obligations b. Natural
a. Law c. Accidental
b. Contract B. Essential Elements of Valid
c. Quasi-Contract Contracts
d. Delict 1. General Provisions
e. Quasi-Delict 2. Essential Requisites
B. Nature and Effects of Civil a. Consent
Obligations i. Elements
C. Kinds of Civil Obligations o Intelligent
1. Pure and Conditional o Free
2. Obligations with a Period o Spontaneous
3. Alternative Obligations ii. Vices
4. Joint and Solidary Obligations o Mistake
5. Divisible and Indivisible o Duress
Obligations • Violence
6. Obligations with a Penal Clause • Intimidation
D. Extinguishment of Civil Obligations o Undue Influence
1. General Provisions o Fraud
2. Payment or Performance b. Object
a. In General c. Cause
b. Application of Payments 3. Form
c. Payment by Cession C. Kinds of Defective Contracts
d. Tender of Payment and 1. Rescissible
Consignation 2. Voidable
3. Loss of the Thing Due 3. Unenforceable
4. Condonation or Remission of 4. Void and Inexistent
Debt D. Reformation and Interpretation of
5. Confusion or Merger of Rights Contracts
6. Compensation IV. Law on Quasi-Contracts
7. Novation A. Negotiorum Gestio
III. Law on Contracts B. Solutio Indebiti
A. General Provisions C. Other Quasi-Contracts
1. Characteristics of a Contract V. Law on Estoppel
a. Obligatory VI. Integratio
b. Autonomy
c. Mutuality

READING PACKET:

Main Reference:
AVELINO SEBASTIAN, JR., OBLIGATIONS AND CONTRACTS (2020).

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I. Introduction to Philippine Civil Law

GEORGE MOUSOURAKIS, ROMAN LAW AND THE ORIGINS OF THE CIVIL LAW TRADITION, 1-159 (2015)
GUY CARLETON LEE, HISTORICAL JURISPRUDENCE: AN INTRODUCTION TO THE SYSTEMATIC STUDY OF
THE DEVELOPMENT OF LAW, 290-323 (1911)
Aurelio C. Ramos, The Roman Law in the Philippines, 9 PHIL. L.J. 185 (1929)

II. Law on Obligations

A. General Provisions

1. Kinds of Obligations

a. Moral

b. Natural
Main Legal Provisions:
RA No. 386, Arts. 1423-1430

Related Legal Provisions:

RA No. 386, Arts. 1156, 2154, 1236, 774, 777, 783, 804-808, 810, 838-839, 960
RA No. 6809

Case Law:
Ansay v. National Development Company, G.R. No. L-13667 (29 April 1960)
Development Bank of the Philippines v. Adil, G.R. No. L-48889 (11 May 1989)
Specified Contractors & Development, Inc. v. Pobocan, G.R. No. 212472 (11 January
2018)

c. Civil

2. Overview on Civil Obligations

Main Legal Provisions:
RA No. 386, Arts. 1423, 1156-1162

Related Legal Provisions:

RA No. 386, Arts. 1106, 774, 40-41, 44, 2014, 921(4), 1157, 1356-1357, 2-3, 886-887,
904, 906, 919-921, 1305-1306, 1420, 1319, 19, 2144, 2154
Act No. 2031, §190, par. 4; §9
1987 CONSTITUTION, §18(2), Art. III
Executive Order (EO) No. 209 (s. 1987), Arts. 55(8), 63(2), 63(4), 64
Act No. 3815, Art. 100, 11
RA No. 9344

Case Law:
Sagrada Orden de Predicadores Del Santismo Rosario de Filipinas v. National Coconut Corporation,
G.R. No. L-3756 (30 June 1952)
Metropolitan Bank and Trust Company v. Rosales and To, G.R. No. 183204 (13 January 2014)
Office of the Solicitor General v. Ayala Land, Inc. et. al., G.R. No. 177056 (18 September
2009)
Leung Ben v. O’Brien, et. al., G.R. No. L-13602 (6 April 1918)
Pelayo v. Lauron, et. al., G.R. No. L-4089 (12 January 1909)
Bautista v. Borromeo, et. al., G.R. No. L-26002 (31 October 1969)
Juan F. Nakpil & Sons v. Court of Appeals, G.R. No. L-47851 (3 October 1986)
Philippine School of Business Administration v. Court of Appeals, G.R. No. 84698 (4 February
1992)
Cruz and Ibias v. Gruspe, G.R. No. 191431 (13 March 2013)

