Introduction

to
Obligation
Civil C o d e definition of
Obligation
Under the New Civil Code,
Article 1156. A n obligation is a juridical necessity to
give, to d o or not to do.
Meaning of Juridical
Necessity
Obligation is a juridical necessity because in case of
noncompliance, the courts ma y b e called upon by the
aggrieved party to enforce its fulfillment or, in default thereof,
the economic value that it
represents. In a proper case, the debtor ma y also b e m a d e
liable for damages, which represents the sum of money given
as a compensation for the injury or harm suffered by the
creditor or obligee (he who has the right to the performance of
the obligation) for the violation of his rights.
In other words, the debtor must comply with his obligation
whether he likes it or not; otherwise, his failure will b e visited
with some harmful or undesirable consequences. If obligations
were not m a d e enforceable, then people c a n disregard them
with impunity. If a n obligation cannot b e enforced, it ma y b e
only a n a tural obligation.
Definition of
Obligation
“An obligation is a juridical relation whereby a person
(called the creditor) m a y d e m a n d from another (called
the debtor) the observance of a determinative conduct
(the giving, doing, or not doing), a n d in case of breach,
m a y d e m a n d satisfaction from the assets of the latter.”
Essential Requisites of a n
Obligation
Every obligation has four definite elements, without which no
obligation c a n exist, to wit:
1) A passive subject (called debtor or obligor) – the person who is
bound to the fulfillment of the obligation; he who has a duty;
2) A n active subject (called creditor or obligee) – the person who is
entitled to d e m a n d the fulfillment of the obligation; he who has the
right;
3) Object or prestation (subject matter of the obligation) – the
conduct required to b e observed by the debtor. It m a y consist in
giving, doing, or not doing. Without the prestation, there is nothing
to perform. In bilateral obligations, the parties are reciprocally
debtors a n d creditors; a n d
4) A juridical or legal tie (also called efficient cause) – that which
binds or connects the parties to the obligation. The tie in a n
obligation c a n easily b e determined by knowing the sources of the
obligation.
It is important to identify the prestation in a certain obligation.
O n c e the prestation is identified, you c a n determine who the
passive subject is whom the active subject c a n d e m a nd
fulfillment of the obligation
Kinds of prestation
1. To give- consist in the delivery of a movable or immovable
thing in order to create a real right or for the use of the
recipient or for its simple possession or in order to return to
its owner
2. To do- all kinds of work or services, whether mental or
physical.
3. Not to do- consist in abstaining from some act, includes
“not to give.” both being negative obligations
A contract of sale a n d a contract of loan are examples of
To
illustrate
In a n obligation to p a y taxes, the passive subject is the
taxpayer, the active subject is the government through the
Bureau of Internal Revenue, the prestation is ―to give,‖
specifically to p a y taxes, the juridical tie is a source of
obligation arising from law.
In a n obligation to give products, the passive subject is
the seller, the active subject is the buyer, the prestation is
―to give,‖ specifically to deliver products, a n d the juridical
tie is a source of obligation arising from contract.
For
Example
Under a building contract, A bound himself to build a
house for B, for ₱ 1,000,000.00
In the given example, it can be inferred that:
• A is the passive subject
• B is the active subject
• The building of the house is the object or prestation.
• The agreement or contract, which is the source of the obligation is the
juridical tie.
For
Example Object or
prestation
Obligation to d o
Building of the
house
A B

Passive Contract Active

subject subject
Juridical
tie
For
Example
Suppose A h a d already constructed the house a n d it
was the agreement that B would p a y after the
construction is finished.
Then,
• A becomes the active subject
• B becomes the passive subject.
 Example: Pelayo v.
Lauron
Facts: A 12about
wife was Phil.to453
deliver(BAR)
a child. Her parents-
in- law called the doctor.

Issue: Who should p a y the doctor: the husband or the

parents?

