SCHOOL OF ACCOUNTANCY, MANAGEMENT. COMPUTING AND INFORMATION STUDIES.

SAINT LOUIS
UNIVERSITY MARYHEIGHTS CAMPUS
DEPARTMENT OF BUSINESS LAWS AND TAXATION

THE LAW ON OBLIGATIONS AND CONTRACTS

OBJECTIVES OF THE SCHOOL

We envision the School of Accountancy and Business Management as the Center of Excellence for Business and Management Education
through the development of reflective, competent and critical business professionals, anchored in Christian values to serve society.

We help our students redefine their performance and enhance their potentials through business development, scientific technology and
techniques, and supportive services, so that they can meet and respond proactively to the fast changing local and international business
environment.

Christian Spirit. To inculcate and strengthen the ethical values and character among our faculty and business students in the practice of
their professions and lead to maturity and develop responsibility, integrity and humane attitude towards others.

Creativity. To equip the faculty and students with a general framework of critical thinking in evaluating and dealing with relevant current
business issues and concerns and sustain a culture of research, critical inquiry and lifelong learning that will contribute to the socio-economic well-
being of the community

Competence. To promote academic excellence in socio-economic education and to keep abreast with new developments and trends in
the business community.

Social Involvement. To promote active involvement, holistic and sustainable community extension programs geared toward improving
the socio-economic conditions and self-reliance of local communities.

I. Descriptive Title: The Law on Obligations and Contracts

II. Course Number: OBLICON
III. Prerequisite Subject/s: Political Science, English 6, Math 3C, Accounting 102, Econ 2, Entrep 1, Finman 1,
Management 1 and Marketing 1

IV. Course Description: OBLICON is the first Business Law subject that a student must finish before he takes the
other business Laws. It gives the student a proper introduction to the Law and a feel of
what law is all about. Law 1 refers to Civil Obligations, its nature and effect, the different
kinds of obligations and the modes by which an obligation may be extinguished.

The highlight of OBLICON is the study of Contracts, its different essential elements, and
the different kinds of defective contracts. Law 1 ends with the study of Natural
Obligations.

V. Course Objectives: With lectures, class discussions, quizzes, examination, recitations and researches the
students are expected to acquire and develop the skills and knowledge championed by
the University:

On Competence:
 To introduce to the Business Management Students the concept of Law in
general and business in particular;
 To be able to show to the students practical application of the different
practical applications of the legal provisions of Civil Obligation, in relation to
their future career as business managers, professionals and administrators;
 To make the students understand the Law on Obligations and Contracts;
 To provide the student a good foundation of their succeeding Business Law
subjects which involves a detailed discussion of the different kinds of Contracts
including the rights and obligations of each party to a contract;
On Creativity, Research and Scholarly Work:
 To have a general idea of the different kinds of Contracts that they will later
encounter in their respective fields of work;
 To be able to decipher the differences in forms and substance the several kinds
of Obligations and Contracts;
 To enable the student to prepare a simple form of contract that will conform
with the essential requisites of a valid contract;
On Social Involvement and Christian Spirit:
 To encourage the learners to adopt and remember not only the legal principles
in the subject but also to put into practice the legal ethics that they have
learned on the subject.
 For the students to appreciate the Christian Values based on the principles of
obligations such as but is not limited to the Principles of Solutio Indebitii,
Negotiorum Gestio and other Natural Obligations.
On NCBTS-based objectives:
 Exhibit punctuality in accomplishing expected tasks and functions as a student.
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VI. Course Content:

Content No. of Meetings Strategies

PRELIMS:
I. Introduction to Law 3  Lecture
1. Meaning of Law in General  Recitation
2. General legal concepts of enforceable rights and
obligations
3. General Division of Law
a. Divine Law
b. Natural Law
c. Moral Law
d. Physical Law
e. State Law
4. Characteristics of Law
5. Necessity and Functions of Law
6. Sources of Law
7. Types of Laws
a. Constitutional Laws
b. Administrative Laws and Regulations
c. Criminal Laws
d. Civil Laws
e. Fiscal Laws
f. Mercantile (Commercial Laws)
- Including Laws of Credit
g. Insolvency and Bankruptcy Laws
8. Organization of Courts
9. National Legal System
a. The system of courts and the administration
of justice
b. Case laws and/or legislation and regulations
affecting enterprises
c. Precedents and statutory interpretations
1. Dispute and the use of experts
II. Obligations 1  Lectures
1. General Provisions – Article 1156  Class
a. Concept of Obligations Discussion
b. Requisites or Elements of an obligation  Recitation

