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8/10/2019 [1] ObliCon


Art. 116. *en t*e obligation consists in not

doing, and t*e obligor does !*at *as been

forbidden *im, it s*all also be undone at *is

eense. (1+--a)

Art. 116-. 2*ose obliged to deliver or to do

somet*ing incur in delay from t*e time t*e obligee

judicially or etrajudicially demands from t*em t*e

fulfillment of t*eir obligation.

o!ever, t*e demand by t*e creditor s*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 and t*e

circumstances of t*e obligation it aears

t*at t*e designation 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 be useless, as

!*en t*e obligor *as rendered it beyond

*is o!er to erform.

n recirocal obligations, neit*er arty incurs indelay if t*e ot*er does not comly or is not ready tocomly in a roer manner !it* !*at is incumbent

uon *im. ;rom t*e moment one of t*e artiesfulfills *is obligation, delay by t*e ot*er begins.(11++a)

Art. 117+. 2*ose !*o in t*e erformance 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 erformance of every 0ind of obligation is

also demandable, but suc* liability may be

regulated by t*e courts, according to t*e

circumstances. (11+%)

Art. 117%. 2*e fault or negligence of t*e obligor

consists in t*e omission of t*at diligence !*ic* is

reuired by t*e nature of t*e obligation and

corresonds !it* t*e circumstances of t*e ersons,

of t*e time and of t*e lace. *en negligence

s*o!s bad fait*, t*e rovisions of Articles 1171 and##+1, aragra* #, s*all aly.

f t*e la! or contract does not state t*e diligence

!*ic* is to be observed in 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 eressly secified 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*ose events !*ic* could not be

foreseen, or !*ic*, t*oug* foreseen, !ere

inevitable. (11+5a)

Art. 1175. <surious transactions s*all be governed

by secial la!s. (n)

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

creditor !it*out reservation !it* resect to t*e

interest, s*all give rise to t*e resumtion t*at said

interest *as been aid.

2*e receit of a later installment of a debt !it*out

reservation as to rior installments, s*all li0e!ise

raise t*e resumtion t*at suc* installments *ave

been aid. (111+a)

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

roerty in ossession of t*e debtor to satisfy t*eir

claims, may eercise all t*e rig*ts and bring all t*e

actions of t*e latter for t*e same urose, save

t*ose !*ic* are in*erent in *is erson" t*ey mayalso imugn t*e acts !*ic* t*e debtor may *ave

done to defraud t*em. (1111)

Art. 117. =ubject to t*e la!s, all rig*ts acuired in

virtue of an obligation are transmissible, if t*ere

*as been no stiulation to t*e contrary. (111#)

CHAPTER %

DIFFERENT KINDS OF OBLIATIONS

SECTION #! " P&'e (nd Condition(l O)li*(tions

Art. 117-. 9very obligation !*ose erformance

does not deend uon a future or uncertain event,or uon a ast event un0no!n to t*e arties, isdemandable at once.

9very obligation !*ic* contains a resolutory

condition s*all also be demandable, !it*out

rejudice to t*e effects of t*e *aening of t*e

event. (111%)

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Art. 11+. *en t*e debtor binds *imself to ay

!*en *is means ermit *im to do so, t*e obligation

s*all be deemed to be one !it* a eriod, subject to

t*e rovisions of Article 11-7. (n)

Art. 111. n conditional obligations, t*e

acuisition of rig*ts, as !ell as t*e etinguis*ment

or loss of t*ose already acuired, s*all deend uon

t*e *aening of t*e event !*ic* constitutes t*e

condition. (111)

Art. 11#. *en t*e fulfillment of t*e condition

deends uon t*e sole !ill of t*e debtor, t*e

conditional obligation s*all be void. f it deends

uon c*ance or uon t*e !ill of a t*ird erson, t*e

obligation s*all ta0e effect in conformity !it* t*e

rovisions of t*is $ode. (1115)

Art. 11%. mossible conditions, t*ose contrary to

good customs or ublic olicy and t*ose ro*ibited

by la! s*all annul t*e obligation !*ic* deends

uon t*em. f t*e obligation is divisible, t*at art

t*ereof !*ic* is not affected by t*e imossible or

unla!ful condition s*all be valid.

2*e condition not to do an imossible t*ing s*all

be considered as not *aving been agreed uon.

(1116a)

Art. 11. 2*e condition t*at some event *aen at

a determinate time s*all etinguis* t*e obligationas soon as t*e time eires or if it *as become

indubitable t*at t*e event !ill not ta0e lace.

(1117)

Art. 115. 2*e condition t*at some event !ill not

*aen at a determinate time s*all render t*e

obligation effective from t*e moment t*e time

indicated *as elased, or if it *as become evident

t*at t*e event cannot occur.

f no time *as been fied, t*e condition s*all be

deemed fulfilled at suc* time as may *ave robably been contemlated, bearing in mind t*e nature of

t*e obligation. (111)

Art. 116. 2*e condition s*all be deemed fulfilled

!*en t*e obligor voluntarily revents its

fulfillment. (111-)

Art. 117. 2*e effects of a conditional obligation to

give, once t*e condition *as been fulfilled, s*all

retroact to t*e day of t*e constitution of t*e

obligation. >evert*eless, !*en t*e obligation

imoses recirocal restations uon t*e arties, t*efruits and interests during t*e endency of t*e

condition s*all be deemed to *ave been mutually

comensated. f t*e obligation is unilateral, t*e

debtor s*all aroriate t*e fruits and interests

received, unless from t*e nature and circumstances

of t*e obligation it s*ould be inferred t*at t*e

intention of t*e erson constituting 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, before t*e fulfillment

of t*e condition, bring t*e aroriate actions for

t*e reservation of *is rig*t.

2*e debtor may recover !*at during t*e same time

*e *as aid by mista0e in case of a susensive

condition. (11#1a)

Art. 11-. *en t*e conditions *ave been imosed

!it* t*e intention of susending t*e efficacy of an

obligation to give, t*e follo!ing rules s*all be

observed in case of t*e imrovement, loss or

deterioration of t*e t*ing during t*e endency of

t*e condition:

(1) f t*e t*ing is lost !it*out t*e fault of

t*e debtor, t*e obligation s*all be

etinguis*ed"

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

t*e debtor, *e s*all be 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 eistence is un0no!n or it cannot

be recovered"

(%) *en t*e t*ing deteriorates !it*out

t*e fault of 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!een t*e rescission of t*e obligation

and its fulfillment, !it* indemnity for

damages in eit*er case"

(5) f t*e t*ing is imroved by its nature,

or by time, t*e imrovement s*all inure to

t*e benefit 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##)

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Art. 11-+. *en t*e conditions *ave for t*eir urose t*e etinguis*ment of an obligation togive, 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 oft*e t*ing, t*e rovisions !*ic*, !it* resect to t*e

debtor, are laid do!n in t*e receding article s*all

be alied to t*e arty !*o is bound to return.