Held: The husband should pay, even if he was not the

one who called the doctor. It is his duty to support the
wife, a n d support, includes medical attendance. The duty
to p a y is a n obligation to give, a n d is imposed by the
law.
 ART. 1159 of the New
Civil Code provides,
Obligations arising
from contracts have
the force of law
between the
contracting parties and
should be compiled
with in good faith.
(1091a)
 A contract is a meeting
of minds between two
persons whereby one binds
himself, with respect to the
other, to give something or
to render some service.
(Art. 1305).
Meaning of the
Article
The article m e a n s that neither party m a y
unilaterally a n d u p o n his o w n exclusive volition,
e s c a p e his obligati ons under the contract, unless
for ca u s e s sufficient in law a n d p r o n o u n c e d
a d e q u a t e b y a co m pete nt tribunal.
(1) Binding force- Obligations arising from
contracts have the force of law between
the contracting parties, i.e., they have
same binding effect of obligations imposed
by laws. This does not mean, however, that
contract is superior to the law. As a source
of enforceable obligation, contract must
b e valid a n d it cannot b e valid if it is
against the law
(2) Requirement of a valid contract – a
contract is valid (assuming all the
essential elements are present; Art. 1318)
if it is not contrary to law, morals, g o o d
customs, public order, a n d public policy.
It is invalid or void if it is contrary to laws,
morals, g o o d customs, public order, or
public policy. (Art. 1306)
Compliance in g o o d
faithCompliance in good faith means compliance or
performance in a c c o rd a n c e with the stipulations or terms of
the contract or agreement. Sincerity a n d honesty must b e
observed to prevent one party from taking unfair
a d v a n ta g e over the other.

Non compliance by a party with his legitimate

obligations after receiving the benefits of a contract
would constitute unjust enrichment on his part.
Example
s:
(1) If Francis agrees to sell his house to Paul a n d Paul
agrees to
buy the house of Francis, voluntarily a n d willingly, then
they
are bound by the terms of their contract a n d neither
party
m ay upon his own will, a n d without any unjustifiable
reason,
withdraw from the contract or e s c a p e from his
obligations there under.

That which is agreed upon in the contract is

the law
between Francis a n d Paul a n d must b e complied with in
g o o d faith.

(2) A contract whereby Francis will kill Paul in

consideration of
P1,000.00 to b e paid by CJ, is void a n d non-existent
Differences between an Obligation and
a Contract
A n obligation is the result of a contract (or
some
other source). Hence, while a contract, if valid,
always
results in obligations, not all obligations c o m e from
contracts. A contract always presupposes a meeting
of
the minds; this is not necessarily true for all
kinds of obligations.

Be it noted however, from another

viewpoint that
a contract ma y itself b e the result of a n
obligation. Thus, if
Paul e n g a g e s Allen as the former’s agent,
we have the
contract of a g e n c y. As a n agent, Allen has
the obligation,
say to look around for clients or buyers, as in
Condrado v. Judge Tan 51 O.G. 2923, Jun.
1955 FACTS: In a validly m a d e contract,
some provisions were later on inserted by
a falsifier.

Issue: Is the whole contract void?

HELD: Only the additional provision

should be disregarded, a n d the original
terms should b e considered valid a n d
subsisting.
 ART. 1160.
Obligations derived from
quasi-contracts shall be
subject to the provisions
of Chapter 1, Title XVII of
this Book. (n) (Art. 1160, N C C )
 A quasi-contract is that juridical relation
resulting from lawful, voluntary, a n d unilateral
acts by virtue of which the parties b e c o m e
bound to e a c h other to the end that no one
will b e unjustly enriched or benefited at the
expense of another.
It is not properly a contract at all. In
contract, there is a meeting of the minds or
c onsent; the parties must have deliberately
entered into a formal agreement. In a quasi-
contract, there is no consent but the same is
supplied by a fiction of law. In other words, the
law considers the parties as having entered
into a contract, although they have not
actually did do, a n d irrespective of their
intention, to prevent injustice.
Kinds of quasi-
contracts
(1)Negotiorum gestio is the voluntary
management of the property or affairs of
another without the knowledge or
consent of the latter. (Art. 2144, NCC.)
(2)Solutio indebiti is the juridical relation which is
created when something is received when
there is no right to d e m a n d it a n d it was
unduly delivered through mistake. (Art. 2154,
N C C ) The requisites are:
(a) There is no right to receive the thing delivered
(b) The thing was delivered through mistake
UST Cooperative Store v. City of Manila, et
al.
L-17133, Dec. 31, 1965
FACTS: The UST Cooperati ve Store, which is tax-exempt under R A 2023 (The
Philippine Non-Agricultural Cooperati ve Act) b e c a u s e its assets are not more than
P500,000 p a i d taxes to the City of Manila, not knowing that it w a s tax exempt.

ISSUE: M a y it successfully ask for re f u n d ?

HELD: Yes, b e c a u s e the p ay m e nt is not considered voluntary in character.

Clearly, the p ay m e nt was m a d e under mistake.
Query: Is a Quasi-Contract
an Implied Contract?
•No, because in a
quasi- contract (unlike
in a n implied
contract) there is NO
meeting of the minds.
Other Examples of
Quasi- Contracts
• When during fire, flood, or other
calamity, property is saved from
destruction by another person
without the knowledge of the owner,
the latter is bound to p a y the former
just compensation.

