Contracts

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is a meeting of minds between 2 persons whereby one binds himself to other, to give something or do somethingContracts

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Contracts

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CONTRACT MUST NOT:

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1. Contrary to law 2. Morals 3. Good customs 4. Public order 5. Public Policy

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deals w/ norms of good & right conduct evolved in community

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Morals

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consists of habits &practices w/c through long usage have been followed and enforced by society

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Customs

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public safety/public weal

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PUBLIC ORDER

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- broader than public order.- Contract w/ has a tendency to be injurious

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Public policy

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w/c has a specific name/designation in law. (commodatum,lease,agency)

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Nominate Contract

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- obligation is the legal tie or relation itself that exists after a contract. -There’s no contract if there’s no obligation. There is obligation even w/o contract

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CONTRACT VS. OBLIGATION

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-Agreement is broader than contract. -All contracts are agreement but not all agreements are contract.

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CONTRACT VS. AGREEMENT

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- no specific name or designation in law

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INNOMINATE CONTRACT

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1. DO UT DES – I give that u may give 2. DO UT FACIAS – I give that u may do 3. FACTO UT DES – I do that u may give 4.FACTO UT FACIAS – I do that u may do

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KINDS OF INNOMINATE CONTRACT

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1. The agreement of the parties. 2. Provision of the civil code on obligations and contracts. 3. The rules governing the most analogous contracts. 4.The customs of the place

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RULES GOVERNING INNOMINATE CONTRACTS

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contracts take effect only between the parties, their assigns and heirs EXCEPT obligations are not transmissible by

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–nature - stipulation - law

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PERSONS AFFECTED BY CONTRACT

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-parties -their assigns/transferees -heirs

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favor upon a 3rd person who has right to demand fulfillment

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Stipulation pour autrui

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3rd person who passes object of a contract over w/c there is a real right are bound to contract even if they are not parties.

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Creating real rights

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– is binding against the whole world & attaches to the property wherever it goes. -However, if real right is not registered, 3rd person who acted in good faith are protected under PPRD.

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Real right

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the creditor is given the right to impugn the contracts of his debtor to defraud him.

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Defraud creditors

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– 3rd person includes another to violate his contract can be sue. - it is presumed that the contract interfered w/ is valid and 3rd person has knowledge to its existence.

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Violated at the inducement of the 3rd person

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Perfected by mere consent (sale,lease,agency)

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Consensual Contract

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perfected by delivery. (delivery,pledge,commodatum)

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Real Contract

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compliance w/ certain formalities prescribed by law.(donation,must be in public instrument)

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Solemn contract

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steps taken leading to perfection of contract.

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Preparation or Negotiation

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definite agreement or meeting of minds

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Perfection or Birth

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Performed the obligation

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Consummation/Termination

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meeting of minds or mutual assent between parties on the subject matter and the cause w/c are to constitute the contract even if neither has been delivered.

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CONSENT

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is a proposal made by one party (offerer) to another (offeree), indicating willingness to enter into a contract.

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OFFER

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specific or determinate thing.

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Must be certain

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- An offer made in jest or anger is not seriously intended therefore not a valid contract. - Lack of serious intent to enter into a contract where such condition was not apparent to the offeree who honestly believed that the offer was seriously intended, does not invalidate the offer.

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Seriously intended

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is the manifestation by the offeree of his assent to all the terms of the offer.

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ACCEPTANCE

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considered an extension of the personality of his principal.

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AGENT

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one giving a person for a consideration a certain period within to accept the offer of the offerer.

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OPTION CONTRACT

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is the period given w/c the offeree must accept the offer.

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OPTION PERIOD

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money paid in consideration for the option.

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OPTION MONEY

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partial payment of the purchase price is considered as proof of perfection of the contract.

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EARNEST MONEY

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those persons who have not yet reached the age 18 and are still subject to parental authority.

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Unemancipated Minors

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“A person does not know how to write does not know how to read.”

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Deaf – mutes

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temporary sanity during w/c a contract entered into by an insane or demented person is valid.

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LUCID INTERVAL

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it impairs the capacity of a person to give intelligent consent.

