Legal Aspects (Chap 1&2) PDF

CHAPTER I INTRODUCTION TO TOURISM LAWS Law - is defined as a rule of conduct, just and obligatory promulgated by legitimate authority and of common observance and benefits. Rule of Conduct o If there is no law in the society, there will be chaos or d...

CHAPTER I INTRODUCTION TO TOURISM LAWS Law - is defined as a rule of conduct, just and obligatory promulgated by legitimate authority and of common observance and benefits. Rule of Conduct o If there is no law in the society, there will be chaos or disorder Just and Obligatory o Law must be applied to people "similarly situated." o Applied to people commensurate to the wrongful act committed by a person. o Obligatory because of the penalty or legal consequence it provides Promulgated by Legitimate Authority o The person who creates the law must have the power or authority to do so. o Congress of the Philippines Common Observance and Benefits o For the welfare of the people o No law, therefore, shall be passed putting the life, liberty or property of the people in danger. o Latin maxim - Salus Populi est Suprema Lex Three Branches of the Government in the Philippines a. Executive Branch o Power to execute, enforce, or implement the law. o This power is vested to the President of the Philippines. b. Legislative Branch o The power to make, revise, repeal, or amend the law. o This power is vested to the Congress of the Philippines which is composed of the Senate and House of Representatives; except to the extent reserved to the people by the provision on initiative and referendum. c. Judicial Branch (Judiciary) o The power to interpret the law o Is not only a power but also the duty of the courts of justice o Different Courts in the Philippines - Municipal Trial Court - Regional Trial Court - Court of Appeals - Sandiganbayan - Court of Tax Appeals - Supreme Court – The highest court with 15 Justices (Chief Justice & 14 Associate Justices) Each branch has its own functions and powers; thus, the function of one cannot be exercised or performed by the other branch. Otherwise, there will be encroachment to or invasion of power. When this happens, oppression may exist. Inherent Powers of the State 1. Eminent Domain - Power of the government to take private property for public purpose or public use provided that the government will pay just compensation 2. Police Power - Power of the government to enact laws in relation to persons and property, provided that they are not contrary to the Constitution - Police power does not pertain to the power of the Philippine National Police - For regulation 3. Taxation Power - Power vested in the legislature - Impose burdens or charges upon persons and property for the purpose of raising revenue for public purpose CHAPTER II CONSTITUTIONAL PROVISIONS RELATIVE TO ACCOMODATION AND TOURISM ESTABLISHMENTS Constitution Basic and Highest Law Must ever remain supreme Supreme Law 1987 Constitution (Our Current Constitution) o Approved on February 2, 1987 o Contains 18 articles Written in every statute and contract If a law or contract violates any norm of the constitution, that law or contract, whether promulgated by the legislative or by the executive branch or entered into by private persons for private purposes, is null and void (not valid) and without any force and effect. ARTICLE III - BILL OF RIGHTS Bill of Rights relationship between the individual and the state is not meant to be invoked against acts of private individuals limitation on the powers of the government is to protect the people against arbitrary and discriminatory use of political power preservation of our natural rights which include personal liberty and security Article 3, Section 1. No person shall be deprived of his life, liberty, or property without due process of law, nor, shall any person be denied the equal protection of the laws. There are two rights that are guaranteed by the above provision, namely: 1. The Right to Due Process; and 2. The Right to Equal Protection of the Law. Two Kinds of Person in Law 1. Natural Person (Example: human being) 2. Juridical Person/Artificial being (Example: corporations such as Lyceum of the Philippines Inc., San Miguel Corporation, etc.) "Person" may refer either to natural person or juridical person. "No natural person or juridical person shall be deprived of life, liberty, or property without due process of law nor shall any natural or juridical person be denied the equal protection of the law." Concept of Due Process of Law in its Procedural Aspect Due process of law means a law that hears before it condemns. Cleary, to say that due process is observed - 1. There must be notice, and 2. There must be hearing or the opportunity to be heard before judgment is rendered. Absence of any of the foregoing requirements there will be no due process If there is no due process, the government cannot take away the life, liberty, or property of any person Three Areas Protected by Section 1 1. Life Life of Natural and Juridical Persons is Protected by the Bill of Rights Government cannot take away the life of the person without due process. 2. Liberty Does not mean to do everything that he/she wants to do Liberty is freedom to do right and never wrong it is ever guided by reason and the upright and honorable conscience of the individual Does not only refer to physical freedom It may also include o Rights of the citizens to use his faculties in all lawful ways  o To live and work where he wills o To earn his livelihood by any lawful calling o To pursue any vocation. 