Articles on Philippine Obligation and Contracts

7/17/2019 Articles on Philippine Obligation and Contracts

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The Law on Obligations and Contracts



Introduction to Law:

-Law means any rule of action or any system

of uniformity.

- Divisions of Law:a. Law which is promulgated & enforced

by the state

b. Law which is not promulgated andenforced by the state.



- Divine Law- the law of religion and faithwhich concerns itself with the concept of sin.

- Natural Law - the divine inspiration in man ofthe sense of justice, fairness and righteousness,not b divine revelation or formal promulgation,

but b internal dictates of reason alone.



- !oral Law - the totalit of the norms of goodand right conduct growing out of the collectivesense of right and wrong of ever communit.

- "hsical Law - uniformities of actions andorders of se#uence which are the phsical phenomena that we sense and feel.



$tate Law- the law that is promulgated and enforced b thestate.- also called positive law, municipal law, civil law,or imperative law



Characteristics of law%&. 't is a rule of conduct.

(. 't is obligator.). 't is promulgated b legitimate authorit.*. 't is of common observance and benefit.



Necessit and +unctions of Law%

&. hat would life be without law(. hat does law do). hat is our dut as members of societ



$ources of Law%

a. Constitution b. Legislation

c. dministrative/ 01ecutive orders,regulations and rulings.d. 2udicial decisions or jurisprudence

e. Customf. Other sources



Classifications of Law%

&. s to purpose$ubstantive Law vs. djective Law

(. s to subject matter"ublic Law vs. "rivate Law



Law on O3L'4T'ON$ and CONT5CT$

- the bod of rules which deals with the nature andsources of obligations and the rights and dutiesarising from agreements and the particularcontracts.



Civil Code of the Philippines

- the law on obligations and contracts is found in

5epublic ct No.)67 8 C'9'L COD0 O+ T:0":'L'""'N0$;

- 3OO< '9 deals with obligations and contracts



T'TL0 ' = O3L'4T'ON$

rticle &&>7. n obligation is a juridicalnecessit to give, to do, or not to do.

2?5'D'CL N0C0$$'T@ = juridical tieAconnotes that in case of noncompliance, there

will be legal sanctions.



n obligation is nothing more than the dut of a person 8obligor; to satisf a specific demandableclaim of another person 8obligee; which, if

breached, is enforceable in court.

contract necessaril gives rise to an obligation but an obligation does not alwas need to have acontract.



0lements of an Obligation&. ctive subject 8 Obligee/ Creditor; - one inwhose favor the obligation is constituted

(. "assive subject 8 Obligor/ Debtor; - one whohas the dut of giving, doing or not doing.

). Object 8"restation; - the conduct which has to be observed b the debtor/obligor



"50$TT'ON 8Object;&.TO 4'90 = deliver of a thing to the creditor

8in sale, deposit, pledge, donation;A

(.TO DO = covers all Binds of worBs or services8contract for professional services;A).NOT TO DO = consists of refraining from

doing some acts 8in following rules andregulations;.



<'ND$ O+ O3L'4T'ON$%+rom the viewpoint of subject matter -

8a;50L O3L'4T'ON = the obligation to give8b;"05$ONL O3L'4T'ON = the obligation

to do or not to do 8e.g. the dut to paint a house,or to refrain from committing a nuisance;- POSITIVE OR AFFIRMATIVE

OBLIGATION – the obligation to give or to do

-NEGATIVE OBLIGATION – the obligation

not to do !hi"h nat#rall$ inl#de% not to give&



rticle &&>. Obligation arises from8&; lawA

8(; contractsA8); #uasi-contractsA8*; acts or omissions punished b lawA

8>; #uasi-delicts.



8&; L = imposed b law itselfA must bee1pressl or impliedl set forth and cannot be

presumed

8(; CONT5CT$ = arise from stipulations of

the parties% meeting of the minds / formalagreement

); ?$'-CONT5CT$= arise from lawful,voluntar and unilateral acts and which areenforceable to the end that no one shall beunjustl enriched or benefited at the e1pense of

another.



- ( Binds of #uasi-contracts%

a.Negotiorum gestio - unauthoriEed managementAThis taBes place when a person voluntaril taBes

charge of anotherFs abandoned business or propert without the ownerFs authorit.

b.$olutio indebiti - undue pamentA This taBes place when something is received when there isno right to demand it, and it was undul deliveredthru mistaBe



8*; D0L'CT$ = arise from civil liabilit which isthe conse#uence of a criminal offense.