• Any person who is constrained to

p a y the taxes of another shall b e
entitled to reimbursement from the
 ART. 1161 Civil obligations
arising from criminal offenses shall
be governed by the penal laws,
subject to the provisions of article
2177, and of the pertinent
provisions of Chapter 2,
Preliminary Title, on Human
Relations, and of the Title XVII of
this Book, regulating damages. (Art.
1161, N C C )
• Oftentimes, the commission
of a crime causes not only
moral evil but also material
damage. From this
principle, the rule has been
established that every
person criminally liable for
an act of omission is also
civilly liable for damages.
(Art. 100, Revised Penal C o d e )
S c o p e of civil
liability
The extent of the civil liability arising
from crimes is governed by the Revised
Penal C o d e a n d the Civil Code. This civil
liability includes:
(1) Restitution
(2) Reparation for damaged
caused
(3) Indemnification for
consequential damages. (Art.
 ART. 1162.
Obligations derived
from quasi-delicts shall
be governed by the
provisions of Chapter 2,
Title XVII of this Book,
and by special laws. (Art.
1162, N C C )
 A quasi-delict is a n act
of or omission by a person
(tort feasor) which causes
d a m a g e to another giving
rise to a n obligation to p a y
for the d a m a g e done,
there being fault or
negligence but there is no
pre-existing contractual
relation between the parties.
(Art. 2176, N C C )
Exampl
es
• While driving a car recklessly, I
injured a pedestrian.

• While cleaning my window sill, my

negligence caused a flower pot to
fall on the street, breaking the arms
of my neighbor.
 Requisites of quasi-
delict
• There must b e a n act or omission
• There must b e fault or negligence
• There must b e d a m a g e caused
• There must b e a direct relation of cause a n d
effect between the act or omission a n d the
damage
• There is no pre-existing contractual relation
between parties
Example: While playing softball with his friends, Francis
broke the window glass of Paul, his neighbor. The
accident would not have h a p p e n e d h a d they
played a little farther from the house of Paul.
Test for determination of
Negligence
“The test in determining whether a person is negligent
is this: Would a prudent m a n (in his position) foresee harm to
the person injured as a reasonable consequence of the
course about to b e pursued? If so, the law imposes a duty on
the actor to refrain from that course, or to take precauti on
against its mischievous results, a n d the failure to d o so
constitutes negligence. Reasonable foresight of harm, followed
by the ignoring of the admoniti on born of this provision, is the
constitute fact of negligence”
Crime distinguished from quasi- delict
The following are the distinctions:
1. In crime, there is criminal or malicious intent or
criminal negligence, while in quasi-delict, there is
only negligence;
2. In crime, the purpose is punishment, while in q u a si-
delict, indemnification of the off ended party;
3. Crime affects public interest, while quasi-delict concerns
private interest;
4. In crime, there are generally two liabilities: criminal a n d civil,
while in quasi-delict, there is only civil liability;
5. Criminal liability c a n not b e compromised or settled by the
parties themselves, while the liability for quasi-delict
c a n b e compromised as any other civil liability.
6. In crime, the guilt of the a c c u s e d must b e proved
beyond
reasonable doubt, while in quasi-delict, the fault or
Nature and Effects of
Obligations
ART. 1163. Every person obliged
to give something is also obliged to
take care of it with the proper
diligence of a good father of a family,
unless the law or the stipulation of the
parties requires another standard of
care. (Art. 1163, N C C )
Duty to Exercise
Diligence
This article deals with the first
effect of an obligation to deliver a
determinate thing (as distinguished from
a generic thing – or one of a class) –
namely- the duty to exercise proper
diligence. Unless diligence is exercised,
there is a danger that the property
would b e lost or destroyed, thus
rendering illusory the obligation.
Diligence
Needed
• That which is required by the nature of the obligation
a n d corresponds with the circumstances of person, time,
and place. This is really diligence of a g o o d father of a
family.

• However, if the law or contract provides for a different

standard of care, said law or stipulation must prevail.
 Ronquillo, et al. v. Singson
CA, L-22612-R, Apr. 22,
1959
FACTS: A m a n ordered a ten-year-old boy, Jose Ronquillo, to
climb a
high a n d rather slippery santol tree, with a promise to give
him part of the fruits. The boy was killed in the act of
climbing.

ISSUE: Is the person who ordered him liable?

HELD: Yes, in view of his negligent act in making the order.

