Legal compensation vs . Conventional compensation Legal compensation Conventional compensation Legal compensation take place by We recognize the concept of conventional operation of law when all the requisites compensation , defined as occurring are present as opposed to conventional "when the parties agree to compensate Compensation which take place when the their mutual obligation even if some parties agree to compensate their mutual requisites is lacking , such as that provide obligation even i in the absence of some in Article 1283 ." It is intended to requisites . The only requisites of eliminate or overcome obstacles which conventional compensation are (1) that prevent ipso jure extinguishment of their each of the parties can dispose of the obligations . credit he seeks to compensate , and (2) that they agree to the mutual extinguishment of their credits