Extinguishment of Obligations Overview
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Questions and Answers

What is one way obligations can be extinguished?

  • By a change in interest rates
  • By delayed performance
  • By payment or performance (correct)
  • By verbal agreement only

    • Which of the following is classified as an involuntary cause of extinguishment of obligations?

  • Compensation
  • Payment or performance
  • Loss of the thing due (correct)
  • Dacion en pago

    • Which of these causes of extinguishment of obligations is related to the creditor and debtor's rights merging?

  • Novation
  • Condonation
  • Confusion or merger (correct)
  • Compensation

    • Which of the following is NOT a cause for the extinguishment of an obligation as per Article 1231?

    <p>Contractual breach</p> Signup and view all the answers

    Under which category do both compensation and novation fall?

    <p>Substitution of performance</p> Signup and view all the answers

    What is meant by 'condonation or remission of the debt' in terms of obligations?

    <p>Forgiving the debt or waiving payment</p> Signup and view all the answers

    Which of the following is considered a 'fortuitous event' that may extinguish an obligation?

    <p>Terrible weather changes that affect a contract</p> Signup and view all the answers

    Which of the following is NOT a cause of extinguishment of obligations listed in this chapter?

    <p>Preservation</p> Signup and view all the answers

    Which cause of extinguishment occurs due to the death of a personal obligation party?

    <p>Impossibility of fulfillment</p> Signup and view all the answers

    What does 'confusion or merger of the rights of creditor and debtor' refer to?

    <p>The creditor and debtor become the same person</p> Signup and view all the answers

    Which of the following is NOT a type of substitution of performance?

    <p>Remission</p> Signup and view all the answers

    What does the term 'natural waiver' refer to in relation to agreement to release?

    <p>Voluntary withdrawal of a legal right</p> Signup and view all the answers

    Which of the following is an example of an involuntary cause for releasing an obligation?

    <p>Impossibility of performance</p> Signup and view all the answers

    What causes an obligation to cease due to 'change of civil status'?

    <p>Death of a party</p> Signup and view all the answers

    What is a 'resolutory condition' in the context of obligations?

    <p>A condition that leads to termination of obligations upon occurrence</p> Signup and view all the answers

    What does 'payment' in Article 1232 include?

    <p>Both delivery of money and performance of an obligation</p> Signup and view all the answers

    When is there technically no payment according to Article 1232?

    <p>When there is no obligation existing prior to payment</p> Signup and view all the answers

    Which of the following scenarios best illustrates a pre-existing obligation?

    <p>A person pays a debt that they agreed to repay</p> Signup and view all the answers

    What must a creditor do for a payment to be considered valid?

    <p>Accept the payment either expressly or implicitly</p> Signup and view all the answers

    In what case can a payment be properly rejected by the creditor?

    <p>When there is a valid reason for rejection</p> Signup and view all the answers

    What is the effect of payment made under a void judgment?

    <p>The payment is null and void.</p> Signup and view all the answers

    Which of the following is NOT a requisite for a valid payment?

    <p>The fulfillment of the obligation must be incomplete.</p> Signup and view all the answers

    How should a monetary obligation be settled?

    <p>By delivery of the money.</p> Signup and view all the answers

    If the debt consists of a personal undertaking, how should payment be made?

    <p>By performing the personal undertaking.</p> Signup and view all the answers

    What must occur if the debt is the delivery of things?

    <p>The thing or things must be delivered.</p> Signup and view all the answers

    Who has the burden of proving the existence of a valid debt?

    <p>The alleged creditor</p> Signup and view all the answers

    What is one acceptable form of proof for a debtor to show payment?

    <p>A receipt</p> Signup and view all the answers

    What can be inferred if a promissory note is still held by the creditor?

    <p>The debt has not been paid</p> Signup and view all the answers

    In the case of Javier v. Brinas, what was the main issue A faced?

    <p>Inability to provide receipts for all payments</p> Signup and view all the answers

    What conclusion was reached regarding A's testimony in Javier v. Brinas?

    <p>It was not sufficient due to lack of receipts</p> Signup and view all the answers

    What is a key aspect of substantial performance in good faith as outlined in Article 1234?

    <p>It enables the obligor to recover as if there was full fulfillment, minus damages.</p> Signup and view all the answers

    According to the commentaries, how does substantial performance benefit the obligee?

    <p>The obligee must accept slight deficiencies as sufficient performance.</p> Signup and view all the answers

    Which of the following statements is correct regarding the court's consideration under substantial performance?

    <p>The court can give time to fulfill obligations for minor breaches.</p> Signup and view all the answers

    What liability does a debtor have when there is substantial performance in good faith?

    <p>The debtor is liable for damages suffered by the obligee.</p> Signup and view all the answers

    What principle underlies the rule of substantial performance in terms of fairness?

    <p>The principle that both parties gain from equity and fairness in the contract.</p> Signup and view all the answers

    What happens when an obligee accepts incomplete performance without protest?

    <p>The obligation is considered fully fulfilled.</p> Signup and view all the answers

    What is the effect of qualified acceptance on a creditor's obligations?

    <p>It indicates acceptance subject to certain conditions.</p> Signup and view all the answers

    What role does estoppel play in the acceptance of performance?

    <p>It prevents creditors from contesting accepted performance later.</p> Signup and view all the answers

    What does accepting partial payment signify in terms of obligation?

