RFBT 09 - LAW ON OBLIGATIONS - CLEAN TTS COPY

RFBT nine - LAW ON OBLIGATIONS - CLEAN TTS COPY

Formation, Nature, and Effect

An obligation is a juridical necessity to give, to do, or not to do. A civil obligation gives the creditor the right to compel; a natural obligation does not give a right of action.

The elements are the passive subject or obligor-debtor, active subject or obligee-creditor, prestation or subject matter, and juridical tie or source.

A real obligation is to give a specific or generic thing. For a specific thing, concurrent obligations are to preserve it, deliver it, deliver its accessions and accessories, and deliver its fruits. Fruits may be natural, industrial, or civil. A personal obligation may be to do, positive, or not to do, negative.

The creditor has a personal right to fruits when the obligation to deliver arises and a real right when the goods are delivered.

Sources are law, contract, quasi-contract, delicts, and quasi-delicts. Law is not presumed. Contracts must be complied with in good faith. Quasi-contracts prevent unjust enrichment. Negotiorum gestio is voluntary taking charge of abandoned business; solutio indebiti is payment by mistake.

Delicts may produce criminal and civil liability, including restitution, reparation of direct damage, and indemnification of consequential damages. Quasi-delicts, or torts or culpa aquiliana, involve damage from fault or negligence where there is no pre-existing contractual relation.

Breach, Delay, and Remedies

Fraud, negligence, delay, and contravention of tenor affect obligations. Culpa contractual results in breach of contract; culpa criminal in commission of crime; culpa aquiliana is civil negligence or quasi-delict.

Mora solvendi is delay of the debtor: ex re for a real obligation and ex persona for a personal obligation. Mora accipiendi is delay of the creditor. Compensatio morae is delay of both parties and is considered no delay.

Causal fraud is fraud in obtaining consent and makes the contract voidable. Incidental fraud is fraud in performance; the obligation remains valid but damages may be due. Waiver of past fraud is valid, but not waiver of future fraud.

General rule: no demand, no delay. Exceptions: law provides otherwise; parties stipulate otherwise; time is of the essence; demand is useless; or the obligation is reciprocal.

For a determinate thing, the creditor may demand specific performance. For a generic thing, specific or substitute performance. For an obligation to do, substitute performance is at the debtor's expense. For an obligation not to do, the act may be undone at the debtor's expense. Specific performance of an obligation to do is unavailable because it would amount to involuntary servitude.

Other remedies are exhaustion of assets, accion subrogatoria, and accion pauliana. Accion subrogatoria lets the creditor exercise the debtor's rights except those inherently personal. Accion pauliana seeks rescission of acts or contracts made to defraud the creditor and is a remedy of last resort when the third person acts in bad faith.