CHAP 1 (contracts) Flashcards
Contract
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
Moral or social agreements
agreements which cannot be enforced by action in the courts of justice
Valid Contracts
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
Morals
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.
Customs
- 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.
Public order
refers principally to public safety although it has been considered to mean also the public weal.
Public policy
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
RULES governing INNOMINATE CONTRACTS
- the AGREEMENT OF THE PARTIES
- the PROVISIONS of the Civil Code on obligations and contracts
- the RULES GOVERNING the MOST ANALOGOUS CONTRACTS
- the CUSTOMS OF THE PLACE
Stipulation pour autrui
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.
Third person
who has not take part in a contract and is a STRANGER to the contract
cases when a contract are effective only between the parties are when the rights and obligations arising from the
contract are NOT TRANSMISSIBLE
- by NATURE
- by STIPULATION
- by the PROVISIONS OF THE LAW
Cases when strangers or third persons affected by a contract.
(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
Classes of stipulation pour autrui
- Those where the stipulation is intended for the sole benefit of such person.
- Those where an obligation is due from the promisee to the third person which the former seeks to discharge by means of such stipulation
Requisites of stipulation pour autrui.
(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
Real right
is binding against the whole world and attaches to the property over which it is exercised wherever it goes
Consensual contract
which is perfected by mere consent
Real contract
which is perfected by the delivery of the thing subject matter of the contract
Solemn contract
which requires compliance with certain formalities prescribed by law such prescribed form being thereby an essential element thereof
Stages in the life of a contract
- Preparation or negotiation
- Perfection or birth
- Consummation or termination
Effect of perfection of the contract.
they are bound….
- to the FULFILLMENT of what has been expressly stipulated
- to all the CONSEQUENCES which according to their nature, may be in keeping with good faith, usage, and law
Ratification (2)
subsequent approval or conformity
cleanses the contract from all of its defects from the moment the contract was entered into
When a person is/ may be bound by the contract
of another.
(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
Limitations on contractual stipulations
- Law
- Police power
Preparation or negotiation
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
Perfection or birth
Parties HAVE COME TO A DEFINITE AGREEMENT OR MEETING OF THE MINDS regarding the SUBJECT MATTER and CAUSE OF THE CONTRACT
Consummation or termination
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
