OBLICON Atty. Mel Sta.

Maria
Memory Aid
Fortuitous Event

Requisites
1. Cause of breach independent of will of debtor
2. Either unforeseeable or unavoidable
3. Renders it impossible to fulfill obligation in a
normal manner
4. Debtor free from any participation in, or
aggravation of the injury.

Exemptions to rule that it extinguishes liability

1. Object of pre station is generic
2. Stipulation otherwise
3. Nature of the obligation
4. Art. 1165
a. Obligor delays
b. Promised to deliver same thing to 2 or
more persons who do not have the
same interests
5. Proceeds from a criminal offense
6. Indemnification of respective spouse in liquidation
of conjugal partnership
7. Bailee in Commodatum if:
a. Devotes thing to any purpose different
from that for which it was loaned#
b. Keeps it longer than period stipulated#
c. Thing loaned has been delivered with
appraisal of its value, unless stipulated
otherwise#
d. Lends or leases the thing to a third
person not member of his household#
e. Being able to save either the thing
borrowed or his own thing, he chose to
save the latter#
Delay

2 Kinds of Delay
1. Mora Solvendi debtor
2. Mora Accipiendi creditor

2 Kinds of Interests
1. Monetary stipulated contractual interest
2. Compensatory damages

Requisites
1. Obligation be demandable and already liquidated
2. Debtor delays performance
3. Creditor requires performance judicially and
extrajudicially

When demand isnt necessary to be in delay

1. Obligation or law expressly declares
2. Time is of the essence
3. Demand would be useless
Conditional Obligations

4 Kinds
1. Suspensive
2. Resolutory
3. Postative
4. Mixed

Rules observed in case of improvement, loss or

deterioration of thing during pendency of suspensive
condition:#
1. Lost#
a. No fault = extinguished#
b. Debtor's fault = pay damages#
2. Deteriorates#
a. No fault = impairment borne by creditor#
b. D's fault = can choose a) rescission, or
b) fulfilment (plus indemnity either way)#
3. Improved#
a. By nature = inure to benefit of creditor#
b. At expense of debtor = no other right
than granted to usurfructuary#
Obligations with a Period

When courts can fix a period

1. Obligation doesnt fix a period but from nature
and circumstances it can be inferred that a period
was intended
2. If there is a postative condition then determine
what the parties probably intended
3. Stipulation that debtor will pay when means allow
him to
4. Rescissible obligations and the court seems it
proper and just to fix period

When debtor loses right to use period

1.

He becomes insolvent, unless furnishes

guarantee
2. Doesnt furnish promised guarantee
3. By his own acts, impaired said guarantees, and
when through a fortuitous event they disappear,
unless immediately gives new one equally
satisfactory
4. Violates any undertaking in consideration of
which creditor agreed to the period
5. Attempts to abscond
Alternative Obligations

Responsibility of debtor until creditor communicates

choice (when expressly given option)
1. One thing lost through fortuitous event = C can
choose from remaining choices
2. Loss of one through Ds fault = C may do #1 or
claim price of lost thing + damages
3. All things lost, Ds fault = C may choose any and
D has to pay price + damages
Solidary Liability

There is solidary liability if:

1. Expressly stipulated
2. Mandated by law
3. Mandated by nature of obligation
Obligations with a Penal Clause

When judges can intervene

1. Equitably reduce penalty if obligation has been
partly or irregularly complied with
2. Reduce if iniquitous or unconscionable regardless
of performance
Extinguishment of Obligations

Modes of Extinguishment:
1. Payment
2. Loss of Thing due
3. Condonation
4. Confusion
5. Compensation
6. Novation
Payment
rd

Effect of Payment made by 3 Person

1. No consent of D can only recover to extent that
D benefited
2. With knowledge but no consent same as (1)
3. With consent can recover amount paid to
creditor (legal subrogation)
4. Expressly allowed in contract same as (3)
5. No intention to be reimbursed treated as a
donation

When payment to an incapacitated person is valid

1. IP kept thing delivered until became capacitated
2. Payment is beneficial to him
rd

When benefit to creditor when paid to a 3 person

need not be proven
rd
1. After payment, 3 person acquires creditors
rights
2. Creditor ratified payment
rd
3. If by Cs own conduct, D was made to believe 3
person was authorized