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 Ace Foods, Inc. v. Micropacific Technologies Co., Ltd., G.R. No. 200602 (11 December 2013)
Locsin II v. Mekeni Food Corporation, G.R. No. 192105 (9 December 2013)
Cruz v. J.M. Tuason & Company, Inc., G.R. No. L-23749 (29 April 1977)
Manantan v. Court of Appeals, G.R. No. 107125 29 January 2001)
Jimenez v. City of Manila, G.R. No. 71049 (29 May 1987)
Gutierrez v. Gutierrez, et. al., G.R. No. 34840 (23 September 1931)

B. Nature and Effects of Civil Obligations

Main Legal Provisions:
RA No. 386, Arts. 1163-1178

Related Legal Provisions:

RA No. 386, Arts. 1172-1174, 1733, 441-442, 429, 1477, 1291, 1381(3), 1544, 466-469, 629, 1191-
1192, 1256, 1266-1267, 2655, 1253, 1052, 1381-1383
1987 CONSTITUTION, §18(2), Art. III
Bar Matter (BM) No. 803 (s. 1997), Rule 130
Presidential Decree (PD) No. 858 (s. 1975)

Case Law:
Chaves v. Gonzales, G.R. No. L-27454 (30 April 1970)
Mackay v. Spouses Caswell, G.R. No. 183872 (17 November 2014)
Tanguilig v. Court of Appeals and Herce, Jr., G.R. No. 117190 (2 January 1997)
Buenviaje v. Spouses Salonga, Jebson Holdings Corporarion, and Banez, G.R. No. 216023 (5 October
2016)
Boysaw et. al. v. Interphil Promotions, Inc. et. al., G.R. No. L-22590 (10 March 1987)
Miguel v. Montañez, G.R. No. 191336 (25 January 2012)
Cupino and Colocado v. Pacific Rehouse Corporation, G.R. No. 205113 (26 August 2015)
University of the Philippines v. De Los Angeles, G.R. No. L-28602 (29 September 1970)
Fidela vda. de Mistica v. Naguiat, G.R. No. 137909 (11 December 2003)
Fil-Estate Golf and Development, Inc. and Fil-Estate Land, Inc. v. Vertex Sales and Trading, Inc., G.R. No.
202079 (30 June 2013)
Swire Realty Development Corporation v. Yu, G.R. No. 207133 (9 March 2015)
Bank of the Philippine Islands v. Sanchez et. al., G.R. No. 179517 (19 November 2014)
Spouses Velarde v. Court of Appeals, G.R. No. 108346 (11 July 2001)
Fong v. Duenas, G.R. No. 185592 (15 June 2015)
Khe Hong Cheng v. Court of Appeals, G.R. No. 144169 (28 March 2001)
Siguan v. Lim et. al., G.R. No. 134685 (19 November 1999)
Marquez v. Elisan Credit Corporation, G.R. No. 194642 (6 April 2015)
Juan F. Nakpil & Sons v. Court of Appeals, ibid.
Fil-Estate Properties, Inc. and Fil-Estate Network, Inc. v. Spouses Roqnuillo, G.R. No. 185798 (13 January
2014)
Phoenix Construction, Inc. v. Intermediate Appellate Court, G.R. No. L-65295 (10 March 1987)
Arrieta and Arietta v. National Rice and Corn Corporation, et. al., G.R. No. L-15645 (31 January 1964)
La Compañia General de Tabacos de Filipina v. Araza, G.R. No. 3019 (9 February 1907)
Social Security System v. Moonwalk Development and Housing Corporation et. al., G.R. No. 73345 (7 April
1993)
Rivera v. Spouses Chua, G.R. No. 184458 (14 January 2015)
Maybank Philippines, Inc. v. Spouses Tarrosa, G.R. No. 213014 (14 October 2015)
Santos Ventura Hocorma Foundation, Inc. v. Santos and Riverland, Inc., G.R. No. 153004 (5 November
2004)
Spouses Vazquez v. Ayala Corporation, G.R. No. 149734 (19 November 2004)
Spouses Agner v. BPI Family Savings Bank, Inc., G.R. No. 182963 (3 June 2013)
Cabanting v. BPI Family Savings Bank, Inc., G.R. No. 201927 (17 February 2016)
Tengco v. Court of Appeals and Cifra, Jr., G.R. No. L-49852 (19 October 1989)
Central Bank of the Philippines v. Court of Appeals and Tolentino, G.R. No. L-45710 (3 October 1985)
Federal Builders, Inc. v. Foundation Specialists, Inc., G.R. No. 194507 (8 September 2014)
Gutierrez v. Gutierrez et. al., G.R. No. 34840 (23 September 1931)
Woodhouse v. Halili, G.R. No. L-4811 (31 July 1953)
Spouses Tongson v. Emergency Pawnshop Bula, Inc. and Napala, G.R. No. 167874 (15 January 2010)
Geraldez v. Court of Appeals and Kenstar Travel Corporation, G.R. No. 108253 (23 February 1994)

