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Chapter 4 (Section 4) Study Guide I

This document provides definitions and explanations regarding confusion and merger as modes of extinguishing obligations in contract law. It defines confusion as the combination or mixture of two things, like rights, and merger as the absorption of one contract into another based on language and intent. It then explains that confusion or merger extinguishes obligations because a person cannot be both debtor and creditor to themselves. Finally, it provides examples of how confusion impacts joint and solidary obligations when a credit is assigned from the original creditor to one of the co-debtors.

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Leinard Agcaoili
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597 views2 pages

Chapter 4 (Section 4) Study Guide I

This document provides definitions and explanations regarding confusion and merger as modes of extinguishing obligations in contract law. It defines confusion as the combination or mixture of two things, like rights, and merger as the absorption of one contract into another based on language and intent. It then explains that confusion or merger extinguishes obligations because a person cannot be both debtor and creditor to themselves. Finally, it provides examples of how confusion impacts joint and solidary obligations when a credit is assigned from the original creditor to one of the co-debtors.

Uploaded by

Leinard Agcaoili
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Chapter 4 (Section 4)

STUDY GUIDE

I. Definition
Define or give the meaning of the following:
1. Confusion
- The combination or mixture of two things; the process of commingling.
Confusion has been used synonymously with merger, meaning a union of two
separate entities that eliminates clear boundaries. Confusion of rights, for
example, is a combination of the rights of debtor and creditor in the same
individual.
2. Merger
- In contract law, agreements are merged when one contract is absorbed into
another. The merger of contracts is generally based on the language of the
agreement and the intent of the parties. The merger of contracts is not the
same as a merger clause, which is a provision in a contract stating that the
written terms cannot be varied by prior or oral agreements.
II. Definitions
1. What is the rationale behind confusion or merger as a mode of extinguishing an
obligation?
- The law treats confusion or merger as a mode of extinguishing obligations
because if a debtor is his own creditor, enforcement of the obligation becomes
absurd since a person cannot claim payment from himself.
2. Give the effect of merger when it takes place:
a. In the person of the principal debtor or creditor.
 Merger in the person of the principal debtor or creditor extinguishes
the obligation. Hence, the accessory obligation of guaranty is also
extinguished in accordance with the principle that the accessory
follows the principal.
b. In the person of the guarantor of the principal obligation.
 The extinguishment of the accessory obligation does not carry with it
that of the principal obligation. Consequently, merger, which takes
place in the person of the guarantor, while it extinguishes the guaranty,
leaves the principal obligation in force.
III. Problems
Explain or state briefly the rule or reason for your answer.
1. A, B, and C are jointly liable to D in the amount of P15,000. Subsequently, D
assigned his credit to C in consideration for goods sold by C to D. Give the effect
of the assignment.
- In this case, C’s share in the obligation is extinguished because of the
confusion in his person. However, the indebtedness of A and B in the amount
of P5,000 each remains, because as to them there is no confusion.
Consequently, B and C would be liable to C, the new creditor, P5,000 each.
2. Assuming the obligation of A, B, and C is solidary, distinguish the effect of the
assignment from first problem.
- The indorsement to C extinguishes the entire obligation of P15,000. C can
demand reimbursement from A and B.

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