OBLIGATIONS, CONTRACTS, & AGREEMENTS Flashcards
a juridical necessity to give, to do, or not to do
Obligation
It is derived from the Latin word “obligare” which means to bind through giving, doing, or not doing something.
Obligation
The Latin word from which “obligation” is derived.
“obligare”
An obligation is a — because the rights and duties emanating from the obligation may be enforced by the courts of law which may order their performance if refused or neglected.
a juridical necessity
The obligation to give is, in essence, a real obligation because a physical thing is involved, the delivery of the same extinguishes the obligation.
Rephrased: The duty to give something is a real obligation because it involves a physical object, and once the object is delivered, the obligation is fulfilled.
“ to give, to do, or not to do“
Below is an example of a —:
Dad A is obliged to give Son X a bicycle because of his good standing in class as promised.
OBLIGATION
Below is an example of a —:
Student B has to perform his task to do his paper to pass the requirements in school.
OBLIGATION
Below is an example of a —:
Passenger D has to pay the jeepney fare upon reaching his destination.
OBLIGATION
Below is an example of a —:
Driver K has to follow traffic rules in order not to be cited with a traffic violation ticket and to avoid accidents as well.
OBLIGATION
is the moral or legal duty that requires an individual to perform, as well as potential penalties to perform.
Obligation in PH Law
is a duty to do what is imposed by contract, promise, or law.
Obligation in PH Law
In the most general sense, a synonym for obligation is —
duty
The prestation to do or not to do are (—), like to draw a plan of a house (—) or not to draw a plan (—).
personal obligations; positive one; negative one
In all of the above examples, the obligation is demandable when due —
[ask]
A promise is a promise, but promises are made to be —
fulfilled
An obligation is nothing more than the duty of a person (—) to satisfy a specific demandable claim of another person (—), which, if breached, is enforceable in court
obligor; obligee
Below is an example of a —:
Paying taxes as per (BIR [Bureau of Internal Revenue]) internal revenue code
OBLIGATION
Below is an example of a —:
Paying correct standard wages as per DOLE (Department of Labor and Employment)
OBLIGATION
Requisites of an obligation (4)
a) Juridical Tie or Vinculum
b) Prestation
c) Active Subject
d) Passive Subject
is the link that binds the parties
a) Juridical Tie or Vinculum
is the giving, doing, or not doing of something
b) Prestation
is the person who holds the right to demand the prestation
c) Active Subject
is the person against whom the prestation may be demanded
d) Passive Subject
Identify the 4 requisites of an obligation in the example below:
Supplier X entered into a contract to deliver backfilling material to Developer Z.
juridical tie: contract
prestation: to deliver the backfilling materials
active subject: Developer Z
passive subject: Supplier X
Identify the 4 requisites of an obligation in the example below:
Boy G promised to Girl K a dinner date on their anniversary.
juridical tie: promise
prestation: dinner date
active subject: Girl K
passive subject: Boy G
enumerates the sources of obligation
Article 1157 of the Civil Code
Sources of obligation (5)
a) Obligations arising from LAW
b) Obligations arising from CONTRACTS
c) Obligations arising from QUASI-CONTRACTS
d) ACTS OF OMISSIONS PUNISHABLE BY LAW
e) QUASI-DELICTS
Identify source:
The obligation of husband and wife to live with each other, observe mutual respect and fidelity and render mutual support. (adultery)
Obligation arising from LAW
Identify source:
The obligation to pay taxes under the National Internal Revenue Code
Obligation arising from LAW
Identify source:
The obligation of an employer to pay minimum wages to the workers.
Obligation arising from LAW
Identify source:
DMCI, a triple-A category contractor in the PCAB, is under contract to build and deliver the 3rd segment of SKYWAY from Makati to Caloocan City by the end of 2022.
Obligation arising from CONTRACTS
PCAB - Philippine Contractors Accreditation Board
Identify source:
As a heavy equipment supplier and lessor, you are under contract to lease your backhoe and dump truck for the excavation and hauling of the drainage project in Cebu Business Park for 6 weeks.
Obligation arising from CONTRACTS
When duly entered into, the obligation from the contract has the full force of the law between the parties and, hence should be complied with in good faith.
Rephrased: Once a contract is properly made, it has the same power as the law between the parties, so it must be followed in good faith.
Obligation arising from CONTRACTS
is the meeting of minds between two persons, whereby one binds himself with respect to the other to give something or render some services.
contract
is a promise or arrangement between two or more parties to do, or not to do, something, is usually informal and sometimes unwritten (but not always).
agreement
The contracts enumerated and treated in the Civil Code are
Sale,
Barter,
Lease,
Partnership,
Agency,
Loan,
Deposit,
Insurance,
Guaranty,
Pledge, and
Mortgage
is a legally binding agreement between two or more parties. Once signed, this contractual agreement creates a promise that certain rights and obligations will be fulfilled by each party.
contract
In essence, a — is at the heart of every contract.
promise
Some examples of an agreement include (2)
a letter of intent
a confidentiality agreement that precedes a commercial discussion.
