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2.

BREACH OF OBLIGATIONS

Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.

Cardinal Rule: the above provision embodies the cardinal rule in


performance of obligations.

MANNER OF BREACH

Art. 1170. Those who in the performance of their obligations are guilty
of fraud, negligence, or delay, and those who in any manner contravene
the tenor thereof, are liable for damages. (1101)

b. Fraud

Art. 1171. Responsibility arising from fraud is demandable in all


obligations. Any waiver of an action for future fraud is void. (1102a)

Art. 1338. There is fraud when, through insidious words or


machinations of one of the contracting parties, the other is induced to
enter into a contract which, without them, he would not have agreed to.
(1269)

Art. 1344. In order that fraud may make a contract voidable, it should
be serious and should not have been employed by both contracting
parties.

Incidental fraud only obliges the person employing it to pay damages.


(1270)

Kinds of Fraud:
G. Dolo causante – or fraud in obtaining consent, is applicable only to
contracts where consent is necessary and thus affects the validity of
the contract, making it voidable.

Under this kind of fraud, the party would not have entered into the
contract were it not for the fraud; annulment is the remedy of the
party who’s consent was obtained through fraud;

H. Dolo incidente – or fraud in the performance of the obligation and


applicable to obligations arising from any source. This kind,
however, does not affect the validity of the contract and makes the
party guilty of fraud liable for damages.

Under this kind, a party would have entered the obligation with or
without the fraud. Remedy is damages.

(1) Negligence

Art. 1172. Responsibility arising from negligence in the performance of

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