Law of Obligation

Student ID : 5710135 (Jump) 5710425 (Ant) 5710426 (Jeans) 5711038 (TangMo) 5713455 (Nut) 5713456 (Zeen) 5716802 (Ton)

Obligation
The state of being forced to do something because it is your duty, or because of a law.

Law of Obligation
Definition of Obligation
Section 194, "By virtue of an obligation the creditor is entitled to claim performance from the debtor. The performance may consist of forbearance."

Characteristic
1. There must be 2 parties (Creditor/Debtor) Creditor is the party who has right to claim performance from the debtor. Debtor is a person who has duty to perform the obligation in accordance with the claim of the creditor.

Characteristic
2. There must be a juristic relation to establish rights and duties It may be a reciprocal juristic relation such as a Sales contract. The juristic relation may be a non-reciprocal one such as deposit of property without remuneration.

Characteristic
3. There must be subjects of obligation Indicates how the debtor should perform an obligation. 3 types Delivery of a property Doing some act Forbear from doing some act

Law of Obligation
Sources of Obligation Contract Between 2 or more parties and obligations enforceable by law. Legal Causes The circumstances which create legal consequences.

Legal Causes
Tort
Created by the law, not by consent.
It creates an obligation, which comes from the willful / negligent act of the debtor in which he must compensate to the creditor by paying damages.

Legal Causes
Management of Affairs without Mandate
An obligation when someone who take charge of the principals affair has managed it in accordance with the interest and the presumptive wishes of the principal. Thus, he is entitled to claim for the expense paid for the principal.

Legal Causes
Undue Enrichment (Unjust Enrichment)
A person who has got any property from the other without any legal ground should return the property to the person who gives it to him. The one who receives the property is deemed to be the debtor because the enrichment is not lawful

Sources of Obligation
Legal Provision
The law particularly provides certain duties to people for the peace and development of the country or public policies, this source of obligation stated in various laws.

Sources of Obligation
Legal Provision
The Civil and Commercial Code Law of Taxation The Labor Protection Act

Law of Obligation
Consequences of Obligation
Where there is an obligation, the creditor may demand performance from his debtor and in the case the debtor ignores his duty, the creditor is entitled to enforce the performance. The enforcement, however, must be in accordance with legal provisions and legal procedures, namely, will be enforced upon the courts decision. Creditor has to file a lawsuit against the debtor.

Consequences of Obligation
Maturity of an obligation
The due date for the debtor to perform the obligation.

Maturity of an obligation
1. Without specified time for performance
The creditor may demand forthwith, and the debtor may perform his part forthwith, namely this obligation is mature once the contract is made.

Maturity of an obligation
2. With specified time for performance (in case of doubt)
The creditor cannot demand the performance before the maturity but the debtor can perform earlier if he wishes.

Maturity of an obligation
3. Mature as per calendar
Mature or falls die exactly on the date of the calendar.
4. Mature on fixed period assuming from the circumstances The due date for the obligation could still be assumed from the circumstances.

Consequences of Obligation
Default
When a debtor performs his obligation later than the maturity and thereby causes the damage to the creditor. Thus the debtor must compensate his creditor for the damage therefrom.

Default
1. Without the specification of time for performance and unable to infer from the circumstance of the maturity
Already mature but the debtor has not yet performed, the debtor is not yet in default. He will default only after the creditor gives him a warning.

Default
2. With the specified maturity date as per calendar
Due on the date and period fixed and if the debtor does not perform his obligation on that date and that period, He is automatically in default.

Default
3. Form Tort
The debtor is in default from the time the party committed a tort.

Consequences of Obligation
The debtors excuse of default
For a debtor who wants to claim that is not yet in default, he must be able to prove that he is not responsible for the circumstances for which he is not responsible.

Consequences of Obligation
Consequences of default

Consequences of default
When the debtor does not perform the obligation in accordance with true intent, the creditor may claim compensation for any damage. If the performance becomes useless to the creditor, he may refuse to accept it and claim compensation for non-performance. A debtor is responsible for all negligence during the default, unless the injury would have arisen even if he had performance in due time.

Consequences of default
A money debt bears interest during the default at seven and half percent per annum. If the creditor can demand higher interest, this shall continue to be paid. If the debtor is bound to make compensation for the value of an object which cannot be delivered during the default, the creditor may demand interest on the amount to be paid as compensation.

Consequences of default
When the creditor is in default
Without legal ground, he does not accept the performance tendered to him. If the debtor is bound to perform his part only upon counter performance by the creditor, the creditor is in default if he does not offer the required performance, though prepared to accept the performance tendered.

Consequences of default
The effects of the creditors being in default
When the creditor is in default, the debtor is not liable for any damage arising from the nonperformance, from the time the debtor has tendered to make performance

Consequences of Obligation
Performance becomes impossible
The performance of an obligation becomes impossible after the obligation was created but before debtor is in default

Performance becomes impossible

1) An obligation becomes impossible in the circumstance for which debtor is responsible
When the performance becomes impossible, debtor does not have to perform his part to the creditor. However, he is liable for the damages to the creditor for such non-performance.

Performance becomes impossible

2) An obligation becomes impossible in the consequence for which the debtor is not responsible
By the third persons action or without debtors responsibility By force majeure

Law of Obligation
Extinction of an obligation

Extinction of an obligation
By performance
Fulfillment or accomplish of a promise, contract or other obligation.

By release
Release is a unilateral, non-reciprocal declaration of intention by the creditor to release the obligation A writing or an oral statement

Extinction of an obligation
By set-off
Two persons are bound to each other by obligation whose subject is of the same kind, debtor may be discharged from his obligation by setting-off.

By novation
A substitution of a new contract, debt, or obligation for an existing one between the same or different parties

Extinction of an obligation
By merger
If right and liabilities in an obligation become vested in the same person, the obligation is extinguished.