1 | ECE Laws, Contracts and Ethics

RA 386
June 18 1949
Civil Code of the Philippines
Book IV
OBLIGATIONS AND CONTRACTS
Obligations
Art. 1156: An obligation is a juridical necessity
to give, to do or not to do.
Elements of an Obligation
1. Active Subject (Obligee/Creditor) one
whose favour the obligation is constituted.
2. Passive Subject (Obligor/Debtor) one who
has the duty of giving, doing or not doing
3. Object the conduct which has to be
observed by the debtor/obligor
Requisites
1. It must be licit (otherwise it is void)
2. It must be possible, physically and
juridically (otherwise it is void)
3. It must be determinate or determinable
(otherwise it is void)
4. It must have pecuniary value
Binds the parties to the obligation
Why obligation exists
Sources of Obligations
Art. 1157: Obligations arise from:
1. Law;
2. Contracts;
3. Quasi-contracts;
4. Acts or omissions punished by law; and
5. Quasi-delicts.
Law set of rules made by the government
Example: Obligation to pay taxes
Contracts arise from stipulation of the
parties
Example: Obligation to repay a loan or
indebtedness by virtue of an agreement

Quasi-contracts - An obligation of one party to

another imposed by law independently of an
agreement between the parties
Example: Obligation to return money
paid by mistake or which is not due
Acts or omissions punished by law when they
arise from civil
Example: Obligation of a thief to return
the car stolen by him
Quasi-Delicts - An act whereby a person,
without malice, but by fault, negligence or
imprudence not legally excusable, causes
injury to another
Example: Obligation of the head of a
family that lives in a building to answer for
damages caused by things thrown or falling
from the same.
Kinds of Obligations
1. Pure Obligation - one which is not subject
to any conditions and no specific date is
mentioned for its fulfillment and is,
therefore, immediately demandable.
2. Conditional Obligation - One which is
superseded by a condition under which it
was created and which is not yet
accomplished.
3. Obligations with a Period whose fulfilment
a day certain has been fixed, shall be
demandable only when that day comes.
4. Alternative Obligation allowing the obligor
to choose which of two or more things he
will do
5. Joint Obligation bond or guarantee
entered into by two or more entities. All
parties to a joint obligation are sued and
released together.6. Solidary Obligation - refers to a legal
relationship where one or more of several
debtors are each liable to pay the entire
amount, or one or more of several creditors
each able to collect the whole.

Prepared by: Engr. Ricardo A. Banal Jr.

ricbanal@gmail.com

2 | ECE Laws, Contracts and Ethics

7. Divisible Obligation - when the object of the
performance is susceptible of division
8. Indivisible Obligation - when the object of
the performance, because of its nature or
because of the intent of the parties, is not
susceptible of division.
Contracts
Art. 1305. 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.
Principal Characteristics
1. Autonomy of wills parties may stipulate
anything as long as not illegal, immoral,
etc
2. Mutuality performance or validity binds
both parties, no left to will of one of parties
3. Obligatory Force parties are bound from
perfection of contract
4. Fulfill what has been expressly stipulated
5. All consequencies which may be in keeping
with good faith, usage and law
6. Relativity binding only between the
parties. Their assigns, heirs; strangers
cannot demand enforcement
Essential Requisites of a Contract
1. Consent meeting of minds between
parties on subject matter and cause of
contract; concurrence of offer and
acceptance; Permission for something to
happen or agreement to do something
2. Objects of Contracts - All things which are
not outside the commerce of men,
including future things, may be the object
of a contract. All things which are not
outside the commerce of men, including

future things, may be the object of a

contract
3. Cause of Contract - the prestation or
promise of a thing or service by the other;
the
service
or
benefit
which
is
remunerated; the mere liberality of the
benefactor
Kinds of Contracts
1. As Perfection or formation
a. Consensual perfected by agreement of
parties
b. Real

perfected
by
delivery
(commodatum, pledge, deposit)
c. Formal/Solemn

perfected
by
conformity to essential formalities
2. As to cause
a. Onerous with valuable consideration
b. Gratuitous founded on liberality
c. Remunerative prestation in given for
service previously rendered not as
obligation
3. As to importance or dependence of one
upon another
a. Principal contract may stand alone
b. Accessory depends on another
contract for its existence; may not exist
on its own
c. Preparatory not an end by itself; a
means through which future contracts
may be made
4. As to parties obliged
a. Unilateral only one of the parties has
an obligations
b. Bilateral both parties are required to
render reciprocal prestations
5. As to name or designation
a. Nominate
b. Innominate

Prepared by: Engr. Ricardo A. Banal Jr.

ricbanal@gmail.com