Obligations and Contracts: Key Concepts

• These notes cover multiple-choice questions related to Obligations and Contracts.

Elements of an Obligation

• The efficient cause of an obligation, also known as the juridical tie or vinculum juris, binds the parties together.

Types of Obligations

• Real obligations involve the duty to deliver or safekeep property, such as giving a grand piano.
• Obligations are juridical necessities to give, to do, or not to do.
• Civil obligations are enforceable through judicial processes.
• Performance of natural obligations depends on the debtor's will.
• A negative obligation involves refraining from an action, like not selling a horse.
• Bilateral obligations are reciprocal, such as those in a contract of sale.

Sources of Obligation

• Obligations arise from law, contracts, quasi-contracts, delicts, and quasi-delicts, but not from quasi-law.
• Obligations derived from law are not presumed.
• Contractual obligations have the force of law between the contracting parties.

Quasi-Contracts

• Negotiorum gestio arises from the voluntary management of another's property without their knowledge or consent.

Quasi-Delicts

• In quasi-delict, no pre-existing contractual relationship exists between the parties.
• Every person criminally liable is also civilly liable.

Obligations to Give

• In obligations to deliver a specific thing, the debtor cannot substitute it without the creditor's consent.
• The debtor isn't liable for loss due to fortuitous event if the obligation is to deliver a generic thing.
• The debtor must take care of a specific thing with the diligence of a good father of a family.
• Accessions refer to everything produced by a thing or incorporated/attached to it, excluding fruits.
• In obligations to give a specific thing, there's a duty to deliver fruits from the time the obligation to deliver arises.
• Substitute performance is available to a creditor in an obligation to give a generic thing.
• Generally, the debtor in an obligation to deliver a generic thing does not have the duty to take care of the thing with the diligence of a good father of a family.

Performance of Obligations

• If an obligation is substantially performed in good faith, the obligor can recover as if there had been complete fulfillment, less damages suffered by the obligee.

Delay

• As a general rule, demand, whether judicial or extrajudicial, is required to put the debtor in delay.
• Mora accipiendi is delay on the part of the creditor.
• When time is of the essence, demand isn't necessary to put the debtor in delay.

Fraud

• Any waiver for an action for future fraud is void.
• A waiver of past fraud is valid if agreed upon by both parties.
• Dolo causante (causal fraud) exists during the perfection of the obligation and makes the contract voidable.

Negligence

• Parties can stipulate a lower degree of diligence than that of a good father of a family.
• Future gross negligence cannot be waived.

Conditional Obligations

• If a party pays before the fulfillment of a suspensive condition, they can recover the payment if the condition isn't met.
• A suspensive condition is deemed fulfilled if the obligor voluntarily prevents its fulfillment.
• If an event will happen at a determinate time, the obligation becomes effective once that time elapses.
• Mixed conditions depend partly on the will of one of the parties and partly on chance or the will of a third person.
• If land improves by nature or time during a suspensive condition, the improvement benefits the creditor.
• If a suspensive condition is impossible, the obligation is void.
• An obligation to give something when a friend dies is a valid obligation subject to a suspensive period.

Obligations with a Period

• An obligation where the debtor binds themselves to pay when their means permit is subject to a suspensive period.
• A debtor loses the benefit of the period if they violate any undertaking that led the creditor to agree to the period.

Alternative and Facultative Obligations

• In an alternative obligation, only one of several prestations is due.
• In a facultative obligation, only one prestation is due, but a substitute may be rendered.
• The choice generally belongs to the debtor in an alternative obligation
• The choice generally belongs to the debtor in a facultative obligation.

Joint and Solidary Obligations

• In a joint obligation, each creditor can only collect their proportionate share of the debt.

Payment and Novation

• Acceptance of a different prestation can extinguish the obligation through novation.
• If a debt produces interest, payment of the principal is given priority, unless stipulated otherwise.
• If no place for payment is stipulated, it should be made at the debtor's residence.
• Payment to a third person is valid only if it benefits the creditor, and the burden of proof lies with the debtor.

Application of Payments

• To apply payments, there must be multiple debts owed to the same creditor by the same debtor, but not all debts need to be due.
• If multiple debts exist, the debtor has the right to specify which debt the payment applies to.

Condonation and Confusion

• Condonation (forgiveness of debt) can be express or implied from the parties' conduct.
• Merger or confusion of rights in one person extinguishes the obligation.

Subrogation

• Conventional subrogation is by agreement of the parties.
• Legal subrogation can occur without the debtor's knowledge, especially when a preferred creditor is paid by a less preferred one.