As for t*e obligations to do and not to do, t*e

rovisions of t*e second aragra* of Article 117

s*all be observed as regards t*e effect of t*e

etinguis*ment of t*e obligation. (11#%)

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

imlied in recirocal ones, in case one of t*e

obligors s*ould not comly !it* !*at is incumbentuon *im.

2*e injured arty may c*oose bet!een t*e

fulfillment and t*e rescission of t*e obligation, !it*

t*e ayment of damages in eit*er case. e may also

see0 rescission, even after *e *as c*osen

fulfillment, if t*e latter s*ould become imossible.

2*e court s*all decree t*e rescission claimed,

unless t*ere be just cause aut*ori?ing 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*e t*ing,

in accordance !it* Articles 1%5 and 1% and t*e

@ortgage a!. (11#)

Art. 11-#. n case bot* arties *ave committed a

breac* of t*e obligation, t*e liability of t*e first

infractor s*all be euitably temered by t*e courts.

f it cannot be determined !*ic* of t*e arties first

violated t*e contract, t*e same s*all be deemed

etinguis*ed, and eac* s*all bear *is o!n damages.

(n)

SECTION $! " O)li*(tions +ith ( Pe'iod

Art. 11-%. Obligations for !*ose fulfillment a daycertain *as been fied, s*all be demandable only!*en t*at day comes.

Obligations !it* a resolutory eriod ta0e effect at

once, but terminate uon arrival of t*e day certain.

A day certain is understood to be t*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

day certain, t*e rules in Article 11- s*all be

observed. (n)

Art. 11-5. Anyt*ing aid or delivered before t*e

arrival of t*e eriod, t*e obligor being una!are of

t*e eriod or believing t*at t*e obligation *as

become due and demandable, may be recovered,

!it* t*e fruits and interests. (11#6a)

Art. 11-6. *enever in an obligation a eriod is

designated, it is resumed to *ave been establis*ed

for t*e benefit of bot* t*e creditor and t*e debtor,

unless from t*e tenor of t*e same or ot*er

circumstances it s*ould aear t*at t*e eriod *as

been establis*ed in favor of one or of t*e ot*er.

(11#7)

Art. 11-7. f t*e obligation does not fi a eriod,

but from its nature and t*e circumstances it can be

inferred t*at a eriod !as intended, t*e courts mayfi 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 under t*e circumstances *ave been

robably contemlated by t*e arties. Once fied

by t*e courts, t*e eriod 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*e eriod:

(1) *en after t*e obligation *as been contracted,

*e becomes insolvent, unless *e gives a guaranty or

security for t*e debt"

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

guaranties or securities !*ic* *e *as romised"

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(%) *en by *is o!n acts *e *as imaired said

guaranties or securities after t*eir establis*ment,

and !*en t*roug* a fortuitous event t*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 to abscond. (11#-a)

SECTION %! " Alte'n(tive O)li*(tions

Art. 11--. A erson alternatively bound 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*oice belongs to t*e

debtor, unless it *as been eressly granted to t*e

creditor.

2*e debtor s*all *ave no rig*t to c*oose t*ose

restations !*ic* are imossible, unla!ful or

!*ic* could not *ave been t*e object of t*e

obligation. (11%#)

Art. 1#+1. 2*e c*oice s*all roduce no 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*e restations !*ereby *e is

alternatively bound, only one is racticable. (11%)

Art. 1#+%. f t*roug* t*e creditors acts 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* are alternatively t*e

object of t*e obligation *ave been lost, or t*e

comliance of t*e obligation *as become

imossible.

2*e indemnity s*all be fied ta0ing as a basis t*e

value of t*e last t*ing !*ic* disaeared, or t*at of

t*e service !*ic* last became imossible.

Bamages ot*er t*an t*e value of t*e last t*ing or

service may also be a!arded. (11%5a)

Art. 1#+5. *en t*e c*oice *as been eressly

given to t*e creditor, t*e obligation s*all cease to

be alternative from t*e day !*en t*e selection *as

been communicated to t*e debtor.

<ntil t*en t*e resonsibility of t*e debtor s*all be

governed by t*e follo!ing rules:

(1) f one of t*e t*ings is lost t*roug* a

fortuitous event, *e s*all erform t*e

obligation by delivering t*at !*ic* t*e

creditor s*ould c*oose from among t*e

remainder, or t*at !*ic* remains if only

one subsists"

(#) f t*e loss of one of t*e t*ings occurs

t*roug* t*e fault of t*e debtor, t*e creditor

may claim any of t*ose subsisting, or t*e

rice of t*at !*ic*, t*roug* t*e fault of

t*e former, *as disaeared, !it* a rig*t to

damages"

(%) f all t*e t*ings are lost t*roug* t*e

fault of t*e debtor, t*e c*oice by t*e

creditor s*all fall uon t*e rice of any

one of t*em, also !it* indemnity for

damages.

2*e same rules s*all be alied to obligations to door not to do in case one, some or all of t*e

restations s*ould become imossible. (11%6a)

Art. 1#+6. *en only one restation *as been

agreed uon, but t*e obligor may render anot*er in

substitution, 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 not render *im liable. /ut once t*e

substitution *as been made, t*e obligor is liable for

t*e loss of t*e substitute on account of *is delay,

negligence or fraud. (n)

SECTION ,! " -oint (nd Solid('. O)li*(tions

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

creditors or of t!o or more debtors in one and t*esame obligation does not imly t*at eac* one of t*eformer *as a rig*t to demand, or t*at eac* one oft*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 reuiressolidarity. (11%7a)

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

!ording of t*e obligations to !*ic* t*e receding

article refers t*e contrary does not aear, t*e

credit or debt s*all be resumed to be divided into

as many s*ares as t*ere are creditors or debtors, t*e

credits or debts being considered distinct from one

anot*er, subject to t*e 8ules of $ourt governing t*emultilicity of suits. (11%a)

Art. 1#+-. f t*e division is imossible, t*e rig*t of

t*e creditors may be rejudiced only by t*eir

collective acts, and t*e debt can be enforced only

by roceeding against all 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 an obligation does

not necessarily give rise to solidarity. >or does

solidarity of itself imly indivisibility. (n)

Art. 1#11. =olidarity may eist alt*oug* t*e

creditors and t*e debtors may not be bound in t*e

same manner and by t*e same eriods 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 not

anyt*ing !*ic* may be rejudicial to t*e latter.

