SITUATIONAL QUESTION 1: Fortuitous Event

Situation:​
Ana borrowed Pedro’s car for a week. On the third day, while the car was parked properly in
front of Ana’s house, a rare and powerful earthquake caused a tree to fall on the car, destroying
it. Pedro is now demanding that Ana pay for the damage.

A – Answer:​
No, Ana is not liable for the destruction of the car due to a fortuitous event.

L – Legal Basis:​
Article 1174 of the Civil Code: “No person shall be responsible for those events which could not
be foreseen, or which, though foreseen, were inevitable.”

A – Application:​
The earthquake was an extraordinary and unforeseeable event that caused the destruction of
the car without Ana’s fault or negligence. Since she was not in default, and the damage
occurred due to a fortuitous event, she is exempt from liability.

C – Conclusion:​
Ana is not liable to pay for the damage to Pedro’s car because the loss was due to a fortuitous
event.

SITUATIONAL QUESTION 2: Determinate vs. Indeterminate Thing

Situation:​
Carlos promised to deliver to Maria “a kilo of mangoes” from any market. On the date of
delivery, a fire destroyed the entire stock of mangoes in the warehouse Carlos usually buys
from. Carlos claims he is excused from delivery.

A – Answer:​
No, Carlos is still obligated to deliver the mangoes.

L – Legal Basis:​
Article 1263 of the Civil Code: “In an obligation to deliver a generic thing, the loss or destruction
of anything of the same kind does not extinguish the obligation.”

A – Application:​
Since the obligation was to deliver a generic thing (a kilo of mangoes), and there are other
sources aside from the destroyed warehouse, the obligation remains. The genus never
perishes.

C – Conclusion:​
Carlos cannot be excused from delivery and remains obligated to deliver the kilo of mangoes.

SITUATIONAL QUESTION 3: Joint vs. Solidary Obligation

Situation:​
Anna, Bea, and Carla borrowed P90,000 from Dan, with no stipulation as to solidarity. Dan is
now demanding the full amount from Anna alone. Anna refuses, saying she is liable only for her
share.

A – Answer:​
Yes, Anna is correct. She is liable only for her proportionate share.

L – Legal Basis:​
Article 1207 of the Civil Code: “The concurrence of two or more creditors or of two or more
debtors in one and the same obligation does not imply that each one of the former has a right to
demand, or that each one of the latter is bound to render, entire compliance with the prestation.
There is a solidary liability only when the obligation expressly so states, or when the law or the
nature of the obligation requires solidarity.”

A – Application:​
Since the obligation is silent on solidarity, the presumption is that it is joint. Therefore, Anna is
only liable for one-third (P30,000) of the total obligation.

C – Conclusion:​
Dan can only demand P30,000 from Anna. The obligation is joint, not solidary.

SITUATIONAL QUESTION 4: Delay (Mora)

Situation:​
Lito was supposed to deliver a laptop to Carla on March 10. Carla didn’t make any demand. Lito
delivered the laptop on March 13. Carla is now suing Lito for delay and damages.

A – Answer:​
No, Lito is not in legal delay (mora) and is not liable for damages.
L – Legal Basis:​
Article 1169 of the Civil Code: “The debtor incurs in delay from the time the obligee judicially or
extrajudicially demands the fulfillment of the obligation...”

A – Application:​
Carla made no demand, either judicial or extrajudicial. Therefore, Lito did not legally fall into
delay, despite delivering the laptop a few days late.

C – Conclusion:​
Lito is not liable for delay or damages, as no demand was made and the exceptions do not
apply.

SITUATIONAL QUESTION 5: Obligation to Give a Determinate Thing

Situation:​
Marco promised to deliver to Erika “the painting of her grandfather” on May 1. Before the due
date, Marco sold the painting to someone else. Erika is demanding the painting or damages.

A – Answer:​
Yes, Erika can demand the delivery of the painting or damages.

L – Legal Basis:​
Article 1165 of the Civil Code: “If the thing is determinate, the creditor may compel the debtor to
make the delivery.”​
Also, if delivery becomes impossible due to the debtor’s fault, he shall be liable for damages.

A – Application:​
The painting is specific (determinate) and of sentimental value. Marco, by selling it, violated
the obligation. Erika can demand either the return of the painting or the payment of damages.

