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An obligation involving generic items is extinguished because they are replaceable.
An obligation involving generic items is extinguished because they are replaceable.
False
Condonation or remission of the debt requires that if the value exceeds P5,000, it must be in writing.
Condonation or remission of the debt requires that if the value exceeds P5,000, it must be in writing.
True
The obligation is extinguished when the roles of creditor and debtor merge in the same person.
The obligation is extinguished when the roles of creditor and debtor merge in the same person.
True
Judicial compensation requires prior agreement between the parties to offset their debts.
Judicial compensation requires prior agreement between the parties to offset their debts.
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In a voluntary compensation scenario, both parties agree to offset their obligations voluntarily.
In a voluntary compensation scenario, both parties agree to offset their obligations voluntarily.
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Payment must always be complete, with no exceptions allowed.
Payment must always be complete, with no exceptions allowed.
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Novation involves the substitution of a new obligation for an existing one, thereby extinguishing the original obligation.
Novation involves the substitution of a new obligation for an existing one, thereby extinguishing the original obligation.
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If a creditor forgives a debt without written agreement, it is valid regardless of the debt's amount.
If a creditor forgives a debt without written agreement, it is valid regardless of the debt's amount.
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Dación en Pago refers to the transfer of property by a creditor to a debtor.
Dación en Pago refers to the transfer of property by a creditor to a debtor.
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Personal novation occurs when a creditor substitutes a third person in the rights of the creditor.
Personal novation occurs when a creditor substitutes a third person in the rights of the creditor.
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If a debtor loses a specific car they owe to a creditor due to a natural disaster, the obligation is extinguished.
If a debtor loses a specific car they owe to a creditor due to a natural disaster, the obligation is extinguished.
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Consignation occurs when a debtor deposits the payment in court after a creditor refuses it unjustly.
Consignation occurs when a debtor deposits the payment in court after a creditor refuses it unjustly.
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In payment by cession, a debtor retains their assets while settling debts to creditors.
In payment by cession, a debtor retains their assets while settling debts to creditors.
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The obligation is extinguished if the debtor caused the loss through negligence.
The obligation is extinguished if the debtor caused the loss through negligence.
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In the application of payment, the debtor must fully cover the payment for a specific debt to be extinguished.
In the application of payment, the debtor must fully cover the payment for a specific debt to be extinguished.
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Acceptance by the creditor of partial payment without objection can extinguish an obligation.
Acceptance by the creditor of partial payment without objection can extinguish an obligation.
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Study Notes
Extinguishment of Obligations
- Obligations can be extinguished through payment or performance, substantial performance in good faith, acceptance without objection, special forms of payment, tender of payment and consignation, application of payment, loss of the thing due, condonation or remission of the debt, confusion or merger of rights, compensation, and novation.
Payment or Performance
- Definition: Fulfillment of the obligation by delivering money or performing an act as agreed.
- Requirements for Valid Payment:
- Debtor must own the item or have the capacity to dispose of it.
- Payment must be complete, unless exceptions apply.
- Exceptions to Complete Payment:
- Substantial Performance in Good Faith: Minor defects, acted in good faith
- Acceptance by the Creditor Without Objection: Partial payment, no objections.
Special Forms of Payment
- Dación en Pago: Debtor transfers property to settle a monetary obligation.
- Payment by Cession: In insolvency, a debtor turns over all assets to creditors for liquidation.
Tender of Payment and Consignation
- Tender is the offer of payment; consignation is depositing payment in court if the creditor unjustly refuses payment.
Application of Payment
- One debtor, one creditor. Debtor has multiple debts.
- Debtor, unless agreed upon by the parties can decide which of several debts to extinguish. Extinguished if completely covered in payment.
Loss of the Thing Due
- Applicability: Only for specific, determinable things (determinate things).
- General Rule: Obligation is extinguished if the thing is lost due to a fortuitous event and without the debtor's fault.
- Exception: If debtor caused the loss.
Condonation or Remission of the Debt
- Definition: Creditor gratuitously forgives the debt.
- Requirements:
- Rules on donations must be followed
- Value exceeding P5,000 requires a written document
- Involves immovable property, needs a public document
- Cannot harm the rights of compulsory heirs.
Confusion or Merger of Rights
- Definition: Roles of creditor and debtor merge in one person; obligation is extinguished.
- Example: A father lends money to a child. After father dies, child inherits the loan; roles merge, extinguishing the debt.
Compensation
- Definition: When two parties owe each other, their obligations may cancel out, either partially or fully.
- Kinds of Compensation:
- Legal Compensation: Automatically arises by operation of law.
- Voluntary/Conventional Compensation: Requires agreement between the parties.
- Judicial Compensation: Ordered by the court.
Novation
- Definition: Substitution of a new obligation for an existing one, extinguishing the original.
- Types of Novation include:
- Real or Objective Novation: Changes the object or conditions of the obligation.
- Personal or Subjective Novation: The person of the debtor or creditor is changed.
Genus Never Perishes
- If the obligation involves generic items, the obligation is not extinguished since these items are replaceable.
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Description
This quiz covers key concepts related to the extinguishment of obligations, including payment or performance and special forms of payment. Test your understanding of essential requirements and exceptions for valid payments, as well as other methods such as dación en pago and payment by cession. It is ideal for students studying law or finance.
