EXTRACTS FROM THE

NEW CIVIL CODE OF

THE PHILIPPINES

(Obligations and Contracts)

CENG135: CE LAWS, CONTRACTS AND ETHICS

GROUP 5
Civil Code of the Philippines
The Civil Code of the Philippines is
the product of the codification of private
law in the Philippines. It is the general
law that governs family and property
relations in the Philippines. It was
enacted in 1950, and remains in force to
date with some significant amendments.
TITLE 1: OBLIGATION
Chapter 1
General Provisions
 Article 1156:
An obligation is a juridical
necessity to give, to do or not to do.

Civil Obligation

Natural Obligations

2
4 Essential Requisites of an Obligation

PASSIVE SUBJECT OBJECT/PRESTATION

01. - Debtor or obligor 03. Conduct to be observed by the
- Bound to the fulfillment of debtor
the obligation

ACTIVE SUBJECT JURIDICAL/LEGAL TIE

02. - Creditor or obligee 04. Binds or connects the parties
- Entitled to demand the to the obligation
fulfillment of the obligation

3
KINDS OF OBLIGATION ACCORDING
TO SUBJECT MATTER

Real Obligation Personal Obligation

The subject matter is a thing The subject matter is an act to
which the obligor must be be done or not to be done.
deliver to the obligee

Positive Personal
Obligation
Negative Personal
Obligation
4
Article 1157: Obligations arise from:

LAW
ACTS OR
When they are imposed by law itself

OMISSIONS When they arise from civil liability which is

the consequence of a criminal offense
CONTRACTS
PUNISHED BY LAW When they arise from stipulation of parties
When they arise from damage caused to
QUASI-DELICTS another through an act or omission, there
QUASI- being
Whenfault
relation
theyorarise
exists
unilateral
negligence,
actsbetween
but no
from lawful, contractual
voluntary,
theenforceable
which are parties.
and
to the
CONTRACTS end that no one shall be unjustly enriched
or benefited at the expense of another.

5
Article 1158: Obligations derived from
law are not presumed. Only those
expressly determined in this Code or
in special laws are demandable, and
shall be regulated by the precepts of
the law which establishes them; and
as to what has not been foreseen, by
the provisions.

6
 Article 1159: Obligations arising
from contracts have the force of
law between the contracting
parties and should be complied
with in good faith.

7
Article 1160: Obligations derived from quasi-
contracts shall be subject to the provisions of
Chapter 1, Title XVII, of this Book.

Negotiorum Gestio Solutio Indebiti

Juridical relation which is created
Voluntary management of the when something is received when
property or affairs of another there is no right to demand it or it
without the knowledge or consent was unduly delivered through
of the latter mistake

8
 Article 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 regulating damages.

CIVIL LIABILITIES:
Restitution
Reparation for the damage
caused
Indemnification for
consequential damages 9
Article 1162: Obligations derived
from quasi-delicts shall be
governed by the provisions of
Chapter 2, Title XVIII of this Book,
and by special law.

10
Chapter 2
Nature effect of obligation
 Article 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 require another standard of care.
Generic Thing Specific Thing
MINIMUM STANDARD OF CARE (Indeterminate (Determinate
ORDINARY DILIDENCE Thing) Thing)
reference only to a class
particular designation or
EXTRAORDINARY DILIDENCE or genus.
specification.
Ex. Gerald obliged
Fortuitus Events – affects the himself to give
Example: Gerald obliged
himself to give black
delivery beyond our control. ballpen to Al. ballpen (G-Tec-C3) to Al.

DUTIES OF OBLIGOR/DEBTOR TO GIVE A DETERMINATE THING

1. Takecare
2. Deliver Natural Industrial Civil
3. Deliver the Fruits of the Thing : Fruits Fruits Fruits
 Article 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 require another standard of care.

Natural Industrial Civil

Fruits Fruits Fruits

Produce by lands trough Result of Juridical

Products of the soil
cultivations and labor Relation
(without human
(with human
intervention)
intervention) Eg. Interest, rental
payment
 Article 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 require another standard of care.
Generic Thing Specific Thing
MINIMUM STANDARD OF CARE (Indeterminate (Determinate
ORDINARY DILIDENCE Thing) Thing)
reference only to a class
particular designation or
EXTRAORDINARY DILIDENCE or genus.
specification.
Ex. Gerald obliged
Fortuitus Events – affects the himself to give
Example: Gerald obliged
himself to give black
delivery beyond our control. ballpen to Al. ballpen (G-Tec-C3) to Al.

