ATENEO DE DAVAO UNIVERSITY
School of Business and Governance
BUSINESS LAW REVIEW
REVIEW ON LAW ON OBLIGATIONS
(Articles 1156-1304 of the Civil Code)
I. Obligations – General Provisions
1. Meaning of “Law on Obligations and Contracts”?
The law on obligations and contracts is the body of rules which deals with the nature and resources of obligations and rights and duties arising from agreements and contracts.
2. Source of the Law on Obligations and Contracts is the Civil Code of the Philippines (Republic Act No.
388)
which took effect August 30, 1950. The Civil Code is derived from the Civil Code of Spain of 1889.
3. Meaning of obligation:
Code basis Article 1158 – obligation is juridical necessity to give to do or not to do.
4. Criticism as to the definition of the Civil Code by Justice J.B.L. Reyes.
It views obligation from the debit side. There is no debt with credit and the credit is an asset in the patrimony of the creditor just as the debt is the liability of the obligor.
Better definition: the one given by Arias Ramos, one of the commentators of the Civil Code:
An obligation is a juridical relation whereby a person (called creditor) may demand from another (called debtor) the observance of a determinative conduct (the giving, doing or not doing) and in case of breach, may demand satisfaction from assets of the latter.
5. Kinds of obligations based on its definition:
Real obligation – obligation to give
Personal obligation – obligation to do or not to do
Two kinds of personal obligation
a) Positive personal obligation – to do
b) Negative personal obligation – not to do
6. Essential Requisites of obligation
1. Active Subject – the obligee or creditor – one who has the right and power to demand the performance of the obligation.
2. Passive Subject – the obligor or debtor – one who is obliged to perform the obligation.
3. Object or Prestation – subject matter of the