Appendix C

Extracts from the New

Civil Code on Obligations
and Contracts
Title I - Obligations
Chapter 1
GENERAL PROVISIONS
Art.1156. An obligation is a juridi
cal necessity to give to do or not
to do. (n)
 Chapter 1: General Provisions
Art. 1157 Obligations arise from:
01
01 LAW;

02 CONTRACTS;
03 QUASI-CONTRACTS;
04 ACTS OF OMISSIONS PUNISHED BY LAW; and

05 QUASI-DELICTS. (1089a)
Chapter 1: General Provisions
Art. 1158. Obligations derived from law
are not presumed. Only those expressly
determined in this Code or special laws
are demandable, and shall be regulated
by the precepts of the law,which establ
ishes them; and as to what has not been
foreseen, by the provisions of this Boo
k.(1090)
Chapter 1: General Provisions
• Art. 1159. Obligations arising from cont
racts have that force of law between the
contracting parties and should comply wi
th in good faith. (1091a)
• Art. 1160. Obligations derived from quas
i-contracts shall be subject to the prov
isions of Chapter 1, Title XVII, (EXTRA-
CONTRACTUAL ONLIGATIONS). (n)
Chapter 1: General Provisions
• Art.1161. Civil obligations arising from cri
minal offenses shall be governed by the pena
l laws, subject to the provisions of article
2177, and of the pertinent provisions of Cha
pter 2, Preliminary Title, on Human Relation
s and of Title XVIII (DAMAGES), regulating d
amages. (1092a)
Chapter 1: General Provisions

• Art.1162. Obligations derived from quas

i-delicts shall begoverned by provision
Chapter 2, Title XVII (EXTRA-CONSTRACTU
AL OBLIGATIONS), and by special laws.(1
093a)
Chapter 2: Nature and Effect o
f Obligations

• Art. 1163. Every person obliged to give

something and also obliged to take care
of it with the proper deligence of a go
od father of a family, unless the law o
r the stiputation of the parties requir
es another standard of care(1094a)
Chapter 2: Nature and Effect of
Obligations

• Art. 1164. The creditor has a right to the f

ruits of the thing from the time the obligat
ion deliver it arises. However, he shall acq
uire no real right over it until the same ha
s been delivered to him (1095)
Chapter 2: Nature and Effect o
f Obligations

• Art. 1165. When what is to be delivered

is a determinate thing, the creditor, i
n a addition to the right granted him b
y article 1170, may compel the debtor t
o make the delivery.
Chapter 2: Nature and Effect of
Obligations
If the thing is indeterminate or genetic
, he may ask that the obligation be compl
ied with at the expense of the debtor
If the obligor delays, or has prom
ised to deliver the same thingto two or m
ore persons who do not have the same inte
rest, he shall be responsible for any for
tuitous event until he has effected the d
elivery
 Chapter 2: Nature and Effect of
Obligations
• Art. 1166. The obligation to give a determin
e thing includes that of delivering all its
accessories, even thoughthey may not have be
en mentioned.(1097)
 Chapter 2: Nature and Effect of
Obligations
• Art. 1167. If a persin obliged to do somethi
ng fails to do it, the same shall be execute
d at his cost.
This same rule shall be observed if he does
it in contravention of the tenor of the oblig
ation. Furthermore, it may be decreed that wh
at has been poorly done be undone.
 Chapter 2: Nature and Effect of
Obligations

• Art. 1168. When the obligation consists is n

ot doing and the obligor does what has been
forbidden him, it shall also be undone at hi
s expense. (1099a)
Chapter 2: Nature and Effect of
Obligations

