OBLIGATIONS AND CONTRACTS

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OBLIGATIONS &

CONTRACTS

ELMER T. RABUYA Professor of Civil Laws and Bar Reviewer

Arellano University School of Law, San Sebastian College, University of Asia and the Pacific, Philippine Christian University

and Polytechnic University of the Philippines Formerly: University of Sto. Tomas, University of the East, Jose Rizal University, Lyceum of the Philippines University

and Pamantasan ng Lungsod ng Pasay Jurists Bar Review Center, Recoletos Law Center

Villasis Law Center, Legal Edge, Academicus Review Center CPRS Bar Review Center, Excellent Bar Review Center

Author: Civil Law Reviewer, Vols. 1 and 2, Property, and The Law on Persons and Family Relations

Ll.B., AUSL, Class Valedictorian A.B. Management Economics, Ateneo de Manila University

2019 EDITION

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Philippine Copyright, 2019

by

ISBN 978-971-23-9943-5

No portion of this book may be copied or reproduced in books, pamphlets, outlines or notes, whether printed, mimeographed, typewritten, copied in different electronic devices or in any other form, for distribution or sale, without the written permission of the author except brief passages in books, articles, reviews, legal papers, and judicial or other official proceedings with proper citation.

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ISBN 978-971-23-9943-5

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DEDICATION

It took me an eternity to write this book. Always working on it, but never had the impulse to finish it. Until you gave me the reason to complete it for your use. To you, my son:

JOHN DARREL

I dedicate this work. It is seldom that a father is given an opportunity to write a book for his child. And I thank God for giving me that opportunity. To borrow the words of Khaled Hosseini, "for you," my son, "a thousand times over."

I also thank my wife, MELVA, for going over the manuscript, and for the inspiration and encouraging words. I would never have the courage to publish my works if not for your faith. As always, you are and forever will be the wind beneath my wings.

And to HOPE, who kept me company during the wee hours of the morning that I was writing this book, but without causing a disturbance. Truly, a man's best friend.

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Chapter 23 (Void or Inexistent Contracts). Note that the articles on Natural Obligations are already discussed in Chapter 3.

The presentation of every topic is simplified for the appreciation of its targeted audience. There was no attempt to discuss the topics in a scholarly manner because the objective is for the book to be easily understood by first year law students. The author hopes that he is able to achieve his objective.

Makati, Philippines, September 29, 2018.

ATTY. ELMER T. RABUYA

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CONTENTS

Dedication................................................................................... iii Preface........................................................................................ v

BOOK IV OBLIGATIONS AND CONTRACTS

Title I- OBLIGATIONS

Chapters 1-3 (General Provisions, Nature and Effect of Obligations,

& Different Kinds of Obligations)

Chapter 1: Concept and Elements (Art. 1156, NCC)................................................................ 1

Chapter 2: Sources of Obligations (Arts. 1157-1162, NCC) ............•.•.........•....................••..... 5

Chapter 3: Civil and Natural Obligations (Arts. 1423-1430; 1956 & 1960, NCC).............................. 39

Chapter 4: Real and Personal Obligations (Arts. 1163-1168, NCC) 46

Chapter 5: Breach of Obligation (Arts. 1169-1178, NCC) ......•.....•...................................•..• 67

Chapter 6: Pure and Conditional Obligations (Arts. 1179-1192, NCC) 87

Chapter 7: Obligations With A Term or Period (Arts. 1193-1198, NCC) 131

Chapter 8: Alternative and Facultative Obligations (Arts. 1199-1206, NCC) 144

Chapter 9: Joint and Solidary Obligations (Arts. 1207-1222, NCC) 165

Chapter 10: Divisible and Indivisible Obligations (Arts. 1223-1225, NCC) 207

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Chapter 11: Obligations With A Penal Clause (Arts. 1126-1230, NCC) ..•................................................

Chapter 4 Extinguishment of Obligations

General Provisions

211

Chapter 12: Payment or Performance (Arts. 1232-1261, NCC) ......•..........•..•..•.••.•..••....•..•..•..•.•... 225

Chapter 13: Loss of Prestation (Arts. 1262-1269, NCC) 307

Chapter 14: Condonation (Remission) and Confusion (Merger) (Arts. 1270-1277) 320

Chapter 15: Compensation (Arts. 1278-1290, NCC) ...•..•.......•..........••......•.•••........•.•••. 327

Chapter 16: Novation (Arts. 1291-1304, NCC) ..........---6..6.66.66.66..66.666666666666.66.6....,, 341

Title II. - CONTRACTS Chapters 1-5

(General Provisions, Essential Requisites of Contracts, Form of Contracts, Reformation of Instruments,

and Interpretation of Contracts)

Chapter 17: Concept, Elements and Characteristics (Arts. 1305-1317, NCC)..................................................... 365

Chapter 18: Essential Requisites of Contracts (Arts. 1318-1355, NCC) 404

Chapter 19: Form, Reformation and Interpretation of Contracts (Arts. 1356-1379, & 1403, par. 2, NCC) 495

Chapters 6-9 (Rescissible Contracts, Voidable Contracts,

Unenforceable Contracts and Void or Inexistent Contracts)

Chapter 20: Rescissible Contracts (Arts. 1380-1389, NCC) 562

Chapter 21: Voidable Contracts (Arts. 1390-1402, NCC) 607

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Chapter 22: Unenforceable Contracts (Arts. 1403-1408, NCC) 622

Chapter 23: Void or Inexistent Contracts (Arts. 1409-1422, NCC) 631

Title III. -- NATURAL OBLIGATIONS

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