Obligations and Contracts: Assignment No.

COMPARATIVE MATRIX
OF CONDONATION,
COMPENSATION,
CONFUSION, AND
NOVATION
DELULU - JD1A
Learners Utilizing Legal Understanding
 group members
Aquino, Shaena Kassandra Estrada, Lhanz
Aspilan, Arthur Galapate, Jobelle
Batasan, Luke Ever Likiyan, Hannah
Claveria, Karla Patricia Molina, Chelsea
Consolacion, Remy Mae Pespes, Kristiana Pauline
Daw-as, Sam Sanchez, Catherine Jill
De Guzman, Rheginaex Santiago, Maximine Alexi
De Leon, Jillian Moira Taras, Jayrene
 DEFINITION
CONDONATION COMPENSATION CONFUSION NOVATION

Novation is the modification of an

Compensation shall take place
obligation by another , either by
when two persons, in their own
Condonation or remission is the changing the object or principal
right, are creditors and debtors of
gratuitous abandonment by the condition, substituting the person
each other. (Art. 1278)
creditor of his right. In plain Confusion or merger is the of the debtor, or subrogating a
It is a mode of extinguishing
language, this refers to meeting in one person of the person in the rights of the
obligations whereby two persons
forgiveness of an idebtedness. To qualities or the characters of creditor. (Art. 1291)
in their capacity as principals are
extinguish the obligation, it mutual debtors and creditors of creditor and debtor.
Example. D owes C 10,000.00, If
requires the debtor's consent. each other with respect to equally (Art. 1275)
parties later agree that D should
(Art. 1270) liquidated and demandable
give a ring instead of the cash ,
obligations to which no retention Example: M makes a promissory
there is novation by changing the
Example: D owes C P3,000.00. or controversy has been timely note payable to P or order. P
object of prestation. There is also
The debt is evidenced by the commenced and communicated indorsed the note to A, A to B, B
novation by substituting the
promisory note. C informs D that by third parties. to C. On due date, C indorsed the
person of the debtor. There is also
he will no longer collect the debt note back to M. The obligation
novation if X will take the place of
and delivers the promisory note Example: D owes P5000.00. C here is the extinguished because D. Finally there is novation if the
to D. D accepts C's generosity. owes D P5000.00. Both debts are M is now the creditor himself. parties later agree that X shall
D's obligation is extinguished by due and demandable. The parties
take the place of C as the new
condonation or remission. do not need to pay each other as
creditor. There is novation by
their obligations are extinguished
subrogating a third person in the
by compensation.
rights of the creditor.
 FEATURES / CHARACTERISTICS
CONDONATION COMPENSATION CONFUSION NOVATION

The following are essential

requisites for condonation of In order for Compensation to take
debt: place, the following are essential
requisites are essential:

1. Since acceptance of the offer In order for novation to take

1. Each of the obligors be bound
is required, there must Confusion has the following place, the concurrence of the
principally, and that he be at
therefore be an agreement; the same time a principal requisites: following requisites is
2. The parties must be creditor of the other. indispensable:
capacitated and consent to 2. Both debts consist of a sum of 1. The merger of the characters 1. There must be a previous
such agreement; money or if the things due are of the creditor and debtor valid obligation;
3. There must be a subject consumable, they be of the must be in the same person; 2. There must be an agreement
matter; same kind, and also of the 2. The merger must take place of the parties concerned to
4. The cause or condition must same quality if the latter has in the person of either the an new contract;
be liberality; been stated. principal creditor or the 3. There must be
5. The obligation must have 3. The two debts be due. principal debtor; and extinguishment of the old
been demandable at the 4. Both debts be liquidated and 3. The merger must be contract; and
demandable.
time of remission; complete and definite. 4. There must be the validity of
5. Neither of them there be any
6. It must not be inofficious; the new contract.
retention or controversy
7. In cases where remission is
commenced by third persons
not expressly implied, the and communicated in due time
formalities of a donation is to the debtor.
required; and
 FEATURES / CHARACTERISTICS

CONDONATION COMPENSATION CONFUSION NOVATION

8. Waivers or remissions must be

Novation is never presumed.
clearly and convincingly shown,
The well settled rule is that
either by express stipulation, or
novation is never presumed, and
by acts admitting of no other
animus novandi, whether totally
reasonable explanation. Hence,
or partially, must appear by
they cannot be presumed
express agreement of the
generally.
parties, of by their acts that are
too clear and unmistakeable.

