Law on Obligations and Contracts in the Philippines An Overview | Poala Madayag - hair-restore.info
Article An obligation is a juridical necessity to give, to do or not to do. Contract – is the meeting of the minds between two persons. Title I. -OBLIGATION Chapter 1. GENERAL PROVISIONS Art. An obligation is a juridical necessity to give, to do or not to do. Obligation. Start studying Law Art. - Art. [Obligations 1: General Provisions]. Meeting of minds whereby one binds oneself with respect to the other to give.
ARTICLE – DISCUSSION – Obligations and Contracts
When it is absolutely impossible to settle doubts by the rules established in the preceding articles, and the doubts refer to incidental circumstances of a gratuitous contract, the least transmission of rights and interests shall prevail. If the contract is onerous, the doubt shall be settled in favor of the greatest reciprocity of interests.
If the doubts are cast upon the principal object of the contract in such a way that it cannot be known what may have been the intention or will of the parties, the contract shall be null and void. The principles of interpretation stated in Rule of the Rules of Court shall likewise be observed in the construction of contracts.
Contracts validly agreed upon may be rescinded in the cases established by law. The following contracts are rescissible: Payments made in a state of insolvency for obligations to whose fulfillment the debtor could not be compelled at the time they were effected, are also rescissible. The action for rescission is subsidiary; it cannot be instituted except when the party suffering damage has no other legal means to obtain reparation for the same. Rescission shall be only to the extent necessary to cover the damages caused.
Rescission creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interest; consequently, it can be carried out only when he who demands rescission can return whatever he may be obliged to restore. Neither shall rescission take place when the things which are the object of the contract are legally in the possession of third persons who did not act in bad faith.
ARTICLE 1156 – 1160 DISCUSSION
In this case, indemnity for damages may be demanded from the person causing the loss. Rescission referred to in Nos. All contracts by virtue of which the debtor alienates property by gratuitous title are presumed to have been entered into in fraud of creditors, when the donor did not reserve sufficient property to pay all debts contracted before the donation.
Alienations by onerous title are also presumed fraudulent when made by persons against whom some judgment has been issued. The decision or attachment need not refer to the property alienated, and need not have been obtained by the party seeking the rescission.
In addition to these presumptions, the design to defraud creditors may be proved in any other manner recognized by the law of evidence. Whoever acquires in bad faith the things alienated in fraud of creditors, shall indemnify the latter for damages suffered by them on account of the alienation, whenever, due to any cause, it should be impossible for him to return them. If there are two or more alienations, the first acquirer shall be liable first, and so on successively. The action to claim rescission must be commenced within four years.
For persons under guardianship and for absentees, the period of four years shall not begin until the termination of the former's incapacity, or until the domicile of the latter is known. The following contracts are voidable or annullable, even though there may have been no damage to the contracting parties: These contracts are binding, unless they are annulled by a proper action in court.
They are susceptible of ratification. The action for annulment shall be brought within four years. This period shall begin: In cases of intimidation, violence or undue influence, from the time the defect of the consent ceases.
In case of mistake or fraud, from the time of the discovery of the same. And when the action refers to contracts entered into by minors or other incapacitated persons, from the time the guardianship ceases. Ratification extinguishes the action to annul a voidable contract.
Ratification may be effected expressly or tacitly. It is understood that there is a tacit ratification if, with knowledge of the reason which renders the contract voidable and such reason having ceased, the person who has a right to invoke it should execute an act which necessarily implies an intention to waive his right. Ratification may be effected by the guardian of the incapacitated person. Ratification does not require the conformity of the contracting party who has no right to bring the action for annulment.
Ratification cleanses the contract from all its defects from the moment it was constituted. The action for the annulment of contracts may be instituted by all who are thereby obliged principally or subsidiarily.
However, persons who are capable cannot allege the incapacity of those with whom they contracted; nor can those who exerted intimidation, violence, or undue influence, or employed fraud, or caused mistake base their action upon these flaws of the contract. An obligation having been annulled, the contracting parties shall restore to each other the things which have been the subject matter of the contract, with their fruits, and the price with its interest, except in cases provided by law.
In obligations to render service, the value thereof shall be the basis for damages. When the defect of the contract consists in the incapacity of one of the parties, the incapacitated person is not obliged to make any restitution except insofar as he has been benefited by the thing or price received by him. Whenever the person obliged by the decree of annulment to return the thing can not do so because it has been lost through his fault, he shall return the fruits received and the value of the thing at the time of the loss, with interest from the same date.
The action for annulment of contracts shall be extinguished when the thing which is the object thereof is lost through the fraud or fault of the person who has a right to institute the proceedings. If the right of action is based upon the incapacity of any one of the contracting parties, the loss of the thing shall not be an obstacle to the success of the action, unless said loss took place through the fraud or fault of the plaintiff.
As long as one of the contracting parties does not restore what in virtue of the decree of annulment he is bound to return, the other cannot be compelled to comply with what is incumbent upon him. The following contracts are unenforceable, unless they are ratified: In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum, thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents: Unauthorized contracts are governed by Article and the principles of agency in Title X of this Book.