C – Conclusion:​
Marco is liable, and Erika may validly demand delivery or damages, since the obligation
involved a determinate thingwrongfully disposed of.

SITUATIONAL QUESTION 6: Personal Obligation to Do

Situation:​
Rafael, a portrait artist, was hired to paint a wedding portrait of a couple. He later refused to do
the painting. The couple wants to compel him to perform.
A – Answer:​
No, the couple cannot compel Rafael to personally paint the portrait.

L – Legal Basis:​
Article 1167 of the Civil Code: “If a person obliged to do something fails to do it, the same shall
be executed at his cost. This same rule applies if he does it in contravention of the tenor of the
obligation.”​
However, if the obligation is personal and requires special skill, specific performance
cannot be compelled.

A – Application:​
Since portrait painting is a personal obligation involving Rafael’s artistic skill, it is not
subject to substitution. The law recognizes the impossibility of forcing someone to perform a
personal artistic act.

C – Conclusion:​
Rafael cannot be compelled to paint the portrait, but the couple may claim damages for his
non-performance.

SITUATIONAL QUESTION 7: Compensation as Mode of Extinguishment

Situation:​
Brent owes Mia P50,000. At the same time, Mia owes Brent P50,000 for consulting services.
Mia is demanding full payment from Brent. Brent claims that their obligations extinguish each
other.

A – Answer:​
Yes, Brent is correct. Their obligations are extinguished by legal compensation.

L – Legal Basis:​
Article 1279 of the Civil Code: "Compensation shall take place when two persons, in their own
right, are creditors and debtors of each other..."​
It lists five conditions for legal compensation, including that both debts are due, liquidated, and
demandable.

A – Application:​
Both debts are of the same kind (money), due, liquidated, and demandable. Since all legal
requirements are met, legal compensation occurs by operation of law.
C – Conclusion:​
Brent and Mia’s debts are extinguished through legal compensation, and neither can demand
further payment from the other.

SITUATIONAL QUESTION 8: Dation in Payment (Dación en Pago)

Situation:​
Jon owes Karen P100,000. He proposes to transfer ownership of his second-hand car, worth
P100,000, as payment for the debt. Karen agrees. Is the obligation extinguished?

A – Answer:​
Yes, the obligation is extinguished through dation in payment.

L – Legal Basis:​
Article 1245 of the Civil Code: "Dation in payment, whereby property is alienated to the creditor
in satisfaction of a debt in money, shall be governed by the law of sales."

A – Application:​
Since Karen accepted the car as payment and it equals the value of the debt, dation in
payment took place. The obligation is considered settled as if paid in money.

C – Conclusion:​
The obligation is extinguished by dation in payment, with the car serving as substitute
payment for the money owed.

SITUATIONAL QUESTION 9: Novation of Obligation

Situation:​
Lucia owes Ramon P200,000. They later agree to change the object of the obligation: instead of
paying cash, Lucia will transfer her motorcycle to Ramon. Is the original obligation
extinguished?

A – Answer:​
Yes, the original obligation is extinguished through novation.

L – Legal Basis:​
Article 1291 of the Civil Code: "Obligations may be modified by... changing their object or
principal conditions."​
Article 1292: "Novation which consists in substituting a new obligation or changing the object or
principal conditions shall extinguish the original obligation."

A – Application:​
The parties clearly agreed to replace the cash payment with delivery of a motorcycle. This
change in the object of the obligation qualifies as an objective novation.

C – Conclusion:​
The original debt is extinguished and replaced with a new obligation via novation.

SITUATIONAL QUESTION 10: Solidary Obligation

Situation:​
Miguel and Paolo solidarily owe Andre P60,000. Andre demanded the full amount from Miguel,
who paid it entirely. Now, Miguel wants Paolo to reimburse him for half. Paolo refuses, saying
Miguel volunteered to pay.

A – Answer:​
Yes, Miguel can demand reimbursement from Paolo.

L – Legal Basis:​
Article 1217 of the Civil Code: "Payment made by one of the solidary debtors extinguishes the
obligation. If two or more solidary debtors are sued, and one pays the debt, he may claim from
his co-debtors their share..."

A – Application:​
Since Miguel paid the entire solidary debt, he has the right to recover Paolo’s share
(P30,000). Solidary liability means any debtor can be compelled to pay the whole amount, but
internal reimbursement is allowed.

