Oblicon Stuff

8/14/2019 Oblicon Stuff

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OBLIGATIONS

I. Defnition

A juridical necessity to give, to do or not to do,1one impressed with the characterof enforceability.

II. Elements o an Obligation

1. Active subject2 The possessor of a right;

he in whose favor the

obligation is constituted;

2. Passive subject !e who has the duty of

giving, doing or not doing;

. "bject or prestation# $ay consist of giving a

thing, or doing or not

doing a certain act%and

#. &'icient cause( The reason why the

obligation e)ists

III. Dierent Kinds o Prestations

1. To give *onsists in the delivery of a

movable or an immovable thing,

in order to create a real right or

for the use of the recipient or for

1 Art. 1156

2 obligee or creditor

3 obligor or debtor

4 the subject matter of the obligation

5 Requisites: 1. it must be licit 2. it must be possible ph!sicall! " juridicall! 3. it must be determinate or determinable 4. it must ha#e a possible equi#alent in mone!

6 vinculumor juridical tie


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its simple possession or in order

to return to its owner

2. To do All +inds of wor+ or services,

whether mental or physical

. ot to do *onsists in abstaining from some

act, includes -not to give, both

being negative obligations

I. !lassif"ation o Obligations

1. *riteria of

demandability/

a. Pure 0 one wc is not

subject to a condition or aterm.

b. *onditional 0 the

acuisition of rights, as well

as the e)tinguishment or

loss of those already

acuired, shall depend

upon the happening of the

event which constitutes thecondition.3

c. 4 a term50

$ Art. 11%1 A past thing can ne#er be a condition. A condition is al&a!s future and uncertain. 'ast e#ent un(no&n to the parties.)) *t is reall! the (no&ledge of the e#ent &+c constitutes the future.*t is the (no&ledge &+c is future and uncertain.

,-ect of *mpossible ondition.)) *t annuls the obligation &+c depends upon them. /he entire juridicaltie is tainted b! the impossible condition.

% see Reference


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2. Plurality of objects

. Plurality of subjects

a. 6ingle

b. Alternative 0 where the

debtor must perform any of

the prestations7

c. 8acultative 0 where only

one thing is due but the

debtor has reserved the

right to substitute it w

another19

d. :oint 0 one in wc each of

the debtors is liable only fora proportionate part of the

debt or each creditor is

entitled only to a

proportionate part of the

credit.11

0 /he characteristic of alternati#e obligations is that se#eral objects being due the fulllment of

one is sucient /olentino

1 Art. 126

11 there are as man! obligations as there are debtors multiplied b! the number of creditors. ,-ects ofoint 7iabilit!:1. /he demand b! one creditor upon one debtor produces the e-ects of default onl! &+ respect to thecreditor &ho demanded and the debtor on &hom the demand &as made but not &+ respect to the others8

2. /he interruption of prescription b! the judicial demand of one creditor upon a debtor does not benetthe other creditors nor interrupt the prescription as to other debtors. 9n the same principle a partialpa!ment or ac(no&ledgement made b! one of se#eral joint debtors does not stop the running of thestatute of limitations as to the others83. /he #ices of each obligation arising from the personal defect of a particular debtor or creditor does nota-ect the obligation or rights of the others84. /he insol#enc! of a debtor does not increase the responsibilit! of his co)debtors nor does it authorie acreditor to demand an!thing from his co)creditors85. *n the joint di#isible obligation the defense of res judicata is not e;tended from one debtor to another.


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e. 6olidary 0 one in wc the

debtor is liable for the

entire obligation or each

creditor is entitled to

demand the whole

obligation. There is only

one obligation is a solidaryobligation.

#. Performance a. ivisible 0 one

susceptible of partial

performance.

b. h!?

@ec. the la& pro#ides so: nless there is an e;press stipulation to that e-ect the creditor cannot becompelled partiall! to recei#e the prestations in &hich the obligation consists. Beither ma! the debtor berequired to ma(e partial pa!ments. ;;; Art. 124% par. 1. /hree ,;ceptions to the Rule on *ndi#isibilit!:1. >hen the parties so pro#ide. Art. 124% par. 1.2. >hen the nature of the obligation necessaril! entails performance in parts.3. >here the la& pro#ides other&ise.

13 /he purpose is to strengthen the coerci#e force of the obligation. >hen a penal clause is

present damages do not ha#e to be pro#ed.


