1. reference: Freedom of contract. Obligations arising from contracts can be enforced between the contracting parties provided such contract is not contrary to law. Although the contracting parties have the right to establish terms as may be convenient to them, this right is limited. For a contract to be valid, stipulations therein must not be contrary to law, morals, good customs, public order, or public policy.

Contracting parties of a valid contract must comply with its terms and conditions in good faith.

 

2. reference: Diligence of a Good Father of a Family

The law made the "diligence of a good father of a family" as the reference point as to the kind of diligence a person obliged to deliver a determinate thing must observe. It is an accepted notion that no father would ever want to risk his family. Hence, when a person is obliged to give something, he is likewise obliged to preserve and take good care of the thing and this he may achieve by treating the same as his own.

The diligence of a good father of a family is best described as that which is required by the nature of the obligation and corresponds with the circumstances of person, time and place (Art. 1173.)

 

Please explain the principle in law and give an illustration based on real life experience or cite a scenario in the application of the principle in law Freedom of Contract Diligence of a Good Father of a Family