CHAP 1 (contracts)

Question 1

Contract

Answer 1

A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service

Question 2

Moral or social agreements

Answer 2

agreements which cannot be enforced by action in the courts of justice

Question 3

Valid Contracts

Answer 3

those that meet all the legal requisites for the type of agreement involved and the limitations on contractual stipulation and are therefore, legally binding and enforceable

Question 4

Morals

Answer 4

deal with norms of good and right conduct evolved in a
community. These norms may differ at different times and places and with each group of people.

Question 5

Customs

Answer 5

• consist of habits and practices which through long usage
  have been followed and enforced by society or some part of it as binding rules of conduct. - It has the force of law when recognized and enforced by law. - A custom must be proved as a fact, according to the rules of evidence.

Question 6

Public order

Answer 6

refers principally to public safety although it has been considered to mean also the public weal.

Question 7

Public policy

Answer 7

is broader than public order, as the former may refer not only to public safety but also to considerations which are moved by the common good

Question 8

RULES governing INNOMINATE CONTRACTS

Answer 8

1. the AGREEMENT OF THE PARTIES
2. the PROVISIONS of the Civil Code on obligations and contracts
3. the RULES GOVERNING the MOST ANALOGOUS CONTRACTS
4. the CUSTOMS OF THE PLACE

Question 9

Stipulation pour autrui

Answer 9

is a stipulation in a contract clearly and deliberately conferring a favor upon a third person who has a right to
demand its fulfillment, provided, he communicates his acceptance to the obligor before its revocation by the obligee or the original parties.

Question 10

Third person

Answer 10

who has not take part in a contract and is a STRANGER to the contract

Question 11

cases when a contract are effective only between the parties are when the rights and obligations arising from the
contract are NOT TRANSMISSIBLE

Answer 11

1. by NATURE
2. by STIPULATION
3. by the PROVISIONS OF THE LAW

Question 12

Cases when strangers or third persons affected by a contract.

Answer 12

(1) In contracts containing a stipulation in favor of a third person
(stipulation pour autrui)
(2) In contracts creating real rights
(3) In contracts entered into to defraud creditors
(4) In contracts which have been violated at the inducement of the third person

Question 13

Classes of stipulation pour autrui

Answer 13

1. Those where the stipulation is intended for the sole benefit of such person.
2. Those where an obligation is due from the promisee to the third person which the former seeks to discharge by means of such stipulation

Question 14

Requisites of stipulation pour autrui.

Answer 14

(1) The contracting parties by their stipulation must have clearly
and deliberately conferred a favor upon a third person

(2) The third person must have communicated his acceptance to
the obligor before its revocation by the obligee or the original parties

(3) The stipulation in favor of the third person should be a part and not the whole of the contract or the contract itself

(4) The favorable stipulation should not be conditioned or
compensated by any kind of obligation whatever

(5) Neither of the contracting parties bears the legal representation or authorization of the third party for otherwise the rules on agency
will apply

Question 15

Real right

Answer 15

is binding against the whole world and attaches to the property over which it is exercised wherever it goes

Question 16

Consensual contract

Answer 16

which is perfected by mere consent

Question 17

Real contract

Answer 17

which is perfected by the delivery of the thing subject matter of the contract

Question 18

Solemn contract

Answer 18

which requires compliance with certain formalities prescribed by law such prescribed form being thereby an essential element thereof

Question 19

Stages in the life of a contract

Answer 19

1. Preparation or negotiation
2. Perfection or birth
3. Consummation or termination

Question 20

Effect of perfection of the contract.

Answer 20

they are bound….

1. to the FULFILLMENT of what has been expressly stipulated
2. to all the CONSEQUENCES which according to their nature, may be in keeping with good faith, usage, and law

Question 21

Ratification (2)

Answer 21

subsequent approval or conformity

cleanses the contract from all of its defects from the moment the contract was entered into

Question 22

When a person is/ may be bound by the contract
of another.

Answer 22

(1) The person entering into the contract must be duly authorized, expressly or impliedly, by the person in whose name he contracts or he must have, by law, a right to represent him

(2) He must act within his power

Question 23

Limitations on contractual stipulations

Answer 23

1. Law
2. Police power

Question 24

Preparation or negotiation

Answer 24

Includes all the steps taken by the parties LEADING TO THE PERFECTION OF THE CONTRACT

In this stage, the parties HAVE NOT YET ARRIVED AT ANY DEFINITE AGREEMENT

Question 25

Perfection or birth

Answer 25

Parties HAVE COME TO A DEFINITE AGREEMENT OR MEETING OF THE MINDS regarding the SUBJECT MATTER and CAUSE OF THE CONTRACT

Question 26

Consummation or termination

Answer 26

Parties HAVE PERFORMED THEIR RESPECTIVE OBLIGATIONS and the contract may be said to have been fully accomplished or executed, resulting in the EXTINGUISHMENT OR TERMINATION THEREOF