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. So#r"es o Obligations$%

A. A single act or omission can give rise to different causes of action

evised

code that -every person criminally liable is also civilly liable.1%

B. Natural Obligations16

They are real obligations to which the law denies an action, but which the debtormay perform voluntarily.13

A. Extra-contractual Obligations18

1. ?uasi0contract170 That juridical relation resulting from a lawful, voluntary andunilateral act, and which has for its purpose, the payment of indemnity to the end thatno one shall be unjustly enriched or bene@ted at the e)pense of another

2 +inds/

a Negotiorum gestio 0 unauthoried management29

b Solutio indebiti 0 undue payment 21

14 9bligations arise from: 1. 7a& 2. ontracts

3. Cuasi)contracts 4. Acts or omissions punished b! la& and 5. Cuasi)delicts.

15 Bolledo ose B. /he 'hilippine 7a& on 9bligations and ontracts ,;plained 10% ,d. p. 2

16 a. @ased not on positi#e la& but on equit! and natural la& b. Do not grant such right of action toenforce their performance

1$ ,;amples of natural obligations enumerated under the i#il ode: 1. 'erformance after the ci#ilobligation has prescribed8 2. Reimbursement of a third person for a debt that has prescribed8 3. Restitution b! minor after annulment of contract8 4. Deli#er! b! minor of mone! or fungible thing in fulllment of obligation8 5. 'erformance after action to enforce ci#il obligation has failed8 6. 'a!ment b! heir of debt e;ceeding #alue of propert! inherited8 and $. 'a!ment of legac! after &ill ha#e been declared #oid.

1% Arts. 2142 to 2104

10 obligation ex quasi-contractu

2 /his ta(es place &hen a person #oluntaril! ta(es charge of anotherEs abandoned business or

propert! &ithout the o&nerEs authorit!

21 /his ta(es place &hen something is recei#ed &hen there is no right to demand it and it &as

undul! deli#ered thru mista(e


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2. ?uasi0delicttorts220


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compelled to do so personally or

by himself.

This same rule shall be observed

if he does it in contravention of

the tenor of the obligation.

8urthermore, it may be decreed

that what has been poorly donebe undone.1

". Breac!es of obligations

1. "omlete failure to erform

ebtor is unable to comply with his obligation because of fortuitous event.

2. efault, delay or mora

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E no default unless creditors ma+es a demand;

%

e)ceptions

1. "bligation or law e)pressly so declares

2. Time is of the essence of the contract

. emand is useless as when obligor has rendered beyond his power to perform

#. There is ac+nowledgment of default.


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b.Mora accipiendi

elay of the creditor to accept the delivery of the thing wc is the object of theobligation

c. Compesatio morae

elay of the parties or obligors in reciprocal obligation.

1. #raud in t!e erformance of obligation$8

a. %aiver of future fraud is void

>esponsibility arising from fraud is demandable in all obligations. Any waiver ofan action for future fraud is void.7

4. Negligence &cula'4(in t!e erformance of obligation

a. )iligence normall* re+uired is ordinar* diligence or diligence of a good fat!erof a famil*

b. Excetions, common carriers !ic! are re+uired to exercise extraordinar*diligence

. "ontravention of t!e tenor of obligation

The faithful observance of an obligation according to its tenor is mandated by law;an une)cused failure thereof renders the obligor liable for losses and damages caused

thereby.#1

6. /egal excuse for breac! of obligation 0 fortuitous event re+uisites

8ortuitous event#20 an event which could not be foreseen or which thoughforeseen, was inevitable.

>euisites/

3% Deliberate and intentional e#asion of the fulllment of an obligation

30 Art. 11$1Guture fraud cannot be &ai#ed because it &ould result to illusor! obligation.

4 9mission of that diligence &hich is required b! the nature of the obligation and corresponds &ith thecircumstances of the persons of the time and of the place Begligence can be &ai#ed unless the natureof the obligation or public polic! requires e;traordinar! diligence as in common carrier.

41 see Art. 11$

42 =eneral Rule: Bo liabilit! in case of fortuitous e#ent. ,;ceptions: 1. >hen e;pressl! declared b! la& e.g. Article 5522 11653 126% 1042 214$ 214% and 2150 ofthe i#il ode.

2. >hen e;pressl! declared b! stipulation or contract 3. >hen the nature of the obligation requires the assumption of ris( 4 >hen the obligor is in default or has promised to deli#er the same thing to 2 or more persons &hodo not ha#e the same interest HArticle 11653I.