8>; ?$'-D0L'CT$ / TO5T$ = arise fromdamage caused to another through an act or

omission, there being no fault or negligence, but

no contractual relation e1ists between the parties



rticle &&>6. Obligations from law are not presumed. Onl those 8&; e1pressl determinedin this code or 8(; in special laws are

demandable, and shall be regulated b the precepts of the law which establishes themA andas to what has not been foreseen, b the provisions of this code.



rticle &&>G. Obligations arising from contractshave the force of law between the contracting

parties and should be complied with in goodfaith.



rticle &&7H. Obligations derived from #uasi-

contracts shall be subject to the provisions ofchapter &, title & of this booB.

rticle &&7&. Civil obligations arising fromcriminal offenses shall be governed b the penallaws, subject to the provisions of rticle (&,

and of the pertinent provisions of Chapter (,"reliminar in :uman 5elations, and of Title &6of this booB, regulating damages.



rticle &&7(. Obligations derived from #uasi-delicts shall be governed b the provisions of

chapter (, title & of this booB, and b speciallaws.





C:"T05 ( NT?50 ND 0++0CT O+ O3L'4T'ON$

rticle &&7). 0ver person obliged to givesomething is also obliged to taBe care of it withthe proper diligence of a good father of a

famil, unless the law or the stipulation of the

parties re#uires another standard of care.



D?T'0$ O+ D03TO5%

"reserve or taBe care of the things due.

D'L'40NC0 O+ 4OOD +T:05 = a good

father does not abandon his famil, he is alwasread to provide and protect his familA ordinarcare which an average and reasonabl prudent

man would do.



NOT:05 $TND5D O+ C50 =e1traordinar diligence provided in the

stipulation of parties.

+CTO5$ TO 30 CON$'D050D = diligencedepends on the nature of obligation and

corresponds with the circumstances of the person, time, and place.



Deliver the fruits of a thingDeliver the accessions/accessories

Deliver the thing itself nswer for damages in case of non-

fulfillment or breach



rticle &&7*. The creditor has a right to thefruits of the thing from the time the obligation

to deliver it arises. :owever, he shall ac#uireno real right over it until the same has beendelivered to him.



50L 5'4:T 8jus in re; = right pertaining to person over a specific thing, without a passivesubject individuall determined against whom

such right ma be personall enforced.-a right enforceable against the whole world



"05$ONL 5'4:T 8jus ad rem; = a right pertaining to a person to demand from another,

as a definite passive subject, the fulfillment of a prestation to give, to do or not to do. Ia right enforceable onl against a definite personor group of persons.



+5?'T$%&.NT?5L = spontaneous products of the soil,

the oung and other products of animalsA(.'ND?$T5'L = produced b lands of ancultivation or laborA).C'9'L = those derived b virtue of juridicalrelation.



rt.&&7>. hen what is to be delivered is a

determinate thing, the creditor J ma compel the debtor to maBe deliver. 'f thething is indeterminate or generic, he ma asB that

the obligation be complied with at the e1pense ofthe debtor. 'f the obligor delas or has promised todeliver the same ting to two or more persons whodo not have the same interest, he shall beresponsible for an fortuitous event until he haseffected the deliver.



rt. &&7>KThis provision applies to an obligation to give.



D0T05!'NT0 T:'N4/$"0C'+'C T:'N4something which is susceptible of particular

designation or specificationAobligation is e1tinguished if the thing is lost

due to fortuitous events.rticle &*7H% a thing is determinate when it is

particularl designated and phsicall

segregated from all others of the same class.



'ND0T05!'NT0 T:'N4 /40N05'C T:'N4something that has reference onl to a class or

genusAobligation to deliver is not so e1tinguished b

fortuitous events.



50!0D'0$ +O5 +'L?50 O+ D0L'905@8determinate thing;&.Complaint for specific performance = an action

to compel the fulfillment of the obligation.(.Complaint for rescission of the obligation =action to rescind

).Complaint for damages = action to claim forcompensation of damages suffered



s a general rule, no person shall beresponsible for those events which could not beforeseen, or which, though foreseen, are

inevitable, e1cept%&.in cases e1pressl specified b the law(.when it is stipulated b the parties).when the nature of the obligation re#uires

assumption of risB



n indeterminate thing cannot be object of

destruction b a fortuitous event because genusnever perishes.



rticle &&77. The obligation to give a determinate

thing includes that of delivering all its accessionsand accessories, even though the ma not have been mentioned.



