UNIVERSITY OF PANGASINAN COLLEGE OF LAW

OBLIGATIONS
- is a juridical necessity to give, to do or not to do.
COMPLIANCE OF AN OBLIGATION

1. Real- the obligation to deliver the thing by the debtor to the creditor for the purpose of transferring ownership
a. Determinate- when it is particularly designated or physically segregated from all others of the same class
- you can identify, it can be substituted

b. Indeterminate- when it is designated merely by its class or genus without any particular designation or
physical segregation from all others of the same class
- things that cannot be separated, eliminated, identified
- You cannot distinguish it from the class to which belongs
- The obligor must observe the quality that has been agreed upon
- The average (normal) quality if there is no agreement
2. Personal- to do or not to do
a. Positive personal- to do
b. Negative Personal-not to do
 Obligor perform the prestation expected from him
 The creditor can demand from its fulfillment, if he refuse, it will done in cost of him
 If he performs an act that is prohibited, it must undone in his expense
ELEMENTS OF OBLIGATION

1. Passive- duty to perform/ comply with the obligation (obligor/ debtor)

2. Object/Prestation-the conduct required by the obligor (to give, to do or not to do)
3. Active-entitled to demand the fulfillment of the obligation (oblige/creditor)
4. Legal tie- efficient cause the both parties tie

SOURCES OF OBLIGATION

1. Laws-is a rule of conduct, just, obligatory, promulgated by legitimate authority

2. Contract-is a meeting of minds between 2 persons, whereby one binds himself , with respect to the other to give
something or to render some service
3. Quasi- Contract-arises from lawful, voluntary, unilateral act which are enforceable to the end that no one shall be
unjustly enriched or benefited at the expense of other
a. Negotiorum gestio -is the voluntary management of the property or affairs of another without the
knowledge or consent of the latter
b. Solutio indebiti -if something is received when there is no right to demand it, and it was unduly
delivered through mistake, the obligation to return it arises
4. Delicts- act or omissions punishable by law
Civil Liabilities in Delict
a. Restitution-the thing itself shall be restored
b. Reparation of the damage caused- the court shall determine the amount of the damages taking into
consideration of the price of the thing
c. Indemnification of the consequential damage- shall include not only those caused the injured party,
but also suffered by his family or by the 3rd person

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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW

5. Quasi- Delicts-act or omissions causes damage to another, there being fault or negligence, is obliged to pay for
the damage done (NEGLIGENCE)
Kinds of Negligence
1. Culpa Aquiliana- the negligence resulting from the failure to observe the required diligence which causes
damage to another person
2. Culpa Contractual- the negligence in the performance of a pre-existing contract
3. Culpa Criminal- the negligence results in the commission of a crime

NATURES AND EFFECTS OF OBLIGATION

Obligations of the DEBTOR in REAL OBLIGATION

Specific Generic
1. Deliver and take care of the thing with the 1. To deliver a generic or indeterminate thing which
diligence of a good father of a family must be neither of superior nor inferior quality

2. Deliver the fruits of the thing 2. To be liable for damages in case of breach
 Fruits of the thing-if it was only
delivered, then real rights arises, until such
time the thing is delivered to you, you only
have personal right
 Personal Right-is the power of one person
to demand another, as definite passive
subject, the fulfillment of a prestation to
give, to do or not to do
 Real Right- is the power belonging to a
person over a specific thing without a
passive subject individually determinate
against whom such may be personally
exercised
 Fungible- susceptible for substitution
 Consumable- by its nature, cannot be use
without being consume

3. Deliver the accessions and accessories

 Accessions-fruits of the thing which is the
object of the obligation all of those which
naturally or artificially attached thereto
 Accessories- things that are necessary and
convenient for the perfection of another
thing
4. To pay damages in case breach

Obligations of the CREDITOR in REAL OBLIGATION

Specific Generic
1. To compel specific performance 1. To ask performance of the obligation
2. To demand rescission/cancellation 2. To ask the obligation be complied at the expense of
3. To recover damages in case of breach the debtor
3. To recover damages in case of breach
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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW

BREACH OF THE OBLIGATION - quantum of measurement

Violation of one will have Breach of Obligation

a. Identity-the obligation must comply precisely, what has been agreed upon has to be delivered and what has
been stipulated must complied with. You cannot deliver a substitute unless the creditor agrees
b. Integrity-must complied with fulfill completely (because if not, they will advance the defense that they
comply with the portion of the obligation) even you deliver a partial, it cannot render a fulfillment of the
obligation

2 Presumptions in a situation
1. With Interest without reservation
- the moment that the principal has been paid without reservation for the payment of the interest it creates a
presumption that the interest had already been paid because the interest is the onerous part
2. To pay the sum of money in installment
- when the oblige accepted the last installment without any reservation to then last few installments, it creates a
presumption that the prior installment had already been paid
-must be paid the payment with due and demandable, if not he is liable for penalties

 FRAUD in the performance of obligation is Malice (he way the obligation is performed)
Fraud in the celebration of a contract as to obtaining the consent of the other party
which is substantial to the annulment of a contract is Dolo (deceit)

2 Kinds of Malice:
a. Causal Fraud- you should not enter to such contract not for the
misrepresentation. It is the malice employed by the debtor in order
to enter in to contract by the creditor.

- It is ground for the annulment of contract, it is voidable from the

beginning
b. Incidental Fraud- there is already a contract but the malice is employed during
the contract
- the debtor is liable for damages, unless deceit is present he is
liable for criminal offense of estafa or swindling

 NEGLIGENCE-omission of diligence required of your obligor

-observe particular degree of care between stipulations of 2 parties
 Diligence- is the degree of care required of a person in the performance of an
obligation
Vary degrees of care:
a. Diligence of a Good Father of a Family- is the standard/default diligence, take care of the thing
b. Extraordinary diligence- always apply in Contract of Carriage, in cases of Transportation it is not
sufficient that would have diligence of a good father of a family, it must always observe with
extraordinary diligence
c. Degree of diligence sometimes depends on the stipulations in a contract

3 Kinds of Negligence(Culpa):

a. Culpa Contractual- it is based on contract that presumes primitive relationship

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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
- Negligence is not element of Contract
b. Culpa Aquiliana- arises from negligence
c. Culpa Criminal- Criminal liability, there is a criminal offense
A X Liable for y Liable for
(Passenger of X) (Driver) Contractual (Nakabangga) Aquiliana

M Subsidiary Liable N
(Operator) for damages (Operator)

Defenses in
case of damages: YES NO (they are not the direct principal)

 FORTUITOUS EVENT- major events which is not foreseen, but if foreseen it is inevitable

Elements:

1. The event must be independent o the human will or at least of eh debtor’s will
2. The event could not be foreseen, or if foreseen, is inevitable
3. The event must be of such a character as to render it impossible for the debtor to
comply with his obligation in a normal manner
4. The debtor must be free from any participation in, or the aggravation of, the injury to the
creditor, that is, there is no concurrent negligence on his part

General Rule: Fortuitous events extinguishes Obligation

Exemptions:
1. In case law provides for it
2. When the obligor promises to deliver the same thing to 2 different person not having the same interest
3. Observance of higher degree of diligence under the stipulations of the 2 parties
4. The moment you are in delay even there is fortuitous event, you are still liable
5. In cases of aliatory contracts when there is assumption of risks(insurances)

 DELAY-non-fulfillment of obligation in respect to time (controlling motive)

-the obligor is in delay, if after a demand has been made upon him/her either judicial or
extrajudicial and fails him to comply with the obligation

General Rule: There is no Delay if there is no Demand

Exemptions:

a. When the law or obligation expressly provides for it

b. When time is the controlling motive
c. When the demand would be useless in the performance of the obligation

Kinds of Delay:
a. Mora Soverendi- delay on the part of the obligor
Kinds:
1. Mora Soverendi Ex Re- demand is not necessary
2. Mora Soverendi Ex Perso- requires demand

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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
b. Mora Accipiendi-delay on the acceptance of the delivery of the thing of the creditor
-consignation of payment(to avoid paying of interests)
-opt for depositing the money in court
c. Compensatio Morae- mutual delay on the reciprocal obligations of the both parties

