Republic of the Philippines
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES-BATAAN BRANCH
Mariveles, Bataan
BUSINESS LAW (OBLIGATIONS AND CONTRACTS)
LAW 20053
Module # 6
Overview
This Module is the continuation of the discussion of Extinguishment of
Obligations, particularly the modes Confusion or Merger of Rights,
Compensation, and Novation.
Module Objective
At the end of this module, you are expected to:
1. Have clear understanding of the several modes
extinguishment of obligations as discussed in this module;
and
2. Give concrete examples of the said modes of extinguishment
of obligations.
Reading Assignment
Confusion or Merger of Rights (Art. 1275-1277)
Compensation (Art. 1278-1290)
Novation (Art. 1291-1304)
Pages 264-305, Recommended Book
Questionnaire
Define. (10 pts)
1. Confusion
2. Compensation
3. Facultative Compensation
4. Novation
5. Real Novation
6. Personal Novation
7. Substitution
8. Subrogation
9. Expromision
10.Delegacion
Enumerate. (20 pts.)
1. Requisites of Confusion. (2 pts.)
2. Requisites of Compensation. (5 pts.)
3. Differences between Compensation and Confusion (3 pts.)
4. Requisites of Novation. (4 pts.)
5. Dual Function of Novation. (2 pts.)
6. Three cases of Legal Subrogation. (4 pts.)
Essay. (30 pts.)
1. Give the effect of merger when it takes place:
a. In the person of the principal debtor or creditor. Give an
example. Explain. (5 pts)
b. In the person of the guarantor of the principal obligation. Give
an example. Explain. (5 pts.)
2. Anna owes Becka PhP 1,000 with Caroline as Guarantor. Becka, in turn
owes Caroline Php 1,000. Becka argues that since Caroline, the
guarantor owes him the same amount the former owes Anna, Becka
already settled the debt through compensation. Is Becka correct?
Explain. (5 pts.)
3. Maricar borrowed PhP 100,000 from ABS Bank. Despite demands for
payment after the loan fell due, Maricar failed to pay. Maricar,
however, has a savings deposit of PhP 150,000 with ABS Bank. Has
the bank the right to apply the deposit to the payment of Maricar’s debt?
Explain (5 pts.)
4. Give an example of Expromision. Explain. (5 pts.)
5. Give an example of Delegacion. Explain. (5 pts.)
