CHAPTER 1 The enumeration by the law is exclusive; hence, there is

GENERAL PROVISIONS no obligation as defi ned in Article 1156, if its source is

not any of those enumerated.3
Art. 1156. An obligation is a juridical necessity to give,
to do or not to do. (n) Art. 1158. Obligations derived from law are not
presumed. Only those expressly determined in this Code
Art. 1157. Obligations arise from:
or in special laws are demandable, and shall be
(1) Law; regulated by the precepts of the law which establishes
them; and as to what has not been foreseen, by the
(2) Contracts; provisions of this Book
(3) Quasi-contracts; Legal obligations.
(4) Acts or omissions punished by law; and Article 1158 refers to legal obligations or obligations
(5) Quasi-delicts. (1089a) arising from law. They are not presumed because they
are considered a burden upon the obligor. They are the
Sources of obligations. exception, not the rule. To be demandable, they must
An obligation imposed on a person and the be clearly set forth in the law, i.e., the Civil Code or
corresponding right granted to another must be rooted special laws.
in at least any of the following sources: Art. 1159. Obligations arising from contracts have the
(1) Law. — when they are imposed by the law itself, force of law between the contracting parties and should
e.g., obligation to pay taxes; obligation to support one’s be complied with in good faith. (1091a)
family (see Art. 195, Family Code.); A contract is a meeting of minds between two persons
(2) Contracts. — when they arise from the stipulation whereby one binds himself, with respect to the other, to
of the parties (Art. 1306.), e.g., the obligation to repay a give something or to render some service. (Art. 1305.) It
loan by virtue of an agreement; is the formal expression by the parties of their rights
and obligations they have agreed upon with respect to
(3) Quasi-contracts. — when they arise from lawful, each other.
voluntary and unilateral acts and which are enforceable
to the end that no one shall be unjustly enriched or (1) Binding force. — Obligations arising from
benefi ted at the expense of another (Art. 2142.), e.g., contracts are governed primarily by the
the obligation to return money paid by mistake or which agreement of the contracting parties. Once
is not due. (Art. 2154.) In a sense, these obligations may perfected, valid contracts have the force of law
be considered as arising from law; between the parties who are bound to comply
therewith in good faith, and neither one may
(4) Crimes or acts or omissions punished by law. — without the consent of the other, renege
when they arise from civil liability which is the therefrom. (Tiu Peck vs. Court of Appeals, 221
consequence of a criminal offense (Art. 1161.), e.g., the SCRA 618 [1993].) In characterizing contracts as
obligation of a thief to return the car stolen by him; the having the force of law between the parties, the
duty of a killer to indemnify the heirs of his victim law stresses the obligatory nature of a binding
and valid agreement (William Golangco
(5) Quasi-delicts or torts. — when they arise from
Construction Corporation vs. Phil. Commercial
damage caused to another through an act or omission,
International Bank, 485 SCRA 293 [2006].),
there being fault or negligence, but no contractual
absent any allegation that it is contrary to law,
relation exists between the parties (Art. 2176.), e.g., the
morals, good customs, public order, or public
obligation of the head of a family that lives in a building
policy. (Art. 1306.)
or a part thereof to answer for damages caused by
(2) Requirements of a valid contract. — As a
things thrown or falling from the same (Art. 2193.); the
source of obligation, a contract must be valid
obligation of the possessor of an animal to pay for the
and enforceable. (see Art. 1403.) A contract is
damage which it may have caused. (Art. 2183.)
valid (assuming all the essential elements are
 present, Art. 1318.) if it is not contrary to law, of their respective undertakings but the parties
morals, good customs, public order, and public did not contemplate that the same could be
policy. It is invalid or void if it is contrary to law, made indefi nitely. (Villamor vs. Court of
morals, good customs, public order, or public Appeals, 202 SCRA 607 [1991].) The mere failure
policy. (Art. 1306; see Phoenix Assurance Co., of a party to respond to a demand letter in the
Ltd. vs. U.S. Lines, 22 SCRA 675 [1968].) In the absence of other circumstances making an
eyes of the law, a void contract does not exist. answer requisite or natural does not constitute
(Art. 1409.) Consequently, no obligations will an implied admission of liability. (Phil. First
arise. Insurance Co., Inc. vs. Wallen Phils. Shipping,
(3) Where contract requires approval by the Inc., 582 SCRA 457 [2009].) (6) Preservation of
government. — Where a contract is required to interest of promisee. — A breach upon the
be verifi ed and approved by the government contract confers upon the injured party a valid
before it can take effect (e.g., contract for cause for recovering that which may have been
overseas employment must be approved by the lost or suffered. The remedy serves to preserve
Philippine Overseas Employment Administration the interest of the promisee of having the
[POEA] under Art. 21[c] of the Labor Code), such benefi t of his bargain, or in being reimbursed
contract becomes the law between the for loss caused by reliance on the contract, or in
contracting parties only when approved, and having restored to him any benefi t that he has
where there is nothing in it which is contrary to conferred on the other party.
law, etc., its validity must be sustained. (Intetrod
Art. 1160. Obligations derived from quasi-contracts shall
Maritime, Inc. vs. National Labor Relations
be subject to the provisions of Chapter 1, Title XVII, of
