Obligations and Contracts Quiz

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.