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1 cause is independent of the will of the debtor#

2 the event must be unforeseeable or unavoidable

occurrence must be such as to render it impossible for the debtor to ful@llhis obligation in a normal manner

# debtor must be free from any participation in the aggravation of the injuryresulting to the creditor##

B. emedies available to creditor in cases of breac!

1. 3ecific erformance4

4hen what is to be delivered is a determinate thing, the creditor, in addition to theright granted him by Art 1139,#(may compel the debtor to ma+e the delivery.#3

a. 3ubstituted erformance b* a t!ird erson on obligation to deliver generict!ing and in obligation to do5 unless a urel* ersonal act

"bligation to give

generic thing

"bligation to do


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The power to rescind obligations is implied in reciprocal ones, in case one of theobligors should not comply with what is incumbent upon him.%1

The injured party may choose between the ful@llment and the rescission of theobligation,%2with the payment of damages in either case. !e may also see+ rescission,even after he has chosen ful@llment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just causeauthoriing the @)ing of a period.

This is understood to be without prejudice to the rights of third persons who haveacuired the thing, in accordance with articles 15%%and 155%#and the $ortgageFaw.%%


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a. Accion subrogatoria58

Action which the creditor may e)ercise in place of the negligent debtor in order topreserve or recover for the patrimony of the debtor the product of such action, and thenobtain therefrom the satisfaction of his own credit.%7

b. Accion pauliana60

*reditors have the right to set aside or revo+e acts which the debtor may havedone to defraud them. All acts of the debtor which reduce his patrimony in fraud of hiscreditors, whether by gratuitous or onerous title, can be revo+ed by this action.

c.Accion directa61

>ight of the lessor to go directly to sublessee for unpaid rents of the lessee.(2

>ight of the laborers or persons who furnish materials for a piece of wor+underta+en by a contractor to go directly to the owner for any unpaid claims due to the

contractor.(

II. Kinds o !i&il Obligations

A. ure

The performance does not depend upon a future or uncertain event, or upon apast event un+nown to the parties, which is demandable at once.(#

B. "onditional

The acuisition of rights, as well as the e)tinguishment or loss of those already

acuired, shall depend upon the happening of the event which constitutes thecondition.(%

1. 3usensive condition66

The happening of the event gives birth to an obligation

5% An action against the debtorEs debtor

50 subrogator! action8 Fee Art. 11$$ 're#ious appro#al of court is not necessar! 'lainti- entitled onl! to so much as is needed to satisf! his credit an! balance shall pertain to thedebtor 'atrimon! of the debtor includes both present and future propert! is liable for the obligations he ma!contract b! being a legal guarant! in fa#or of his creditors. Lence he cannot maliciousl! reduce suchguarant!

6 rescissor! action An action to rescind contracts entered into b! the debtor in fraud of creditors Arts.11$$ last sentence and 13%1 par. 3 Fee Reference 'a!ments of pre)e;isting obligations alread! due &hether natural or ci#il cannot be impugned b! anaccion pauliana

61 Arts. 1652 16% 1$20 " 1%038 see reference

62 Fee Art. 1652

63 Fee Art. 1$20

64 Art. 11$0


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2. esolutor* condition6

The happening of the event will e)tinguish the obligation.

$. otestative5 casual or mixed

Potestative *asual $i)ed

"ne wc depends

solely on the will of

either one party.(5

"ne where the

condition is made to

depend upon a third

person or upon

chance.(7

"ne wc depends

partly upon the will

of one of the parties

and partly on either

chance or the will of

a third person.

a. Obligations sub7ect to otestative susensive conditions are void

4hen the ful@llment of the condition depends upon the sole will of the debtor, theconditional obligation shall be void.

hen the debtor binds himself to pa! &hen his means permithim to do so the obligation shall be deemed to be one &ith a period subject to the pro#isions of Article110$ Art. 11%Art. 11%1

66 condition precedent

6$ condition subsequent

6% e.g. M* &ill gi#e !ou m! plantation in Da#ao pro#ided !ou reside in Da#ao permanentl!.M

60 e.g. M* &ill gi#e !ou m! land in 'ampanga if !ou &ill pass the bar e;ams this !ear.M

$ Art. 11%2


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"bligations with a resolutory period ta+e e'ect at once, but terminate uponarrival of the day certain.