C – Conclusion:​
Paolo is legally bound to reimburse Miguel for his proportionate share of the solidary debt.

SITUATIONAL QUESTION 11: Joint Indivisible Obligation

Situation:​
Carlos and Diego jointly promised to deliver a specific sculpture to Emma. Only Diego
delivered part of the sculpture, making it useless. Emma wants to sue both for damages.
A – Answer:​
Yes, both Carlos and Diego are liable for damages.

L – Legal Basis:​
Article 1209 of the Civil Code: "If the division is impossible, the right of the creditors may be
prejudiced only by their collective acts, and the debtors by their collective acts."​
Indivisible obligations, even if joint, require collective performance.

A – Application:​
Since the obligation is indivisible (a specific sculpture) and only Diego acted, the obligation
was breached. Both are jointly liable for damages, since performance required joint effort.

C – Conclusion:​
Carlos and Diego are jointly liable for damages due to failure to deliver an indivisible
prestation.

SITUATIONAL QUESTION 12: Natural Obligation

Situation:​
Leo lost a gambling bet to Ben and voluntarily paid him P10,000. Later, Leo demands it back,
claiming gambling debts are not legally enforceable.

A – Answer:​
No, Leo cannot recover the amount he voluntarily paid.

L – Legal Basis:​
Article 1423 of the Civil Code recognizes natural obligations as not enforceable by court
action, but they produce legal effects when voluntarily fulfilled.

A – Application:​
Leo’s gambling debt is a natural obligation. Though not legally demandable, once paid
voluntarily, it cannot be recovered.

C – Conclusion:​
Leo is not entitled to a refund, as the payment was made voluntarily to settle a natural
obligation.

SITUATIONAL QUESTION 13: Impossible Obligation

A – Answer:​
No, Dino is not liable, because the obligation is void.

L – Legal Basis:​
Article 1183 of the Civil Code: “Impossible conditions, those contrary to good customs or public
policy and those prohibited by law shall annul the obligation which depends upon them.”

A – Application:​
Resurrecting the dead is physically impossible. The condition makes the obligation void from
the beginning, so there’s no legal basis for Niko’s claim.

C – Conclusion:​
The obligation is void due to impossibility, and Dino is not liable.

SITUATIONAL QUESTION 14: Fraud in Performance of Obligation

Situation:​
Sofia hired Belle to cater her wedding for P200,000. Belle agreed but used spoiled ingredients,
knowing they would cause food poisoning to cut costs. Several guests got sick. Sofia is suing
for damages.

A – Answer:​
Yes, Belle is liable for damages due to fraud.

L – Legal Basis:​
Article 1170 of the Civil Code: “Those who in the performance of their obligations are guilty of
fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are
liable for damages.”

A – Application:​
Belle knowingly used spoiled food, which constitutes fraud (dolo). Fraud in the performance
of an obligation renders the debtor fully liable for all resulting damages, even if there’s no
penal clause.

C – Conclusion:​
Belle is liable for damages due to fraudulent performance of her obligation.
SITUATIONAL QUESTION 15: Obligation with a Penal Clause

Situation:​
Tristan agreed to build a house for Lucas for P2M, with a clause stating that a penalty of
P100,000 would be paid for each week of delay. Tristan finished the project 3 weeks late. Lucas
demands payment of the penalty.

A – Answer:​
Yes, Lucas can demand P300,000 as penalty.

L – Legal Basis:​
Article 1226 of the Civil Code: “In obligations with a penal clause, the penalty shall substitute the
indemnity for damages and payment of interests in case of non-compliance...”

A – Application:​
The parties agreed on a penal clause of P100,000/week. Since there was 3 weeks' delay,
Lucas is entitled to demand P300,000, even without proving actual damages.

C – Conclusion:​
Tristan is liable to pay the P300,000 penalty, based on the express agreement.

SITUATIONAL QUESTION 16: Alternative Obligation

Situation:​
Anna promised to either deliver 100 sacks of rice or pay P50,000 to Ben. Anna delivered only
80 sacks of rice, and Ben demanded the P50,000. Anna claims that she can still deliver the
remaining sacks to fulfill the obligation.

A – Answer:​
No, Anna cannot fulfill the obligation by delivering the remaining sacks; she has already failed to
deliver the promised amount.