(111a)

Art. 1#1%. A solidary creditor cannot assign *isrig*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 if any 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

creditors or !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 eecuted any of t*ese

acts, as !ell as *e !*o collects t*e debt, s*all be

liable to 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 roceed against any

one of t*e solidary debtors or some or all of t*em

simultaneously. 2*e demand made against one of

t*em s*all not be an obstacle to t*ose !*ic* may

subseuently be directed against t*e ot*ers, so long

as t*e debt *as not been fully collected. (11a)

Art. 1#17. ayment made by one of t*e solidary

debtors etinguis*es t*e obligation. f t!o or more

solidary debtors offer to ay, t*e creditor may

c*oose !*ic* offer to accet.

e !*o made t*e ayment may claim from *is co'

debtors only t*e s*are !*ic* corresonds to eac*,

!it* t*e interest for t*e ayment already made. f

t*e ayment is made before t*e debt is due, no

interest 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 debtor

aying 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'debtors if

suc* ayment is made after t*e obligation *as

rescribed or become illegal. (n)

Art. 1#1-. 2*e remission made by t*e creditor of

t*e s*are !*ic* affects one of t*e solidary debtors

does 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 of t*e solidary debtors, does not

entitle *im to reimbursement from *is co'debtors.

(n)

Art. 1##1. f t*e t*ing *as been lost or if t*e

restation *as become imossible !it*out t*e fault

of t*e solidary debtors, t*e obligation s*all be

etinguis*ed.

f t*ere !as fault on t*e art of any one of t*em, all

s*all be resonsible to t*e creditor, for t*e rice and

t*e ayment of damages and interest, !it*out rejudice to t*eir action against t*e guilty or

negligent debtor.

f t*roug* a fortuitous event, t*e t*ing is lost or t*e

erformance *as become imossible after one of

t*e solidary debtors *as incurred in delay t*roug*

t*e judicial or etrajudicial demand uon *im by

t*e creditor, t*e rovisions of t*e receding

aragra* s*all aly. (117a)

Art. 1###. A solidary debtor may, in actions filed

by t*e creditor, avail *imself of all defenses !*ic*are derived from t*e nature of t*e obligation and of

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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*ereof

only as regards t*at art of t*e debt for !*ic* t*e

latter are resonsible. (11a)

SECTION /! " Divisi)le (nd Indivisi)le

O)li*(tions

Art. 1##%. 2*e divisibility or indivisibility of t*e

t*ings t*at are t*e object of obligations in !*ic*t*ere is only one debtor and only one creditor doesnot alter or modify t*e rovisions of $*ater # oft*is 2itle. (11-)

Art. 1##. A joint indivisible obligation gives rise

to indemnity for damages from t*e time anyone of

t*e debtors does not comly !it* *is underta0ing.2*e debtors !*o may *ave been ready to fulfill

t*eir romises s*all not contribute to t*e indemnity

beyond t*e corresonding ortion of t*e rice of

t*e t*ing or of t*e value of t*e service in !*ic* t*e

obligation consists. (115+)

Art. 1##5. ;or t*e uroses of t*e receding

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 eecutionof a certain number of days of !or0, t*e

accomlis*ment of !or0 by metrical units, or

analogous t*ings !*ic* by t*eir nature are

suscetible of artial erformance, it s*all be

divisible.

o!ever, even t*oug* t*e object or service may be

*ysically divisible, an obligation is indivisible if

so rovided by la! or intended by t*e arties.

n obligations not to do, divisibility or indivisibility

s*all be determined by t*e c*aracter of t*e restation in eac* articular case. (1151a)

=9$2O> 6. ' Obligations !it* a enal $lause

Art. 1##6. n obligations !it* a enal clause, t*e enalty s*all substitute t*e indemnity for damages

and t*e ayment of interests in case ofnoncomliance, if t*ere is no stiulation to t*econtrary. >evert*eless, damages s*all be aid if t*eobligor refuses to ay t*e enalty or is guilty offraud 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 *as been

eressly reserved for *im. >eit*er can t*e creditor

demand t*e fulfillment of t*e obligation and t*e

satisfaction of t*e enalty at t*e same time, unless

t*is rig*t *as been clearly granted *im. o!ever, if

after t*e creditor *as decided to reuire 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 damages suffered 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 euitably reduce t*e

enalty !*en t*e rincial obligation *as been

artly or irregularly comlied !it* by t*e debtor.

9ven if t*ere *as been no erformance, t*e enalty

may also be reduced by t*e courts if it is iniuitous

or unconscionable. (115a)

Art. 1#%+. 2*e nullity of t*e enal clause does not

carry !it* it t*at of t*e rincial obligation.

2*e nullity of t*e rincial obligation carries !it*it t*at of t*e enal clause. (1155)

CHAPTER ,

E0TINUISH1ENT OF OBLIATIONS

ENERAL PROVISIONS

Art. 1#%1. Obligations are etinguis*ed:

(1) /y ayment or erformance:

(#) /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 merger of t*e

rig*ts of creditor and debtor"

(5) /y comensation"

(6) /y novation.

Ot*er causes of etinguis*ment of obligations, suc*as annulment, rescission, fulfillment of a resolutory

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condition, and rescrition, are governed else!*erein t*is $ode. (1156a)

SECTION #! " P(.2ent o' Pe'fo'2(n3e

Art. 1#%#. ayment means not only t*e delivery of

money but also t*e erformance, in any ot*ermanner, 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*e

obligation 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 good fait*, t*e obligor may recover as

t*oug* t*ere *ad been a strict and comlete

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 deemed fully comlied

!it*. (n)

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

ayment or erformance by a t*ird erson !*o *as

no interest in t*e fulfillment of t*e obligation,

unless t*ere is a stiulation to t*e contrary.

*oever ays for anot*er may demand 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 of t*e

debtor, *e can recover only insofar as t*e ayment

*as been beneficial to t*e debtor. (115a)

Art. 1#%7. *oever ays on be*alf of t*e debtor

!it*out t*e 0no!ledge or against t*e !ill of t*e

latter, cannot comel t*e creditor to subrogate *im

in *is rig*ts, suc* as t*ose arising from a mortgage,

guaranty, or enalty. (115-a)

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

does not intend to be reimbursed by t*e debtor is

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

debtors consent. /ut t*e ayment is in 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*e rovisions of Article

1#7 under t*e 2itle on C Natural Obligations.C

(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 erson aut*ori?ed

to receive it. (116#a)

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

incaacitated to administer *is roerty s*all be

valid if *e *as 0et t*e t*ing delivered, or insofar

as t*e ayment *as been beneficial to *im.

ayment made to a t*ird erson s*all also be valid

insofar as it *as redounded to t*e benefit of t*e

creditor. =uc* benefit to t*e creditor need not be

roved in t*e follo!ing cases:

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

acuires t*e creditors rig*ts"

(#) f t*e creditor ratifies t*e ayment to

t*e t*ird erson"

(%) f by t*e creditors 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 of t*e credit s*all

release t*e debtor. (116)

Art. 1#%. ayment made to t*e creditor by t*edebtor after t*e latter *as been judicially ordered toretain t*e debt s*all not be valid. (1165)

Art. 1#. 2*e debtor of a t*ing cannot comel t*e

creditor to receive a different one, alt*oug* t*e

latter may be of t*e same value as, or more

valuable t*an t*at !*ic* is due.

n obligations to do or not to do, an act or

forbearance cannot be substituted by anot*er act or

forbearance against t*e obligees !ill. (1166a)

Art. 1#5. Bation in ayment, !*ereby roerty is

alienated to t*e creditor in satisfaction of a debt in

money, s*all be governed by t*e la! of sales. (n)

Art. 1#6. *en t*e obligation consists in t*e

delivery of an indeterminate or generic t*ing,

!*ose uality and circumstances *ave not been

stated, t*e creditor cannot demand a t*ing of

suerior uality. >eit*er can t*e debtor deliver a

t*ing of inferior uality. 2*e urose of t*e

obligation and ot*er circumstances s*all be ta0en

into consideration. (1167a)

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(1) *en t*e creditor is absent or

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*e obligation *as

been lost. (1176a)

Art. 1#57. n order t*at t*e consignation of t*et*ing due may release t*e obligor, it must first be

announced to t*e ersons interested in t*efulfillment of t*e obligation.

