General Provisions of Obligations

Introduction to Law on Obligations and Contracts

• Deals with nature and sources of obligations, rights, and duties in agreements and contracts
• Governed by relevant articles in the Civil Code of the Philippines (Republic Act No. 386)
• Civil Code of the Philippines approved on June 18, 1949; effective August 30, 1950
• Based on the Civil Code of Spain effective in the Philippines since December 7, 1889

Definition of Obligation

• Found in Article 1156 of the New Civil Code of the Philippines
• Obligation: Juridical necessity to give, to do, or not to do
• Juridical Necessity: Court may enforce performance if debtor refuses

Parties in an Obligation

• Debtor: The one who performs the obligation
• Creditor: The one who has the right to demand performance

Types of Obligations

• Real Obligation: Obligation to give
• Personal Obligation: Obligation to do or not to do
  • Positive Personal Obligation: Obligation to do
  • Negative Personal Obligation: Obligation not to do

Requisites or Essential Elements of an Obligation

• Active Subject/Creditor/Obligee: Party with the right to demand performance
• Passive Subject/Debtor/Obligor: Party obliged to perform
• Prestation: Subject matter of the obligation (giving, doing, or not doing)
• Efficient Cause: Legal tie binding parties; may be law, contracts, quasi-contracts, acts/omissions punishable by law, or quasi-delics

Examples

Example 1: Loan Contract

• Passive Subject: D (must give 10,000 PHP with 12% interest to C)
• Active Subject: C (can demand the money)
• Prestation: Giving of 10,000 PHP with interest
• Efficient Cause: Contract of loan
• Type: Unilateral Obligation (only one party performs)

Example 2: Contract of Carriage

• Transport of Goods:
  • Active Subject: C
  • Passive Subject: D
  • Prestation: Transport of goods
  • Efficient Cause: Contract of carriage
• Payment of Transport Costs:
  • Active Subject: D
  • Passive Subject: C
  • Prestation: Payment of transport costs
  • Efficient Cause: Contract of carriage
• Type: Bilateral Obligation (both parties perform)

Civil Obligation vs. Natural Obligation

• Civil Obligation:

  • Based on positive law
  • Enforceable by court action
  • Involves juridical necessity

• Natural Obligation:

  • Based on natural law
  • Not enforceable by court action
  • Lacks juridical necessity

• Note: Definition in Article 1156 pertains to civil obligations