Notes Ce Laws, contracts and obligations

7/21/2019 Notes Ce Laws, contracts and obligations

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In reciprocal obligations, neither party incursn delay if the other does not comply or is notready to comply in a proper manner with what isncumbent upon him. From the moment one ofthe parties fullls his obligation, delay by the

other begins.

Article 1170. Those who in the performance oftheir obligations are guilty of fraud, negligence, ordelay,

and those who in any mannercontravene the tenor thereof, are liable fordamages.

Article 1231. Obligations are extinguished:

!" #y payment or performance$

%" #y the loss of the thing due$&" #y the condonation or remission of thedebt$

'" #y the confusion or merger of the rightsof creditor and debtor$

(" #y compensation$)" #y novation.

Civil Code Provisionon Contracts:

Article 1305. * contract is a meeting of minds between twpersons whereby one binds himself,

with respect to the other, to give somethingor to render some service.

Article 1306. The contracting parties may establish suchstipulations, clauses, terms and conditions as

they may deem convenient, provided they anot contrary to law, morals, good customs,

public order, or public policy.

Article 1308. The contract must bind both contractingparties$ its validity or compliance cannot be left

to the will of one of them.

Article 1317. +o one may contract in the name of anotherwithout being authoried by the latter, or

unless he has by law a right to represent him

* contract entered into in the name of another by onewho has no authority or legalrepresentation, or who has acted beyond his powers, shall unenforceable, unless it is ratied,expressly or impliedly, by the person on whose behalf it hasbeen executed, before it is revo-ed by the other contractingparty.

Article 1166. The obligation to give a determinate thing includesthat of delivering all its accessions

and accessories, even though they may not have bmentioned.

Article 1167. If a person obliged to do something fails to do it, thsame shall be executed at his cost.

This same rule shall be observed if he does it incontravention of the tenor of the

obligation. Furthermore, it may be decreed that whhas been poorly done be undone. Article 1168. hen the obligation consists in not doing, and theobligor does what has been

forbidden him, it shall also be undone at his expens

Article 1169. Those obliged to deliver or to do something incur indelay from the time the obligee

/udicially or extra/udicially demands from them thefulllment of their obligation.

0owever, the demand by the creditor shall not be necessary order that delay may exist:

!" hen the obligation or the law expressly so declare$ or%" hen from the nature and the circumstances of the

obligation it appears that the designation of the time when the thing is to be delivered the service is to be rendered was a controlling motive for the establishment o

the contract$ or&" hen demand would be useless, as when the obligor has

rendered it beyond his power to perform.

BASCS !"B#$A%"!S A!& C"!%'AC%S

Civil Code Provisions on "(ligations:

Article 1156. *n obligation is a /uridical necessity togive, to do or not to do. n"

1 enforceable by the courts.

Article 1157. Obligations arise from:!" 2aw$%" 3ontracts$&" 4uasi1contracts$'" *cts or omissions punished by law$ and(" 4uasi1delicts.

Article 1159. Obligations arising from contractshave the force of law between the contracting parties

and should be complied with in goodfaith.

1 contract is the law between the parties, but

provisions in the contract which areagainst the law are void.



Com)etence o* Contracting Parties

!. 5inor6infant 7 contracts entered into by him is voidable ahis option %. Insane person 7 contract is voidable at the option of theinsane person &. 8run-en person 1 if not conscious that he had entered ina contract, contract is voidable at his option. '. 3onvicts 7 competence to enter into contract is suspendfor some time until suspension is lifted by proper authorities (. 9rofessionals 7 only licensed professionals are competento enter into contracts

for professional services. ). 3orporations 7 contracts entered into must be thru a dulyauthoried agent or representative . ;nemy *lien 7 cannot contract or sue under existingcontract unless permitted by the government, but may be sued inour courts under existing contracts <. =overnments 7 can enter into contracts but with certainrestrictions, procedures and form of contract are rigidlyprescribed by law.

>. Foreign countries and their sovereign 7 can ma-e contracand sue under existing contracts in out courts, but may not besued in such courts without their consent.

Contract &oc+ments *or #arge Constr+ctionPro,ect

1. Advertisement 1 a written invitation to bidders to furnish

materials or services of value 1 includes information on what to furnish, the siteof wor-, deadline for submission of bids, re?uired bidder@s bond, date of openingof bids, manner of addressing the bids, where to secure plans andspecications of the wor-, and statement of owner@s right to re/ect any bid.