2*e consignation s*all be ineffectual if it is not

made strictly in consonance !it* t*e rovisions

!*ic* regulate ayment. (1177)

Art. 1#5. $onsignation s*all be made by

deositing t*e t*ings due at t*e disosal of judicial

aut*ority, before !*om t*e tender of ayment s*all

be roved, in a roer case, and t*e announcement

of t*e consignation in ot*er cases.

2*e consignation *aving been made, t*e interested

arties s*all also be notified 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 *as been 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 sum deosited,

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*ori?e t*e debtor to

!it*dra! t*e same, *e s*all lose every reference

!*ic* *e may *ave over t*e t*ing. 2*e co'debtors,

guarantors and sureties s*all be released. (111a)

SECTION $! " Loss of the Thin* D&e

Art. 1#6#. An obligation !*ic* consists in t*e

delivery of a determinate t*ing s*all beetinguis*ed if it s*ould be lost or destroyed!it*out t*e fault of t*e debtor, and before *e *as

incurred in delay.

*en by la! or stiulation, t*e obligor is liable

even for fortuitous events, t*e loss of t*e t*ing does

not etinguis* t*e obligation, and *e s*all be

resonsible for damages. 2*e same rule alies

!*en t*e nature of t*e obligation reuires t*e

assumtion of ris0. (11#a)

Art. 1#6%. n an obligation to deliver a generic

t*ing, t*e loss or destruction of anyt*ing of t*e

same 0ind does not etinguis* t*e obligation. (n)

Art. 1#6. 2*e courts s*all determine !*et*er,

under t*e circumstances, t*e artial loss of t*e

object of t*e obligation is so imortant as to

etinguis* t*e obligation. (n)

Art. 1#65. *enever t*e t*ing is lost in t*e

ossession of t*e debtor, it s*all be resumed t*at

t*e loss !as due to *is fault, unless t*ere is roof to

t*e contrary, and !it*out rejudice to t*e

rovisions of article 1165. 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*e restation becomes legally or

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

obligor. (11a)

Art. 1#67. *en t*e service *as become so difficult

as to be manifestly beyond t*e contemlation of t*e

arties, t*e obligor may also be released t*erefrom,

in !*ole or in art. (n)

Art. 1#6. *en t*e debt of a t*ing certain anddeterminate roceeds from a criminal offense, t*e

debtor s*all not be eemted from t*e ayment of

its rice, !*atever may be t*e cause for t*e loss,

unless t*e t*ing *aving been offered by *im to t*e

erson !*o s*ould receive it, t*e latter refused

!it*out justification to accet it. (115)

Art. 1#6-. 2*e obligation *aving been etinguis*ed

by t*e loss of t*e t*ing, t*e creditor s*all *ave all

t*e rig*ts of action !*ic* t*e debtor may *ave

against t*ird ersons by reason of t*e loss. (116)

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SECTION %! " Condon(tion o' Re2ission of the

De)t

Art. 1#7+. $ondonation or remission is essentiallygratuitous, and reuires t*e accetance by t*eobligor. t may be made eressly or imliedly.

One and t*e ot*er 0ind s*all be subject to t*e rules

!*ic* govern inofficious donations. 9ress

condonation s*all, furt*ermore, comly !it* t*e

forms of donation. (117)

Art. 1#71. 2*e delivery of a rivate document

evidencing a credit, made voluntarily by t*e

creditor to t*e debtor, imlies t*e renunciation of

t*e action !*ic* t*e former *ad against t*e latter.

f in order to nullify t*is !aiver it s*ould be

claimed to be inofficious, t*e debtor and *is *eirsmay u*old it by roving t*at t*e delivery of t*e

document !as made in virtue of ayment of t*e

debt. (11)

Art. 1#7#. *enever t*e rivate document in

!*ic* t*e debt aears is found in t*e ossession

of t*e debtor, it s*all be resumed t*at t*e creditor

delivered it voluntarily, unless t*e contrary is

roved. (11-)

Art. 1#7%. 2*e renunciation of t*e rincial debt

s*all etinguis* t*e accessory obligations" but t*e!aiver of t*e latter s*all leave t*e former in force.

(11-+)

Art. 1#7. t is resumed t*at t*e accessory

obligation of ledge *as been remitted !*en t*e

t*ing ledged, after its delivery to t*e creditor, is

found in t*e ossession of t*e debtor, or of a t*ird

erson !*o o!ns t*e t*ing. (11-1a)

SECTION ,! " Conf&sion o' 1e'*e' of Ri*hts

Art. 1#75. 2*e obligation is etinguis*ed from t*etime t*e c*aracters of creditor and debtor aremerged in t*e same erson. (11-#a)

Art. 1#76. @erger !*ic* ta0es lace in t*e erson

of t*e rincial debtor or creditor benefits t*e

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

erson of any of t*e latter does not etinguis* t*e

obligation. (11-%)

Art. 1#77. $onfusion does not etinguis* a joint

obligation ecet as regards t*e s*arecorresonding to t*e creditor or debtor in !*om t*e

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

SECTION /! " Co2pens(tion

Art. 1#7. $omensation s*all ta0e lace !*en t!o

ersons, in t*eir o!n rig*t, are creditors anddebtors of eac* ot*er. (11-5)

Art. 1#7-. n order t*at comensation may be

roer, it is necessary:

(1) 2*at eac* one of t*e obligors be bound

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

a rincial creditor of t*e ot*er"

(#) 2*at bot* debts consist in a sum of

money, or if t*e t*ings due are

consumable, t*ey be of t*e same 0ind, andalso 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 and

demandable"

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

retention or controversy, commenced by

t*ird ersons and communicated in due

time to t*e debtor. (11-6)

Art. 1#+. >ot!it*standing t*e rovisions of t*e receding article, t*e guarantor may set ucomensation as regards !*at t*e creditor may o!e

t*e rincial debtor. (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 a total 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 claim for damages against t*e

ot*er, t*e former may set it off by roving *is rig*t

to said damages and t*e amount t*ereof. (n)