L – Legal Basis:​
Article 1193 of the Civil Code: “In alternative obligations, the debtor has the right to choose
which of the prestations he will perform, unless it is otherwise stipulated...”​
However, when the debtor fails to deliver any of the prestations within the time frame, the
alternative obligation becomes extinguished.
A – Application:​
Anna promised to deliver either 100 sacks of rice or pay the equivalent in money. Since she did
not deliver the full amount of rice and failed to fulfill the obligation in time, she must pay the
P50,000 as agreed.

C – Conclusion:​
Anna is liable to pay P50,000 since she failed to deliver the full quantity of rice and the
alternative obligation is not fulfilled.

SITUATIONAL QUESTION 17: Obligation with a Period (Suspensive

Situation:​
Oliver promised to pay Janice P200,000 on December 1, but only if Janice successfully
completes her marketing project. The project is due on November 30, but Janice didn’t meet the
deadline. Janice now demands the payment.

A – Answer:​
No, Janice cannot demand payment because the obligation was conditional on her completing
the project.

L – Legal Basis:​
Article 1182 of the Civil Code: “An obligation is subject to a suspensive condition if the fulfillment
of the obligation depends upon the occurrence of a future and uncertain event.”

A – Application:​
The obligation to pay P200,000 is suspended until Janice fulfills the condition of completing her
marketing project. Since she failed to meet the deadline, the suspensive condition was not
fulfilled, and Oliver is not yet obligated to pay.

C – Conclusion:​
Janice cannot demand payment from Oliver, as the condition precedent (completion of the
project) was not fulfilled.

SITUATIONAL QUESTION 18: Voidable Obligation

Situation:​
Carlos entered into a contract to buy a house from Laura for P3M. Carlos was intoxicated when
he signed the contract, and after sobering up, he claims he should not be bound by the contract.
A – Answer:​
Yes, Carlos can void the contract based on his being intoxicated at the time of signing.

L – Legal Basis:​
Article 1390 of the Civil Code: “An obligation is voidable when the consent of one of the parties
is vitiated by lack of understanding or when the contract is entered into under duress,
intimidation, or undue influence, or when one party is intoxicated...”

A – Application:​
Since Carlos was intoxicated when he signed the contract, his consent was vitiated. Under the
law, he can void the contract by invoking the voidable nature of the obligation.

C – Conclusion:​
Carlos has the right to void the contract due to his lack of understanding caused by
intoxication, as this renders the obligation voidable.

SITUATIONAL QUESTION 19: Performance of an Obligation

Situation:​
Paolo owes Elena P100,000 and is required to pay the debt on or before December 1. On
November 30, Paolo deposits the full amount into Elena's bank account. Elena claims the
payment is invalid because she didn’t receive the money directly from Paolo.

A – Answer:​
No, Elena cannot refuse the payment as long as Paolo made the payment correctly.

L – Legal Basis:​
Article 1244 of the Civil Code: “Payment must be made in accordance with the terms of the
obligation and may be made through an agent.”​
Also, under Article 1250: “Payment made through an agent is valid, even without the creditor’s
express consent.”

A – Application:​
Paolo paid the debt by depositing the amount in Elena’s bank account, and the mode of
payment (via a bank deposit) does not invalidate the payment. It was made in good faith and
with the intention of fulfilling the obligation.

C – Conclusion:​
Paolo has validly performed his obligation by making the payment into Elena's bank account,
and Elena cannot refusethe payment.
SITUATIONAL QUESTION 20: Facultative Obligation

Situation:​
Rico promised to give Louie a laptop, but if the laptop is not available, he would pay Louie
P20,000 in cash. The laptop is unavailable, and Louie is demanding the P20,000.

A – Answer:​
Yes, Rico is obligated to pay Louie P20,000.

L – Legal Basis:​
Article 1187 of the Civil Code: “In facultative obligations, the debtor may perform any one of the
prestations, and if he chooses to perform another, he shall comply with the substituted
prestation.”

A – Application:​
Rico’s obligation to give Louie a laptop was facultative, meaning that if the laptop was
unavailable, the alternative obligation was to pay P20,000 in cash. Since the laptop was
unavailable, the obligation was modified, and Rico must now pay P20,000.

C – Conclusion:​
Rico is obligated to pay Louie P20,000, as the laptop was unavailable and the alternative
performance is the cash payment.

