law on ob&con

8/3/2019 Law on OB&CON

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Art. 1156. An obligation is a juridical

necessity to give, to do or not to do.

(n)Art. 1157. Obligations arise from:

(1) a!"(#) $ontracts"

(%) &uasi'contracts"() Acts or omissions unis*ed

by la!" and

(5) &uasi'delicts. (1+-a)

Art. 115. Obligations derived fromla! are not resumed. Only t*ose

eressly determined in t*is $ode or

in secial la!s are demandable, ands*all be regulated by t*e recets of

t*e la! !*ic* establis*es t*em" andas to !*at *as not been foreseen, by

t*e rovisions of t*is /oo0. (1+-+)

Art. 115-. Obligations arising from

contracts *ave t*e force of la!bet!een t*e contracting arties and

s*ould be comlied !it* in good

fait*. (1+-1a)

Art. 116+. Obligations derived fromuasi'contracts s*all be subject to

t*e rovisions of $*ater 1, 2itle34, of t*is /oo0. (n)

Art. 1161. $ivil obligations arising

from criminal offenses s*all begoverned by t*e enal la!s, subject

to t*e rovisions of Article #177, andof t*e ertinent rovisions of

$*ater #, reliminary 2itle, on

uman 8elations, and of 2itle 34of t*is /oo0, regulating damages.

(1+-#a)

Art. 116#. Obligations derived from

uasi'delicts s*all be governed byt*e rovisions of $*ater #, 2itle

34 of t*is /oo0, and by secialla!s. (1+-%a)

$A298 #

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Art. 116%. 9very erson obliged togive somet*ing is also obliged to

ta0e care of it !it* t*e roerdiligence of a good fat*er of a

family, unless t*e la! or t*e

stiulation of t*e arties reuiresanot*er standard of care. (1+-a)

Art. 116. 2*e creditor *as a rig*t to

t*e fruits of t*e t*ing from t*e time

t*e obligation to deliver it ariseso!ever, *e s*all acuire no rea

rig*t over it until t*e same *as beendelivered to *im. (1+-5)

Art. 1165. @*en !*at is to bedelivered is a determinate t*ing, t*e

creditor, in addition to t*e rig*tgranted *im by Article 117+, may

comel t*e debtor to ma0e t*e

delivery.f t*e t*ing is indeterminate or

generic, *e may as0 t*at t*eobligation be comlied !it* at t*e

eense of t*e debtor.f t*e obligor delays, or *as

romised to deliver t*e same t*ing

to t!o or more ersons !*o do not*ave t*e same interest, *e s*all be

resonsible for any fortuitous eventuntil *e *as effected t*e delivery.

(1+-6)

Art. 1166. 2*e obligation to give a

determinate t*ing includes t*at of

delivering all its accessions andaccessories, even t*oug* t*ey may

not *ave been mentioned. (1+-7a)

Art. 1167. f a erson obliged to dosomet*ing fails to do it, t*e same

s*all be eecuted at *is cost.

2*is same rule s*all be observed if*e does it in contravention of t*e

tenor of t*e obligation. =urt*ermore,


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it may be decreed t*at !*at *as

been oorly done be undone. (1+-)

Art. 116. @*en t*e obligation

consists in not doing, and t*e obligordoes !*at *as been forbidden *im, it

s*all also be undone at *is eense.(1+--a)

Art. 116-. 2*ose obliged to deliver orto do somet*ing incur in delay from

t*e time t*e obligee judicially oretrajudicially demands from t*em

t*e fulfillment of t*eir obligation.

o!ever, t*e demand by t*e creditors*all not be necessary in order t*at

delay may eist:(1) @*en t*e obligation or t*e

la! eressly so declare" or

(#) @*en from t*e nature andt*e circumstances of t*e

obligation it aears t*at t*edesignation of t*e time !*en

t*e t*ing is to be delivered or

t*e service is to be rendered!as a controlling motive for t*e

establis*ment of t*e contract"or

(%) @*en demand !ould beuseless, as !*en t*e obligor

*as rendered it beyond *is

o!er to erform.n recirocal obligations, neit*er

arty incurs in delay if t*e ot*erdoes not comly or is not ready to

comly in a roer manner !it*

!*at is incumbent uon *im. =romt*e moment one of t*e arties fulfills

*is obligation, delay by t*e ot*er

begins. (11++a)

Art. 117+. 2*ose !*o in t*eerformance of t*eir obligations are

guilty of fraud, negligence, or delay,and t*ose !*o in any manner

contravene t*e tenor t*ereof, are

liable for damages. (11+1)Art. 1171. 8esonsibility arising

from fraud is demandable in all

obligations. Any !aiver of an action

for future fraud is void. (11+#a)

Art. 117#. 8esonsibility arising

from negligence in t*e erformanceof every 0ind of obligation is also

demandable, but suc* liability maybe regulated by t*e courts,

according to t*e circumstances

(11+%)

Art. 117%. 2*e fault or negligence oft*e obligor consists in t*e omission

of t*at diligence !*ic* is reuired by

t*e nature of t*e obligation andcorresonds !it* t*e circumstances

of t*e ersons, of t*e time and of t*elace. @*en negligence s*o!s bad

fait*, t*e rovisions of Articles 1171and ##+1, aragra* #, s*all aly.f t*e la! or contract does not state

t*e diligence !*ic* is to be observedin t*e erformance, t*at !*ic* is

eected of a good fat*er of a family

s*all be reuired. (11+a)

Art. 117. 9cet in cases eresslysecified by t*e la!, or !*en it is

ot*er!ise declared by stiulation, or!*en t*e nature of t*e obligation

reuires t*e assumtion of ris0, no

erson s*all be resonsible for t*oseevents !*ic* could not be foreseen,

or !*ic*, t*oug* foreseen, !ereinevitable. (11+5a)

Art. 1175. ;surious transactionss*all be governed by secial la!s

(n)

Art. 1176. 2*e receit of t*e

rincial by t*e creditor !it*outreservation !it* resect to t*e

interest, s*all give rise to t*eresumtion t*at said interest *as

been aid.

2*e receit of a later installment of adebt !it*out reservation as to rior

installments, s*all li0e!ise raise t*e


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resumtion t*at suc* installments

*ave been aid. (111+a)

Art. 1177. 2*e creditors, after *aving

ursued t*e roerty in ossessionof t*e debtor to satisfy t*eir claims,

may eercise all t*e rig*ts and bringall t*e actions of t*e latter for t*e

same urose, save t*ose !*ic* are

in*erent in *is erson" t*ey may alsoimugn t*e acts !*ic* t*e debtor

may *ave done to defraud t*em.(1111)

Art. 117. ?ubject to t*e la!s, allrig*ts acuired in virtue of an

obligation are transmissible, if t*ere*as been no stiulation to t*e

contrary. (111#)

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Art. 117. 2*e effects of a

conditional obligation to give, once

t*e condition *as been fulfilled, s*allretroact to t*e day of t*e

constitution of t*e obligation.evert*eless, !*en t*e obligation

imoses recirocal restations uont*e arties, t*e fruits and interests

during t*e endency of t*e condition

s*all be deemed to *ave beenmutually comensated. f t*e

obligation is unilateral, t*e debtors*all aroriate t*e fruits and

interests received, unless from t*e

nature and circumstances of t*eobligation it s*ould be inferred t*at

t*e intention of t*e ersonconstituting t*e same !as different.

n obligations to do and not to do,t*e courts s*all determine, in eac*case, t*e retroactive effect of t*e

condition t*at *as been comlied!it*. (11#+)

Art. 11. 2*e creditor may, beforet*e fulfillment of t*e condition, bring

t*e aroriate actions for t*ereservation of *is rig*t.

2*e debtor may recover !*at duringt*e same time *e *as aid by

mista0e in case of a susensive

condition. (11#1a)

Art. 11-. @*en t*e conditions *avebeen imosed !it* t*e intention of

susending t*e efficacy of an

obligation to give, t*e follo!ingrules s*all be observed in case of t*e

imrovement, loss or deterioration

of t*e t*ing during t*e endency oft*e condition:

(1) f t*e t*ing is lost !it*outt*e fault of t*e debtor, t*e

obligation s*all beetinguis*ed"

(#) f t*e t*ing is lost t*roug*

t*e fault of t*e debtor, *e s*allbe obliged to ay damages" it is

understood t*at t*e t*ing is

lost !*en it eris*es, or goes

out of commerce, or disaears

in suc* a !ay t*at its eistenceis un0no!n or it cannot be

recovered"(%) @*en t*e t*ing

deteriorates !it*out t*e faultof t*e debtor, t*e imairment is

to be borne by t*e creditor"

() f it deteriorates t*roug*t*e fault of t*e debtor, t*e

creditor may c*oose bet!eent*e rescission of t*e obligation

and its fulfillment, !it*

indemnity for damages ineit*er case"

(5) f t*e t*ing is imroved byits nature, or by time, t*e

imrovement s*all inure to t*ebenefit of t*e creditor"(6) f it is imroved at t*e

eense of t*e debtor, *e s*all*ave no ot*er rig*t t*an t*at

granted to t*e usufructuary.

