Professional Documents
Culture Documents
1. Contract
Contract is the meeting of the minds between two persons whereby one binds himself with
respect to the other to give something or to render some service.
3. Characteristics of contracts
Contracts take effect only between the parties, their assigns and heirs except in
cases where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by provision of law.
If the contract should contain some stipulation in favor of a third person, he may
demand its fulfillment provided he communicated his acceptance to the obligor
before its revocation. A mere incidental benefit or interest of a person is not
sufficient. The contracting parties must have clearly and deliberately conferred a
favor upon a third person. (Stipulation pours autrul)
Consent is manifested by the meeting of the offer and acceptance upon the thing and the
cause which are to constitute a contract.
1. Certain or definite;
2. Made with intent to be bound of the same is accepted.
Acceptance thru correspondence acceptance binds the offeror from the time it came to
his knowledge.
Offer and acceptance thru agent the principal is bound from the time the acceptance is
communicated to the agent.
Cognition theory Contract is perfected from the moment the acceptance comes to the
knowledge of the offeror.
Expedition theory Contract is perfected from the moment the acceptance is declared or
made even if not made known to the offeror.
1. Consent
2. Object
3. Cause
1. Error or mistake
2. Violence or force
3. Intimidation or threat
4. Undue influence
5. Fraud or deceit
Kinds of simulation:
1. Absolute when the parties do not intend to be bound, void from the beginning
2. Relative parties conceal their true agreement
1. Under the contract of sale, things having potential existence may be the object of the
contract of sale.
2. There may be a sale of expected things but subject to the condition that it will come
to existence. (emptio rei speratae)
3. There may be sale of hope, the hope or expectancy already exists. (emptio spei)
10. Cause is the essential or principal purpose or reason which the contracting parties have in
view at the time of entering into the contract. (why of the contract)
The contract (with lesion) is valid except when there is fraud mistake or undue influence.
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OUTLINE OF LECTURE IN LAW ON CONTRACTS
(Defective Contracts)
1. Defective contracts
1. Rescissible contract valid until rescinded;
2. Voidable contract valid until annulled;
3. Unenforceable contract cannot be sued upon or enforced unless
ratified;
4. Void contract no effect at all cannot be ratified or validated
2. Rescission
Rescission is the remedy granted by law to the contracting parties and
sometimes even to third persons in order to recover indemnity for damages
caused them by a contract, even if such contract be valid, by means of
restoration of things to their condition prior to the celebration of contract.
5. Rescissible contracts
1. Those made by guardians when their wards suffer lesion by more than
of the value of the things which are the object thereof;
2. Those agreed upon in behalf of absentees if the latter suffer the lesion
stated above;
3. Those made in fraud of creditors provided the following requisites are
present:
i. There must be credit prior to the contract to be rescinded;
ii. Fraud on the part of the debtor;
iii. Creditor cannot recover his credit in any other manner.
4. Those which refer to things under litigation made by defendants
without the knowledge and approval of the litigants or a competent
judicial authority;
5. All other contracts especially declared by law to be subject to
rescission.
6. Voidable contract
It is a contract which possesses all the essential requisites of a valid contract
but one of the parties is incapable of giving consent, or consent is vitiated by
mistake, violence, intimidation, undue influence or fraud.
Prescriptive period
Requisites of ratification
a. If the contract is executor the parties are not bound to comply with
their prestation.
b. If the contract is already executed, the parties shall restore to each
other the object of the contract
c. The guilty party is liable to answer for damages.
7. Unenforceable contract
It is a contract that cannot be enforced in court or sued upon by reason of
defects provided by law until they are ratified according to law.
The Statute of Frauds found in Art. 1403, No. 2 Civil Code is the rule which
requires that certain agreements or some note or memo thereof shall be in
writing and subscribed by the party charged or by his agent; otherwise, such
agreement shall be unenforceable by action because evidence of the same
cannot be received without the writing on a secondary evidence of the same
cannot be received without the writing or a secondary evidence of its
contents.
8. Void contract
It is contract which has absolutely no force and effect and is inexistent from
the beginning.
1. It produces no effect
2. It cannot be ratified
3. It cannot give rise to valid contract
4. The right to set up the defense of illegality cannot be waived
5. The defense of illegality is available to the third persons only when their
interests are directly affected.
6. The action does not prescribe
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OUTLINE OF LECTURE ON CONTRACTS
(Forms, Reformation and Interpretation)
1. Form of contracts
A contract shall be obligatory or binding in whatever form it may have been entered into
provided all the essential requisites (consent, object and cause; and in certain specified
contracts, delivery of form) for its validity are present
.
In the following cases, the form of the contract is essential:
a. When the law requires that the contract be in some form to be valid (for validity);
b. When the law requires that a contract be in some form to be enforceable or proved in
a certain way (for enforceability);
c. When the law requires that a contract be in certain form for the convenience of the
parties (for convenience).
The requirement above is only directory. If the acts or contracts do not appear in a public
instrument, they are still valid, and the parties may compel each other by filing an action
in court to observe the necessary form.
3. Reformation
Reformation is that remedy in equity by means of which a written instrument is made or
construed so as to express or conform to the real intention of the parties when some error
or mistake has been committed.
Requisites of reformation
1. Meeting of the minds between the parties.
2. Instrument does not express the true intention of the parties.
3. The failure of intention is due to mistake, fraud, inequitable conduct or accident.
4. There must be clear and convincing proof.
Interpretation of contracts is the determination of the meaning of the terms or words used
by the parties in the contract.
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