When a debtor’s performance does not conform to what was agreed, the creditor can seek both compensation for the breach and a restoration of the original position. Damages cover the harm caused by the wrong performance, while undoing the obligation (rescission) lets the creditor require the contract to be unwound and the property or benefits returned, with the debtor paying the costs to put things back as they were. This combination reflects the creditor’s interest in being made whole and in restoring the situation to its pre-contract state if the agreed performance cannot be fulfilled properly. For example, if the debtor delivered something different or performed in a way that violates the agreement, the creditor may claim damages for the misperformance and also demand that the contract be undone, with the debtor bearing the expenses to restore or return what was received. Specific performance is not the correct remedy here because the issue is the wrong or non-conforming performance already given; the appropriate route is compensation plus restoration, not forcing the debtor to perform again under the same terms. Forfeiture of the contract is not the typical remedy for this scenario, as the usual options are damages and rescission.

Natural obligations come from equity and justice rather than from the written law giving a remedy in court. They exist as moral or ethical duties recognized by law, but they cannot be enforced through a court action to compel performance. The law treats them as obligations that bind in conscience; they are not the kind of obligations that give rise to a sue-for-breach remedy. This is what sets them apart from obligations arising from positive law or from contracts, which are enforceable by legal action. In short, natural obligations reflect a sense of duty recognized by equity, without creating a legally enforceable claim in court.

Conventional subrogation happens when a third person voluntarily pays or satisfies the creditor’s claim with the agreement of the original parties—the creditor and the debtor—and that third person is substituted in the creditor’s rights. The essence is a negotiated transfer of rights brought about by the consent of all involved: the debtor, the creditor, and the paying third party. Once the third party pays, they step into the creditor’s shoes and can pursue the debtor for reimbursement or enforcement of the original claim. This is why the statement that best fits conventional subrogation is that it involves the consent of the original parties and a third person. It reflects the contractual, voluntary nature of conventional subrogation, as opposed to subrogation by operation of law (which can occur without the debtor’s knowledge) or schemes that involve no third party or only partial consent.

When a debtor substitutes a performance with something else, that substitute becomes the subject of the obligation and the debtor must deliver it in the agreed condition and timeframe. The debtor bears the risk of loss of the substitute if the loss occurs due to his fault, specifically in cases of delay, negligence, or fraud. If the substitute is lost or damaged because the debtor delays delivering it, handles it carelessly, or engages in deceitful misrepresentation or the use of a inferior substitute, he is liable for the loss. It isn’t limited to situations where the creditor delays or where the substitute happens to be damaged during transport, and it isn’t automatic in all circumstances, because liability arises from the debtor’s fault in the substitution process.