VIII. OBLIGATIONS AND CONTRACTS

Question 1

A. Obligations
1. Civil and Natural Obligations – Civil Code, arts. 1423-1430
2. General Provisions – Civil Code, arts. 1156-1162
3. Nature and Effect of Obligations – Civil Code, arts. 1163-1178
4. Different Kinds of Obligations – Civil Code, arts. 1179-1230
5. Extinguishment of Obligations – Civil Code, arts. 1231-1304

Discuss #1

Answer 1

Civil and Natural Obligations under the Civil Code of the Philippines (Articles 1423-1430)

Mnemonic: “CVB BOND”

C - Civil Obligations (Art. 1423):
- Civil obligations are those which give a right of action to compel their performance.
- Example: A contract for the sale of goods where the buyer can sue the seller for delivery.

V - Voidable Contracts (Art. 1424):
- Obligations from voidable contracts can be ratified and then produce the same effects as valid contracts.
- Example: A minor entering into a contract, which can be ratified upon reaching the age of majority.

B - Benefit Received (Art. 1425):
- When a minor receives a benefit from a contract, the contract cannot be annulled if the minor cannot return the benefit.
- Example: A minor receiving essential goods on credit and cannot return them.

B - Binding Recognition (Art. 1426):
- When a person voluntarily recognizes a natural obligation and performs it, it is as binding as a civil obligation.
- Example: A debt prescribed by the statute of limitations but paid voluntarily.

O - Obligation to Return (Art. 1427):
- Those who received something under a natural obligation are not required to return it.
- Example: Paying off a gambling debt, which the creditor cannot demand but can keep if paid.

N - Natural Obligations (Art. 1423):
- Natural obligations do not grant a right of action to enforce their performance but arise from moral duty and can be recognized by law.
- Example: Reimbursing a friend for money they lent without any formal agreement.

D - Debt Acknowledgment (Art. 1428):
- Payment of a debt acknowledged as a natural obligation (such as a prescribed debt) is considered valid and cannot be recovered.
- Example: Voluntarily paying a time-barred debt.

Grouped Explanation:

1. Civil Obligations (Art. 1423):
   
   • These obligations provide a legal right to enforce their performance through the court system.
   • Example: A borrower fails to repay a loan on time; the lender can sue to recover the debt.
2. Natural Obligations (Arts. 1423-1424, 1426-1428):
   
   • Art. 1424: Natural obligations are based on moral duty but cannot be enforced by action.
     
     • Example: A moral duty to support a sibling financially in times of need.
   • Art. 1426: Voluntary performance of natural obligations gives them the same binding effect as civil obligations.
     
     • Example: Paying a prescribed debt willingly.
   • Art. 1427: Benefits received under natural obligations need not be returned.
     
     • Example: Keeping money paid for a gambling debt.
   • Art. 1428: Payments on acknowledged natural obligations cannot be recovered.
     
     • Example: Settling a morally recognized debt after it has prescribed.
3. Voidable Contracts and Benefits (Arts. 1424-1425):
   
   • Art. 1424: Voidable contracts can become enforceable if ratified.
     
     • Example: A minor’s contract ratified upon reaching adulthood.
   • Art. 1425: If a minor benefits from a contract, annulment cannot occur if the benefit cannot be returned.
     
     • Example: Minor receiving necessities which they cannot return.

Illustrative Examples:

• Civil Obligation Example: A loan agreement where the borrower is legally required to repay the lender, and the lender can sue for non-payment.
• Natural Obligation Example: An individual pays off a debt that has expired due to the statute of limitations. This payment cannot be reclaimed because it was done out of a moral sense of duty.
• Voidable Contract Example: A 17-year-old enters into a lease agreement and later ratifies it at 18, making the contract binding.
• Benefit Example: A minor buys food on credit and consumes it. The seller cannot annul the contract if the food cannot be returned.

This mnemonic and grouping should help in memorizing and understanding the Civil and Natural Obligations under the Civil Code of the Philippines.