3. Property May refer to personal or real, immovable or movable objects which can be taken or disposed o Land o Buildings o Cars o Jewelry Parcel of property owned by anyone cannot be taken by the government without due process Employment is considered as a property o August 26, 1999 o Supreme Court o Employment is not merely a contractual relationship; it has assumed the nature of property right One's employment, profession, trade or calling is a property right within the protection of the Constitutional guaranty of due process of law Equal Protection Clause second sentence of Article 3 section 1 means people of the same class shall be treated alike, under like circumstances and conditions both as to the privileges conferred and liabilities enforced does not mean absolute equality, for otherwise there would be injustice. Article 3, Section 3 (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the court, or when public safety or order requires otherwise, as prescribed by law. (2) Any evidence obtained in violation of this or the preceding section shall be inadmissible for any purpose in any proceeding. Essence of Right to Privacy the right to be let alone protected by many provisions in the Constitution o Article 3 Section 2 on warrant of arrest and search warrant: o Article 3 Section 6 on the right to travel o Articles 3 Section 8 on the right to form union or organization Article 26 - Every person shall respect the dignity, personality, privacy, and peace of mind of his neighbors and other person anyone who is meddling and prying into the privacy of another may be held liable Expectation of Privacy individual cannot simply invoke the right to privacy must prove that he/she really has privacy in the first place if one performs an act in public place, there is no privacy to speak of; therefore the right to privacy cannot be invoked The Privacy of Communication or Correspondence Article 3 Section 3 guarantees the right to privacy of communication communication given in confidence or privately to the other cannot be intercepted or intruded by the government or any of its agencies Correspondence or communication made in writing is treated with confidentiality. (Letters cannot be taken by gov’t or any of its agents) If there is a court order such as search warrant then it can be taken and inquired into by the police officer Exceptions to the Right to Privacy right to privacy is considered a fundamental right protected from intrusion or constraint right to privacy is not absolute Article 3 section 3 provides that if there is lawful order of the court or when public safety or order requires otherwise, then, the right to privacy of communication and correspondence may be impaired or diminished. Doctrine of the Fruit of the Poisonous Tree second paragraph of Article 3, section 3 evidence obtained illegally cannot be used as evidence therefore is considered to be inadmissible in any proceedings RA 4200, Anti-Wiretapping Law it shall be unlawful for any person, not being authorized by all the parties to any private communication or spoken word, to tap any wire or cable, or by using any other device or arrangement, to secretly overhear, intercept, or record such communication or spoken word by using a device commonly known as a Dictaphone or dictograph or walkie-talkie or tape recorder. private citizens or government officials or employees may be sued for the violation of this law. Exceptions to the Anti-Wiretapping Law there must be a prior written order of the court and the felony or crimes are any of the following only:  1. Treason 2. Espionage 3. Provoking war 4. Disloyalty in case of war 5. Piracy, mutiny in the high seas 6. Rebellion 7. Conspiracy and proposal to commit rebellion 8. Inciting to rebellion 9. Sedition 10. Conspiracy to commit sedition 11. Inciting to sedition 12. Kidnapping All other crimes or felony such as rape, murder, violation of the Dangerous Drugs Act, homicide and others cannot be wiretapped. Wiretapping is allowed under Anti-Terrorism Act of 2020 July 3, 2020, President Duterte signed into law Republic Act 11479 or the Anti-Terrorism Act of 2020. Allows the law enforcement agent or military personnel upon written order of the Court of Appeals to secretly wiretap, overhear, and listen to private communications between members of a judicially declared and outlawed terrorist organization or any person charged with or suspected of committing terrorism act RA 9995 Anti-Photo and Video Voyeurism Act of 2009 Prohibited Acts Under this law, it shall be unlawful for any person: 1. To take photo or video coverage of a person or group of persons performing sexual act 2. To copy or reproduce, such photo or video or recording of sexual act or any similar activity with or without consideration; 3. To sell or distribute, such photo or video or recording of sexual act, whether it be the original copy or reproduction thereof; or 4. To publish or broadcast, the photo or video coverage or recordings of such sexual act or any similar activity through VCD/DVD, internet, cellular phones and other similar means or device. Republic Act No. 10173, the Data Privacy Act of 2012 ensures that personal information in information and communications systems in the government and in the private sector are secured and protected. applies to individual or juridical entity that processes or gathers personal information.  