• Art. 1169. Those obliged to deliver or

to do something incur in delay fr judic
ially or extrajudicially demands from t
hem the fulfillment of their obligation
.
 Chapter 2: Nature and Effect of
Obligations
• However, the demand by the creditor shall no
t be necessary in order that may exist:
1) When the obligation of the law expressly s
o declares; or
2) When from the nature and the circumstances
of the obligation it appears that the desi
gnation of the time when the thing is to b
e delivered or the service is to be render
ed was a controlling motive for the establ
 Chapter 2: Nature and Effect of
Obligations
3) When the demand would be useless, as when the
obligor has rendered it beyond his power to pe
rform.
In reciprocal obligations, neither party incur
s in delat if the other does not comply or is no
t ready to comply in propper manner with what is
incumbent upon him. From the moment one of the p
arties fulfills his obligations, delay by the ot
her begins. (1101)
 Chapter 2: Nature and Effect of
Obligations
• Art. 1170. Those who in the performance of t
heir obligations are guilty of fraud, neglig
ence, or delay, and those who in any manner
contravene the tenor thereof, are liable for
damages. (1101)
• Art.1171. Responsibility arising from fraud
is demandable in all obligations. Any waiver
of an action for future fraud is void. (1102
a)
 Chapter 2: Nature and Effect of
Obligations
• Art. 1172. responsibility arising from negli
gence in the performance of every kind of ob
ligation is also demandable, but such liabil
ty may be regulated by the courts, according
to the circumstances. (1103)
 Chapter 2: Nature and Effect of
Obligations
• Art. 1173. The fault or negligence of the ob
ligor consists in the omission of that dilig
ence which is required by the nature of the
obligation and corresponds with the circumst
ances of the persons, of the time and of the
place. When negligence shows bad faith, the
provisions of articles 1171 and 2201, paragr
aoh 2 , shall apply.
 Chapter 2: Nature and Effect of Obligations
If the law or contract does not state the dilige
nce which as to be observed in the performance tha
t which is expected of, a good father of a family
shall be required.(1104)
• Art. 1174. Except in casese expressly specified b
y the law, or when it is otherwise declared by st
ipulation, or when the nature of the obligation r
equires the assumption of risk, no person shall b
e responsible for those events which could not be
foreseen, or which, though forseen, were inevitab
 Chapter 2: Nature and Effect of
Obligations
• Art. 1175. Usurious transactions shall be go
verned by special laws. (n)
• Art. 1176. The receipt of the principal by t
he creditor without reservation with respect
to the interest, shall give rise to the pres
umption that said interest has been paid.
 Chapter 2: Nature and Effect of
Obligations
• Art.1176. The receipt of the principal by the
creditor without reservation with respect to t
he interest, shall give rise to the presumptio
n that said interest had been paid.
The receipt of a later installment of a debt
without reservatuon as to prior installments,
shall likewise raise the presumption such ins
tallments have been paid. (1110a)
 Chapter 2: Nature and Effect of
Obligations
• Art. 1177. The creditors, after having pursu
ed the property in possession of the debtor
to satisfy their claims, may exercise all th
e rights and bring all the actors of the lat
ter for the same purpose, save those which a
re inherent in this person; they may also im
pugn the acts which the debtor may have done
to defraud them. (1111)
 Chapter 2: Nature and Effect of
Obligations

• Subject to the laws, all rights acquired in

virtue of an obligations are transmissible,
if there has been no stipulation to the cont
rary. (1112)
 Chapter 3: Different Kinds of
Obligations
Section 1. Pure and Conditional Obligations
• Art. 1179. Every obligation whose performance do
es not depend upon a future or uncertain event,
or upon a pet event unknown to the parties, is d
emendable at once.
Every obligation which contains a reaolutary co
ndition shall also be demendable, without preju
dice to the effects of the happening of the eve
nt.(1113)
Chapter 3: Different Kinds of
Obligations
• Art.1180. When the debtor binds himself to pay
when his means permit him to do so, the obliga
tion shall be deemed to be one with a period,
subject to the provision of article 1197.(n)
• Art.1181. In condition obligations, the acquis
ition of rights, shall depend upon the happeni
ng of the event which constitute the condition
. (1114)
 Chapter 3: Different Kinds of
Obligations
• Art. 1182. When the fulfillment of the condi
tion depends upon the sole will of the debto
r, the conditional obligation shall be void.
If it depends upon chance or upon the will o
f a third person, the obligation shall take
effect in comformity with the provision of t
his Code. (1115)
 Chapter 3: Different Kinds of
Obligations
• Art. 1183. Impossible conditions, those contrary
to good customs or public policy and those prohi
bited by law shall annul the obligation which d
epends upon them.If the obligation is divisible,
that part thre of which is not affected by the i
mpossible or unlawful condition should be valid.
The condition not to do an impossible th
ing should be considered as not having been agree
d upon.(1116a)
 Chapter 3: Different Kinds of
Obligations
• Art. 1184. The condition that some event happen at
a determine time shall extinguish the obligation a
s soon as the time expires or if it has become ind
ubitable that the event will not take place.(1117)
• Art. 1185. the condition that some event will not
happen at a determine time shall render the obliga
tion effective from the moment the time indicated
has elapsed, or if it has becomr evident that the
event cannot occur.
 Chapter 3: Different Kinds of
Obligations
If no time has been fixed, the condition shal
l be deemed fulfilled at such time as may hav
e probably been contemplated, bearing in mind
the nature of the obligation.(1118)
• Art. 1186. The condition shall be deemed ful
filled when the obligor voluntarily prevents
its fulfillment.(1119)
 Chapter 3: Different Kinds of
Obligations
• Art. 1187. The effects of a conditional obligation to gi
ve once the condition has been fulfilled, shall retroact
to the day of the constitution of the obligation.Neverth
eless, when the obligation imposes reciprocal prestation
s upon the parties , the fruits and interests during the
pendency of the condition shall be deemed to have been m
utually compensated.If the obligation is unilateral, the
debtor shall appropriate the fruits and interest receive
d, unless from the nature and circumstances of the oblig
ation it should be inferred that the intention of the pe
rson constituting the same was different.
 Chapter 3: Different Kinds of
Obligations
In obligations to do and not to do, the courts shal
l determine, in each case, the retroactive effect o
f the condition that has been complied with.(1120)
• Art. 1188. The credior may, before the fulfillment
of the condition, bring the appropriate actions fo
r the preservation of his right.
The debtor may recover what during the same ti
me he has paid by mistake in case of a suspensive c
ondition.(1121a)
 Chapter 3: Different Kinds of
Obligations
• Art. 1189. When the condition have been impo
sed with the intention of suspending the eff
icacy of an obligation to give, the followin
g rules shall be observed in case of the imp
rovement, loss or deterioration of the thing
during the pendency of the condition:
 Chapter 3: Different Kinds of
Obligations
1) If the thing is lost without the fault of
the debtor, the obligation shall be extin
guished;
2) If the thing is lost through the fault of
the debtor, he shall be obliged to pay da
mages;it is understood that the thing is
lost when it perishes, or goes out of com
merce, or disappears in such a way that i
ts existence is unknown or it cannot be r
ecovered;
 Chapter 3: Different Kinds of
Obligations
3) When the thing deteriorates without the fault of
the debtor, the impairment is to be borne by the
creditor;
4) If it deteriorates through the fault of the debt
or, the creditor may choose between the rescissi
on of the obligation and its fulfillment, with i
ndemnity for damages in either case;
5) If the thing is improved by its nature, the impr
ovement shall inure to the benefit of creditor;
 Chapter 3: Different Kinds of
Obligations
6) if it is improved at the expense of the de
btor, he shall have no other right than th
at granted to the usurfructuary.(1122)
• Art. 1190. When the conditions have for thei
r purpose the extinguishment of an obligatio
n to give, the parties, upon the fulfillment
of said conditions, shall return to each oth
er what they have received.
 Chapter 3: Different Kinds of
Obligations
In the case of loss, deterioration or impr
ovement of the thing, the provisions which, w
ith respect to the debtor, are laid down in t
he preceding article shall be applied to the
party who is bound to return.
As for obligations to do and not to do, th
e provisions of the second paragraph of artic
le 1187 shall be observed as regards the effe
ct of the extinguishment of the obligation.(1
123)
 Chapter 3: Different Kinds of
Obligations
• Art. 1191. the power to rescind obligations
is implied in reciprocal ones, in case one o
f the obligors should not comply with what i
s incumbent upon him.
The injured party may choose between the
fulfillment and the rescission of the obligat
ion, with the payment of damages in either ca
se. He may also seek rescission
 Chapter 3: Different Kinds of Obligations

