Chapter IV. Extinguishment of Obligations
WHY SHOULD PAYMENT BE MADE?
Because C may compel D to pay, and failure to pay will allow C to satisfy credit from properties of D that are not exempt from execution
end of Obligations
-CIVIL LAW REVIEWER TABLE of CONTENTS
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CONTRACTS
Table of Contents
Chapter I. General Provisions...122 I. Classification of Contracts...122 II. Elements of Contracts...123 III. Stages of Contracts...123 IV. Charactertics of Contracts (MARCO) 123 Chapter II. Essential Requisites ...125 I. Consent ...125 II. Object ...127 III. Cause ...127 Chapter III. Forms of Contracts ...129 I. Rules ...129 II. Kinds of Formalities...129 Chapter IV. Reformation of Contracts...130 Chapter V. Interpretation of Contracts...130 Chapter VI. Defective Contracts ...131 I. Rescissible Contracts (Arts. 1380-1389)
131
II. Voidable Contracts (Arts. 1390-1402) 132
III. Unenforceable Contracts (Arts. 1403-1408) ...133 IV. Void or Inexistent Contracts (Arts. 1409-1422) ...134
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Chapter I. General Provisions
I. CLASSIFICATION II. ELEMENTS III. STAGES
IV. CHARACTERISTICS
Article 1305, Civil Code. A contract is a meeting of minds, between two persons whereby one binds himself, with respect to the other, to give something or to render some service.
I. Classification of Contracts
A. To formation:
1. Consensual: consent is enough; e.g.
sale
2. Real: consent and delivery is required;
e.g. deposit, pledge
3. Solemn or formal: special formalities are required for perfection e.g. donation of realty
B. To relation to other contracts:
1. Principal: may exist alone; e.g. lease 2. Accessory: depends on another contract
for its existence; e.g. guaranty
3. Preparatory: a preliminary step towards the celebration of a subsequent contract; e.g. agency
C. To nature of vinculum
1. Unilateral: only one party is bound by the prestation; e.g. commodatum
2. Bilateral (synallagmatic): where both parties are bound by reciprocal prestations; e.g. sale
D. To fulfillment of prestations
1. Commutative: fulfillment is determined in advance
2. Aleatory: fulfillment is determined by chance
E. By equivalence of prestations
1. Gratuitous: no correlative prestation is received by a party
2. Onerous: there is an exchange of correlative prestations
3. Remuneratory: the prestation is based on services or benefits already received F. By the time of fulfillment
1. Executed: obligation is fulfilled at the time contract is entered into
2. Executory: fulfillment does not take place at the time the contract is made G. To their purpose
O B L IG A T IO N S & C O N T R A C T S
OBLIGATIONS & CONTRACTS TEAM Prof. Solomon Lumba
Faculty Editor Leo Ledesma Lead Writer Krizel Malabanan
Ivy Velasco Tin Reyes Frances Domingo
Hazel Abenoja Writers CIVIL LAW Kristine Bongcaron
Patricia Tobias Subject Editors
ACADEMICS COMMITTEE Kristine Bongcaron
Michelle Dy Patrich Leccio Editors-in-Chief
PRINTING & DISTRIBUTION Kae Guerrero
DESIGN & LAYOUT Pat Hernandez Viktor Fontanilla Rusell Aragones Romualdo Menzon Jr.
Rania Joya
LECTURES COMMITTEE Michelle Arias
Camille Maranan Angela Sandalo
Heads Katz Manzano
Sam Nuñez Arianne Cerezo
Mary Rose Beley Krizel Malabanan Marcrese Banaag Volunteers
MOCK BAR COMMITTEE Lilibeth Perez
BAR CANDIDATES WELFARE Dahlia Salamat
LOGISTICS Charisse Mendoza
SECRETARIAT COMMITTEE Jill Hernandez
Head Loraine Mendoza
Mary Mendoza
Faye Celso Joie Bajo Members
CIVIL LAW REVIEWER Chapter I. GENERAL PROVISIONS
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1. Transfer of ownership, e.g. sale
2. Conveyance of Use, e.g. Commodatum 3. Rendition of Service, e.g. agency H. To their subject matter
1. Things, e.g. sale, deposit 2. Services, e.g. agency I. To their designation
1. Nominate: the law gives the contract a special designation or particular name e.g. deposit
2. Innominate: the contract has no special name
Article 1305, Civil Code. INNOMINATE CONTRACTS shall be regulated by the stipulations of the parties, by the general provisions of Titles I and II of [the Civil Code], by the rules governing the most analogous nominate contracts, and by the customs of the place.