paves the way for a sustainable free flow of information where consumers feel safe to give out their personal data, and government and businesses are accountable for the responsible use of the information they collect Rights of Data Subject or an Individual whose Personal Information is Processed The data subject is entitled to: 1. Be informed whether personal information pertaining to him or her shall be, are being or have been processed; 2. The right to object to the collection of data; 3. The right to access personal data; 4. The right to rectification. The data subject has the right to dispute the inaccuracy or error in the personal data and have the personal information controller correct it immediately and according 5. The right to erasure or blocking. The data subject shall have the right to suspend, withdraw or order the blocking, removal or destruction of his or her personal data from the personal information controller's filing system. Prohibited Acts 1. Unauthorized processing of personal information and sensitive personal information. 2. Accessing personal information and sensitive personal information due to negligence. 3. Improper disposal of personal information and sensitive personal information. 4. Processing of personal information and sensitive personal information for unauthorized purposes. 5. Unauthorized access or intentional breach. 6. Malicious disclosure. Any personal information controller or personal information processor, or any of its officials, employees or agents, who, with malice or in bad faith, discloses unwarranted or false information relative to any personal information or sensitive personal information obtained by him or her. 7. Unauthorized disclosure Violations of the Data Privacy Act can result in imprisonment of up to six years or a fine of up to P5 million. Personal information and Sensitive information Personal information refers to any information whether recorded in a material form or not, from which the identity of an individual is apparent or can be reasonably and directly ascertained by the entity holding the information, or when put together with other information would directly and certainly identify an individual. Example of personal information are: o Full names, home addresses, telephone numbers, email addresses and bank account details. Sensitive information on the other hand refers to personal information: o (1) About an individual's race, ethnic origin, marital status, age, color, and religious, philosophical or political affiliations: o (2) About an individual's health, education, genetic or sexual life of a person, or to any proceeding for any offense committed or alleged to have been committed by such person, the disposal I of such proceedings, any court in such proceedings; or the sentence of  o (3) Issued by government agencies peculiar to an individual which includes, but not limited to, social security numbers, previous or current health records, licenses or its denials, suspension or revocation, and tax returns; both personal and sensitive information cannot be processed or collected unless o there is a consent form the data subject or the person whose personal information is processed and o the processing of the information is provided for by exiting laws and regulations. To report Data Privacy Violations – Data Privacy Commission Group Article 3, Section 6. The liberty of abode and of changing the same within the limits prescribed by law shall not be impaired except upon lawful order of the court. Neither shall the right to travel be impaired except in the interest of national security, public safety, or public health, as may be provided by law. The said provision protects two rights, namely: 1. The Liberty of Abode (Home/residence); and 2. The Right to Travel Liberty of Abode The Constitution guarantees the right of the person to establish his own residence or home. In the same manner, any person can also change his residence or dwelling from one place to another. Exception to the Liberty of Abode However, the Right to Abode must be within the limits prescribed by law, meaning, if there is a law that disallows any structure in a certain place because of good reason such as public safety then this right may be impaired. The Right to Travel Travelling from one place to another is also a guaranteed right, However, there are cases wherein this right can be impaired or restricted by the government. Under the Bill of Rights, the right to travel can be impaired if any of the following circumstances are present, to wit: 1. Interest of National Security; 2. Public Safety; and 3. Public Health.  