Business Law (I) (2).pptx - Business Law(I LAW OF...

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Business Law (I) LAW OF OBLIGATIONS
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OBLIGATION The term obligation has three meanings. In the narrowest sense, the term obligation is related to monetary obligations (debts). In the narrower sense, obligation means a single duty of debtor to fulfill his promise (debt) In the broadest sense, the term obligation means an obligation relationship between two parties.
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OBLIGATION RELATIONSHIP An obligation relationship is a legal relationship; arising from contract (contractual relationship ) which charges one party ( the debtor) to perform his promise in favor of the other party (the creditor arising from a tort ( tortious relationship)which charges one party to repair damage caused to the injured party. The concept obligation relationship covers frame relationship between the creditor and debtor.
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Creditor A creditor based on the legal relationship has the right to request from the debtor the fulfillment of his promise. The creditor is the active party of the obligation relationship.
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Debtor The debtor has to perform his obligation in favor of the creditor. The debtor is the passive party to the obligation relationship.
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Promise Promise of performance of the obligation, is the subject matter of the obligation relationship. A promise is an assurance made by the promisor (debtor) to the promisee (creditor) stating that he will give or do something or refrain from doing some specified acts. A promise is more than an intention.
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Promise A promise may be related to giving something. In a sales contract the seller promises to deliver the property sold and the buyer promises to pay the purchase price. The promise may be related to doing something. An architect promises to build a house or a worker promises to work in enterprise. A promise can also be related to refrain from a particular act. A promises not to engage in unfair competition or not to block his neighbor’s view by planting tall trees.
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The Legal Nature of Obligation Relationship The relative nature of the obligation relationship. The obligation relationship forms the basis for the relative rights, which each party can exercise against the other party. In a sales contract seller can demand payment of the purchase price only from the buyer, and the buyer can demand the delivery of the property sold only from the seller. A relative right can only be isolated by the debtor.
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Relative Rights and Claim A relative right arising from contract or torts confers to the creditor an authorization to request from his debtor the accomplishment of his obligation, which is referred to as «claim». A claim can only be exercised when the obligation becomes due. When a claim is raised by the creditor before a court, there is a lawsuit.
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Contractual Liability The violation of a contract ( brach of a contract) is referred to as contractual liability.
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