    <p>It does not automatically negate the full obligation.</p> Signup and view all the answers

    In which case is the importance of clear acceptance highlighted?

    <p>Constante Amor de Castro v. CA</p> Signup and view all the answers

    Under what condition can a creditor refuse payment from a third party?

    <p>When there's no stipulation permitting third party payment</p> Signup and view all the answers

    What can a person who pays a debt for another demand?

    <p>Reimbursement from the debtor</p> Signup and view all the answers

    What is one reason the Code Commission prefers that creditors can refuse third-party payments?

    <p>Creditors should not be forced to interact with disliked parties</p> Signup and view all the answers

    What is a condition under which reimbursement is allowed for a third-party payment?

    <p>If the payment was made with the debtor's knowledge</p> Signup and view all the answers

    In which situation would a creditor accept a third-party payment?

    <p>If the third party is a co-debtor</p> Signup and view all the answers

    What must occur for a third person to be entitled to reimbursement and subrogation after making a payment for a debtor?

    <p>The debtor must consent to the payment.</p> Signup and view all the answers

    What is the primary limitation on a third person's right to reimbursement if the payment was made against the debtor's will?

    <p>They may recover only benefits related to the payment.</p> Signup and view all the answers

    Which situation allows a third person to recover from the creditor rather than the innocent debtor?

    <p>The debt has been completely remitted.</p> Signup and view all the answers

    If a third party pays $500 instead of the actual $1,000 due without debtor consent, what can they recover?

    <p>$500 from the debtor.</p> Signup and view all the answers

    Which scenario does NOT qualify as valid grounds for a third person to recover payment from the creditor?

    <p>The payment was made in cash.</p> Signup and view all the answers

    Study Notes

    Extinguishment of Obligations

    • Obligations can be extinguished in numerous ways, with some being voluntary and others involuntary.
    • Voluntary Causes: These involve conscious actions by the parties involved.
    • Performance is the primary method of extinguishment, involving the delivery of money or fulfillment of the agreed-upon service.
    • Substitution of Performance involves alternative methods of fulfilling the obligation, including:
      • Compensation: When two people owe each other money and their debts cancel each other out.
      • Novation: Replacing an old obligation with a new one, either changing the object, the creditor, or the debtor.
      • Dacion en pago (datio in solutum): Paying a debt with something other than money, agreed upon by the parties.
    • Agreement to Release involves both parties agreeing to end the obligation:
      • Subsequent to the obligation:
        • Unilateral waiver: The creditor voluntarily releases the debtor from the obligation.
        • Natural waiver: When the debt is extinguished due to a legal reason like prescription.
        • Remission: The creditor formally forgives the debt, usually in writing.
        • Mutual dissent: Both parties agree to terminate the obligation.
        • Compromise: The parties reach an agreement to modify or extinguish the obligation.
      • Simultaneous with the creation of the obligation:
        • Resolutory condition: The obligation ends upon the occurrence of a future event.
        • Resolutory term: The obligation ends on a specific date or after a certain period.
    • Involuntary Causes occur outside of the parties' control.
    • Failure to bring an action: The right to claim the obligation is lost due to limitations imposed by law. This is often referred to as the statute of limitations.
    • Resolutory condition or condition subsequent: An event that terminates the obligation, such as a merger of the creditor and debtor's rights.
    • By reason of the object:
      • Impossibilty of performance: The agreed-upon action becomes impossible to perform.
      • Loss of the thing due: The object of the obligation is lost or destroyed.

    Payment or Performance

    • Payment is a key method for extinguishing an obligation.
    • Payment refers to delivery of money or fulfillment of the obligation in another way.
    • Payment requires acceptance by the creditor, whether explicit or implicit.
    • Payment made under a void judgment is considered null and void.
    • Completeness of Payment: Payment is valid only when the entire object or service is delivered or rendered.
    • Burden of Proof: The creditor must first prove the existence of a valid debt, and then the debtor must prove they have paid it.
    • Receipts are strong evidence of payment.

    Substantial Performance in Good Faith

    • This principle allows recovery for substantial completion of an obligation, less damages incurred by the obligee.
    • It is based on fairness, aiming to compensate the obligor for their good faith efforts.
    • The court might grant a period for the debtor to complete the remaining obligation, rather than rescinding the contract altogether.

    Creditor's Right to Refuse Payment

    • Generally, a creditor is not obligated to accept payment from a third party who has no interest in the obligation.
    • Exceptions include cases where the creditor agrees to accept third-party payments or if the third party is a guarantor or co-debtor.
    • This rule aims to protect the creditor's right to choose who they deal with.

    Payment by a Third Person

    • A third party can pay with the knowledge and consent of the debtor, which entitles them to reimbursement and subrogation (assuming rights like a guarantee or mortgage).
    • If the third party pays without the debtor's knowledge or consent, they only receive beneficial reimbursement, the amount that actually benefited the debtor.
    • Third parties can also recover from the creditor in certain situations:
      • When the debt has already been paid.
      • When the debt has been remitted.
      • When the debt has prescribed.
      • When legal compensation has already taken place.

    Lazaro v. Sagun Case

    • Charges against a deceased lawyer were deemed moot and academic, indicating that the death of a party can extinguish certain legal obligations.

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    Description

    This quiz explores the various ways obligations can be extinguished, focusing on both voluntary and involuntary methods. It covers essential concepts like performance, substitution of performance, and agreements to release. Test your understanding of these legal principles and their applications.

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