He did
not take due care to avoid a reasonably foreseeable injury
to the
10y/o boy. The tree was a treacherous one, a veritable trap.
His act
was clearly a departure from the standard of conduct
required of a
Preserve the thing – In
obligations to give (real
obligations), the obligor has
the incidental duty to take
care of the thing due with
the diligence of a g o o d
father of a family pending
delivery.
Factors to be considered. – The
diligence required necessarily
depends upon the nature of the
obligation a n d corresponds with
the circumstances of the person, of
the time, a n d of the place. (Art.
1173, NCC.) It is not necessarily the
standard of care one always uses
in the protection of his property. As
a general rule, the debtor
is not liable if his failure to p reserve
the thing is not due to his fault or
negligence but to fortuitous events
 A thing is said to b e specific or determinate
p a rticularly
designated or physically segregated others of the same
class.

Examples:
1. the watch I am wearing
2. The car sold by X
3. M y d o g n a m e d “Terror”
4. the house at the corner of Rizal a n d del Pilar
5. the Toyota car with Plate No. A AV 316
6. this c a v a n of rice
7. the money I g a v e you.
Specific thing and generic thing
distinguished.
• A determinate thing is identified by its individuality.
The debtor cannot substitute it with another
although the latter is of the same kind a n d
quality without the consent of the creditor.

• A generic thing is identified only b y its specie. The

debtor c a n give anything of the same class as
long as it is of the same kind.
 ART. 1164. The creditor
has a right to the fruits of
the thing from the time the
obligation to deliver it
arises. However, he shall
acquire no real right over it
until the same has been
delivered to him. (Art. 1164,
NCC.)
Different Kind of
fruits The fruits mentioned by the law refer to natural,
industrial, a n d civil fruits.

[Link] fruits are the spontaneous products of

the soil, a n d the young a n d other products of animals.

Example: Grass; all trees a n d plants

on lands’ produced
without the intervention of human labor.

[Link] fruits are those produced by lands of any

kind through
cultivation or labor.

Example: Sugar cane, vegetables; rice; a n d all

products of lands brought about by reason of human labor.

[Link] fruits are those derived by virtue of a juridical relation.

Example: Rents of buildings, price of leases of

lands a n d other property a n d the amount of perpetual or
Right of creditor to the
fruits
The creditor is entitled to the fruits of the thing to be delivered
from the time the obligation to make delivery arises. The intention of the
law is to protect the interest of the obligee should the obligor commit
delay, purposely or otherwise, in the fulfillment of his obligation.
• When creditor is entitled to the fruits
– Example: Francis is obliged to give Paul on Dec. 3,
2004, a particular parcel of land. (before Dec. 3, he
has no right whatsoever over the fruits). After Dec. 3,
2004, Paul, the creditor is entitled (as of right) to the
fruits. But if the fruits and the land are actually or
constructively delivered only on Dec. 15, 2004, Paul
becomes owner of the said fruits a n d land only from
the said date. Between Dec.3 a n d Dec. 15, Paul h a d
only a personal right (enforceable against Francis);
after Dec. 15, he has a real right (over the properties),
a right that is enforceable against the whole world.
 When obligation to deliver
fruits arises
1. Generally, the obligation to deliver the thing due and,
consequently, the fruits thereof, if any, arises from the
time of
the “perfection of the contract. Perfection, in this case,
refers to
the birth of the contract or to the meeting of the
minds between the parties. (Art. 1305, 1315,
1319, NCC.)
2. If the obligation is subject to a suspensive condition or
period
(Art. 1179, 1189, 1193), it arises upon the fulfillment of the
condition or arrival of the term. However, the parties m ay
make
a stipulation to the contrary as regards the right of the
creditor to the fruits of the thing.
3. In a contract of sale, the obligation arises from the
perfection of
the contract even if the obligation is subject to a
suspensive
condition or a suspensive period where the price
 Meaning of personal right
and real right
[Link] right is the right or power of a person
(creditor) to d e m a n d from another (debtor), as a definite
passive subject, the fulfillment of the latter’s obligiation to
give, to do, or not to do.

