The Law on Obligation and Contracts (RFBT 11)

• Obligation


  A juridical necessity to give, to do or not to do
• Obligation (etymology)


  Derived from the Latin word "obligatio" which means a "tying" or "binding"
• Obligation (definition 1)


  A tie of law or a juridical bond by virtue of which one is bound in favor of another to render something — and this may consist in giving a thing, doing a certain act, or not doing a certain act
• Obligation (definition 2)


  A legal relation established between one party and another, whereby the latter is bound to the fulfillment of a prestation which the former may demand of him
• Obligation (definition 3)


  The duty of the debtor or obligor (he who has the duty of giving, doing, or not doing)
• Juridical necessity


  In case of non-compliance, the courts of justice may be called upon to enforce its fulfillment or, in default thereof, the economic value that it represents
• Civil obligations


  Obligations which give to the creditor or obligee a right of action in courts of justice to enforce their performance
• Natural obligations


  Obligations not based on positive law but on equity and natural law, do not grant a right of action to enforce their performance although in case of voluntary fulfillment by the debtor, the latter may not recover what has been delivered or rendered by reason thereof
• Essential requisites of an obligation

  • Passive subject (debtor/obligor)
  • Active subject (creditor/obligee)
  • Object or prestation (subject matter of the obligation)
  • Juridical or legal tie (source of the obligation)
• As a general rule, the law does not require any form in obligations arising from contracts for their validity or binding force
• Obligations arising from other sources do not have any form at all
• Obligation


  The act or performance which the law will enforce
• Right


  The power which a person has under the law, to demand from another any prestation
• Wrong (cause of action)

  An act or omission of one party in violation of the legal right or rights of another, causing injury to the latter
• Essential elements of cause of action

  • A legal right in favor of a person (creditor/plaintiff)
  • A correlative legal obligation on the part of another (debtor/defendant) to respect or not to violate said right
  • An act or omission in breach or violation of said right by the defendant with consequential injury or damage to the plaintiff for which he may maintain an action for the recovery of damages or other appropriate relief
• If any of the essential elements of a cause of action is absent, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action
• A cause of action only arises when the last element occurs, i.e., at the moment a right has been transgressed
• An obligation on the part of a person cannot exist without a corresponding right existing in favor of another, and vice-versa, for every right enjoyed by a person, there is a corresponding obligation on the part of another to respect such right
• Actions based upon a written contract should be brought within 10 years from the time the right of action accrues
• The cause of action resulting from breach of contract is dependent on the facts of each particular case
• Injury


  The illegal invasion of a legal right; the wrongful act or omission which causes loss or harm to another
• Damage


  The loss, hurt, or harm which results from the injury
• Damages


  The sum of money recoverable as amends for the wrongful act or omission
• There may be injury without damage and damage without injury
• A wrongful violation of his legal right is not sufficient to entitle a person to sue another in a court of justice for the enforcement or protection of said right. As a rule, there must be, in addition, loss or damage caused to him by the violation of his right
• A person has the right to take all legal steps to enforce his legal and/or equitable rights. One who makes use of his legal right does no injury. If damage results from a person's exercising his legal rights, it is damnum absque injuria
• Proof of loss for injury

  A wrongful violation of his legal right is not sufficient to entitle a person to sue another in a court of justice for the enforcement or protection of said right. As a rule, there must be, in addition, loss or damage caused to him by the violation of his right.
• Except for actual or compensatory damages, no pecuniary proof is necessary in order that moral, nominal, temperate, liquidated, or exemplary damages may be awarded
• A person has the right to take all legal steps to enforce his legal and/or equitable rights. One who makes use of his legal right does no injury.
• If damage results from a person's exercising his legal rights, it is damnum absque injuria (damage without injury)
• The plaintiff must establish that the damage to him resulted from a breach or violation of legal duty which the defendant owned to him; otherwise, the consequences must be borne by the plaintiff alone
• In order that the law will give redress for an act (or omission) causing damage, that act must be not only hurtful, but wrongful
• The delay in the delivery of goods to the highest bidder due to the importer contesting the forfeiture is an incident to the exercise by the importer of his right to contest the forfeiture and the sale of his goods
• Real obligation


  Obligation to give, where the subject matter is a thing which the obligor must deliver to the obligee
• Personal obligation


  Obligation to do or not to do, where the subject matter is an act to be done or not to be done
• Types of personal obligation

  • Positive personal obligation (obligation to do or to render service)
  • Negative personal obligation (obligation not to do)
• Sources of obligations


  • Law
  • Contracts
  • Quasi-contracts
  • Acts or omissions punished by law
  • Quasi-delicts
• The enumeration by the law of the sources of obligations is exclusive
• There are only two sources of obligations: law and contracts, because obligations arising from quasi-contracts, crimes, and quasi-delicts are really imposed by law
• Obligations derived from law are not presumed. Only those expressly determined in the Civil Code or in special laws are demandable