Art. 1#. *en one or bot* debts are rescissible

or voidable, t*ey may be comensated against eac*

ot*er before t*ey are judicially rescinded or

avoided. (n)

Art. 1#5. 2*e debtor !*o *as consented to t*e

assignment of rig*ts made by a creditor in favor of

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a t*ird erson, cannot set u against t*e assignee

t*e comensation !*ic* !ould ertain to *im

against t*e assignor, unless t*e assignor !as

notified by t*e debtor at t*e time *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 not consent t*ereto, t*e latter may set

u t*e comensation of debts revious to t*e

cession, but not of subseuent ones.

f t*e assignment is made !it*out t*e 0no!ledge of

t*e debtor, *e may set u t*e comensation of all

credits rior to t*e same and also later 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*e debts may be ayable at

different laces, but t*ere s*all be an indemnity for

eenses of ec*ange or transortation to t*e lace

of ayment. (11--a)

Art. 1#7. $omensation s*all not be roer !*en

one of t*e debts arises from a deositum or from

t*e obligations of a deositary or of a bailee in

commodatum.

>eit*er can comensation be set u against a

creditor !*o *as a claim for suort due by

gratuitous title, !it*out rejudice to t*e rovisionsof aragra* # of Article %+1. (1#++a)

Art. 1#. >eit*er s*all t*ere be comensation if

one of t*e debts consists in civil liability arising

from a enal offense. (n)

Art. 1#-. f a erson s*ould *ave against *im

several debts !*ic* are suscetible of

comensation, t*e rules on t*e alication of

ayments s*all aly to t*e order of t*e

comensation. (1#+1)

Art. 1#-+. *en all t*e reuisites mentioned in

Article 1#7- are resent, comensation ta0es effect

by oeration of la!, and etinguis*es bot* debts to

t*e concurrent amount, even t*oug* t*e creditors

and debtors are not a!are of t*e comensation.

(1#+#a)

SECTION 4! " Nov(tion

Art. 1#-1. Obligations may be modified by:

(1) $*anging t*eir object or rincial

conditions"

(#) =ubstituting t*e erson of t*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 beetinguis*ed by anot*er !*ic* substitute t*e same,

it is imerative t*at it be so declared in uneuivocalterms, or t*at t*e old and t*e ne! obligations be onevery oint incomatible !it* eac* ot*er. (1#+)

Art. 1#-%. >ovation !*ic* consists in substituting

a ne! debtor in t*e lace of t*e original one, may

be made 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*erig*ts mentioned in Articles 1#%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!

debtors insolvency or non'fulfillment of t*e

obligations s*all not give rise to any liability on t*e

art of t*e original debtor. (n)

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

*as been roosed by t*e original debtor and

acceted by t*e creditor, s*all not revive t*e actionof t*e latter against t*e original obligor, ecet

!*en said insolvency !as already eisting and of

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 in conseuence of a novation,

accessory obligations may subsist only insofar as

t*ey may benefit t*ird ersons !*o did not give

t*eir consent. (1#+7)

Art. 1#-7. f t*e ne! obligation is void, t*e originalone s*all subsist, unless t*e arties intended t*at

t*e 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 !*en ratification

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, unlessit is ot*er!ise stiulated. (n)

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Art. 1%++. =ubrogation of a t*ird erson in t*e

rig*ts of t*e creditor is eit*er legal or conventional.

2*e former is not resumed, ecet in cases

eressly mentioned in t*is $ode" t*e latter must be

clearly establis*ed in order t*at it may ta0e effect.

(1#+-a)

Art. 1%+1. $onventional subrogation of a t*ird

erson reuires t*e consent 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 is referred, even !it*out t*e debtors

0no!ledge"

(#) *en a t*ird erson, not interested 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, a erson interested in t*e

fulfillment of t*e obligation ays, !it*out

rejudice to t*e effects of confusion as to

t*e latters s*are. (1#1+a)

Art. 1%+%. =ubrogation transfers to t*e ersonssubrogated t*e credit !it* all t*e rig*ts t*eretoaertaining, eit*er against t*e debtor or againstt*ird erson, be t*ey guarantors or ossessors of

mortgages, subject to stiulation in a conventionalsubrogation. (1#1#a)

Art. 1%+. A creditor, to !*om artial 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 artial ayment of t*e same credit. (1#1%)

Title II! " CONTRACTS

CHAPTER #

ENERAL PROVISIONS

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 torender some service. (1#5a)

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

suc* stiulations, clauses, terms and conditions as

t*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

of 2itles and of t*is /oo0, by t*e rules

governing t*e most analogous nominate contracts,and by t*e customs of t*e lace. (n)

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

arties" its validity or comliance cannot be left to

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

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

may be left to a t*ird erson, !*ose decision s*all

not be binding until it *as been made 0no!n to

bot* contracting arties. (n)

Art. 1%1+. 2*e determination s*all not beobligatory if it is evidently ineuitable. n suc*

case, t*e courts s*all decide !*at is euitable under

t*e circumstances. (n)

Art. 1%11. $ontracts ta0e effect only bet!een t*e

arties, t*eir assigns and *eirs, ecet in case

!*ere t*e rig*ts and obligations arising from t*e

contract are not transmissible by t*eir nature, or by

stiulation or by rovision of la!. 2*e *eir is not

liable beyond t*e value of t*e roerty *e received

from t*e decedent.

f a contract s*ould contain some stiulation in

favor of a t*ird erson, *e may demand its

fulfillment rovided *e communicated *is

accetance to t*e obligor before its revocation. A

mere incidental benefit or interest of a erson is not

sufficient. 2*e contracting arties must *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 into ossession of t*e object of

t*e contract are bound t*ereby, subject to t*e

rovisions of t*e @ortgage a! and t*e and

8egistration a!s. (n)

Art. 1%1%. $reditors are rotected in cases of

contracts intended to defraud t*em. (n)

Art. 1%1. Any t*ird erson !*o induces anot*er to

violate *is contract s*all be liable for damages tot*e ot*er contracting arty. (n)

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Art. 1%15. $ontracts are erfected by mere 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 and la!. (1#5)

Art. 1%16. 8eal contracts, suc* as deosit, 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 being aut*ori?ed by t*e latter, or

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

A contract entered into in t*e name of 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 is ratified, eressly or

imliedly, by t*e erson on !*ose be*alf it *as

been eecuted, before it is revo0ed by t*e ot*er

contracting arty. (1#5-a)

CHAPTER $

ESSENTIAL RE5UISITES OF CONTRACTS

ENERAL PROVISIONS

Art. 1%1. 2*ere is no contract unless t*e follo!ing

reuisites concur:

(1) $onsent of t*e contracting arties"

(#) Object certain !*ic* is t*e subject

matter of t*e contract"

(%) $ause of t*e obligation !*ic* is

establis*ed. (1#61)

SECTION #! " Consent

Art. 1%1-. $onsent is manifested by t*e meeting of

t*e offer and t*e accetance uon t*e t*ing and t*ecause !*ic* are to constitute t*e contract. 2*e offer must be certain and t*e accetance absolute. Aualified accetance constitutes a counter'offer.

