CLASSIFICATIONS OF

OBLIGATIONS
CLASSIFICATIONS OF
OBLIGATIONS
PRIMARY CLASSIFICATION
1. PURE
2. CONDITIONAL
3. WITH A PERIOD
4. ALTERNATIVE
5. FACULTATIVE
6. JOINT
7. SOLIDARY
8. DIVISIBLE
9. INDIVISIBLE
10.WITH A PENAL CLAUSE
CLASSIFICATIONS OF
OBLIGATIONS
SECONDARY CLASSIFICATION
1. UNILATERAL
2. BILATERAL
3. REAL
4. PERSONAL
5. DETERMINATE
6. GENERIC
7. CIVIL
8. NATURAL
9. LEGAL
10.CONVENTIONAL
11.PENAL
 PURE OBLIGATION
- One without a condition or term
- Ex. I promise to deliver to you ten
sack of chayote from my organic
farm.
 CONDITIONAL OBLIGATION
- One whose consequences are subject
in one or another to the fulfilment of a
condition.
- CONDITION
- A. A future and uncertain event
- Ex. I will pay you when I win the
Lotto.
- B. A past and unknown event
 CONDITIONAL OBLIGATION
- Types of condition
- As to EFFECT:
- A. SUSPENSIVE – the happening of
which gives rise to the obligation
- B. RESOLUTORY – the happening of
which ends an existing obligation
**deemed fulfilled if obligor voluntarily
prevents its fulfilment (Art 1186)
 CONDITIONAL OBLIGATION
- Types of condition
- As to EFFECT: SUSPENSIVE/RESOLUTORY
- 1. Once a suspensive condition is
fulfilled, its effects shall retroact to the
day when the obligation was constituted
- 2. Right to fruits
- A. in reciprocal obligations – none as
deemed mutually compensated
- B. In unilateral obligations – generally,
none as it is gratuitous
 CONDITIONAL OBLIGATION
- Types of condition
- As to EFFECT: SUSPENSIVE/RESOLUTORY
- 3. Creditor may bring appropriate
action to preserve his rights pending
fulfilment of suspensive condition
- 4. Debtor may recover what he has
paid by mistake pending fulfilment of
condition (solutio indebiti)
 CONDITIONAL OBLIGATION
- Types of condition
- As to EFFECT: SUSPENSIVE/RESOLUTORY
- Art 1189: Rules in case of loss during
pendency of condition
- KINDS OF LOSS:
- A. Physical – when the thing perishes
- B. Civil – when the existence of the thing
is unknown or thing cannot be recovered
- C. Legal – when thing goes out of
commerce
 CONDITIONAL OBLIGATION
- Types of condition
- As to EFFECT: SUSPENSIVE/RESOLUTORY
- Art 1189: Rules in case of loss during pendency
of condition
- 1. if thing is lost without the fault of the debtor,
obligation is extinguished
- 2. if this is lost through the fault of debtor, he is
liable for damages
- 3. if thing deteriorates without the fault of
debtor, impairment is borne by the creditor
- 4. if thing deteriorates through the fault of the
debtor, creditor can choose between rescission or
fulfilment and/or damages (remedy is
alternative and not commulative)
 CONDITIONAL OBLIGATION
- Types of condition
- As to EFFECT: SUSPENSIVE/RESOLUTORY
- Art 1189: Rules in case of loss during
pendency of condition
- 5. if the thing is improved by its nature
or time, the improvement shall inure
to the benefit of the creditor
- 6. if the thing is improved at the
expense of the debtor, he shall only
have the rights of a usufructuary
 CONDITIONAL OBLIGATION
- Types of condition
- As to EFFECT: SUSPENSIVE/RESOLUTORY
- KINDS OF OBLIGATION AS TO THE
PERSON OBLIGED
- A. UNILATERAL – only one party is
obliged to comply with a prestation
- B. BILATERAL – both parties are mutually
bound to each other
- 1. RECIPROCAL – arise from the same
cause
- 2. NON-RECIPROCAL – do not impose
correlative obligations
 CONDITIONAL OBLIGATION
- Types of condition
- As to EFFECT: SUSPENSIVE/RESOLUTORY
- WHAT IF BOTH PARTIES ARE GUILTY OF
BREACH? (IN PARI DELICTO)
- A. 1ST INFRACTOR is known – liability is
1st infractor will be equitably reduced
- B. 1st INFRACTOR undetermined – each
shall bear his own damages
 CONDITIONAL OBLIGATION
- Types of condition….
