OBLIGATIONS AND

CONTRACTS
What is an Obligation?

■ Derived from the Latin word “obligatio”

■ Article 1156. An Obligation is a juridical necessity to give, to do or not to do.

– Juridical necessity- the debtor must comply with his obligation whether he likes
it or not otherwise there will be legal sanctions.
Essential requisites of an obligation
■ Passive Subject (Debtor or obligor)
– The one that is bound to the fulfillment of the obligation.
■ Active Subject (Creditor or obligee)
– The person that is entitled to demand the fulfillment of the obligation.
■ Object or Prestation (subject matter)
– Conduct required to be observed by the debtor or the one that should be
performed.
– May consist of giving, doing or not doing.
■ Juridical or legal tie (efficient cause)
– The one that binds the parties to the obligation

Example: Under a building contract , X bound himself to build a house for Y

for P1,000,000.
Form of obligations

– Refers to the manner in which an obligation is manifested or incurred.

■ Written
■ Oral
■ Partly Oral or Partly Written
– In Obligations arising in contracts
– Generally the law does require any form.
– In Other Sources
– Do not have any form at all (Art. 1157)
Kinds of obligation according to the
subject matter
■ Real Obligation (obligation to give)
– The subject matter is a “Thing” which the obligor must deliver.
example: X binds himself to deliver the piano to Y.
■ Personal Obligation (obligation to do or not to do)
– The subject matter is an “Act” to be done or not to be done.
■ Positive (to do)
example: X binds himself to repair the piano of Y
■ Negative (not to do) also includes not to give
Example: X obliges himself not to build a fence in a portion of lot of Y.
Sources of obligation (Art. 1157)

■ Law

■ Contract

■ Quasi- Contracts

■ Acts or omissions punishable by law

■ Quasi - Delicts
Obligations emanating from Law
■ They are imposed by the law itself.
Example: Obligation to pay taxes; Obligation to support one’s family.
■ Article 1158
Obligations derived from law are not presumed. Only those expressly determined
in this code or in special laws are demandable, and shall be regulated by the
precepts of the law which establishes them.

– To be demandable they must be Clearly set forth in the law.

Example: A private school has no obligation to provide free clothing or uniforms to

its students or teachers because there is no law which imposes this obligation
upon schools.
Obligations emanating from Licit acts

■ Contracts

■ Quasi-Contracts
Contracts

■ Art. 1159
Obligations arising from contracts have the force of law between the contracting
parties and should be coupled with good faith.

Binding Force
– Have the same binding effect of obligations imposed by law. However it does
not mean that contract is superior to law it must be within the purview of law.
– It cannot be valid if it is against the law.
Example: Obligation to pay a loan or indebtedness by virtue of agreement.
Quasi-Contract

■ 1160.Is that juridical relation resulting from lawful, voluntary and unilateral acts by
virtue of which the parties become bound to each other to the end that no one will
be unjustly enriched at the expense of others.

Contracts and Quasi Contracts distinguished

– In contract consent is essential, in quasi contract consent is not essential as it
is implied by law.
Example: the obligation to return money paid by mistake.
Quasi-Contract
■ 2 Kinds of Quasi Contracts:
■ Negotiorium Gestio
– Is the voluntary management of the property or affairs of another without the
knowledge or consent of the latter.

■ Solutio Indebiti
– Is the juridical relation which is created when something is received when
there is no right to demand it and it was unduly delivered through mistake.
– There is no right to receive the thing delivered
– The thing was delivered through mistake
Delicts or acts or omissions punished
by law as source of obligation
■ While an act or omission is felonious because it is punishable by law.
■ the criminal act gives rise to civil liability
– Oftentimes the commission of a crime causes not only moral evil but also
material damage.

Example: is the duty of a killer to indemnify the heirs of the victim.

Quasi-Delicts

■ They arise from damage caused to another through an act or omission, there being
fault or negligence, but no contractual relation exist.
Quasi Delicts distinguished from delicts

– In delicts there is a malicious intent, in quasi delicts there is only negligence

– In delicts there are two liabilities criminal and civil while in quasi delicts there
is only civil liability

Example: While playing baseball X broke the glass window of Y, his neighbor. The
Accident would not have happened if they played a little farther from the house of
Y.