Article 3, Section 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. Right to Form Union of Employees in the Government Sector The right to self-organization is not denied to government employees. It is clear from the above provision that employees in the public sector have the right to form union. Provided, the purpose or objective of the union, association, or society formed should not be contrary to law. Right to Form Union in the Private Sector On the other hand, the right to form union in the private sector Is not only constitutional but also statutory. A company cannot prevent its employees to form a union nor shall terminate an employee simply because said employee formed a union. Managerial Employees are not Allowed to Join or Form Union It is worth noting however that managerial employees in the private sector are not eligible to join, assist or form any labor organization. This is clear under Article 255 (formerly article 245) of the Labor Code of the Philippines. Supervisory Employee's Right to Form Union On the other hand, supervisory employees may join, assist or form a separate union of their own but they are not eligible for membership in the collective bargaining unit of the rank-and-file employees. Employees in the Private Sector have the Right to Strike Strike means temporary stoppage of work through concerted action of employees as a result of a labor or industrial dispute. The right to strike is available to workers in the private sector provided that the strike must be in accordance with law. Employees in the Government Service Do not Enjoy the Right to Strike While employees in the government can form union, society or association, they do not have the right to strike. Employees in the civil service may not resort to strikes, walkouts and other temporary work stoppages, like workers in the private sector, to pressure the government to accede to their demands. The reason is that once this right is granted to them it will greatly affect the people or member of a community considering that the strike will paralyze government services they need.  ARTICLE XII NATIONAL ECONOMY AND PATRIMONY Section 10. The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos. In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. The State shall regulate and exercise authority over foreign Investments within its national jurisdiction and in accordance with its national goals and priorities. Filipino First Policy The second paragraph of the above provision orders the state to give preference to qualified Filipinos in the grant of right and privileges provided that the Filipino is qualified even if a foreigner is more qualified National Patrimony In its plain and ordinary meaning, the term "patrimony" pertains to heritage. When the Constitution speaks of national patrimony, it refers not only to the natural resources of the Philippines, as the Constitution could have very well used the term "natural resources," but also to the cultural heritage of the Filipinos. Manila Hotel is part of the National Patrimony Foreign Investments in the Philippines Under the Foreign Investment Act of 1991, foreign investment shall be encouraged in enterprises that significantly expand livelihood and employment opportunities for the Filipinos. As a general rule, there are no restrictions on extent of foreign ownership of export enterprises. In domestic market enterprises, foreigners can invest as much as one hundred percent (100%) equity except in areas included in the negative list. "Negative List" shall mean a list of areas of economic activity whose foreign ownership is limited to a maximum of forty percent (40%) of the equity capital of the enterprises engaged therein.  Examples: 1. Sauna and steam bathhouses, massage clinics and other like activities, except wellness center, foreign equity is allowed up to forty percent (40%); 2. All forms of gambling except those covered by investment agreements with PAGCOR. Investments that are Completely not Allowed to Foreigners There are investments in the Philippines where foreigners are not allowed to engage or invest with. Among them are: 1. Mass media except recording: 2. Practice of profession: 3. Operation of private detective, watchmen, security guard agencies; 4. Manufacture of fire crackers and other pyrotechnic devices 5. Cooperatives. Up to Thirty Percent (30%) Foreign Equity Foreigners may engage into advertising provided their equity is only 30%. Up to Twenty Five Percent (25%) Foreign Equity Foreigners may engage into the following investments provided their equity is only up to 25%. To wit: 1. Private recruitment, whether for local or overseas employment; 2. Contracts for the construction of defense-related structures. Local Government Code – Gave Life to LGUs Search Warrant – Property; Warrant of Arrest – Person Inherent – Automatic Reasonable Classification Test o Must rest on substantial distinctions o Germane to the purposes of the law o Not limited to existing conditions o Applied equally to all of the same class  CHAPTER III THE LAWS ON OBLIGATIONS AND CONTRACTS Applicable Provisions of the Law on Obligations and Contracts Article 1156. Obligation is a jurídical necessity, to give, to do, or not to do. The obligation referred to in the above article is a civil obligation, meaning, only those obligations which if not performed by one party, the other party may go to court to enforce the obligation or simply to hold such person to pay for damages. Therefore, not all obligations are enforceable before the courts. For example, it is the obligation of students to study hard but supposing they did not, can their parents sue their children for not studying? The answer is No, because that obligation is not a civil obligation. Civil obligations are those obligations that arise from any of the following sources: (SOURCES OF OBLIGATIONS) 1. Law Obligations arising from law Only obligations expressly determined by law are demandable 2. Contracts Under article 1305 is a meeting of the minds Some types of contracts o contract of sale o contract of loan o contract of public transportation or carriage Once the contract is perfected, the parties must comply their respective obligations otherwise its non-fulfilment or breach thereof shall give the injured party the right to file a civil case against the erring party. Contract is different from obligation. There can be obligation even without contract Contract is one source of obligation. There is no contract if there is no obligation All contracts have obligation. 