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 Metropolitan Fabrics, Inc. v. Prosperity Credit Resources, Inc., G.R. No. 154390 (17 March 2014)

C. Kinds of Civil Obligations

1. Pure and Conditional

Main Legal Provisions:
RA No. 386, Arts. 1179-1192

Related Legal Provisions:

RA No. 386, Arts. 1420, 1458, 1461, 579, 1163, 1381(3), 1357, 1538(1), 1194, 1174, 440,
457, 579-580

Case Law:
Gaite v. Fonacier, G.R. No. L-11827 (31 July 1961)
Coronel et. al. v. Court of Appeals, G.R. No. 103577 (7 October 1996)
Parks v. Province of Tarlac et. al., G.R. No. L-24190 (13 July 1926)
Central Philippine University v. Court of Appeals, G.R. No. 112127 (17 July 1995)
Quijada et. al. v. Court of Appeals, G.R. No. 126444 (4 December 1998)
Rustan Pulp & Paper Mills, Inc. v. The Intermediate Appellate Court, G.R. No. 70789 (19
October 1992)
Spouses Silos v. Philippine National Bank, G.R. No. 181045 (2 July 2014)
Naga Telephone Co., Inc. v. Court of Appeals and Camarines Sur II Electric Cooperative, Inc., G.R.
No. 107112 (24 February 1994)
Smith, Bell & Co. Ltd., v. Matti, G.R. No. L-16570 (9 March 1922)
Romero v. Court of Appeals and Enriqueta vda. de. Ongsiong, G.R. Ni. 107207 (23 November
1995)
Roman Catholic Archbishop of Manila, Roman Catholic Bishop of Imus, and Spouses Ignao v. Court
of Appeals and the Estate of deceased Spouses De Castro and Rieta, G.R. Nos. 77425 and 77450
(19 June 1991)
The Wellex Group, Inc. v. U-Land Airlines, Co., Ltd., G.R. No. 167519 (14 January 2015)

2. Obligations with a Period

Main Legal Provisions:
RA No. 386, Arts. 1193-1198

Related Legal Provisions:

RA No. 386, Arts. 1180, 1169

Case Law:
Gregorio Araneta, Inc. v. Philippine Sugar Estates Development Co., Ltd., G.R. No. L-22558 (31
May 1967)

3. Obligations with Multiple Prestations

a. Alternative Obligations
b. Facultative Obligations
Main Legal Provisions:
RA No. 386, Arts. 1199-1206

Related Legal Provisions:

RA No. 386, Arts. 1244, 1200, 1262, 1174

Case Law:
Arco Pulp and Paper Co., Inc. et. al. vs. Lim, doing business under the name and style of Quality
Papers & Plastic Products Enterprises, G.R. No. 206806 (25 June 2014)

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 4. Obligations with Multiple Subjects

a. Joint Obligations
b. Solidary Obligations
Main Legal Provisions:
RA No. 386, Arts. 1207-1222

Related Legal Provisions:

RA No. 386, Arts. 1231, 1278, 1290, 1282, 1275, 2047, 2079, 1243

Case Law:
Land Bank of the Philippines v. Belle Corporation, G.R. No. 205271 (2 September 2015)
Spouses Sinamban v. China Banking Corporation, G.R. No. 193890 (11 March 2015)

5. Divisible and Indivisible Obligations

Main Legal Provisions:
RA No. 386, Arts. 1223-1225

Related Legal Provisions:

RA No. 386, Arts. 2089

6. Obligations with a Penal Clause

Main Legal Provisions:
RA No. 386, Arts. 1226-1230

Related Legal Provisions:

Arts. 1306, 2226-2227

Case Law:
Rivelisa Realty, Inc. v. First Sta. Clara Builders Corporation, G.R. No. 189618 (15 January
2014)
Lambert v. Fox, G.R. No. L-7991 (29 January 1914)
New World Developers and Management, Inc. v. AMA Computer Learning Center, Inc., G.R. No.
187930 (23 February 2015)
Rivera v. Spouses Chua, ibid.
Robes-Francisco Realty & Development Corporation v. Court of First Instance and Millan, G.R.
No. L-41093 (30 October 1978)
Social Security System v. Moonwalk Development and Housing Corporation et. al. ibid.