DUTIES OF OBLIGOR/DEBTOR TO GIVE A DETERMINATE THING

1. Takecare
2. Deliver Natural Industrial Civil
3. Deliver the Fruits of the Thing : Fruits Fruits Fruits
 Article 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 require another standard of care.

DUTIES OF OBLIGOR/DEBTOR TO GIVE A DETERMINATE THING

1. Takecare
2. Deliver
3. Deliver the Fruits of the Thing :
4. To deliver its ACCESIONS and ACCESSORIES even if they have not been mentioned.

Accessions – improvements upon a thing

Accessories – better use perfection

and enjoyment
 Article 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.

Real Right Personal Right

Right or power over a is a right may be
specific thing such as enforced by one person
possession or ownership. to another person
a right of the creditor to demand the
delivery of the thing.
Article 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 at the expense
of the debtor.

If the obligation 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
any fortuitous event until he has effected the
delivery.
Article 1165. When what is to be delivered is a
Those who in the performance of their
determinate thing, the creditor, in addition to the
obligations are guilty of fraud, negligence, or
right granted him by Article 1170, may compel the
delay, and those who in any manner
debtor to make the delivery.
contravene the tenor thereof, are liable for
Fraud – pandadayadamages. (Breaches of obligations)
Causal fraud(with punishment-Incidental fraud (No punishment but the creditor has
right to demand damages and charges.)
Negligence (CULPA)-kapabayaan,
1. Contractual Negligence
2. Criminal Negligence
3. Quasi delic Negligence

Delay (MORA) pagkaantala

1.Mora Solvendi delay in on the part of the debtor
2.Mora Accepiende delay on the part of the creditor
3. Compensatio Morae delay on both parties
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.
 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 has been poorly done be
undone.
Situations contemplated: Remedies of creditor
1. The debtor fails to perform an
obligation 1. Debtor’s expense
2.The debtor performs an 2 And 3
obligations contrary to the Considered Undone, therefore
terms thereof Entitled for damages
3.The debtor performs an
obligation but in POOR MANNER
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. 1169. Those obliged to deliver or to do something incur in delay from
the time the obligee judicially or extrajudicially demands from them the
fulfillment of their obligation.

However, the demand by the creditor shall not be necessary in order that
delay may exist:

(1) When the obligation or the law expressly so declare; or

(2) When from the nature and the circumstances of the obligation it appears
that the designation of the time when the thing is to be delivered or the
service is to be rendered was a controlling motive for the establishment of
the contract; or
(3) When demand would be useless, as when the obligor has rendered it
beyond his power to perform.

In reciprocal obligations, neither party incurs in delay if the other does not
comply or is not ready to comply in a proper manner with what is incumbent
upon him. From the moment one of the parties fulfills his obligation, delay
by the other begins.
 TITLE II:
CONTRACTS
Chapter 1: GENERAL PROVISIONS
￮ ARTICLE 1305. 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 service. (1254a)

2
Characteristics of a Contract
A. Mutuality of Contracts C. Relativity of Contracts
― Its validity and ― Contracts are binding only
performance cannot be left to the upon the parties and their
will of only one of the parties. (Art. successors-in-interest. (Art.
1308) 1311)
B. Autonomy of Contracts D. Consensuality of Contracts

― Parties are free to stipulate ― Contracts are perfected

terms and provisions in a contract, by mere consent. And no form
as long as these terms and is prescribed by law for their
provisions are not contrary to law, validity. Exception: (a)
morals, good customs, public real contracts (such as pledge,
order and public policy. (Art. 1306) chattel mortgage); (b) contracts
covered under the Statute of
Frauds. (Article 1315, 1316, 1403 (2))
E. Obligatory Force of Contract
― By the obligatory force of contracts, it constitutes the law as between the parties
who are compelled to perform under the threat of being sued in the courts of law.
(Art. 1159)
3
1 II.
Classification
of Contracts
A. According to their
relation to other contracts:
1. Preparatory ― Those 2. Principal ― Those 3. Accessory ―
which have for their which can subsist Those which can
object the establishment independently from exist only as a
of a condition in law other contracts and consequence of,
which is necessary as a whose purpose can or in relation
preliminary step towards be fulfilled with, another prior
the celebration of by themselves. contract.
another subsequent con
tract.