Accetance made by letter or telegram does not

bind t*e offerer ecet from t*e time it came to *is

0no!ledge. 2*e contract, in suc* a case, is

resumed to *ave been entered into in t*e lace

!*ere t*e offer !as made. (1#6#a)

Art. 1%#+. An accetance may be eress or

imlied. (n)

Art. 1%#1. 2*e erson ma0ing t*e offer 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 time accetance is

communicated to *im. (n)

Art. 1%#%. An offer becomes ineffective uon t*e

deat*, civil interdiction, insanity, or insolvency of

eit*er arty before accetance is conveyed. (n)

Art. 1%#. *en t*e offerer *as allo!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

advertisements of 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 advertiser is

not bound to accet t*e *ig*est or lo!est bidder,

unless t*e contrary aears. (n)

Art. 1%#7. 2*e follo!ing cannot give consent to a

contract:

(1) <nemanciated minors"

(#) nsane or demented ersons, and deaf'

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

(1#6%a)

Art. 1%#. $ontracts entered into during a lucidinterval are valid. $ontracts agreed to in a state ofdrun0enness or during a *ynotic sell arevoidable. (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

disualifications establis*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 to t*e substance of t*e t*ing

!*ic* is t*e object of t*e contract, or to t*ose

conditions !*ic* *ave rincially moved one or

bot* arties to enter into t*e contract.

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@ista0e as to t*e identity or ualifications 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 is unable 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 *ave been fully elained to t*e

former. (n)

Art. 1%%%. 2*ere is no mista0e if t*e arty alleging

it 0ne! t*e doubt, contingency or ris0 affecting t*e

object of t*e contract. (n)

Art. 1%%. @utual error as to t*e legal effect of an

agreement !*en t*e real urose of t*e arties is

frustrated, may vitiate consent. (n)

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 comelled by a reasonable and !ell'

grounded fear of an imminent and grave evil uon

*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 ones claim t*roug* cometent

aut*ority, if t*e claim is just or legal, does not

vitiate consent. (1#67a)

Art. 1%%6. 4iolence or intimidation s*all annul t*e

obligation, alt*oug* it may *ave been emloyed by

a t*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

!ill of anot*er, deriving t*e latter of a reasonable

freedom of c*oice. 2*e follo!ing circumstances

s*all be considered: t*e confidential, family,

siritual and ot*er relations bet!een t*e arties, or

t*e fact t*at t*e erson alleged to *ave been unduly

influenced !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*e contracting

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

by confidential 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, are not in t*emselves fraudulent. (n)

Art. 1%1. A mere eression of an oinion does

not signify fraud, unless made by an eert and t*e

ot*er arty *as relied on t*e formers secial

0no!ledge. (n)

Art. 1%#. @isreresentation by a t*ird erson does

not vitiate consent, unless suc* misreresentation

*as created substantial mista0e and t*e same is

mutual. (n)

Art. 1%%. @isreresentation made in good fait* is

not fraudulent but may constitute error. (n)

Art. 1%. n order t*at fraud may ma0e a contract

voidable, it s*ould be serious and s*ould not *ave

been emloyed by bot* contracting arties.

ncidental fraud only obliges t*e erson emloying

it to ay damages. (1#7+)

Art. 1%5. =imulation of a contract may be absolute

or relative. 2*e former ta0es lace !*en t*e arties

do 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. A relative simulation, !*en it does

not rejudice a t*ird erson and is not intended for

any urose contrary to la!, morals, good customs,

ublic order or ublic olicy binds t*e arties to

t*eir real agreement. (n)

SECTION $! " O)6e3t of Cont'(3ts

Art. 1%7. All t*ings !*ic* are not outside t*ecommerce of men, including future t*ings, may bet*e object of a contract. All rig*ts !*ic* are not

intransmissible may also be t*e object of contracts.

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>o contract may be entered into uon future

in*eritance ecet in cases eressly aut*ori?ed by

la!.

All services !*ic* are not contrary to la!, morals,

good customs, ublic order 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 to its 0ind. 2*e fact t*at t*e uantity

is not determinate s*all not be an obstacle to t*e

eistence of t*e contract, rovided it is ossible to

determine t*e same, !it*out t*e need of a ne!

contract bet!een t*e arties. (1#7%)

SECTION %! " C(&se of Cont'(3ts

Art. 1%5+. n onerous contracts t*e cause isunderstood to be, for eac* contracting arty, t*e

restation or romise of a t*ing or service by t*eot*er" in remuneratory ones, t*e service or benefit!*ic* is remunerated" and in contracts of ure beneficence, t*e mere liberality of t*e benefactor.(1#7)

Art. 1%51. 2*e articular motives of t*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 no effect !*atever. 2*e

cause is unla!ful if it is contrary to la!, morals,

good customs, ublic order or ublic olicy.

(1#75a)

Art. 1%5%. 2*e statement of a false cause in

contracts s*all render t*em void, if it s*ould not be

roved t*at t*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 of cause s*all not invalidate a

contract, unless t*ere *as been fraud, mista0e or

undue influence. (n)

CHAPTER %FOR1 OF CONTRACTS

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*eirvalidity are resent. o!ever, !*en t*e la!reuires t*at a contract be in some form in order

t*at it may be valid or enforceable, or t*at acontract be roved in a certain !ay, t*atreuirement is absolute and indisensable. n suc*

cases, t*e rig*t of t*e arties stated in t*e follo!ingarticle cannot be eercised. (1#7a)

Art. 1%57. f t*e la! reuires a document or ot*er

secial form, as in t*e acts and contracts

enumerated 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 be eercised simultaneously !it* t*e

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

Art. 1%5. 2*e follo!ing must aear in a ublic

document:

(1) Acts and contracts !*ic* *ave for t*eir

object t*e creation, transmission,

modification or etinguis*ment of real

rig*ts over immovable roerty" sales of

real roerty or of an interest t*erein a

governed by Articles 1+%, >o. #, and

1+5"

(#) 2*e cession, reudiation or

renunciation of *ereditary rig*ts or of

t*ose of t*e conjugal artners*i of gains"

(%) 2*e o!er to administer roerty, or

any ot*er o!er !*ic* *as for its object

an act aearing or !*ic* s*ould aear in

a ublic document, or s*ould rejudice a

t*ird erson"

() 2*e cession of actions or rig*ts

roceeding from an act aearing in a ublic document.

All ot*er contracts !*ere t*e amount involvedeceeds five *undred esos must aear in !riting,even a rivate one. /ut sales of goods, c*attels ort*ings in action are governed by Articles, 1+%, >o.# and 1+5. (1#+a)

CHAPTER ,

REFOR1ATION OF INSTRU1ENTS 7n8

Art. 1%5-. *en, t*ere *aving been a meeting of

t*e minds of t*e arties to a contract, t*eir trueintention is not eressed in t*e instrument

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of stiulations !*ic* are ordinarily establis*ed.