(11##)

Art. 11-+. @*en t*e conditions *avefor t*eir urose t*e etinguis*ment

of an obligation to give, t*e arties,uon t*e fulfillment of said

conditions, s*all return to eac* ot*er

!*at t*ey *ave received.n case of t*e loss, deterioration or

imrovement of t*e t*ing, t*erovisions !*ic*, !it* resect to t*e

debtor, are laid do!n in t*e

receding article s*all be alied tot*e arty !*o is bound to return.

As for t*e obligations to do and not

to do, t*e rovisions of t*e secondaragra* of Article 117 s*all be

observed as regards t*e effect of t*eetinguis*ment of t*e obligation

(11#%)

Art. 11-1. 2*e o!er to rescind

obligations is imlied in recirocalones, in case one of t*e obligors


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s*ould not comly !it* !*at is

incumbent uon *im.

2*e injured arty may c*oosebet!een t*e fulfillment and t*e

rescission of t*e obligation, !it* t*eayment of damages in eit*er case.

e may also see0 rescission, evenafter *e *as c*osen fulfillment, if t*e

latter s*ould become imossible.

2*e court s*all decree t*e rescissionclaimed, unless t*ere be just cause

aut*oriBing t*e fiing of a eriod.2*is is understood to be !it*out

rejudice to t*e rig*ts of t*ird

ersons !*o *ave acuired t*et*ing, in accordance !it* Articles

1%5 and 1% and t*e Cortgagea!. (11#)

Art. 11-#. n case bot* arties *avecommitted a breac* of t*e

obligation, t*e liability of t*e firstinfractor s*all be euitably temered

by t*e courts. f it cannot be

determined !*ic* of t*e arties firstviolated t*e contract, t*e same s*all

be deemed etinguis*ed, and eac*s*all bear *is o!n damages. (n)

?9$2O #. ' Obligations !it* a

eriod

Art. 11-%. Obligations for !*ose

fulfillment a day certain *as beenfied, s*all be demandable only

!*en t*at day comes.

Obligations !it* a resolutory eriodta0e effect at once, but terminate

uon arrival of t*e day certain.

A day certain is understood to bet*at !*ic* must necessarily come,

alt*oug* it may not be 0no!n !*en.f t*e uncertainty consists in

!*et*er t*e day !ill come or not,t*e obligation is conditional, and it

s*all be regulated by t*e rules of t*e

receding ?ection. (11#5a)

Art. 11-. n case of loss,

deterioration or imrovement of t*e

t*ing before t*e arrival of t*e daycertain, t*e rules in Article 11-

s*all be observed. (n)

Art. 11-5. Anyt*ing aid or deliveredbefore t*e arrival of t*e eriod, t*e

obligor being una!are of t*e eriod

or believing t*at t*e obligation *asbecome due and demandable, may

be recovered, !it* t*e fruits andinterests. (11#6a)

Art. 11-6. @*enever in an obligationa eriod is designated, it is

resumed to *ave been establis*edfor t*e benefit of bot* t*e creditor

and t*e debtor, unless from t*etenor of t*e same or ot*ercircumstances it s*ould aear t*at

t*e eriod *as been establis*ed infavor of one or of t*e ot*er. (11#7)

Art. 11-7. f t*e obligation does notfi a eriod, but from its nature and

t*e circumstances it can be inferredt*at a eriod !as intended, t*e

courts may fi t*e duration t*ereof.2*e courts s*all also fi t*e duration

of t*e eriod !*en it deends uon

t*e !ill of t*e debtor.n every case, t*e courts s*all

determine suc* eriod as may undert*e circumstances *ave been

robably contemlated by t*e

arties. Once fied by t*e courts, t*eeriod cannot be c*anged by t*em.

(11#a)

Art. 11-. 2*e debtor s*all lose

every rig*t to ma0e use of t*eeriod:

(1) @*en after t*e obligation *asbeen contracted, *e becomes

insolvent, unless *e gives a guaranty

or security for t*e debt"


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(#) @*en *e does not furnis* to t*e

creditor t*e guaranties or securities

!*ic* *e *as romised"(%) @*en by *is o!n acts *e *as

imaired said guaranties orsecurities after t*eir establis*ment,

and !*en t*roug* a fortuitous eventt*ey disaear, unless *e

immediately gives ne! ones eually

satisfactory"() @*en t*e debtor violates any

underta0ing, in consideration of!*ic* t*e creditor agreed to t*e

eriod"

(5) @*en t*e debtor attemts toabscond. (11#-a)

?9$2O %. ' Alternative Obligations

Art. 11--. A erson alternativelybound by different restations s*all

comletely erform one of t*em.2*e creditor cannot be comelled to

receive art of one and art of t*e

ot*er underta0ing. (11%1)

Art. 1#++. 2*e rig*t of c*oicebelongs to t*e debtor, unless it *as

been eressly granted to t*ecreditor.

2*e debtor s*all *ave no rig*t to

c*oose t*ose restations !*ic* areimossible, unla!ful or !*ic* could

not *ave been t*e object of t*eobligation. (11%#)

Art. 1#+1. 2*e c*oice s*all roduceno effect ecet from t*e time it *as

been communicated. (11%%)

Art. 1#+#. 2*e debtor s*all lose t*e

rig*t of c*oice !*en among t*erestations !*ereby *e is

alternatively bound, only one isracticable. (11%)

Art. 1#+%. f t*roug* t*e creditorDsacts t*e debtor cannot ma0e a

c*oice according to t*e terms of t*e

obligation, t*e latter may rescind t*e

contract !it* damages. (n)

Art. 1#+. 2*e creditor s*all *ave a

rig*t to indemnity for damages!*en, t*roug* t*e fault of t*e

debtor, all t*e t*ings !*ic* arealternatively t*e object of t*e

obligation *ave been lost, or t*e

comliance of t*e obligation *asbecome imossible.

2*e indemnity s*all be fied ta0ingas a basis t*e value of t*e last t*ing

!*ic* disaeared, or t*at of t*e

service !*ic* last becameimossible.


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t*em, also !it* indemnity for

damages.

2*e same rules s*all be alied toobligations to do or not to do in case

one, some or all of t*e restationss*ould become imossible. (11%6a)

Art. 1#+6. @*en only one restation

*as been agreed uon, but t*e

obligor may render anot*er insubstitution, t*e obligation is called

facultative.2*e loss or deterioration of t*e t*ing

intended as a substitute, t*roug* t*e

negligence of t*e obligor, does notrender *im liable. /ut once t*e

substitution *as been made, t*eobligor is liable for t*e loss of t*e

substitute on account of *is delay,negligence or fraud. (n)

?9$2O . ' Eoint and ?olidaryObligations

Art. 1#+7. 2*e concurrence of t!o ormore creditors or of t!o or more

debtors in one and t*e sameobligation does not imly t*at eac*

one of t*e former *as a rig*t todemand, or t*at eac* one of t*e

latter is bound to render, entire

comliance !it* t*e restation.2*ere is a solidary liability only !*en

t*e obligation eressly so states, or!*en t*e la! or t*e nature of t*e

obligation reuires solidarity.

(11%7a)

Art. 1#+. f from t*e la!, or t*e

nature or t*e !ording of t*eobligations to !*ic* t*e receding

article refers t*e contrary does notaear, t*e credit or debt s*all be

resumed to be divided into as manys*ares as t*ere are creditors or

debtors, t*e credits or debts being

considered distinct from oneanot*er, subject to t*e 8ules of

$ourt governing t*e multilicity of

suits. (11%a)

Art. 1#+-. f t*e division isimossible, t*e rig*t of t*e creditors

may be rejudiced only by t*eircollective acts, and t*e debt can be

enforced only by roceeding againstall t*e debtors. f one of t*e latter

s*ould be insolvent, t*e ot*ers s*all

not be liable for *is s*are. (11%-)

Art. 1#1+. 2*e indivisibility of anobligation does not necessarily give

rise to solidarity. or does solidarity

of itself imly indivisibility. (n)

Art. 1#11. ?olidarity may eistalt*oug* t*e creditors and t*e

debtors may not be bound in t*esame manner and by t*e sameeriods and conditions. (11+)

Art. 1#1#. 9ac* one of t*e solidary

creditors may do !*atever may be

useful to t*e ot*ers, but notanyt*ing !*ic* may be rejudicial to

t*e latter. (111a)

Art. 1#1%. A solidary creditor cannotassign *is rig*ts !it*out t*e consent

of t*e ot*ers. (n)

Art. 1#1. 2*e debtor may ay any

one of t*e solidary creditors" but ifany demand, judicial or etrajudicial,

*as been made by one of t*em,

ayment s*ould be made to *im.(11#a)

Art. 1#15. ovation, comensation,confusion or remission of t*e debt,

made by any of t*e solidary creditorsor !it* any of t*e solidary debtors,

s*all etinguis* t*e obligation,!it*out rejudice to t*e rovisions

of Article 1#1-.

2*e creditor !*o may *ave eecutedany of t*ese acts, as !ell as *e !*o

collects t*e debt, s*all be liable to


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t*e ot*ers for t*e s*are in t*e

obligation corresonding to t*em.