SITUATIONAL QUESTION 21: Stipulation Pour Autrui (Third-Party

Situation:​
Jackie and Marlon entered into a contract where Marlon promised to deliver 100 bags of rice to
Jackie's sister, Susan. Susan was not a party to the contract, but she knows about it. When
Marlon fails to deliver the rice, Susan sues Marlon for non-performance.

A – Answer:​
Yes, Susan has the right to demand the performance from Marlon.

L – Legal Basis:​
Article 1311 of the Civil Code: “A contract may be entered into by a stipulation pour autrui or for
the benefit of a third person, and the third person may demand performance if the contract was
made for his or her benefit.”
A – Application:​
The contract between Jackie and Marlon was made for the benefit of Susan (who was the
third-party beneficiary). Even though Susan was not a signatory to the contract, she can enforce
it because the stipulation was for her benefit.

C – Conclusion:​
Susan, as a third-party beneficiary, has the right to demand performance from Marlon under
the stipulation pour autruiprinciple.

These three scenarios reinforce key concepts such as the performance of an obligation,
facultative obligations, and third-party stipulations (stipulation pour autrui). Would you like
me to continue providing more questions on specific topics like rescission of obligations,
contract interpretation, or any other concepts?

SITUATIONAL QUESTION 22: Resolutory Condition

Situation:​
Maria promised to pay Pablo P50,000 if he graduates from college. Pablo has just graduated,
but Maria claims she is not obligated to pay because the payment was contingent on his
graduation, which she considers uncertain.

A – Answer:​
Yes, Maria is obligated to pay Pablo the P50,000 because the condition has been fulfilled.

L – Legal Basis:​
Article 1181 of the Civil Code: “A condition is resolutory when, upon the fulfillment of the
condition, the obligation is extinguished or terminated.”​
This defines a resolutory condition that terminates the obligation upon its fulfillment.

A – Application:​
Pablo has graduated, which fulfills the resolutory condition in their agreement. Since the
condition is fulfilled, the obligation is now due, and Maria must pay Pablo P50,000.

C – Conclusion:​
Maria is obligated to pay Pablo the agreed amount since the resolutory condition
(graduation) has been fulfilled.

SITUATIONAL QUESTION 23: Vitiated Consent (Duress)

A – Answer:​
Yes, Carlos can void the contract due to vitiated consent under duress.

L – Legal Basis:​
Article 1330 of the Civil Code: “Consent is vitiated by intimidation, violence, or undue influence
when the will of the party is forced, constrained, or influenced against their free will.”

A – Application:​
Since Alana threatened Carlos with harm to force him into signing the contract, the consent
was not freely given. This constitutes duress, and Carlos can void the contract.

C – Conclusion:​
Carlos can void the contract because his consent was vitiated by duress.

SITUATIONAL QUESTION 24: Cessation of Obligation Due to Destruction of

Situation:​
Jules promised to deliver a rare antique chair to Alisa. Before the delivery, the chair was
destroyed by fire, and Jules cannot provide the chair. Alisa now demands the chair or damages.

A – Answer:​
No, Jules is no longer obligated to deliver the chair, but Alisa may demand damages.

L – Legal Basis:​
Article 1262 of the Civil Code: “When the object of the obligation is lost through a fortuitous
event, the obligation is extinguished.”​
However, if the loss is due to the debtor’s fault, they are still liable for damages.

A – Application:​
The chair was destroyed by fire, which is a fortuitous event. Since the loss of the object was
beyond Jules' control, the obligation to deliver the chair is extinguished. However, Alisa may
claim damages for the non-performance of the obligation.
C – Conclusion:​
The obligation is extinguished due to the fortuitous event, but Alisa may seek damages for
non-performance if it was not Jules' fault.

SITUATIONAL QUESTIONS ON OBLIGATIONS AND CONTRACTS

SITUATIONAL QUESTION 1: Fraud (Dolo)

Situation:​
Sofia entered into a contract with Maria for the sale of a car for P500,000. Maria falsely
represented that the car had a clean title when it did not. Sofia later discovers the fraud and
seeks to void the contract.

A – Answer:​
Sofia may rescind the contract due to fraud.

L – Legal Basis:​
Article 1338 of the Civil Code: "A contract is voidable when it is executed through deceit,
violence, intimidation, or undue influence."

A – Application:​
Maria made a false representation regarding the car’s title, which is fraudulent. Sofia can
rescind the contract based on fraud.