[Link] right is the right or interest of a person over a

specific thing (like ownership, possesion, mortgage),
without a definite passive subject against whom the right
m a y b e personally enforced.
 Personal right and real
right
distinguished
• In personal right there is a definite
active subject a n d a definite
passive subject, while in real right,
there is only a definite subject
without any definite passive
subject. (See Art. 1156.)
• A personal right is, therefore,
binding or enforceable only
against a particular person,
while a real right is directed
Exampl
e: Francis is the owner of a parcel of land
under a torrens title registered in his n a m e in
the Registry of Property. His ownership is a real
right directed against everybody. There is no
definite passive subject.
If the land is claimed by Paul who takes
possesion, Francis has a personal right to
recover from Paul, as a definite passive subject,
the property.
If the same land is mort g a g e d by
Francis to Mae, the mortgage; if duly
registered, is binding against third persons. A
purchaser buys the land subject to
Ownership acquired by
delivery
Ownership a n d other real rights over
property are acquired a n d transmitted in
consequence of certain contracts by tradition
or delivery. Mere agreement does not effect
transfer of ownership.
The meaning of the phrase “he shall
acquire no real right over it until the same has
been delivered to him”, is that the creditor does
not b e c o m e the owner until the specific thing
has been delivered to him. Hence, when there
has been no delivery yet, the proper court
action of the creditor is not one for recovery of
possession a n d ownership but o n c e for specific
performance or rescission of the obligation.
 ART. 1165. When what is to be
delivered is a determinate thing, the creditor,
in addition to the right granted him by Article
1170, may compel the debtor to make the
delivery.
If the thing is indeterminate or
generic, he may ask that the obligation be
complied with the expense of the debtor.
If the obligor delays, or has promised to
deliver the same thing to two or more persons
who do not have the same interest, he shall
be responsible for fortuitous event until he has
effected the delivery. (Art. 1165, NCC.)
Remedies of creditor in real
obligation
In a specific real obligation (obligation to
deliver a determinate thing), the creditor ma y
exercise the following remedies or rights in case
the debtor fails to comply with his obligation:

a. D e m a n d specific performance or fulfillment (if it

is still possible) of the obligation with a right to
indemnity for damages; or
b. D e m a n d rescission or cancellation (in a certain
cases) of the obligation also with the right to
recover damages(Art. 1170); or
c. D e m a n d payme nt of d a m a g e s only where it is
the only feasible remedy.
 A generic real obligation
(obligation to deliver a generic
thing), on the other hand, c a n b e
performed by a third person since
the object is expressed only
according to its family or genus. It
is, thus, not necessary for the
creditor to compel the debtor to
make the delivery, although he
m a y ask for performance of the
obligation. *the manner of
compliance with a n obligation to
deliver a generic thing is
Responsibility of debtor who
delays or has promised
delivery to separate creditors.
Paragraph 3 gives two
instances when a fortuitous event
does not exempt the debtor from
responsibility. It likewise refers to a
determinate thing.
A n indeterminate thing c a n
not b e the object of destruction by
a fortuitous event because genus
nunquam perit (genus never
perishes).
 Effects of Fortuitous
Events
Another important difference between a generic
a n d a specific obligation is that, a specific
obligation, that
is, a n obligation to deliver a specific thing, is, as a
rule,
extinguished by a fortuitous event or act of God.
Upon the
other hand, generic obligations are never
extinguished by fortuitous events.

Examples:
a. Francis is oblig e d to give Paul this c ar. Before
delivery,
a n earthquake destroys completely the
car. The obligation to deliver is
extinguished.
b. Francis is oblig e d to give Paul a b o o k. Since this
‘Ordinary Delay’ Distinguished
from ‘Default’

Ordinary delay is different from

legal delay (default). The first is
merely non-performance at the
stipulated time; default is that delay
which amounts to a virtual
nonfulfillment of the obligation. (As
a rule, to put a debtor in default,
there must b e a d e m a n d for
fulfillment, the d e m a n d being
either judicial or extrajudicial)
Example
s:Ron is obliged to give Harry his Jaguar car
a.
on Dec. 7, 2005. If on said day, Ron does
not deliver, he is in ordinary delay (not
default). If on Dec. 8, 2005, a n earthquake
destroys the Jaguar c ar, Ron is not liable
because the obligation is extinguished.
b. If, however, on Dec. 8, d e m a n d was m a d e
for delivery, Ron would b e in legal delay
(default) a n d if later, the car is destroyed
by a fortuitous event, he would still b e
liable (in that the obligation to deliver the
lot specific thing is converted into a
monetary claim for damages). However, if
the car would have been destroyed at
any rate even if no d e m a nd h a d been
 ART. 1166. The
obligation to give a
determinate thing
includes that of
delivering all its
accessions and
accessories, even
though they may not
have been mentioned.
 Meaning of Accessions
and Accessories
[Link] are the fruits of a thing or
additions to or improvements upon a thing
(the principal).
Examples: house or trees on a land;
rents of a building; air-conditioner in a car;
profits or dividends accruing from shares of
stocks, etc/