Examples: partnership, Examples: sale, lease, Examples: pledge,

agency, common carrier, common mortgage
insurance carrier, insurance

5
B. According to their perfection:
￮ Consensual ― Those which are
perfected by the mere agreement of
the parties.
Examples: sale, lease
￮ Real ― Those which require not only
the consent of the parties for their
perfection, but also the delivery of the
object by one party to the other.
￮ Examples: commodatum, deposit,
pledge
6
According to their form:
1. Common or informal ― Those which require no particular
form.
Example: loan
2. Special or formal ― Those which require some particular
form.
Examples: donation, chattel mortgage

7
D. According
to their
purpose:

1 2 3

8
E. According to their subject matter:
1. Things
￮ Examples: sale, deposit, pledge
2. Services
￮ Examples: agency, lease of services, labor

F. According to the nature of the

vinculum which they produce:
1. Unilateral – or those which give rise to an obligation for only
one of the parties.

Examples: commodatum, gratuitous deposit

2. Bilateral – or those which give rise to reciprocal obligations
for both parties.

Examples: sale, lease 9

G. According to their cause:
Onerous – or those in Gratuitous – or
which each of the those in which one of
parties aspires to the parties proposes
procure for himself to give to the other a
a benefit benefit without
through the giving any equivalent
of an equivalent or compensation.
or compensation.
￮ Examples: sale, Example: commodat
insurance, um
common carrier
10
H. According to the risks involved:
Commutative- or those where each of the parties acquires
equivalent of his presentation and such equivalent is
pecuniary appreciable and already determined from the
moment of the celebration of the contract.
￮ Example: lease

Aleatory- or those where each of the parties has to his

account the acquisition of an equivalent of his prestation,
but such equivalent, although precuniarily appreciable, is
not yet determined at the moment of the celebration of the
contract, since it depends upon the happening of an
uncertain event, thus charging the parties with the risk
of loss or gain.
￮ Example: insurance
11
I. According to their names
or norms regulating them:
👉 Nominate – or those which have their own
individuality and are regulated by
special provisions of law.
Examples: sale, lease, common carrier,
insurance, deposit, agency

👉 Innominate – or those which lack

individuality and are not regulated by special
provisions of law

12
ARTICLE 1306. The contracting parties may 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. (1255a)

ARTICLE 1307. Innominate contracts shall be regulated by the stipulations of the

parties, by the provisions of Contracts, by the rules governing the most analogous
nominate contracts, and by the customs of the place.

ARTICLE 1308. The contract must bind both contracting parties; its validity or
compliance cannot be left to the will of one of them. (1256a)

ARTICLE 1309. The determination of the performance may be left to a third person,
whose decision shall not be binding until it has been made known to both contracting
parties.
ARTICLE 1310. The determination shall not be obligatory if it is evidently inequitable. In
such case, the courts shall decide what is equitable under the circumstances.

ARTICLE 1311. Contracts take effect only between the parties, their assigns and heirs,
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. The heir is not
liable beyond the value of the property he perceived from the decedent.
13
“
￮ If a contact should contain some
stipulation in favor of third person,
he may demand its fulfilment
provided he communicated his
acceptance to the obligor before
its revocation. A mere incidental
benefit or interest of a person is not
sufficient. The contracting parties
must have clearly and deliberately
conferred a favor upon a third
person. (1257a)
14
ARTICLE 1312. In contracts creating real rights, third persons who come into
possession of the object of the contract are bound thereby, subject to the provisions
of the Mortgage Law and the Land Registration Laws.

ARTICLE 1313. Creditors are protected in cases of contracts intended to defraud them.

ARTICLE 1314. Any third person who induces another to violate his contract shall be
liable for damages to the other contracting party.