D. Extinguishment of Civil Obligations

1. General Provisions
Main Legal Provision:
RA No. 386, Art. 1231

Related Legal Provisions:

RA No. 386, Arts. 1390-1402, 1380, 1190, 1181, 1425, 1423, 1830(5), 1919(3)

Case Law:
Saura Import and Export Co., Inc., v. Development Bank of the Philippines, G.R. No. L-24968
(27 April 1972)
Talampas, Jr. v. Moldex Realty, Inc., G.R. No. 170134 (17 June 2015)
GBMLT Manpower Services, Inc. v. Malinao, G.R. No. 189262 (6 July 2015)
Metro Concast Steel Corporation et. al. v. Allied Bank Corporation, G.R. No. 177921 (4
December 2013)

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 Arco Pulp and Paper Co., Inc. et. al. vs. Lim, doing business under the name and style of Quality
Papers & Plastic Products Enterprises, ibid.
Heir of Spouses Natividad v. Natividad and Spouses Cruz, G.R. No. 198434 (29 February
2016)

2. Performance or Payment

a. In General
Main Legal Provisions:
RA No. 386, Arts. 1232-1251

Related Legal Provisions:

RA No. 386, Arts. 1271-1272, 2154, 1291, 1300-1302, 37-38, 1178, 1887-1900,
1980
Act No. 2031, §85
EO No. 209, Art. 234
RA No. 6809
BM No. 803 (s. 1997), §84, Rule 84
RA No. 7653
RA No. 8183

Case Law:
PCI Bank (now BDO Unibank, Inc.) v. Franco, G.R. No. 180069 (5 March 2014)

b. Special Forms of Payment

i. Dation in Payment
Main Legal Provisions:
RA No. 386, Art. 1245

Related Legal Provisions:

RA No. 386, Art. 1548, 1561, 1555

Case Law:
Philippine National Bank v. Dee, Antipolo Properties, Inc. and AFP-RSBS,
Inc., G.R. No. 182128 (19 February 2014)
Filinvest Credit Corporation v. Philippine Acetylene Co., Inc., G.R. No. L-
50449 (30 January 1982)
Tan Shuy v. Spouses Maulawin, G.R. No. 190375 (8 February 2012)

ii. Payment by Cession

Main Legal Provision:
RA No. 386, Art. 1255

Related Legal Provisions:

RA No. 386, Arts. 1231, 1278, 1290, 1282, 1275, 2047, 2079, 1243

iii. Tender of Payment and Consignation

Main Legal Provisions:
RA No. 386, Arts. 1256-1261

Related Legal Provisions:

RA No. 386, Arts. 1244, 1233

Case Law:

9
 Meat Packing Corporation of the Philippine v. Sandiganbayan, G.R. No.
103068 (22 June 2001)
Spouses Bonrostro v. Spouses Luna, G.R. No. 172346 (24 July 2013)
Del Carmen v. Spouses Sabordo, G.R. No. 181723 (11 August 2014)
Spouses Cacayorin v. Armed Forces and Police Mutual Benefit Association, Inc.,
G.R. No. 171298 (15 April 2013)

c. Application of Payments
Main Legal Provisions:
RA No. 386, Arts. 1252-1254

Related Legal Provisions:

RA No. 386, Arts.

Case Law:
Paculdo v. Regalado, G.R. No. 123855 (20 November 2000)
Marquez v. Elisan Credit Corporation, ibid.
Spouses Chuy Tan substituted by Joel Tan and Eric Tan v. China Banking Corporation,
G.R. No. 200299 (17 August 2016)
Spouses Sinamban v. China Banking Corporation, ibid.