[Link] are things joined to or included

with the principal thing for the latter’s
embellishment, better use, or completion.
Examples: Key of a house; frame of a
picture; bracelet of a watch; machinery in a
 Right of creditor to
accessions and
accessories
The general rule is that all accessions and
accessories are considered included in the
obligation to deliver a determinate thing although
they ma y not have been mentioned. This rule is
base d on the p rinciple of law that the accessory
follows the principal. In order that they will b e
excluded, there must b e a stipulation to that effect.
But, unless otherwise stipulated, a n
obligation to deliver the accessions or accessories
of a thing does not include the latter. Thus, a sale
of the improvements (e.g., house) upon a land is
not sufficient to convey title or any right to the
land. But the lease of a building or house
naturally includes the lease of the lot on which it is
constructed for the possession of the lot is implied
 ART. 1167. If a person
obliged to do something fails
to do it, the same shall be
executed at his cost.
This same rule shall be
observed if he does it in
contravention of the tenor of
the obligation. Furthermore, it
may be decreed that what
 Remedies of Creditor if Debtor
Fails to Do
a. To have the obligation performed (by himself or by
another) at
debtor’s expense (only if another c a n d o the
performance).

b. Also– to obtain damages. (Da ma g es alone cannot

substitute for performance if owners c a n d o it; if purely
personal or special – as a painting to b e d on e by a
reputed artist – only d a m a g e s m a y b e asked, unless
substitution is permitted)
 Performance by a third
person
A personal obligation to do, like a
obligation
real
to deliver a generic thing, c a n b e performed by a
third
person. While the debtor c a n b e compelled to
make the
delivery of a specific thing, a specific performance
cannot
b e ordered in a personal obligation to d o because
this
ma y amount to involuntary servitude which, as
rule, is prohibited under our Constitution.
Where, however, the personal qualifications
of
the debtor are the determining motive for the
obligation
contracted (e.g., to sing in a night club), the
performance
of the same by another would b e impossible or
 ART. 1168 When the
obligation consists in
not doing, and the
obligor does what has
been forbidden him, it
shall also be undone at
his expense. (Art. 1168,
NCC)
 In a n obligation not to do, the duty of the obligor is to
abstain from a n act. Here, there is no specific
performance. The
very obligation is fulfilled in not doing what is forbidden.
Hence,
in this kind of obligation the debtor cannot b e guilty of
delay. (Art. 1169, N C C )
As a rule, the remedy of the obligee is the
undoing of
the forbidden thing plus damages. However, if it is not
possible to
undo what was done, either physically or legally, or
because of
the rights acquired by third persons who acted in g o o d
faith, or
for some other reason, his remedy is a n action for
d a m a ges
caused by the debtor’s violation of his obligation.

Example:
Ron bought a land from Harry. It was stipulated
that
 When Demand is Not Needed
to Put Debtor in
Default
[Link] the law so provides (Example: Taxes should b e
paid within a definite period, otherwise penalties are
imposed without ne e d of d e m a n d for payment)
b. When the obligation expressly so provides
[Link] time is of the essence of the contract (or
when the fixing of the time was the controlling
motive for the establishment of the contract)
[Link] d e m a n d would b e useless, as when the
obligor has rendered it beyond his power to perform.
(Example: When before the maturity, the seller has
disposed of it in favor of another, or has destroyed
the subject matter, or is hiding)
[Link] the obligor has expressly acknowledged that he
really is in default (But it should b e noted that his mere
asking for extension of time is not a n express
 Different Kinds of
Mora
a. mora solvendi (default on part of the debtor)
[Link] solvendi ex re (debtor’s default in real
obligations)
[Link] solvendi ex persona (debtor’s default in
personal
obligations)

b. mora accipiendi (default on part if the creditor)