Requisites of Dation in Payment

1. Animo Solvendi - performance of prestation in
lieu of payment
2. Aliud Pro Alio some difference between
prestation due and the substitute
3. Agreement that original obligation is immediately
extinguished by reason of performance of new
prestation

Requisites of Pactum Commisorium

1. Creditor-debtor relationship
2. Property used as security
3. Automatic appropriation of property
Tender of Payment and Consignation

Same effect as creditor unjustly refusing payment

1. C absent or unknown, or doesnt appear at place
of payment
2. Incapacitated to receive payment at time it is due
3. Refuses to give receipt with just cause
4. Two or more persons claim same right to collect
5. Title of obligation is lost

Requirements for Consignation

1. Debt due

Sales, D. Block A 2016

OBLICON Atty. Mel Sta. Maria

Memory Aid
2.

Creditor to whom tender of payment was made

unjustly refuses (see above)
3. Previous notice given to interested people
4. Amount due placed at courts disposal
5. After consignation, interested person notified
Loss of Thing Due

Requisites of Rebus Sic Stantibus

1. Prestation became so difficult to render
2. Service has become manifestly beyond the
contemplation of the parties

When court can intrude in contracts

1. Obligation has become legally or physically
impossibly
2. Service has become manifestly beyond
contemplation of parties
3. Penalty clause is unconscionable
4. Fixing a period
Compensation

Requisites
1. Mutual creditor and debtor to each other
2. Both debts consist in a sum of money, or if things
due are consumable, they be of same kind and
also of same quality if stated (fungible)
3. Two debts due
4. Liquidated and demandable
5. Over neither be any retention or controversy
rd
commenced by 3 persons and communicated to
debtor before legal compensation takes place

Ds right to compensation when C assigns credit to a

third person
1. Ds consent cant late claim compensation
unless expressly reserved right
2. Ds knowledge, no consent claim only for debts
due before cession
3. No knowledge or consent claim only for debts
due before he had knowledge of cession

When compensation will not apply

1. Debts arising from depositum or from obligation
of a depositary
2. Debts arising from obligations of a bailee in
commodatum
3. Debts arising from duty to support
4. Debts consisting of a civil liability arising from a
penal offense
Novation

3 Kinds
1. Objective
2. Subjective
a. Change in debtor
b. Change in creditor
3. Mixed

To effect novation, either

1. Expressly declare in unequivocal terms, or
2. New obligation be on every point incompatible
with the new one

Requisites
1. Previous valid obligation
2. Agreement of all parties to new contract
3. Extinguishment of old contract
4. Validity of new one

2 kinds of Change in Debtor

1. Delegacion D suggests substitute
2. Expromission no knowledge or consent of D

2 Kinds of Novation in Creditor

1. Legal Subrogation (presumed when):
a. Creditor pays another C who is preferred
rd
b. 3 person not interested pays with
express or tacit approval of debtor
c. Even if no knowledge of D, person
interested pays w/o prejudice to effects
of confusion
2. Conventional Subrogation contractual
Contracts

Stages of a contract
1. Negotiation
2. Perfection
a. Consensual after concurrence
b. Real after delivery of object
c. Solemn after compliance with
formalities required by law

3. Consummation
Innominate Contracts governed by the following:
1. Stipulation
2. Provisions in law of ObliCon
3. Rules governing most analogous contracts
4. Customs of the place

Exception to relativity of contracts:

1. Stipulation Pour Autrui (requisites)
rd
a. Stipulation in favor of 3 person
b. Must only be part not whole contract
c. Parties have clearly and deliberately
rd
conferred favor upon 3 person (not
merely incidental benefit)
d. Neither party bears legal representation
rd
of 3 party
e. 3rd party communicated acceptance to
debtor before revocation
rd
2. In obligations creating real rights, 3 persons
who possess object are bound to honor
subsequent contract
3. Creditors protected from contracts intended to
defraud them
rd
4. Tort Interference - 3 person who induces
another to violate contract (requisites)
a. Existence of a valid contract
rd
b. 3 persons knowledge of contract
c. Interference w/o legal justification

Requisites of a Contract
1. Consent of parties
2. Object certain subject matter
3. Cause of obligation
Consent

Cant give consent at time of perfection of contract

1. Unemancipated minors
2. Insane or demented persons, and deaf-mutes
who dont know how to write
a. Classes of mental incapacity
i. Idiot insane from birth
ii. Lunatic once sane but lost
use of reason
iii. All other mental weakness that
dont render person totally
incapable of giving consent
3. Intoxicated person if
a. Drunkenness was brought about by
opposite party
b. Fraudulent advantage was taken of it
c. Drunkenness so complete as to deprive
party of reason of an agreeing mind
4. Under a hypnosis spell

