Page 38 - Obligations & Contracts Module 1-2

*EFFECT OF PARTIAL LOSS – ( judicial determination of extent is necessary)

a) when loss is significant – may be enough to extinguish obligation

b) when loss insignificant – not enough to extinguish obligation

*WHEN THING IS LOST IN THE POSSESSION OF THE DEBTOR

Presumption: Loss due to debtor’s fault ( disputable )

Exception: natural calamity, earthquake, flood, storm

3. REBUS SIC STANTIBUS - agreement is valid only if the same conditions prevailing at time of

contracting continue to exist at the time of performance

*EFFECT OF DIFFICULTY BEYOND PARTIES’ CONTEMPLATION

Rule: Obligor may be released in whole or in part

*Requisites:

(a) The change could not have been foreseen at the time of the execution of the contract

(b) The performance is extremely difficult, but not impossible (because if it is impossible, it is

extinguished by impossibility)

(c) The event was not due to the act of any of the parties

(d) The contract is for a future prestation

4. CONDONATION/REMISSION OF THE DEBT – gratuitous abandonment of debt or right to

claim; donation; rules of donation applies; express or implied