A day certain is understood to be that which must necessarily come, although itmay not be +nown when.


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B#C 4hen the debtor violates any underta+ing, in consideration of which thecreditor agreed to the period;

B%C 4hen the debtor attempts to abscond.59

4. esolutor* eriod

"bligations with a resolutory period ta+e e'ect at once, but terminate uponarrival of the day certain.51

. )efinite or indefinite eriod

a. nstances !en courts ma* fix t!e eriod


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The nullity of one prestation does

not invalidate the obligation, wc

is still in force w respect to

those wc have no vice

The nullity of the principal

prestation invalidates the

obligation and the creditor

cannot demand the substitute

even when this is valid.

As to choice

The right to choose may be given

to the creditor

"nly the debtor can choose the

substitute prestation.

As to e'ect of loss

"nly the impossibility of all the

prestations due wo fault of the

debtor e)tinguishes the

obligation

The impossibility of the principal

prestation is su'icient to

e)tinguish the obligation, even if

the substitute is possible.5%

2. Effect of loss of secific t!ings or imossibilit* of erformance of alternative5 t!roug!

fault of debtor:creditor or t!roug! fortuitous events

*hoice is debtorGs *hoice is the

creditorGs

%5 *O /olentino


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a. 4hen only one prestation is

left,5(the debtor may perform the

one that is left.53

b.


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III. 'oint and Solidar( obligation

A. ;oint &divisible' obligation

1. "oncurrence of to or more creditors and or to or more debtors

a. ;oint obligation is resumed5 unless ot!erise indicated b* t!e la or nature

of obligation

The concurrence of two or more creditors or of two or more debtors in one andthe same obligation does not imply that each one of the former has a right to demand,or that each one of the latter is bound to render, entire compliance with the prestation.

There is a solidary liability only when the obligation e)pressly so states, or whenthe law or the nature of the obligation reuires solidarity.7

b. Obligation resumed to be divided into as man* e+ual s!ares as t!ere arecreditors or debtors

The credit or debt or deemed divided into as many shares as there are creditorsor debtors to each other, each resulting credit or debt being considered distinct fromone another.7#

c. Eac! credit is distinct from one anot!er5 t!erefore a 7oint debtor cannot be

re+uired to a* for t!e s!are of anot!er it! debtor5 alt!oug! !e ma* a* if !e

ants to


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corresponding portion of the price of the thing or of the value of the service in whichthe obligation consists.75

". 3olidar* obligation

1. =utual agenc* among solidar* debtors

The debtor may pay any one of the solidary creditors; but if any demand, judicialor e)trajudicial, has been made by one of them, payment should be made to him.77

ovation, compensation, confusion or remission of the debt, made by any of thesolidary creditors or with any of the solidary debtors, shall e)tinguish the obligation,without prejudice to the provisions of Article 1217.199

The creditor who may have e)ecuted any of these acts, as well as he who collectsthe debt, shall be liable to the others for the share in the obligation corresponding tothem.191

2. =utual guarant* among solidar* debtors

The creditor may proceed against any one of the solidary debtors or some or all ofthem simultaneously. The demand made against one of them shall not be an obstacle tothose which may subseuently be directed against the others, so long as the debt hasnot been fully collected.192

Payment made by one of the solidary debtors e)tinguishes the obligation.


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$. Eac! one of solidar* creditors ma* do !atever ma* be useful to t!e ot!ers5 but not

an*t!ing re7udicial to t!em1(

a' Effect of an* novation5 comensation5 confusion or remission of debt executed

b* a solidar* creditor

The obligation is e)tinguished, without prejudice to the provisions of Article 1217.19(

The creditor who may have e)ecuted any of these acts, as well as he who collectsthe debt, is liable to the others for the share in the obligation corresponding to them.193

). )ivisible and ndivisible

"bligations to give de@nite things and those which are not susceptible of partialperformance shall be deemed to be indivisible.

4hen the obligation has for its object the e)ecution of a certain number of days ofwor+, the accomplishment of wor+ by metrical units, or analogous things which by theirnature are susceptible of partial performance, it shall be divisible.

!owever, even though the object or service may be physically divisible, anobligation is indivisible if so provided by law or intended by the parties.


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The nullity of the principal obligation carries with it that of the penal clause.112

I). E*ting#is+ment o Obligations

A. a*ment

The creditor is not bound to accept payment or performance by a third person

who has no interest in the ful@llment of the obligation, unless there is a stipulation tothe contrary.

