Ch.5 - Contracts (General Provisions) Flashcards
What is Art. 1305? (Definition of a contract)
A contract is a meeting of minds between two persons whereby one person binds himself, with respect to the other, to give something or to render some service.
What are the essential elements of a contract?
- Consent of the contracting parties
- Object certain which is the subject matter of the contract; and
- Cause of the obligation which is established
Classification of contracts according to their relation to other contracts
a. Preparatory
b. Principal
c. Accesssory
What is a preparatory contract?
Those which have for their object the establishment of a condition in law which is necessary as a preliminary step towards the celebration of another subsequent contract
What is a principal contract?
Those which can subsist independently from other contracts and whose purpose can be fulfilled by themselves
What is an accessory contract?
Those which can exist only as a consequence of, or in relation with, another prior contract
Enumerate classification of contracts according to their perfection
- Consensual
- Real
What is a consensual contract?
Those which are perfected by the mere agreement of the parties
What is a real contract?
Those which require not only the consent of the parties for their perfection, but also the delivery of the object by any one party to the other
Classification of contracts according to their form?
a. Common or informal
b. Special or formal
What is a common or informal contract?
Those which do not require some particular form
What is a special or formal contract?
Those which require some particular form
Classification of contracts according to their purpose?
a. Transfer of ownership
b. Conveyance of use
c. Rendition of services
Classification of contracts according to their subject matter
a. Things
b. Services
Classification of contracts according to their vinculum which they produce
a. Unilateral
b. Bilateral
What is a unilateral contract?
Those which give rise to an obligation for only one of the parties
What is a bilateral contract?
Those which give rise to reciprocal obligations for both parties
Classifications of contracts according to their clause?
a. Onerous
b. Gratuitous
What is an onerous contract?
Those in which of the parties aspires to procure for himself a benefit through the giving of an equivalent or compensation
What is a gratuitous contract?
Those in which one of the parties propose to give to the other a benefit without any equivalent or compensation
Classification of contracts according to risks involved
a. Commutative
b. Aleatory
What is a commutative contract?
Those where each of the parties acquires an equivalent of his prestation and such equivalent is pecuniarily appreciable and already determined from the moment of the celebration of the contract
What is an aleatory contract?
Those where each of the parties has to account the acquisition of an equivalent of his prestation, but such equivalent, although pecuniarily appreciable, is not yet determined, at the moment of the celebration of the contract, since it depends upon the happening of an uncertain event, thus charging the parties with the risk of loss or gain
Classification of contracts according to their names or norms regulating them
a. Nominate
b. Innominate
What is a nominate contract?
Those which have their own individuality and are regulated by special provisions of law
What is an innominate contract?
Those which lack individuality and are not regulated by special provisions of law
What is a contract of adhesion?
A contract of adhesion is a contract whereby almost all of its provisions are drafted by one party. The participation of the other party is limited to affixing his signature or his “adhesion” to the contract. For this reason, contracts of adhesion are strictly construed against the party who drafted it.
Are contracts of adhesion invalid?
No, they are binding as ordinary contracts, since the other party is free to accept or reject it. It is only void when the dominant party takes advantage of the weakness of the other party, completely depriving the latter of the opportunity to bargain on equal footing
(Art. 1306) The contracting parties may establish such stipulations, clauses, terms and conditions on their contracts as they deem convenient, provided that?
They are not contrary to law, morals, good customs, public order, or public policy.
The provisions of Article 1306 express the?
Principle of autonomy of contracts or freedom of contracts
Is the freedom of contracts absolute or not?
The SC held that the freedom of contract is not absolute
What is a compromise agreement?
Is a contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced. Compromise is a form of amicable settlement that is not only allowed, but also encouraged in civil cases
What is public policy?
refers to the aims of the state to promote the social and general well-being of the inhabitants
(Art. 1307) Innominate contracts shall be regulated by?
The stipulations of the parties, by the provisions of Title I and Title II of this book, by the rules governing the most analogous (comparable) nominate contracts, and by the customs of the place
What are the kinds of innominate contracts?
- Do ut des (I give that you give)
- Do ut facias (I give that you do)
- facio ut des (I do that you give)
- facio ut facias (I do that you do)
What are the rules on innominate contracts?
- Stipulations of the parties
- The provisions of the Civil Code on ObliCon
- The rules governing the most analogous nominate contracts, and;
- The customs of the place
What is the rationale behind Article 1307
It was stated in the 1903 case of Perez vs Pomar, basically the plaintiff was employed as interpreter but there was no written contract, but the defendant still accepted and made use of the latter. This gives rise to the obligation upon the person benefited of the services to make compensation. Basically, it is also the well-known principle of no one should enrich himself to the damage of another
(Art. 1308) The contract must?