Classes of Innominate Contracts 1. Do ut des: I give so that you may give 2. Do ut facias: I give so that you may do 3. Facio ut facias: I do so that you may do 4. Facio ut des: I do so that you may give
II. Elements of Contracts
A. Essential: Those without which the contract would not exist (consent, object, causa).
B. Natural: Those which are derived from the nature of the contract and ordinarily accompany the same-they are presumed to exist unless the contrary is stipulated e.g.
warranty in sales
C. Accidental: Those which exist only if stipulated
Solemn Real Consensual Common
Elements
Consent, subject matter, causa Special
Elements
Formality Delivery None Example Donationo
f personal property more than P5K
Loan, pledge
Others
III. Stages of Contracts
A. Preparation, conception or generation:
period of negotiation and bargaining, ending at the moment of agreement
B. Perfection or birth: the moment when the parties come to agree on the terms of the contract
C. Consummation or death: the fulfillment or performance of the terms agreed upon
IV. Charactertics of Contracts (MARCO)
A. MUTUALITY
The contract must bind both contracting parties;
its validity or compliance cannot be left to the will of one of them (Art.1308).
Taylor v. Uy Teng Piao, 1922: [BUT] a contract may expressly confer upon one party the right to cancel the contract because the exercise of that right is a fulfillment of the provisions of the contract itself
The release must be binding on both parties.
The determination of the performance may be left to a 3rdperson, whose decision shall NOT be binding if:
It is evidently inequitable (the courts will decide)
The decision had not been made known to both parties (Art.1309)
B. 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 (Art. 1306).
C. 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. (Art.
1311)
Exception: Strangers may enforce the contract in their favor in the ff. cases:
1. Stipulations Pour Autrui—
If a contract should contain some stipulation in favor of a third person, he may demand its fulfilment provided he communicated his
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acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favour upon a third person (Art.1311).
Requisites:
a. There must be a stipulation in favor of a third person
b. The stipulation must be part, not the whole of the contract
c. The contracting parties must have clearly and deliberately conferred a favor upon a third person, NOT a mere incidental benefit or interest.
d. The third person must have communicated his acceptance to the obligor before its revocation
e. No relation of agency exists between any of the parties and the third person favored
Florentino v. Encarnacion, 1977:
a. Contracts to perform personal acts which cannot be as well performed by others are discharged by the death of the promissor. Conversely, where the service or act is of such a character that it may as well be performed by another, or where the contract, by its terms, shows that performance by others was contemplated, death does not terminate the contract or excuse nonperformance.
b. In this case the stipulation is a stipulation pour atrui because the true intent of the parties is to confer a direct and material benefit upon a third party.
Accion Directa: Where the statute authorizes the creditor to sue on his debtor’s contract, e.g. lessor v. sub-lessee (Art. 1651,1652) (J.B.L. Reyes) 2. Third Person In Possession—
When the third person comes into possession of the object of a contract creating real rights (Art 1312)
3. Fraud—
Where the contract is entered into in order to defraud a person (Art. 1313)
4. Tortuous Interference—
Where the third person induces a contracting party to violate his contract (Art.1314).
Requisites:
a. Existence of a valid contract
b. Knowledge of the third person of the existence of the contract; and
c. Interference by third person without legal justification or excuse
D. 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.
(Tolentino)
E. OBLIGATORY FORCE
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.
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.
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.
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.
CIVIL LAW REVIEWER Chapter II. ESSENTIAL REQUISITES
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