 CONTRAVENTION TO THE TENOR OF THE OBLIGATION

-fail to observe the identity and integrity of obligation

REMEDIES IN CASES OF BREACH

1. Extrajudicial-remedies available to you without filing in an action and it can be a personal

demand
-remedies which available outside the court
a. Right of the unpaid seller of Personal Property
 Personal Property (chattel mortgage) - which can carry from 1 place to another
-notice of recession while preferable is not dispensable
 Real Property (real estate mortgage)- immovable properties
-give notice that you are sending the obligation that subject to judicial scrutiny (substantial
compliance of the obligation)
-reservation of recession of obligation without notice(only preferred but not
mandatory)
-subject to public auction there must be certificate of sale executed by Sheriff
-1 Year to redeem
-file a case in court(writ of possession/ writ of demolition)
2. Judicial- file of an action in court I order for you to seek redress in the violation of your right
3 Classifications:

A. Principal- the consequence is exactly the opposite

a. Specific Performance- asking the court to compel the obligor to complete/ fulfill the obligation,
can perform equivalent prestation
b. Recession of Obligation/ Resolution
-asking the court to invalidate the same and whatever has been paid will
forfeited in your favor
-you cannot claim interest unless in Writing, the moment it was filed in Court, it
will be legal interest
 Recession of Contract- presupposes economic prejudice to the affected party
 Recession of Obligation- remedy under the law
-you cannot get a property not entitled to the name of the debtor
B. Subsidiary – remedies which can avail by the oblige in the effect that the principal is
inadequate/ insufficient to address the issue
- Instances that there is no money and property
a. Accion Pauliana- transaction entered into by debtor to defraud the creditor, the
action must be recession
-if the obligation attach to the thing to be inherited then you inherit
the obligation because you assume the place of your predecessor
-the effect of restituting the property
b. Accion Subrogatori- action against the debtor’s debtor
-ask the court to render a decision to place you in the shoes of your debtor so you
will become the creditor of your debtor’s debtor because when you are the 3 rd
person, you will not have the right with respect to a transaction
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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
C. Anciliary- which are intended to presume the integrity of a final judgment
a. Replevin- obtain the property even before the decision will released
b. Real Property Attachment- attachment bond, answer the damages if you are proven wrong after all
c. Garnishment- freeze the bank account

KINDS OF THE OBLIGATION

1. Pure and Conditional

 Pure- with futurity and certainty
-Obligation which is not subject to any condition/ term, the obligation is immediately
demandable anytime
 Condition-characterized by futuristic and uncertainty
-as long as these are resolutory conditions, they are also immediately
demadable
-The knowledge will just come to you in the future
a. Suspensive-acquire a right/ birth
b. Resolutory- immediately demandable
-lose your right / obligation is already there
2. Obligations with a Period
 Period- is future and certain event
 The court will fixed the period
3. Alternative and Facultative
 Alternative-there were several prestations are due but the performance of one is
sufficient
-2/more prestation but the delivery of 1 extinguishes the obligation
 Cumulative-delivers everything
 Facultative- whre only one prestation is due but the debtor may substitute another (if was already
communicated)
4. Joint and Solidary
 Joint- where the whole obligation is to paid/ fulfilled proportionately by the different debtors/ to be
demanded proportionately by the different creditor
 Solidary-where one of the debtor is bound to render /each one of the creditors has a right to demand from
the debtors, the entire compliance of prestation
-solidary creditor can collect the entire obligation to any solidary debtor
-it is not presumed
a. law provides
b. stipulations of the parties
-acting for the interest of the co-creditor
 Joint indivisible obligation-gives of indemnity of damages from the time anyone of the debtors
does not comply with his undertaking
5. Divisible and Indivisible
 Divisible- the obligation is subject to partial fulfillment
a. Obligations which have for their object the execution of a certain number of days of work
b. Obligations which have for their object of the accomplishment of work by metrical units
c. Obligations which by their nature are susceptible of partial performance
 Indivisible- the obligation is not subject to partial fulfillment
a. Obligation to give definite things
b. Obligation which are not susceptible of partial performance
c. Obligations provided by law to be indivisible even if the thing/ service is physically divisible
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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
d. Obligations intended by the parties to be indivisible even if thing /service is physically divisible
6. Obligations with a Penal Clause
-contains an accessory undertaking, substitute the indemnity for damages and payment of interest in case of non-
compliance
-If it is not written in the obligation the law will take effect
 Principal obligation declared null and void so also the accessory
 If there is breach of the obligation, it controls the provision of the law in the absence of any
stipulation
 If there is no stipulation, apply the penal clause
 If there is no interest written it cannot be validly stipulated
-There is legal interest if someone file it in court
-From the date of finality of payment of the obligation to pay damages, legal interest of 6% will
now be imposed
-Forbearance in the debt of money, legal interest of 12 % will now apply

