OBLIGATIONS AND CONTRACTS

by: Hector S. de Leon

Obligation is a JURIDICAL NECESSITY

to give, to do or not to do (a.115)

Obligatio Latin word meaning tying or binding

Obligation is a LEGAL RELATION established

between one party and another whereby the latter
is bound to the fulfillment of a PRESTATION (the
conduct which has to be observed by the
Debtor/Obligor) which the former may demand
from him

Juridical Necessity in case of non-compliance the

courts may call upon to enforce its fulfillment or,
the economic value it represents.

Damages represents the SUM OF MONEY given as

a compensation for the injury or harm suffered by
the creditor/oblige for the violation of his rights.

Creditor or Obligee he who has the RIGHT TO THE

PERFORMANCE of the Obligation.

Debtor or Obligor he who has the Obligation to

comply otherwise shall be visited by Harmful/
Undesirable Legal Consequences
NATURE OF OBLIGATIONS (CC):
1. Civil Obligations obligations which give to
the creditor/obligee a RIGHT OF ACTION in
courts of justice to enforce their performance.
2. Natural Obligations
NOT based on Positive Law (Law recognized
by govt authority); but on EQUITY and
NATURAL LAW (derived from nature and
binding upon society);
does NOT grant a Right of Action to enforce
their performance; if voluntary fulfillment by
debtor, cannot recover what has been
delivered
ESSENTIAL ELEMENTS OF OBLIGATIONS:
(1) Active Subject (Creditor/Obligee) or the
person who is entitled to DEMAND the
fulfillment of the obligation; he who has the
RIGHT <power a person has under the law
to demand from another any prestation>
(2) Passive Subject (Debtor/Obligor) person
who is bound to the fulfillment of the
obligation;
he
who
has
the
DUTY/OBLIGATION <act or performance
which the law will enforce>
(3) Object/Prestation SUBJECT MATTER of
the obligation or the CONDUCT required to
be observed by the debtor (giving, doing, or
not doing)
(4) Juridical Tie/Legal Tie EFFICIENT CAUSE
or that which BINDS OR CONNECTS the
parties to the obligation. The tie can be be
easily determined by knowing the source of
obligation.
Example:
X bound himself to construct a house for Y for 1M,
contract
X is the debtor/obligor/passive subject
Y is the creditor/oblige/active subject
House object/prestation
Contract juridical tie

Wrong/ Cause of Action ACT OR OMISSION of one

As a General Rule, the Law does not require any FORM
in
Obligations arising from contract nor from
other sources
party in violation of the legal right(s) of another,
causing injury to the latter. Example: breach of
contract
ESSENTIAL ELEMENTS OF THE CAUSE OF
ACTION:
1. Essential Elements:
a. There is a LEGAL RIGHT in favor of a
person
b. There is a LEGAL OBLIGATION on the
part of another
c. There is an ACT or OMISSION in
breach or violation of the said right
by the defendant (one being sued in
civil action or prosecuted in a
criminal action) with consequential
injury or damage to the plaintiff (one
who brings an action at law) for
which he may maintain an act for
damages
or
appropriate
relief
(assistance)
2. If any element is absent, complaint becomes
vulnerable to motion to dismiss on the ground
of failure to state a cause of action
3. A cause of action only arises when the last
Action per Contracts should be brought within 10 YEARS
from the time the Right of Action Accrues <to exist as
legally enforceable claim>

element occurs the moment a right has been

transgressed (trespassed).
a. Right of action distinguished from
maintain
b. Right of action/Right to commence
<procedural law laws which
establish procedure and rules of
court and the court system and
which matters are conducted>
ii.
Right
to
maintain
an
action
<substantive law written law
controlling rights and actions of
persons within jurisdiction>
b. For every Right enjoyed by a person,
there is a corresponding obligation on
the part of another to respect such right.
(Contracts) accrues only when an actual breach
or violation occurs
Period of Prescription from the occurrence of
breach

Injury the ILLEGAL INVASION of a legal right;

wrongful act or omission which causes loss or
harm to another

Damage Is the LOSS, HURT, or HARM which

results from the injury

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OBLIGATIONS AND CONTRACTS

by: Hector S. de Leon

Damages denotes the SUM OF MONEY

recoverable as amends <compensation for loss
or injury> for the wrongful act or omission

Injury is the LEGAL WRONG to be redressed

<remedied/compensated>

PROOF OF LOSS FOR INJURY:

There must be
(1) Wrongful Violation of a legal right/ Injury;
(2) Loss or Damage caused to him by such
violation

* One who makes use of his legal right does no

injury
* Qui jure suo utitur mullum damnum facit
* If damages result from a persons exercise of
legal right
* Damnum absque injuria (damage without injury)
Art.19. Every Person must in the exercise of his
rights and in the performance of his duties, act with
justice, give everyone his due and observe honesty
and good faith.
KINDS OF OBLIGATIONS (SUBJECT MATTER):
(1) Real Obligations (obligation to give)
The subject matter is a thing which the obligor
must deliver to the oblige;
(2) Personal Obligation (obligation to do or not to
do)
The subject matter is an act to be done or not
to be done;
a. Positive Personal Obligation
Obligation to do or to render service;
b. Negative Personal Obligation
Obligation not to do, includes not to
give
SOURCES OF OBLIGATIONS:
Obligations arise from:
1. Law statutes, legislative enactments;

2. Contracts meeting of minds between

two persons whereby one binds himself,
with respect to the other to give
something or to render service;
3. Quasi-contracts obligation arising not
from an agreement between them but
from some relationship between them;
4. Acts/Omissions punished by law when
they arise from a civil liability as a
consequence of some criminal offense;
5. Quasi-delicts when they arise from
damage caused to another through an
act or omission, there being fault or
negligence, but theres no contractual
relation
CLASSIFICATIONS OF SOURCES:
(1) Those emanating from LAW
(2) Those emanating from PRIVATE ACTS:
a. Licit Acts Contracts & Quasi-contracts
b. Illicit Acts
Punishable-delicts;
not punishable-quasi-delicts

Art. 1158. Obligations derived from LAW are not

presumed. Only those expressly determined in
the CC or in special laws <other laws no in CC>
are demandable and shall be regulated by the
percepts of the law which establishes them; as
to what has not been foreseen, by the
provisions of this book.
LAW (OBLIGATION EX LEGE)
Legal Obligations or Obligations arising from
law: are not presumed because they are
considered a burden upon the obligor.
Must be expressly <explicit, defined, clear>
set forth and cannot be presumed.

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