[Link] morae (when in a reciprocal obligation

both parties are in default; here it is a s if neither is in
 Requisites for mora
solvendi
1. The obligation must b e due, enforceable,
a n d already liquidated or determinate in
amount.
2. There must b e non-performance
3. There must b e a demand, unless the
d e m a n d is not required (as already
discussed). (When d e m a n d is needed,
proof of it must b e shown by the creditor)
4. The d e m a n d must b e for the obligation that
is due (and not for another obligation, nor
one with a bigger amount, except in
certain instances, considering all the
 Mora
a.
Accipiendi
The creditor is guilty of default when he unjustifiably
refuses to a c c e p t payment or performance at the time
said payment or performance c a n b e done. Some
justifiable reasons for refusal to a c c e p t m a y b e that the
payor has no legal capacity or that there is a n offer to
p a y a n obligation other than what has been agreed
upon.
b. If a n obligation arises ex delicto (as a result of a
crime), the debtor-criminal is responsible for loss,
even though this b e through a fortuitous event,
unless the creditor is in mora accipiendi.
 Reciprocal
a.
Obligations
Reciprocal obligations d e p e n d upon e a c h other for
performance (Example: In a sale, the buyer must
PAY, a n d the seller must DELIVER)
b. Here performance ma y b e set on different dates.
(Example:
delivery date on Dec. 9, 2005; a n d payment on Dec.
13, 2005.
To put the seller in default, d e m a n d as a rule must b e
made.
Delivery upon the other hand, does not put the buyer
in
default, till after demand, unless d e m a n d is not
required. This
is because, in the example given, different
periods for performance were given)
c. If the performance is not set on different dates, either by
the
law, contract, or customs, it is understo o d that
performa n c e
 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
Grounds for
Liability
1. Fraud (deceit or dolo) – as
used in Article 1170, it is the
deliberate or intentional
evasion of the normal
fulfillment of the obligation. As
a ground for damages, it
implies some kind of malice or
dishonesty a n d it cannot
cover cases of mistake a n d
errors of judgment m a d e in
 Article 1170 refers to
incidental fraud (dolo incidente)
committed in the performance
of a n obligation already
existing becaus e of contract. It
is to be differentiated from
casual fraud (dolo causante) or
fraud employed in the
execution of a contract under
Article 1338, which vitiates
 2. Negligence (fault
or culpa) – it is any
voluntary act or
omission, there being
no malice, which
prevents the normal
fulfillment of a n
obligation. (see Arts.
1173, 1174, N C C )
3. Delay (mora) – this has
already been discussed
under article 1169.
4. Contravention of the terms
of the obligation – This is the
violation of the terms a n d
conditions stipulated in the
obligation. The
contravention must not b e
due to s fortuitous event or
force majeure. (Art. 1174,
NCC)
 Fraud and
Negligence
1. distinguished
In fraud, there is deliberate intention to cause
d a m a g e or injury, while in negligence, there is no
such intention.
2. Waiver of the liability for future fraud is void (Art. 1171),
while such waiver may, in a certain sense, b e
allowed in negligence. (Art1172)
3. Fraud must b e clearly proved, while negligence is
presumed from the violation of a contractual
obligation.
4. Lastly, liability for fraud cannot b e mitigated or
reduced by the courts, while liability for negligence
ma y b e reduced according to the circumstances.
(Art. 1173)
They are similar in that both are voluntary, that is, they
are committed with volition. Where, however, the negligence
 ART. 1171. Responsibility
arising from fraud id
demandable in all obligations.
Any waiver of action for future
fraud is void. (Art. 1171, N C C )
 Waiver of Action for future
fraud void
According to the time of commission, fraud
m a y b e past or future.

A waiver of a n action for future fraud is void

(no effect, as if there is no waiver) as being
against the law a n d public policy. A contrary rule
would encourage the perpetration of fraud
because the obligor knows that even if he
should commit fraud, he would not b e liable for it,
thus making the obligation illusory.
 Waiver of Action for Past
Fraud Valid
What the law prohibits is waiver anterior to the
fraud a n d to the knowledge thereof by the aggrieved
party.
A past fraud c a n b e the subject of a valid waiver
because the waiver c a n b e considered as a n act of
generosity a n d magnanimity on the part of the party who
is the victim of the fraud. Here, what is renounced is the
effect of the fraud, that is, the right to indemnity of the party
entitled thereto.
 Exampl
e:Sally promised to deliver 120 cavans of rice of a
particular brand a n d quality to Bessie at the rate of 10
cavans a month.
Sally cannot make a n agreement with Bessie,
whereby Bessie will not file a n action in court against
Sally, should Sally commit fraud in the performance of her
obligation. This waiver of a n action for future fraud is void.
Hence, Bessie c a n still bring a n action against Sally for
d a m a g e s arising from the fraud.
But o n c e fraud is committed, Bessie, with full
knowledge thereof, c a n waive her right to indemnity as
a n act of forgiveness on her part.
 ART. 1172. Responsibility
arising from negligence in the
performance of every kind of
obligation is also
demandable, but such
liability may be regulated by
the courts, according to the
circumstances. (Art. 1172,
NCC.)
 Validity of waiver of action
arising from
1.
negligence
A n action for future negligence (not fraud) ma y be
renounced except where the nature of the obligation
requires the exercise of extraordinary diligence as in the
case of c o m m o n carriers. Thus, in the preceding
example, the law allows a n agreement between Sally
a n d Bessie, whereby Sally will not b e liable for
d a m a g e s arising from negligence in the perform a nc e
of his o b ligation. But if Sally is a c o m m on carrier (e.g.,
bus, shipping or airline company) such waiver is void.

