Understanding Joint and Several Obligations & Extinction

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Joint Obligations Explained

In the case of multiple debtors and one creditor, the creditor can only claim each debtor's proportional share of the debt. Conversely, with multiple creditors and one debtor, each creditor can only claim their proportional share of the credit from the debtor.

Joint and Several Obligations Defined

When there are multiple debtors and one creditor, the creditor can claim the entire credit from any single debtor. The debtor who pays the full amount is then entitled to seek compensation from the remaining debtors.

If there are multiple creditors and one debtor, each creditor can claim the entire credit from the debtor, who only has to pay once. The creditor who receives the full credit is then obligated to distribute the amount received among the other creditors.


Extinction of Obligations: How Debts End

Obligations are extinguished by:

  • Payment or Performance: Fulfilling the terms of the obligation.
  • Loss of the Object Due: Obligations are extinguished when the object due is lost without the debtor's fault. In obligations involving actions or refraining from actions, sudden impossibility is considered equivalent to loss. Obligations must always be possible. Therefore:
  1. The loss cannot be caused by the debtor's fault.
  2. The loss must occur before the time of performance.
  3. The loss cannot affect generic items (e.g., a kilogram of apples).
Forgiveness of the Debt: The creditor voluntarily renounces their right. This renunciation cannot prejudice other parties.
  • Express remission: The creditor explicitly declares the relinquishment of a right.
  • Tacit remission: The creditor's intent is inferred from their behavior, such as returning a check signed by the debtor.
Confusion of Rights of Creditors and Debtors: The obligation is extinguished when the same person simultaneously holds the positions of both creditor and debtor. Setoff (Compensation): The obligation is extinguished when the involved parties are reciprocally creditor and debtor, provided certain requirements are met, as outlined in Article 1196 of the Civil Code:
  1. The reciprocal credits and debts must involve giving something of the same kind (e.g., money, oranges of the same quality).
  2. The reciprocal credits and debts must be undisputed.
  3. The reciprocal credits and debts must be overdue and payable.
Novation: Replacing an existing obligation with a new one. Novation can be either extinctive or modificative.

Extinctive Novation

Occurs when a new obligation replaces the former, with the new and old obligations being incompatible. This incompatibility can be either material (physical) or legal.

  • Material incompatibility
  • Legal incompatibility: Arises when the legal regime applicable to the old and new obligations differs.
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several obligations loss of object creditor confusion of rights performance forgiveness of debt payment joint obligations debtor extinction of obligations setoff