(11%)

Art. 1#16. 2*e creditor may roceedagainst any one of t*e solidary

debtors or some or all of t*emsimultaneously. 2*e demand made

against one of t*em s*all not be an

obstacle to t*ose !*ic* maysubseuently be directed against t*e

ot*ers, so long as t*e debt *as notbeen fully collected. (11a)

Art. 1#17. ayment made by one oft*e solidary debtors etinguis*es t*e

obligation. f t!o or more solidarydebtors offer to ay, t*e creditormay c*oose !*ic* offer to accet.

e !*o made t*e ayment mayclaim from *is co'debtors only t*e

s*are !*ic* corresonds to eac*,

!it* t*e interest for t*e aymentalready made. f t*e ayment is

made before t*e debt is due, nointerest for t*e intervening eriod

may be demanded.@*en one of t*e solidary debtors

cannot, because of *is insolvency,

reimburse *is s*are to t*e debtoraying t*e obligation, suc* s*are

s*all be borne by all *is co'debtors,in roortion to t*e debt of eac*.

(115a)

Art. 1#1. ayment by a solidary

debtor s*all not entitle *im to

reimbursement from *is co'debtorsif suc* ayment is made after t*e

obligation *as rescribed or becomeillegal. (n)

Art. 1#1-. 2*e remission made by

t*e creditor of t*e s*are !*ic*

affects one of t*e solidary debtorsdoes not release t*e latter from *is

resonsibility to!ards t*e co'

debtors, in case t*e debt *ad been

totally aid by anyone of t*em

before t*e remission !as effected(116a)

Art. 1##+. 2*e remission of t*e

!*ole obligation, obtained by one oft*e solidary debtors, does not entitle

*im to reimbursement from *is co'

debtors. (n)

Art. 1##1. f t*e t*ing *as been lostor if t*e restation *as become

imossible !it*out t*e fault of t*e

solidary debtors, t*e obligation s*allbe etinguis*ed.

f t*ere !as fault on t*e art of anyone of t*em, all s*all be resonsible

to t*e creditor, for t*e rice and t*eayment of damages and interest,!it*out rejudice to t*eir action

against t*e guilty or negligentdebtor.

f t*roug* a fortuitous event, t*e

t*ing is lost or t*e erformance *asbecome imossible after one of t*e

solidary debtors *as incurred indelay t*roug* t*e judicial or

etrajudicial demand uon *im byt*e creditor, t*e rovisions of t*e

receding aragra* s*all aly

(117a)

Art. 1###. A solidary debtor may, inactions filed by t*e creditor, avai

*imself of all defenses !*ic* are

derived from t*e nature of t*eobligation and of t*ose !*ic* are

ersonal to *im, or ertain to *is

o!n s*are. @it* resect to t*ose!*ic* ersonally belong to t*e

ot*ers, *e may avail *imself t*ereofonly as regards t*at art of t*e debt

for !*ic* t*e latter are resonsible.(11a)

?9$2O 5. '


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Art. 1##%. 2*e divisibility or

indivisibility of t*e t*ings t*at aret*e object of obligations in !*ic*

t*ere is only one debtor and onlyone creditor does not alter or modify

t*e rovisions of $*ater # of t*is2itle. (11-)

Art. 1##. A joint indivisible

obligation gives rise to indemnity fordamages from t*e time anyone of

t*e debtors does not comly !it* *isunderta0ing. 2*e debtors !*o may

*ave been ready to fulfill t*eir

romises s*all not contribute to t*eindemnity beyond t*e corresonding

ortion of t*e rice of t*e t*ing or oft*e value of t*e service in !*ic* t*e

obligation consists. (115+)Art. 1##5. =or t*e uroses of t*ereceding articles, obligations to

give definite t*ings and t*ose !*ic*are not suscetible of artial

erformance s*all be deemed to be

indivisible.@*en t*e obligation *as for its

object t*e eecution of a certainnumber of days of !or0, t*e

accomlis*ment of !or0 by metricalunits, or analogous t*ings !*ic* by

t*eir nature are suscetible of

artial erformance, it s*all bedivisible.

o!ever, even t*oug* t*e object orservice may be *ysically divisible,

an obligation is indivisible if so

rovided by la! or intended by t*earties.

n obligations not to do, divisibility

or indivisibility s*all be determinedby t*e c*aracter of t*e restation in

eac* articular case. (1151a)

?9$2O 6. ' Obligations !it* aenal $lause

Art. 1##6. n obligations !it* aenal clause, t*e enalty s*all

substitute t*e indemnity for

damages and t*e ayment of

interests in case of noncomliance, if

t*ere is no stiulation to t*econtrary. evert*eless, damages

s*all be aid if t*e obligor refuses toay t*e enalty or is guilty of fraud

in t*e fulfillment of t*e obligation.2*e enalty may be enforced only

!*en it is demandable in accordance

!it* t*e rovisions of t*is $ode(115#a)

Art. 1##7. 2*e debtor cannot eemt*imself from t*e erformance of t*e

obligation by aying t*e enalty,

save in t*e case !*ere t*is rig*t *asbeen eressly reserved for *im

eit*er can t*e creditor demand t*efulfillment of t*e obligation and t*e

satisfaction of t*e enalty at t*esame time, unless t*is rig*t *asbeen clearly granted *im. o!ever,

if after t*e creditor *as decided toreuire t*e fulfillment of t*e

obligation, t*e erformance t*ereof

s*ould become imossible !it*out*is fault, t*e enalty may be

enforced. (115%a)

Art. 1##. roof of actual damagessuffered by t*e creditor is not

necessary in order t*at t*e enalty

may be demanded. (n)

Art. 1##-. 2*e judge s*all euitablyreduce t*e enalty !*en t*e

rincial obligation *as been artly

or irregularly comlied !it* by t*edebtor. 9ven if t*ere *as been no

erformance, t*e enalty may also

be reduced by t*e courts if it isiniuitous or unconscionable.

(115a)

Art. 1#%+. 2*e nullity of t*e enalclause does not carry !it* it t*at of

t*e rincial obligation.

2*e nullity of t*e rincial obligationcarries !it* it t*at of t*e enal


10/29

clause. (1155)

$A298 932>;?C92 O= O/>A2O?

>998A 8O4?O?

Art. 1#%1. Obligations are

etinguis*ed:

(1) /y ayment orerformance:

(#) /y t*e loss of t*e t*ing due:(%) /y t*e condonation or

remission of t*e debt"

() /y t*e confusion or mergerof t*e rig*ts of creditor and

debtor"(5) /y comensation"

(6) /y novation.Ot*er causes of etinguis*ment ofobligations, suc* as annulment,

rescission, fulfillment of a resolutorycondition, and rescrition, are

governed else!*ere in t*is $ode.

(1156a)

?9$2O 1. ' ayment orerformance

Art. 1#%#. ayment means not only

t*e delivery of money but also t*e

erformance, in any ot*er manner,of an obligation. (n)

Art. 1#%%. A debt s*all not be

understood to *ave been aid unless

t*e t*ing or service in !*ic* t*eobligation consists *as been

comletely delivered or rendered, as

t*e case may be. (1157)Art. 1#%. f t*e obligation *as been

substantially erformed in goodfait*, t*e obligor may recover as

t*oug* t*ere *ad been a strict andcomlete fulfillment, less damages

suffered by t*e obligee. (n)

Art. 1#%5. @*en t*e obligee accets

t*e erformance, 0no!ing its

incomleteness or irregularity, and

!it*out eressing any rotest or

objection, t*e obligation is deemedfully comlied !it*. (n)

Art. 1#%6. 2*e creditor is not bound

to accet ayment or erformanceby a t*ird erson !*o *as no

interest in t*e fulfillment of t*e

obligation, unless t*ere is astiulation to t*e contrary.

@*oever ays for anot*er maydemand from t*e debtor !*at *e *as

aid, ecet t*at if *e aid !it*out

t*e 0no!ledge or against t*e !ill oft*e debtor, *e can recover only

insofar as t*e ayment *as beenbeneficial to t*e debtor. (115a)

Art. 1#%7. @*oever ays on be*alf oft*e debtor !it*out t*e 0no!ledge or

against t*e !ill of t*e latter, cannotcomel t*e creditor to subrogate *im

in *is rig*ts, suc* as t*ose arising

from a mortgage, guaranty, orenalty. (115-a)

Art. 1#%. ayment made by a t*ird

erson !*o does not intend to bereimbursed by t*e debtor is deemed

to be a donation, !*ic* reuires t*e

debtorDs consent. /ut t*e ayment isin any case valid as to t*e creditor

!*o *as acceted it. (n)

Art. 1#%-. n obligations to give,

ayment made by one !*o does not*ave t*e free disosal of t*e t*ing

due and caacity to alienate it s*all

not be valid, !it*out rejudice to t*erovisions of Article 1#7 under t*e

2itle on FNatural Obligations.F(116+a)

Art. 1#+. ayment s*all be made to

t*e erson in !*ose favor t*e

obligation *as been constituted, or*is successor in interest, or any


11/29

erson aut*oriBed to receive it.

(116#a)

Art. 1#1. ayment to a erson !*o

is incaacitated to administer *isroerty s*all be valid if *e *as 0et

t*e t*ing delivered, or insofar as t*eayment *as been beneficial to *im.

ayment made to a t*ird erson

s*all also be valid insofar as it *asredounded to t*e benefit of t*e

creditor. ?uc* benefit to t*e creditorneed not be roved in t*e follo!ing

cases:

(1) f after t*e ayment, t*et*ird erson acuires t*e

creditorDs rig*ts"(#) f t*e creditor ratifies t*e

ayment to t*e t*ird erson"

(%) f by t*e creditorDs conduct,t*e debtor *as been led to

believe t*at t*e t*ird erson*ad aut*ority to receive t*e

ayment. (116%a)

Art. 1##. ayment made in good

fait* to any erson in ossession oft*e credit s*all release t*e debtor.

