obligation

obligation

1. Law a legally enforceable agreement to perform some act, esp to pay money, for the benefit of another party

2. Law

a. a written contract containing a penalty

b. an instrument acknowledging indebtedness to secure the repayment of money borrowed

Obligation

 

a relationship in civil law wherein one party (the debtor) is obliged to perform a certain action (transfer property, perform work, pay money) for the benefit of another party (the creditor) or to refrain from performing the action. The creditor in turn has the right to require the debtor to carry out his obligation. Under Soviet law the parties to an obligation are socialist organizations and citizens. Obligations generally arise from a contract, from planning or other administrative directives, from the infliction of property damage subject to compensation, or from the unjust acquisition or holding of property.

Depending on the rights and duties of the parties, obligations may be classified as those involving transfer of property to ownership or operational management, with or without compensation; transfer of property for use, with or without compensation; performance of work or services; or the protection of socialist and personal property or other property rights.

If several creditors or several debtors are involved in an obligation, its manner of performance is determined by the object of the obligation and the conditions of the agreement of the parties. If each of the participants in the obligation is required to perform a certain (equal or unequal) part of the obligation, the obligation is called a joint obligation. If the creditor has the right to demand performance of the obligation in full from any one of the creditors (in which case the other participants in the obligation are released from liability), the obligation is called a joint and several (solidary) obligation. Performance of an obligation may be secured by an additional obligation. If the obligation is not performed voluntarily, the debtor can be compelled to perform the obligation by a court or arbitration board.

An obligation may be terminated by setting-off a similar counterclaim, by agreement between the parties, if the performance of the obligation is impossible and the debtor is not responsible, or by the dissolution of a legal person (debtor or creditor) unless performance of the obligation is assigned by law to another legal person.