3. Quasi-Contracts certain lawful, voluntary, and unilateral acts no one may be unjustly enriched This is not a contract because of the absence of meeting of the minds an obligation exists 4. Acts or omissions punishable by law (delicts) Under the Revised Penal Code of the Philippines any person criminally liable is also civilly liable Criminally Liable – Imprisonment (Punishment by Law) Civilly Liable – Compensation of Victim Intentional  5. Quasi-Delicts Culpa Aquiliana “Parang acts or omissions that cause damage to another negligence no pre-existing contractual relation Unintentional Requisites of Quasi-Delicts o (a) Damage suffered by the plaintiff (the injured party); o (b) Fault or negligence of defendant (the party at fault); and o (c) Connection of cause and effect between the fault or negligence of defendant and the damage incurred by the plaintiff. injured party is merely asking for damages Elements of Obligation 1. Passive subject is the person or party who has the duty to fulfil the obligation or the prestation Passive subject is sometimes called the obligor or debtor. 2. Active subject is the person who has the power to demand the fulfilment of the obligation he is sometimes called the creditor or obligee. 3. Prestation is the object of the obligation either to give, to do, or not to do 4. Juridical Tie is the vinculum (pl. vincula, a unifying bond) or that which binds the debtor and creditor Contract Owners and Managers of an Establishment are Liable for the Negligent Act of their Employees based on Quasi-Delicts one is only responsible for his own act or omission a person will generally be held liable only for the wrong doings committed by him and not by another one of the exceptions of the above rule is found in Article 2180 (4) and (5) of the Civil Code. Article 2180 paragraph (4) states that, "The owners and managers of an establishment or enterprises are responsible for damages caused by their employees in the service of the branches in which the employee is employed or on the occasion of their functions." Article 2180 paragraph (5) stipulates that, "Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry. The law makes the employer vicariously liable on the basis of the civil law principle of pater familias (a good father of the family) for failure to exercise due care and vigilance over the acts of one's subordinates to prevent damage to another. Defense of the Owners, Managers or Employers in order to be relieved from liability of their employees In the last paragraph of Article 2180 of the Civil Code, the employer may invoke the defense that they observed all the diligence of a good father of a family to prevent damage The liability of the owner or manager or the employer, however, is relieved on a showing that he exercised the diligence of a good father of the family in the selection and supervision of its employees. Source of Damages (Liability) Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. 1. Fraud is the deliberate and intentional evasion of the normal fulfillment of obligation Intentional Act Two types of fraud contemplated in the performance of contracts o Dolo Incidente (Incidental Fraud) ▪ committed in the performance of an obligation already existing because of contract ▪ will make the debtor liable for damages only ▪ Annulment of contract is not a remedy ▪ After o Dolo Causante (Casual Fraud) ▪ serious enough to render a contract voidable ▪ fraud is committed at the very beginning of the transaction ▪ to enter into a contract ▪ Annulment of contract is a remedy ▪ Before 2. Negligence (Culpa) omission of that diligence which is required by the nature of the obligation Unintentional Act obligor has the duty to observe diligence in the performance of his obligation failure to observe the same will hold him liable for damages Two Kinds of Diligence  o Diligence or diligence of a good father of a family ▪ ordinary diligence ▪ must be observed by the obligor in general ▪ Default Diligence o Utmost diligence ▪ extraordinary diligence ▪ highest degree of care ▪ observed only when the law so provides or when the parties so agree ▪ common carrier must observe extraordinary diligence 3. Delay non-fulfillment of the obligation with respect to time Requisites o obligation be demandable and already liquidated o debtor delays performance o creditor requires (demand) the performance judicially or extrajudicially o when the maturity date within which to perform the obligation was not performed, the creditor should demand its fulfilment in order for the debtor to be considered in delay o No Demand, No Delay ▪ if the creditor did not demand for the