Question 2

A. Obligations
1. Civil and Natural Obligations – Civil Code, arts. 1423-1430
2. General Provisions – Civil Code, arts. 1156-1162
3. Nature and Effect of Obligations – Civil Code, arts. 1163-1178
4. Different Kinds of Obligations – Civil Code, arts. 1179-1230
5. Extinguishment of Obligations – Civil Code, arts. 1231-1304

Discuss # 2

Answer 2

General Provisions of the Civil Code of the Philippines (Articles 1156-1162)

Mnemonic: “OCAC QNI”

• O - Obligation (Art. 1156)
• C - Contractual Obligations (Art. 1157)
• A - Acts or Omissions Punished by Law (Art. 1157)
• C - Compliance and Performance (Art. 1158)
• Q - Quasi-contracts (Art. 1157)
• N - Natural Obligations (Art. 1157)
• I - Illicit Acts (Art. 1159-1162)

Grouped Explanation:

1. Obligation (Art. 1156):
   
   • Definition: A juridical necessity to give, to do, or not to do.
   • Example: A contract to deliver goods on a specified date.
2. Sources of Obligations (Art. 1157):
   
   • Law: Obligations arising directly from law.
     
     • Example: Tax obligations imposed by the government.
   • Contracts: Obligations arising from agreements.
     
     • Example: A lease agreement.
   • Quasi-contracts: Arise from lawful, voluntary acts that benefit another.
     
     • Example: Unjust enrichment, where someone benefits without a contract.
   • Acts or Omissions Punished by Law: Arising from offenses.
     
     • Example: Liability for damages due to a criminal act.
   • Quasi-delicts: Arise from damage caused to another through fault or negligence.
     
     • Example: A car accident caused by reckless driving.
3. Compliance and Performance (Art. 1158):
   
   • Definition: Obligations must be performed in accordance with their terms and conditions.
   • Example: A loan contract specifying monthly payments must be complied with exactly.
4. Illicit Acts (Art. 1159-1162):
   
   • Art. 1159: Obligations from contracts have the force of law between parties.
     
     • Example: Breach of a contract may lead to legal consequences.
   • Art. 1160: Obligations arising from quasi-contracts must be complied with.
     
     • Example: A person who mistakenly receives money not owed to them must return it.
   • Art. 1161: Civil obligations arising from criminal offenses.
     
     • Example: Restitution for theft.
   • Art. 1162: Obligations derived from quasi-delicts (torts).
     
     • Example: Compensation for injuries caused by negligence.

Illustrative Examples:

• Obligation Example (Art. 1156): A supplier agrees to deliver 100 bags of rice to a retailer on the first of every month. This is a juridical necessity, and failure to comply can result in legal action.
• Contractual Obligations Example (Art. 1157): Two parties sign a contract for the lease of a property, establishing the lessee’s obligation to pay rent monthly.
• Acts or Omissions Punished by Law Example (Art. 1157): A person who commits theft is obliged to return the stolen item or its equivalent value and may also face criminal charges.
• Quasi-contract Example (Art. 1157): If someone accidentally receives a payment meant for another person, they are obliged to return it, even without a prior agreement.
• Compliance Example (Art. 1158): If a borrower agrees to repay a loan in installments, they must adhere strictly to the repayment schedule.
• Illicit Acts Example (Arts. 1159-1162):
  • Art. 1159: If a tenant breaches the terms of a lease contract, the landlord can seek legal remedies.
  • Art. 1160: If someone finds and keeps money that was mistakenly transferred to their account, they must return it.
  • Art. 1161: A person convicted of embezzlement must return the embezzled funds and may face additional penalties.
  • Art. 1162: A driver who causes an accident due to negligence must compensate the injured party for medical expenses and damages.

This mnemonic and grouping should help in memorizing and understanding the General Provisions of the Civil Code of the Philippines under Articles 1156-1162.

Question 3

A. Obligations
1. Civil and Natural Obligations – Civil Code, arts. 1423-1430
2. General Provisions – Civil Code, arts. 1156-1162
3. Nature and Effect of Obligations – Civil Code, arts. 1163-1178
4. Different Kinds of Obligations – Civil Code, arts. 1179-1230
5. Extinguishment of Obligations – Civil Code, arts. 1231-1304

Discuss # 3

Answer 3

Nature and Effect of Obligations – Civil Code of the Philippines (Articles 1163-1178)

Mnemonic: “DOP REDCC”

• D - Determinate vs. Indeterminate Things (Art. 1163)
• O - Obligor’s Duty (Art. 1164)
• P - Performance and Perfection (Art. 1165)
• R - Rights and Remedies (Art. 1166-1167)
• E - Extraordinary Diligence (Art. 1168)
• D - Damages (Art. 1170)
• C - Consensual Contracts (Art. 1171-1172)
• C - Conditions and Conditional Obligations (Art. 1173-1178)

Grouped Explanation:

1. Determinate vs. Indeterminate Things (Art. 1163):
   
   • Determinate: The object of the obligation is specifically designated or physically segregated.
   • Indeterminate: The object is designated only by its kind, without specific identification.
   • Example: A specific car (determinate) vs. any car of a certain model (indeterminate).
2. Obligor’s Duty (Art. 1164):
   
   • The obligor must take care of the object with the proper diligence of a good father of a family.
   • Example: A borrower must take good care of the borrowed car as a diligent owner would.
3. Performance and Perfection (Art. 1165):
   
   • The obligor must deliver the determinate object or perform the obligation according to its terms.
   • Example: Delivering the specific car agreed upon in the sale contract.
4. Rights and Remedies (Art. 1166-1167):
   
   • Art. 1166: Obligor must deliver the fruits of the object from the time the obligation to deliver arises.
     
     • Example: Delivering the rent generated by a leased property from the time it was supposed to be delivered.
   • Art. 1167: If the obligation involves doing something, and the obligor fails, the obligee can have it done at the obligor’s expense.
     
     • Example: Hiring someone to complete a renovation that the contractor failed to finish, and charging the cost to the contractor.
5. Extraordinary Diligence (Art. 1168):
   
   • Obligations to do or not to do require the same diligence as in obligations to give.
   • Example: A contractor must exercise extraordinary diligence to ensure a building is constructed safely.
6. Damages (Art. 1170):
   
   • The obligor is liable for damages in case of fraud, negligence, delay, or contravention of the tenor of the obligation.
   • Example: A contractor who fraudulently uses substandard materials must pay for damages.
7. Consensual Contracts (Art. 1171-1172):
   
   • Art. 1171: Responsibility arising from fraud is demandable in all obligations.
   • Art. 1172: Responsibility arising from negligence in the performance of every kind of obligation is also demandable.
   • Example: A seller who misrepresents the quality of goods (fraud) or delivers them late due to carelessness (negligence) is liable for damages.
8. Conditions and Conditional Obligations (Art. 1173-1178):
   
   • Obligations may be subject to a condition, which must be fulfilled before the obligation becomes demandable.
   • Example: An obligation to pay a sum of money only if a specific event occurs, such as the approval of a loan.

Illustrative Examples:

1. Determinate vs. Indeterminate Things (Art. 1163):
   
   • Determinate: A contract specifies the sale of Juan’s red Toyota Corolla with plate number XYZ123.
   • Indeterminate: A contract specifies the sale of any red Toyota Corolla.
2. Obligor’s Duty (Art. 1164):
   
   • A tenant must take care of the rented apartment as a good father of a family would.
3. Performance and Perfection (Art. 1165):
   
   • If a seller fails to deliver the specific car sold, the buyer can demand its delivery or an equivalent replacement.
4. Rights and Remedies (Art. 1166-1167):
   
   • Art. 1166: If a landlord must deliver an apartment’s rent from the start of the lease, they must also deliver the rent collected from any subleasing.
   • Art. 1167: If a contractor abandons a construction project, the homeowner can hire another contractor and charge the cost to the original contractor.
5. Extraordinary Diligence (Art. 1168):
   
   • A security company contracted to protect a bank must exercise extraordinary diligence in its duty.
6. Damages (Art. 1170):
   
   • If a contractor delays a project due to negligence, causing the client to lose business, the contractor must compensate for the losses.
7. Consensual Contracts (Art. 1171-1172):
   
   • Art. 1171: A seller who fraudulently claims a product is genuine when it is fake must compensate the buyer.
   • Art. 1172: A delivery service that negligently damages goods in transit must pay for the damages.
8. Conditions and Conditional Obligations (Art. 1173-1178):
   
   • A person agrees to donate a sum to a charity only if the charity reaches a certain fundraising goal.

This mnemonic and grouping should help in memorizing and understanding the Nature and Effect of Obligations under the Civil Code of the Philippines (Articles 1163-1178).

