Reviewer Law

8/9/2019 Reviewer Law

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PART I OBLIGATION An obligation is a juridicalnecessity to give, to do or not to do

ELEMENTS:

1 Active subject ! obligee"creditor # t$e one in %$ose &avor t$e obligation is

constituted

' Passive subject ! obligor"debtor # t$e one %$o $as t$e duty o& giving, doing or not

doing

( Object )restation* t$e conduct %$ic$ $as to be observed by t$e debtor"obligor

+ inculu- .uris juridical"legal tie

/ 0ausa !causa debendi"causa obligationes# %$y obligation eists

Requisites of Object:

1 licit i& illicit, it is void

' )ossible i& i-)ossible, it is void

( deter-inate or deter-inable or else, void

+ )ecuniary value

SOURCES OF OBLIGATION:

1 LAW (OBLIGATION EX LEGE# 2ust be e)ressly or i-)liedly set &ort$ and

cannot be )resu-ed

1 CONTRACT( OBLIGATION EX CONTRACTU# 2ust be co-)lied %it$ in good &ait$

because it is t$e 3la%4 bet%een )arties* neit$er )arty -ay unilaterally evade $is

obligation in t$e contract, unless5

a# contract aut$ori6es it

b# ot$er )arty assents

Parties may freely enter into any stipulations, provided they are not contrary to law, morals,

good customs, public order or public policy

1 QUASICONTRACT! OBLIGATION EX QUASI-CONTRACTU# T$at juridical

relation resulting &ro- a la%&ul, voluntary and unilateral act, and %$ic$ $as &or its


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)ur)ose, t$e )ay-ent o& inde-nity to t$e end t$at no one s$all be unjustly enric$ed

or bene7ted at t$e e)ense o& anot$er

' 8inds5

1 Ne!otio"u# !estio unaut$ori6ed -anage-ent* T$is ta8es )lace %$en a )erson

voluntarily ta8es c$arge o& anot$er9s abandoned business or )ro)erty %it$out t$e

o%ner9s aut$ority

' So$utio i%&ebiti undue )ay-ent * T$is ta8es )lace %$en so-et$ing is received

%$en t$ere is no rig$t to de-and it, and it %as unduly delivered t$ru -ista8e

1 'ELICTS! OBLIGATION EX MALEFICIO OR EX DELICTO#

Governing rules5

1 Pertinent )rovisions o& t$e RP0 and ot$er )enal la%s subject to Art '1:: 0ivil 0ode

Art 1;;, RP0 o& Boo8 I o& t$e 0ivil 0ode on da-ages

What civil liability ai!i"# $%& a ci&' i"cl)'!*

1 restitution

' re)aration o& da-age caused

( inde-nity &or conse?uential da-ages

E+'ct %$ ac,ittal i" ci&i"al ca!'*

%$en ac?uittal is due to reasonable doubt no civil liability

%$en ac?uittal is due to ee-)ting circu-stances t$ere is civil liability

%$en t$ere is )re)onderance o& evidence t$ere is civil liability

1 QUASI'ELICTTORTS! OBLIGATION E) QUASI'ELICTO o" E) QUASI

MALEFICIO# It is a &ault or act o& negligence ! or o-ission o& care # %$ic$ causesda-age to anot$er, t$ere being no )re@eisting contractual relations bet%een t$e

)arties

E$e#e%ts:


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a# T$ere -ust be &ault or negligence attributable to t$e )erson c$arged

b# T$ere -ust be da-age or injury

c# T$ere -ust be a direct relation o& cause and eect bet%een t$e &ault or negligence on

t$e one $and and t$e da-age or injury on t$e ot$er $and ! )roi-ate cause #

N%t'*

Th' SC i" Sa#a)a v Nacc%c% i&.li') that th' !%c'! %$ %bli#ati%" i" At

//01 i! '2cl!iv' Ma"y c%&&'"tat%! b'li'v'3 h%4'v' that it !h%l) "%t

b' At .'!'"t3 th'' i! %"' &%' .%!!ibl' !%c' %$ %bli#ati%"! 5 6UBLIC

OFFER (6blic O+' i! i" $act a !%c' %$ %bli#ati%" i" th' G'&a" Civil

C%)'7


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b# Dit$ a ter-")eriod u)on t$e e)iration o& t$e ter-")eriod

c# Ci-)le &ro- t$e )er&ection o& t$e contract

FAILURE TO COM.L* WIT5 .ERFORMANCEREME'IES:

6 7i%&s of .e"fo"#3%ce:

1 +, S.ECIFIC .ERFORMANCE @ )er&or-ance o& t$e )restation itsel&

' 1, SUBSTITUTE .ERFORMANCE @ so-eone else )er&or-s or so-et$ing else is

)er&or-ed at t$e e)ense o& debtor

( 6, EQUI8ALENT .ERFORMANCE da-ages

Re-edies

Ob$i!3tio% to !i/e

(Re3$ Ob$i!3tio%9

Ob$i!3tio%s to &o

(.e"so%3$ Ob$i!3tio%9

Seci;c !e%e"ic To &o Not to &o

CP


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IRREGULARIT* OF .ERFORMANCEBREAC5

1 A, CAUSES ATTRIBUTABLE TO 'EBTOR

1 +, Co%t"3/e%tio% of te%o"

' 1, 'e$32 Mo"3 @ Non )er&or-ance %it$ res)ect to ti-e

Mo"3 so$/e%&i de&ault on t$e )art o& t$e debtor* ' 8inds5

!1# 2ora Colvendi


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1 F"3u& 'o$o oluntary eecution o& a %rong&ul act or %ill&ul o-ission, 8no%ing and

intending t$e eects %$ic$ naturally and necessarily arise &ro- suc$ act or o-ission

1 0ausante ! causal # -a8es contract voidable

' incidente ! incidental # &raud in )er&or-ance o& obligation* does not aect

validity o& obligations

Re#e&ies of .e"so% i% f"3u& u%&e" ob$i!3tio%s 3"e:

1 insist on s)eci7c )er&or-ance !art 1'((#

' resolve contract !art 11J1#

( clai- da-ages, in eit$er case

1 =, Ne!$i!e%ce Cu$3 absence o& due diligence

E$e#e%ts:

a# O-ission o& diligence re?uired

b# Kiligence re?uired )er nature o& obligation, circu-stances o& )ersons, ti-e and )lace

FRAU' 'ISTINGUIS5E' FROM NEGLIGENCE

RAHK N


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Mo"3 3cceie%&i de&ault on )art o& creditor* 0reditor is guilty o& de&ault %$en $e

unjusti7ably re&uses to acce)t )ay-ent or )er&or-ance at t$e ti-e )ay-ent")er&or-ance

can be done

E


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a# %$en e)ressly declared by la% ! bad &ait$, subject -atter is generic, debtor is in

delay #

b# %$en e)ressly declared by sti)ulation or contract

c# %$en nature o& obligation re?uires assu-)tion o& ris8

REME'IES OF CRE'ITORS generally trans-issible !ece)t5 la%, sti)ulation, )ersonal

obligation#5

1


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CATEGORIES:

1 Ke-andability )ure, conditional or %it$ a ter-

' Plurality o& object si-)le, alternative or &acultative

( Plurality o& subject si-)le, joint or solidary

+ Per&or-ance divisible or indivisible

/ Canctions &or breac$ %it$ or %it$out a )enal clause

(+9 .u"e de-andable at once, no ter-, no condition

(19 Co%&itio%3$ > A condition is a &uture and an uncertain event or a )ast event un8no%n

to t$e )arties

?i%&s:

i, Suse%si/e $a))ening o& condition gives rise to obligation


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%"o &ault or not at e)ense

o& obligor


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Impossible condition physically not feasible

Illegal condition prohibited by law, good custom, public policy and morals

(69 Wit0 3 e"io& &uture E certain, )ast E uncertain, )ayable %$en able

D$en sti)ulation says 3)ayable %$en able 3 it is %it$ a )eriod, re-edy5

a# agree-ent a-ong )arties

b# court s$all 7 )eriod o& )ay-ent %$en )arties unable to agree

?i%&s:

1 a Reso$uto"2! in die- # ta8es eect at once but ter-inate u)on arrival o& t$e

day certain*Day certain that which must necessarily come, although it may not be

known when

' b, Suse%si/e! e die # ta8es eect on t$e day sti)ulated

W5EN COURTS MA* FI) .ERIO':

a# art 11J:

b# art 11J:, 'nd)aragra)$

c# art 11J1, (rd)aragra)$

d# art 1>:, 'nd, (rd, +t$sentence

e# art 11>;

W5EN 'EBTOR LOSES RIG5T TO .ERIO':

1 insolvency o& debtor, unless security )rovided

' did not deliver security

( i-)aired security@ t$ru &ault or &ortuitous event

+ violate underta8ing in consideration o& etension o& )eriod

/ atte-)ts to abscond

(=9, F3cu$t3ti/e only one )restation $as been agreed u)on but anot$er -ay be given in

substitution

E


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a# o& t$ing intended as substitute no liability

b# o& t$e substitute a&ter substitution is -ade %it$ liability

(9, A$te"%3ti/e bound by dierent )restations but only one is due

Rig$t o& c$oice5 General rule5 rig$t o& c$oice belongs to debtor

1 t0e c0oice is it0 &ebto"