(1#7)

Art. 1%77. 2*e interretation of obscure !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 absolutely imossible to settle

doubts by t*e rules establis*ed in t*e receding

articles, and t*e doubts refer to incidental

circumstances of a gratuitous contract, t*e least

transmission of rig*ts and interests s*all revail. f

t*e contract is onerous, t*e doubt s*all be settled in

favor of t*e greatest recirocity of interests.

f t*e doubts are cast uon t*e rincial object of

t*e contract in suc* 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*all be null and void. (1#-)

Art. 1%7-. 2*e rinciles of interretation stated in

8ule 1#% of t*e 8ules of $ourt s*all li0e!ise be

observed in t*e construction of contracts. (n)

CHAPTER 4

RESCISSIBLE CONTRACTS

Art. 1%+. $ontracts validly agreed uon may berescinded in t*e cases establis*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

reresent suffer 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 in reresentation of

absentees, if t*e latter suffer t*e lesion

stated in t*e receding number"

(%) 2*ose underta0en in fraud of creditors

!*en t*e latter cannot in any ot*er manner

collect t*e claims due t*em"

() 2*ose !*ic* refer to t*ings under

litigation if t*ey *ave been entered into by

t*e defendant !it*out t*e 0no!ledge and

aroval of t*e litigants or of cometent

judicial aut*ority"

(5) All ot*er contracts secially declared

by la! to be subject to rescission. (1#-1a)

Art. 1%#. ayments made in a state of insolvencyfor obligations to !*ose fulfillment t*e debtorcould not 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 instituted ecet !*en t*e arty sufferingdamage *as no ot*er legal means to obtain

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

Art. 1%. 8escission s*all be only to t*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 to restore.

>eit*er s*all rescission ta0e lace !*en t*e t*ings

!*ic* are t*e object of t*e contract are legally in

t*e ossession of t*ird ersons !*o did not act in

bad fait*.

n t*is case, indemnity for damages may be

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

Art. 1%6. 8escission referred to in >os. 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 not reserve sufficient

roerty to ay all debts contracted before t*e

donation.

Alienations by onerous title are also resumed

fraudulent !*en made by ersons against !*om

some judgment *as been issued. 2*e decision or

attac*ment need not refer to t*e roerty alienated,and need not *ave been obtained by t*e arty

see0ing t*e rescission.

n addition to t*ese resumtions, t*e design to

defraud creditors may be roved in any ot*er

manner recogni?ed by t*e la! of evidence. (1#-7a)

Art. 1%. *oever acuires in bad fait* t*e t*ings

alienated in fraud of creditors, s*all indemnify t*e

latter for damages suffered by t*em on account of

t*e alienation, !*enever, due to any cause, it

s*ould be imossible for *im to return t*em.

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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 claim rescission must be

commenced !it*in four years.

;or ersons under guardians*i and for absentees,

t*e eriod of four years s*all not begin until t*e

termination of t*e formers incaacity, or until t*e

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

CHAPTER 9

VOIDABLE CONTRACTS

Art. 1%-+. 2*e follo!ing contracts are voidable orannullable, even t*oug* t*ere may *ave been no

damage to t*e contracting arties:

(1) 2*ose !*ere one of t*e arties is

incaable of giving consent to a contract"

(#) 2*ose !*ere t*e consent is vitiated by

mista0e, violence, intimidation, undue

influence or fraud.

2*ese contracts are binding, unless t*ey areannulled by a roer action in court. 2*ey aresuscetible of ratification. (n)

Art. 1%-1. 2*e action for annulment s*all be

broug*t !it*in four years.

2*is eriod s*all begin:

n cases of intimidation, violence or undue

influence, from t*e time t*e defect of t*e

consent ceases.

n case of mista0e or fraud, from t*e time

of t*e discovery of t*e same.

And !*en t*e action refers to contracts entered into by minors or ot*er incaacitated ersons, from t*etime t*e guardians*i ceases. (1%+1a)

Art. 1%-#. 8atification etinguis*es t*e action to

annul a voidable contract. (1%+-a)

Art. 1%-%. 8atification may be effected eressly or

tacitly. t is understood t*at t*ere is a tacit

ratification if, !it* 0no!ledge of t*e reason !*ic*

renders t*e contract voidable and suc* reason

*aving ceased, t*e erson !*o *as a rig*t to invo0e

it s*ould eecute an act !*ic* necessarily imlies

an intention to !aive *is rig*t. (1%11a)

Art. 1%-. 8atification may be effected by t*e

guardian of t*e incaacitated erson. (n)

Art. 1%-5. 8atification does not reuire t*e

conformity of t*e contracting arty !*o *as no

rig*t to bring t*e action for annulment. (1%1#)

Art. 1%-6. 8atification cleanses t*e contract from

all its defects from t*e moment it !as constituted.

(1%1%)

Art. 1%-7. 2*e action for t*e annulment of

contracts may be instituted by all !*o are t*ereby

obliged rincially or subsidiarily. o!ever,

ersons !*o are caable cannot allege t*e

incaacity of t*ose !it* !*om t*ey contracted" nor

can t*ose !*o eerted intimidation, violence, or

undue influence, or emloyed fraud, or caused

mista0e base t*eir action uon t*ese fla!s of t*e

contract. (1%+#a)

Art. 1%-. An obligation *aving been annulled, t*e

contracting arties s*all restore to eac* ot*er t*e

t*ings !*ic* *ave been t*e subject matter of t*e

contract, !it* t*eir fruits, and t*e rice !it* its

interest, ecet in cases rovided by la!.

n obligations to render service, t*e value t*ereof

s*all be t*e basis for damages. (1%+%a)

Art. 1%--. *en t*e defect of t*e contract consists

in t*e incaacity of one of t*e arties, t*e

incaacitated erson is not obliged to ma0e any

restitution ecet insofar as *e *as been benefited

by t*e t*ing or rice received by *im. (1%+)

Art. 1++. *enever t*e erson obliged by t*e

decree of annulment to return t*e t*ing can not do

so because it *as been lost t*roug* *is fault, *e

s*all return t*e fruits received and t*e value of t*e

t*ing at t*e time of t*e loss, !it* interest from t*e

same date. (1%+7a)

Art. 1+1. 2*e action for annulment of contracts

s*all be etinguis*ed !*en t*e t*ing !*ic* is t*e

object t*ereof is lost t*roug* t*e fraud or fault of

t*e erson !*o *as a rig*t to institute t*e

roceedings.

f t*e rig*t of action is based uon t*e incaacity of

any one of t*e contracting arties, t*e loss of t*e

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

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action, unless said loss too0 lace t*roug* t*e fraud

or fault of t*e laintiff. (1%1a)