2. nstr+ction to (idders1 to amplify anything which has been omitted in

the advertisement because of the cost and space limitation - includes description of wor-, how to prepare bid

proposals, bid delivery and withdrawal, (idders (ond, bidder@sresponsibility, interpretation of contract

documents, re?uirement for signing bids,conditions for the award of contract, eAectivity of contract, instruction for theexecution of )er*ormance (ond, time of pro/ect completion, interpretation of standardspecication, and contract documents needed.

/ssential'e+isites o* Contracts

Article 1318. There is no contract unless thefollowing re?uisites concur:

!" 3onsent of the contracting parties$%" Ob/ect certain which is the sub/ect matter of

the contract$&" 3ause of the obligation which is established.

/lements o* Contracts:

!. Two or more competent contracting parties%. 5utual agreement meeting of the minds" by

all parties to the contract&. Baluable consideration or cause 7 something

e?uivalent given or done for theact or promise to give, to do or not to do

something of value.'. Obligations of the parties must not be

contrary to law, morals, good customsand public policy

(. 5ust be set forth according to the form andexecuted in the manner prescribed

by law.



6. Per*ormance (ond - A form of bond intended to protect theowner in the event that the contractor is unable to nish the wor- in accordancewith the plans and specications.

1 * bonding company surety" guaranteesthe owner that the pro/ect will be completed by the contractor. In the event thecontractor is unable to nish the pro/ect, thesurety uses the amount of the bond to engagethe services of another contractor who will

nish the pro/ect. If and when the originacontractor nishes the pro/ect, theperformance bond he posted is cancelled

7. $eneral S)ecications 1 specications of general character relatinto the pro/ect.

8. &etailed S)ecications 1 specications relating to a particular itemof wor-.

9. Plans and &raings

#a(or Code o* tePili))ines

1 the law governing employment practices and laborrelations . 1 prescribes the rules for hiring and termination of privatemployees, the conditions of wor- including maximum wor-inghours and overtime, employee benets such as holiday pay, thirteenthmonth pay and retirement pay$

and the guidelines in the organiation and membershipin labor union as well as

in collective bargaining.

1 contains several provisions which are benecial to labo 1 it prohibits termination from employment of 9rivateemployees except for

/ust or authoried causes as prescribed in *rticle %<% to%<' of the 3ode.

1 The right to trade union is expressly recognied, as is thright of a union to insist on a

closed shop .1 Ctri-es are also authoried for as long as they comply

with the strict re?uirementsunder the 3ode, and wor-ers who organie or

participate in illegal stri-es may besub/ect to dismissal.

1 5oreover, 9hilippine /urisprudence has long applied arule that any doubts in the

interpretation of law, especially the 2abor 3ode, will beresolved in favor of labor and

against management.

Pa4ment *or /tra or

- hen changes in the contract aremade necessary because conditions arisewhich had

not been readily determined before thebeginning of the wor-, the contractor may,

by written notice to the owner,negotiate for s+))lemental contract orvariation order.

Pa4ment &+e to nation

- In the event of an inDation in currency,the contract stipulation on the limit of

inDation rate beyond which thecontractor can claim for extra cost shall be thebasis.

1 If there is no contract stipulation on thismatter, the contractor may as- the

court to intervene but he must prove

that the inDation is extra1ordinary.

3. Bid Pro)osal1 the contract amount and services

which the contractor oAers to the owner forthe construction of the pro/ect$ bid

proposal form is usually furnished by theowner

to ensure uniformity and easycomparison of bids.

. $eneral Conditions1 includes the intent of the contract,

denition of terms, bond re?uirements,

nancial protection, reports andpayments, contractual relations, conduct of

wor- for protection of properties andthe general public, retainage matters,

termination of contract andarbitration matters, terms of completion and

acceptance

5. Agreement1 the contract in its written form,

contains the scope of wor-, contract price,and

components of the whole contract.