4hoever pays for another may demand from the debtor what he has paid, e)ceptthat if he paid without the +nowledge or against the will of the debtor, he can recoveronly insofar as the payment has been bene@cial to the debtor.11

4hoever pays on behalf of the debtor without the +nowledge or against the will ofthe latter, cannot compel the creditor to subrogate him in his rights, such as thosearising from a mortgage, guaranty, or penalty.11#

Payment made by a third person who does not intend to be reimbursed by thedebtor is deemed to be a donation, which reuires the debtorGs consent. =ut thepayment is in any case valid as to the creditor who has accepted it11%

1. )ation in a*ment

Property is alienated to the creditor in satisfaction of a debt in money.11(

2. #orm of a*ment

The payment of debts in money shall be made in the currency stipulated.


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4. Alication of a*ment11


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*onsignation shall be made by depositing the things due at the disposal of judicialauthority, before whom the tender of payment shall be proved, in a proper case, and theannouncement of the consignation in other cases.

The consignation having been made, the interested parties shall also be [email protected]%

The e)penses of consignation, when properly made, shall be charged against thecreditor.12(

"nce the consignation has been duly made, the debtor may as+ the judge to orderthe cancellation of the obligation.

=efore the creditor has accepted the consignation, or before a judicial declarationthat the consignation has been properly made, the debtor may withdraw the thing orthe sum deposited, allowing the obligation to remain in force.123

!ing )ue or mossibilit* or difficult* of erformance

The obligation is e)tinguished if it should be lost or destroyed without the fault ofthe debtor, and before he has incurred in delay.

4hen by law or stipulation, the obligor is liable even for fortuitous events, theloss of the thing does not e)tinguish the obligation, and he shall be responsible fordamages. The same rule applies when the nature of the obligation reuires theassumption of ris+.127

The debtor in obligations to do shall also be released when the prestationbecomes legally or physically impossible without the fault of the obligor.19

4hen the service has become so di'icult as to be manifestly beyond thecontemplation of the parties, the obligor may also be released therefrom, in whole or inpart.11

". "ondonation or emission of )ebt

An act of liberality by virtue of which, without receiving any euivalent, thecreditor renounces enforcement of an obligation which is e)tinguished, in whole or inpart.12

125 Art. 125%

126 Art. 1250

12$ Art. 126

12% Art. 1261

120 Art. 1262

13 Art. 1266

131 Art. 126$


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1. Exress condonations and re+uired formalit* t!ereof

&)press condonation shall comply with the forms of donation.1

2. mlied

The delivery of a private document evidencing a credit, made voluntarily by thecreditor to the debtor, implies the renunciation of the action which the former had

against the latter.


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B2C =oth debts consist in a sum of money, or if the things due are consumable,they be of the same +ind, and also of the same uality if the latter has been stated;

BC The two B2C debts be due;

B#C They be liuidated and demandable;

B%C "ver neither of them there be any retention or controversy, commenced bythird persons and communicated in due time to the debtor.17

1. ?inds

a. /egal comensation

*ompensation ta+es place by operation of law, even though the debts may bepayable at di'erent places, but there shall be an indemnity for e)penses of e)change ortransportation to the place of payment.1#9

4hen all the reuisites mentioned above are present, compensation ta+es e'ectby operation of law, and e)tinguishes both debts to the concurrent amount, even thoughthe creditors and debtors are not aware of the compensation.1#1

b. Agreement

The parties may agree upon the compensation of debts which are not yet due.1#2

c. @oluntar*14$

d. ;udicial


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2. Obligations not comensable

a. 4hen one of the debts arises from a depositum or from the obligations of adepositary or of a bailee in commodatum.

b. Against a creditor who has a claim for support due by gratuitous title, withoutprejudice to the provisions of paragraph 2 of Article 91.1#(

c.


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4hen the principal obligation is e)tinguished in conseuence of a novation,accessory obligations may subsist only insofar as they may bene@t third persons whodid not give their consent.1%


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!ONT,A!TS

I. Essential ,e-#isites

B1C *onsent of the contracting parties;

B2C "bject certain which is the subject matter of the contract;

BC *ause of the obligation which is established.1(2

II. Kinds o !ontra"ts

*onsensual >eal 8ormal or

6olemn

Perfected by mere

consent and from

that moment, the

parties are bound not

only to the ful@llment

of what has been

e)pressly stipulated

but also to all

conseuences which,

according to their

nature may be in

+eeping with good

faith, usage and law.