CC0$$'ON$ = fruits of the thing or additions to

or improvements upon the principal-those which are naturall or artificiall attached tothe thing

E'(tree% on a land) air"onditioner in a "ar CC0$$O5'0$ = things included with the principal for the latterFs embellishment, better use,or completion E'( *e$ o+ a ho#%e) +ra,e o+ a i"t#re



rticle &&7. 'f a person obliged to do somethingfails to do it, the same shall be e1ecuted at his cost.This same rule shall be observed if he does it in

contravention of the tenor of the obligation J itma be decreed that what has been poorl done beundone.

K Thi% rovi%ion alie% to an obligation to do(



T:500 $'T?T'ON$%a;DebtorFs failure to perform an obligation

creditor ma do the obligation, or b another, atthe e1pense of the debtorArecover damages





rticle &&76. hen the obligation consists in NOT DO'N4 and the obligor does what has beenforbidden him, it shall also be undone at his

e1pense.

K Thi% rovi%ion alie% to an obligation not to

do(



rticle &&7G. Those obliged to deliver or to dosomething incur in dela from the time the obligee judiciall or e1trajudiciall demands from them the

fulfillment of their obligation.:owever, the demand b the creditor shall not benecessar in order that dela ma e1ists%

&.hen the law or obligation so e1pressl declaresA



(.hen from the nature of the contract, time us theessence and motivating factor for its establishmentA

).hen demand would be useless 8prestation isimpossible;A'n reciprocal obligations, from the moment one ofthe parties fulfills his obligationAhen the debtor admits he is in default



O5D'N5@ D0L@ = mere failure to perform anobligation at the appointed time.L04L D0L@ 8D0+?LT; = tantamount tonon-fulfillment of the obligation and arises afteran e1trajudicial or judicial demand was madeupon the debtor.



<'ND$ O+ D0+?LT%a;!O5 $OL90ND' = dela on the part of thedebtor to fulfill his obligationA

50?'$'T0$%&.failure of the obligor to perform obligation on theDT0 agreed uponA(.demand 8judicial/e1trajudicial; b the creditorA).failure to compl with such demand



0++0CT$%

&;debtor = liable for damages and interests(;debtor = liable for the loss of a thing due to afortuitous event

<'ND$%&;mora solvendi e1 re = default in real obligations8to give;

(;mora solvendi e1 persona = default in personalobligations 8to do;



b;!O5 CC'"'0ND' = dela on the part of thecreditor to accept the performance of the obligationA0ffects%

&.creditor = liable for damages(.creditor = bears the risB of loss of the thing).debtor = not liable for interest from the time ofcreditorFs dela

*.debtor = release himself from the obligation



c;CO!"0N$T'O !O50 = dela of the obligors

in reciprocal obligation.0ffect% the default of one compensates the

default of the otherA their respective liabilities shall

be offset e#uitable.

Default / Dela in negative obligation is not

possible. 8'n negative obligation, onl fulfillmentand violation are possible;



rticle &&H. Those who in the performance oftheir obligations are guilt of fraud, negligence,or dela, and those who in an mannercontravene the tenor thereof, are liable fordamages.



+5?D 8dolo; = deliberate intentional evasionof the faithful fulfillment of an obligationA N04L'40NC0 8culpa or fault; = voluntar actor omission of diligence, there being no malice,which prevents the normal fulfillment of anobligationA



D0L@ 8mora; = default or tardiness in the performance of an obligation after it has been dueand demandableA

CONT590NT'ON O+ T05!$ O+O3L'4T'ON 8violation;= violation of terms andconditions stipulated in the obligationA this must

not be due to a fortuitous event.



rticle &&&. 5esponsibilit arising from fraudis demandable in all obligations. n waiver ofan action for future fraud is void.



rticle &&(. 5esponsibilit arising fromnegligence in the performance of ever Bind ofobligation is also demandable, but suchliabilit ma be regulated b the courts,according to circumstances.



CourtFs discretion because%8a;negligence depends upon the circumstances

of a case = good or bad faith of the obligor ma be considered as well as the conduct ormisconduct of the obligeeA

8b;it is not as serious as fraud.