C – Conclusion:​
Sofia can rescind the contract due to fraud (dolo) and demand the return of her money.

SITUATIONAL QUESTION 2: Negligence (Culpa)

Situation:​
Carlos borrowed P100,000 from Lucille and promised to repay the amount in three months.
However, Carlos negligently lost the money by leaving it in an unsafe place. Lucille is
demanding payment.

A – Answer:​
Carlos is liable for negligence and must still pay the debt.
L – Legal Basis:​
Article 1173 of the Civil Code: "Those who in the performance of their obligations are guilty of
negligence are liable for damages."

A – Application:​
Carlos’ loss of the money was due to his negligence and not a force majeure event. He
remains liable for the debt.

C – Conclusion:​
Carlos must still pay Lucille the P100,000 due to his negligence.

SITUATIONAL QUESTION 3: Solidary Obligation

Situation:​
Miguel and Paolo solidarily owe Andre P60,000. Andre demands the full amount from Miguel,
who pays it entirely. Miguel later wants to recover half from Paolo, but Paolo refuses.

A – Answer:​
Miguel is entitled to recover half from Paolo.

L – Legal Basis:​
Article 1217 of the Civil Code: "A payment made by one of the solidary debtors extinguishes the
obligation, but he may claim from his co-debtors their respective shares."

A – Application:​
Miguel paid the entire debt on behalf of both solidary debtors. He is entitled to reimbursement
of Paolo’s share.

C – Conclusion:​
Miguel has the right to recover half of the amount from Paolo due to the solidary nature of the
obligation.

SITUATIONAL QUESTION 4: Dation in Payment (Dación en Pago)

Situation:​
Jon owes Karen P100,000. Jon proposes to give Karen his second-hand car worth P100,000
instead of paying cash, and Karen agrees.

A – Answer:​
The obligation is extinguished through dation in payment.
L – Legal Basis:​
Article 1245 of the Civil Code: "Dation in payment, whereby property is alienated to the creditor
in satisfaction of a debt in money, shall be governed by the law of sales."

A – Application:​
Karen accepts the car as payment in satisfaction of the debt. This constitutes dation in
payment.

C – Conclusion:​
Jon’s obligation is extinguished by dation in payment.

SITUATIONAL QUESTION 5: Novation of Obligation

Situation:​
Lucia owes Ramon P200,000. They later agree to change the object of the obligation: instead of
paying cash, Lucia will transfer her motorcycle to Ramon. Is the original obligation
extinguished?

A – Answer:​
Yes, the original obligation is extinguished through novation.

L – Legal Basis:​
Article 1291 of the Civil Code: "Obligations may be modified by... changing their object or
principal conditions."

A – Application:​
The agreement to replace the cash payment with the motorcycle constitutes novation, which
extinguishes the original obligation.

C – Conclusion:​
The original obligation is extinguished, and a new obligation is created through novation.

SITUATIONAL QUESTION 6: Impossible Obligation

Situation:​
Dino promised to bring back his deceased grandfather to life in exchange for P1,000,000 from
Niko. Niko agreed. Later, Dino failed to fulfill his promise, and Niko is suing him.

A – Answer:​
No, Dino is not liable because the obligation is void due to impossibility.
L – Legal Basis:​
Article 1183 of the Civil Code: "Impossible conditions, those contrary to good customs or public
policy, and those prohibited by law shall annul the obligation which depends upon them."

A – Application:​
Resurrecting the dead is impossible, and this makes the obligation void from the start.

C – Conclusion:​
Dino is not liable, as the obligation was impossible and void.

SITUATIONAL QUESTION 7: Fraud in Performance of Obligation

Situation:​
Sofia hired Belle to cater her wedding for P200,000. Belle used spoiled ingredients, knowing
they would cause food poisoning to cut costs. Several guests got sick. Sofia is suing for
damages.

A – Answer:​
Belle is liable for damages due to fraud.

L – Legal Basis:​
Article 1170 of the Civil Code: "Those who in the performance of their obligations are guilty of
fraud, negligence, or delay are liable for damages."

A – Application:​
Belle used spoiled food, knowing it would cause harm. This constitutes fraud in performance,
and she is liable for damages.

C – Conclusion:​
Belle is liable for damages resulting from her fraudulent performance.

