XIV. QUASI-CONTRACTS (Civil Code, arts. 2142-2143) Flashcards
Quasi-contracts
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ARTICLE 2142. Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another. (n)
Article 2142: Quasi-Contract
Summary:
- Unjust Enrichment Prevention: This article establishes the concept of quasi-contract. It means that if someone benefits unfairly at the expense of another, the law creates a fictional contract-like relationship to correct this injustice.
- No Formal Agreement: Unlike regular contracts, there’s no formal agreement between the parties. The law imposes the obligation to prevent unjust enrichment.
Example:
- Solutio Indebiti: Someone mistakenly pays a debt that they don’t owe. The person who received the money unjustly has a quasi-contractual obligation to return it. This is a very common example of quasi-contract in the Philippines.
Quasi-contracts
ARTICLE 2143. The provisions for quasi-contracts in this Chapter do not exclude other quasi-contracts which may come within the purview of the preceding article. (n)
Negotiorum Gestio: A quasi-contractual obligation that arises when a person (the gestor) Voluntarily MANAGES THE AFFAIRS or property of another (the principal) WITHOUT the latter’s CONSENT or prior authorization, but with the intent to benefit the principal.
Example:
Juan sees his neighbour Pedro’s house on fire while Pedro is away. Juan takes it upon himself to call the fire department and incurs expenses to help extinguish the fire. Pedro, upon returning, is obligated to reimburse Juan for the reasonable expenses incurred in managing the emergency, even though there was no prior agreement between them.
Key Points for Easy Memorization:
1. Voluntary Act: The gestor acts without the principal’s consent.
2. Intent to Benefit: The gestor aims to benefit the principal.
3. Reimbursement: The principal must reimburse the gestor for reasonable expenses.
Negotiorum gestio creates an obligation similar to a contract, even though no formal agreement exists, thus classifying it as a quasi-contract.
MCQ 1:
Which of the following statements best describes the concept of quasi-contracts as defined in Article 2142 of the Civil Code of the Philippines?
A) Quasi-contracts arise from formal agreements between parties.
B) Quasi-contracts are based on unlawful and involuntary acts.
C) Quasi-contracts aim to prevent unjust enrichment or benefit at the expense of another.
D) Quasi-contracts require mutual consent and consideration between parties.
Answer: C) Quasi-contracts aim to prevent unjust enrichment or benefit at the expense of another.
MCQ 2:
What kind of acts give rise to the juridical relation of quasi-contract, as stated in Article 2142 of the Civil Code of the Philippines?
A) Unlawful and involuntary acts
B) Voluntary acts with mutual consent
C) Lawful, voluntary, and unilateral acts
D) Acts with mutual consideration and agreement
Answer: C) Lawful, voluntary, and unilateral acts
Challenging MCQs on Quasi-Contract
MCQ 1
Maria mistakenly sends Php 10,000 to John’s bank account instead of her sister’s. John, realizing the mistake, uses the money to pay his credit card bill. Which of the following is correct?
(A) There is no legal obligation for John to return the money to Maria.
(B) John has a quasi-contractual obligation to return the Php 10,000 to Maria.
(C) Maria can sue John for damages due to negligence.
(D) John can keep the Php 10,000 as a “gift.”
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Answer: (B) John has a quasi-contractual obligation to return the Php 10,000 to Maria.
Legal Reasoning: This is a classic example of solutio indebiti, a type of quasi-contract. John received money that did not belong to him, and he has an obligation to return it to prevent unjust enrichment.
MCQ 2
A construction company accidentally builds a fence on the wrong property. The owner of the property on which the fence was built refuses to allow the company to remove the fence. Which of the following is correct?
(A) The property owner can keep the fence without any obligation to the construction company.
(B) The construction company can demand payment for the fence from the property owner.
(C) The property owner must allow the construction company to remove the fence.
(D) The construction company can sue the property owner for trespassing.
Answer: (C) The property owner must allow the construction company to remove the fence.
Legal Reasoning: This scenario presents another example of quasi-contract. The construction company has been unjustly enriched by having its fence on another person’s property. The property owner cannot benefit from the mistake. The construction company has the right to remove the fence to prevent unjust enrichment.
Juan finds an injured stray dog on the street and takes it to a veterinarian for treatment. The vet provides necessary medical care without discussing payment. Later, the dog’s owner, Maria, is located. Who is liable for the veterinary bills?
a) Juan, because he initiated the treatment
b) Maria, as the dog’s owner
c) The veterinarian, as no explicit agreement was made
d) The government, as it involves a stray animal
Answer: b) Maria, as the dog’s owner
Legal reasoning: This scenario falls under negotiorum gestio, a type of quasi-contract. Juan acted as a gestor by voluntarily managing the affairs of another (the dog’s care) without prior authorization. Under Article 2175 of the Civil Code of the Philippines, the owner (Maria) is bound to reimburse the gestor (Juan) for necessary and useful expenses. The veterinarian’s services are considered necessary expenses for the dog’s welfare. Therefore, Maria, as the beneficiary of Juan’s actions, is liable for the veterinary bills.
A municipality mistakenly deposits 100,000 pesos into Pedro’s bank account. Pedro, believing it to be a government aid program, spends 50,000 pesos before realizing the error. What is the legal consequence?
a) Pedro must return the full 100,000 pesos
b) Pedro must return only the remaining 50,000 pesos
c) Pedro can keep the entire amount as it was the municipality’s error
d) Pedro must return 50,000 pesos and pay interest on the spent amount
Answer: d) Pedro must return 50,000 pesos and pay interest on the spent amount
Legal reasoning: This situation falls under solutio indebiti, another type of quasi-contract. According to Article 2154 of the Civil Code of the Philippines, when something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises. Pedro received money to which he had no right, due to the municipality’s mistake. Under Article 2159, he is obliged to return the full amount. However, since he has already spent half in good faith, he must return the remaining 50,000 pesos and pay legal interest on the 50,000 pesos he spent, from the time he became aware of the mistake. This balances the principle of unjust enrichment with the consideration of Pedro’s good faith in initially spending the money.