Negligence = lacB of foresight or Bnowledge'mprudence = lacB of sBill or precaution

T0$T O+ N04L'40NC0.id the de+endant) in doing the alleged negligent a"t)

#%e the rea%onable "are and "a#tion !hi"h an

ordinar$ r#dent ,an !o#ld have #%ed in the %a,e

%it#ation/



ricle &&). The fault or negligence of the obligorconsists in the omission of that diligence which isre#uired b the nature of the obligation andcorresponds with the circumstances of the persons,

of he time and of the placeJ 'f the law or contractdoes not state the diligence which is to be observedin the performance, that which is e1pected if a good

father of a famil shall be re#uired.



D'L'40NC0 = the attention and care re#uired ofa person in a given situation and is opposite ofnegligence.

N04L'40NC0 = consists in the omission of thatdiligence which is re#uired b the nature of the particular obligation and corresponds with the

circumstances of the persons, of the time, and ofthe place.



rticle &&*. 01cept in cases e1pressl specified b the law, or when it is otherwise declared bstipulation, or when the nature of the obligation

re#uires the assumption of risB, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were

inevitable.



+O5T?'TO?$ 090NT = an occurrence orhappening which could not be foreseen or even ifforeseen, is inevitableA absolutel independent of

human interventionA act of 4od.

+O5C0 !20?50 - an event caused b the

legitimate or illegitimate acts of persons otherthan the obligorA there is human intervention.



rticle &&>. ?surious transactions shall begoverned b special laws.

?$?5@ = contracting for or receiving interest ine1cess of the amount allowed b law for the loan

or use of mone, goods, etc.



rticle &&7. The receipt of the principal b thecreditor without reservation with respect to theinterest, shall give rise to the presumption that said

interest has been paid.The receipt of a later installment of a debt withoutreservation as to prior installments, shall liBewise

raise the presumption that such installments have been paid.



These are mere presumptions.To be sure = write the interest and the dates

covered b such pament in the receipt.



rticle &&. The creditors, after having pursuedthe propert in possession of the debtor to satisftheir claims, ma e1ercise all the rights and bring

all the actions of the latter for the same purpose,save those which are inherent in his personA thema also impugn the acts which the debtor ma

have done to defraud them.



50!0D'0$ 9'L3L0 TO C50D'TO5$ +O5T:0 $T'$+CT'ON O+ T:0'5 CL'!$%&.01act fulfillment with right to damages

(.01haustion of the debtorFs properties still in his possession = writ of attachment 8before judgment;or writ of e1ecution 8for final judgment not et

e1ecuted;



).CC'ON $?35O4TO5' = an action wherethe creditor whose claims had not been fullsatisfied, ma go after the debtors 8)rd person; of

the defendant debtor.*.CC'ON "?L'N = an action where thecreditor files an action in court for the

50$C'$$'ON of acts or contracts entered into bthe debtor designed to defraud the former.



rticle &&6. $ubject to the laws, all rightsac#uired in virtue of an obligation aretransmissible, if there has been no stipulation to

the contrar.



0MC0"T'ON$%a;Those not transmissible b their nature liBe purel

personal rightsA b;Those not transmissible b provision of lawA

c;Those not transmissible b stipulation of parties.



C:"T05 )

D'++050NT <'ND$ O+ O3L'4T'ON$

$ection & = "ure and Conditional Obligations



rticle &&G. 0ver obligation whose performancedoes not depend upon a future or uncertain event,or upon a past event unBnown to the parties, isdemandable at once.0ver obligation which contains a resolutorcondition shall also be demandable, without prejudice to the effects of the happening of the

event.



"?50 O3L'4T'ON = an obligation which doesnot contain an condition or term upon which the

fulfillment is made to dependA immediateldemandable b the creditors and the debtor cannot be e1cused from not compling with his prestation.



COND'T'ONL O3L'4T'ON = an obligation

which depends upon a future or uncertain event, orupon a past event unBnown to the contracting parties.



= an obligation subject to a condition.a;uspensive !bligation = its fulfillment gives riseto an obligationA the demandabilit of the obligation

or the effectivit of the contract can taBe place onlafter the condition has been fulfilled. b;"esolutory !bligation = its happening

e1tinguishes the obligation which is alread e1istingA



rticle &&6H. hen the debtor binds himself to pa when his means permit him to do so, theobligation shall be deemed to be one with a period, subject to the provisions of rticle &&G.



"05'OD = a future and certain event upon the

arrival of which, the obligation subject to iteither arises or is e1tinguished.