(116)

Art. 1#%. ayment made to t*e

creditor by t*e debtor after t*e latter*as been judicially ordered to retain

t*e debt s*all not be valid. (1165)

Art. 1#. 2*e debtor of a t*ing

cannot comel t*e creditor toreceive a different one, alt*oug* t*e

latter may be of t*e same value as,

or more valuable t*an t*at !*ic* isdue.

n obligations to do or not to do, anact or forbearance cannot be

substituted by anot*er act orforbearance against t*e obligeeDs

!ill. (1166a)

Art. 1#5.


12/29

!*en t*roug* t*e fault of t*e

creditor t*ey *ave been imaired.

n t*e meantime, t*e action derivedfrom t*e original obligation s*all be

*eld in t*e abeyance. (117+)

Art. 1#5+. n case an etraordinaryinflation or deflation of t*e currency

stiulated s*ould suervene, t*e

value of t*e currency at t*e time oft*e establis*ment of t*e obligation

s*all be t*e basis of ayment, unlesst*ere is an agreement to t*e

contrary. (n)

Art. 1#51. ayment s*all be made in

t*e lace designated in t*eobligation.

2*ere being no eress stiulationand if t*e underta0ing is to deliver adeterminate t*ing, t*e ayment s*all

be made !*erever t*e t*ing mig*tbe at t*e moment t*e obligation !as

constituted.

n any ot*er case t*e lace ofayment s*all be t*e domicile of t*e

debtor.f t*e debtor c*anges *is domicile in

bad fait* or after *e *as incurred indelay, t*e additional eenses s*all

be borne by *im.

2*ese rovisions are !it*outrejudice to venue under t*e 8ules

of $ourt. (1171a)

?;/?9$2O 1. ' Alication of

ayments

Art. 1#5#. e !*o *as various debts

of t*e same 0ind in favor of one andt*e same creditor, may declare at

t*e time of ma0ing t*e ayment, to!*ic* of t*em t*e same must be

alied. ;nless t*e arties sostiulate, or !*en t*e alication of

ayment is made by t*e arty for

!*ose benefit t*e term *as beenconstituted, alication s*all not be

made as to debts !*ic* are not yet

due.

f t*e debtor accets from t*ecreditor a receit in !*ic* an

alication of t*e ayment is made,t*e former cannot comlain of t*e

same, unless t*ere is a cause forinvalidating t*e contract. (117#a)

Art. 1#5%. f t*e debt roducesinterest, ayment of t*e rincial

s*all not be deemed to *ave beenmade until t*e interests *ave been

covered. (117%)

Art. 1#5. @*en t*e ayment cannotbe alied in accordance !it* t*e

receding rules, or if alication cannot be inferred from ot*er

circumstances, t*e debt !*ic* ismost onerous to t*e debtor, amongt*ose due, s*all be deemed to *ave

been satisfied.f t*e debts due are of t*e same

nature and burden, t*e ayment

s*all be alied to all of t*emroortionately. (117a)

?;/?9$2O #. ' ayment by

$ession

Art. 1#55. 2*e debtor may cede or

assign *is roerty to *is creditorsin ayment of *is debts. 2*is

cession, unless t*ere is stiulation tot*e contrary, s*all only release t*e

debtor from resonsibility for t*e net

roceeds of t*e t*ing assigned. 2*eagreements !*ic*, on t*e effect of

t*e cession, are made bet!een t*e

debtor and *is creditors s*all begoverned by secial la!s. (1175a)

?;/?9$2O %. ' 2ender of ayment

and $onsignation

Art. 1#56. f t*e creditor to !*om

tender of ayment *as been maderefuses !it*out just cause to accet

it, t*e debtor s*all be released from


13/29

resonsibility by t*e consignation of

t*e t*ing or sum due.

$onsignation alone s*all roduce t*esame effect in t*e follo!ing cases:

(1) @*en t*e creditor is absentor un0no!n, or does not

aear at t*e lace of ayment"(#) @*en *e is incaacitated to

receive t*e ayment at t*e time

it is due"(%) @*en, !it*out just cause,

*e refuses to give a receit"() @*en t!o or more ersons

claim t*e same rig*t to collect"

(5) @*en t*e title of t*eobligation *as been lost.

(1176a)

Art. 1#57. n order t*at t*econsignation of t*e t*ing due mayrelease t*e obligor, it must first be

announced to t*e ersons interestedin t*e fulfillment of t*e obligation.

2*e consignation s*all be ineffectual

if it is not made strictly inconsonance !it* t*e rovisions

!*ic* regulate ayment. (1177)

Art. 1#5. $onsignation s*all bemade by deositing t*e t*ings due at

t*e disosal of judicial aut*ority,

before !*om t*e tender of ayments*all be roved, in a roer case,

and t*e announcement of t*econsignation in ot*er cases.

2*e consignation *aving been made,

t*e interested arties s*all also benotified t*ereof. (117)

Art. 1#5-. 2*e eenses of

consignation, !*en roerly made,s*all be c*arged against t*e

creditor. (117)

Art. 1#6+. Once t*e consignation *asbeen duly made, t*e debtor may as0

t*e judge to order t*e cancellation of

t*e obligation./efore t*e creditor *as acceted t*e

consignation, or before a judicial

declaration t*at t*e consignation *as

been roerly made, t*e debtor may

!it*dra! t*e t*ing or t*e sumdeosited, allo!ing t*e obligation to

remain in force. (11+)

Art. 1#61. f, t*e consignation*aving been made, t*e creditor

s*ould aut*oriBe t*e debtor to

!it*dra! t*e same, *e s*all loseevery reference !*ic* *e may *ave

over t*e t*ing. 2*e co'debtors,guarantors and sureties s*all be

released. (111a)

?9$2O #. ' oss of t*e 2*ing


14/29

due to *is fault, unless t*ere is roof

to t*e contrary, and !it*out

rejudice to t*e rovisions of article1165. 2*is resumtion does not

aly in case of eart*ua0e, flood,storm, or ot*er natural calamity.

(11%a)

Art. 1#66. 2*e debtor in obligations

to do s*all also be released !*en t*erestation becomes legally or

*ysically imossible !it*out t*efault of t*e obligor. (11a)

Art. 1#67. @*en t*e service *as

become so difficult as to bemanifestly beyond t*e contemlation

of t*e arties, t*e obligor may alsobe released t*erefrom, in !*ole or in

art. (n)

Art. 1#6. @*en t*e debt of a t*ing

certain and determinate roceedsfrom a criminal offense, t*e debtor

s*all not be eemted from t*e

ayment of its rice, !*atever maybe t*e cause for t*e loss, unless t*e

t*ing *aving been offered by *im tot*e erson !*o s*ould receive it, t*e

latter refused !it*out justification toaccet it. (115)

Art. 1#6-. 2*e obligation *avingbeen etinguis*ed by t*e loss of t*e

t*ing, t*e creditor s*all *ave all t*erig*ts of action !*ic* t*e debtor

may *ave against t*ird ersons by

reason of t*e loss. (116)

?9$2O %. ' $ondonation or

8emission of t*e


15/29

or creditor benefits t*e guarantors.

$onfusion !*ic* ta0es lace in t*e

erson of any of t*e latter does notetinguis* t*e obligation. (11-%)

Art. 1#77. $onfusion does not

etinguis* a joint obligation ecetas regards t*e s*are corresonding

to t*e creditor or debtor in !*om

t*e t!o c*aracters concur. (11-)

?9$2O 5. ' $omensation

Art. 1#7. $omensation s*all ta0e

lace !*en t!o ersons, in t*eiro!n rig*t, are creditors and debtors

of eac* ot*er. (11-5)

Art. 1#7-. n order t*atcomensation may be roer, it isnecessary:

(1) 2*at eac* one of t*eobligors be bound rincially,

and t*at *e be at t*e same time

a rincial creditor of t*eot*er"

(#) 2*at bot* debts consist in asum of money, or if t*e t*ings

due are consumable, t*ey be oft*e same 0ind, and also of t*e

same uality if t*e latter *as

been stated"(%) 2*at t*e t!o debts be due"

() 2*at t*ey be liuidated anddemandable"

(5) 2*at over neit*er of t*em

t*ere be any retention orcontroversy, commenced by

t*ird ersons and

communicated in due time tot*e debtor. (11-6)

Art. 1#+. ot!it*standing t*e

rovisions of t*e receding article,t*e guarantor may set u

comensation as regards !*at t*e

creditor may o!e t*e rincialdebtor. (11-7)

Art. 1#1. $omensation may be

total or artial. @*en t*e t!o debts

are of t*e same amount, t*ere is atotal comensation. (n)

Art. 1##. 2*e arties may agree

uon t*e comensation of debts!*ic* are not yet due. (n)

Art. 1#%. f one of t*e arties to a

suit over an obligation *as a claimfor damages against t*e ot*er, t*e

former may set it off by roving *isrig*t to said damages and t*e

amount t*ereof. (n)

Art. 1#. @*en one or bot* debts

are rescissible or voidable, t*ey maybe comensated against eac* ot*er

before t*ey are judicially rescindedor avoided. (n)

Art. 1#5. 2*e debtor !*o *asconsented to t*e assignment of

rig*ts made by a creditor in favor of

a t*ird erson, cannot set u againstt*e assignee t*e comensation

!*ic* !ould ertain to *im againstt*e assignor, unless t*e assignor

!as notified by t*e debtor at t*etime *e gave *is consent, t*at *e

reserved *is rig*t to t*e

comensation.f t*e creditor communicated t*e

cession to *im but t*e debtor did notconsent t*ereto, t*e latter may set

u t*e comensation of debts

revious to t*e cession, but not ofsubseuent ones.

f t*e assignment is made !it*out

t*e 0no!ledge of t*e debtor, *e mayset u t*e comensation of all

credits rior to t*e same and alsolater ones until *e *ad 0no!ledge of

t*e assignment. (11-a)

Art. 1#6. $omensation ta0es lace

by oeration of la!, even t*oug* t*edebts may be ayable at different

laces, but t*ere s*all be an


16/29

indemnity for eenses of ec*ange

or transortation to t*e lace of

ayment. (11--a)

Art. 1#7. $omensation s*all not beroer !*en one of t*e debts arises

from a deositum or from t*eobligations of a deositary or of a

bailee in commodatum.

eit*er can comensation be set uagainst a creditor !*o *as a claim

for suort due by gratuitous title,!it*out rejudice to t*e rovisions

of aragra* # of Article %+1.