Question 4

A. Obligations
1. Civil and Natural Obligations – Civil Code, arts. 1423-1430
2. General Provisions – Civil Code, arts. 1156-1162
3. Nature and Effect of Obligations – Civil Code, arts. 1163-1178
4. Different Kinds of Obligations – Civil Code, arts. 1179-1230
5. Extinguishment of Obligations – Civil Code, arts. 1231-1304

Discuss # 4

Answer 4

Different Kinds of Obligations – Civil Code of the Philippines (Articles 1179-1230)

Mnemonic: “C-FALC-DOMN”

• C - Conditional Obligations (Art. 1179-1192)
• F - Fulfillment of Conditions (Art. 1181-1182)
• A - Alternative Obligations (Art. 1199-1206)
• L - Loss of Thing (Art. 1189)
• C - Conjunctive and Disjunctive Obligations (Art. 1207-1208)
• D - Divisible and Indivisible Obligations (Art. 1210-1225)
• O - Obligations with a Period (Art. 1193-1198)
• M - Multiple or Joint Obligations (Art. 1207-1212)
• N - Natural Obligations (Art. 1423-1430)

Grouped Explanation:

1. Conditional Obligations (Art. 1179-1192):
   
   • Definition: Obligations that depend on a future and uncertain event.
   • Example: A promise to pay a sum of money if a particular event occurs, such as passing a certification exam.
2. Fulfillment of Conditions (Art. 1181-1182):
   
   • Suspensive Condition: Obligation arises only upon fulfillment.
   • Resolutory Condition: Obligation is terminated upon fulfillment.
   • Example: Payment for goods to be made upon delivery (suspensive); contract termination if a condition is breached (resolutory).
3. Alternative Obligations (Art. 1199-1206):
   
   • Definition: Obligations where several prestations are due, but the performance of one is sufficient.
   • Example: An agreement to deliver either rice or corn; fulfilling either delivery suffices.
4. Loss of Thing (Art. 1189):
   
   • Definition: Obligation is extinguished if the specific thing is lost without the debtor’s fault.
   • Example: A painting to be delivered is destroyed in a fire without the owner’s fault.
5. Conjunctive and Disjunctive Obligations (Art. 1207-1208):
   
   • Conjunctive: All parts of the obligation must be performed.
   • Disjunctive: Only one of the multiple prestations needs to be performed.
   • Example: Delivering both rice and corn (conjunctive) vs. delivering either rice or corn (disjunctive).
6. Divisible and Indivisible Obligations (Art. 1210-1225):
   
   • Divisible: Obligation can be performed in parts.
   • Indivisible: Obligation cannot be performed in parts.
   • Example: Paying a debt in installments (divisible) vs. delivering a complete car (indivisible).
7. Obligations with a Period (Art. 1193-1198):
   
   • Definition: Obligations that are to be performed at a future time or upon the arrival of a period.
   • Example: A loan to be repaid after five years.
8. Multiple or Joint Obligations (Art. 1207-1212):
   
   • Joint Obligation: Each debtor is liable only for their part.
   • Solidary Obligation: Each debtor is liable for the entire obligation.
   • Example: Several people jointly promising to pay a sum, each responsible for a portion (joint) vs. any one of them being liable for the whole amount (solidary).

.

Illustrative Examples:

1. Conditional Obligations (Art. 1179-1192):
   
   • Example: Juan promises to donate PHP 10,000 to Maria if she passes the bar exam. This is a suspensive condition because the obligation arises upon Maria passing the exam.
2. Fulfillment of Conditions (Art. 1181-1182):
   
   • Suspensive: Juan will pay Maria PHP 5,000 if she graduates. The obligation only arises upon graduation.
   • Resolutory: Juan will continue to provide financial support to Maria unless she gets a job. The obligation ends when she gets a job.
3. Alternative Obligations (Art. 1199-1206):
   
   • Example: Pedro agrees to deliver either 100 kg of rice or 100 kg of corn. Performing either of the prestations fulfills the obligation.
4. Loss of Thing (Art. 1189):
   
   • Example: A contract to deliver a specific antique vase becomes impossible to fulfill if the vase is accidentally destroyed in a natural disaster.
5. Conjunctive and Disjunctive Obligations (Art. 1207-1208):
   
   • Conjunctive: Carlos is obligated to deliver both 50 kg of rice and 50 kg of corn to Ana.
   • Disjunctive: Carlos is obligated to deliver either 50 kg of rice or 50 kg of corn to Ana.
6. Divisible and Indivisible Obligations (Art. 1210-1225):
   
   • Divisible: A debt of PHP 100,000 can be paid in ten installments of PHP 10,000.
   • Indivisible: The obligation to deliver a specific car cannot be divided and must be fulfilled as a whole.
7. Obligations with a Period (Art. 1193-1198):
   
   • Example: Luis borrows PHP 50,000 and agrees to repay it after two years. The obligation is to be performed upon the arrival of the specified period.
8. Multiple or Joint Obligations (Art. 1207-1212):
   
   • Joint Obligation: Three friends jointly promise to pay PHP 30,000, each liable for PHP 10,000.
   • Solidary Obligation: Three friends promise to pay PHP 30,000, and any one of them can be held responsible for the entire amount.