2. Sources of Obligations – Articles 1157 – 1162 2  Class

a. Law Discussion
b. Contracts  Recitation
c. Quasi-contracts  Lectures
d. Delicts
e. Quasi-delicts
3. Nature and Effects of Obligations – Articles 1163 – 6  Class
1178 Discussion
a. Specific circumstances affecting obligations in  Recitation
general  Lectures
b. Accessory Obligations in a Real Obligation
i. Diligence of a good father of a family
ii. Kinds of Fruits
iii. Accessions and Accessories
c. Sources of Liabilities for damages
i. Fraud
ii. Default or Legal Delay
iii. Negligence
iv. Breach of Contract
d. Fortuitous Events
e. Presumptions:
i. Disputable
ii. Conclusive
f. Remedies of creditor in a Positive and Negative
Personal Obligations
g. Rights of Creditors
h. Transmissibility of Rights
4. Different Kinds of Obligations 4  Lectures
a. Pure and Conditional Obligation – Art. 1179-1192  Recitation
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i. Suspensive Condition  Class

ii. Resolutory Condition Discussion
b. Obligation with a Period – Art. 1193-1206
MIDTERMS:
c. Alternative Obligation – Art. 1199-1206 5  Lectures
d. Joint and Solidary Obligations – Art. 1207-1222  Recitation
e. Divisible and Indivisible Obligation – Art. 1223-  Class
1225 Discussion
f. Obligations with Penal Clause – Art. 1226-1230
5. Extinguishment of Obligations – Art. 1231 11  Lectures
a. Payment or Performance – Arts. 1223-1261  Recitation
 Payment of Debts in money – Legal  Class
Tender Discussion
 Negotiable Instrument as mode of
payment
 Special Forms of Payment:
 Dation in Payment
 Application of Payment
 Payment by Cession
 Tender of Payment and
Consignation
 Effects of Payment:
 By the Debtor
 By a third person with Interest
 By a third person without
Interest
 By a third person who does not
want to be reimbursed
 Concept of Subrogation

b. Loss of the thing due – Arts. 1262 – 1269 (Genus

non-quam Peruit)
 Effect of Loss in Real Obligation – where
subject matter is specific or when it is
generic
 Importance of default and negligence in
loss of the thing due

c. Condonation or Remission – Arts. 1270 – 1274

d. Confusion or Merger of Rights – Arts. 1275-1277
e. Compensation – Arts. 1278 – 1290
 Kinds of Compensation
a. Conventional
b. Legal
c. Judicial or set-off
f. Novation – Arts. 1291 – 1304
FINALS:
III. CONTRACTS 14  Lectures
1. General Provisions – Arts. 1305-1317  Recitation
a. Constitutional Provision of Contracts  Class Discussion
b. Classification of Contracts  Assignment –
c. Meaning of Stipulation pour autrui student to
submit different
2. Basic Principles of Contracts or Characteristics of Samples of
Contracts Contracts
a. Autonomy of Will – Art. 1306  Drafting of
b. Obligatory Force of Contracts – Art. 1159 Sample
c. Mutuality of Contracts – Art. 1308 & 1310 contracts
d. Consensuality of Contracts – Art. 1305
e. Relativity of Contracts – Art. 1311
3. Persons bound in a Contract
4. Essential Elements/Requisites of Contracts – Art.
1318
a. Consent – Arts. 1319 – 1346
 Capacitated parties
 Requisites
 Vices of Consent
b. Objects of Contracts – Arts. 1347 – 1349
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c. Cause of Contracts – Arts. 1350-1355

 Consideration of contracts
5. General Principles of the Laws of Contracts
a. Formation/Stages of a Contract
b. Contract of contents and terms, including
exclusion clauses
c. Discharge of a contract
d. Remedies for failure to perform the terms of
the contract
6. Freedom from contract and limitations
7. Form of Contracts – Arts. 1356-1358
8. Reformation of Instruments – Arts. 1359-1369
9. Interpretation of Contracts – Arts. 1370 – 1379
10. Kinds of Defective Contracts
a. Rescissible Contracts – Arts. 1380 – 1389
b. Voidable Contracts – Arts. 1390-1402
c. Unenforceable Contracts – Arts. 1403-1408
d. Void or Inexistent Contracts – Arts. 1409-1422
IV. NATURAL OBLIGATION – 1423-1430 2  Lectures
1. Concept of Natural Obligations  Recitation
2. Distinctions between Civil and Natural Obligations  Class Discussion

VII. Course Requirements for 1. Attendance

Evaluation: 2. Lectures
3. Participation in Class Discussion
4. Recitation
5. Quizzes
6. Periodical Examinations
7. Assignments
8. Seatworks

VIII. Grading System:  Has adopted the grading system stipulated in the SLU Faculty
Handbook
 Assignments of percentages per grading (to follow)

IX. References: MAIN REFERENCE:

DE LEON, Hector B., Law on Obligations and Contracts

OTHERS:

DOMINGO, ANDRIX., Obligations and Contracts

PARAS, Edgardo L., Latest Revised Edition, Book IV, Civil Code of
the Philippines Annotated
TORRES, Justo, (2003) Obligations and Contracts: With
Introduction to Law
FELICIANO, Julie David, (2001) Obligations and Contracts
Simplified
JURADO, Desiderio P., (2006 Revised Edition) Civil Law Reviewer
SUAREZ, Carlos B. and SUAREZ, Alexander Q., 2011, Volume 1,
Pointers in Business Law
SORIANO, Fidelito R., 2011 Edition, Notes in Business Law (For
Accountancy Students and CPA Reviewees)