(1#++a)

Art. 1#. eit*er s*all t*ere becomensation if one of t*e debts

consists in civil liability arising froma enal offense. (n)

Art. 1#-. f a erson s*ould *aveagainst *im several debts !*ic* are

suscetible of comensation, t*e

rules on t*e alication of aymentss*all aly to t*e order of t*e

comensation. (1#+1)

Art. 1#-+. @*en all t*e reuisitesmentioned in Article 1#7- are

resent, comensation ta0es effect

by oeration of la!, andetinguis*es bot* debts to t*e

concurrent amount, even t*oug* t*ecreditors and debtors are not a!are

of t*e comensation. (1#+#a)

?9$2O 6. ' ovation

Art. 1#-1. Obligations may bemodified by:

(1) $*anging t*eir object orrincial conditions"

(#) ?ubstituting t*e erson oft*e debtor"

(%) ?ubrogating a t*ird erson

in t*e rig*ts of t*e creditor.(1#+%)

Art. 1#-#. n order t*at an obligation

may be etinguis*ed by anot*er

!*ic* substitute t*e same, it isimerative t*at it be so declared in

uneuivocal terms, or t*at t*e oldand t*e ne! obligations be on every

oint incomatible !it* eac* ot*er.(1#+)

Art. 1#-%. ovation !*ic* consistsin substituting a ne! debtor in t*e

lace of t*e original one, may bemade even !it*out t*e 0no!ledge or

against t*e !ill of t*e latter, but not

!it*out t*e consent of t*e creditor.ayment by t*e ne! debtor gives

*im t*e rig*ts mentioned in Articles1#%6 and 1#%7. (1#+5a)

Art. 1#-. f t*e substitution is!it*out t*e 0no!ledge or against

t*e !ill of t*e debtor, t*e ne!debtorDs insolvency or non'

fulfillment of t*e obligations s*all

not give rise to any liability on t*eart of t*e original debtor. (n)

Art. 1#-5. 2*e insolvency of t*e ne!

debtor, !*o *as been roosed byt*e original debtor and acceted by

t*e creditor, s*all not revive t*e

action of t*e latter against t*eoriginal obligor, ecet !*en said

insolvency !as already eisting andof ublic 0no!ledge, or 0no!n to t*e

debtor, !*en t*e delegated *is debt.

(1#+6a)

Art. 1#-6. @*en t*e rincial

obligation is etinguis*ed inconseuence of a novation,

accessory obligations may subsistonly insofar as t*ey may benefit

t*ird ersons !*o did not give t*eirconsent. (1#+7)

Art. 1#-7. f t*e ne! obligation isvoid, t*e original one s*all subsist,

unless t*e arties intended t*at t*e


17/29

former relation s*ould be

etinguis*ed in any event. (n)

Art. 1#-. 2*e novation is void if t*e

original obligation !as void, ecet!*en annulment may be claimed

only by t*e debtor or !*enratification validates acts !*ic* are

voidable. (1#+a)

Art. 1#--. f t*e original obligation!as subject to a susensive or

resolutory condition, t*e ne!obligation s*all be under t*e same

condition, unless it is ot*er!ise

stiulated. (n)

Art. 1%++. ?ubrogation of a t*irderson in t*e rig*ts of t*e creditor is

eit*er legal or conventional. 2*eformer is not resumed, ecet incases eressly mentioned in t*is

$ode" t*e latter must be clearlyestablis*ed in order t*at it may ta0e

effect. (1#+-a)

Art. 1%+1. $onventional subrogation

of a t*ird erson reuires t*econsent of t*e original arties and of

t*e t*ird erson. (n)

Art. 1%+#. t is resumed t*at t*ere

is legal subrogation:(1) @*en a creditor ays

anot*er creditor !*o isreferred, even !it*out t*e

debtorDs 0no!ledge"

(#) @*en a t*ird erson, notinterested in t*e obligation,

ays !it* t*e eress or tacit

aroval of t*e debtor"

(%) @*en, even !it*out t*e

0no!ledge of t*e debtor, aerson interested in t*e

fulfillment of t*e obligationays, !it*out rejudice to t*e

effects of confusion as to t*e

latterDs s*are. (1#1+a)

Art. 1%+%. ?ubrogation transfers to

t*e ersons subrogated t*e credit

!it* all t*e rig*ts t*eretoaertaining, eit*er against t*e

debtor or against t*ird erson, bet*ey guarantors or ossessors of

mortgages, subject to stiulation ina conventional subrogation. (1#1#a)

Art. 1%+. A creditor, to !*omartial ayment *as been made, may

eercise *is rig*t for t*e remainder,and *e s*all be referred to t*e

erson !*o *as been subrogated in

*is lace in virtue of t*e artialayment of t*e same credit. (1#1%)

2itle . ' $O28A$2?

$A298 1>998A 8O4?O?

Art. 1%+5. A contract is a meeting of

minds bet!een t!o ersons

!*ereby one binds *imself, !it*resect to t*e ot*er, to give

somet*ing or to render someservice. (1#5a)

Art. 1%+6. 2*e contracting arties

may establis* suc* stiulations,

clauses, terms and conditions ast*ey may deem convenient, rovided

t*ey are not contrary to la!, morals,good customs, ublic order, or ublic

olicy. (1#55a)

Art. 1%+7. nnominate contracts

s*all be regulated by t*e stiulations

of t*e arties, by t*e rovisions of2itles and of t*is /oo0, by t*e

rules governing t*e most analogousnominate contracts, and by t*e

customs of t*e lace. (n)

Art. 1%+. 2*e contract must bind

bot* contracting arties" its validityor comliance cannot be left to t*e

!ill of one of t*em. (1#56a)


18/29

Art. 1%+-. 2*e determination of t*e

erformance may be left to a t*ird

erson, !*ose decision s*all not bebinding until it *as been made

0no!n to bot* contracting arties.(n)

Art. 1%1+. 2*e determination s*allnot be obligatory if it is evidently

ineuitable. n suc* case, t*e courts

s*all decide !*at is euitable undert*e circumstances. (n)

Art. 1%11. $ontracts ta0e effect onlybet!een t*e arties, t*eir assigns

and *eirs, ecet in case !*ere t*e

rig*ts and obligations arising fromt*e contract are not transmissible by

t*eir nature, or by stiulation or byrovision of la!. 2*e *eir is not

liable beyond t*e value of t*eroerty *e received from t*edecedent.

f a contract s*ould contain somestiulation in favor of a t*ird erson,

*e may demand its fulfillment

rovided *e communicated *isaccetance to t*e obligor before its

revocation. A mere incidental benefitor interest of a erson is not

sufficient. 2*e contracting artiesmust *ave clearly and deliberately

conferred a favor uon a t*ird

erson. (1#57a)Art. 1%1#. n contracts creating real

rig*ts, t*ird ersons !*o come intoossession of t*e object of t*e

contract are bound t*ereby, subject

to t*e rovisions of t*e Cortgagea! and t*e and 8egistration a!s.

(n)

Art. 1%1%. $reditors are rotected incases of contracts intended to

defraud t*em. (n)Art. 1%1. Any t*ird erson !*o

induces anot*er to violate *iscontract s*all be liable for damages

to t*e ot*er contracting arty. (n)

Art. 1%15. $ontracts are erfected bymere consent, and from t*at

moment t*e arties are bound not

only to t*e fulfillment of !*at *as

been eressly stiulated but also to

all t*e conseuences !*ic*,according to t*eir nature, may be in

0eeing !it* good fait*, usage andla!. (1#5)

Art. 1%16. 8eal contracts, suc* asdeosit, ledge and $ommodatum,

are not erfected until t*e delivery

of t*e object of t*e obligation. (n)Art. 1%17. o one may contract in

t*e name of anot*er !it*out beingaut*oriBed by t*e latter, or unless *e

*as by la! a rig*t to reresent *im.

A contract entered into in t*e nameof anot*er by one !*o *as no

aut*ority or legal reresentation, or!*o *as acted beyond *is o!ers,

s*all be unenforceable, unless it isratified, eressly or imliedly, byt*e erson on !*ose be*alf it *as

been eecuted, before it is revo0edby t*e ot*er contracting arty.