Question 5

A. Obligations
1. Civil and Natural Obligations – Civil Code, arts. 1423-1430
2. General Provisions – Civil Code, arts. 1156-1162
3. Nature and Effect of Obligations – Civil Code, arts. 1163-1178
4. Different Kinds of Obligations – Civil Code, arts. 1179-1230
5. Extinguishment of Obligations – Civil Code, arts. 1231-1304

Question 6

MCQ 1:
Which of the following is a characteristic of a natural obligation under the Civil Code of the Philippines?

A. It grants the obligee a right to enforce performance through legal action.
B. It arises from a contract that is void ab initio and cannot be ratified.
C. It is based on a moral duty and does not grant a right of action to enforce performance.
D. It is always annulled if the obligor is a minor.

Answer 6

Answer: C. It is based on a moral duty and does not grant a right of action to enforce performance.

Legal Reasoning:
Natural obligations do not grant a right of action to enforce their performance but arise from a sense of moral duty (Art. 1423). They are not enforceable by legal means but can be recognized by law if voluntarily performed.

Question 7

MCQ 2:
A minor enters into a contract to purchase essential goods on credit. The minor later refuses to pay, claiming the contract is voidable due to minority. Which article of the Civil Code applies, and what is the likely outcome?

A. Art. 1424 - The contract is voidable and can be annulled regardless of the minor’s ability to return the goods.
B. Art. 1425 - The contract cannot be annulled if the minor cannot return the goods.
C. Art. 1426 - The contract is binding if recognized voluntarily.
D. Art. 1427 - The contract is not binding, and the minor must return the goods.

Answer 7

Answer: B. Art. 1425 - The contract cannot be annulled if the minor cannot return the goods.

Legal Reasoning:
Article 1425 states that if a minor receives a benefit from a contract, the contract cannot be annulled if the minor cannot return the benefit.
Since the minor received essential goods, the contract remains valid to the extent that the minor cannot return the goods.

Question 8

MCQ 3:
Which of the following best illustrates a situation where a natural obligation is transformed into a binding obligation?

A. A person promises to repay a friend for a gift received years ago.
B. A debtor voluntarily pays a debt that is already prescribed by the statute of limitations.
C. A minor enters into a contract that is ratified upon reaching the age of majority.
D. An individual signs a contract under duress but later decides to honor it voluntarily.

Answer 8

Answer: B. A debtor voluntarily pays a debt that is already prescribed by the statute of limitations.

Legal Reasoning:
Article 1426 of the Civil Code provides that when a person voluntarily recognizes a natural obligation and performs it, it is as binding as a civil obligation. Voluntarily paying a prescribed debt, which cannot be legally enforced, transforms the natural obligation into a binding one.

Question 9

MCQ 4:
Which of the following is NOT a characteristic of a civil obligation under the Civil Code of the Philippines?

A. It gives a right of action to compel performance.
B. It can be enforced through the court system.
C. It is based solely on moral duty without any legal binding effect.
D. It can arise from contracts, quasi-contracts, delicts, or quasi-delicts.

Answer 9

Answer: C. It is based solely on moral duty without any legal binding effect.

Legal Reasoning:
Civil obligations are those that provide a legal right to enforce their performance through the court system (Art. 1423). They can arise from contracts, quasi-contracts, delicts, or quasi-delicts and grant the obligee a right of action. Natural obligations, on the other hand, are based on moral duty and do not grant a right of action.

Question 10

1. A supplier enters into a contract with a retailer to deliver 100 bags of rice on the first of every month. On the scheduled delivery date, the supplier fails to deliver the goods. What type of obligation is being breached, and what legal action can the retailer take?a. Quasi-contract; the retailer can demand the return of any payment made.b. Civil obligation; the retailer can file a lawsuit to compel delivery or seek damages.c. Natural obligation; the retailer can only request compliance as it’s based on moral duty.d. Quasi-delict; the retailer can claim damages for negligence.

Answer 10

1. Civil obligation; the retailer can file a lawsuit to compel delivery or seek damages: Civil obligations (Art. 1156) are enforceable through legal action. The failure to deliver goods constitutes a breach of this obligation, giving the retailer the right to seek legal remedies.Answer: b. Civil obligation; the retailer can file a lawsuit to compel delivery or seek damages.
   Legal Reasoning: Under Article 1156, a civil obligation is a juridical necessity to give, to do, or not to do, and it can be legally enforced through the courts.