!1# I& only 1 is le&t eit$er because o& &ortuitous events or due to debtor9s acts, )er&or- %$at

is le&t T$e eect is t$at t$e debtor loses t$e rig$t o& c$oice

!'# i& t$e c$oice is li-ited because o& t$e creditor9s acts, t$e debtor $as t$e rig$t o&

resolution and da-ages

!(# i& all are lost due to debtor, t$e creditor is entitled to da-ages

!+# i& so-e are lost, t$e debtor can c$oose &ro- t$e re-aining

' t0e c0oice is it0 c"e&ito"

!1# i& one or so-e are lost due to &ortuitous event, t$e creditor c$ooses t$e re-ainder

!'# i& one or so-e is lost because o& t$e &ault o& debtor, t$e creditor -ay c$oose eit$er t$e

re-ainder or t$e value o& any %$ic$ disa))eared, and da-ages in eit$er case

!(# i& all is lost due to t$e debtor9s &ault, t$e creditor -ay c$oose t$e value o& any i& so-e is

lost due to debtor9s &ault, t$e creditor c$ooses t$e re-ainder

!+# i& all is lost due to &ortuitous event, obligation is etinguis$ed

!/# i& all is lost due to creditor9s &ault, t$e obligation is etinguis$ed

Requisites fo" #37i%! t0e c0oice:

a# 2ade )ro)erly so t$at creditor or $is agent %ill actually 8no%

b# 2ade %it$ &ull 8no%ledge t$at a selection is indeed being -ade

c# 2ade voluntarily and &reely

d# 2ade in due ti-e be&ore or u)on -aturity

e# 2ade to all )ro)er )ersons


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2ade %"o conditions unless agreed by t$e creditor

g# 2ay be %aived, e)ressly or i-)liedly

'ISTINCTIONS BETWEEN ALTERNATI8E AN' FACULTATI8E OBLIGATIONS

ALT


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' on t$e )art o& t$e obligors and obligees, or t$e )art o& t$e debtors and t$e

creditors

+ Co%/e%tio%3$ agreed u)on by t$e )arties

/ Le!3$ i-)osed by la%

I%st3%ces 0e"e $3 i#oses so$i&3"2 ob$i!3tio%:

1 obligations arising &ro- tort

' obligations arising &ro- ?uasi@contracts

( legal )rovisions regrading obligation o& devisees and legatees

+ liability o& )rinci)als, acco-)lices, and accessories o& a &elony

/ bailees in co--odatu-


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: co-)lete" )ersonal de&ense total or )artial ! u) to a-ount o& s$are only # i& not

)ersonal to $i-

obligation t$at is ca)able o& )artial )er&or-ance

1 eecution o& certain no o& days %or8

' e)ressed by -etrical units

( nature o& obligation susce)tible o& )artial &ul7ll-ent

(9 I%&i/isib$e one not ca)able o& )artial )er&or-ance

1 to give de7nite t$ings

' not susce)tible o& )artial )er&or-ance

( )rovided by la%

+ intention o& )arties

!1;# Wit0 e%3$ c$3use > an accessory underta8ing to assu-e greater liability in case

o& breac$*

C5ARACTERISTICS OF .ENAL CLAUSES

1 Cubsidiary As a general rule, only )enalty can be de-anded, )rinci)al cannot be

de-anded, ece)t5 Penalty is joint or cu-ulative

'


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' )enalty )rovided is ini?uitous"unconscionable

E)TINGUIS5MENT OF OBLIGATIONS

2odes o&


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!b# (RK)erson )ays")er&or-s only t$e creditor9s consent* I& )er&or-ance is done also %it$

debtor9s consent $e ta8es t$e )lace o& t$e debtor T$ere is subrogation ece)t i& t$e

(rd)erson intended it to be a donation

!c# (rd)erson )ays")er&or-s %it$ consent o& creditor but not %it$ debtor9s consent, t$e

re)ay-ent is only to t$e etent t$at t$e )ay-ent $as been bene7cial to debtor

!'# Payee

!a# )ayee creditor or obligee or successor in interest o& trans&eree, or agent

!b# (rd)erson i& any o& t$e concur5

1 it -ust $ave redounded to t$e obligee9s bene7t and only to t$e etent o& suc$ bene7t

ii it &alls under art 1'+1, )ar 1,',( t$e bene7t is total so, )er&or-ance is total

!c# anyone in )ossession o& t$e credit but %ill a))ly only i& debt $as not been )reviously

garnis$ed

.A*MENT MA'E TO AN INCA.ACITATE' .ERSON @ 8ALI' IF:

1 Inca)acitated )erson 8e)t t$e t$ing delivered, or

' Inso&ar as t$e )ay-ent $as been bene7cial to $i-

.A*MENT TO A 6R'.ART* NOT AUT5ORIE'@ 8ALI' IF .RO8E' 4 ONL* TO T5E

E)TENT OF BENEFIT .RESUME' IF:

1 A&ter )ay-ent, (rd)erson ac?uires t$e creditor9s rig$ts

' 0reditor rati7es )ay-ent to (rd)erson

( By creditor9s conduct, debtor $as been led to -a8e t$e )ay-ent !esto))el#

.A*MENT MA'E IN GOO' FAIT5 TO A .ERSON IN .OSSESSION

OF CRE'IT S5ALL RELEASE 'EBTOR@ Requisites:

1 Pay-ent by debtor -ust be -ade in good &ait$

' 0reditor -ust be in )ossession o& t$e credit E not -erely t$e evidence o&

indebtedness

( Dit$ res)ect to ti-e and )lace o& )ay-ent -ust be according to t$e obligation

D$ere )ay-ent s$ould be -ade5


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1 In t$e )lace designated in t$e obligation

' I& t$ere is no e)ress sti)ulation and t$e underta8ing is to deliver a s)eci7c t$ing at

t$e )lace %$ere t$e t$ing -ig$t be at t$e -o-ent t$e obligation %as constituted

( In ot$er case in t$e )lace o& t$e do-icile o& t$e debtor

Ti-e o& )ay-ent ti-e sti)ulated

Eect of payment extinguish obligation

Except order to retain debt

SUBSTANTIAL .ERFORMANCE

1 Atte-)t in Good ait$ to )er&or- %it$out %ill&ul or intentional de)arture

' Keviation is slig$t

( O-ission"Ke&ect is tec$nical or uni-)ortant

+ 2ust not be so -aterial t$at intention o& )arties is not attained

E


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( Ca-e creditor

+ All debts -ust be due


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to a-ount o& )ro)erty unless %" contrary sti)ulation* A s)ecial &or- o& )ay-ent

because 1 ele-ent o& )ay-ent is -issing5 IK


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c# 0reditors %ill collect credits in t$e order o& )re&erence agreed u)on, or in de&ault o&

agree-ent, in t$e order ordinarily establis$ed by la%

1 Co%si!%3tio%

T'")'@t$e act o& oering t$e creditor %$at is due $i- toget$er %it$ a de-and t$at t$e

creditor acce)t t$e sa-e !D$en creditor re&uses %"o just cause to acce)t )ay-ent, $e

beco-es in -ora acce)iendi E debtor is released &ro- res)onsibility i& $e consigns t$e t$ing

or su- due#

C%"!i#"ati%" t$e act o& de)ositing t$e t$ing due %it$ t$e court or judicial aut$orities

%$enever t$e creditor cannot acce)t or re&uses to acce)t )ay-ent* generally re?uires )rior

tender o& )ay-ent

REQUISITES OF 8ALI' CONSIGNATION:

!1#


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+ ' or -ore creditor clai-ing t$e sa-e rig$t to collect

/ title o& obligation $as been lost

1,LOSS OF T5E T5ING 'UE )artial or total" includes i-)ossibility o& )er&or-ance

W5EN IS T5ERE A LOSS:

1# D$en t$e object )eris$es !)$ysically#

'# D$en it goes out o& co--erce

(# D$en it disa))ears in suc$ a %ay t$at5 its eistence is un8no%n or it cannot be

recovered

W5EN IS T5ERE IM.OSSIBILIT* OF .ERFORMANCE

1# P$ysical i-)ossibility

'# Legal i-)ossibility 5

!a# Kirectly caused as %$en )ro$ibited by la%

!b# Indirectly caused as %$en debtor is re?uired to enter a -ilitary dra&t

OBLIGATION TO 'ELI8ER A S.ECIFIC T5ING

General Rule5


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b# i& t$e generic t$ing $as already been segregated

c# -onetary obligation

OBLIGATION TO 'O

General Rule5 Kebtor is released %$en )restation beco-es legally or )$ysically i-)ossible

%it$out &ault on )art o& debtor

EFFECT OF .ARTIAL LOSS ! judicial deter-ination o& etent is necessary#

a# %$en loss is signi7cant -ay be enoug$ to etinguis$ obligation

b# %$en loss insigni7cant not enoug$ to etinguis$ obligation

W5EN T5ING IS LOST IN T5E .OSSESSION OF T5E 'EBTOR

Presu-)tion5 Loss due to debtor9s &ault ! dis)utable #

agree-ent is valid only i& t$e sa-e conditions )revailing at

ti-e o& contracting continue to eist at t$e ti-e o& )er&or-ance

EFFECT OF 'IFFICULT* BE*ON' .ARTIESH CONTEM.LATION

Rule5 Obligor -ay be released in %$ole or in )art

R


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1 T$ere -ust be an agree-ent

' T$ere -ust be a subject -atter !object o& t$e re-ission, ot$er%ise t$ere %ould be

not$ing to condone#

( 0ause o& consideration -ust be liberality ! Daivers or re-ission are not to be )resu-ed generally