(1#5-a)

$A298 #

9??92A 89&;?29? O=$O28A$2?

>998A 8O4?O?

Art. 1%1. 2*ere is no contractunless t*e follo!ing reuisites

concur:(1) $onsent of t*e contracting

arties"

(#) Object certain !*ic* is t*esubject matter of t*e contract"

(%) $ause of t*e obligation

!*ic* is establis*ed. (1#61)?9$2O 1. ' $onsent

Art. 1%1-. $onsent is manifested by

t*e meeting of t*e offer and t*eaccetance uon t*e t*ing and t*e

cause !*ic* are to constitute t*e

contract. 2*e offer must be certainand t*e accetance absolute. A


19/29

ualified accetance constitutes a

counter'offer.

Accetance made by letter ortelegram does not bind t*e offerer

ecet from t*e time it came to *is0no!ledge. 2*e contract, in suc* a

case, is resumed to *ave beenentered into in t*e lace !*ere t*e

offer !as made. (1#6#a)

Art. 1%#+. An accetance may beeress or imlied. (n)

Art. 1%#1. 2*e erson ma0ing t*eoffer may fi t*e time, lace, and

manner of accetance, all of !*ic*

must be comlied !it*. (n)Art. 1%##. An offer made t*roug* an

agent is acceted from t*e timeaccetance is communicated to *im.

(n)Art. 1%#%. An offer becomesineffective uon t*e deat*, civil

interdiction, insanity, or insolvencyof eit*er arty before accetance is

conveyed. (n)

Art. 1%#. @*en t*e offerer *asallo!ed t*e offeree a certain eriod

to accet, t*e offer may be!it*dra!n at any time before

accetance by communicating suc*!it*dra!al, ecet !*en t*e otion

is founded uon a consideration, as

somet*ing aid or romised. (n)Art. 1%#5. ;nless it aears

ot*er!ise, business advertisementsof t*ings for sale are not definite

offers, but mere invitations to ma0e

an offer. (n)Art. 1%#6. Advertisements for

bidders are simly invitations to

ma0e roosals, and t*e advertiseris not bound to accet t*e *ig*est or

lo!est bidder, unless t*e contraryaears. (n)

Art. 1%#7. 2*e follo!ing cannot giveconsent to a contract:

(1) ;nemanciated minors"

(#) nsane or dementedersons, and deaf'mutes !*o

do not 0no! *o! to !rite.

(1#6%a)

Art. 1%#. $ontracts entered intoduring a lucid interval are valid

$ontracts agreed to in a state ofdrun0enness or during a *ynotic

sell are voidable. (n)Art. 1%#-. 2*e incaacity declared in

Article 1%#7 is subject to t*e

modifications determined by la!,and is understood to be !it*out

rejudice to secial disualificationsestablis*ed in t*e la!s. (1#6)

Art. 1%%+. A contract !*ere consent

is given t*roug* mista0e, violence,intimidation, undue influence, or

fraud is voidable. (1#65a)Art. 1%%1. n order t*at mista0e may

invalidate consent, it s*ould refer tot*e substance of t*e t*ing !*ic* ist*e object of t*e contract, or to

t*ose conditions !*ic* *averincially moved one or bot*

arties to enter into t*e contract.

Cista0e as to t*e identity orualifications of one of t*e arties

!ill vitiate consent only !*en suc*identity or ualifications *ave been

t*e rincial cause of t*e contract.A simle mista0e of account s*all

give rise to its correction. (1#66a)

Art. 1%%#. @*en one of t*e arties isunable to read, or if t*e contract is in

a language not understood by *im,and mista0e or fraud is alleged, t*e

erson enforcing t*e contract must

s*o! t*at t*e terms t*ereof *avebeen fully elained to t*e former.

(n)

Art. 1%%%. 2*ere is no mista0e if t*earty alleging it 0ne! t*e doubt,

contingency or ris0 affecting t*eobject of t*e contract. (n)

Art. 1%%. Cutual error as to t*elegal effect of an agreement !*en

t*e real urose of t*e arties is

frustrated, may vitiate consent. (n)


20/29

Art. 1%%5. 2*ere is violence !*en in

order to !rest consent, serious or

irresistible force is emloyed.2*ere is intimidation !*en one of

t*e contracting arties is comelledby a reasonable and !ell'grounded

fear of an imminent and grave eviluon *is erson or roerty, or uon

t*e erson or roerty of *is souse,

descendants or ascendants, to give*is consent.

2o determine t*e degree of intimidation, t*e age, se and

condition of t*e erson s*all be

borne in mind.A t*reat to enforce oneDs claim

t*roug* cometent aut*ority, if t*eclaim is just or legal, does not vitiate

consent. (1#67a)Art. 1%%6. 4iolence or intimidations*all annul t*e obligation, alt*oug*

it may *ave been emloyed by at*ird erson !*o did not ta0e art in

t*e contract. (1#6)

Art. 1%%7. 2*ere is undue influence!*en a erson ta0es imroer

advantage of *is o!er over t*e !illof anot*er, deriving t*e latter of a

reasonable freedom of c*oice. 2*efollo!ing circumstances s*all be

considered: t*e confidential, family,

siritual and ot*er relations bet!eent*e arties, or t*e fact t*at t*e

erson alleged to *ave been undulyinfluenced !as suffering from

mental !ea0ness, or !as ignorant or

in financial distress. (n)Art. 1%%. 2*ere is fraud !*en,

t*roug* insidious !ords or

mac*inations of one of t*econtracting arties, t*e ot*er is

induced to enter into a contract!*ic*, !it*out t*em, *e !ould not

*ave agreed to. (1#6-)Art. 1%%-. =ailure to disclose facts,

!*en t*ere is a duty to reveal t*em,

as !*en t*e arties are bound byconfidential relations, constitutes

fraud. (n)

Art. 1%+. 2*e usual eaggerations

in trade, !*en t*e ot*er arty *ad

an oortunity to 0no! t*e facts, arenot in t*emselves fraudulent. (n)

Art. 1%1. A mere eression of anoinion does not signify fraud,

unless made by an eert and t*eot*er arty *as relied on t*e

formerDs secial 0no!ledge. (n)

Art. 1%#. Cisreresentation by at*ird erson does not vitiate

consent, unless suc*misreresentation *as created

substantial mista0e and t*e same is

mutual. (n)Art. 1%%. Cisreresentation made in

good fait* is not fraudulent but mayconstitute error. (n)

Art. 1%. n order t*at fraud mayma0e a contract voidable, it s*ouldbe serious and s*ould not *ave been

emloyed by bot* contractingarties.

ncidental fraud only obliges t*e

erson emloying it to ay damages.(1#7+)

Art. 1%5. ?imulation of a contractmay be absolute or relative. 2*e

former ta0es lace !*en t*e artiesdo not intend to be bound at all" t*e

latter, !*en t*e arties conceal t*eir

true agreement. (n)Art. 1%6. An absolutely simulated

or fictitious contract is void. Arelative simulation, !*en it does not

rejudice a t*ird erson and is not

intended for any urose contrary tola!, morals, good customs, ublic

order or ublic olicy binds t*e

arties to t*eir real agreement. (n)

?9$2O #. ' Object of $ontracts

Art. 1%7. All t*ings !*ic* are notoutside t*e commerce of men,

including future t*ings, may be t*e

object of a contract. All rig*ts !*ic*are not intransmissible may also be

t*e object of contracts.


21/29

o contract may be entered into

uon future in*eritance ecet in

cases eressly aut*oriBed by la!.All services !*ic* are not contrary

to la!, morals, good customs, ublicorder or ublic olicy may li0e!ise

be t*e object of a contract. (1#71a)Art. 1%. mossible t*ings or

services cannot be t*e object of

contracts. (1#7#)Art. 1%-. 2*e object of every

contract must be determinate as toits 0ind. 2*e fact t*at t*e uantity is

not determinate s*all not be an

obstacle to t*e eistence of t*econtract, rovided it is ossible to

determine t*e same, !it*out t*eneed of a ne! contract bet!een t*e

arties. (1#7%)

?9$2O %. ' $ause of $ontracts

Art. 1%5+. n onerous contracts t*e

cause is understood to be, for eac*

contracting arty, t*e restation orromise of a t*ing or service by t*e

ot*er" in remuneratory ones, t*eservice or benefit !*ic* is

remunerated" and in contracts ofure beneficence, t*e mere liberality

of t*e benefactor. (1#7)

Art. 1%51. 2*e articular motives oft*e arties in entering into a

contract are different from t*e causet*ereof. (n)

Art. 1%5#. $ontracts !it*out cause,

or !it* unla!ful cause, roduce noeffect !*atever. 2*e cause is

unla!ful if it is contrary to la!,

morals, good customs, ublic orderor ublic olicy. (1#75a)

Art. 1%5%. 2*e statement of a falsecause in contracts s*all render t*em

void, if it s*ould not be roved t*att*ey !ere founded uon anot*er

cause !*ic* is true and la!ful.

(1#76)Art. 1%5. Alt*oug* t*e cause is not

stated in t*e contract, it is resumed

t*at it eists and is la!ful, unless

t*e debtor roves t*e contrary.

