Law on Obligations and Contracts Reviewer

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Questions and Answers

What is the outcome when there is a solidary obligation?

  • Each debtor is only liable for a proportionate part of the debt.
  • Each creditor is entitled to demand the entire obligation from any of the debtors. (correct)
  • Each debtor is liable for the entire obligation.
  • Each creditor is only entitled to demand a proportionate part of the obligation.

What is the characteristic of an industrial fruit?

  • It is a result of the juridical relation of parties.
  • It is a spontaneous product of the soil.
  • It is derived from human intervention, cultivation, or labor. (correct)
  • It is a natural product of animals.

What is the result of omission of diligence required by the nature of the obligation?

  • Negligence consists in the omission of that diligence. (correct)
  • Negligence consists in the performance of that diligence.
  • Negligence consists in the partial omission of that diligence.
  • Negligence consists in the excess of that diligence.

What is the characteristic of a civil fruit?

<p>It is a result of the juridical relation of parties. (C)</p> Signup and view all the answers

What is an accession?

<p>An addition or improvement upon a thing. (B)</p> Signup and view all the answers

What is the degree of care required in an obligation?

<p>That required by law and the nature of the obligation. (B)</p> Signup and view all the answers

What is the characteristic of a joint obligation?

<p>Each debtor is liable only for a proportionate part of the debt. (C)</p> Signup and view all the answers

What is the term for the thing delivered in an obligation?

<p>Thing. (A)</p> Signup and view all the answers

What is the nature of obligations derived from law?

<p>They are not presumed. (A)</p> Signup and view all the answers

What is a contract in the context of obligations?

<p>A meeting of minds between two persons. (C)</p> Signup and view all the answers

What is the force of obligations arising from contracts?

<p>They have the force of law. (A)</p> Signup and view all the answers

How should obligations arising from contracts be complied with?

<p>In good faith. (A)</p> Signup and view all the answers

What is the basis of obligations derived from law?

<p>The provisions of both the Civil Code and special laws. (B)</p> Signup and view all the answers

What is the relationship between contracting parties in a contract?

<p>One of equality and mutual respect. (C)</p> Signup and view all the answers

What is the nature of laws in the context of obligations?

<p>They are fixed and unchangeable. (D)</p> Signup and view all the answers

What is the relationship between the Civil Code and special laws in the context of obligations?

<p>The Civil Code complements special laws. (D)</p> Signup and view all the answers

What type of mistake does NOT vitiate consent?

<p>Mistake or error as to motive (D)</p> Signup and view all the answers

What is the effect of a contract without a cause or with an unlawful cause?

<p>It becomes void (C)</p> Signup and view all the answers

What type of mistake gives rise to correction only?

<p>A simple mistake of account (B)</p> Signup and view all the answers

What is the effect of stating a false cause in a contract?

<p>It makes the contract void (B)</p> Signup and view all the answers

What is another term for 'onerous' in the context of contracts?

<p>Prestation (B)</p> Signup and view all the answers

What is the presumption when the cause is not stated in the contract?

<p>It is presumed to be true and lawful (C)</p> Signup and view all the answers

What is the exception to the rule that inadequacy of the price does not affect the contract?

<p>When expressly provided by law (D)</p> Signup and view all the answers

What is the term for the use of serious or irresistible force to wrest consent?

<p>Violence (D)</p> Signup and view all the answers

What is the primary purpose of granting scholarships?

<p>To reward merit or help gifted students in whom society has an interest (A)</p> Signup and view all the answers

What is the remedy by which a written instrument is made or construed to express the true intention of the parties?

<p>Reformation of instruments (A)</p> Signup and view all the answers

What is the minimum number of requisites required for the reformation of instruments?

<p>3 (B)</p> Signup and view all the answers

What is presumed by the law when an insurer approves an insurance application?

<p>The insurer considered the personal qualification of the insured (C)</p> Signup and view all the answers

What is the consequence of a contract having an interest rate of 50%?

<p>It is void and reduced for being contrary to morals (C)</p> Signup and view all the answers

What is NOT a ground for the cancellation of a non-life policy?

<p>The insured's change of occupation (C)</p> Signup and view all the answers

What is the right protected by the constitution in the case of Saura vs. Sindico?

<p>The right to be elected in public office (D)</p> Signup and view all the answers

What is the result of disparity in a written instrument?

<p>The instrument can be reformed to reflect the true intention of the parties (A)</p> Signup and view all the answers

What is a characteristic of a contract of insurance?