Article 92. When employer may requwork on a rest day. The employer may re?uiremployees to wor- on any day:

a" In case of actual or impendingemergencies caused by serious accidents, rDood,

typhoon, earth?ua-e, epidemic or otdisaster or calamity to prevent loss of life

and property or imminent danger to safety$ b" In case of urgent wor- to be perform

the machinery, e?uipment or installationto avoid serious loss which the empl

would otherwise suAer$ c" In the event of abnormal pressure of wdue to special circumstances, where the

employer cannot ordinarily be expectresort to other measures$ d" To prevent loss or damage to perishabgoods$ e" here the nature of the wor- re?uirescontinuous operations and the stoppage of

wor- may result in irreparable in/ury to the employer$ and f" Ender other circumstances analogoussimilar to the foregoing as determined by

the Cecretary of 2abor and ;mployme

Article 88. Undertime not oset be overtEndertime wor- on any particular day shall notoAset by overtime wor- on any other day.9ermission given to the employee to go on leavsome other day of the wee- shall not exempt temployer from paying the additional compensare?uired in this 3hapter.

eel4 'estPeriods

Article 91. Right to weekly rest day. a" It be the duty of every employer, whether operatfor prot or not, to provide each of his employerest period of not less tan tent4-*o+rconsec+tive o+rs a*ter ever4 si consec+normal or da4s.

b" The employer shall determine and schethe wee-ly rest day of his employees, sub/ect tcollective agreement and to such rules andregulations as the Cecretary of 2abor and;mployment may provide. 0owever, the emploshall respect the preference of employees as towee-ly rest day when such preference is basedreligious grounds.

Article 8. Hours worked. 0ours wor-ed shallinclude a" all time during which an employee is re?to be on duty or to be at a prescribed wor-place, anall time during which an employee is suAered orpermitted to wor-.

est periods of short duration during wor-ing hoursbe counted as hours wor-ed.

Article 85. eal periods. Cub/ect to such regulaas the Cecretary of 2abor and ;mployment mayprescribe, it shall be the duty of every employer to his employees not less than sit4 min+tes time1oA

their regular meals.

Article 86. !ight shift dierential. ;very employshall be paid a night shift diAerential of not less tha)ercent of his regular wage for each hour of wor-performed between ten ocloc in te evening aocloc in te morning.

Article 87. "vertime work. or- may be perform(e4ond eigt o+rs a day provided that the empis paid for the overtime wor- an additional compense?uivalent to his regular wage plus at least tent4)ercent thereof. or- performed beyond eight houa olida4 or rest da4 shall be paid an additionalcompensation e?uivalent to the rate for the rst eig

hours on a holiday or rest day plus at least 30 )ercthereof .

;o+rs o* or <#a(oro* te Pili))ines=

#overage. *ll establishments and underta-ingswhether for prot or not, but not to governmentemployees, managerial employees, eld personnel,members of the family of the employer who are depeon him for support, domestic helpers, persons in thepersonal service of another and wor-ers who are pairesults as determined by the Cecretary of 2abor and;mployment in appropriate regulations.

Field personnel refers to non1agricultural emplowho regularly perform their duties away from the priplace of business or branch oGce of the employer an

whose actual hours of wor- in the eld cannot bedetermined with reasonable certainty.

Article 83. !ormal hours of work. The normal hwor- of any employee shall not eceed eigt in a

;ealt )ersonnel hospital or clinic personnel"cities or municipalities with a population of at least omillion or in hospitals or clinics with a bed capacity oleast one hundred shall hold regular oGce hours for ehours a day, for ve da4s a ee> or a total o* *oo+rs a ee> exclusive of time for meals, ece)t the exigencies of the service re?uire that such persowor- for si da4s> *ort4-eigt o+rs, in which caseshall be entitled to an additional compensation of at

30 )ercent o* teir reg+lar age *or or on tsit da4

Article 120. #reation of the !ational Waand $roductivity #ommission. There is herebycreated a +ational ages and 9roductivity3ommission, hereinafter referred to as the3ommission, which shall be attached to the8epartment of 2abor and ;mployment 8O2;"policy and program coordination. *s amended* )%"

Article 122. #reation of Regional %ripartWages and $roductivity &oards. There is herebcreated egional Tripartite ages and 9roduct#oards, hereinafter referred to as egional #oain all regions, including autonomous regions asbe established by law. The 3ommission shalldetermine the oGces6head?uarters of therespective egional #oards. The egional #oards shall have the followpowers and functions in their respective territo