Voidable if given through

1. Mistake
a. Mutual mistake as to legal effect
b. Frustrates real purpose
2. Violence
3. Intimidation (requisites)
a. Must be determining cause of consent
b. Threatened act unjust or unlawful
c. Threat be real and serious
d. Produces reasonable and well-grounded
fear
4. Undue Influence
5. Fraud
Object

What can be the object of contracts

1. All things within commerce of men
2. Rights which are transmissible
3. Services not contrary to law, morals, public
policy, public order or good customs

Requisites
1. Possible
2. Determinate as to its kind
a. Must at least be generic
b. If quantity not determinate, can be
determined w/o need for new contract
Cause

Causes for different contracts

1. Onerous prestation of promise of a thing or
service by the other

Sales, D. Block A 2016

OBLICON Atty. Mel Sta. Maria

Memory Aid
2.
3.
4.
Form

Reciprocal obligation or promise of each is the

consideration for the other
Remunerated service/benefir remunerated
Pure beneficence liberality of benefactor

Purposes of prescribed form

1. Validity
2. Enforceability
3. Greater Efficacy capacity for producing desired
effect

Following must appear in a public document (directory

only not mandatory)
1. Acts involving the creation, transmission,
modification of extinguishment of real rights over
immovable
2. Cession, repudiation, or renunciation of
hereditary rights or of conjugal partnership of
gains (now repealed by Family Code = void)
3. Power to administer property or have for its
object an act appearing or which should appear
rd
in a public document or prejudice a 3 person
4. Cession of actions or right proceeding from an
act appearing in a public document
5. All other contracts where amount involved exceed
P500
Reformation

Requirements:
1. Valid contract
2. Written contract
3. Written contract fails to express true intent and
agreement of the parties

Exceptions to mutual mistake rule:

1. If unilateral and other acted fraudulently or
inequitably person defrauded may ask
2. One party was mistaken and other knew
instrument didnt state agreement but concealed
from former treated as mutual
3. Ignorance, lack of skill, negligence or bad faith of
person drafting instrument treated as mutual

No reformation in:
1. Simple donations inter vivos where no condition
is imposed
2. Wills
3. Contracts where real agreement is void
Rescissible Contracts

The following are rescissible:

1. Entered by guardians, and ward suffers lesion by
more than value of object (w/o court approval)
2. Entered by admin for absentee (Same as 1)
3. Undertaken in fraud of creditors where C cant
collect anymore from D
4. Things under litigation, without approval of
litigants or of court
5. All others specially declared by law
6. Payment, when in state of insolvency, for debts
not yet demandable

Presumption of fraud arises when

1. Debtor alienates property by gratuitous title, when
doesnt have sufficient property to pay all debts
contracted before donation
2. Alienation by onerous title, made by person
against whom some judgment has been rendered
or some writ of attachment has been issued

Accion Pualiana presupposes:

1. Judgment
2. Issuance by trial court of writ of execution for
satisfaction of judgment
3. Failure of sheriff to enforce and satisfy judgment
4. Creditor exhausted property of debtor
Voidable Contracts

Following are voidable:

1. One of parties is incapable of giving consent
2. Vitiated consent
Unenforceable Contacts

Following are unenforceable unless ratified

1. Entered into in name by another who has no
authority or legal representation, or acted beyond
his powers
2. Those that do not comply with statute of Frauds

a.

Agreement by terms isnt to be

performed within year from perfection
i. Exceptions:
ii. One party fully completed his
part w/n 1 year
iii. Stipulated that immediately
executor but was reset by
agreement
iv. Shouldve been completed but
delayed because of agreed
postponement by parties
b. Special promise to answer for debt,
default or miscarriage of another
(guarantor)
c. Agreement made in consideration of
marriage other than mutual promise to
marry
d. Agreement of sale of goods at price not
less than P500
i. Exception
ii. Buyer accepts and receives
iii. Sale by auction recorded in
sales book
e. Agreement for lease for period longer
than 1 year, or sale of real property, or
of interest therein
rd
f. Representation to credit of 3 person
3. Both parties incapable of giving consent
Void and Inexistent Contracts