>euires delivery of

object for

perfection.1(

>euires compliance

with certain

formalities

prescribed by law,

such prescribed form

being an essential

element

1. )onations

$ovable


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The acceptance may be made in the same deed of donation or in a

separate public document, but it shall not ta+e e'ect unless it is

done during the lifetime of the donor.


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A stipulation between the common carrier and the shipper or owner limiting the

liability of the former for the loss, destruction, or deterioration of the goods to a degree

less than e)traordinary diligence shall be valid, provided it be/

B1C easonable, just and not contrary to public policy.132

. "!attel mortgage

Personal property is recorded in the *hattel $ortgage >egister as security for theperformance of an obligation.


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B1C Acts and contracts which have for their object the creation, transmission,modi@cation or e)tinguishment of real rights over immovable property; sales of realproperty or of an interest therein are governed by Articles 1#9, o. 2, and 1#9%;135

B2C The cession, repudiation or renunciation of hereditary rights or of those of theconjugal partnership of gains;

BC The power to administer property, or any other power which has for its object

an act appearing or which should appear in a public document, or should prejudice athird person;

B#C The cession of actions or rights proceeding from an act appearing in a publicdocument.

All other contracts where the amount involved e)ceeds @ve hundred pesosBP%99.99C must appear in writing, even a private one. =ut sales of goods, chattels orthings in action are governed by articles, 1#9, o. 2 and 1#9%.137

I. Dee"ti&e !ontra"ts

A. escissible "ontracts18(

B1C Those which are entered into by guardians whenever the wards whom theyrepresent su'er lesion by more than one0fourth of the value of the things which are theobject thereof;

B2C Those agreed upon in representation of absentees, if the latter su'er thelesion stated in the preceding number;

BC Those underta+en in fraud of creditors when the latter cannot in any othermanner collect the claims due them;

B#C Those which refer to things under litigation if they have been entered into bythe defendant without the +nowledge and approval of the litigants or of competentjudicial authority;

B%C All other contracts specially declared by law to be subject to rescission.151

B(C Payments made in a state of insolvency on account of obligations not yetenforceable

1. i'erence with >escission BresolutionC under Art. 1171

>escission in Article

1171

>escission Proper in Article

151


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The only ground is non0

performance of oneDs obligations

or what is incumbent upon him.

There are % grounds to rescind.

on0performance by the other

party is not important.


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4hen one of the parties is unable to read, or if the contract is in a language notunderstood by him, and mista+e or fraud is alleged, the person enforcing the contractmust show that the terms thereof have been fully e)plained to the former.155

There is no mista+e if the party alleging it +new the doubt, contingency or ris+a'ecting the object of the contract.157

$utual error as to the legal e'ect of an agreement when the real purpose of the

parties is frustrated, may vitiate consent.179

There is violence when in order to wrest consent, serious or irresistible force isemployed.

There is intimidation when one of the contracting parties is compelled by areasonable and well0grounded fear of an imminent and grave evil upon his person orproperty, or upon the person or property of his spouse, descendants or ascendants, togive his consent.

To determine the degree of intimidation, the age, se) and condition of the person

shall be borne in mind.

A threat to enforce oneGs claim through competent authority, if the claim is just orlegal, does not vitiate consent.171

Kiolence or intimidation shall annul the obligation, although it may have beenemployed by a third person who did not ta+e part in the contract.172

There is undue inJuence when a person ta+es improper advantage of his powerover the will of another, depriving the latter of a reasonable freedom of choice. Thefollowing circumstances shall be considered/ the con@dential, family, spiritual and otherrelations between the parties, or the fact that the person alleged to have been undulyinJuenced was su'ering from mental wea+ness, or was ignorant or in @nancialdistress.17

There is fraud when, through insidious words or machinations of one of thecontracting parties, the other is induced to enter into a contract which, without them,he would not have agreed to.17#

8ailure to disclose facts, when there is a duty to reveal them, as when the partiesare bound by con@dential relations, constitutes fraud.17%

1%$ Art. 1331

1%% Art. 1332

1%0 Art. 1333

10 Art. 1334

101 Art. 1335

102 Art. 1336

103 Art. 133$

104 Art. 133%


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The usual e)aggerations in trade, when the other party had an opportunity to+now the facts, are not in themselves fraudulent.17(