EXTINGUISHMENT OF THE OBLIGATION

1. Payment or Performance
 Payment-not just delivery of money/ it could be performance
a. integrity-complied with completely
XPN:
1. substantially performed in good faith
2. when the oblige accepts the performance
3. express liquidation
4. when the debt is partially liquidated/ partially unliquidated
b. identity- complied with precisely
 Who can be paid?
1. The creditor itself
2. successor the contract
3. other person authorized by law
 Relativity of Contracts- those who have the right bounded

General Rule: Creditor is not bound t accept payment to the 3rd person
XPN:
1. if made by 3rd person who has interest in the obligation
2. if there is contrary stipulation
 Right of the 3rd person, who paid the obligation of another
1. if with knowledge and consent of debtor
-can recover the entire amount
-can subrogated the creditor’s right
-the obligation is extinguish
2. if without the knowledge / consent and against your will
-if there is no interest in the fulfillment of the obligation
-the creditor is not bound to accept the payment unless there is stipulation to the
contrary
-the 3rd person can only recover the amount which beneficial to the debtor
-if the 3rd person doesn’t intend to reimburse tteh amount to the debtor, it is
deemed to be a DONATION, it requires creditors consent
 Rules in monetary obligation

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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
1. Payment in cash
-currency stipulated/ legal tender in the Philippines
RA 529(Jun. 16, 1950)- foreign currency denomination/ gold is VOID
RA 8183 (Jun. 11, 1996)- foreign currency denomination/ gold is VALID
2. Payment in check
-not considered payment unless it is in cash
 Inflation/ deflation
-increase/ decrease in the value of money
-the value of the currency at the time of the establishment of obligation will be
the basis of payment
-the solution is to adjust the amount
 Where suppose to pay?
1. Place where the obligation is located
2. Place under stipulation
3. Domicile of the debtor
 Application of payment
-designation of the debt where it will apply
1. 1st choice lies on the debtor
2. Apply it where it is due and demandable
3. Apply it to the most onerous
4. The creditor can put it in receipt where it will apply once the debtor
accepted it, it is now binding

Dation in Pago Cession of payment

There is only ONE Creditor PLURALITY of creditor
Not necessarily in state of INSOLVENCY Debtor must PARTIALLY/ relatively insolvent
Specific thing delivered which is considered as Universality of PROPERTY of debtor is what needed
EQUIVALENT of performance
PAYMENT extinguishes obligation to the extent of the It merely releases the debtor for net proceeds of the things
value of the thing delivered as agreed upon, proved/ ceded for assigned unless there is contrary in them
implied from the conduct of creditor

 Consignation-depositing the prestation of the obligation

-if there is a valid tender of payment
 Reasons why the creditor can accept the payment:
a. Insanity
b. Civil interdiction

2. Loss of the Thing Due

-when it perishes, goes out commerce, disappears in such a way that its existence is unknown or cannot be
recovered
- as a general rule it extinguish the obligation
 When loss of the thing cannot be extinguish
a. When the law so provides
b. When the stipulation so provides
c. When the nature of the obligations requires assumption of risk
d. When the obligation to deliver a specific thing arises from a crime

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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
 Theory of impervisibility/ frustration of enterprise in contracts
-in obligations to do, the debtor shall released when the prestation becomes legally/
physically impossible without its fault, when the service has become so difficult as to manifest
become contemplate with the parties the obligor may be released therefrom

3. Condonation or remission of the debt

 Condonation- is the gratuitous abandonment by the creditor of his right against the debtor. It is a form of
DONATION

4. Confusion of merger of rights of the creditor and debtor

 Confusion of merger of rights- is the meeting in 1 person of the qualities of creditor and debtor with
respect o the same obligation
 like corporations/ banks buying each other, buying their assets also its liabilities, therefore the obligation
is extinguished