- As to FORM:
- A. EXPRESS – the condition is clearly
stated
- B. IMPLIED – the condition is merely
inferred
 CONDITIONAL OBLIGATION
- Types of condition….
- As to POSSIBILITY:
- A. POSSIBLE – the condition is
capable of fulfilment
- B. IMPOSSIBLE – the condition is
NOT capable of fulfilment
SUB-TYPES: CONDITION EFFECT
Impossible Void
Legal Illegal Void
Physical Immoral Void
Negative impossible Valid
Negative illegal
Negative immoral
 CONDITIONAL OBLIGATION
- Types of condition….
- As to CAUSE/ORIGIN:
- A. POTESTATIVE – the condition depends upon the will
of one of the contracting parties
- ***if condition is based solely upon the will of the
debtor, obligation is void, unless obligation is pre-
existing.
- Ex. I will pay you if I want.
A owes B P1M. On due date, A promises to pay B
if Juan pays what he owes A
- B. CASUAL – the condition depends upon chance or
upon the will of a 3rd person
- C. MIXED – the condition depends partly upon chance
and partly upon the will of a 3rd person
 CONDITIONAL OBLIGATION
- Types of condition….
- As to MODE:
- A. POSITIVE – the condition consists
in the performance of an act
- B. NEGATIVE – the condition consists
in the omission of an act
-
CONDITIONAL OBLIGATION
Types of condition….
- As to NUMBERS:
- A. CONJUNCTIVE – there are several
conditions and all must be fulfilled
- B. DISJUNCTIVE – there are several
conditions and only one or some of
them must be fulfilled
 CONDITIONAL OBLIGATION
- Types of condition….
- As to DIVISIBILITY:
- A. DIVISIBLE – the condition is
susceptible of partial performance
- B. INDIVISIBLE – the condition is NOT
susceptible of partial performance
OBLIGATIONS WITH A PERIOD
PERIOD- A future and certain event;
that which must necessarily come even
though it may not be known when (Art
1193)
KINDS
1. AS TO EFFECT
a. SUSPENSIVE PERIOD ( EX DIE)
b. RESOLUTORY PERIOD
(IN DIEM)
OBLIGATIONS WITH A PERIOD
PERIOD
KINDS
1. AS TO SOURCE
a. LEGAL – provided by law
b. CONVENTIONAL/VOLUNTARY
– as agreed upon by the parties
c. JUDICIAL – fixed by the court
 OBLIGATIONS WITH A PERIOD
PERIOD
KINDS
1. AS TO DEFINITENESS
a. DEFINITE PERIOD – fixed or it is
known when it will come
b. INDEFINITE PERIOD – not fixed
but one is intended; courts may fix the
period
 OBLIGATIONS WITH A PERIOD
WHO BENEFITS FROM THE
CONVENTIONAL PERIOD?
GEN. RULE: Art 1196 – both parties
EXCEPTION: Art 1198 – When debtor
loses the right to the period
 OBLIGATIONS WITH A PERIOD
EXCEPTION: Art 1198 – When debtor loses the right
to the period
1. Debtor becomes insolvent after contract was
made
2. Debtor does not give the securities or guaranties
promised
3. By own acts of debtor the securities or guaranties
are impaired or lost through fortuitous event
unless he replaces them
4. Debtor violates any undertaking promised
5. Debtor attempts to abscond
 ALTERNATIVE OBLIGATIONS
KINDS OF OBLIGATION ACCORDING TO OBJECT
1. SIMPLE – there is only one prestation
2. COMPOUND – there are two or more
prestations
A. CONJUNCTIVE – there are several
prestations and ALL are due
B. DISTRIBUTIVE – there are several
prestations and only some are due
b.1. ALTERNATIVE – there are several
prestations due but the performance of one is
sufficient
b.2. FACULTATIVE – one prestation is due
but debtor may substitute another
 ALTERNATIVE OBLIGATIONS
(Art 1200) Right of choice belongs to the debtor
unless expressly granted to the creditor
The debtor shall have no right to
choose prestations which are impossible,
unlawful or which could not have been the object
of the obligation
(Art 1201/1205) – When notice of choice has
been communicated , the obligation becomes
simple
(Art 1202) – When only one choice is
practicable, the obligation becomes simple
 ALTERNATIVE OBLIGATIONS
(Art 1203) – When debtor cannot make a
choice because of creditor’s acts, debtor can
rescind.
