OBLIGATION q Definition of obligation q Sources of

OBLIGATION q Definition of obligation q Sources of obligation q Types of obligation

THE CONCEPT OF OBLIGATION This chapter is intended to introduce the students to the basic notions of obligations and contracts that are crucial to understand the chapters that follow. The conceptual foundation of obligation traces as far back to ancient Roman law which defines obligation as a means of an undertaking or legally binding relationships where one party promises the other party to perform some acts or to do something.

DEFINITION OF OBLIGATION. A generic word, derived from the Latin substantive "obligatio" having many, wide, and varied meanings, according to the context in which it is used. Black's law dictionary defines obligation as “a legal duty or moral duty to do or not to do something”. The binding power of a vow, promise, oath, or contract, or of law, civil, political, or moral, independent of a promise; that which constitutes legal or moral duty, and which renders a person liable to coercion and punishment for neglecting it.

OBLIGATION OF CONTRACT OBLIGATION OF A CONTRACT: is the duty of performance. That which law in force when contract is made obliges parties to do or not to do, and remedy and legal means to carry it into effect.

SOURCES OF OBLIGATION In modern time, the laws of different countries clearly express the sources of obligation. For instance, French civil code classifies the source of obligation as; I. Obligation that arises from contract II. Obligations that arise beyond the contract III. Obligation that arises from the unlawful acts IV. Obligations that arises from the causing of physical injure or causing material damage V. Obligations arising from law

SOURCES OF OBLIGATION CONT. . In so far as an obligation arising from the law is concerned, it happens in situations when law imposes obligations on persons to give or not to give, to do or not to do some acts recognized in almost all-legal systems. Obligation arising from the law is a unilateral obligation imposed on citizens or contracting parties without their consent. It includes among other things Ø Obligation to pay income taxes Ø Obligations of creditors Ø Obligation of debtors Ø Obligations of families to their children, etc.

TYPES OF OBLIGATIONS Obligations can be classified based on the nature of activities, and the number of parties legally bound by the obligation. Accordingly, they can be classified into: 1) Divisible obligation This is one whereby a party undertakes to perform its obligations by dividing into parties. For instance, if A and B owed C 1, 000 USD such parties to the obligation perform or discharge the obligations by paying half (part) of the debt to C, which is 500 each.

TYPES OF OBLIGATIONS CONT. . 2) Indivisible obligations In this type of obligation, the performance of the obligation undertaken cannot be divided into parts. Hence, in this type of obligation partial performance is impossible given the conditions and circumstances of its formation, which does not allow the performance of obligation by dividing into parts. 3) Positive obligation This is a situation where a person's obligation is to do or to give some thing to another. It requires an action from the debtor.

TYPES OF OBLIGATIONS CONT. . 4) Negative obligation. This is a situation where a person's obligation does not to do some thing or it refrains from doing some thing. Such obligations are also called obligations not to do. Example, company A may agree with company B in which company A under takes an obligation not to produce or sell certain goods in the same market.

TYPES OF OBLIGATIONS CONT. . Based on the number of parties legally bound, obligations can be classified into unilateral, bilateral, and multilateral obligations. a) Unilateral obligation arises from contract in which two parties are participate. However, only one of the parties is legally bound by the contract for the benefit of the other contracting party. Example, donations b) Bilateral obligation arises from a contract entered into by two parties in which these contracting parties are bound legally to each other on equal terms. Accordingly, there are two promisors and two promises.

TYPES OF OBLIGATIONS CONT. . c) Multilateral obligation. This is a case where more than two persons undertake to perform an obligation. Such obligations can be classified into three: 1) Simple joint obligation: each liable for its own share 2) Joint obligations: jointly debtors to creditors 3) Several and joint obligations: co-debtors shall be jointly and severally liable

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