performance of the obligation the debtor is no considered to be in delay ▪ the creditor cannot go to court to sue the debtor ▪ demand is necessary o Exceptions to the Rule "NO DEMAND, NO DELAY" ▪ When the law so provides the law itself provides that there is no need to demand on the part of the creditor ▪ When the obligation so provides parties agree that demand is no longer required when the maturity date arrived ▪ When time is of essence Time is the controlling motive for the establishment of the contract ▪ When demand would be useless creditor already knew even before the said date that there will be no thing to be delivered to him o How to Demand the Fulfillment of the Obligation ▪ Judicial Demand creditor goes to court to fix the period within which the debtor performs the obligation ▪ Extrajudicial Demand creditor writes a demand letter or demands orally 4. Contravention of the tenor of the Obligation failure to perform that which is incumbent upon him non-performance or failure of the party to fulfil his duty is liable for damages Damages that may be Recovered If there are injuries committed either due to wrongful o negligent act or if a certain obligation or contract has been violated the party so injured may be entitled to any of the following damages 1. Moral Damages o enable the injured party to obtain means, diversions or amusements that will serve to alleviate the moral suffering he has undergone, by reason the defendant's culpable action. o not meant to be punitive o designed to compensate 2. Exemplary Damages o also called corrective damages o Certain conditions when exemplary damages may be awarded ▪ may be imposed by way of example or correction only in addition, among others, to compensatory damages, and cannot be recovered as a matter of right, their determination depending upon the amount of compensatory damages that may be awarded to the claimant. ▪ claimant must first establish his right to moral. temperate, liquidated or compensatory damages. ▪ wrongful act must be accompanied by bad faith and the award would be allowed only if the guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner 3. Nominal Damages o awarded in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. 4. Temperate Damages o moderate damages o more than nominal but less than compensatory damages o recovered when the court finds that some pecuniary loss had been suffered but its amount cannot, from the nature of the case be proved with certainty 5. Actual Damages or Compensatory Damages o awarded in satisfaction of, or in recompense for, loss or injury sustained o make good or replace the loss caused by the wrong 6. Liquidated Damages o are those agreed upon by the parties to a contract o to be paid in case of breach o stipulation that Fortuitous Event Paid in case of breach Fortuitous Event Article 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable. (1105a) the obligor is exempt from liability if the reason thereof is due to fortuitous event Fortuitous Event Definition and Concept could not be foreseen though foreseen, is inevitable Caso Fortuito Requisites o Independent of the Will of the debtor o Unforeseeable or Unavoidable o Impossible for the debtor to fulfill the obligation o Free of participation in or aggravation of the injury to the creditor Exceptions to Fortuitous Events o when it is expressly specified by the law o otherwise agreed upon o nature of the obligation requires the assumption of risk. Different Kinds of Obligation 1. Pure Obligation one whose performance or extinguishment is not subject to any condition or a period this kind of obligation is demandable at once 2. Conditional Obligation is an obligation the performance or extinguishment of which is dependent upon the happening of the condition this kind of obligation is not immediately demandable 3. Obligation with a period is one that has a fixed day certain for its fulfillment obligation is demandable only when that day comes 4. Joint debtor is liable only for a proportionate part of the debt creditor is entitled to demand only proportionate part of the credit from each debtor each obligor answers only part of the whole liability each obligor belongs only a part of the correlative rights creditor cannot compel one of the debtors to satisfy in the whole obligation Presumption o the obligation is always joint unless it is clearly stated that the obligation is solidary Other terms for joint obligation o Pro-rata o Proportionate o Mancomunada 5. Solidary Obligation one in which each of the debtors is liable for the entire obligation each of the creditors is entitled to demand the satisfaction of the whole obligation from any or all of the debtors solidary obligation is not presumed, the liability is solidary only when: o The obligation expressly so states; o When the law so provides; or o When the nature of the obligation so requires  Other terms for Solidary Obligation o In solidum o Jointly and Severally o Individually and Collectively o Mancomunada Solidaria o If the contract states that the persons are liable "together or separately." 