Compensation Confusion/ Merger of Rights

2 persons who are mutual debtors and creditors to each 2 person where qualities of debtor and creditor are merged
other
There must be at least 2 obligations There is only 1 obligation

5. Compensation- is the extinguishment to the concurrent amount of the debts of 2 persons who, in their own right,
are debtors of each other
 You cannot always compensate debts unless it is:
1. Due
2. Demandable
3. Liquidated
 Debts that are susceptible for compensation
1. Debts arising from contract of deposit
2. Debts arising from contract of commodatum
3. Claim for support due to gratuitous title
4. Obligation arising from criminal offense
5. Certain obligation in favor of the government

Compensation Payment
Takes effect by the operation of law Takes effect by the parties
Capacity to give and acquire not necessary Capacity to give and acquire is essential

6. Novation-total or partial extinction of an obligation through creation of a new one which substitutes it
a. Changing their object or principal conditions
b. Substituting the person of the debtor
c. Subrogating a 3rd person in the rights of the creditor

2 forms of substitution:
1. Expromision- which takes place when a third person owns initiative and without the knowledge or
against the will of the original debtor assumes the latter obligation with the consent of the creditor
2. Delegacion- which takes place when the creditor accepts a third person to take place of the debtor at
the instance of the latter

2 forms of Subrogating a 3rd person in the rights of the creditor:

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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
1. Conventional subrogation-takes place upon the agreement of 2 creditor, debtor and 3 rd person,
subrogating the creditor
2. Legal subrogation-within the provision of the law

Conventional subrogation Assignment of rights

Governed by Article 1300-1304 Governed by Article 1624-1627
Debtors consent is required Debtors consent not needed
Ex. the Obligation and gives rise to new one Transmission of rights of the creditor to 3rd person without
modifying ex. the obligation
Defects and vices in the old obligation are cured Defects and vices in the old obligation are not cured
Takes effect upon the moment novation/ substitution As far as the debtor is concerned, takes effect upon the
notification

Exemption of the Subrogation(1302):

1. When the creditor pays another creditor who is preferred without debtors knowledge
2. When a 3rd person not interested in the payment

CONTRACTS
-is a meeting of minds between two persons whereby one binds himself in respect to give something or to render some
service.

TENANTS OF CONTRACT

1. MUTUALITY
The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of
them
-one of the exemption is that contractual freedom is subordinate with police power

2. AUTONOMY
The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law, morals, good customs, public order, or public policy

3. RELATIVITY
Contracts take effect only between parties, their assigns and heirs UNLESS, obligations arising from the
contract are not transmissible by their (1) nature, (2) by stipulation or (3) by provision of law. The heir is not
liable beyond the value of the property he received from the decedent.
 Stipulation Pour Atrui-benefits the 3rd person
 Inter Alius Acta-3rd person cannot affect the right of a particular person

4. CONSENSUALITY
Contracts are perfected by mere consent and from that moment, the parties are bound not only to the
fulfillment of what has been expressly stipulated but also to all consequences which, according to their nature,
may be in keeping with good faith, usage and law, (Art.1315) EXCEPT real contracts, such as deposit, pledge and
 Commodatum , are not perfected until the delivery of the object of the obligation
 Consent is sufficient to establish contract because it is the meeting of minds

Real Contract Consensual Contract

Accompanied by delivery of the object Perfected the moment there is manifestation of the offer
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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
and acceptance

5. OBLIGATORY FORCE
-the moment the contract is perfected there is now force and effect of law between them
-complied in good faith

a. Art. 1159, Civil Code

Obligations arising from contracts have the force of law between the contracting parties and should be
complied with in good faith.

b. Art. 1308, Civil Code

The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one
of them.

c. Art. 1315, Civil Code

Contracts are perfected by mere consent, and from that moment the parties are bound not only to the
fulfillment of what has been expressly stipulated but also to all the consequences which, according to
their nature, may be in keeping with good faith, usage and law.

d. Art. 1356, Civil Code

Contracts shall be obligatory, in whatever form they may have been entered into, provided all the
essential requisites for their validity are present. However, when the law requires that a contract be in
some form in order that it may be valid or enforceable, or that a contract be proved in a certain way, that
requirement is absolute and indispensable. In such cases, the right of the parties stated in the following
article cannot be exercised.