<p>It can have any terms and conditions agreed upon by the parties (D)</p> Signup and view all the answers

What is the principle behind the granting of scholarships according to the case of Cui vs. Arellano?

<p>To reward merit or help gifted students in whom society has an interest (A)</p> Signup and view all the answers

What can an insured NOT do without the insurer's consent?

<p>Assign rights under a property policy (A)</p> Signup and view all the answers

What is the consequence of prohibiting a losing candidate in a convention from running as an independent candidate?

<p>It is a violation of the right to be elected in public office (B)</p> Signup and view all the answers

What is a result of a physical change in the property insured?

<p>The property becomes uninsurable (B)</p> Signup and view all the answers

What is a consequence of a willful or reckless act or omission?

<p>The risk insured against is increased (C)</p> Signup and view all the answers

What is a consequence of a conviction of a crime arising out of acts increasing the hazard insured against?

<p>The policy is cancelled (B)</p> Signup and view all the answers

What type of contract is a contract of insurance?

<p>Synallagmatic (D)</p> Signup and view all the answers

Flashcards

Source of Obligations (Law)

Obligations arise from laws explicitly stated in codes or special laws.

Contract Obligation

An agreement with the force of law between parties, obligating them to specific actions.

Solidary Obligation

Each debtor/creditor is fully responsible /entitled to the entire obligation, not just a portion.

Joint Obligation

Each party is only responsible for a portion of the debt.

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Natural Fruits

Spontaneous products of the land or animals.

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Industrial Fruits

Fruits resulting from human effort (cultivation, labor).

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Civil Fruits

Fruits resulting from legal relationships.

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Cause of Obligation

The reason why a party assumes an obligation in a contract.

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Onerous Cause

Each party gives something for something.

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Gratuitous Cause

A contract based on generosity.

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Remuneratory Cause

A contract in recognition for a past service/benefit.

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Unlawful Cause

Invalid contract (no legal reason for agreement).

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False Cause

A false reason for a contract (can be invalid).

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Reformation of Instruments

Correcting a written agreement to reflect the true intention of the parties.

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Requirements for Reformation

Meeting of the minds, written agreement reflecting a different intention.

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Mistake in an agreement

Does not invalidate consent in most cases

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Insurance Contract Cancellation

Reasons for terminating a policy (e.g., non-payment, fraud).

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Study Notes

Sources of Obligations

  • Obligations derived from law are not presumed, only those expressly determined in the Code or special laws are demandable.
  • Law is the primary source of obligations.

Contracts

  • A contract is a meeting of minds between two persons, whereby one binds himself to give something or to render some service.
  • Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.

Rights and Obligations of Multiple Parties

  • Solidary obligation: each debtor/creditor is liable/entitled to demand for the entire obligation.
  • Joint obligation: each of the debtors is liable only for a proportionate part of the debt or each.

Kinds of Fruits

  • Natural fruits: spontaneous product of the soil, young and other products of animals.
  • Industrial fruits: those derived from human intervention, cultivation, or labor.
  • Civil fruits: those derived from the juridical relation of parties.

Remedies for Breach of Obligations

  • Cause: the essential or impelling reason why a party assumes an obligation.
  • Onerous cause: for each contracting party, the prestation or promise of a thing or service by the other.
  • Gratuitous cause: mere liberality of the benefactor.
  • Remuneratory cause: service or benefit already rendered.

Rules on Cause

  • Contracts without cause, or with unlawful cause, produce no effect whatever.
  • The statement of a false cause in contracts shall render them void, if it should not be proved that they were founded upon another cause which is true and lawful.

Mistake and Violence

  • Mistake does not vitiate consent, except:
    • Mistake as to the object of the contract.
    • Mistake as to the conditions which have principally moved one or both parties to enter into the contract.
    • Mistake as to the identity or qualifications of one of the parties when such identity or qualifications have been the principal cause of the contract.

Reformation of Instruments

  • Reformation: is the remedy by means of which a written instrument is made or construed to express or conform to the true intention of the parties when some error or mistake has been committed.
  • Requisites: meeting of the minds, written instrument, and the written instrument does not reflect the true intention of the parties.

Mutuality

  • Rescission/Cancellation of insurance contracts:
    • Grounds for cancellation: non-payment of premium, fraud or material misrepresentation, physical changes in the property insured, conviction of a crime, willful or reckless acts, and determination by the Insurance Commissioner that the policy would violate the Insurance Code.

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