2. Where negligence shows b a d faith (i.e., deliberately

committed), it s considered equivalent to fraud. Any
waiver of a n action for future negligence of this kind
 Kinds of negligence
according to source
of obligation
1. Contractual negligence (culpa contractual) or negligence
in contracts resulting in their breach. Article 1172 refers
to culpa contractual. This kind of negligence is not a
source of obligation. (Art. 1157) It merely makes the
debtor liable for d a m a g e s in view of his negligence in
the fulfillment of a pre- existing obligation. (Arts. 1170,
1172)
2. Civil negligence (culpa aquiliana) or negligence which
itself is the source of a n obligation between the parties
not so related before by any pre-existing contract. It is
also called tort or quasi-delict. (Art. 2176)
3. Criminal negligence (culpa criminal) or negligence
resulting in the commission of a crime. The same
negligent act causing d a m a g e s ma y produce civil
liability arising from a crime under Article 100 of the
 Example
1. s:
If Sandy entered into a contract with Bandy to
deliver a specific horse on a certain d a y a n d the
horse died through the negligence of Sandy before
delivery, Sandy is liable for d a m a g e to Bandy for
having failed to fulfill a pre-existing obligation
because of his negligence. This is culpa contractual.
2. Assume now, that the horse belongs to a n d is in the
possession of Bandy. The negligence of Sandy
which results in the death of the horse is culpa
aquiliana. In this case, there is no pre-existing
contractual relation between Sandy a n d Bandy.
The negligence itself is the source of liability
3. A crime c a n b e committed by negligence. If Bandy
wants, she c a n bring a n action for culpa criminal
( d a m a g e to property through simple or reckless
imprudence). Here, the crime is the source of the
obligation of Sandy to p a y damages.
 ART. 1173. The fault or
negligence of the obligor consists in
the omission of that diligence which is
required by the nature of the
obligation and corresponds with the
circumstances of the person, of the
time and of the place. When
negligence shows bad faith, the
provisions of the articles 1171 and
2201, paragraph 2, shall apply.
If the law or contract does not
state the diligence which is to be
observed in the performance, that
 Negligence is a question of fact, its existenc e being
de pe ndent
upon the particular circumstances of e a c h case. In determining the
issue of
negligence, the following factors must b e considered:
[Link] of Obligation
Example: Smoking while carrying materials known
to b e inflammable constitutes negligence.
[Link] of the person
Example: A guard, a m a n in the prime of life, robust a n d
healthy, sleepin g while on duty is guilty of negligence.
[Link] of time
Example: Driving a car without headlights at night is gross
negligence but it does not by itself constitute negligence when
driving during the day.
[Link] of the place
Example: Driving at 80kph on the superhighw a y is
permissible but
driving at the same rate of speed in Rizal Avenue, Manila
 ART. 1174. Except in cases
expressly specified by 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,
 A fortuitous event is any
event which cannot b e
foreseen, or which, though
foreseen, is inevitable.
The essence of a
fortuitous event consists of
being a happening
independent of the will of the
debtor a n d which happening,
makes the normal fulfillment of
 Fortuitous event
distinguished from
force
[Link] of man majeure
– strictly speaking, fortuitous event
is a n event independent of the will of the
obligor but not of other human wills.
Examples: War, fire, robbery, insurrection

[Link] of God – They refer to what is called

majeure or those events which are totally
independent will of every human being.
Examples: Earthquake, flood, rain,
shipwreck, lightning, eruption of volcano, etc.
 Kinds of Fortuitous
1.
Events
Ordinary fortuitous events or those events which a re
common a n d which the contracting parties could
reasonably foresee (e.g., rain)

2. Extra-ordinary fortuitous events or those events which are

uncommon a n d which the contracting parties could
not have reasonably foreseen. (e.g., earthquake, fire,
war, pestilence, unusual flood). (see Art. 1680, par. 2.)
 Rule as to liability in case of
fortuitous event
A person is not, as a rule, responsible for loss or
d a m a g e caused to another resulting from fortuitous events.
In other words, his obligation is extinguished. The exceptions
are enumerated below.

1. When expressly specified by law – In exception (a), (b),

a n d (c) below, the special strictness of the law is justified.
(a) The debtor is guilty of fraud, negligence, or delay, or
contravention of the tenor of the obligation. (Arts. 1170,
1165, par 3.)
(b) The debtor has promised to deliver the same (specific)
thing to two or more persons who d o not have the
same interest
(c) The obligation to deliver s specific thing arises from a
crime. (Art. 1268, N C C )
 Rule as to liability in case of
fortuitous event
[Link] declare by stipulation- the basis for the
exception rests upon the freedom of contract,
(see Art. 1306, NCC). Such stipulation is usually
intended to better protect the interest of the
creditor a n d procure greater diligence on the
part of the debtor in the fulfillment of his obligation.
But the intention to make the debtor liable even
in the case of a fortuitous event should b e clearly
expressed.
[Link] the nature of the obligation requires
the assumption of risk- here, risk of loss or
d a m a g e is an essential element in the
obligation.