/urisdiction:xxx

b" To determine and x minimum wage raapplicable in their respective regions,

provinces or industries therein and to

the corresponding wage orders, sub/ect to guidelines issued by the 3ommissio

?!?@? A$/ '

Article 99. Regional inimum Wages. The minimum wrates for agricultural and non1agricultural employees and win each and every region of the country shall be determined3ommission, which shall be attached to the 8epartment of and ;mployment 8O2;" for policy and program coordinatio

Article 112. !on'interference in disposal of wages. +oemployer shall limit or otherwise interfere with the freedomemployee to dispose of his wages. 0e shall not in any mannforce, compel or oblige his employees to purchase merchancommodities or other property from the employer or from aother person or otherwise ma-e use of any store or servicessuch employer or any other person.

Article 113. Wage deduction. +o employer, in his own bor in behalf of any person, shall ma-e any deduction from twages of his employees except:

a" In cases where the wor-er is insured with his consentemployer, and the deduction is to

recompense the employer for the amount paid by hipremium on the insurance$

b" For union dues, in cases where the right of the wor-eunion to chec- oA has been

recognied by the employer or authoried in writing bindividual wor-er concerned$ and

c" In cases where the employer is authoried by law orregulations issued by the Cecretary of 2abor and ;mployment

;"#&AS> S/'C/ !C/!%/ #/A/S A!S/'C/ C;A'$/S

Article 9. Right to holiday pay. a" ;very wor-er shall be paid hregular daily wage during regular holidays, except in retail and servicestablishment regularly employing less than ten wor-ers$

b" The employer may re?uire an employee to wor- on any holidasuch employee

shall be paid a compensation e?uivalent to twice his regular r c" *s used in this *rticle, HholidayH includes: +ew earJs 8ay, 5au Thursday, =ood

Friday, the ninth of *pril, the rst of 5ay, the twelfth of Kune, laCunday of *ugust, rst of

+ovember, the thirtieth of +ovember, the twenty1fth and the of 8ecember, thirty1rst of 8ecember, and the day designated by law for holding a genelection.

Article 95. Right to service incentive leave. a" ;very employee rendered at least one year of service shall be entitled to a yearly servincentive leave of ve days with pay.

b" This provision shall not apply to those who are already en/oyinbenet herein provided,

those en/oying vacation leave with pay at least ve days and employed in establishments

regularly employing less than ten employees or in establishmexempted from granting this

benet by the Cecretary of 2abor after considering the viabilitnancial condition of such

establishment. c" The grant of benet in excess of that provided herein shall not

made a sub/ect of arbitrationor any court or administrative action.

Article 93. #ompensation for rest day, (unday or hwork. a" here an employee is made or permitted to whis scheduled rest day, he shall be paid an additionalcompensation of at least 30 )ercent of his regular wagemployee shall be entitled to such additional compensafor wor- performed on Cunday only when it is his establrest day.

b" hen the nature of the wor- of the employee is that he has no regular

wor-days and no regular rest days can be schedhe shall be paid an additional

compensation of at least &L percent of his regulwage for wor- performed on

Cundays and holidays.

c" or- performed on any special holiday shall be padditional compensation of

at least &L percent of the regular wage of theemployee. here such holiday wor-

falls on the employeeJs scheduled rest day, he shentitled to an additional

compensation of at least (L percent of his regulawage.

d" here the collective bargaining agreement or otapplicable employment

contract stipulates the payment of a higher prempay than that prescribed under

this *rticle, the employer shall pay such higher r

Article 28. )isease as ground for terminatioemployer may terminate the services of an employwho has been found to be suAering from any diseaose contin+ed em)lo4ment is )roi(ited (or is )re,+dicial to is ealt as ell as te o* is co-em)lo4ees: 9rovided, That he is paidse)aration )a4 e?uivalent to at least one month or to one1half month salary for every year of servicwhichever is greater, a fraction of at least six montbeing considered as one whole year.