Substitution of Debtor. A new

debtor (delegado) can be
substituted in the place of the
original one (delegante).
 FEATURES / CHARACTERISTICS

CONDONATION COMPENSATION CONFUSION NOVATION

Release of Original Debtor. In

order to change the person of
the debtor, the old one mut be
expressly released from the
obligation, and the hird person
or new debtor must assume the
former’s place in the relation.

Consent of Creditor. Whether

the substitution of the debtor is
made through expromision or
delegacion, the consent of the
creditor is an indespensible
requirement.
 KINDS
CONDONATION COMPENSATION CONFUSION NOVATION

1. As to Form
1. According to object or
(a) Express: When it is made
purpose
formally, either oral or in writing. 1. By its effect or extent:
(a) Real or objective- Novation
It should be in accordance with (a) Total. — when both 1. As to Effect
by changing the object or
the forms of ordinary donations. obligations are of the same
principal condition
(b) Implied: When it can be amount and are entirely (a) Effect of Confusion or
(b) Personal or subjective-
inferred from the acts of the extinguished (Art. 1281.); or Merger upon guarantors:
Novation by the change of the
parties, such as when the (b) Partial. — when the two
parties (debtor or creditor).
creditor voluntarily delivers the obligations are of different Article 1276 provides that merger
(b-1) Substituting the person
private document evidencing amounts and a balance remains. which takes place in the person
of the debtor (always with
the credit to the debtor. The extinctive effect of of the principal debtor or
the creditors consent)
compensation will be partial only creditor benefits the guarantor,
Expromision - a third person
2. As to Amount or Extent as regards the larger debt. but confusion which takes place
initiates the substitution and
(a) Partial: Refer to the amount in the person of any of the latter
assumes the obligation even
of indebtedness or to an 2. By its cause or origin: does not extinguish the
without the knowledge or
accessory obligation only (such (a) Legal. — when it takes place obligation.
against the will of the debtor.
as pledge or interest), or to some by operation of law when
Delegacion - it is the debtor
other aspect of the obligation all the requisites are present
who initiates the substitution
(such as solidarity). even without the knowledge of
which requires the consent of
(b) Total: Entire obligation the parties (Arts. 1279, 1290.)
all parties. (original debtor,
(principal and accessory) is
creditor, new debtor)
remitted.
 KINDS
CONDONATION COMPENSATION CONFUSION NOVATION

(b) Effect of Merger in Joint and

(b-2) Subrogating a third
(b) Conventional or voluntary. Solidary Obligation:
person in the rights of the
— when it takes place by
creditor. Kinds of
agreement of the parties Since in Joint Obligations, the
subrogation:
(Art.1282.); credit or debt is distinct from
Conventional - change of
(c) Judicial. — when it takes one another, the extinction of
3. As to the Manner of creditor by the agreement of
place by order from a court in a the debt of one debtor does not
Remission the parties (original parties
litigation. (Art. 1283.) Strictly necessarily affect the debt of
(a) Inter vivos: Effective during and new creditor)
speaking, judicial compensation others. Except as regards the
the lifetime of debtor and Legal - by operation of law
is merely a form of legal or share corresponding to the
creditor.
voluntary compensation when creditor or debtor in whom the
(b) Mortis causa: Effective upon (c) Mixed- change of object and
declared by the courts by virtue two characters concur.
the death of the creditor. It must parties to the obligation.
of an action by one of the parties,
be contained in a will or
who refuses to admit it, and by Article 1215 of the Civil Code
testament. 2. According to Form
the defense of the other who provides that confusion has the
(a) Express - declared in
invokes it; or effect of extinguishing the
unequivocal terms
(d) Facultative. — when it can obligation if the confusion
(b) Implied - the old and new
be set up only by one of the affects the entire obligation.
obligation are on every point
parties.
incompatible with each other
 KINDS
CONDONATION COMPENSATION CONFUSION NOVATION

