OBLIGATIONS AND CONTRACTS

1) Under the law on Contracts, only the parties to a contract may be affected by the terms and conditions of a contract and demand fulfilment of the terms thereof. Is there an instance when a person who is not a party to a contract may have the right to demand its fulfillment? Explain fully. What kind of stipulation can the parties enter into and what is the condition before it can take effect?

2) What are the modes of extinguishing an obligation? Define each.

3) To what kinds of obligations is compensation available? What are the requisites for a valid compensation?

4) When an obligation to pay becomes due and demandable, the debtor has the duty to deliver the amount due to his creditor. When the debtor attempted to make his payment to his creditor, the creditor refused to accept the payment because, according to him, he was not in the mood to receive the payment.

(a) What must the debtor do in order for him not to incur in delay and eventually extinguish the obligation?

(b) Are there any instance when the debtor is not required to make an attempt to make payment to his creditor before his obligation may be extinguished? Explain fully.

5) In an obligation with a penal clause, the penalty shall take the place of damages in case of breach of the terms and conditions of the obligation.

(a) Can the creditor recover damages even if the obligation already contains a penal clause? Explain.

(b) If the obligation with a penal clause does not contain a stipulation that the creditor can recover damages in addition to the penalty, can he still recover damages? Explain.

6) What is a contract and what are its essential requisites?