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DRUNKNESS & HYPNOTIC SPELL

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false notion of a thing or a fact material to the contract.

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ERROR OR MISTAKE

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an erroneous belief at contracting that certain facts are true.

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MISTAKE

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arises from an ignorance of some provision of law or from an erroneous interpretation of its meaning, or from an erroneous conclusion as to the legal effect of an agreement on the part of one parties.

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MISTAKE OF LAW

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the employment of serious, irresistible physical force

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VIOLENCE OR FORCE

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need not resort physical force. INTERNAL

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INTIMIDATION

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EXTERNAL

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VIOLENCE

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1. AGE 2. SEX 3. CONDITION OF THE PERSO

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FACTORS OF INTIMIDATION

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fear of displeasing a person whom respect and obedience are due, the contract is valid.

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Reverential fear

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takes improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice.

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UNDUE INFLUENCE

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committed by one party before or at the time of celebration of the contract to secure the consent of the other. It is the fraud used by a party to induce the other to enter into a contract w/o w/c the latter would not have agreed to.

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CAUSAL FRAUD

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is equivalent to misrepresentation or false misrepresentation.

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Concealment

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the act of deliberately deceive others by feigning or pretending by agreement, the appearance of a contract w/c either non-existent or concealed.

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SIMULATION

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does not really exist. Inexsistent & void

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Absolute simulation

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contract entered by parties is different from their true agreement.

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Relative simulation

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All the things w/c are not outside the commerce of men, including future things, may be abject of a contract. All rights w/c are not transmissible may also be object of contracts.

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OBJECTS OF CONTRACTS

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essential reason or purpose which the contracting parties have in view at the time of entering into contract.

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Cause of Contract –

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On the cause w/c, for each contracting party is the prestation or promise of a thing or service by the other. Parties are reciprocally obligated to each other

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ONEROUS

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one the cause of w/c is the service or benefit w/c is remunerated. The purpose of the contract is to REWARD the service that had been previously rendered by the party remunerated

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REMUNERATORY

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one the cause of w/c is the liberality of the benefactor or giver.

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GRATUITOUS

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purely personal or private reason w/c a party has entering into a contract. It is diff. from the cause of contract.

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Motive

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is any damage caused by the fact that price is unjust or inadequate. Inequality of situation, by one party who does not receive the full equivalent for what he gives in a commutative contract,

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Lesion

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refers to the manner in w/c a contract is executed or manifested.

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Form of contract

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MAY BE ORAL OR WRITTEN

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INFORMAL CONTRACT

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required by law for its efficacy to be certain specified form. - Donation of real property - Sale of land - donation - Stipulation to pay interest - Contract of partnership

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FORMAL CONTRACT –

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REMEDY ALLOWED BY LAW MEANS OF W/C A WRITTEN INSTRUMRNT IS AMENDED OR RECTIFIED SO AS TO EXPRESS OR CONFORM TO THE REAL AGREEMENT OR INTENTION

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REFORMATION

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mistake of fact that is common to both parties.

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MUTUAL MISTAKE

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1. Rescissible

2.VOIDABLE/ANNULABLE

3.unenforceable

4. VOID

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DEFECTIVE CONTRACTS:

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those validly agreed upon because all the essential elements exist and therefore, legally effective but in the case established by law, remedy of rescission is granted in the interest or equity.

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RECISSIBLE CONTRACTS

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those w/c possess all the essential requisites of valid contract but one of the parties incapable of giving consent, consent is vitiated by mistake , violence, fraud, undue influence or fraud.

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VOIDABLE/ ANNUALABLE

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remedy provided by law for reason of public interest for the declaration of the inefficacy of a contract biased on a defect or vice in the consent of open of the contracting parties in order to restore them to their original position in w/c b4 they were b4 the contract was executed.

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Annulment

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Those that cannot be enforced or given effect in a court law or sued upon By reason of certain defects provided by law until and unless they are ratified according to law.

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Unenforceable

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those w/c, because of certain defects generally produce no effect at all. Inexistent from the beginning.

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VOID