Reviewer For Final Exam

OBLIGATIONS & CONTRACTS
(Reviewer for Final Exam)
1. Obligation – a juridical necessity to give, to do or not to do (Art. 1156).

2. Elements of an Obligation:
a) Active subject (the obligee or creditor);
b) Passive subject (the obligor or debtor);
c) Subject matter (the object or prestation); and
d) Juridical tie (the vinculum or legal tie).
3. Sources of Obligations. Explain briefly and give an example each (Art. 1157):
a) Law – a rule of conduct, just and obligatory, imposed by the proper authority to govern
the relationships of persons in the society. Obligations derived therefrom are not
presumed, hence, they must be clearly and expressly set forth therein. (Example – the
duty to pay taxes and to support one’s family).
b) Contracts – the meeting of the minds, and the obligations arising therefrom have the
force of law between the contracting parties and should be complied with in good faith.
(Example – the duty to repay a loan by virtue of an agreement).
c) Quasi-contracts – there is no meeting of the minds, and it is the law that supplements
the consent. This is intended for reimbursement of expenses in the case of negotiorum
gestio (unauthorized management), and for the return of money in the case of solution
indebiti (undue payment). (Example – the duty to refund or return an “over-change”
of money).
d) Delicts (or crimes) – acts or omissions punishable by law, and it is based on the penal
provision which states that every person criminally liable for a felony is also civilly
liable. (Example – the duty to return the stolen property [restitution]).
e) Quasi-delicts (or torts) – a fault or act of negligence which causes damage or injury to
another, there being no pre-existing contractual relations between the parties, otherwise
known as culpa aquiliana. (Example – the duty to repair damage due to negligence).
4. To pay a sum of money being a generic object, is a real obligation.
5. Rights and Obligations of the Parties in Real Obligation:
A. Determinate (Involving Specific Object/Thing)
Rights of the Creditor (Obligee) Obligations of the Debtor (Obligor)
1) To demand delivery of the specific thing, 1) To take care of the specific thing before it
or compel specific performance. is delivered to the creditor with due
diligence of a good father of a family.
2) To rescind the contract. 2) To deliver the specific thing (substitution
of such thing is not allowed).
3) To claim for damages under Art. 1170. 3) To include in the delivery of such
determinate thing all its accessions and
accessories.
4) To pay for damages under Art. 1170.
B. Indeterminate (Involving Generic Object/Thing)
Rights of the Creditor (Obligee) Obligations of the Debtor (Obligor)
1) To demand delivery of the thing, or 1) To deliver a generic thing which is
compel performance of the obligation. neither of superior nor of inferior quality.
2) To ask for the compliance of the 2) To pay for the expenses spent in fulfilling
obligation by 3rd person at the expense the obligation made by a third person.
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of the debtor.
3) To rescind the contract. 3) To pay for damages under Art. 1170.
4) To claim for damages under Art. 1170.
6. Rights and Obligations of the Parties in Personal Obligation:

A. Positive (An obligation to do)
Rights of the Creditor Obligations of the Debtor
1) To demand performance of the 1) To perform the obligation.
obligation.
2) To look for a third person to perform the 2) To pay for the expenses spent in
obligation at the expense of the debtor. performing the obligation done by a third
person.
3) To rescind the contract. 3) To pay for damages under Art. 1170.
2) To claim for damages under Art. 1170.
B. Negative (An obligation not to do)
Rights of the Creditor Obligations of the Debtor
1) To demand the undoing of the 1) To undo the prohibited thing.
prohibited thing.
2) To look for a third person to undo the 2) To pay for the expenses incurred in the
prohibited thing at the debtor’s undoing of the prohibited thing by a third
expense. person.
3) To claim for damages under Art. 1170. 3) To pay for damages under Art. 1170.
7. Questions about a hypothetical case on determinate real obligation and positive personal
obligation. (For Answer, see II(b) in the Midterm Exam’s booklet).
8. Article 1169 – When does an obligor incur in delay (or in default)? ANS - When demand
is not needed, at the time the obligor fails to perform his obligation which is already due
and demandable. On the other hand, when demand is needed, at the time the obligor
receives the judicial or extrajudicial demand from the obligee.
In the former case, demand is not necessary due to the following instances:
a) When the law expressly so provides;
b) When the obligation expressly so provides;
c) When the fixing of the time was the controlling motive for the establishment of the
contract;
d) When demand would be useless, as when the obligor has rendered it beyond his
power to perform.
9. Questions about the sources of obligation based on a hypothetical case involving a
vehicular accident resulting to the death of a passenger and a pedestrian. (ANS – see III(b),
Midterm Exam’s booklet).
10. Fortuitous event – that which could not be foreseen, or if though foreseen, is inevitable
(Article 1174).
11. Essential Elements/Characteristics of a Fortuitous Event:
a) The cause of the breach of the obligation must be independent of the will of the
debtor;
b) The event must be either unforeseeable or unavoidable;
c) The event must be such as to render it impossible for the debtor to fulfill his
obligation in a normal manner; and
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d) The debtor must be free from any participation in, or aggravation of the injury
resulting to the creditor.
12. Generally, no person shall be responsible for fortuitous event, except in the following
cases, to wit (LSA):
a) When expressly declared by the law;
b) When expressly declared by stipulation or contract; and
c) When the nature of the obligation requires the assumption of risk.
13. Exclusive (one after the other) Remedies/Rights of the creditor if debtor refuses to pay
his debt upon demand by the former (Article 1177):
a) To exhaust all the debtor’s properties not exempted by the law (by attachment,
garnishment or levy).
b) To exercise all the rights and actions of the debtor against other persons except
personal ones and those involving public interest (accion subrogatoria).
c) To impugn or rescind all the acts or contracts done by the debtor to defraud the
creditor (accion pauliana).
14. As a general rule, all rights acquired in virtue of an obligation are transmissible, except in
the following circumstances:
a) If the law expressly provides otherwise.
b) If the contract or agreement expressly provides otherwise.
c) If the obligation is purely personal.
15. Distinguish condition from period (term).
a) A condition is an uncertain event while period is a certain length or interval of time.
b) In condition there is no certainty as to the occurrence of the event while in period
there is certainty as to the happening of the event.
c) Condition affects the existence of the obligation while period affects the
demandability of the obligation.
d) Condition has retroactive effect while period has none.
e) In condition, if the same is dependent on the sole will of the debtor, the obligation is
void while in period, such circumstance has no effect because there is already a pre-
existing obligation.
16.
17. What are the effects of loss, deterioration, or improvement (LDI) of the thing during the
pendency of the suspensive condition (Article 1189):
a) If the thing is lost without the fault of the debtor, the obligation shall be
extinguished;
b) If the thing is lost through the fault of the debtor, he shall be obliged to pay
damages;
c) When the thing deteriorates without the fault of the debtor, the impairment shall be
borne by the creditor;
d) If it deteriorates through the fault of the debtor, the creditor may choose between
the rescission of the obligation and its fulfillment, with indemnity for damages in
either case;
e) If the thing is improved by its nature, or by time, the improvement shall inure to the
benefit of the creditor;
f) If it is improved at the expense of the debtor, he shall have no other right than that
granted to the usufructuary.
18. Are the above effects of LDI of the thing the same upon the happening of the resolutory
condition (Article 1190)? ANS – Yes. In an obligation with resolutory condition, the
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parties should restore to each other what they have received upon the happening of the