ARTICLE 1317. No one may contract in the name of another without being authorized
by the latter, or unless he has by law a right to represent him.

A contract entered into in the name of another by one who has no authority or legal
representation, or who has acted beyond his powers, shall be unenforceable,
unless it is ratified, expressly or impliedly, by the person on whose behalf it has
been executed, before it is revoked by the other contracting party. (1259a)

15
 CHAPTER 2:
ESSENTIAL REQUISITES
OF CONTRACT
 General Provisions
ARTICLE 1318: There is no contract unless the
following requisites occur:

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.

SECTION 1.

CONSENT
ARTICLE 1319:
Consent is manifested by the
meeting of the offer and the acceptance
upon the thing and the cause which are
to constitute the contract. The offer
must be certain and the acceptance
absolute. A qualified acceptance
constitutes a counter-offer.
Acceptance made by letter or telegram does not bind
the offerer except from the time it came to his knowledge.
The contract in such a case, is presumed to have been
entered into the place where the offer was made.
ARTICLE 1320: An acceptance may be
expressed or implied.

ARTICLE 1321: The person making the offer

may fix the time, place, and manner of
acceptance, all of which must be complied
with.
ARTICLE 1322: An offer made through an
agent is accepted from the time acceptance is
communicated to him.

ARTICLE 1323: An offer becomes ineffective

upon the death, civil interdiction, insanity, or
insolvency of either party before acceptance
is conveyed.
ARTICLE 1324: When the offerer has allowed the
offeree ascertain period to accept, the offer may be
withdrawn at any time before acceptance by
communicating such withdrawal, except when the
option is rounded upon a consideration, as
something paid or promised.

ARTICLE 1325: Unless it appears otherwise,

business advertisements of things for sale are not
definite offers, but mere invitations to make an
offer.
ARTICLE 1326: Advertisement for bidders are
simply invitations to make proposals, and the
advertiser is not bound to accept the highest or
lowest bidder, unless the contrary appears.

ARTICLE 1327: The following cannot give consent to

a contract:

1) Unemancipated minors;

2) Insane or demented persons, and deaf-mutes who do not know

how to write.
ARTICLE 1328: Contracts entered into during a
lucid interval are valid, contracts agreed to in a
state of drunkenness or during a hypnotic spell
are voidable.

ARTICLE 1329: The incapacity declared in

article 1327 is subject to the modifications
determined by law, and is understood to be
without prejudice to special disqualifications
established in the laws.
ARTICLE 1330: A contract where consent is given
through mistake, violence, intimidation, undue
influence or fraud is voidable.

ARTICLE 1331: In order that mistake may invalidate

consent, it should refer to the substance of the thing
which is the object of the contract, or to those
conditions which have principally moved one or both
parties to enter into the contract.
Mistake as to the identity or qualifications of one of the parties will vitiate consent
only when such identity or qualifications have been the principal cause of contract.
A simple mistake of account shall give rise to its correction.
ARTICLE 1332: When one of the parties is unable to
read, or if the contract is in a language not
understood by him, and mistake or fraud is alleged,
the person enforcing the contract must show that
the terms thereof have been fully explained to the
former.

ARTICLE 1333: There is no mistake if the party

alleging it know the doubt, contingency, or risk
affecting the object of the contract.

ARTICLE 1334: Mutual error as to the legal effect of

an agreement when the real purpose of the parties
is frustrated may vitiate consent.
ARTICLE 1335: There is violence when in order to wrest
consent, serious or irresistible force is employed.

There is intimidation when one of the contracting parties is

compelled by a reasonable and wellgrounded fear of an
imminent and grave peril upon his person or property, or upon
the person or property of his spouse, descendants or ascendants,
to give his consent.

To determine the degree of the intimidation, the age, sex and

condition of the person shall be borne in mind.

A threat to enforce one’s claim through competent authority,

if the claim is just or legal, does not vitiate consent.
ARTICLE 1336: Violence or intimidation shall annul
the obligation, although it may have been employed
by third Person who did not take part in the contract.

ARTICLE 1337: There is undue influence when a

person takes improper advantage of his power over
the will of another, depriving the latter of a
reasonable freedom of choice.

