Chapter 3 - Obligations and Contracts in TH

An obligation is a legal duty, anyways created, the violation of which may become the basis of an action of law.

• TRUE

• FALSE

This characteristic of contracts means that contracts are binding only upon the parties and their successors-in-interest.

• Mutuality of Contracts

• Relativity of Contracts

This stage of a contract refers to the fulfillment of the purpose for which the contract was constituted.

• Perfection

• Consummation

It is a contract in which almost all the provisions have been drafted by only one party, usually a corporation or insurance company.

• Contract of Adhesion

• Contract of Sales

It is a contract that is valid until annulled.

• Voidable Contract

• Rescissible Contract

The active subject in an obligation is the one bound to perform the prestation to give, to do, or not to do. He is also called the debtor or obligor.

• TRUE

• FALSE

Novation as a method of extinguishing an obligation pertains to the change or modification of an obligation by another, resulting in the extinguishment of an obligation.

• TRUE

• FALSE

Compensation as means of extinguishing an obligation is the offsetting of the respective obligations of two (2) persons who stand as principal creditors and debtors of each other, resulting in the extinguishment of their obligations to their concurrent amount.

• TRUE

• FALSE

This characteristic of contracts means that the parties are free to stipulate terms and provisions in a contract, as long as these are not contrary to law, morals, good customs, public order, and public policy.

• Consensuality of Contracts

• Autonomy of Contracts

All kinds of works or services, whether physical or mental, is covered by the obligation to give.

• TRUE

• FALSE