Article 285. %ermination by employee. a" *nemployee may terminate without /ust cause theemployee1employer relationship by serving a writtnotice on the employer at least one month in adva

The employer upon whom no such notice was servmay hold the employee liable for damages. b" *n employee may put an end to the relatiowithout serving any notice on the

employer for any of the following /ust caus !" Cerious insult by the employer or hisrepresentative on the honor and person

of the employee$ %" Inhuman and unbearable treatmentaccorded the employee by the employer

or his representative$ &" 3ommission of a crime or oAense by temployer or his representative

against the person of the employee or the immediate members of his

family$ and '" Other causes analogous to any of theforegoing.

Article 283. Closure of establishment reduction of personnel . The employer may aterminate the employment of any employee duthe installation o* la(or-saving devices,red+ndanc4> retrencment to )revent lossthe closing or cessation o* o)eration o* testa(lisment or underta-ing +nless te clois *or te )+r)ose o* circ+mventing te)rovisions o* tis title, by serving a rittennotice on the wor-ers and the 8epartment of and ;mployment at least one <1= mont (e*te intended date tereo*. In case of termin

due to te installation o* la(or-saving devor red+ndanc4> the wor-er aAected thereby sbe entitled to a se)aration )a4 e?uivalent to least one <1= mont )a4 or to at least one <mont )a4 *or ever4 4ear o* service, whichis higher. In case of retrencment to )revenlosses and in cases o* clos+res or cessatioo)erations o* esta(lisment or +ndertainnot d+e to serio+s (+siness losses or nareverses, the separation pay shall be e?uivaleone <1= mont )a4 or at least one-al* <12mont )a4 *or ever4 4ear o* service>icever is iger. * fraction of at least sixmonths shall be considered one !" whole year

Article 282. %ermination by empl*n employer may terminate an employmfor any of the following ,+st ca+ses:

a" Cerious misconduct or willfuldisobedience by the employee of the laworders of

his employer or representative inconnection with his wor-$

b" =ross and habitual neglect by themployee of his duties$ c" Fraud or willful breach by theemployee of the trust reposed in him by employer

or duly authoried representative d" 3ommission of a crime or oAensthe employee against the person of his

employer or any immediate memof his family or his duly authoried

representative$ and

e" Other causes analogous to theforegoing.

%/'?!A%"! "D /?P#"

Article 278. #overage. The provisions of this Tshall apply to all establishments or underta-ings,whether for prot or not.

Article 279. (ecurity of %enure. In case of regemployment, the employer shall not terminate theservices of an employee except for a ,+st ca+se oen a+toriEed by this Title. *n employee who un/ustly dismissed from wor- shall be entitled toreinstatement without loss of seniority rights and tbac-wages computed from the time his compensawas withheld from him up to time of his reinstatem*s amended by * )!("

Article 280. Regular and casual employmentprovisions of written agreement to the contrarynotwithstanding and regardless of the oral agreemof the parties, an employment shall be deemed to reg+lar ere te em)lo4ee as (een engage)er*orm activities ic are +s+all4 necessardesira(le in te +s+al (+siness or trade o* tem)lo4er e*cept where the employment has beefor a s)ecic )ro,ect or +ndertaing, the compor termination of which has been determined at thof the engagement of the employee or where the wor service to be performed is seasonal in nature a

employment is for the duration of the season.

'ecless im)r+dence consists in voluntarily, butwithout malice, doing or failing to do an act from whicmaterial damage results by reason of inexcusable lac-precaution on the part of the person performing or faiperform such act, ta-ing into consideration his employor occupation, degree of intelligence, physical conditioother circumstances regarding persons, time and plac

Sim)le im)r+dence consists in the lac- of precadisplayed in those cases in which the damage impendbe caused is not immediate nor the danger clearly ma

The penalty next higher in degree to those providin this article shall be imposed upon the oAender who

to lend on the spot to the in/ured parties such help as be in his hands to give.

Finds o* damage

Act+al or com)ensator4 damages are those awin order to compensate a party for an in/ury or loss hesuAered. They arise out of a sense of natural /ustice aare aimed at repairing the wrong done. To be recoveraactual and compensatory damages must be duly provwith reasonable degree of certainty. * court cannot respeculation, con/ecture or guesswor- as to the fact anamount of damages, but must depend upon competenproof that they have suAered and on evidence of the aamount thereof. The party alleging a fact has the burproving it and a mere allegation is not evidence.

hen the execution of the act covby this article shall have only resulteddamage to the property of another, thoAender shall be punished by a neranging from an amount e?ual to the vof said damages to three times such vbut which shall in no case be less thantwenty1ve pesos.

