Obligations and Contracts Law Quiz

Burden of Proof

• The debtor must prove that payment has been made
• The debtor is not responsible for damages if the loss is due to fortuitous events
• If the obligation involves generic things and they are lost, the obligation is not extinguished

Loss of the Thing Due

• Debtor must deliver a thing of the same kind to fulfill their obligation
• Condonation is the voluntary relinquishment of the creditor’s right to collect debt

Condonation or Remission of Debt

• Condonation must be accepted by the debtor
• It can be either express or implied
• It is gratuitous and not inofficious (meaning it doesn’t benefit one party excessively over the other)

Confusion

• The obligation is extinguished when a creditor inherits a debt from a debtor (merging of debtor-creditor roles)

Compensation

• The extinguishment of mutual debts between two parties
• Operates automatically by law when all conditions are met

Conditions for Legal Compensation

• Debts need to be due, liquidated, and of the same kind or amount
• Debts payable at different locations can be compensated, but transportation costs must be paid
• Total compensation occurs when debts are of equal amounts

Total vs. Partial Compensation

• Partial compensation occurs when debts are unequal, extinguishing them to the extent of the smaller debt

Determining Divisibility

• The primary factor is the purpose of the obligation and the intention of the parties
• An object can be physically divisible but deemed indivisible by law or agreement
• Legal provisions may declare certain obligations indivisible regardless of their nature

Examples of Divisibility

• A contractor’s obligation to build a house in stages is divisible because it allows for partial completion
• A debt paid in monthly installments is divisible, but each installment is indivisible as it must be paid in full at each due date
• Obligations to perform work over a set number of days are generally divisible

Types of Divisible Obligations

• Qualitative Division: Based on the quality of the items rather than quantity (Example: Dividing an inheritance into specific items)
• Quantitative Division: Based on the quantity of items (Example: Splitting a harvest of rice into equal portions)
• Ideal Division: Exists only in the minds of the parties (Example: Co-ownership of a property where specific portions are not physically divided)

Types of Indivisible Obligations

• Obligations declared indivisible by law, even if they are naturally divisible
• The nature of the obligation dictates whether is divisible or indivisible
• Determining divisibility in negative obligations requires evaluation on a case-by-case basis

Obligations with a Penal Clause

• Principal Obligations: Can stand alone and don't depend on another obligation
• Accessory Obligations: Attached to a principal obligation and cannot exist independently

Obligations with a Penal Clause

• Penal Clause: An accessory undertaking to pay a stipulated indemnity in case of breach
• Nature of Penal Clause: An accessory undertaking that increases the obligor's liability in case of breach
• Definition and Purpose: Intended to deter breaches and ensure compliance with the obligation

Types of Penal Clauses

• Legal Penal Clauses: Mandated by law
• Conventional Penal Clauses: Established by agreement of the parties

Enforcement of Penal Clauses

• The penalty substitutes for damages and interests in case of non-compliance

General Rules

• Proof of actual damages is not necessary to enforce the penalty

Joint and Solidary Obligations

• Obligations can involve one or multiple parties (creditors and debtors)
• The nature of the obligation determines if it is joint or solidary
• Solidarity: Collective responsibility among debtors or creditors

Types of Obligations

• Individual Obligation: Involves one obligor and one obligee
• Collective Obligation: Involves multiple debtors and/or creditors, which can be either joint or solidary

Joint vs. Solidary Obligations

• Joint Obligations: Each debtor is responsible for a proportionate part
• Solidary Obligations: Each debtor is liable for the entire obligation

Presumptions in Obligations

• Presumption of Joint Obligations: Obligations involving multiple parties are presumed to be joint unless stated otherwise
• Challenging the Presumption: The presumption can be challenged if the contract or law explicitly states solidarity

Test your understanding of key concepts in obligations and contracts law, including the burden of proof, loss of the thing due, and methods of extinguishing debts such as condonation and compensation. This quiz covers essential principles that dictate debtor and creditor relationships.