3. Impossibility of Performance
Main Legal Provisions:
RA No. 386, Arts. 1262-1269

Related Legal Provisions:

RA No. 386, Arts. 1163, 1348, 1306, 1174, 1462, 1170, 1335, 1174, 1306

Case Law:
Labayen et. al. v. Talisay-Silay Milling Co., G.R. No. 29298 (15 December 1928)
Osmena III et. al., v. Social Security System et. al., G.R. No. 165272 (13 September 2007)
Tagaytay Realty Co., Inc. v. Gacutan, G.R. No. 160033 (1 July 2015)
Naga Telephone Co., Inc. v. Court of Appeals and Camarines Sur II Electric Cooperative, Inc., ibid.
Philippine National Construction Corporation v. Court of Appeals, G.R. No. 116896 (15 May
1997)
So v. Food Fest Land, Inc., G.R. No. 183628 (7 April 2010)
Comglasco Corporation/Aguila Glass v. Santos Car Check Center Corporation, G.R. No. 202989
(25 March 2015)
Iloilo Jar Corporation v. Comglasco Corporation/Aguila Glass, G.R. No. 219509 (18 January
2017)

4. Condonation or Remission of Debt

Main Legal Provisions:
RA No. 386, Arts. 1270-1274

Related Legal Provisions:

RA No. 386, Arts. 748-749, 804-808, 810, 1423

Case Law:
Victor Yam and Yek Sun Lent v. Court of Appeals and Manphil Investment Corporation, G.R.
No. 104726 (11 February 1999)
Bognot v. RRI Lending Corporation, represented by its General Manager, Bernardez, G.R. No.
180144 (24 September 2014)

5. Confusion or Merger of Rights

Main Legal Provisions:

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 RA No. 386, Arts. 1275-1277

Related Legal Provisions:

RA No. 386, Arts. 562, 603, 649

6. Compensation
Main Legal Provisions:
RA No. 386, Arts. 1278-1290

Related Legal Provisions:

RA No. 386, Arts. 1380, 1390, 1178
BM No. 803 (s. 1997), §6-7, Rule 6
EO No. 209, Art. 194-195

Case Law:
Gan Tion v. Court of Appeal et. al., G.R. No. L-22490 (21 May 1969)
Philippine Trust Company v. Spouses Roxas, G.R. No. 171897 (14 October 2015)
Union Bank of the Philippines v. Development Bank of the Philippines, G.R. No. 191555 (20
January 2014)
California Manufacturing Co., Inc. v. Advanced Technology System, Inc., G.R. No. 202454 (25
April 2017)
Spouses Mirasol v. Court of Appeals et. al., G.R. No. 128448 (1 February 2001)
Montemayor v. Millora, G.R. No. 168251 (27 July 2011)
First United Constructors Corporation and Blue Star Construction Corporation v. Bayanihan
Automotive Corporation, G.R. No. 164985 (15 January 2014)

7. Novation
Main Legal Provisions:
RA No. 386, Arts. 1291-1304

Related Legal Provisions:

RA No. 386, Arts. 1178, 1236-1237, 2066-2067

Case Law:
Ace Foods, Inc. v. Micropacific Technologies Co., Ltd., ibid.
Starbright Sales Enterprises, Inc. v. Philippine Realty Corporation et. al., G.R. No. 177936 (18
January 2012)
Magbanua et. al. v. Uy, G.R. No. 161003 (6 May 2005)
Philippine Charter Insurance Corp. v. Petroleum Distributors & Service Corp., G.R. No. 180898
(18 April 2012)
Heirs of Franco v. Spouses Gonzales, G.R. No. 159709 (27 June 2012)
S.C. Megaworld Construction and Development Corporation v. Parada, G.R. No. 183804 (11
September 2013)
Arco Pulp and Paper Co., Inc. et. al. vs. Lim, doing business under the name and style of Quality
Papers & Plastic Products Enterprises, ibid.
Bank of the Philippine Islands v. Domingo, G.R. No. 169407 (25 march 2015)

III. Law on Contracts

Alan Watson, The Roman Law: The System of Contracts, in SOCIETY AND LEGAL CHANGE (2nd Ed., 2001)

A. General Provisions
Main Legal Provision:
RA No. 386, Arts. 1305

Related Legal Provisions:

RA No. 386, Arts. 1490-1491

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Case Law:
Manila International Airport Authority v. Avia Filipinas International, Inc., G.R. No. 180168 (27
February 2012)
Pilipino Telephone Corporation v. Tecson, G.R. No. 156966 (7 May 2004)
Alpha Insurance and Suretey Co. v. Castor, G.R. No. 198174 (2 September 2013)
Ejercito et. al. v. Oriental Assurance Corporation, G.R. No. 192099 (8 July 2015)
Buenaventura v. Metropolitan Bank and Trust Company, G.R. No. 167082 (3 August 2016)
Cabanting v. BPI Family Savings Bank, Inc., ibid.