* ne not exceeding two1hundredpesos and censure shall be imposed uany person who, by simple imprudencnegligence, shall cause some wrong wif done maliciously, would have constita light felony.

In the imposition of these penaltiethe courts shall exercise their sounddiscretion, without regard to the rules

prescribed in article sixty1four.

It is settled that in negligence cases the aggrieved pmay choose between an actionunder the evised 9enal 3ode or of ?uasi1delict under Arti

2176 of the 3ivil 3ode of the9hilippines. hat is prohibited by Article 2177 of the 3ivi

of the 9hilippines is to recovertwice for the same negligent act.

*ctions based upon +asi-delicts prescribe after fourfrom the commission

of the fault or negligent deed.

Criminal !egligence: <'evised PenaCode=

Art. 365 Imprudence and negligence. N *ny person who

rec-less imprudence, shall commitany act which, had it been intentional, would constitute a gfelony, shall suAer the penalty of

arresto mayor in its maximum period to prision correccionamedium period$ if it would have

constituted a less grave felony, the penalty of arresto mayominimum and medium periods

shall be imposed$ if it would have constituted a light felonypenalty of arresto menor in its maximum periodic shall be imposed.

*ny person who, by simple imprudence or negligence, shcommit an act which would

otherwise constitute a grave felony, shall suAer the penaltyarresto mayor in its medium and

maximum periods$ if it would have constituted a less serioufelony, the penalty of arresto mayor

in its minimum period shall be imposed.

%orts or G+asi-delict: <Civil Code o* tPili))ines=

Art. 2176.. hoever by act or omission causes damage to there being fault or

negligence, is obliged to pay for the damage done. Cuch fault ornegligence, if there is

no pre1existing contractual relation between the parties, is called+asi-delict and is

governed by the provisions of this 3hapter.

!egligence is the omission to do something which a reasonman, guided by those

considerations which ordinarily regulate the conduct of human aAwould do, or the doing of something which a prudent and reasonable man would drefers to the

conduct which creates undue ris- of harm to another, the failure tobserve that degree

of care, precaution and vigilance that the circumstance /ustly demwhereby that other

person suAers in/ury. The 3ourt declared the test by which to detethe existence of

negligence in $icart v. (mith.

The test by which to determine the existence of negligence in particular case may be

stated as follows: 8id the defendant in doing the alleged negligenuse that reasona(le care and ca+tion which an ordinarily prudent person would havin the same situation

If not, then he is guilty of negligence. The law here in eAect adopstandard supposed to

be supplied by the imaginary conduct of the discreet paterfamiliaoman law. The

existence of negligence in a given case is not determined by refethe personal

/udgment of the actor in the situation before him. The law considwould be rec-less,

blameworthy, or negligent in the man of ordinary intelligence andprudence and determines

liability by that.

?oral damages are awarded to compensate for the

suAering, mental anguish, fright, moral shoc-, sleepless nbesmirch reputation, wounded feelings of the complainanallegations do not suGce$ they must be substantiated by and convincing proof.

8amages are not intended to enrich the complainantexpense of the defendant. They are awarded only to allevthe moral suAering that the in/ured party had undergone reason of the defendantJs culpable action. 7 There is no haand1fast rule in the determination of what would be a fairamount of moral damages since each case must be goverits own peculiar facts.

!ominal damages may be awarded to a plaintiA whright has been violated or invaded by the defendant, for t

purpose of vindicating or recogniing that right, and not foindemnifying the plaintiA for any loss suAered by him. Its is thus not for the purpose of indemnication for a loss buthe recognition and vindication of a right. +ominal damagdamages in name only and not in fact. hen granted by tcourts, they are not treated as an e?uivalent of a wrong inbut simply a recognition of the existence of a technical in/violation of the plaintiAs right, even if only technical, is suto support an award of nominal damages. 3onversely, so as there is a showing of a violation of the right of the plainaward of nominal damages is proper.

/em)lar4 damages may be awarded in order to tethe defendant a lesson, to provide an example for the pubgood.

#i+idated damages are those which have been agrthe parties orally or in writing.

Notes Ce Laws, contracts and obligations

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Transcript of Notes Ce Laws, contracts and obligations