COURSE DESCRIPTION
A study of the concepts of law in general. It covers (a) obligations, their nature, elements, sources, classification, effects and modes of extinction; and (b) contracts, their nature, elements, effects, form, interpretation, rescission, nullity, annulment and enforcement.
COURSE OBJECTIVES
At the end of the semester the students are expected:
• To gain knowledge of the legal provisions governing business transactions in general, and the law on obligations and contracts in particular
• To prepare the students for advance studies on business law;
• To develop analytical skills of applying the law on obligations and contracts on certain situations or business transactions.
COURSE OUTLINE
I. Introduction to Law
II. General Provisions on Obligation
III. Nature and Effect of Obligations
IV. Different Kinds of Obligations
V. Extinguishment of Obligations
VI. General Provisions on Contract
VII. Essential Requisites of Contracts
VIII. Forms of Contract
IX. Reformation of Instruments
X. Interpretation of Contracts
XI. Rescissible Contracts
XII. Voidable Contracts
XIII. Unenforceable Contracts
XIV. Void or Inexistent Contracts
REQUIRED TEXT
De Leon, Hector S. The Law on Obligations and Contracts. Latest Edition, Rex Bookstore.
COURSE SCHEDULE AND READING MATERIALS
SESSION 2
Topics to be discussed:
Introduction to Law
a. Concepts and Definition
b. Kinds, Classification and Divisions
c. State Law
d. Definition: Law on Obligations and Contracts
General provisions on Obligations
1. Definition of Obligation (Art. 1156, NCC)
2. Essential Requisites of Obligation
3. Natural Obligations (Arts. 1423-1430, NCC)
4. Concepts and Sources of Obligations (Arts. 1157-1162, NCC)
4.1 Law (Art. 1158)
4.2 Contracts (Art. 1159)
4.3. Quasi-contracts (Art. 1160, NCC) – Definition; kinds
4.4. Crimes or delict (Art.1161, NCC) – Scope of liability
4.5. Quasi-delict (Art. 1162, NCC)—Definition; Crimes vs. Quasi delict
5. Concepts of obligor and obligee
SESSION 3
Nature and Effect of Obligations
a. Rights of Creditor and Duties of Debtor
a.1 Obligation to give (Arts. 1163-1166, NCC)
a.2 Obligation to Do (Art. 1167, NCC)
a.3 Obligations not to do (Arts. 1168)
b. Grounds for liability for damages (art.1170, NCC)
b.1 Delay (Art. 1169, NCC) – Definition; Kinds; Effects; Rule and Exceptions (When demand is not necessary to put debtor in delay)
b.2 Fraud (Art. 1171) – Definition; Kinds
b.3 Negligence (Arts. 1172-1173, NCC) – Definition; kinds; Negligence vs. Diligence; Kinds of diligence
b.4 Contravention of the tenor of the obligation (Art. 1170, NCC) – Meaning
b.5 Fortuitous event (Art. 1174, NCC) – Definition; kinds; requisites; rule and Exceptions
c. Usurious transactions (Art. 1175, NCC) – Meaning of Loan or Mutuum
d. Presumptions (Art. 1176, NCC) – Definition; Kinds; When not applicable
e. Remedies available to creditors for the satisfaction of their claims (Art. 1177, NCC)
f. Transmissibility of rights (Art. 1178, NCC) – Rule and Exceptions
SESSION 4
PRELIMINARY EXAM
SESSION 5
NATURE AND EFFECTS OF OBLIGATION
Different kinds of obligations
a. Secondary Classifications under the Civil Code
a.1 Unilateral vs. bilateral (Arts. 1168-1169, NCC)
a.2 Real vs. Personal (Arts. 1163-1168, NCC)
a.3 Determinate vs. Generic (art. 1165, NCC)
a.4 Civil vs. Natural (Art. 1423, NCC)
a.5 Legal, Conventional and Penal (Arts. 1157, 1159, 1161, NCC
b. Primary Classifications under the New Civil Code
b.1 Pure and Conditional (Arts. 1179-1192)
b.2. Obligations with a period (Arts. 1180, 1193-1198, NCC)
b.3. Alternative vs. Facultative Obligations (Arts. 1199-1206, NCC)
b.4. Joint and Solidary Obligations (Art. 1207-1222, NCC)
b.5. Divisible vs. Divisible Obligations (Arts. 1223-1225, NCC)
b.6 Obligations with a Penal Clause (Arts. 1126-1304, NCC)
SESSION 6
Extinguishment of Obligations (Art. 1231, NCC)—Cause of Extinguishment not under Art. 1231.
1. Payment or performance (Art. 1232-1254)
1.a. Payment by Cession (Art. 1255)
1.b. Tender of payment and consignation (Arts. 1256-1261, NCC)
2. Loss of the thing due (arts. 1262-1269, NCC)
3. Condonation or remission of debt (Arts. 1270-1274)
4. Confusion or merger of rights (Arts. 1275-1277, NCC)
5. Compensation (Arts. 1278-1304, NCC)
6. Novation (Arts. 1291-1304, NCC)
SESSION 7
Contracts
1. Definition (Art. 1305, NCC), Nature and Concepts
2. General Provisions (Arts. 1306-1317, NCC)
3. Essential requisites of Contracts (Art. 1318, NCC)
a. Consent (Arts. 1319-1346)
b. Object (Arts. 1347-1349, NCC)
c. Cause (Arts. 1350-1355,NCC)
SESSION 8
AUGUST 15, 2009
4. Form of Contracts (Arts. 1356-1358)
5. Reformation of Instruments (Arts. 1359-1369)
6. Interpretation of Contracts (Arts. 1370-1379)
SESSION 9
Defective Contracts under the Civil Code:
Rescissible Contracts (Arts. 1380-1389, NCC)
Meaning: Rescissible Contract
Rescission: Definition, requisites, nature and extent, period for filing, persons entitled to bring action
Payments made in state of insolvency
When alienation presumed in fraud of creditors (Art. 1387, NCC)
SESSION 10
MIDTERM EXAM
SESSION 11
Voidable Contracts (Arts. 1390-1402, NCC)
Definition, nature and effects
Annulment: Meaning and the period for filing action for annulment; persons entitled and those not entitled to filing such actions; extinguishment of action for annulment
Ratification: definition; requisites; effects; persons who can ratify
SESSION 12
Unenforceable Contracts (Art. 1403-1408, NCC)
Meaning; kinds
Unauthorized contracts: definition
Agreements within the scope of the statute of frauds
Modes of ratification under the statute of frauds
When unenforceable contract becomes a voidable contract
When unenforceable contract becomes a valid contract
Right of third persons to assail an unenforceable contract
SESSION 13
Void or Inexistent Contracts (Arts. 1409-1422, NCC)
Meaning, characteristics
Instances of void or inexistent contracts
Rules where contract is illegal and the act constitutes a criminal offense
Rules where contract is illegal but the act does not constitute a criminal offense
Persons entitled to raise defense or illegality or nullity.
Definition of in pari delicto
SESSION 14
FINAL EXAM
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