Informal agreements are based on —, and aren’t legally enforceable in court or with arbitration – so if one party doesn’t do what they’ve said they will (for example if the contractor or volunteer doesn’t turn up), the other party likely can’t seek a remedy or enforcement through the courts.
trust
What is the difference between an agreement and a contract?
Like an agreement, a contract is a formal arrangement between two or more parties to do or not to do something. But its terms and conditions are legally enforceable- perhaps in court or through arbitration. That means if someone breaks them, the other party can seek legal action.
Rephrased: A contract, like an agreement, is a formal arrangement between two or more parties to take or avoid certain actions. However, its terms and conditions are legally binding, meaning that if one party fails to comply, the other can pursue legal action through court or arbitration.
a “meeting of the minds between two persons whereby one binds himself with respect to the other, to give something, or to render some service”
contract
STAGES OF A CONTRACT (3)
a) Preparation or conception,
b) Perfection or birth
c) Consummation or termination.
Stage that starts from the inception and negotiation that may lead to the parties coming to the terms of the contract
A) Preparation
Stage that marks the time the parties agree upon the object or subject matter and may cause or consideration of the contract.
B) Perfection or birth
Stage that is simply the implementation of the terms of the contract and simultaneous documentation in formal ones
c) Consummation or termination.
Identify stages of the contract:
Contract of Sale of Land
Buyer A drafts a letter of intent to buy a property of Seller B with an offer of 100K. Seller B counter-offers to sell his property at 150K to Buyer A with the condition that real estate taxes will be shouldered by Buyer A and also the relocation expenses. Seller B agrees to sell his property @ 150K if it is surveyed and done with the relocation of the markers and the pay the real estate taxes.
Full payment shall be paid by Buyer A to Seller B once the terms and conditions are agreed upon and satisfied.
Rephrased: Buyer A writes a letter of intent to buy Seller B’s property for $100K. Seller B responds with a counteroffer, asking for $150K and requiring Buyer A to cover real estate taxes and relocation expenses. Seller B agrees to sell at $150K if the property is surveyed, boundary markers are relocated, and real estate taxes are paid. Full payment will be made once all terms are met.
Stage 1 - is the negotiation and putting all the conditions of the buyer to the seller. Preparation and inception
Stage 2 - Once they have prepared all the conditions and agreed upon them, then the Birth or perfection of the contract is done. The signing of the contract.
Stage 3 - Once the markers and relocation survey with the survey drawings are submitted is done. Payment is made. Then the deed of sale is signed and sealed and then consummation of the contract. Consumatun Est
Stages of the Contract:
Stage 1: Negotiation & Preparation – Buyer and seller discuss and agree on the terms.
Stage 2: Contract Signing (Perfection) – Once both parties agree, they sign the contract, making it official.
Stage 3: Completion (Consummation) – After the survey, relocation, and submission of survey drawings, Buyer A makes the payment. The deed of sale is then signed and finalized. Consummatum Est – The contract is fulfilled.
Contractor ABC won a bid to construct a 4-storey commercial building. The terms and conditions were met so contractor A started to mobilize. The building owner then pays the 30% down payment. So full construction activities followed from excavation to re-bars placement to concreting to formworks and scaffoldings and so forth until the building was completed and turned over. Once the terms and conditions were satisfied by the contractor, payments were also made until the turnover of the building and final punch listing. To satisfied Owner then terminates the contract by paying the 10% retention to the contractor ABC following all terms and conditions of the contract.
A very ideal contract; no problems encountered.
Requisites of a Contract (Elements of a Contract)
If the Contract lacks any of the said elements, the contract is null and void, as if it had not existed at all.
1) Consent of the Contracting parties
2) Object Certain - which is the subject matter of the Contract
3) Cause of Obligation - which is established
is the conformity of wills of the contracting parties upon the object and cause as well as the other terms and conditions of the contract.
Consent of the contracting parties
is the subject matter of the contract. All things which are within the commerce of man (e.g., delivery of goods, delivery of services)
Object Certain
e.g. Contract amount
(1) Mode of payment
(a) Delivery date (deadline)
(b) Liquidated damages (LD) penalties
Cause of the Obligation
Is one that was entered into legally by the contracting parties but has resulted in economic damage to one of the parties or an outside party.
RESCISSIBLE CONTRACTS
capable of being rescinded
Rescissible ( adjective)
cancellation of a contract; terminated
Rescinded
may be unilateral; as when a party rightfully cancels a contract because of another party’s material breach. Can also be mutual when the contracting parties agree to discharge all remaining obligations.
Rescission
Below is an example of a —:
A contractor has not delivered the scope of work accordingly using substandard materials. Not following specifications by itself
Rescinded Contracts
Below is an example of a —:
The labor contract did not deliver the certain work on time.
Rescinded Contracts
Below is an example of a —:
The contractor not only breached his contract but also rescinded his contract by not showing up at the job site anymore.
Rescinded Contracts
