Article 1170 is a cornerstone of Philippine contract law. It establishes the legal basis for holding a party liable for damages when they fail to fulfill their obligations properly. The law states:
"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."
This provision serves as a "catch-all" for breach of contract, ensuring that creditors are compensated when debtors fail to live up to their end of a bargain.
The Four Grounds for Liability
To successfully claim damages under Article 1170, the breach must fall under one of these four categories:
1. Fraud (Dolo)
In the context of Article 1170, we are referring to Incidental Fraud (Dolo Incidente). This is the intentional evasion of the normal fulfillment of an obligation.
- Distinction: This is different from Causal Fraud (Dolo Causante), which occurs before a contract is signed to trick someone into agreeing to it. Under Article 1170, the contract already exists, but the party intentionally cheats during its execution.
- Example: A contractor agrees to build a house using premium steel but secretly uses cheaper, rusted materials to save money.
2. Negligence (Culpa)
This is the omission of that diligence required by the nature of the obligation. If the law or contract does not specify the degree of diligence, the standard is that of a "good father of a family" (bonus pater familias).
- Contractual Negligence (Culpa Contractual): Since there is a pre-existing contract, the plaintiff only needs to prove the existence of the contract and its non-performance to raise a presumption of negligence.
3. Delay (Mora)
Legal delay is not just being "late." It is the failure to perform an obligation on time, which constitutes a breach.
- Mora Solvendi: Delay on the part of the debtor.
- Mora Accipiendi: Delay on the part of the creditor (refusing to accept performance without just cause).
- Compensatio Morae: Delay of both parties in reciprocal obligations.
- Note: Usually, a demand (judicial or extrajudicial) is required before delay officially begins, unless the law or the contract specifically states otherwise.
4. Contravention of the Tenor
This is a broad category that covers any violation of the terms and conditions stipulated in the agreement that doesn't strictly fall under fraud, negligence, or delay.
- Example: A singer agrees to perform five songs at a wedding but only performs three. Even if they weren't "late" or "negligent," they contravened the tenor of the agreement.
Types of Damages Recoverable
When a breach occurs under Article 1170, the injured party may seek various types of damages, often remembered by the acronym MENTAL:
| Type | Description |
|---|---|
| Moral | For physical suffering, mental anguish, and besmirched reputation. |
| Exemplary | Imposed as a correction for the public good (usually requires gross negligence or malice). |
| Nominal | Awarded to vindicate a right that has been violated, even if no actual loss was proven. |
| Temperate | Awarded when some pecuniary loss has been suffered but its amount cannot be proved with certainty. |
| Actual | Compensation for scientifically proven pecuniary (financial) loss. |
| Liquidated | Damages previously agreed upon by the parties in the contract itself. |
Key Legal Principles
- Diligence Required: If the contract is silent, the debtor must exercise the diligence of a "good father of a family." However, if the law (like for common carriers) requires "extraordinary diligence," that higher standard must be met.
- Future Fraud: Any waiver of an action for future fraud is void. You cannot legally agree to let someone cheat you in the future. However, a waiver for past fraud is valid, as it is considered an act of generosity or settlement.
- Fortuitous Events: Generally, no person is responsible for events that could not be foreseen or were inevitable (e.g., earthquakes, war). However, if the debtor is already in delay or acted with fraud, they are still liable even if a "force majeure" occurs.
Comparison of Fraud and Negligence
| Feature | Fraud (Dolo) | Negligence (Culpa) |
|---|---|---|
| Intent | Deliberate intention to cause damage. | No intention, just lack of care. |
| Liability | Cannot be mitigated by courts. | May be reduced by courts depending on circumstances. |
| Waiver | Waiver for future fraud is void. | Waiver for future negligence may be valid (unless gross). |
Would you like me to draft a sample demand letter based on a breach of contract under Article 1170?