Bind both contracting parties; its validity or compliance cannot be left to the will of one of them
Article 1308 of the Civil Code expresses what is known in law as the?
Principle of mutuality of contracts
What is the purpose of the mutuality principle?
The ultimate purpose of the mutuality principle is thus to nullify a contract containing a condition which makes its fulfillment or pre-termination dependent exclusively upon the uncontrolled will of one of the contracting parties
(Art. 1309) The determination of the performance may be left to a third person, whose decision shall not be binding until?
It has been made known to both contracting parties
(Art. 1310) The determination shall not be obligatory if?
it is evidently inequitable.
(Art. 1310) In such cases where determination is evidently inequitable, then?
the courts shall decide what is equitable under the circumstances
(Art. 1311) Contracts take effect only between the parties, their assigns and heirs, except in?
Case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law.
(Art. 1311) Is the heir liable for the value of the property he received from the decedent?
The heir is not liable beyond the value of the property he received from the decedent
(Art. 1311) If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided that?
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
Art. 1311 refers to the?
Relativity of contracts
The general rule is that contracts take effect only between parties, their assigns and their heirs. What are the exceptions?
- Contracts are not transmissible by their nature;
- Contracts are not transmissible by stipulation; or
- Contracts are not transmissible by provision of law
What is the four exceptional cases to the principle of relativity of contracts?
- If a 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
- In contracts creating real rights, third persons who come into possession of the object of the contract are bound thereby
- Creditors are protected in cases of contracts intended to defraud them
- Any third person who induces another to violate his contract shall be liable for damages to the other contracting party
Requisites of stipulation pour autrui or stipulations in favor of a third person
- There must be a stipulation in favor of a third person
- The stipulation must be a part, not the whole, of the contract
- The contracting parties must have clearly and deliberately conferred a favor upon a third person, not a mere incidental benefit or interest
- The third person must have communicated his acceptance to the obligor before its revocation, and
- Neither of the contracting parties bears the legal representation or authorization of the third party
(Art. 1312) In contracts creating real rights, third persons who come into possession of the object are?
bound thereby, subject tot he provisions of the Mortgage Law and the Land Registration Laws
(Art. 1313) Creditors are protected in cases of?
Contracts intended to defraud them
Art. 1312, 1313 and 1314 are exception to the
Principle of relativity of contracts
(Art. 1314) Any third person who induces another to violate his contract shall be?
Liable for damages to the other contracting party
Art. 1314 expresses the?
Principle of tort interference
What are the elements of tort interference?
- Existence of a valid contract
- Knowledge on the part of the third person of the existence of a contract
- Interference of the third person is without legal justification
(Art. 1315) Contracts are perfected by mere consent, and from the moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also
to all the consequences which, according to their nature, may be in keeping with good faith, usage and law
(Art. 1316) Real contracts, such as deposit, pledge, and commodatum, are not perfected until
The delivery of the object of the obligation
Effect of a judicial approval of a contract
When a compromise agreement is given judicial approval, it becomes more than a contract binding upon the parties. Having been sanctioned by the court, it is entered as a determination of a controversy and has the force and effect of a judgment. It is immediately executory and not appealable, except for ices of consent or forgery. The nonfulfillment of its terms and conditions justifies the issuance of a writ of execution; in such an instance, execution becomes a ministerial duty of the court
What is a commodatum?
One of the parties delivers to another, either something not consumable so that the latter may use the same for a certain time and return it
What is a deposit?
A deposit is constituted from the moment a person receives a thing belonging to another, with the obligation of safely keeping it and of returning the same
What is a pledge?
In a contract of pledge, the creditor is given the right to retain the debtor’s movable property in his possession, or in that of a third person to whom it has been delivered, until the debt is paid
Effect of the perfection of the contract
The parties are bound not only to the fulfillment of what has been stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law
(Art. 1317) No one may contract in the name of another without?
Being authorized by the latter, or unless he has by law a right to represent him
(Art. 1317) A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be?
Unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party
General Rule is that no one may contract in the name of another. Exceptions are?
- The person entering into a contract in the name of another has been authorized by the latter
- The person entering into a contract in the name of another has by law a right to represent him
General Rule on the Effect of an Unauthorized contract?
A contract entered into the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable
Exception to the effect of an unauthorized contract?
If it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party