The court shall decree the rescission claimed, unless

there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the right of
third persons who have acquired the thing, in accordance
eith articles 1385 and 1388 and the Mortage Law. (1124)
 Chapter 3: Different Kinds of Obligations

• Art. 1192. In case both parties have committed a

breachof the obligation, the liability of the first infractor
shall be equitably tempered by the courts. If it cannot be
determined which of the parties first violated the
contract, the same shall be deemed extinguished, and
each shall bear his own damages.(n)
 Chapter 3: Diffrent Kinds of Obligations

Section 2. Obligations with a Period

• Art. 1193. obligations for whose fulfillment a day certain
has been fixed, shall be demandable only when that day
comes.
Obligations with resolutary period take effect at once,
but terminate upon arrival of the day certain.
A day certain is understood to be that which must
necessarilyb come, although it may not be known when.
 Chapter 3: Different Kinds of Obligations

If the uncertainty consists in whether the day will come or

not, the obligation is conditional, and it shall regulated by
the rules of the preceding Section.(1125a)
• Art. 1194. In case of loss, deterioration or improvement
of the thing before the arrival of the day certain, the
rules in article 1189 shall be observed.(n)
Chapter 3: Different Kinds of
Obligations
Art.1195. Anything paid or delivered before the
arrival of the period, the obligor being unaware
of the period or believing that the obligation has
become due and demandable, may be recovered,
with the fruits and interests.(1126a)
Chapter 3: Different Kinds of
Obligations
Art.1196. Whenever in an obligation a period is
designated, it is presumed to have been
established for the benefit of both the creditor and
the debtor, unless from the tenor of the same or
other circumstances it should appear that the
period has been established in favor of one or of
the other. (1127)
Chapter 3: Different Kinds of
Obligations
Art.1197. if the obligation does not fix a period, but
frome it's nature and the circumstances it can be
inferred that a period was intended, the courts may
fation thereof.
The courts shall also fix the duration of the
period when it depends upon the will of the debtor.
Chapter 3: Different Kinds of
Obligations
In every case, the courts shall determine such
period as may under the circumstance have been
probably contemplated by the parties. Once fixed
by the courts, the period cannot be changed by
them. (1128a)
Chapter 3: Different Kinds of
Obligations
Art.1198. the debtor shall lose every right to make use
of the period.
1) When after the obligation has been contracted, he
becomes insolvent, unless he gives a guaranty or
security for the debt;
2) When he does not furnish to the creditor the
guaranties or securities which he has promised;
Chapter 3: Different Kinds of
Obligations
3) When by his own acts he has impaired said
guaranties or securities after their establishment,
and when through a fortuitous even they
disappear, unless he immediately gives new ones
equally satisfactory;
4) When the debtor violates any undertaking, in
consideration of which the creditor agreed to the
period;
Chapter 3: Different Kinds of
Obligations

5) When the debtor attempts to abscond. (1129a)

“A shepherd may like to travel, but
he should never forget his sheep.”
― Paulo Coelho, The Alchemist