 Nominate- if there is name assigned by law and govern by specific provision of the law.
1. Do ut des
2. Do ut facias
3. Facio ut des
4. Facio ut facias
 Innominate- if there is no name assigned by law.
1. Stipulations of the parties
2. Title 1 and 2
3. Analogous case
4. Customs of the place

THEORIES IN CORNTRACT:

1. Manifestation Theory- contract is perfected from the moment the acceptance is made
2. Expedition Theory- the contract is perfected the moment the offeree transmits the notification of the acceptance to
the offeror
3. Reception- the notification of acceptance is in the hands of the offeror
4. Cognition- the acceptance came to the knowledge of the offeror

STAGES IN THE PERFECTION OF THE CONTRACT:

1. Preparation- it is the negotiation/generating part in the contract

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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
2. Perfection- meeting of minds
3. Consummation- death/ extinguishment of contract

REQUISITES OF CONTRACT

1. CONSENT- is manifested by the meeting of the offer and the acceptance upon the thing and the
cause which are to constitute the contract. The offer must be certain and the acceptance
absolute. A qualified acceptance constitutes a counter-offer.
a. Offer- Certain
b. Acceptance- absolute
c. Qualified Acceptance=Counter offer, no consent on the money

Contract of Agency-contract in behalf

General Power of Attorney Special Power of Attorney
Acts of administration Acts to execute
Not performance of conveyance of rights As part of ownership
Attorney in fact, represent you in court

 Juridical Capacity- fit to be a subject of legal relations

 Capacity to Act- legal effects
 Capacity of Party- voidable contract
 Incapacitated Consent- unforceable

GN: You cannot ratify a Void Contract

XPN: if the agent(child) have authority but the principal can ratify the contract(surviving parent)

 Vices of consent:
1. Mistake-refers to the substance (1331)
2. Violence (1335)
3. Intimidation (1335)
4. Undue Influence (1337)
5. Fraud (1338)
 Simulation of Contract
a. Absolute- no real transaction existed/ intended
b. Relative- real transaction is needed
 Those who cannot give consent:
1. Unemancipated Minors(under 18)
XPN:
a. Contracts for necessaries
b. Contracts by guardians/ legal representations
c. Contracts for minors own representation
d. Contracts of deposit provided that the minor is over 15
2. Insane or demented persons- unless they are in lucid interval(or in soundness of mind)
3. Deaf-mute who do not know how to write
-if he knows how to write then he can execute last will and testament
However the person must know how to write:
a. The testator signed the last will and testament in your presence and 2 other witnesses
b. That all the witnesses signed in the presence of testator on another
c. The number of pages of last will and testament
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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
d. That there are the signature of the parties
e. That the same are notarized/ subscribed in front of notary public
 The reckoning point is the AGE and SOUNDNESS OF MIND because they must be a
way to communicate the last will and testament
 Commission of Fraud
1. The guardian respect to the property of their ward
2. Agents with respect to the property of whose administration/sale may have been entrusted to them unless
the consent of the principal was given
3. The executor or administrator with respect to the property or estate under administration
4. Public officer/ employee with respect to government property
5. Any other person who disqualify by law

Donation Deed of sale

It is love, and pure act of liberality Cannot be revoke
Have its grounds for revocation Consent, object, price

2. OBJECT -All things which are not outside the commerce of men, including future things, may be the object of a
contract. All rights which are not intransmissible may also be the object of contracts

 The following may not be the object of the contract:

1. Things outside the commerce of man especially communal property for public use
Ex. private property t deed of donation to government= public property
2. Intransmissible rights(vote) because it is pure and personal
3. Future inheritance except provided for by law
4. Impossible things and services

3. CAUSE- In onerous contracts the cause is understood to be, for each contracting party, the prestation or promise of a
thing or service by the other; in remuneratory ones, the service or benefi t which is remunerated; and in contracts of pure
beneficence, the mere liberality of the benefactor
-what puts the parties in the contract

Onerous Gratuitous
Expected to render something in return You do not have to do anything, you just need to receive
them
Receipt for the offeree Pure act of liberality (Donation)
Price for the offeror