Art. 1+#. As long as one of t*e contracting arties

does not restore !*at in virtue of t*e decree of

annulment *e is bound to return, t*e ot*er cannot

be comelled to comly !it* !*at is incumbent

uon *im. (1%+)

CHAPTER :

UNENFORCEABLE CONTRACTS 7n8

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

unenforceable, unless t*ey are ratified:

(1) 2*ose entered into in t*e name of

anot*er erson by one !*o *as been given

no aut*ority or legal reresentation, 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*e follo!ing cases an

agreement *ereafter made s*all be

unenforceable 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 by its

terms is not to be erformed

!it*in a year from t*e ma0ing

t*ereof"

(b) A secial romise to ans!er

for t*e debt, default, or

miscarriage of anot*er"

(c) An agreement made inconsideration of marriage, ot*er

t*an a mutual romise to marry"

(d) An agreement for t*e sale of

goods, c*attels or t*ings in

action, at a rice not less t*an

five *undred esos, unless t*e

buyer accet and receive art of

suc* goods and c*attels, or t*e

evidences, or some of t*em, of

suc* t*ings in action or ay at t*e

time some art of t*e urc*asemoney" but !*en a sale is made

by auction and entry is made by

t*e auctioneer in *is sales boo0,

at t*e time of t*e sale, of t*e

amount and 0ind of roerty

sold, terms of sale, rice, names

of t*e urc*asers and erson on

!*ose account t*e sale is made, it

is a sufficient memorandum"

(e) An agreement of t*e leasing

for a longer eriod t*an one year,

or for t*e sale of real roerty or

of an interest t*erein"

(f) A reresentation as to t*e

credit of a t*ird erson.

(%) 2*ose !*ere bot* arties are incaable

of giving consent to a contract.

Art. 1+. <naut*ori?ed contracts are governed byArticle 1%17 and t*e rinciles of agency in 2itle 3of t*is /oo0.

Art. 1+5. $ontracts infringing t*e =tatute of

;rauds, referred to in >o. # of Article 1+%, are

ratified by t*e failure to object to t*e resentation

of oral evidence to rove t*e same, or by t*e

accetance of benefit under t*em.

Art. 1+6. *en a contract is enforceable under t*e

=tatute of ;rauds, and a ublic document is

necessary for its registration in t*e 8egistry of

Beeds, t*e arties may avail t*emselves of t*e rig*t

under Article 1%57.

Art. 1+7. n a contract !*ere bot* arties are

incaable of giving consent, eress or imlied

ratification by t*e arent, or guardian, as t*e case

may be, of one of t*e contracting arties s*all give

t*e contract t*e same effect as if only one of t*em

!ere incaacitated.

f ratification is made by t*e arents or guardians,as t*e case may be, of bot* contracting arties, t*e

contract s*all be validated from t*e incetion.

Art. 1+. <nenforceable contracts cannot be

assailed by t*ird ersons.

CHAPTER ;

VOID AND INE0ISTENT CONTRACTS

Art. 1+-. 2*e follo!ing contracts are ineistent

and void from t*e beginning:

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(1) 2*ose !*ose cause, object or urose

is contrary to la!, morals, good customs,

ublic order or ublic olicy"

(#) 2*ose !*ic* are absolutely simulated

or fictitious"

(%) 2*ose !*ose cause or object did not

eist at t*e time of t*e transaction"

() 2*ose !*ose object is outside t*e

commerce of men"

(5) 2*ose !*ic* contemlate an

imossible service"

(6) 2*ose !*ere t*e intention of t*e

arties relative to t*e rincial object oft*e contract cannot be ascertained"

(7) 2*ose eressly ro*ibited or declared

void by la!.

2*ese contracts cannot be ratified. >eit*er can t*erig*t to set u t*e defense of illegality be !aived.

Art. 11+. 2*e action or defense for t*e declaration

of t*e ineistence of a contract does not rescribe.

Art. 111. *en t*e nullity roceeds from t*eillegality of t*e cause or object of t*e contract, and

t*e act constitutes a criminal offense, bot* arties

being in ari delicto, t*ey s*all *ave no action

against eac* ot*er, and bot* s*all be rosecuted.

@oreover, t*e rovisions of t*e enal $ode relative

to t*e disosal of effects or instruments of a crime

s*all be alicable to t*e t*ings or t*e rice of t*e

contract.

2*is rule s*all be alicable !*en only one of t*e

arties is guilty" but t*e innocent one may claim

!*at *e *as given, and s*all not be bound tocomly !it* *is romise. (1%+5)

Art. 11#. f t*e act in !*ic* t*e unla!ful or

forbidden cause consists does not constitute a

criminal offense, t*e follo!ing rules s*all be

observed:

(1) *en t*e fault is on t*e art of bot*

contracting arties, neit*er may recover

!*at *e *as given by virtue of t*e

contract, or demand t*e erformance of

t*e ot*ers underta0ing"

(#) *en only one of t*e contracting

arties is at fault, *e cannot recover !*at

*e *as given by reason of t*e contract, or

as0 for t*e fulfillment of !*at *as been

romised *im. 2*e ot*er, !*o is not at

fault, may demand t*e return of !*at *e

*as given !it*out any obligation tocomly *is romise. (1%+6)

Art. 11%. nterest aid in ecess of t*e interestallo!ed by t*e usury la!s may be recovered by t*edebtor, !it* interest t*ereon from t*e date of t*e ayment.

Art. 11. *en money is aid or roerty

delivered for an illegal urose, t*e contract may

be reudiated by one of t*e arties before t*e

urose *as been accomlis*ed, or before any

damage *as been caused to a t*ird erson. n suc*case, t*e courts may, if t*e ublic interest !ill t*us

be subserved, allo! t*e arty reudiating t*e

contract to recover t*e money or roerty.

Art. 115. *ere one of t*e arties to an illegal

contract is incaable of giving consent, t*e courts

may, if t*e interest of justice so demands allo!

recovery of money or roerty delivered by t*e

incaacitated erson.

Art. 116. *en t*e agreement is not illegal er se

but is merely ro*ibited, and t*e ro*ibition by t*ela! is designated for t*e rotection 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 rice allo!ed may recover suc*

ecess.

Art. 11. *en t*e la! fies, or aut*ori?es t*e

fiing of t*e maimum 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 additional comensation for

service rendered beyond t*e time limit.

Art. 11-. *en t*e la! sets, or aut*ori?es t*e

setting of a minimum !age for laborers, and a

contract is agreed uon by !*ic* a laborer accets

a lo!er !age, *e s*all be entitled to recover t*e

deficiency.

http://www.chanrobles.com/revisedpenalcodeofthephilippines.htm



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Art. 1#+. n case of a divisible contract, if t*e

illegal terms can be searated from t*e legal ones,

t*e latter may be enforced.

Art. 1#1. 2*e defense of illegality of contract 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 illegal contract, is also void and

ineistent.

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