6. Alternative Obligation 7. Facultative Obligation Extinguishment of Obligation (1) By payment or performance; (2) By the loss of the thing due; (3) By the condonation or remission of the debt; (4) By the confusion or merger of the rights of creditor and debtor (5) By compensation; (6) By novation. Contract Article 1305 states that, "Contract is a meeting of the minds between two persons, whereby one binds himself, with respect to the other, to give something or render some service." Instrument – Paper where the contract is written (Evidence of the Contract) Essential Requisites of Contract Article 1318. There is no contract unless the following requisites concur (1) Consent of the contracting parties; (2) Object certain which is the subject matter of the contract; (3) Cause of the obligation which is established. Consent is manifested by the meeting of the offer and the acceptance of the thing and the cause, which are to constitute the contract. Object. The object of the contract may be: o Things o Rights o Service Rules Regarding the Object (1) The object of the contract must be within the commerce of man. This means that the object is capable of appropriation. (2) The object must be lawful. (Thus, shabu, marijuana and other contrabands cannot be the object of the contract). (3) Services as an object should not be contrary to law, morals good customs, public order, or public policy. (4) Intransmissible rights cannot be the object of the contract Cause or Consideration is an essential requisite of a contract the cause or consideration is the reason why the parties entered into a contract. Formalities of Contract contracts are valid and binding from their perfection regardless of form whether they be oral or written provided the three essential requisites are present, namely the consent, object and consideration. Exceptions o When the law requires that a contract be in some form in order that it may be valid or enforceable which is called solemn contracts o Contracts that the law requires to be proved by some writing (memorandum) of its terms, as in those covered by the Statute of Frauds, under Article 1403 (2) of the Civil Code. Stages of Contract 1. Negotiation Stage or Generation Stage first step parties will bargain or negotiate as to the terms and conditions No meeting of the minds yet 2. Perfection or Birth of the Contract parties shall determine whether to accept, the terms and conditions Once it is accepted then there is a contract stage where the contract is perfected 3. Consummation or Termination stage where the contract is ended because the parties have fulfilled with their obligations Characteristics of Contract 1. Mutuality of Contract validity or performance or compliance of which cannot be left to the will of only one of the parties  to nullify a contract containing a condition which makes its fulfilment or pre-termination dependent 2. Autonomy of Contract parties are free to establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy presence of any of the limitations mentioned will render the contract void 3. Obligatory Force Contracts are perfected by mere consent parties are bound not only to the fulfilment also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. Once the contract is perfected, the parties must faithfully observe the terms and conditions established. Otherwise, a cause of action for breach of contract will arise. 4. Relativity of Contract contract entered into by the parties are binding only between them, their heirs and assigns, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law heir is not liable beyond the value of the property he received from the decedent Defective Contracts and their Effects 1. Rescissible Contracts are valid contracts having all the essential requisites of contract, but by reason of injury or damage caused to either of the parties therein or to third persons are considered defective and, thus, may be rescinded 2. Voidable Contracts contracts which are valid until annulled Article 1390 provides that, "The following contracts are voidable or annullable, even though there may have been no damage to the contracting parties:" o Those where one of the parties is incapable of giving consent to a contract; o Those where the consent is vitiated by mistake, violence intimidation, undue influence or fraud o contracts are binding, unless they are annulled by a proper action in court o susceptible of ratification 3. Unenforceable Contract cannot be enforced unless ratified, due to any of the following reasons: o The contract was entered into the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers o The Contract did not comply with the Statute of Frauds o Both parties are incapable of giving consent 4. Void and inexistent contract equivalent to nothing and is absolutely wanting in civil effects cannot be validated either by ratification or prescription when any of its terms have been performed, an action to declare its inexistence is necessary to allow restitution of what has been given under it The following contracts are inexistent and void from the beginning: o Those whose cause, object, or purpose is contrary to law morals, good customs, public order or public policy; o Those which are absolutely simulated or fictitious; o Those whose cause or object did not exist at the time of the transaction; o Those whose object is outside the commerce of men; o Those which contemplate an impossible service; o Those where the intention of the parties relative to the principal object of the contract cannot be ascertained and o Those expressly prohibited or declared void by law