condition which extinguishes the obligation. Hence, in case of the loss, deterioration or
improvement of the thing to be returned, the above-mentioned effects shall also be applied
to whoever has the duty to return such thing.
19. What will be your advice to your client if the obligation does not fix a period (Article
1197)? ANS – I will advise my client to ask the court first for the fixing of the period.
Then, to demand fulfillment of the obligation upon the arrival of the period fixed by the
court. If refused, to file an action against the erring debtor for rescission or fulfillment of
the obligation, with payment of damages in either case.
20. When shall the debtor lose every right to make use of the period (Article 1198)?
ANSWER:
a) When after the obligation has been contracted, he becomes insolvent, unless he
gives guaranty or security for the debt;
b) When he does not furnish to the creditor the guaranties or securities which he has
promised;
c) When by his own acts he has impaired said guaranties or securities after their
establishment, and when through a fortuitous event they disappear, unless he
immediately gives new ones equally satisfactory;
d) When the debtor violates any undertaking , in consideration of w2hich the creditor
agreed to the period;
e) When the debtor attempts to abscond.
21. Distinguish alternative obligation from facultative one.
ANSWER: (See Articles 1199 and 1206, and page 274)
22. Distinguish joint from solidary obligation.
ANSWER: (See Article 1207, etc.)
16. In reciprocal obligations (arising from one and the same contract), both parties have
concomitant rights and obligations. From the moment one of the parties fulfills his
obligation, delay by the other begins.
17. Failure to perform the obligation is a breach thereof imputable either to something
voluntary in character, such as; fraud, negligence, default, or contravention of the tenor
of the obligation (FNDC) or involuntary one, such as; circumstances beyond the control
of the debtor/obligor (fortuitous event). Accordingly, the debtor/obligor is liable for
damages in the former case, while in the latter case, he is not liable therefor, unless
excepted.
18. Grounds for Liability in the Performance of Obligations (FNDC):
a) Fraud
b) Negligence
c) Default
d) Contravention of the tenor of the obligation
19. Rule on the loss of specific thing if there is a combination of fortuitous event and
negligence on the part of the debtor:
a) If the fortuitous event was the proximate cause, the obligation is extinguished.
b) If the negligence was the proximate cause, the obligation is not extinguished.
20. Distinguish Pure Obligation from Conditional Obligation. (Give example each)
ANSWER: Pure obligation is one without a condition, or a term or period, and as such,
demandable at once. Conditional obligation, on the other hand, is one where its effectivity
is dependent or subject to a condition, and it is demandable only upon the happening of the
suspensive condition, but demandable at once if the condition is resolutory.
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21. Classification of Conditions (Briefly explain and give example each):
a) Suspensive – one which suspends the effectivity of the obligation, and which will
rise only upon the happening of the condition. In the meantime, the creditor has a
mere hope or expectancy which will ripen into a right only upon the happening of
the condition. (Example: I will give you my car, provided you pass the bar exam
this year).
b) Resolutory – one where the rights and obligation of the parties are subject to the
threat of extinction, considering that the happening of the condition shall terminate
or extinguish the obligation. (Example: I promise to give you my car, but if you fail
this year’s bar exam, you have to return it to me).
c) Potestative – one which depends on the exclusive will of one of the parties.
(Example: I will sell to you my car at a very low price if I like).
d) Casual – one which depends on chance or the will of a third person. (Example: I
will give you my car if I win in the lotto).
e) Mixed – one which depends partly on the will of one of the parties, and partly on
chance or the will of a third person. (Example: I promise to give you my car if I
pass the bar this year).
f) Possible – one which is capable of realization (or fulfillment) in nature and in law.
(Example: I will lend you my car, provided you will inform me of the result of your
bar examination).
g) Impossible – one which is incapable of realization (or fulfillment) as it goes against
the law, good customs, or public policy.(Example: I will give you my car, provided
you will regularly supply me with shabu).
22. Effects of the following conditions:
a) Potestative – depends on the sole will of the debtor – suspensive – Void
(because there is already a pre-existing obligation) – resolutory – Valid
– depends on the sole will of the creditor – - - - - - - - - - Valid
b) Casual - Valid
c) Mixed - Valid (Article 1182)
d) Possible - Valid
e) Impossible - Void

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OBLIGATIONS & CONTRACTS

(Reviewer for Final Exam)

1. Obligation – a juridical necessity to give, to do or not to do (Art. 1156).

6. Rights and Obligations of the Parties in Personal Obligation:

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