Interactive Explorer: Obligations and Delays

Use the explorer below to understand the different types of obligations and the concept of delay (mora), which is highly relevant in construction schedules.

Liquidated Damages Calculator

Explore a hypothetical liquidated-damages calculation. The daily rate, calculation base, entitlement, and cap must come from the actual contract and governing law; no universal Philippine rate or 10% cap applies to every construction contract.

Calculation Result

Under the entered illustrative terms, 15 days would yield PHP 15,000 in liquidated damages. No example cap reached.
Illustrative LD=min⁡(1000000×(0.1/100)×15,1000000×(10/100))=PHP 15000\text{Illustrative LD} = \min(1000000 \times (0.1/100) \times 15, 1000000 \times (10/100)) = \text{PHP } 15000

Torts and Damages

In civil engineering, liability often arises not just from a breach of contract, but from negligence that causes harm to third parties.

Understanding Torts (Quasi-Delicts)

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Important

Article 1723 of the Civil Code: The engineer or architect who drew up the plans and specifications for a building is liable for damages if within fifteen (15) years from the completion of the structure, the same should collapse by reason of a defect in those plans and specifications, or due to the defects in the ground. The contractor is likewise responsible for the damages if the edifice falls, within the same period, on account of defects in the construction or the use of materials of inferior quality furnished by him, or due to any violation of the terms of the contract.

Key Takeaways
  • A quasi-delict (tort) requires fault or negligence without a pre-existing contract.
  • The standard of care is the diligence of a "good father of a family".
  • Article 1723 holds engineers liable for 15 years for structural collapse due to defects.

Mora and Damages

Example

Scenario: Mora and Damages

Contractor ABC was supposed to finish a building for Owner XYZ by December 31. On January 15, the building is still unfinished, but Owner XYZ has never formally demanded that Contractor ABC finish the work. On January 16, Owner XYZ demands the building be turned over.

Explanation: Under the Civil Code, a mere delay in time does not automatically constitute legal delay (Mora). The general rule is "No Demand, No Delay." Until Owner XYZ made the demand on January 16, Contractor ABC was not legally in default. Therefore, damages and penalties (like Liquidated Damages) generally start accruing from the time the demand is made, not the target completion date, unless the contract explicitly states that "time is of the essence" and demand is not necessary.

Sources of Obligations & Contracts

Example

Scenario: Defective Contracts - Vitiated Consent

Contractor A threatens Owner B with physical harm if Owner B does not sign a contract awarding the construction of a building to Contractor A. Owner B signs out of fear.

Application: This contract is voidable. The consent of Owner B was vitiated by intimidation. In obligations and contracts, consent must be freely given for a contract to be perfectly valid. Owner B can file a case to annul the contract.