Obligations and Contracts - Domingo Answers

Assignment No.
I. General Provisions
A. Define the Following

i. Obligation
- Is a term derived from the Latin word obligatio meaning tying or binding. It
is a bond which is recognized by law by virtue of which one is bound in
favor of another to render something, which may consist in giving
something, doing or not doing certain acts (De Leon, 2021).
ii. Quasi-contract
- Is the obligation of an entity to return assets, which usually come in the
form of cash, given or paid by mistake by a payor or simply something that
is not due to the payee. Art. 2142 states that when they arise from lawful,
voluntary and unilateral acts which are enforceable to the end that no one
shall be unjustly enriched or benefited at the expense of another.
iii. Compliance in good faith

- Means compliance in accordance with the terms/stipulations that was
stated in the contract/agreement. Sincerity and honesty must be observed
at all times to prevent one party to take unfair advantage over the other.
Although, usually, a contract does not state penalties for violations, a party
cannot and should not breach it with impunity. Any oppressed party would
still be protected by his rights.
iv. Solutio indebiti

- It is the juridical relation which is created when something is received
when there is no right to demand it and it was unduly delivered by mistake.
It is based on the principle that no one shall enrich himself unjustly at the
expense of another.
B. Discussions
i. What are the essential requisites of an obligation? Give an example to illustrate
them.
There are four (4) essential requisites for an obligation, namely:
a. A passive subject (debtor or obligor);
b. An active subject (creditor or obligee);
c. Object or prestation (subject matter of the obligation); and
d. A juridical or legal tie (efficient cause)
Illustration/example:
A building contract has been bound between J. Marko and Engr.
Labiao. Here it is stated that Engr. Labiao has bound and agreed to build a
house for his client, J. Marko for Php 5,000,000.
Here, Engr. Labiao is the passive subject, J. Marko is the active subject,
the building of the house is the prestation, and the contract is the juridical tie.
This is the case if pre-payment was done. But if the house has been completely
constructed before the payment, the roles of the two parties would be
interchanged.
ii. Why are obligations under the Civil Code a necessity?

Obligations are considered as juridical necessities because in case of
noncompliance, the courts of justice may be called upon by the aggrieved party
to enforce its fulfilment or the economic value it represents. In a proper case, a
debtor may be made liable for damages, which represents the sum of money
given as compensation for the injury suffered by the creditor for the violation
of his legal rights.
II. Nature and Effects of Obligations
A. Define the Following

i. Generic or indeterminate thing
- A thing is considered generic or indeterminate when it refers only to a class
or genus to which it pertains and cannot be pointed out with particularity.
Some examples would be the ff:
a. A Rolex watch
b. Gucci shoes
c. A 2020 Ford car
ii. Quasi-contract
- Is the obligation of an entity to return assets, which usually come in the
form of cash, given or paid by mistake by a payor or simply something that
is not due to the payee. Art. 2142 states that when they arise from lawful,
voluntary and unilateral acts which are enforceable to the end that no one
shall be unjustly enriched or benefited at the expense of another.
iii. Fortuitous Event
- These are events in which are not foreseen or were foreseen but are
inevitable (impossible to foresee or avoid). It can either be an act of man
(e.g. war, car accidents, robbery) or act of God (e.g. earthquakes, flash
floods, etc.)
iv. Legal Delay or Default
- Also called mora, is the failure to perform an obligation on time which
failure constitutes a breach of the obligation.
v. Diligence of a good father of the family
- This phrase has been equated with ordinary care or that diligence which an
average (or a reasonably prudent) person exercises over his own property.
B. Discussions
i. Give the rules as to the liability of a person for loss or damage resulting from
fortuitous event.
In general terms, a person is not responsible for any loss or damage caused
by fortuitous events. In other words, any obligation he has is extinguished
except for the following exceptions below.
(1) When it is expressly specified by the law.
(a) The debtor is guilty of fraud, negligence, or delay, comply or
contravention of the tenor of the obligation;
(b) The debtor has promised to deliver the same thing to two or
more persons who do not have the same interest;
(c) The obligation to deliver a specific thing arises from a crime; and
(d) The thing to be delivered is generic.
(2) When declared by stipulation.
(3) When the nature of the obligation requires the assumption of risk.
ii. What rights are given by law to the creditor in case the debtor fails to comply
with his obligation to deliver a specific thing?
In a specific real obligation (obligation to deliver a determinate thing), the
creditor may exercise the following remedies or rights in case the debtor fails
to comply with his obligation:
(1) Demand specific performance or fulfilment (if possible) of the
obligation with a right to indemnify for damages; or
(2) Demand rescission or cancellation of the obligation also with a right
to recover damages; or
(3) Demand payment of damages only, when it is the only feasible
remedy.
iii. What are included to be delivered in an obligation to give a definite thing?

(1) Preserve or take care of the thing;
(2) Deliver the fruits of the thing;
(3) Deliver the accessions and accessories;
(4) Deliver the thing itself; and
(5) Answer for damages in case of non-fulfilment or breach.
Sources:
De Leon, H., De Leon, H., Jr. (2021). The Law on Obligations and Contracts. Chapter 1: General
Provisions & Chapter 2: Nature and Effect of Obligations.

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Assignment No.

A. Define the Following

iii. Compliance in good faith

iv. Solutio indebiti

ii. Why are obligations under the Civil Code a necessity?

II. Nature and Effects of Obligations

A. Define the Following

iii. What are included to be delivered in an obligation to give a definite thing?

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