Contracts infringing the Statute of Frauds, referred to in No. Rights over the accessories and accessions. If it is a generic thing: To ask for performance of the obligation 2.
To ask that the obligation be complied with at the expense of the debtor. A determinate thing is one that is particularly designated or physically segregated from all others of the same class. The following are the obligations of the passive subject in: To deliver the thing which he has obligated himself to give.
To take care of the thing with the proper diligence of a good father of a family. To deliver all its accessories and accessions.
To pay damages in case of breach of obligation. If the debtor fails to do what he is obliged to do, it will be done at his expense.
However, the passive subject may be held liable for damages. The sources of liability for damages 18 of a party in an obligation are as follows: The fraud is incidental fraud dolo incidente which is fraud incident to the performance of an obligation. In fraud, there is an intent to evade the normal fulfillment of the obligation and to cause damage. This kind of fraud is a ground for annulment of the contract plus damages; 2 Negligence. The negligence referred here, in the case of contracts i.
Negligence consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, or the time and of the place. Application of the Law Case: To fulfill this engagement, Dr. Pablo booked passage with Alitalia, an Italian airline company. She arrived in Milan on the day before the meeting in accordance with the itinerary and time table set for her by Alitalia. She was however told by the Alitalia personnel there at Milan that her luggage was "delayed inasmuch as the same x x x was in one of the succeeding flights from Rome to Milan.
ARTICLE – Oblicon
But the other flights arriving from Rome did not have her baggage on board. Feeling desperate, she went to Rome to try to locate her bags herself. There, she inquired about her suitcases in the domestic and international airports, and filled out the forms prescribed by Alitalia for people in her predicament. However, her baggage could not be found. Completely distraught and discouraged, she returned to Manila without attending the meeting in Ispra, Italy.
As it turned out, Dr. Pablo's suitcases were,in fact,located and forwarded to Ispra, Italy, but only on the day after her scheduled appearance and participation at the U. Pablo was no longer there to accept delivery; she was already on her way home to Manila. And for some reason, the suitcases were not actually restored to Prof. Pablo by Alitalia until eleven 11 months later. Pablo entitled to damages for the negligence committed by Alitalia? Pablo should be entitled to nominal damages.
Apart from this, there can be no doubt that Dr. Pablo underwent profound distress and anxiety, which gradually turned to panic and finally despair, from the time she learned that her suitcases were missing up to the time when, having gone to Rome, she finally realized that she would no longer be able to take part in the conference.
As she herself put it, she "was really shocked and distraught and confused. Pablo cannot under the circumstances be restricted to that prescribed by the Warsaw Convention for delay in the transport of baggage. The debtor can be held liable for the delay or default in the fulfillment of his obligation only after the creditor has made a demand, judicial or extrajudicial, on the debtor, except: In a contract of loan, if a particular rate of interest has been expressly stipulated by the parties, such stipulated interest shall be applied.
It is only in contracts of loan, with or without security, that interest may be stipulated and demanded. This interest by way of compensation, must be in writing, otherwise, no interest by way of compensation may be collected. In all cases, interest due shall earn legal interest from the time it is judicially demanded although the obligation may be silent upon this point. Performance in contravention of the tenor or terms of the obligations means where performance is contrary to what is agreed upon or stipulated thus making the debtor liable for damages.
Intermediate Appellate Court, G. This is an action for damages for alleged breach of contract. The facts reveal that Mr. Cuenca boarded Northwest Airlines in Manila with a first class ticket to Tokyo. Upon arrival at Okinawa, Mr. Cuenca was transferred to the tourist class compartment.
Although he revealed that he was traveling in his official capacity as official delegate of the Republic to a conference in Tokyo, an agent of Northwest Airlines rudely compelled him, in the presence of other passengers, to move, over his objection, to the tourist class, under threat of otherwise leaving him in Okinawa. In order to reach the conference on time, respondent had no choice but to obey. Cuenca entitled to damages for culpa contractual? Cuenca is entitled to nominal damages.
At any rate, considering that petitioner's agent had acted in a wanton, reckless and oppressive manner, said award may, also, be considered as one for exemplary damages. Rafael Carrascoso is a civil engineer who was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes on March 30, Carrascoso a 'first class' round trip airplane ticket from Manila to Rome. From Manila to Bangkok, Mr. Carrascoso traveled in 'first class', but at Bangkok, the Manager of the Air France airline forced him to vacate the 'first class' seat that he was occupying because there was a 'white man', who, the Manager alleged, had a 'better right to the seat.
Carrascoso, as was to be expected, refused. A commotion ensued but Mr. Carrascoso reluctantly gave his 'first class' seat in the plane. Carrascoso was issued a first-class ticket, it was no guarantee that the passenger to whom the same had been issued would be accommodated in the first-class compartment, for the passenger has yet to make arrangements upon arrival at every station for the necessary first class reservation.