'ND'CT'ON$ O+ T05! O5 "05'OD%

hen the debtor binds himself to pa=a.when his means permit him to do so b.little b little

c.as soon as possibled.from time to timee.as soon as ' have the mone

f.in partial pamentg.when in the position to pa



rticle &&6&. 'n conditional obligations, theac#uisition of rights, as well as thee1tinguishment or loss of those alread ac#uired,shall depend upon the happening of the eventwhich constitutes the condition.



uspensive Condition = the ac#uisition of rights bthe creditor depends upon the happening of theevent which constitutes the conditionA if such

condition does not taBe place, it would be as of theconditional obligation had never e1isted.8e.g. promise to give a car after graduating from law

school as cum laude;



"esolutory Condition = the rights and obligationsalread e1isting are under threat of e1tinction uponthe happening or fulfillment of such condition.

8e.g. donation b reason of marriage = thecelebration of marriage is a resolutor conditionA ifthe marriage did not push through, the donation

ma be revoBed;



rticle &&6(. hen the fulfillment of the conditiondepends upon the sole will of the debtor, the

conditional obligation shall be void. 'f it dependsupon chance or upon the will of a third person, theobligation shall taBe effect in conformit with the provisions of this Code.



) <'ND$ O+ COND'T'ON$ ?ND05 T:'$5T'CL0%&."OT0$TT'90 = a suspensive condition which

depends upon the will of one of the contracting parties if at the sole will of the debtor, it is voidAif at the creditorFs, still valid. this is to prevent theestablishment of illusor obligations.



(.C$?L = the condition depends upon chanceor the will of a third personA8e.g. cellphonewarrant;).!'M0D = the condition depends partl upon thewill of the parties and partl upon chance or thewill of a third personA 8e1ample ni tt. De

ChaveE% passing the bar;



rticle &&6). 'mpossible conditions, those contrarto good customs or public polic and those prohibited b law shall annul the obligation which

depends upon them. 'f the obligation is divisible,that part thereof which is not affected b theimpossible or unlawful condition shall be valid.The condition not to do an impossible thing shall beconsidered as not having been agreed upon.



"O$$'3L0 COND'T'ON = if it is capable of

realiEation or actualiEation according to nature, law, public polic or good customs.

( <'ND$ O+ '!"O$$'3L0 COND'T'ON$%



( <'ND$ O+ '!"O$$'3L0 COND'T'ON$%&."hsicall 'mpossible = cannot e1ist or cannot be

done in its natureA(.Legall 'mpossible = contrar to law, goodcustoms, or public polic.

Onl the affected obligation is void, if theobligation is divisible, and the part thereof notaffected b the impossible condition is valid.

Onl the condition is void if there is alread a pre-e1isting obligation and it does not depend upon the

fulfillment of the condition which is impossible.



rticle &&6*. The condition that some eventhappen at a determinate time shall e1tinguish the

obligation as soon as the time e1pires or if it has become indubitable that the event will not taBe place.



"ositive condition = refers to the fulfillment of anevent or performance of an act

Negative condition = refers to the non-fulfillmentor non-performance of an act.



"O$'T'90 $?$"0N$'90 COND'T'ONThe obligation is e1tinguished%

&.s soon as the T'!0 0M"'50$ without the eventtaBing placeA(.s soon as it has become certain that the 090NT

'LL NOT T<0 "LC0 although the timespecified has not et e1pired.



rticle &&6>. The condition that some event will nothappen at a determinate time shall render theobligation effective from the moment the timeindicated has elapsed, or if it has become evident thatthe event cannot occur.'f no time has been fi1ed, the condition shall bedeemed fulfilled at such time as ma have probabl

been contemplated, bearing in mind the nature of theobligation.



The obligation shall become effective and binding%a;+rom the moment the time indicated has elapsedwithout the event taBing placeAb;+rom the moment it has become evident that theevent cannot occur, although the time indicated hasnot et elapsed.



rticle &&67. The condition shall be deemedfulfilled when the obligor voluntaril prevents its

fulfillment.Thi% rovi%ion %ea0% o+ the .O1TRINE OF

1ONSTR21TIVE F2LFILLMENT



50?'$'T0$%&.The condition is $?$"0N$'90A

(.The obligor CT?LL@ "5090NT$ thefulfillment of the conditionA).:e acts 9OL?NT5'L@.



rticle &&6. The effects of a conditional obligation togive, once the condition has been fulfilled, shallretroact to the da of the constitution of the obligation.

Nevertheless, when the obligation imposes reciprocalprestations upon the parties, the fruits and interestsduring the pendenc of the condition shall be deemed

to have been mutuall compensated.



