Contracts Quiz: Dolo Causante and Obligations

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Questions and Answers

What type of clause is present in the contract between Carlos Bernardo and CM Wine Company?

Damages clause

Penal clause (correct)

Joint liability clause

Indemnity clause

Who can Mr. Carlos Bernardo hold liable when filing a case in court according to the legal opinion?

Both Chona Romulo and Manny Santiago (correct)

Only Manny Santiago

Neither Chona Romulo nor Manny Santiago

Only Chona Romulo

What is the purpose of a penal clause in an obligation?

To reduce the burden on the obligor

To require proof of damages suffered

To increase damages incurred

To substitute indemnity for damages (correct)

What accessory obligation does a penal clause impose?

Added burdens on the obligor Signup and view all the answers

Under joint and several liability, what does it mean for Chona Romulo and Manny Santiago to be liable?

Either can be held fully liable for the damages Signup and view all the answers

How does a contract with a penal clause impact the burden of proof in case of breach?

It eliminates the need for proof of damages suffered Signup and view all the answers

Which term is used for any act or omission causing damage to another without the existence of a preexisting contractual relation?

Quasi-delict Signup and view all the answers

In the sources of liability for damages under Article 1170 of the Civil Code, who are responsible for damages?

All of the above Signup and view all the answers

What is the key characteristic of Dolo Causante or Causal Fraud?

Employment of fraud to get consent Signup and view all the answers

What type of diligence corresponds with the circumstances of persons, time, and place?

Ordinary Diligence Signup and view all the answers

What condition must be met before holding a debtor liable for delay in fulfilling obligations?

Creditor makes an extrajudicial demand Signup and view all the answers

Within the sources of liability for damages in obligations, what must a party do to be considered guilty of fraud?

Intent to deceive and cause harm Signup and view all the answers

In solidary obligations, how are the debtors and creditors characterized?

Several debtors or creditors with the right to demand and duty to perform entirely Signup and view all the answers

What does a joint obligation refer to?

An obligation where there must be multiple creditors and multiple debtors Signup and view all the answers

What does the term 'joint and several' signify in contracts?

The obligee can hold one or all parties liable together Signup and view all the answers

When does a situation of joint and several liability arise?

In obligations where there are multiple debtors or creditors Signup and view all the answers

What defines an obligation with a period?

The consequences are subject to a specific expiration period Signup and view all the answers

How is a joint obligation different from a solidary obligation?

In a joint obligation, each party must fulfill the entire obligation individually Signup and view all the answers

Study Notes

Obligations with a Period

An obligation with a period is one where the consequences are subject to the expiration of a specific term or period.
Example: Carol promises to pay P1,000 if Darren remains an outstanding employee for the month of May.

Joint Obligations

Joint obligations are those where multiple creditors and debtors concur, but there is no right to demand nor a duty to render entire compliance of the entire obligation.
Example: Alfredo promises to pay Britney P5,000 on or before December 30, 2023, as part of the staff incentive program.

Solidary Obligations

Solidary obligations are those where multiple debtors or creditors concur, and each creditor has the right to demand, and each debtor is bound to perform the entire obligation.
Example: The term "joint and several" used in contracts is applied to the object of the obligation, allowing the obligee to hold one or all liable together.
However, this situation arises only when the obligation expressly so states or when the law or nature of the obligation requires solidarity.

Case: Quasi-Delict

Quasi-delict (also called culpa aquiliana) is an act or omission that causes damage to another, involving fault or negligence, and no preexisting contractual relation between the parties.

Sources of Liability for Damages

Article 1170 of the Civil Code: Those who perform their obligations with fraud, negligence, or delay, and those who contravene the tenor of the obligation are liable for damages.
Sources of liability include:
- Fraud (with intent to evade the normal fulfillment of the obligation and cause damage)
- Negligence (omission of required diligence)
- Delay (Mora, after the creditor has made a demand)

Types of Fraud

Dolo Causante or Causal Fraud: employment of fraud to get consent
Dolo Incidente or Incidental Fraud: fraud incident to the performance of an obligation

Types of Diligence

Ordinary Diligence or the Diligence of a Good Father of a Family
Extra Ordinary Diligence

Delay (Mora)

The debtor can be held liable for delay or default in the fulfillment of their obligation only after the creditor has made a demand, judicial or extrajudicial, on the debtor, except when the law expressly provides that demand is not necessary.

Case: Carlos Bernardo vs. CM Wine Company

Legal Opinion: In this situation, Mr. Carlos Bernardo may at his option hold either Chona Romulo or Manny Santiago, or both liable when filing a case in court for damages incurred.

Obligation with a Penal Clause

An obligation with a penal clause is one that contains an accessory obligation imposing added burdens or operates as a previously stipulated indemnity to secure the performance of the principal obligation.
It substitutes the indemnity for damages and eliminates the need for proof of damages suffered in case of breach of the obligation.

Modes of Extinguishing Obligations

Article 1231 of the Civil Code: Obligations can be extinguished through various means, such as payment, novation, and remission.

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Test your knowledge on obligations and contracts. Learn about different types of obligations such as with period and joint obligations.

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