Understanding Obligations: Types and Legal Implications

Posted on Nov 20, 2024 in Law & Jurisprudence

1) Joint Obligations

Joint obligations involve multiple benefits, all of which must be fulfilled by the debtor. The debtor is required to provide cumulatively more benefits for the fulfillment of all. This is governed by common law rather than the Civil Code (CC) regarding simple obligations. The debtor is not de-obligated until each provision in the full obligation is met.

2) Alternative Obligations

In alternative obligations, the debtor is required to complete only one of several benefits listed in the obligation (Art. 1161: “one must meet one of them completely”). Fulfilling one extinguishes the execution of the others. Requirements:

  • There must be an obligation with multiple benefits.
  • The services must be independent of each other, each with its own existence.
  • Indeterminacy of provision is defined until the concentration is operated by the impossibility of all benefits except one.

4) Obligations to Do

These obligations involve positive acts, such as painting a picture, defending a lawsuit, or writing a literary work. They are aimed at one or more acts by the debtor, distinct from delivering a thing. The law requires these obligations to be fulfilled within the stipulated time and manner. The manner of the act is inseparable from the obligation.

5) Performance by a Third Party

Generally, obligations are considered impersonal, with exceptions for very personal ones. Typically, the debtor must personally fulfill the promise as intended by the parties (Art. 1149 – CC). However, a third party can perform the benefit if the obligation wasn’t established based on the debtor’s specific qualities or abilities. If the duty is very personal, it cannot be fulfilled by a third party.

6) Enforcement of Obligations to Do

If the debtor refuses compliance, Art. 1318 of the CC allows for forced execution, unless violence against the debtor is necessary. Art. 1150 of the CC states that if the debtor breaches the obligation, the creditor can choose to:

  • Require forced execution of the promises made.
  • Require the benefit to be performed by a third party, unless it is highly personal.
  • Cancel the obligation.

7) Late or Defective Compliance in Obligations to Do

1) For partial or delayed compliance due to the debtor, the creditor can take measures mentioned in Art. 1150 or:

  • Consider the service not performed.
  • Require the debtor to destroy what was done.
  • Accept the services performed and require a reduction in consideration.

In any case, the creditor can demand compensation for damages.

2) For late or defective compliance without the debtor’s fault, the creditor can:

  • Consider the service not performed if it’s useless.
  • Require destruction of what was done if harmful.
  • Accept the services and require a reduction in compensation.

A) Impossibility Without Debtor’s Fault

If the debtor received something from the creditor to perform the obligation and non-compliance occurs without the debtor’s fault, the obligation is resolved, but the debtor is liable to compensate the creditor for damages (Art. 1154).

B) Impossibility Due to Creditor’s Fault

If performance is impossible due to the creditor, the debtor’s obligation is resolved, preserving their right to compensation (Art. 1155).

C) Impossibility Without Fault of Either Party

If performance becomes impossible without fault of either party, the debtor is discharged from the obligation without responsibility (Art. 1156 CC). Art. 1316 and 1317 state the debtor is not responsible for damages resulting from non-performance unless otherwise specified.

8) Indemnization for Damages in Obligations Not to Do

In all three cases mentioned, the creditor can demand compensation for damages. If it’s impossible to prevent the destruction of what was done in contravention of the obligation not to do, the obligation is resolved, and the creditor can demand damages.

9) Liability for Breach of Obligation Not to Do

The CC applies provisions of Sections 1154 (1st paragraph), 1155, and 1157:

  1. If performance is impossible due to the debtor, the obligation is resolved, but the creditor can demand compensation.
  2. If performance is impossible due to the creditor, the debtor’s obligation is resolved, but the debtor retains the right to compensation.
  3. If the contract fails without fault of either party, the debtor’s obligations are resolved.

10) Delay in Obligations Not to Do

Obligations not to do can be classified as instantaneous or permanent:

  • Instantaneous: Refrain from a single act.
  • Permanent: Continuous or periodic refrain.

If a permanent obligation not to do is breached, it may or may not entail absolute and final non-performance, only placing the debtor in arrears.

1) Alternative vs. Optional Obligations

  • Alternative obligations have multiple objects; optional obligations have one.
  • In alternative obligations, the choice is right; in optional, the creditor can demand the principal service.
  • Optional obligations have one due benefit; alternative have multiple.
  • Alternative choice is by law; optional is not.
  • In optional, the main service is the only one; in alternative, if one disappears, others remain.

2) Liability for Breach of Obligation Not to Do

Same as section 9.

3) Late or Defective Compliance in Obligations to Do

Same as section 7.

4) Failure of the Provision

When the choice is for the debtor, creditor, or a third party:

A) When the choice is for the debtor:

  • Due to the debtor: The situation is resolved, and the debtor must return the consideration and compensate for damages (Art. 1165 CC).
  • Through no fault of the debtor: The obligation is extinguished (Art. 1165 inc 3 CC).
  • Failure of some benefits: The debtor fulfills obligations with any remaining benefits (Art. 1165 inc 2).

B) When the choice is for the creditor or a third party:

  • Impossibility of all benefits due to the creditor: The obligation is resolved, and the creditor can demand compensation (Art. 1166 inc 4).
  • Impossibility of benefits through no fault of the debtor: The creditor can claim any remaining benefits.

Indivisible Obligations vs. Solidarity

Indivisible

Indivisibility arises from the nature of the benefit or impossibility of material division. It is subjective-objective as it falls on an object not divisible. Co-creditors cannot waive the requirement. It is transmitted to heirs. Any creditor can receive full payment due to the nature of the benefit.

Solidarity

Solidarity is based on the obligation’s title, by convention or law. It is subjective, falling on the cause of the obligation. Co-creditors can write off the whole debt of one co-debtor. Solidarity is not passed to heirs. Each creditor holds the integrity of the credit.

Joint Obligations

Joint obligations are divided among all creditors and debtors. The object must be severable for partial payment.

Effects

  • Enforceability: Each can require only their share.
  • Payment: Each debtor pays their share.
  • Insolvency: If a debtor is insolvent, the creditor is affected.
  • Prescription: Runs separately for each debtor.
  • Delay and Guilt: Affect only the debtor at fault.
  • Penalty: Applies only to the defaulting debtor’s share.

Presumption of Commonwealth

Commonwealth is presumed, with equal division. It is presumed because solidarity is an exception. Governed by rules of divisible obligations (Art. 1172, 1173, 1174).

Obligations of Solidarity

Obligations with multiple subjects where the creditor can demand the entire amount from any debtor, and debtors are obligated to comply with the entire debt.

Requirements

  • Plurality of creditors or debtors.
  • Delivery unit is divisible but fulfilled at one time.
  • Multiple legal links with a single benefit.

Solidarity is not presumed (Art. 1183). It must be explicitly established by law or the obligation’s title.

Novation, Remission, Compensation, and Transactions

between the creditor and one of the debtors.
Between the creditor and one of the debtors on the whole debt, frees the other debtors.
In novation, the co-debtors respond to your choice, for his part in the original obligation or by the proportion that would have returned.
In compensation, the co-debtors account for you.
In the waiver extinguishes the obligation of co-debtors.
In the transaction co-signer respond to his election by his party to the original obligation or the GIVING they would have received in benefits resulting from the transaction.