3. According to Extent
(a) Total or extinctive - old
obligation is totally extinguished,
such as when an obligation to
pay a sum of money is replaced
with an obligation to give a
diamond ring.
(b) Partial or modificatory - old
obligation still remains in force
except as it has been modified,
such as when the place of
payment is changed or when
there is a variation in the amount
of installment payments.
 EFFECTS
CONDONATION COMPENSATION CONFUSION NOVATION

a. Effect of inofficious
a). Effect of merger in the
remission
person of principal debtor or
While a person make donations, a. Total
creditor a. Total or Extinctive
no one can give more than that When the two debts are of the
Merger in the person of the It is extinctive when an old
which he can give by will; same amount.
principal debtor or creditor obligation is terminated by the
otherwise, the excess shall be
extinguishes the obligation. creation of a new one that takes
inofficious and shall be reduced b. Partial
Hence, the accessory obligation the place of the former
by the court accordingly. When the two debts are not of
of guaranty is also extinguished
the same amount.
in accordance with the principle Dual Function of Extinctive
As a rule, testamentary
that the accessory follows the Novation
dispositions which impair the Debtor can set up
principal. 1. One to extinguish an existing
legitimate shall be reduced on compensation as a defense
obligation; and
petition of the heirs (Art. 887) for all debts prior to his
b.) Effect of merger in the 2. To substitute a new one in its
insofar as they are inofficious or knowledge of the
person of principal debtor or place
excessive. assignment not prior or after
creditor
the assignment.
Merger in the person of the b. Partial or Modificatory
Incidentally, legitimate is that
principal debtor or creditor It is merely modificatory when
part of the testator’s property Compensation can be set up
extinguishes the obligation. the old obligation subsists to the
which he cannot dispose of regarding debts previous to
Hence, the accessory obligation extent that it remains
because the law has reserved it the cession or assignment.
of guaranty is also extinguished compatible with the amendatory
for certain heirs (like the children This refers to debts previous
in accordance with the principle agreement
with respect to their parents) to the cession or assignment.
that the accessory follows the
who are, therefore, called
principal.
compulsary heirs.
 EFFECTS

CONDONATION COMPENSATION CONFUSION NOVATION

b. Effects of renunciation of the

principal debt of the accessory
obligation
c.) Effect of merger in the
person of guarantor
Article 1273. The renunciation of
Article 1279. When all the The extinguishment of the
the principal debt shall
requisites mentioned in Article accessory obligation does not
extinguish the accessory
1279 are present, compensation carry with it that of the principal
obligations; but the waiver of the
takes effect by operation of law, obligation.
latter shall leave the former in
and extinguishes both debts to
force.
the concurrent amount, even Consequently, merger which
though the creditors and takes place in the person of the
The above provisions follows the
debtors are not aware of the guarantor, while it extinguishes
rule that the accessory follows
compensation. the guaranty, leaves the principal
the principal. While the
obligation in force.
accessory obligations cannot
exist without the principal
obligation, the latter may exist
without the former.
 REFERENCES
De Leon, H.S. & De Leon, H.M. (2021). The Law on Obligations and Contracts.
Rex Book Store.

Domingo, A.D. (2018). Obligations and Contracts. Coaching for Results

Publishing.

Soriano, F.R. (2016). Notes in Business Law. GIC Enterprises & Co., Inc.

The New Civil Code of the Philippines.