CONTRACTS
Meaning: A CONTRACT IS A MEETING OF MINDS BETWEEN TWO PERSONS WHEREBY ONE BINDS
HIMSELF, WITH RESPECT TO THE OTHER, TO FIVE SOMETHING OR O RENDER SOME SERVICE.
ELEMENTS OF CONTRACTS:
ESSENTIAL – without them, there is no contract- Cause, Object, Consent
NATURAL – deemed included except if stipulated not to include.
ACCIDENTAL – included if stipulated.
Stages of a Contract:
1. Preparation, conception, or generation
2. Perfection or birth of the contract
3. Consummation or death
Other valid stipulations:
Venue of Action
Escalation clauses, &
Limitation of carrier’s liability
Requisites on the interference of third persons
● the existence of a valid contract
● knowledge by the third person of the existence of a contract
● interference by the third person in the contractual relation without legal justification
Kinds of ratification:
1. express
2. implied
CHAPTER 2 ESSENTIAL REQUISITES OF CONTRACTS
There is no contract unless the following requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established
Consent
Meaning: Is manifested by the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified
acceptance constitutes a counter-offer. Acceptance made by letter or telegram does not bind the offerer
except from the time it came to his knowledge. The contract, in such a case, is presumed to have been
entered into in the place where the offer was made.
Requisites:
consent must be manifested by the concurrence of the offer and the acceptance (Arts. 1319-
1326);
contracting parties must possess the necessary legal capacity (Arts. 1327-1329); and
consent must be intelligent, free, spontaneous and real (Arts. 1330-1346
Forms of Consent:
Consent may either be express or implied
The following cannot give consent to a contract:
(1) Unemancipated minors;
(2) Insane or demented persons, and deaf-mutes who do not know how to write.
Defects of the will:
intelligence is vitiated by error;
freedom by violence, intimidation, or undue influence; and
spontaneity by fraud.
3 Requisites of Mutual Error:
1) the error must be as to the legal effect of an agreement;
2) it must be mutual; and
3) the real purpose of the parties is frustrated.
Requisites of violence:
1) That the physical force employed must be irresistible or of such degree that the victim has no other
course, under the circumstances, but to submit; and
2) that such force is the determining cause in giving the consent to the contract.
Requisites of intimidation:
1) that the intimidation must be the determining cause of the contract, or must have caused the consent
to be given;
2) that the threatened act be unjust or unlawful;
3) that the threat be real and serious, there being an evident disproportion between the evil and the
resistance which all men can offer; and
4) that it produces a reasonable and well-grounded fear from the fact that the person from whom it
comes has the necessary means or ability to inflict the threatened injury.
Fraud is every kind of deception, whether in the form of insidious machinations, manipulations,
concealments, or misrepresentations, for the purpose of leading another party into error and thus
executing a particular act.
Kinds of fraud:
1) dolo causante—which determines or is the essential cause of the consent;
2) dolo incidente—which does not have such a decisive influence and by itself cannot cause the giving of
consent, but refers only to some particular or accident of the obligation.
Requisites of fraud:
1) it must have been employed by one contracting party upon the other;
2) it must have induced the other party to enter into the contract;
3) it must have been serious;
4) and it must have resulted in damage or injury to the party seeking annulment.
OBJECTS OF CONTRACTS
The object of a contract is its subject matter. It is the thing, right, or service which is the subject-matter
of the obligation arising from the contract.
Requisites:
1) It must be within the commerce of man;
2) it must be licit, or not contrary to law, morals, good customs, public policy, or public order;
3) it must be possible ; and
4) it must be determinate as to its kind.
• Things which are outside the commerce of man:
1. Services which imply an absolute submission by those who render them, sacrificing their liberty,
their independence or beliefs, or disregarding in any manner the equality and dignity of persons,
such as perpetual servitude or slavery;
2. Personal rights, such as marital authority, the status and capacity of a person, and honorary titles
and distinctions;
3. Public offices, inherent attributes of the public authority, and political rights of individuals
4. Property, while they pertain to the public dominion
5. Sacred things and common things as long as they have not been appropriated.
SECTION 3. - Cause of Contracts
Classification of contract accdg. to cause:
1. Onerous
2. Remuneratory or remunerative
3. Gratitous
Requisites of clause:
1) it must exist;
2) it must be true; and
3) it must be licit
SECTION 3 FORMS OF CONTRACTS
The form of contract refers to the manner in which a contract is executed or manifested.
Forms of Contract:
1. Oral or in writing
2. Express or implied
Classification of contracts according to form
1. Informal or common or simple contract
2. Formal or solemn contract
Form of validity of contract:
1. Donation of real property
2. Donation of personal property
3. Sale of land through an agent
4. Stipulation to pay interest
5. Contract of partnership
