Legal Compensation and Assignment

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Questions and Answers

What is the crucial time for setting up compensation as a defense?

The time of the payment

The time of the debt maturation

The time of the knowledge of the assignment (correct)

The time of the assignment

Who is responsible for paying expenses incurred in compensation?

The creditor

The debtor

The assignor

Whoever claims compensation (correct)

In which of the following situations can legal compensation not take place?

When one of the debts arises from a sale

When one of the debts arises from a depositum (correct)

When one of the debts arises from a gift

When one debt arises from a loan

What happens to debts that are susceptible to compensation when a person has several debts?

The rules on the application of payments apply to the order of the compensation Signup and view all the answers

When does compensation take effect and extinguish both debts?

When all the requisites mentioned in article 1279 are present Signup and view all the answers

What is the exception to compensation when one of the debts arises from civil liability?

If the offended party agrees to compensation Signup and view all the answers

What is a condition for compensation between two debts?

Both debts consist of a sum of money or consumable things of the same kind and quality Signup and view all the answers

What is the benefit of compensation to guarantors?

It extinguishes the accessory obligation Signup and view all the answers

When can total compensation occur?

When both debts are of the same amount Signup and view all the answers

What is judicial compensation also known as?

Set-off Signup and view all the answers

What is the term for the non-fulfillment of an obligation on time?

Mora Signup and view all the answers

What happens when one or both debts are rescissible or voidable?

They can be compensated against each other before they are judicially rescinded or avoided Signup and view all the answers

What is the effect on compensation when an assignment is made with the consent of the debtor?

Compensation cannot be set up Signup and view all the answers

Which type of negligence is also known as tort or quasi-delict?

Civil negligence Signup and view all the answers

What happens when both parties are mutually negligent?

The fault of one party cancels or neutralizes the negligence of the other Signup and view all the answers

What is the term for the responsibility arising from negligence?

Culpa Signup and view all the answers

What is the purpose of the discretion of the court to fix the amount of damages?

To justify the circumstances Signup and view all the answers

What happens when a waiver of an action for future fraud is made?

The waiver is void Signup and view all the answers

Study Notes

Compensation

Compensation can be set up as a defense for debts maturing prior to debtor's knowledge of the assignment.
Debtor must pay for expenses incurred, such as exchange or transportation, when claiming compensation.

Instances Where Compensation Cannot Take Place

When one debt arises from a depositum (a loan creating a debtor-creditor relationship).
When one debt arises from commodatum (a gratuitous contract for lending non-consumable items).
When one debt arises from a claim of support due by gratuitous title.
When one debt consists of civil liability arising from a penal offense, unless the offended party agrees to compensation.

Requisites of Compensation

Parties are principal debtors and creditors of each other.
Both debts consist of a sum of money or consumable things of the same kind and quality.
Two debts are due or demandable.
Two debts are liquidated (already determined or ascertained).
No retention or controversy has been commenced by a third person.

Effects of Compensation

Compensation benefits guarantors by extinguishing the accessory obligation.
Compensation can be total or partial, depending on the amount of the debts.
Parties may agree upon compensation of debts not yet due (voluntary compensation).

Judicial Compensation

If one party has a claim for damages, payment for damages can lessen that party's debt to the other.

Effect of Assignment on Compensation

If the assignment is made with the consent of the debtor, compensation cannot be set up.
If the assignment is made with the knowledge but without the consent of the debtor, compensation can be set up regarding debts previous to the assignment.

Negligence and Fortuitous Events

Negligence can be contractual, civil, or criminal.
Fault or culpa can lead to damages or cancellation of obligations.
Fortuitous events can be ordinary (foreseeable) or extraordinary (unforeseeable).