(Art 1204) – When debtor is at fault and all
prestations are lost, creditor can sue for
damages based on the value of the last
thing which disappeared or service which
has become impossible to fulfill.
 ALTERNATIVE OBLIGATIONS
EFFECT OF LOSS IN FACULTATIVE
OBLIGATION
BEFORE AFTER
SUBSTITUTION SUBSTITUTION
AND DUE TO AND DUE TO
FORTUITOUS FORTUITOUS
EVENT W/O EVENT W/O
FAULT FAULT
PRINCIPAL EXTINGUISHED* NO LIABILITY
SUBSTITUTE NO LIABILITY EXTINGUISHED*
*If debtor is at fault, damages will be due
 JOINT AND SOLIDARY
OBLIGATIONS
KINDS OF OBLIGATIONS ACCORDING TO
THE NUMBER OF PARTIES
1. INDIVIDUAL – one D and one C
2. COLLECTIVE – 1D and 2C
1D and 2+C
2D and 1C
2+D and 1C
2+D and 2C
2+D and 2+C
 JOINT AND SOLIDARY
OBLIGATIONS
COLLECTIVE …
JOINT – ratio and proportion,
mancummunada, mancomunadamente,
pro rata, proportionately, “we promised to
pay” signed by two or more persons
SOLIDARY – in solidum, jointly and/or
severally, solidaria, together and/or
separately, individually and/or collectively,
juntos y separamentes, “I promise to pay”
signed by two or more persons
 JOINT AND SOLIDARY
OBLIGATIONS
KINDS OF SOLIDARITY
1. ACTIVE
2. PASSIVE
3. MIXED
 JOINT AND SOLIDARY
OBLIGATIONS
1. Solidarity can exist even if the debtors and
creditors are bound by different terms, periods
and conditions.
2. Joint indivisible obligation – the parties are
proportionately liable and the object is not
physically divisible
DIVISIBLE AND INDIVISIBLE
OBLIGATIONS
DIVISIBLE – capable of partial performance
a. QUANTITATIVE
b. QUALITATIVE
c. IDEAL/INTELLECTUAL
INDIVISIBLE – not capable of partial
performance
a. LEGAL INDIVISIBILITY (Ex. Art 1225)
b. CONVENTIONAL INDIVISIBILITY
c. NATURAL INDIVISIBILITY
OBLIGATIONS WITH A PENAL
CLAUSE
A penal clause is attached to an obligation to
ensure compliance (PRINCIPAL)
It is an ACCESORY undertaking
Meant to punish a debtor for non-compliance
Debtor assumes greater responsibility in case of
breach
 OBLIGATIONS WITH A PENAL
CLAUSE
KINDS
AS TO ORIGIN
1. LEGAL
2. CONVENTIONAL
AS TO PURPOSE
1. COMPENSATORY – takes the place of damages
2. PUNITIVE – as punishment for breach
AS TO DEMADABILITY/EFFECT
1. SUBSIDIARY/ALTERNATIVE – only the penalty
can be impoised
2. JOINT/CUMULATIVE – both principal and penal
clause can be enforced
OBLIGATIONS WITH A PENAL
CLAUSE
Penalty is not a substitute for performance.
Debtor cannot choose to perform the penal
clause instead of the principal unless the right is
expressly reserved
Penalty is subsidiary. Creditor cannot demand
its fulfilment if primary/principal obligation has
been complied with
Proof of actual damages suffered by the creditor
is NOT necessary in order that the penalty may
be demanded
OBLIGATIONS WITH A PENAL
CLAUSE
Courts can reduce the penalty if (1) there has
been partial performance, (2) irregular
performance or (4) when the penalty agreed
upon is iniquitous or unconscionable
The nullity of the penal clause does not carry
with it that of the principal obligation.
The nullity of the principal obligation carries
with it that of the penal clause
 REFERENCES
Black's law dictionary (8th ed) (2007). St. Paul,
MN. : West Pub.
De Leon, Hector S. (2010). (5TH ed). Comments
and cases on obligation and contract.. Manila: Rex
Jurado, Desiderio P. (2010). (12th ed.). Comments
and jurisprudence on obligations and contracts.
Manila: Rex,
Salao, Ernesto C. Law Dictionary.(2009) Manila:
Rex
Suarez,, Carlos B. (2011) (2001 Ed)The law on
obligations and contracts: for business students.
Manila: GIC