The following circumstances shall be considered: the confidential,

family, spiritual, and other relations between the parties, or the fact
that the person alleged to have been unduly influenced was suffering
from mental weakness, or was ignorant or in financial distress.
ARTICLE 1338: There is fraud when, through insidious
words or machinations of one of the contracting
parties, the other is induced to enter into contract
which, without them, he would not have agreed to.

ARTICLE 1339: Failure to disclose facts, when there is

a duty to reveal them, as when the parties are bound
by confidential relations, constitutes fraud.
ARTICLE 1340: The usual exaggerations in
trade, when the other party had an opportunity
to know the facts, are not in themselves
fraudulent.

ARTICLE 1341: A mere expression of an opinion

does not signify fraud, unless made by an
expert and the other party has relied on the
former’s special knowledge.
ARTICLE 1342: Misrepresentation by a third person
does novitiate consent, unless such misrepresentation
has created substantial mistake and the same is mutual.

ARTICLE 1343: Misrepresentation made in good faith is

not fraudulent but may constitute error.

ARTICLE 1344: In order that fraud may make a contract

voidable, it should be serious and should not have been
employed by both contracting parties. Incidental fraud
only obliges the person employing it to pay damages.
ARTICLE 1335: Simulation of a contract may be
absolute or relative. The former takes place when
the parties do not intend to be bound at all; the
latter, when the parties conceal their true
agreement.

ARTICLE 1346: An absolutely simulated or

fictitious contracts void. A relative simulation,
when it does not prejudice third person and is not
intended for any purpose contrary to law, morals,
good customs, public order or public policy binds
the parties to their real agreement.
 SECTION 2:

OBJECT OF CONTRACTS
ARTICLE 1347: All things which are not outside the
commerce of men, including future things, may be the object
of contract. All rights which are not in transmissible may
also be the object of contracts.

No contract may be entered into upon future inheritance except

in cases expressly authorized by law.

All services which are not contrary to law, morals,

good customs, public order or public policy may
likewise be the object of a contract.
ARTICLE 1348: Impossible things or services cannot be
the object of contracts.

ARTICLE 1349: The object of every contract must be

determinate so as to its kind. The fact that the quantity is
not determinate shall not be an obstacle to the existence
of a contract, provided it is possible to determine the
same, without the need of a new contract between the
parties.
 SECTION 3:

CAUSE OF CONTRACTS
ARTICLE 1350: In onerous contracts the cause is
understood to be, for each contracting party, the
prostration or promise of a thing or service by the other; in
remunerator ones, the service or benefit which is
remunerated; and in contrast of pure beneficence, the
mere liberality of the benefactor.

ARTICLE 1351: The particular motives of the parties in

entering into a contract are different from the cause
thereof.
ARTICLE 1352: Contracts without cause, or with
unlawful cause, produce no effect whatever. The cause
is unlawful if is contrary to law, morals, good customs,
public order or public policy.

ARTICLE 1353: The statement of a false

cause in contracts shall render them void, if it
should not be proved that they were rounded
upon another cause which is true and lawful.
ARTICLE 1354: Although the cause is not stated in the
contract, it is presumed that it exist and is lawful, unless
the debtor proves the contrary.

ARTICLE 1355: Except in cases specified by law, lesion

or inadequacy of cause shall not invalidate a contract,
unless there has been fraud, mistake or undue influence.
 REFERENCES:

https://www.google.com/urlsa=t&source=web&rct=j&url=https://www.chan
01 robles.com/civilcodeofthephilippinesbook4.htm&ved=2ahUKEwj0wPDmydL
wAhWUad4KHeG4Bn8QFjAAegQIBBAC&usg=AOvVaw0d5bIHmqc7flZprrvl
w55i&cshid=1621318501804

02 https://www.slideshare.net/jojoisanan_mendoza/jojo-obligation-
and-contracts-ppt
REPORTERS:
Sapo, Christian R.
Sarra, Gaile Marie T.
Tagle, Mark Anthony P.
Tesorero, Alchristine Joy R.
Valenciado, Alexandria T.
Valentino, Al Franco, R.
Villanueva, Kevin A.
Villena, Michelle Mae P.
THE END