2 Kinds:
1. Inexistent Contract element missing
2. Void but Ostensible Contracts illegal cause or
object

The following are void and inexistent

1. Cause, object or purpose contrary to
L,M,GC,PU,PO
2. Absolutely simulated or fictitious
3. Cause or object didnt exist at time of inception
4. Object outside commerce of man
5. Contemplates impossible service
6. Intention of parties relative to principal object
cant be ascertained
7. Expressly prohibited or declared void by law

When Pari Delicto will not apply: #1,4&7

1. Exception: Illegal purpose but repudiated before
accomplishment = by public interest
2. One party in illegal contract is incapacitated =
interest of justice
3. Not illegal per se, merely prohibited for protection
of plaintiff = public policy
Damages
Rescissibl
e

Annullable

(Specificall
y provided
by law)

(Still in
executory
stage = no
contract to
assail)

Unenforce
able

Void

Ratificatio
n

(Valid but
prejudicial)

Restituti
on

(Except if
incapacita
ted)

(Nothing
to ratify)

Ostensibl
e
No
Contract

rd

3 Parties

(Those who
are
prejudiced,
though
generally just
between
parties)

Pari
Delicto

(No contract to
assail)

(Only those
whose
interests are
affected)

If O
If N

Estoppel

2 Kinds
1. By Deed (requisites)
a. Representation or concealment of
material facts
b. Representation done with knowledge of
facts
c. Other party ignorant of the truth

Sales, D. Block A 2016

OBLICON Atty. Mel Sta. Maria

Memory Aid
d.

2.

3.

Made with intention that other would act

on it
Estoppel in Pais (requisites)
a. Conduct amounting to false
representation or concealment of
material facts or at least calculated to
convey impression that facts are
otherwise than, and inconsistent with,
those which party subsequently
attempts to assert
b. Intent, or at least expectation that this
conduct will be acted upon or at least
influenced other party
c. Knowledge, actual or constructive of
actual facts
rd
When contract between 3 persons concerning
immovable property, one is mislead with respect
to ownership or real right over the real estate, the
latter is precluded from asserting his legal title or
interest therein provided all of these requisites
concur:
a. Fraudulent representation or wrongful
concealment of facts known to party
estopped
b. Party precluded intended that other
should act upon facts as misrepresented
c. Party misled must be unaware of true
facts
d. Party defrauded acted in accordance
with misrepresentation

Relativity of
Contracts!
(Binding only on:)!
Parties"

Exceptions (nonparties
are affected)"

1. Stipulation Pour Autrui

(1311)"

1. Principal Parties"
2. Assigns, heirs and
successors"

Exceptions to
Transmissibility!

2. In contracts creating real

rights, 3rd persons who
possess object of contract
(1312)"

1. Law"

3. Creditors are protected in

case of contracts intended to
defraud them (1313)"

2. Stipulation"

4. 3rd Person who induces

another to violate his
contract will be held liable for
damages (1314)"

3. Nature"

Trusts

2 Kinds
1. Express
2. Implied
a. Resulting
b. Constructive
Negotiorum Gestio

When obligation will not arise

1. Property is not neglected or abandoned
2. Manager tacitly authorized by owner

Circumstances when one may carry out business of

another
1. They relate to determined things or affairs and
that there be no administrator or rep of owner in
charge of management
2. Foreign to all idea of express or tacit mandate on
part of owner, may happen even without
knowledge
3. Actor be inspired by beneficent idea of averting
losses and damages to owner through
abandonment of things that belong to him or of
the business which he is interested in not for
profit

Liable for fortuitous event even if assumed

management to save business from imminent danger
1. Manifestly unfit to carry on management
2. By his intervention, prevented more competent
person from taking management

Liable for any fortuitous event if:

1. Undertakes risky operations which owner was not
accustomed to embark upon
2. Preferred his own interest to that of owners
3. Fails to return property after owners demand
4. Assumed management in bad faith

No right of action between owner and third persons.

Will not apply if:
1. Owner expressly or tacitly ratified management
2. Contract refers to things pertaining to owner of
business

Owner liable even if no benefit nor was there

imminent danger provided that:
1. Officious manager acted in good faith, and
2. Property or business is intact and ready to be
returned to owner
Solutio Indebiti

Requisites
1. No right to collect excess sums
2. Amounts paid through mistake by defendants

Sales, D. Block A 2016