Fo"#s: E-te%t: ?i%&s:

a c$aracter o& debtor E creditor is -erged in

sa-e )erson %it$ res)ect to sa-e obligation


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REQUISITES:

1 It -ust ta8e )lace bet%een )rinci)al debtor E )rinci)al creditor only

' 2erger -ust be clear E de7nite

( T$e obligation involved -ust be sa-e E identical one obligation only

+ Revocable, i& reason &or con&usion ceases, t$e obligation is revived

, COM.ENSATION Cet o* it is a -ode o& etinguis$-ent to t$e concurrent a-ount t$e

obligation o& )ersons %$o are in t$eir o%n rig$t reci)rocally debtors or creditors

REQUISITES:

1 Bot$ )arties -ust be -utually creditors and debtors in t$eir o%n rig$t and as)rinci)als

' Bot$ debts -ust consist in su- o& -oney or i& consu-able , o& t$e sa-e 8ind or

?uality

( Bot$ debts are due

+ Bot$ debts are li?uidated E de-andable !deter-ined#

/ Neit$er debt -ust be retained in a controversy co--enced by (rd)erson E

co--unicated %" debtor !neit$er debt is garnis$ed#

?i%&s:

1 legal by o)eration o& la%* as long as / re?uisites concur@ even i& un8no%n to )arties

E i& )ayable in di )laces* inde-nity &or e)ense o& ec$anges* even i& not e?ual

debts only u) to concurring a-ount

' conventional agree-ent o& )arties is enoug$, &orget ot$er re?uire-ent as long as

bot$ consented

( &acultative one )arty $as c$oice o& clai-ing"o))osing one %$o $as bene7t o&

)eriod -ay c$oose to co-)ensate

@ not all re?uisites are )resent

@ de)ositu-* co--odatu-* cri-inal oense* clai- &or &uture su))ort* taes


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1 judicial set o* u)on order o& t$e court* needs )leading E )roo&* all re?uire-ents

-ust concur ece)t li?uidation

' total %$en ' debts are o& t$e sa-e a-ount

( )artial %$en ' debts are not o& t$e sa-e a-ount

E


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@ old obligation is void

1 old obligation subsists i&5

@ ne% obligation is void or voidable but annulled already ! ece)t5 intention o& )arties #

1 i& old obligation $as condition

@ i& Resolutory E it occurred old obligation already etinguis$ed* no ne% obligation

since not$ing to novate

@ i& sus)ensive E it never occurred as i& no obligation* also not$ing to novate

1 i& old obligation $as condition, -ust be co-)atible %it$ t$e ne% obligation* i& ne% is

%"o condition dee-ed attac$ed to ne%

' i& ne% obligation $as condition

@ i& resolutory5 valid

@ i& sus)ensive E did not -ateriali6e5 old obligation is en&orced

?IN'S:

1 REALOBECTI8E c$ange object, cause"consideration or )rinci)al condition

' .ERSONALSUBECTI8E

1 substituting )erson o& debtor ! )assive #

E).ROMISION* initiative is &ro- (rd )erson or ne% debtor* ne% debtor E creditor to

consent* old debtor released &ro- obligation* subject to &ull rei-burse-ent E subrogation i&

-ade %" consent o& old debtor* i& %"o consent or against %ill , only bene7cial

rei-burse-ent* i& ne% debtor is insolvent, not res)onsible since %"o $is consent

'ELEGACION* initiative o& old debtor* all )arties to consent* &ull rei-burse-ent* i& insolvent

ne% debtor not res)onsible old debtor because obligation etinguis$ed by valid novation

unless5 insolvency already eisting E o& )ublic 8no%ledge or 8no% to $i- at ti-e o&

delegacion

1 Kelegante old debtor

' Kelegatario creditor

( Kelegado ne% debtor

1 subrogating (rd)erson to rig$ts o& creditor ! active #

1 conventional@ agree-ent E consent o& all )arties* clearly establis$ed


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' legal@ ta8es )lace by o)eration o& la%* no need &or consent* not )resu-ed

ece)t as )rovided &or in la%5

)resu-ed %$en@

1 creditor )ays anot$er )re&erred creditor even %"o debtor9s 8no%ledge

' (rd)erson not interested in obligation )ays %" a))roval o& debtor

( )erson interested in &ul7ll-ent o& obligation )ays debt even %"o 8no%ledge o& debtor

Kierence &ro- )ay-ent by (rd)erson 0$ange o& debtor

1 debtor is not nec Released &ro- debt 1 debtor is released

' can be done %"o consent o& creditor

' needs consent o& creditor e)ress or

i-)lied

( 1 obligation

( ' obligations* 1 is etinguis$ed E ne% one

created

+ (rd)erson $as no oblig to )ay i&

insolvent + ne% debtor is obliged to )ay

PART II 0ONTRA0TC @-eeting o& -inds bet ' )arties %$ereby one binds

$i-sel& %it$ res)ect to ot$er to give so-et$ing or render so-e service

.RINCI.AL C5ARACTERISTICS:

1 Auto%o#2 of i$$s )arties -ay sti)ulate anyt$ing as long as not illegal, i--oral,

etc

' Mutu3$it2 >)er&or-ance or validity binds bot$ )arties* not le&t to %ill o& one o&

)arties

( Ob$i!3to"2 Fo"ce )arties are bound &ro- )er&ection o& contract5

+ Re$3ti/it2 binding only bet%een t$e )arties, t$eir assigns, $eirs* strangers cannot

de-and en&orce-ent

1 &ul7ll %$at $as been e)ressly sti)ulated

' all conse?uences %"c -ay be in 8ee)ing %it$ good &ait$, usage E la%

E)CE.TION TO RELATI8IT*:


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1 Accion )auliana

' Accion directa

( Cti)ulation )our autrui

REQUISITES OF STI.ULATION .OUR AUTRUI

!1# Parties -ust $ave clearly and deliberately con&erred a &avor u)on a (rd)erson

!'# T$e sti)ulation in &avor o& a (rd)erson s$ould be a )art o&, not t$e %$ole contract

!(# T$at t$e &avorable sti)ulation s$ould not be conditioned or co-)ensated by any 8ind o&

obligation %$atsoever

!+# Neit$er o& t$e contracting )arties bears t$e legal re)resentation or aut$ori6ation o&

(rd)arty

!/# T$e t$ird )erson co--unicates $is acce)tance be&ore revocation by t$e original )arties

1 Art 1(1'

' Art 1(1+

REQUISITES OF ART +6+1:

!1#


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As to i#o"t3%ce o" &ee%&e%ce of o%e uo% 3%ot0e"

1 )rinci)al contract -ay stand alone

' accessory de)ends on anot$er contract &or its eistence* -ay not eist on its o%n

( Pre)aratory not an end by itsel&* a -eans t$roug$ %$ic$ &uture contracts -ay be

-ade

As to 3"ties ob$i!e&:

1 Hnilateral only one o& t$e )arties $as an obligation

' Bilateral bot$ )arties are re?uired to render reci)rocal )restations

As to %3#e o" &esi!%3tio%:

1 No-inate

' Inno-inate

a# Ko ut des I give t$at you -ay give

b# Ko ut &acias I give t$at you -ay do

c# acio ut des I do t$at you -ay give

d# acio ut &acias I do t$at you -ay do

STAGES IN A CONTRACT:

1 Pre)aration negotiation

' )er&ection"birt$

( consu--ation )er&or-ance


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( Intelligence and &ree %ill

+ 2ani&estation o& intent o& )arties

/ 0ognition by t$e ot$er )arty

0on&or-ity o& -ani&estation and cognition

N%t'* W' $%ll%4 th' th'%y %$ c%#"iti%" a") "%t th' th'%y %$ &a"i$'!tati%"

U")' % civil la43 th' %+' a") acc'.ta"c' c%"c %"ly 4h'" th' %+'% c%&'!

t% 8"%43 a") "%t 4h'" th' %+''' &''ly &a"i$'!t! hi! acc'.ta"c'

ELEMENTS OF 8ALI' OFFER ELEMENTS OF 8ALI' ACCE.TANCE

a de7nite a une?uivocal

b co-)lete b unconditional

c intentional

W5EN OFFER BECOMES INEFFECTI8E:

1 deat$, civil interdiction, insanity or insolvency o& eit$er )arty be&ore acce)tance is

conveyed

' e)ress or i-)lied revocation o& t$e oer by t$e oeree

( ?uali7ed or conditional acce)tance o& t$e oer

+ subject -atter beco-es illegal or i-)ossible be&ore acce)tance is co--unicated

.ERIO' FOR ACCE.TANCE

1 stated 7ed )eriod in t$e oer

' no stated 7ed )eriod

a# oer is -ade to a )erson )resent acce)tance -ust be -ade i--ediately

b# oer is -ade to a )erson absent acce)tance -ay be -ade %it$in suc$ ti-e t$at,under nor-al circu-stances, an ans%er can be received &ro- $i-

O.TION > o)tion -ay be %it$dra%n anyti-e be&ore acce)tance is co--unicated but not

%$en su))orted by a consideration ot$er t$an )urc$ase )rice5 o)tion -oney

N%t'* A"# 9 v CA (/::;7 !tat'! that a "ilat'al .%&i!' t% by % !'ll3 i$ "%t

!..%t') by a )i!ti"ct c%"!i)'ati%"3 &ay b' 4ith)a4" bt &ay "%t b' )%"'