Question 11

2. A person mistakenly receives a payment intended for someone else and uses it to pay off their debts. Under which provision does this scenario fall, and what is the recipient’s obligation?a. Contract; the recipient has no obligation as there was no agreement.b. Quasi-delict; the recipient must compensate the sender for negligence.c. Quasi-contract; the recipient must return the payment.d. Natural obligation; the recipient can keep the money based on moral grounds.

Answer 11

2. Quasi-contract; the recipient must return the payment: Quasi-contracts (Art. 1160) arise from situations where a person benefits without an agreement, creating an obligation to return the mistakenly received payment.Answer: c. Quasi-contract; the recipient must return the payment.
   Legal Reasoning: Under Article 1160, obligations arising from quasi-contracts must be complied with, including returning money mistakenly received.

Question 12

3. An individual commits theft and is ordered by the court to return the stolen items and compensate the victim. Which type of obligation is being enforced, and under which article?a. Contractual obligation under Article 1157.b. Civil obligation arising from a criminal offense under Article 1161.c. Quasi-delict under Article 1162.d. Natural obligation under Article 1157.

Answer 12

3. Civil obligation arising from a criminal offense: Civil obligations from criminal offenses (Art. 1161) require restitution and compensation for damages caused by the offense, in this case, theft.Answer: b. Civil obligation arising from a criminal offense under Article 1161.
   Legal Reasoning: Article 1161 addresses civil obligations arising from criminal offenses, requiring the return of stolen items and compensation for damages.

Question 13

4. A minor enters into a contract to lease an apartment but decides to annul it. The landlord argues that the minor has benefited from staying in the apartment and should not annul the contract. Under which provision can this dispute be resolved, and what is the likely outcome?a. Article 1157 on quasi-contracts; the contract stands since the minor benefited.b. Article 1158 on compliance; the contract must be performed as agreed.c. Article 1425 on benefits received; the minor cannot annul the contract if the benefit cannot be returned.d. Article 1160 on quasi-contracts; the contract is void and the minor can annul it.

Answer 13

4. Article 1425 on benefits received: If a minor cannot return the benefits received from a contract, annulment is not permitted (Art. 1425), protecting the landlord’s right to payment for the apartment use.Answer: c. Article 1425 on benefits received; the minor cannot annul the contract if the benefit cannot be returned.
   Legal Reasoning: Under Article 1425, if a minor has received a benefit from a contract that cannot be returned, the contract cannot be annulled.

Question 14

Question 1:
A manufacturing company contracts with a supplier to deliver 1000 units of a specific part by June 1st. The contract specifies the exact model and specifications of the part. However, the supplier delivers a different model on June 1st. What right does the manufacturing company have under the Civil Code?

A. Accept the different model and seek a price reduction.
B. Reject the delivery and demand the specific part as agreed.
C. Accept the delivery and demand additional parts for compensation.
D. Reject the delivery and cancel the contract without further obligation.

Answer 14

Answer: B. Reject the delivery and demand the specific part as agreed.
Legal Reasoning: Under Article 1163, the obligor must deliver the determinate thing agreed upon. The manufacturing company has the right to demand the specific part that was specified in the contract.

Question 15

Question 2:
An online retailer agrees to ship a rare collectible item to a customer. The item is a one-of-a-kind, autographed book. Before the shipment, the retailer misplaces the book and tries to send a different, unsigned copy instead. What is the retailer’s obligation according to the Civil Code?

A. The retailer must replace the book with any similar book.
B. The retailer must offer a refund and cancel the contract.
C. The retailer must locate and deliver the specific autographed book.
D. The retailer can substitute the book with another item of equal value.

Answer 15

Answer: C. The retailer must locate and deliver the specific autographed book.
Legal Reasoning: Under Article 1165, the obligor must deliver the determinate object or perform the obligation according to its terms. The retailer is obligated to deliver the specific autographed book as agreed.

Question 16

Question 3:
A construction company contracts to build a house by December 1st. Due to negligence, the project is delayed, causing the homeowner to incur additional living expenses. Under the Civil Code, what is the construction company liable for?

A. Only the cost to complete the construction.
B. Any damages caused by the delay, including additional living expenses.
C. Only the material costs incurred by the homeowner.
D. No liability, as delays are common in construction.

