Pure and Conditional Obligations

A pure obligation is one where its performance of does not depend upon a future or uncertain event, or upon a past event unknown to the parties, resulting in such obligation being immediately due and demandable.

As a sub-set of a pure obligation, a reciprocal obligation is one which arise from the same cause, and which each party is a debtor and a creditor of the other, such that the obligation of one is dependent upon the obligation of the other. Necessarily, the performance of each reciprocal obligation is conditioned upon the simultaneous completion of the other. Hence, both obligations must be performed at the same time.

Continue reading here.

 

Consequences for Breach of Obligations

The debtor is liable for damages if it breaches its obligations in either or a combination of these instances: (a) the debtor is guilty of fraud, negligence, or delay, and/or (b) the debtor contravenes in any manner the tenor of the obligation. Continue reading here.

Demand and Consequences of Delay

A creditor’s demand generally places the debtor in default and results in the obligation becoming due and demandable. When this happens, the debtor is considered to be in delay from the date of demand. Once in default or in delay, the debtor becomes liable for damages.

By way of exceptions, these are the instances when demand is not required to place the debtor in default:

Continue reading here.

 

Nature and Effects of Obligations

In the conduct of its operations, a business is required to observe a certain standard of care depending on that prescribed by the law or what has been agreed upon. By default, a person who is obliged to give something is also required to take care of the item with the proper diligence of a good father of a family except if there is a different standard of care required by law or through a stipulation of the parties.

Similarly, a person who is obliged to perform an obligation is required to observe the diligence of a good father of a family if the law or contract does not state the diligence which is to be observed in the performance thereof.

Continue reading here.

Sources of Obligations

There may be various sources of obligations, including moral, ethical, and legal. For the purpose of understanding business law, the focus is on legal obligations which may be enforced against another person through the regular courts.

There are five sources of legal obligations, namely: (1) law; (2) contracts; (3) quasi-contracts; (4) acts or omissions punished by law; and (5) quasi-delicts.[1]

Continue reading here.

 

Concept and Nature of Obligations

Learning business law starts with understanding rights and obligations. From commencement until termination, a business acquires rights and incurs obligations.

An obligation is a juridical necessity to give, to do or not to do.[1] Otherwise stated, an obligation is one that creates a compulsion on a person to do or not to do an act that may be enforced through legal processes. Continue reading here.