A mere e)pression of an opinion does not signify fraud, unless made by an e)pertand the other party has relied on the formerGs special +nowledge.173

$isrepresentation by a third person does not vitiate consent, unless suchmisrepresentation has created substantial mista+e and the same is mutual.175

$isrepresentation made in good faith is not fraudulent but may constituteerror.177


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>ati@cation may be e'ected e)pressly or tacitly. ati@cation may be e'ected by the guardian of the incapacitated person.29%

>ati@cation does not reuire the conformity of the contracting party who has no

right to bring the action for annulment.29(

>ati@cation cleanses the contract from all its defects from the moment it wasconstituted.293

The action for the annulment of contracts may be instituted by all who arethereby obliged principally or subsidiarily. !owever, persons who are capable cannotallege the incapacity of those with whom they contracted; nor can those who e)ertedintimidation, violence, or undue inJuence, or employed fraud, or caused mista+e basetheir action upon these Jaws of the contract.295

An obligation having been annulled, the contracting parties shall restore to eachother the things which have been the subject matter of the contract, with their fruits,and the price with its interest, e)cept in cases provided by law.


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boo+, at the time of the sale, of the amount and +ind of property sold, terms ofsale, price, names of the purchasers and person on whose account the sale ismade, it is a su'icient memorandum;

BeC An agreement for the leasing for a longer period than one B1C year, or forthe sale of real property or of an interest therein;

BfC A representation as to the credit of a third person.

BC Those where both parties are incapable of giving consent to a contract.21%

Inauthoried contracts are governed by Article 11321( and the principles ofagency.213

*ontracts infringing the 6tatute of 8rauds, referred to in o. 2 of Article 1#9,are rati@ed by the failure to object to the presentation of oral evidence to prove thesame, or by the acceptance of bene@t under them.215

4hen a contract is enforceable under the 6tatute of 8rauds, and a public

document is necessary for its registration in the >egistry of eeds, the parties mayavail themselves of the right under Article 1%3.217


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B2C Those which are absolutely simulated or @ctitious;

BC Those whose cause or object did not e)ist at the time of the transaction;

B#C Those whose object is outside the commerce of men;

B%C Those which contemplate an impossible service;

B(C Those where the intention of the parties relative to the principal object of thecontract cannot be ascertained;

B3C Those e)pressly prohibited or declared void by law.

These contracts cannot be rati@ed. either can the right to set up the defense ofillegality be waived.222

An absolutely simulated or @ctitious contract is void. A relative simulation, whenit does not prejudice a 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 realagreement.22

*omparative table of defective contracts

221 /hose &here all of the requisites of a contract are present but the cause object or purpose is

contrar! to la& morals good customs public order or public polic! or contract itself is

prohibited or declared #oid b! la&.

222 Art. 140

223 Art. 1346


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Koid Koidable >escissible Inenforceable

1. efect iscaused bylac+ of essential

elements orillegality

efect iscaused by viceof consent

efect iscaused byinjury damageeither to one of

the parties of toa rd person

efect iscaused by lac+of form,authority, or

capacity of both partiesnot cured byprescription

2. o not, asa general ruleproduce anylegal e'ect

Kalid andenforceableuntil they areannulled by acompetent

court

Kalid andenforceableuntil they arerescinded by acompetent

court

*annot beenforced by aproper actionin court

. Action forthedeclaration ornullity orine)istence ordefense of nullity orine)istence

does notprescribe

Action forannulment ordefense of annulabilitymay prescribe

Action forrescission mayprescribe

*orresponding action forrecovery, ifthere wastotal or partialperformanceof theunenforceable

contractunder o. 1 or of Article1#9 mayprescribe

#. ot curedbyprescription

*ured byprescription

*ured byprescription

ot cured byprescription

%. *annot berati@ed

*an be rati@ed eed not berati@ed

*an berati@ed

(. Assailednot only by acontractingparty buteven by athird personwhoseinterest isdirectlya'ected

Assailed only bya contractingparty

Assailed notonly by acontractingparty but evenby a thirdperson who isprejudiced ordamaged by thecontract

Assailed onlyby acontractingparty

3. Assaileddirectly orcollaterally

Assaileddirectly orcollaterally

Assaileddirectly only

Assaileddirectly orcollaterally


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1. Pactum commissorium

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