Answer 16

Answer: B. Any damages caused by the delay, including additional living expenses.
Legal Reasoning: According to Article 1170, the obligor is liable for damages in case of negligence, delay, or contravention of the obligation’s terms. The construction company is responsible for compensating the homeowner for the additional expenses incurred due to the delay.

Question 17

Question 4:
An NGO receives a conditional donation, which will be given only if they raise a matching amount within a year. The NGO fails to raise the matching funds within the specified time. What is the status of the donation under the Civil Code?

A. The donation is automatically granted to the NGO.
B. The donation is nullified due to the unmet condition.
C. The NGO can appeal for an extension to meet the condition.
D. The NGO receives half of the donation for their efforts.

Answer 17

Answer: B. The donation is nullified due to the unmet condition.
Legal Reasoning: Under Articles 1173-1178, conditional obligations require the fulfillment of the specified condition for the obligation to become demandable. Since the NGO did not meet the condition, the donation is nullified.

Question 18

Multiple Choice Questions on Different Kinds of Obligations (Articles 1179-1230)

1. Conditional Obligations:

Juan promises to donate PHP 50,000 to Maria if she graduates with honors. Maria, unfortunately, does not meet the honors criteria but graduates. Which statement is correct regarding Juan’s obligation?

A. Juan must still donate PHP 50,000 because Maria graduated.

B. Juan’s obligation is extinguished because the condition was not met.

C. Juan can donate a lesser amount if he chooses to.

D. Juan must donate PHP 50,000 only if Maria agrees to perform an additional task.

Answer: B

Reasoning: The obligation was conditional upon Maria graduating with honors (suspensive condition). Since this specific condition was not met, the obligation to donate PHP 50,000 is extinguished.

2. Fulfillment of Conditions:

Which of the following is an example of a resolutory condition?

A. Juan will pay Maria PHP 10,000 if she wins a singing contest.

B. Maria will receive a monthly allowance from Juan until she gets a job.

C. Pedro will deliver either 100 kg of rice or 100 kg of corn to Ana.

D. Carlos must deliver a specific antique vase by next month.

Answer: B

Reasoning: A resolutory condition causes an obligation to end when a certain event occurs. Here, the obligation to provide an allowance will cease once Maria gets a job.

3. Alternative Obligations:

Pedro agrees to deliver either 100 kg of rice or 100 kg of corn to Ana. If Pedro delivers 100 kg of rice, what is the legal effect?

A. Pedro must still deliver 100 kg of corn.

B. The obligation is fully satisfied.

C. Ana can demand 100 kg of corn instead.

D. Pedro must deliver both 100 kg of rice and 100 kg of corn.

Answer: B

Reasoning: In an alternative obligation, performing one of the prestations (delivering 100 kg of rice) fully satisfies the obligation.

4. Loss of Thing:

A contract obligates Pedro to deliver a specific painting to Ana. Before delivery, the painting is destroyed in a fire without Pedro’s fault. What is the legal consequence?

A. Pedro must find an identical painting to deliver.

B. Pedro must compensate Ana for the value of the painting.

C. Pedro’s obligation is extinguished.

D. Ana can demand another artwork from Pedro.

Answer: C

Reasoning: When the specific thing is lost without the debtor’s fault, the obligation to deliver that specific thing is extinguished.

5. Multiple or Joint Obligations:

Three friends, Juan, Pedro, and Luis, jointly promise to pay PHP 90,000 to Maria. If Maria demands payment, what amount can she claim from each friend?

A. PHP 30,000 from each friend.

B. PHP 90,000 from any one friend.

C. PHP 90,000 from each friend.

D. PHP 45,000 from each friend.

Answer: A

Reasoning: In a joint obligation, each debtor is liable only for their part of the obligation. Thus, Maria can claim PHP 30,000 from each friend, totaling PHP 90,000.

Answer 18

6. Divisible and Indivisible Obligations:

Luis borrows PHP 100,000 and agrees to repay it in 10 monthly installments. This type of obligation is:

A. Indivisible.

B. Divisible.

C. Conjunctive.

D. Disjunctive.

Answer: B

Reasoning: A divisible obligation can be performed in parts, such as paying a debt in installments.

7. Conjunctive and Disjunctive Obligations:

Carlos is obligated to deliver both 50 kg of rice and 50 kg of corn to Ana. This obligation is:

A. Disjunctive.

B. Conjunctive.

C. Alternative.

D. Divisible.

Answer: B

Reasoning: A conjunctive obligation requires all parts of the obligation to be performed, meaning Carlos must deliver both 50 kg of rice and 50 kg of corn.