(1#77)Art. 1%55. 9cet in cases secified

by la!, lesion or inadeuacy ofcause s*all not invalidate a contract,

unless t*ere *as been fraud, mista0eor undue influence. (n)

$A298 %=O8C O= $O28A$2?

Art. 1%56. $ontracts s*all be

obligatory, in !*atever form t*ey

may *ave been entered into,rovided all t*e essential reuisites

for t*eir validity are resent.o!ever, !*en t*e la! reuires t*at

a contract be in some form in ordert*at it may be valid or enforceable,or t*at a contract be roved in a

certain !ay, t*at reuirement isabsolute and indisensable. n suc*

cases, t*e rig*t of t*e arties stated

in t*e follo!ing article cannot beeercised. (1#7a)

Art. 1%57. f t*e la! reuires adocument or ot*er secial form, as

in t*e acts and contractsenumerated in t*e follo!ing article,

t*e contracting arties may comel

eac* ot*er to observe t*at form,once t*e contract *as been

erfected. 2*is rig*t may beeercised simultaneously !it* t*e

action uon t*e contract. (1#7-a)

Art. 1%5. 2*e follo!ing must aearin a ublic document:

(1) Acts and contracts !*ic*

*ave for t*eir object t*ecreation, transmission,

modification or etinguis*mentof real rig*ts over immovable

roerty" sales of real roertyor of an interest t*erein a

governed by Articles 1+%, o.

#, and 1+5"(#) 2*e cession, reudiation or

renunciation of *ereditary


22/29

rig*ts or of t*ose of t*e

conjugal artners*i of gains"

(%) 2*e o!er to administerroerty, or any ot*er o!er

!*ic* *as for its object an actaearing or !*ic* s*ould

aear in a ublic document, ors*ould rejudice a t*ird

erson"

() 2*e cession of actions orrig*ts roceeding from an act

aearing in a ublicdocument.

All ot*er contracts !*ere t*e

amount involved eceeds five*undred esos must aear in

!riting, even a rivate one. /ut salesof goods, c*attels or t*ings in action

are governed by Articles, 1+%, o. #and 1+5. (1#+a)

$A298 89=O8CA2O O= ?28;C92? (n)

Art. 1%5-. @*en, t*ere *aving beena meeting of t*e minds of t*e arties

to a contract, t*eir true intention isnot eressed in t*e instrument

urorting to embody t*eagreement, by reason of mista0e,

fraud, ineuitable conduct or

accident, one of t*e arties may as0for t*e reformation of t*e instrument

to t*e end t*at suc* true intentionmay be eressed.

f mista0e, fraud, ineuitable

conduct, or accident *as revented ameeting of t*e minds of t*e arties,

t*e roer remedy is not reformation

of t*e instrument but annulment oft*e contract.

Art. 1%6+. 2*e rinciles of t*egeneral la! on t*e reformation of

instruments are *ereby adotedinsofar as t*ey are not in conflict

!it* t*e rovisions of t*is $ode.

Art. 1%61. @*en a mutual mista0e oft*e arties causes t*e failure of t*e

instrument to disclose t*eir real

agreement, said instrument may be

reformed.

Art. 1%6#. f one arty !as mista0enand t*e ot*er acted fraudulently or

ineuitably in suc* a !ay t*at t*einstrument does not s*o! t*eir true

intention, t*e former may as0 for t*ereformation of t*e instrument.

Art. 1%6%. @*en one arty !as

mista0en and t*e ot*er 0ne! orbelieved t*at t*e instrument did not

state t*eir real agreement, butconcealed t*at fact from t*e former,

t*e instrument may be reformed.

Art. 1%6. @*en t*roug* t*eignorance, lac0 of s0ill, negligence or

bad fait* on t*e art of t*e ersondrafting t*e instrument or of t*e

cler0 or tyist, t*e instrument doesnot eress t*e true intention of t*earties, t*e courts may order t*at

t*e instrument be reformed.Art. 1%65. f t!o arties agree uon

t*e mortgage or ledge of real or

ersonal roerty, but t*einstrument states t*at t*e roerty

is sold absolutely or !it* a rig*t ofreurc*ase, reformation of t*e

instrument is roer.Art. 1%66. 2*ere s*all be no

reformation in t*e follo!ing cases:

(1) ?imle donations intervivos !*erein no condition is

imosed"(#) @ills"

(%) @*en t*e real agreement is

void.Art. 1%67. @*en one of t*e arties

*as broug*t an action to enforce t*e

instrument, *e cannot subseuentlyas0 for its reformation.

Art. 1%6. 8eformation may beordered at t*e instance of eit*er

arty or *is successors in interest, ift*e mista0e !as mutual" ot*er!ise,

uon etition of t*e injured arty, or

*is *eirs and assigns.Art. 1%6-. 2*e rocedure for t*e

reformation of instrument s*all be


23/29

governed by rules of court to be

romulgated by t*e ?ureme $ourt.

$A298 5

298892A2O O= $O28A$2?

Art. 1%7+. f t*e terms of a contractare clear and leave no doubt uon

t*e intention of t*e contracting

arties, t*e literal meaning of itsstiulations s*all control.

f t*e !ords aear to be contrary tot*e evident intention of t*e arties,

t*e latter s*all revail over t*e

former. (1#1)Art. 1%71. n order to judge t*e

intention of t*e contracting arties,t*eir contemoraneous and

subseuent acts s*all be rinciallyconsidered. (1##)Art. 1%7#. o!ever general t*e

terms of a contract may be, t*eys*all not be understood to

comre*end t*ings t*at are distinct

and cases t*at are different fromt*ose uon !*ic* t*e arties

intended to agree. (1#%)Art. 1%7%. f some stiulation of any

contract s*ould admit of severalmeanings, it s*all be understood as

bearing t*at imort !*ic* is most

adeuate to render it effectual.(1#)

Art. 1%7. 2*e various stiulations ofa contract s*all be interreted

toget*er, attributing to t*e doubtful

ones t*at sense !*ic* may resultfrom all of t*em ta0en jointly.

(1#5)

Art. 1%75. @ords !*ic* may *avedifferent significations s*all be

understood in t*at !*ic* is most in0eeing !it* t*e nature and object

of t*e contract. (1#6)Art. 1%76. 2*e usage or custom of

t*e lace s*all be borne in mind in

t*e interretation of t*e ambiguitiesof a contract, and s*all fill t*e

omission of stiulations !*ic* are

ordinarily establis*ed. (1#7)

Art. 1%77. 2*e interretation ofobscure !ords or stiulations in a

contract s*all not favor t*e arty!*o caused t*e obscurity. (1#)

Art. 1%7. @*en it is absolutelyimossible to settle doubts by t*e

rules establis*ed in t*e receding

articles, and t*e doubts refer toincidental circumstances of a

gratuitous contract, t*e leasttransmission of rig*ts and interests

s*all revail. f t*e contract is

onerous, t*e doubt s*all be settled infavor of t*e greatest recirocity of

interests.f t*e doubts are cast uon t*e

rincial object of t*e contract insuc* a !ay t*at it cannot be 0no!n!*at may *ave been t*e intention or

!ill of t*e arties, t*e contract s*allbe null and void. (1#-)

Art. 1%7-. 2*e rinciles of

interretation stated in 8ule 1#% oft*e 8ules of $ourt s*all li0e!ise be

observed in t*e construction ofcontracts. (n)

$A298 6

89?$??/9 $O28A$2?

Art. 1%+. $ontracts validly agreed

uon may be rescinded in t*e casesestablis*ed by la!. (1#-+)

Art. 1%1. 2*e follo!ing contracts

are rescissible:(1) 2*ose !*ic* are entered

into by guardians !*enever t*e

!ards !*om t*ey reresentsuffer lesion by more t*an one'

fourt* of t*e value of t*e t*ings!*ic* are t*e object t*ereof"

(#) 2*ose agreed uon inreresentation of absentees, if

t*e latter suffer t*e lesion

stated in t*e recedingnumber"


24/29

(%) 2*ose underta0en in fraud

of creditors !*en t*e latter

cannot in any ot*er mannercollect t*e claims due t*em"

() 2*ose !*ic* refer to t*ingsunder litigation if t*ey *ave

been entered into by t*edefendant !it*out t*e

0no!ledge and aroval of t*e

litigants or of cometentjudicial aut*ority"

(5) All ot*er contracts seciallydeclared by la! to be subject to

rescission. (1#-1a)

Art. 1%#. ayments made in a stateof insolvency for obligations to

!*ose fulfillment t*e debtor couldnot be comelled at t*e time t*ey

!ere effected, are also rescissible.(1#-#)Art. 1%%. 2*e action for rescission

is subsidiary" it cannot be institutedecet !*en t*e arty suffering

damage *as no ot*er legal means to

obtain rearation for t*e same.(1#-)

Art. 1%. 8escission s*all be only tot*e etent necessary to cover t*e

damages caused. (n)Art. 1%5. 8escission creates t*e

obligation to return t*e t*ings !*ic*

!ere t*e object of t*e contract,toget*er !it* t*eir fruits, and t*e

rice !it* its interest" conseuently,it can be carried out only !*en *e

!*o demands rescission can return

!*atever *e may be obliged torestore.

eit*er s*all rescission ta0e lace

!*en t*e t*ings !*ic* are t*e objectof t*e contract are legally in t*e

ossession of t*ird ersons !*o didnot act in bad fait*.

n t*is case, indemnity for damagesmay be demanded from t*e erson

causing t*e loss. (1#-5)

Art. 1%6. 8escission referred to inos. 1 and # of Article 1%1 s*all not

ta0e lace !it* resect to contracts

aroved by t*e courts. (1#-6a)

Art. 1%7. All contracts by virtue of!*ic* t*e debtor alienates roerty

by gratuitous title are resumed to*ave been entered into in fraud of

creditors, !*en t*e donor did notreserve sufficient roerty to ay all

debts contracted before t*e

donation.Alienations by onerous title are also

resumed fraudulent !*en made byersons against !*om some

judgment *as been issued. 2*e

decision or attac*ment need notrefer to t*e roerty alienated, and

need not *ave been obtained by t*earty see0ing t*e rescission.

n addition to t*ese resumtions,t*e design to defraud creditors maybe roved in any ot*er manner

recogniBed by t*e la! of evidence(1#-7a)

Art. 1%. @*oever acuires in bad

fait* t*e t*ings alienated in fraud ofcreditors, s*all indemnify t*e latter

for damages suffered by t*em onaccount of t*e alienation, !*enever,

due to any cause, it s*ould beimossible for *im to return t*em.

f t*ere are t!o or more alienations,

t*e first acuirer s*all be liable first,and so on successively. (1#-a)

Art. 1%-. 2*e action to claimrescission must be commenced

!it*in four years.