SITUATIONAL QUESTION 8: Obligation with a Penal Clause

Situation:​
Tristan agreed to build a house for Lucas for P2M, with a clause stating that a penalty of
P100,000 would be paid for each week of delay. Tristan finished the project 3 weeks late. Lucas
demands payment of the penalty.

A – Answer:​
Yes, Lucas can demand the P300,000 penalty.
L – Legal Basis:​
Article 1226 of the Civil Code: "In obligations with a penal clause, the penalty shall substitute the
indemnity for damages and payment of interests in case of non-compliance."

A – Application:​
Since the penal clause clearly states the penalty per week of delay, Lucas is entitled to the
P300,000 for the 3-week delay.

C – Conclusion:​
Tristan is liable to pay the P300,000 penalty due to the penal clause in the contract.

SITUATIONAL QUESTION 9: Alternative Obligation

Situation:​
Anna promised to either deliver 100 sacks of rice or pay P50,000 to Ben. Anna delivered only
80 sacks of rice, and Ben demanded the P50,000. Anna claims that she can still deliver the
remaining sacks to fulfill the obligation.

A – Answer:​
No, Anna cannot fulfill the obligation by delivering the remaining sacks; she has already failed to
deliver the promised amount.

L – Legal Basis:​
Article 1193 of the Civil Code: "In alternative obligations, the debtor has the right to choose
which of the prestations he will perform..."

A – Application:​
Since Anna did not deliver the full 100 sacks of rice, the alternative obligation becomes
extinguished and she must pay P50,000.

C – Conclusion:​
Anna must pay P50,000 since she failed to deliver the full quantity of rice.

SITUATIONAL QUESTION 10: Performance with Delay

Situation:​
Carlos owes Danilo P100,000 and the due date for payment is December 1. On December 1,
Carlos pays only P70,000 and promises to pay the remaining P30,000 the next day. Danilo
agrees. However, Carlos delays again and does not pay the remaining P30,000 for another
week. Danilo sues Carlos for breach of contract.
A – Answer:​
Carlos is liable for breach of contract due to delay in performance.

L – Legal Basis:​
Article 1169 of the Civil Code: “Those obliged to deliver or do something are considered in
default from the moment the obligation to deliver or to do something has been demanded.”

A – Application:​
Carlos made an agreement to pay the full amount on December 1, and even though Danilo
agreed to the delay for one day, Carlos did not pay the remaining amount as promised, causing
a delay.

C – Conclusion:​
Carlos is liable for breach of contract due to the delay in fulfilling his obligation.

SITUATIONAL QUESTION 11: Obligation with a Period (Suspensive

Situation:​
Lucas agreed to lend a car to Ana, with the condition that Ana must return it by a specific date,
August 31. Ana does not return the car on time and is now asking for an extension until
September 5. Lucas insists that the car be returned on time.

A – Answer:​
Lucas is correct in insisting that Ana return the car on time, as the agreement was conditioned
upon a specific date.

L – Legal Basis:​
Article 1183 of the Civil Code: “An obligation is subject to a suspensive condition if the fulfillment
of the obligation depends upon the occurrence of a future and uncertain event.”

A – Application:​
The agreement is clear about the time-bound condition, and Ana's failure to return the car on
time constitutes a breachof the agreed-upon terms. Ana must comply with the specified period
unless Lucas agrees to an extension.

C – Conclusion:​
Ana must return the car by the agreed-upon date, as it was a condition that the obligation
must be fulfilled within the period.
SITUATIONAL QUESTION 12: Rescission of Obligation Due to
Non-Performance

Situation:​
Maria entered into a contract with Peter to sell her house for P3M. After receiving an advance of
P500,000, Maria decides not to sell the house. Peter demands the house or the return of the
advance payment. Maria refuses to either return the money or deliver the house.

A – Answer:​
Peter may rescind the contract and demand the return of the advance payment.

L – Legal Basis:​
Article 1381 of the Civil Code: “Contracts are rescissible when there has been a breach of an
obligation by one of the parties, and the breach causes serious damage to the other party.”

A – Application:​
Maria’s refusal to perform her part of the contract (selling the house) constitutes a breach of
obligation, and Peter can rescind the contract and demand the return of the advance payment.

C – Conclusion:​
Peter is entitled to rescind the contract and claim the return of the advance payment because
Maria’s refusal to perform causes serious damage.