Commission, 198 SCRA 318 [1991].)
this Book. (n)
(4) Compliance in good faith. — It means
compliance or performance in accordance with A quasi-contract is that juridical relation resulting from
the stipulations or terms of the contract or certain lawful, voluntary and unilateral acts by virtue of
agreement.9 Good faith and fair dealing must which the parties become bound to each other to the
be observed to prevent one party from taking end that no one will be unjustly enriched or benefi ted
unfair advantage over the other. Evasion by a at the expense of another. (Art. 2142.)
party of legitimate obligations after receiving
the benefi ts under the contract would It is not, properly, a contract at all. In a contract, there is
constitute unjust enrichment on his part. (see a meeting of the minds or consent; the parties must
Royal Lines, Inc. vs. Court of Appeals, 143 SCRA have deliberately entered into a formal agreement. In a
608 [1986].) quasi-contract, there is no consent but the same is
(5) Liability for breach of contract. — Although the supplied by fi ction of law. In other words, the law
contract imposes no penalty for its violation, a considers the parties as having entered into a contract,
party cannot breach it with impunity. Our law irrespective of their intention, to prevent injustice.
on contracts recognizes the principle that Corollarily, if one who claims having enriched somebody
actionable injury inheres in every contractual has done so pursuant to a contract with a third party, his
breach. (Boysaw vs. Interphil Promotions, Inc., cause of action should be against the latter, who, in
148 SCRA 635 [1987]; see Arts. 1170, 1191.) turn, Art. 1160 GENERAL PROVISIONS 20 OBLIGATIONS
Interest may, in the discretion of the court, on may, if there is any ground therefor, seek relief against
equitable grounds, be allowed upon damages the party benefi ted.
awarded for breach of contract. (see Art. 2210.) Kinds of quasi-contracts.
The failure of either party to a contract to
demand performance of the obligation of the The principal kinds of quasi-contracts are negotiorum
other for an unreasonable length of time may gestio and solutio indebiti.
render the contract ineffective where the 1.Negotiorum gestio is the voluntary management of
contract does not provide for the period within the property or affairs of another without the
which the parties may demand the performance knowledge or consent of the latter
2. Solutio indebiti is the juridical relation which is Scope of civil liability
created when something is received when there is no
The extent of the civil liability arising from crimes is
right to demand it and it was unduly delivered through
governed by the Revised Penal Code and the Civil
mistake. (Art. 2154.) The obligation to pay money
Code.18 This civil liability includes:
mistakenly paid arises from the moment said payment
was made, and not from the time the payee admits the (1) Restitution;
obligation to reimburse.
(2) Reparation for the damage caused; and
Art. 1161. Civil obligations arising from criminal offenses
shall be governed by the penal laws, subject to the (3) Indemnification for consequential damages
provisions of Article 2177, and of the pertinent Art. 1162. Obligations derived from quasi-delicts shall
provisions of Chapter 2, Preliminary Title, on Human be governed by the provisions of Chapter 2, Title XVII of
Relations, and of Title XVIII of this Book, regulating this Book, and by special laws.
damages
Requisites of quasi-delict. Before a person can be held
Civil liability arising from crimes or delicts. This article liable for quasi-delict, the following requisites must be
deals with civil liability arising from crimes or delicts. (1) present:
The commission of an offense has a two-pronged effect:
one, on the public as it breaches the social order and (1) There must be an act or omission by the defendant;
the other, upon the private victim as it causes personal (2) There must be fault or negligence of the defendant;
sufferings or injury, each of which is addressed,
respectively, by the imposition of heavier punishment (3) There must be damage caused to the plaintiff;
on the accused and by an award of additional damages
(4) There must be a direct relation or connection of
to the victim.
cause and effect between the act or omission and the
Oftentimes, the commission of a crime causes not only damage;
moral evil but also material damage. From this principle,
(5) There is no pre-existing contractual relation between
the rule has been established that every person
the parties.
criminally liable for a felony is also civilly liable.
CHAPTER 2
In crimes, however, which cause no material damage
(like contempt, insults to person in authority, gambling, NATURE AND EFFECT OF OBLIGATIONS
violations of traffi c regulations, etc.), there is no civil
Art. 1163. Every person obliged to give something is
liability to be enforced. But a person not criminally
also obliged to take care of it with the proper diligence
responsible may still be liable civilly.
of a good father of a family, unless the law or the
Reservation of right to recover civil liability. stipulation of the parties requires another standard of
care.
Under the present rule, only the civil liability arising
from the offense charged is deemed instituted with the (1) A determinate thing is identified by its individuality.
criminal action unless the offended party waives the The debtor cannot substitute it with another although
civil action, reserves his right to institute it separately, or the latter is of the same kind and quality without the
institutes the civil action prior to the criminal action consent of the creditor.

(2) A generic thing is identified only by its specie. The

debtor can give anything of the same class as long as it
is of the same kind.