Carrascoso entitled to damages? There was a contract to furnish Mr. Carrascoso a first class passage. The reservation for a 'first class' accommodation for him was confirmed. Hence, said contract was breached when Air France failed to furnish first class transportation. As a rule, a written document speaks a uniform language.
If only to achieve stability in the relations between passenger and air carrier, adherence to the ticket so issued is desirable. Lastly, passengers do not contract merely for transportation. They have to be treated by the carrier's employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious 21 -- Northwest Airlines, Inc. L, August 31, Any rude or discourteous conduct on the part of employees towards a passenger gives the latter an action for damages against the carrier.
There was bad faith when the employee of Air France forced Mr. Carrascoso to leave his first class accommodation berth "after he was already seated" and to take a seat in the tourist class, by reason of which he suffered inconvenience, embarrassmentand humiliation, thereby causing him mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral damages.
In addition, exemplary damages are well awarded. The Civil Code gives the Court ample power to grant exemplary damages — in contracts and quasi-contracts. The only condition is that defendant should have "acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.
Carrascoso was ejected from his first class seat fits into this legal precept. The obligation is extinguished and the debtor is not liable, except: Effect when goods are lost through a fortuitous event in a contract of sale: There is no transfer of ownership until there is delivery of the goods. In case down payment has been made before delivery, the buyer may recover the price. Since a contract of sale is reciprocal in nature, once the obligation to deliver is extinguished, the correlative obligation to pay the price must also be extinguished.
Sue the debtor for collection; 2. Exercise all the rights and actions which the debtor may have against third persons, except those which are inherently personal to the debtor; 4. To impugn or contest acts of debtor which are intended to defraud his creditor Action pauliana ; Transmissibility of rights: Subject to such laws, all rights acquired by virtue of an obligation are transmissible.
Heirs shall be liable only to the extent of what they stand to inherit. Ariel promises to pay Brenda P1, A conditional obligation is one whose consequences are subject in one way or another to the fulfillment of a condition.
Carol promises to pay B P1, A condition is defined as future and uncertain event which may or may not happen. The following are the different kinds of condition: An obligation with a period is one whose consequences are subject in one way or another to the expiration of the said period or term. Alfredo the owner of the hotel promises to pay Britney employee of the hotel P5, The courts are empowered to fix the duration of a period in an obligation in the following instances: If the debtor binds himself when his means permit him to do so.
If the obligation does not fix a period but it can be inferred that a period was intended by the parties. Joint obligations are those where, although there concur two or more creditors and debtors, in one and the same obligation, there is no right to demand nor a duty on the part of each of the latter to render entire compliance of the entire obligation. Solidary obligations are those in which concur several debtors or creditors or both, and where each creditor has the right to demand, and each debtor is bound to perform, in its entirety, the prestation constituting the object of the obligation.
However, this situation arises only when the obligation expressly so states or when the law or nature of the obligation requires solidarity. Situations where the law expressly states solidarity are as follows: For three days that the wines were not delivered, many complaints arose from dining customers for wines ordered that were out of stock. Ramos only hold Mr. Aldeguer liable for damages?
In this situation, Mr. Danny Ramos may at his option hold either Chona Romulo or Michael Aldeguer, or both liable when filing a case in court for damages incurred.
An obligation with a penal clause is an obligation which contains an accessory obligation imposing upon the obligor added burdens or which operates as a previously stipulated indemnity, for the purpose of securing the performance of the principal obligation. It substitutes the indemnity for damages and, therefore, it does away with proof of damages suffered in case of breach of the obligation.
Article 1156 – 1160 Discussion
Nolledo, Revised Edition, page Fox, together with many others, agreed to take over the business, incorporate it and accept stocks therein in payment of their respective credits.
When this was done, Mr. A few days after the incorporation was completed, Mr. Fox entered into the following agreement: Fox on October 19,sold his stock in the said corporation to E. McCullough of the firm of E. This sale was made by Mr. Fox against the protest of Mr. Lambert and with the warning that he would be held liable under the contract hereinabove set forth and in accordance with its terms.
Lambert entitled to the liquidated damages in the amount of P1, Lambert is entitled to the liquidated damages in the amount of P1, In this jurisdiction penalties provided in contracts of this character are enforced.Obligations and Contracts - Dr. Rosario
It is the rule that parties who are competent to contract may make such agreements within the limitations of the law and public policy as they desire, and that the courts will enforce them according to their terms. Civil Code, articles,and ; Fornow vs.
Obligation arising from quasi-delict or tort — like the duty of the tortfeasor to pay damages for injuries of damages to his fault, omission or negligence. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book.
Unless such obligations are expressly provided by law, they are not demandable and enforced. Regulation of Obligations Arising from Law. The civil code is applicable suppletorily. Factor to Determine whether an Obligation Arises from Law or from other sources. And, when the law obliges to act upon which it is based in nothing more than a mere factor of determining the moment when it comes demandable, then this source of obligation is the law itself.