 Business Advertisement-is just an invitation to make offer

 Withdraw the offer if there is no acceptance made except if the period is characterized by consideration
 Remunatory-the service are benefited/ remunerate for pay

Option Money Earnest Money

You can withdraw anytime ut if there is consideration Is not an option because there is already a meeting f
then you have to pay for the RESERVATION minds
One of the remedy is to file specific performance/
rescission
You are paying for the period waiting for the acceptance It is part of the purchase price or also called PARTIAL
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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
PAYMENT

 Kinds of Causes
1. Absence- no cause at all
2. Failure- it does not benefit the contract, voids it due to failure of cause
3. Illegality
4. Falsity- the contract is void unless the party can show another cause
5. Lesion/ economic prejudice

The perfection of contract: the MEETING OF MINDS and the PRESENCE OF ELEMENTS

FORMS OF CONTRACT

GN: All contracts are valid as long as essential elements are present
XPN: Law will require some form

Invalid/ Void Unenforceable Greater Efficacy

As if it was not executed/ no effect Basically valid but because of public Not adversely affect the binding of
policy, you cannot enforce it, if one of the contract
parties object to it/ possibility of fraud

A. Validity
-Contracts are obligatory in whatever form may have been entered to
 Written document- is a private document
 Public document- is a notarized document(constructive)
-there is a notice of validity, it binds the 3rd person

Must be in WRITING Must be in PUBLIC INSTRUMENT

Donations of personal property which value exceeds Donation of real property
5000 -also be in acceptance with or another public
instrument
Stipulations to pay interest- must be in writing except if Partnership which immovable property
there is a case filed in court (legal interest)
Sale of land through an agent Sale of cattle
-transfer the registration of cattle
Stipulation limiting your liability to less than
extraordinary diligence Substantial compliance with chattel mortgage
- contract of transportation
Contract of antichresis
-the benefits of other people (the fruits/
interest / the ownership belong to other
people)
Sale of a vessels- imbued with public interest

B. Enforceability

Must be in WRITING
1. Agreement not to performed within 1 year from the meeting thereof
2. Promise to answer for the debt befall the miscarriage of another

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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
3. Agreement in consideration of marriage other than mutual promise
-consent must be freely given
4. Agreement to the sale of goods and others in a price less than 500 pesos
5. Contract of lease for the period longer than 1 year
6. Under the presentation of the credit of a 3rd person

 Enforceability not applicable? Apply to contracts of which to be performed

As long as there is partial performance, statute of frauds will no longer apply, the contract is ready to
enforce
 Statute of Frauds- contracts should be in writing otherwise you cannot enforce it

Statute of Frauds Statute of Limitations

If the contract is not in writing, you cannot enforce it Principle in civil procedure eve you have cause of action
because of intervening circumstances you are already
prohibited from barred of filing it/ claiming such right due
to prescription

C. Greater efficacy/ convenience of the parties

-failure to comply does not affect the validity and binding effect of the act between the parties
 Public document(under the codal)- will not bind the 3rd person but bind the parties

REFORMATION OF INSTRUMENTS

-set a right and clear act whatever they have been an error in perfection / ability in the instrument and to make it truly
reflective in the true intention of the parties but nit create a new one

-Usually parties will just execute simple affidavit to create/ reformation of instrument

 Elements:
1. Meeting of minds
2. True intention
3. Clear and convincing proof of your mistake, simulation, fraud

 Reformation cannot apply:

1. Simple donations inter vivos wherein no condition is imposed;
2. Wills;
3. When the real agreement is void.

RESCISSIBLE CONTRACTS
-is valid contract but one of the parties or third person suffered economic prejudice, so you
need not to ratify it
-So long as there are other remedy to cover economic loss you cannot obtain recession of contracts

 Legal consequence: there must be restitution(the object of the contract must be returned)
 Ratification-even having knowledge of whatever effect is, you choose to proceed because of subsequent
circumstances attendant to transaction
 Ward- ¼ of the value of the party
-minor cannot enter into his any contract relating to his property, guardian can enter to it

Administration Ownership
Management of the property Involve your authority to sell, alienate and encumber the
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 UNIVERSITY OF PANGASINAN COLLEGE OF LAW
property and also have the capacity to dispose

 The court will appoint you to be the guardian(similar to adoption, there is publication)

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