=or ersons under guardians*i andfor absentees, t*e eriod of four

years s*all not begin until t*e

termination of t*e formerDsincaacity, or until t*e domicile of

t*e latter is 0no!n. (1#--)

$A298 74O


25/29


26/29

t*ing s*all not be an obstacle to t*e

success of t*e action, unless said

loss too0 lace t*roug* t*e fraud orfault of t*e laintiff. (1%1a)

Art. 1+#. As long as one of t*econtracting arties does not restore

!*at in virtue of t*e decree ofannulment *e is bound to return, t*e

ot*er cannot be comelled to comly

!it* !*at is incumbent uon *im.(1%+)

$A298

;9=O8$9A/9 $O28A$2? (n)

Art. 1+%. 2*e follo!ing contracts

are unenforceable, unless t*ey areratified:

(1) 2*ose entered into in t*ename of anot*er erson by one!*o *as been given no

aut*ority or legalreresentation, or !*o *as

acted beyond *is o!ers"

(#) 2*ose t*at do not comly!it* t*e ?tatute of =rauds as

set fort* in t*is number. n t*efollo!ing cases an agreement

*ereafter made s*all beunenforceable by action, unless

t*e same, or some note or

memorandum, t*ereof, be in!riting, and subscribed by t*e

arty c*arged, or by *is agent"evidence, t*erefore, of t*e

agreement cannot be received

!it*out t*e !riting, or asecondary evidence of its

contents:

(a) An agreement t*at byits terms is not to be

erformed !it*in a yearfrom t*e ma0ing t*ereof"

(b) A secial romise toans!er for t*e debt,

default, or miscarriage of

anot*er"(c) An agreement made in

consideration of marriage,

ot*er t*an a mutual

romise to marry"

(d) An agreement for t*esale of goods, c*attels or

t*ings in action, at a ricenot less t*an five *undred

esos, unless t*e buyeraccet and receive art of

suc* goods and c*attels,

or t*e evidences, or someof t*em, of suc* t*ings in

action or ay at t*e timesome art of t*e urc*ase

money" but !*en a sale is

made by auction andentry is made by t*e

auctioneer in *is salesboo0, at t*e time of t*e

sale, of t*e amount and0ind of roerty sold,terms of sale, rice,

names of t*e urc*asersand erson on !*ose

account t*e sale is made,

it is a sufficientmemorandum"

(e) An agreement of t*eleasing for a longer eriod

t*an one year, or for t*esale of real roerty or of

an interest t*erein"

(f) A reresentation as tot*e credit of a t*ird

erson.(%) 2*ose !*ere bot* arties

are incaable of giving consent

to a contract.Art. 1+. ;naut*oriBed contracts

are governed by Article 1%17 and t*e

rinciles of agency in 2itle 3 of t*is/oo0.

Art. 1+5. $ontracts infringing t*e?tatute of =rauds, referred to in o.

# of Article 1+%, are ratified by t*efailure to object to t*e resentation

of oral evidence to rove t*e same,

or by t*e accetance of benefitunder t*em.


27/29

Art. 1+6. @*en a contract is

enforceable under t*e ?tatute of

=rauds, and a ublic document isnecessary for its registration in t*e

8egistry of


28/29

debtor, !it* interest t*ereon from

t*e date of t*e ayment.

Art. 11. @*en money is aid orroerty delivered for an illegal

urose, t*e contract may bereudiated by one of t*e arties

before t*e urose *as beenaccomlis*ed, or before any damage

*as been caused to a t*ird erson.

n suc* case, t*e courts may, if t*eublic interest !ill t*us be

subserved, allo! t*e artyreudiating t*e contract to recover

t*e money or roerty.

Art. 115. @*ere one of t*e artiesto an illegal contract is incaable of

giving consent, t*e courts may, if t*einterest of justice so demands allo!

recovery of money or roertydelivered by t*e incaacitatederson.

Art. 116. @*en t*e agreement isnot illegal er se but is merely

ro*ibited, and t*e ro*ibition by

t*e la! is designated for t*erotection of t*e laintiff, *e may, if

ublic olicy is t*ereby en*anced,recover !*at *e *as aid or

delivered.Art. 117. @*en t*e rice of any

article or commodity is determined

by statute, or by aut*ority of la!,any erson aying any amount in

ecess of t*e maimum riceallo!ed may recover suc* ecess.

Art. 11. @*en t*e la! fies, or

aut*oriBes t*e fiing of t*emaimum number of *ours of labor,

and a contract is entered into

!*ereby a laborer underta0es to!or0 longer t*an t*e maimum t*us

fied, *e may demand additionalcomensation for service rendered

beyond t*e time limit.Art. 11-. @*en t*e la! sets, or

aut*oriBes t*e setting of a minimum

!age for laborers, and a contract isagreed uon by !*ic* a laborer

accets a lo!er !age, *e s*all be

entitled to recover t*e deficiency.

Art. 1#+. n case of a divisiblecontract, if t*e illegal terms can be

searated from t*e legal ones, t*elatter may be enforced.

Art. 1#1. 2*e defense of illegality ofcontract is not available to t*ird

ersons !*ose interests are not

directly affected.Art. 1##. A contract !*ic* is t*e

direct result of a revious illegalcontract, is also void and ineistent.

2itle . ' A2;8A O/>A2O?

Art. 1#%. Obligations are civil ornatural. $ivil obligations give a rig*t

of action to comel t*eirerformance. atural obligations,not being based on ositive la! but

on euity and natural la!, do notgrant a rig*t of action to enforce

t*eir erformance, but after

voluntary fulfillment by t*e obligor,t*ey aut*oriBe t*e retention of !*at

*as been delivered or rendered byreason t*ereof. ?ome natural

obligations are set fort* in t*efollo!ing articles.

Art. 1#. @*en a rig*t to sue uon

a civil obligation *as lased byetinctive rescrition, t*e obligor

!*o voluntarily erforms t*econtract cannot recover !*at *e *as

delivered or t*e value of t*e service

*e *as rendered.Art. 1#5. @*en !it*out t*e

0no!ledge or against t*e !ill of t*e

debtor, a t*ird erson ays a debt!*ic* t*e obligor is not legally

bound to ay because t*e actiont*ereon *as rescribed, but t*e

debtor later voluntarily reimbursest*e t*ird erson, t*e obligor cannot

recover !*at *e *as aid.

Art. 1#6. @*en a minor bet!eeneig*teen and t!enty'one years of

age !*o *as entered into a contract


29/29

!it*out t*e consent of t*e arent or

guardian, after t*e annulment of t*e

contract voluntarily returns t*e!*ole t*ing or rice received,

not!it*standing t*e fact t*e *e *asnot been benefited t*ereby, t*ere is

no rig*t to demand t*e t*ing or ricet*us returned.

Art. 1#7. @*en a minor bet!een

eig*teen and t!enty'one years ofage, !*o *as entered into a contract

!it*out t*e consent of t*e arent orguardian, voluntarily ays a sum of

money or delivers a fungible t*ing in

fulfillment of t*e obligation, t*eres*all be no rig*t to recover t*e same

from t*e obligee !*o *as sent orconsumed it in good fait*. (116+A)

Art. 1#. @*en, after an action toenforce a civil obligation *as failedt*e defendant voluntarily erforms

t*e obligation, *e cannot demand

t*e return of !*at *e *as delivered

or t*e ayment of t*e value of t*e

service *e *as rendered.Art. 1#-. @*en a testate or

intestate *eir voluntarily ays a debtof t*e decedent eceeding t*e value

of t*e roerty !*ic* *e received by!ill or by t*e la! of intestacy from

t*e estate of t*e deceased, t*e

ayment is valid and cannot berescinded by t*e ayer.

Art. 1%+. @*en a !ill is declaredvoid because it *as not been

eecuted in accordance !it* t*e

formalities reuired by la!, but oneof t*e intestate *eirs, after t*e

settlement of t*e debts of t*edeceased, ays a legacy in

comliance !it* a clause in t*edefective !ill, t*e ayment iseffective and irrevocable.

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