'f the obligation is unilateral, the debtor shallappropriate the fruits and interests received, unlessfrom the nature and circumstances of the obligation itshould be inferred that the intention of the personconstituting the same was different.'n obligations to do and not to do, the courts shalldetermine, in each case, the retroactive effect of the

condition that has been complied with.



rticle &&66. The creditor ma, before thefulfillment of the condition, bring the appropriateactions for the preservation of his right.

The debtor ma recover what during the same timehe has paid b mistaBe in case of a suspensivecondition.

ctions available to the creditor%



ctions available to the creditor%ction for prohibition restraining the alienation

of the thing pending the happening of thesuspensive conditionA

ction to demand securit if the debtor has

become insolventAction to set aside alienations made b the

debtor in fraud of creditorsActions against adverse possessors to interrupt

the running prescriptive period.To have his rights annotated in the registr.



5ights of the D03TO5 = entitled to recover whathas been paid b mistaBe prior to the happening ofthe suspensive condition.



rticle &&6G. hen the conditions have beenimposed with the intention of suspending theefficac of an obligation to give, the following

rules shall be observed in case of the improvement,loss or deterioration of the thing during the pendenc of the condition%



LO$$8&;debtor without fault = obligation is e1tinguished8(;debtor with fault = obligation to pa damages

D0T05'O5T'ON8&;debtor without fault = impairment is to be borne bthe creditor 8(;debtor with fault = creditor chooses% rescission of

obligation, fulfillment, indemnit



'!"5O90!0NT8&;b nature or time = improvement% inure to the

benefit of the creditor 8(;at the e1pense of the debtor = granted to theusufructuar



rticle &&GH. hen the conditions have for their purpose the e1tinguishment of an obligation to give,the parties, upon the fulfillment of said conditions,

shall return to each other what the have received.'n case of the loss, deterioration or improvement ofthe thing, the provisions which, with respect to thedebtor, are laid down in the preceding article shall

be applied to the part who is bound to return.



s for the obligations to do and not to do, the provisions of the second paragraph of rticle&&6 shall be observed as regards the effect of the

e1tinguishment of the obligation.



-5efers to the fulfillment of a resolutor condition.-hen the resolutor condition happened, theobligation is considered as if it did not e1ist.-The parties are bound to return or restore whatever

the have received from each other = reciprocalrestitution-Donation b reason of marriage = if the marriage

does not happen, such donation should be returnedto the donor.



rticle &&G&. The power to rescind obligations isimplied in reciprocal ones, in case one of theobligors should not compl with what is incumbent

upon him.The injured part ma choose between thefulfillment and the rescission of the obligation, with

the pament of damages in either case.



:e ma also seeB rescission, even after he has chosenfulfillment, if the latter should become impossible. Thecourt shall decree the rescission claimed, unless there

be just cause authoriEing the fi1ing of a period.This is understood to be without prejudice to the rightsof third persons who have ac#uired the thing, inaccordance with rticles &)6> and &)66 and the!ortgage Law.

50C'"5OCL = each is a debtor and creditor of the



other

50$C'$$'ON = resolution or cancellation of thecontract-pplies onl to reciprocal obligations where two

parties are mutuall debtor and creditor of each otherin the same transaction. The cause must be identical adthe obligations must arise simultaneousl.-The part who can demand rescission should be the

part who is read, willing, and able to compl withhis own obligations while the other is not capable toperform his own.



50!0D'0$%

&.$pecific performance or fulfillment of obligationwith damagesA(.5escission of contract with damages.



0ffect of rescission% the parties must surrenderwhatever the have received from the other, and theobligation to pa is e1tinguished.

'f there is an e1press stipulation of automaticrescission between parties = such resolution shall taBeplace onl after the creditor has notified the debtor ofhis choice of rescission subject to judicial scrutin.



rticle&&G(. 'n case both parties have committed a breach of the obligation, the liabilit of the firstinfractor shall be e#uitabl tempered b the courts.

'f it cannot be determined which of the parties firstviolated the contract, the same shall be deemede1tinguished, and each shall bear his own damages.



+'5$T 'N+5CTO5 <NON

The liabilit of the first infractor should bee#uitabl reduced. = e#uitabl offset each otherFsdamages.

+'5$T 'N+5CTO5 CNNOT 30D0T05!'N0D

The court shall declare the e1tinguishment of the

obligation and each shall bear his own damages.

Documents

Articles on Philippine Obligation and Contracts