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4hi&!ically % abitaily< th' i#ht %$ th' #a"t'' h'' i! )a&a#'! a") "%t

!.'ci=c .'$%&a"c'?; SCRA ;@7 h'l) that a" %.ti%"

cla!' i" %)' t% b' vali) a") '"$%c'abl' &!t i")icat' th' )'="it' .ic' at

4hich th' .'!%" #a"ti"# th' %.ti%" i! 4illi"# t% !'ll3 c%"tact ca" b' '"$%c')

a") "%t %"ly )a&a#'!< 6aa"a,' i"#! CA (/::17 !tat'! that i#ht %$ =!t

'$!al &ay b' '"$%c') by !.'ci=c .'$%&a"c'

.ERSONS W5O CANNOT GI8E CONSENT TO A CONTRACT:

1 2inors

' Insane or de-ented )ersons

( Illiterates" dea&@-utes %$o do not 8no% $o% to %rite

+ Intoicated and under $y)notic s)ell

/ Art 1((1 )erson under -ista8e* -ista8e -ay de)rive intelligence

Art 1((> )erson induced by &raud !dolo causante#

N%t'* D%l! b%"! (!al '2a##'ati%"! i" ta)'7 a' "%t i" th'&!'lv'!

$a)l'"t

RULE ON CONTRACTS ENTERE' INTO B* MINORS

General Rule5 OIKABL thi"# al'a)y i" .%!!'!!i%" %$ .aty i" #%%) $aith< !b'ct t% i")'&"ity

%"ly< i$ th'' a' > % &%' ali'"ati%"! 5 liability %$ /!ti"$act%

1 8OI'ABLE CONTRACTS intrinsic de&ect* valid until annulled* de&ect is due to vice

o& consent or legal inca)acity

C5ARACTERISTICS:

1


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!/# in state o& drun8enness

!# in state o& $y)notic s)ell

' T5OSE W5ERE T5E CONSENT IS 8ITIATE' B* MISTA?E@ 8IOLENCE@

INTIMI'ATION@ UN'UE INFLUENCE OR FRAU' (/ice of co%se%t9

(+9 #ist37e &alse belie& into so-et$ing

REQUISITES:

1 Re&ers to t$e subject o& t$e t$ing %$ic$ is t$e object o& t$e contract

' Re&ers to t$e nature o& t$e contract

( Re&ers to t$e )rinci)al conditions in an agree-ent

+


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' Obligation to do value o& service

.RESCRI.TION IN ACTION FOR ANNULMENT OF 8OI'ABLE CONTRACTS:

Inti-idation"iolence"undue Inuence + years &ro- ti-e de&ect o& consent ceases

2ista8e"raud + years &ro- ti-e o& discovery

0ontracts entered into by

-inors"inca)acitated )ersons + years &ro- ti-e guardians$i) ceases

1 6, UNENFORCEABLE CONTRACT valid but cannot co-)el its eecution unless

rati7ed* etrinsic de&ect* )roduce legal e&e&cts only a&ter rati7ed

?IN'S8ARIETIES:

1 Hnaut$ori6ed"No suMcient aut$ority entered into in t$e na-e o& anot$er %$en5

1 no aut$ority con&erred

' in ecess o& aut$ority con&erred ! ultra vires #

N%t'* Cabl' by RATIFICATION

1 Bot$ )arties inca)able o& giving consent @' -inor or ' insane )ersons

N%t'* Cabl' by ACNOWLEDGEMENT

1 ailure to co-)ly %it$ Ctatute o& rauds

1 Agree-ent to be )er&or-ed %it$in a year a&ter -a8ing contract

' C)ecial )ro-ise to ans%er &or debt, de&ault or -iscarriage o& anot$er

( Agree-ent -ade in consideration o& )ro-ise to -arry

+ Agree-ent &or sale o& goods, c$attels or t$ings in action at )rice not less t$an

/;;* ece)tion5 auction %$en recorded sale in sales boo8

/ Agree-ent &or lease o& )ro)erty &or -ore t$an 1 year E sale o& real )ro)ertyregardless o& )rice

Re)resentation as to credit o& anot$er

1 WA*S OF CURING UNENFORCEABLE CONTRACTS:


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1 ailure o& de&endant to object in ti-e, to t$e )resentation o& )arole evidence in court,

t$e de&ect o& unen&orceability is cured

' Acce)tance o& bene7ts under t$e contract I& t$ere is )er&or-ance in eit$er )art and

t$ere is acce)tance o& )er&or-ance, it ta8es it out o& unen&orceable contracts* also

esto))el sets in by acce)ting )er&or-ance, t$e de&ect is %aived

1 =, 8OI' OR INE)ISTENT o& no legal eect

C5ARACTERISTICS:

1 It )roduces no eect %$atsoever eit$er against or in &avor o& anyone

' T$ere is no action &or annul-ent necessary as suc$ is i)so jure A judicial declaration

to t$at eect is -erely a declaration

( It cannot be con7r-ed, rati7ed or cured

+ I& )er&or-ed, restoration is in order, ece)t i& )ari delicto %ill a))ly

/ T$e rig$t to set u) t$e de&ense o& nullity cannot be %aived

I-)rescri)tible

: Anyone -ay invo8e t$e nullity o& t$e contract %$enever its juridical eects are

asserted against $i-

?IN'S OF 8OI' CONTRACT:

1# T0ose $3c7i%! i% esse%ti3$ e$e#e%ts5 no consent, no object, no cause !ineistent

ones# essential &or-alities are not co-)lied %it$ ! e5 donation )ro)ter nu)tias s$ould

con&or- to &or-alities o& a donation to be valid #

!a# T$ose %"c are absolutely si-ulated or 7ctitious no cause

!b# T$ose %$ic$ cause or object did not eist at t$e ti-e o& t$e transaction no

cause"object

!c# T$ose %$ose object is outside t$e co--erce o& -an no object

!d# T$ose %"c conte-)late an i-)ossible service no object

!e# T$ose %"c intention o& )arties relative to )rinci)al object o& t$e contract cannot be

ascertained


42/44

19 ."o0ibite& b2 $3

! T$ose e)ressly )ro$ibited or declared void by la% 0ontracts %"c violate any legal

)rovision, %$et$er it a-ounts to a cri-e or not

(# I$$e!3$I$$icit o%es T$ose %$ose cause, object or )ur)ose is contrary to la%, -orals,good custo-s, )ublic order or )ublic )olicy *


43/44

)rosecuted

Instru-ent o& cri-e %ill be

con7scated in &avor o& govt

No action &or s)eci7c)er&or-ance

Innocent )arty is entitled to

restitution

Guilty )arty is not entitled

to restitution

.ARI 'ELICTO 'OCTRINE bot$ )arties are guilty, no action against eac$ ot$er* t$ose %$o

co-e in e?uity -ust co-e %it$ clean $ands* a))lies only to illegal contracts E not to

ineistent contracts* does not a))ly %$en a su)erior )ublic )olicy intervenes

E)CE.TION TO .ARI 'ELICTO RULE

1 I& )ur)ose $as not yet been acco-)lis$ed E I& da-age $as not been caused to any

(rd)erson

Re?uisites5

a# contract is &or an illegal )ur)ose

b# contract -ust be re)udiated by any o& t$e )arties be&ore )ur)ose is acco-)lis$ed or

da-age is caused to (rd)arties

c# court believes t$at )ublic interest %ill be served by allo%ing recovery !discretionary

u)on t$e court # based on re-orse* illegality is acco-)lis$ed %$en )arties entered into

contract* be&ore it ta8es eect )arty %"c is re-orse&ul )revents it

1 D$ere la%s are issued to )rotect certain sectors5 consu-er )rotection, labor, usury

la%

a# 0onsu-er )rotection i& )rice o& co--odity is deter-ined by statute, any )erson

)aying an a-ount in ecess o& t$e -ai-u- )rice allo%ed -ay recover suc$ ecess


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b# Labor i& la% sets t$e -ini-u- %age &or laborers, any laborer %$o agreed to receive

less -ay still be entitled to recover t$e de7ciency* i& la% set -a %or8ing $ours E laborer

%$o underta8es to %or8 longer -ay de-and additional co-)ensation

c# Interest )aid in ecess o& t$e interest allo%ed by t$e usury la% -ay be recovered by

debtor %it$ interest &ro- date o& )ay-ent

1 I& one )arty is inca)acitated, courts -ay allo% recovery o& -oney, )ro)erty delivered

by inca)acitated )erson in t$e interest o& justice* )ari delicto cannot a))ly because

an inca)acitated )erson does not 8no% %$at $e is entering into* unable to

understand t$e conse?uences o& $is o%n action

1 I& agree-ent is not illegal )er se but -erely )ro$ibited E )ro$ibition is designated &or

t$e )rotection o& t$e )lainti -ay recover %$at $e $as )aid or delivered by virtue o&

)ublic )olicy

MUTUAL RESTITUTION IN 8OI' CONTRACTS

Ge%e"3$ Ru$e5 )arties s$ould return to eac$ ot$er %$at t$ey $ave given by virtue o& t$e

void contract in case %$ere nullity arose &ro- de&ect in essential ele-ents

1 return object o& contract E &ruits

' return )rice )lus interest

E-cetio%5 No recovery can be $ad in cases %$ere nullity o& contract arose &ro- illegality o&

contract %$ere )arties are in )ari delicto* ece)t5

1 inca)acitated not obliged to return %$at $e gave but -ay recover %$at $e $as

given

' ot$er )arty is less guilty or not guilty

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