1. Characteristics of a Contract

a. Obligatory
Main Legal Provision:
RA No. 386, Arts. 1305

Case Law:
Heirs of Manuel Uy Ek Liong v. Csstillo, et. al., G.R. No. 176425 (5 June 2013)
R.S. Tomas, Inc. v. Rizal Cement Company, Inc., G.R. No. 173155 (21 March 2012)

b. Autonomy

Main Legal Provision:

RA No. 386, Arts. 1306

Related Legal Provisions:

RA No. 386, Arts. 1315, 1874, 1944, 1933

Case Law:
Surviving Heirs of Alfredo Bautista v. Spouses Lindo, G.R. No. 208232 (10 March
2014)

c. Mutuality
Main Legal Provision:
RA No. 386, Arts. 1308-1310

Case Law:
Philippine National Bank v. Spouses Manalo, G.R. No. 174433 (24 February 2014)
Spouses Manalo v. Philippine National Bank., G.R. No. 181045 (2 July 2014)

d. Relativity
Main Legal Provisions:
RA No. 386, Arts. 1311-1314, 1318

Related Legal Provisions:

RA No. 386, Arts. 1313, 1381(3), 1387, 40, 1881, 1883, 1897, 2176

Case Law:
Philippine National Bank v. Dee, Antipolo Properties, Inc. and AFP-RSBS, Inc., ibid.
Fort Bonifacio Development Corporation v. Fong, G.R. No. 209370 (25 March 2015)
Juana vda. de Rojales v. Dime, G.R. No. 194548 (10 February 2016)
Buenviaje v. Spouses Salonga, Jebson Holdings Corporarion, and Banez, ibid.

e. Consensuality
Main Legal Provisions:

12
 RA No. 386, Arts. 1315-1317

Related Legal Provisions:

RA No. 386, Arts. 1547-1548, 2085-2123, 749, 1771, 1773, 1874, 2132, 2134,
1403(1), 1868
RA No. 11057
EO No. 209, Art. 225

Case Law:
Philippine National Bank v. Dee, Antipolo Properties, Inc. and AFP-RSBS, Inc., ibid.

2. Stages of a Contract

3. Innominate Contracts
Main Legal Provision:
RA No. 386, Arts. 1307

Case Law:
Dizon v. Gaborro, G.R. No. L-36821 (22 June 1978)

4. Elements of a Contract

a. Essential
b. Natural
Main Legal Provisions:
RA No. 386, Arts. 1318-1355

Related Legal Provisions:

RA No. 386, Arts. 1548, 1561

c. Accidental

B. Requisites of Valid Contracts

1. General Provisions
Main Legal Provision:
RA No. 386, Arts. 1318

Related Legal Provisions:

RA No. 386, Arts. 37, 1390, 1346

2. Essential Requisites

a. Consent
Main Legal Provisions:
RA No. 386, Arts. 1319-1346

Related Legal Provisions:

RA No. 386, Arts. 2142, 19-20, 1317, 1050, 1881-1883, 37-39, 1489(2), 290,
399, 807
RA No. 10142, §17
RA No. 9184
EO No. 209, Art. 290, 234
RA No. 6809

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Case Law:
Traders Royal Bank v. Cuison Lumber Co. and Josefa vda. de Cuison, G.R. No. 174286
(5 June 2009)
Spouses Gironella v. Philippine National Bank, G.R. No. 194515 (16 September
2015)
C. W. Rosenstock, as administrator of the estate of H. W. Elser vs. Burke, G.R. No.
20732 (26 September 1924)
Malbarosa v. Court of Appeals and S.E.A. Development Corp., G.R. No. 125761 (30
April 2003)
Talampas, Jr. v. Moldex Realty, Inc., ibid.
Bank of the Philippine Islands v. Montessori Internationale, G.R. No. 149454 (28 May
2004)
Sanchez v. Rigos, G.R. No. L-25494 (14 June 1972)

i. Elements

ii. Vices

Main Legal Provision:

RA No. 386, Arts. 1330

o Mistake
Main Legal Provisions:
RA No. 386, Arts. 1331-1334

Related Legal Provision:

RA No. 386, Arts. 1350, 3

Case Law:
Kasilag v. Rodriguez et. al., G.R. No. 46623 (7 December 1939)

o Duress
Main Legal Provisions:
RA No. 386, Arts. 1335-1336

• Violence
• Intimidation

o Undue Influence
Main Legal Provision:
RA No. 386, Arts. 1337

Related Legal Provision:

RA No. 386, Arts. 24

Case Law:
Martinez v. Hongkong & Shanghai Banking Corporation, G.R.
No. 5496 (19 February 1919)
Banez v. Court of Appeals, G.R. No. L-30351 (11 September
1974)

o Fraud
Main Legal Provisions:

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 RA No. 386, Arts. 1338-1346

Related Legal Provisions:

RA No. 386, Arts. 1331, 1336

Case Law:
Spouses Tongson v. Emergency Pawnshop Bula, Inc. and Napala,
ibid.
The Roman Catholic Church v. Pante, G.R. No. 174118 (11 April
2012)
ECE Realty and Development, Inc. v. Mandap, G.R. No. 196182
(1 September 2014)
Metropolitan Fabrics, Inc. v. Prosperity Credit Resources, Inc., G.R.
No. 154390 (17 March 2014)
Sunlife Assurance Company of Canada v. Court of Appeals, G.R.
No. 105135 (22 June 1995)
Heirs of Mario and Angelina Intac v. Court of Appeals, G.R. No.
173211 (11 October 2012)

b. Object
Main Legal Provisions:
RA No. 386, Arts. 1347-1349

Related Legal Provisions:

RA No. 1459-1462, 776, 1493, 1267

Case Law:
WT Construction, Inc. v. The Province of Cebu, G.R. No. 208984 (16 September
2015)

c. Cause
Main Legal Provisions:
RA No. 386, Arts. 1350-1355

Related Legal Provisions:

RA No. 386, Arts. 1355, 1318, 1352-1354, 1381(3), 1330, 1470, 749, 1390

Case Law:
Spouses Buenaventura et. al. v. Court of Appeals, G.R. No. 126376 (20 November
2003)
Liguez v. Court of Appeals, Maria vda. de Lopez, et. al., G.R. No. L-11240 (16
September 2015)

3. Form
Main Legal Provisions:
RA No. 386, Arts. 1356-1358

Related Legal Provisions:

RA No. 386, Arts. 1319

Case Law:
Dauden-Hernaez v. De Los Angeles, Hollywood Far East Productions, Inc. and Valenzuela, G.R.
No. L-27010 (10 April 1969)
Zamora v. Spouses Miranda, G.R. No. 162930 (5 December 2012)
San Miguel Properties, Inc. v. BF Homes, Inc., G.R. No. 169343 (5 August 2015)

C. Reformation and Interpretation of Contracts

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 Main Legal Provisions:
RA No. 386, Arts. 1359-1369, 1370-1379

Related Legal Provisions:

RA No. 386, Arts. 1319
BM No. 803, Rule 130

Case Law:
Bentir and Spouses Pormida v. Leanda, G.R. No. 128991 (12 April 2000)
Garcia v. Bisaya et. al., G.R. No. L-8060 (28 September 1955)
Sarming et. al. v. Dy et. al., G.R. No. 133643 (6 June 2002)
Heirs of Mario Intac and Intac v. Court of Appeals, G.R. No. 173211 (11 October 2012)
Spouses Paras v. Kimwa Construction and Development Corp., G.R. No. 171601 (8 April 2015)

D. Kinds of Defective Contracts

1. Rescissible
Main Legal Provisions:
RA No. 386, Arts. 1380-1389

Related Legal Provisions:

RA No. 386, Arts. 1191, 1098, 1539, 1542, 1177, 1311-1313
BM No. 803, §1, Rule 94; §6, Rule 107; Rule 96
EO No. 209, Art. 225

Case Law:
Siguan v. Lim et. al., G.R. No. 134685 (19 November 1999)
Oria v. McMicking et. al., G.R. No. 7003 (18 January 1912)
Ada et. al. v. Baylon, G.R. No. 182435 (13 August 2012)

2. Voidable
Main Legal Provisions:
RA No. 386, Arts. 1390-1402

Related Legal Provisions:

RA No. 386, Arts. 1319, 37-39, 1311, 1163, 1174, 1402

Case Law:
Philippine National Bank v. The Philippine Vegetable Oil Co., Inc., G.R. No. 25400 (14 January
1927)
Uy Soo Lim v. Unchuan, Pastrano and Bundan, G.R. No. 12605 (7 September 1918)
Spouses Viloria v. Continental Airlines, Inc., G.R. No. 188288 (16 January 2012)
ECE Realty and Development, Inc. v. Mandap, ibid.