8. Obligations with a Period:

Maria agrees to pay Juan PHP 10,000 upon receiving her annual bonus next year. This obligation is:

A. Conditional.

B. With a period.

C. Joint.

D. Divisible.

Answer: B

Reasoning: An obligation with a period is one that is to be performed at a future time or upon the arrival of a specific period, such as Maria’s annual bonus.

9. Natural Obligations:

Juan feels a moral duty to support his elderly neighbor, Pedro, financially, although there is no legal obligation. If Juan gives Pedro money, what kind of obligation is this?

A. Civil obligation.

B. Natural obligation.

C. Joint obligation.

D. Solidary obligation.

Answer: B

Reasoning: A natural obligation is based on equity and natural justice, not enforceable by court action, but can be performed voluntarily.

10. Alternative Obligations:

Pedro owes Ana PHP 20,000. The contract states he can either pay the amount in cash or deliver his motorcycle to her. This is an example of:

A. Disjunctive obligation.

B. Conjunctive obligation.

C. Alternative obligation.

D. Joint obligation.

Answer: C

Reasoning: An alternative obligation allows the obligor to choose between different prestations to fulfill the obligation, such as paying PHP 20,000 or delivering the motorcycle.

Question 19

1. Juan promised to pay Maria PHP 100,000 if she passes the bar exam. Maria passed the exam but Juan refuses to pay, arguing that the obligation was conditional and he has changed his mind. Which of the following is correct?

a) Juan is not obligated to pay because the condition was suspensive and he can revoke his promise at any time before fulfillment.
b) Juan is obligated to pay because the suspensive condition of Maria passing the bar exam has been fulfilled.
c) Juan is not obligated to pay because conditional obligations are unenforceable under the law.
d) Juan is obligated to pay only if Maria files a case against him within the prescriptive period.

Answer 19

Answer: b) Juan is obligated to pay because the suspensive condition of Maria passing the bar exam has been fulfilled.

Legal Reasoning: Under Article 1181, if the obligation is subject to a suspensive condition, the acquisition of rights takes effect upon the fulfillment of the condition. Since Maria fulfilled the condition of passing the bar exam, Juan’s obligation to pay PHP 100,000 has arisen and become demandable.

Question 20

2. Ana agreed to deliver either 100 kg of rice or 100 kg of corn to Pedro. If Ana delivers 50 kg of rice and 50 kg of corn, which statement is correct?

a) Ana has fulfilled her obligation because she delivered both prestations.
b) Ana has not fulfilled her obligation because she was supposed to deliver either rice or corn, not both.
c) Ana has partially fulfilled her obligation and can still choose to deliver either the remaining 50 kg of rice or corn.
d) Ana’s obligation is void because alternative obligations involving different kinds of prestations are not allowed.

Answer 20

Answer: b) Ana has not fulfilled her obligation because she was supposed to deliver either rice or corn, not both.

Legal Reasoning: Under Article 1199, an alternative obligation is one where several prestations are due, but the performance of one is sufficient. By delivering both rice and corn, Ana has not fulfilled the alternative obligation, which required her to deliver either 100 kg of rice or 100 kg of corn.

Question 21

4. Liza borrowed PHP 500,000 from Ben and agreed to repay it within 5 years. After 3 years, Liza’s business failed, and she became unable to repay the loan. Which statement is correct?

a) Liza’s obligation is extinguished because the loss of her business constitutes a fortuitous event that makes performance impossible.
b) Liza’s obligation remains valid, and she must repay the loan within the remaining 2 years or face legal consequences.
c) Liza’s obligation is converted into a natural obligation, which she can choose to fulfill voluntarily without legal enforcement.
d) Liza’s obligation is suspended until her business recovers, and the 5-year period is extended accordingly.

Answer 21

Answer: b) Liza’s obligation remains valid, and she must repay the loan within the remaining 2 years or face legal consequences.

Legal Reasoning: Under Article 1197, an obligation with a period is one where the prestation is demandable upon the arrival of the period. Liza’s business failure does not extinguish her obligation to repay the loan within the agreed 5-year period. She remains legally bound to fulfill her obligation within the remaining 2 years, regardless of her financial circumstances.

These MCQs cover various types of obligations, including conditional, alternative, joint, and obligations with a period, and require a thorough understanding of the relevant legal principles and their application to common scenarios encountered in litigation.