3. Unenforceable
Main Legal Provisions:
RA No. 386, Arts. 1403-1408

Related Legal Provisions:

RA No. 386, Arts. 1317, 2047, 1207-1230, 1868-1932

Case Law:
Neri et. al. v. Heirs of Hadji Yusop Uy and Uy, G.R. No. 194366 (10 October 2012)
Iglesia Filipina Independiente v. Heirs of Bernardino Taeza, G.R. No. 179597 (3 February 2014)
Limketkai Sons Milling Inc. v. Court of Appeals, G.R. No. 118509 (29 March 1996)
Carbonnel v. Poncio et. al., G.R. No. L-11231 (12 May 1958)

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 Heirs of Natividad v. Mauricio-Natividad, G.R. No. 198434 (29 February 2016)
Swedish Match AB et. al. v. Court of Appeals, G.R. No. 128120 (20 October 2004)
Domalagan v. Bolifer, G.R. No. 8166 (8 February 1916)

4. Void and Inexistent

Main Legal Provisions:
RA No. 386, Arts. 1409-1422

Related Legal Provisions:

RA No. 386, Arts. 1462, 1347, 750
Act No. 2655
Central Bank of the Philippines Circular No. 905 (s. 1982)
RA No. 10121
RA No. 7581
PD No. 442 (s. 1974), as amended, Arts. 82-90

Case Law:
Fullido v. Grilli, G.R. No. 215014 (29 February 2016)
Gonzalo v. Tarnate, Jr., G.R. No. 160600 (15 January 2014)
Nicolas v. Mariano, G.R. No. 201070 (1 August 2016)
Pena v. Delos Santos and the Heirs of Rosita Flores, G.R. No. 202223 (2 March 2016)
Tingalan v. Spouses Melliza, G.R. No. 195247 (29 June 2015)
Clemente v. Court of Appeals and Jalandoon, G.R. No. 175483 (14 October 2015)
Tanchuling and Heirs of Vicente Tanchuling v. Cantela, G.R. No. 209284 (10 November 2015)
Reyes v. Asuncion, G.R. No. 196083 (11 November 2015)
Sta. Fe Realty, Inc. and Fabregas v. Sison, G.R. No. 199431 (31 August 2016)
Tolentino v. Spouses Lagatan, G.R. No. 179874 (22 June 2015)

IV. Law on Quasi-Contracts

Main Legal Provisions:
RA No. 386, Arts. 2142-2175

Related Legal Provisions:

RA No. 386, Art. 1156

Case Law:
Cruz v. J.M. Tuason & Company, Inc., G.R. No. L-23749 (29 April 1977)
Dometila M. Andres - Irene’s Wearing Apparel v. Manufacturers Hanover & Trust Corporation, G.R. No. 82670 (15
September 1989)
Gonzalo Puyat & Sons, Inc v. City Of Manila and Marcelo Sarmiento, as City Treasurer of Manila, G.R. No. L-17447
(30 April 1963)

V. Law on Estoppel
Main Legal Provisions:
RA No. 386, Arts. 1431-1439

Related Legal Provisions:

RA No. 386, Art. 1547
BM No. 803, §2(a), Rule 131; §32, Rule 130; §2(b), Rule 131

Case Law:
Maneclang v. Baun, G.R. No. 27876 (22 April 1992)
Ramos v. Central Bank of the Philippines, No. L-29352 (4 October 1971)
National Power Corporation v. Alonzo-Legasto, G.R. No. 148318, (22 November 2004)
Mendoza v. Court of Appeals, G.R. No. 116710 (25 June 2001)
Caluban v. Ricarcen Development Corporation, G.R. No. 202364 (30 August 2017)

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VI. Integration

Approved by:

_________________________
VIRGILIO DE LOS REYES
Dean, College of Law

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