Codal Provisions (Contracts)

Question 1

Art 1305

Answer 1

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

Question 2

Article 1306

Answer 2

The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient provided that they are not contrary to law, morals, good customs, public order or public policy.

Question 3

Article 1307

Answer 3

Innominate contracts shall be regulated by the stipulations of the parties, the provisions of Title I and II of this Book, the rules governing the most analogous nominate contracts and the customs of the place.

Question 4

Article 1308

Answer 4

The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them.

Question 5

Article 1309

Answer 5

The determination of performance may be left to a third person whose decision shall not be binding until it has been made known to both contracting parties.

Question 6

Article 1310

Answer 6

The determination shall not be obligatory if it is evidently inequitable. In such cases, the Courts shall decide what is equitable under the circumstances.

Question 7

Article 1311

Answer 7

Contracts take effect only between the parties, their assigns and heirs, except in cases when the rights and obligations arising from the contract are not transmissible by their nature or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent.

If the 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. A mere incidental benefit of interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person.

Question 8

Article 1312

Answer 8

In contracts creating real rights, third persons who come into possession of the object of the contract are bound thereby, subject to the provisions of the mortgage law and the land registration laws.

Question 9

Article 1313

Answer 9

creditors are protected in cases of contracts intended to defraud them

Question 10

Article 1314

Answer 10

Any third person who induces another to violate his contract shall be liable for damages to the other contracting party.

Question 11

Article 1315

Answer 11

Contracts are perfected by mere consent, and from that 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.

Question 12

Article 1316

Answer 12

Real contracts, such as deposit, pledge and Commodatum, are not perfected until the delivery of the object of the obligation.

Question 13

Article 1317

Answer 13

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.

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.

Question 14

Article 1318

Answer 14

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.

Question 15

Article 1319

Answer 15

Consent 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.

Question 16

Article 1320

Answer 16

An acceptance may be express or implied.

Question 17

Article 1321

Answer 17

The person making the offer may fix the time, place, and manner of acceptance, all of which must be complied with.

Question 18

Article 1322

Answer 18

An offer made through an agent is accepted from the time acceptance is communicated to him.

Question 19

Article 1323

Answer 19

An offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either party before acceptance is conveyed.

Question 20

Article 1324

Answer 20

When the offerer has allowed the offeree a certain period to accept, the offer may be withdrawn at any time before acceptance by communicating such withdrawal, except when the option is founded upon a consideration, as something paid or promised.

Question 21

Article 1325

Answer 21

Unless it appears otherwise, business advertisements of things for sale are not definite offers, but mere invitations to make an offer.

Question 22

Article 1326

Answer 22

Advertisements for bidders are simply invitations to make proposals, and the advertiser is not bound to accept the highest or lowest bidder, unless the contrary appears.

Question 23

Article 1327

Answer 23

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.

Question 24

Article 1328

Answer 24

Contracts entered into during a lucid interval are valid. Contracts agreed to in a state of drunkenness or during a hypnotic spell are voidable.

Question 25

Article 1329

Answer 25

The incapacity declared in Article 1327 is subject to the modifications determined by law, and is understood to be without prejudice to special disqualifications established in the laws.

Question 26

Article 1330

Answer 26

A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable.

Question 27

Article 1331

Answer 27

In order that mistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or to those conditions which have principally moved one or both parties to enter into the contract.

Mistake as to the identity or qualifications of one of the parties will vitiate consent only when such identity or qualifications have been the principal cause of the contract.

A simple mistake of account shall give rise to its correction.

Question 28

Article 1332

Answer 28

When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former.

Question 29

Article 1333

Answer 29

There is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object of the contract.

Question 30

Article 1334

Answer 30

Mutual error as to the legal effect of an agreement when the real purpose of the parties is frustrated, may vitiate consent.

Question 31

Article 1335

Answer 31

There is violence when in order to wrest consent, serious or irresistible force is employed.

There is intimidation when one of the contracting parties is compelled by a reasonable and well-grounded fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse, descendants or ascendants, to give his consent.

To determine the degree of intimidation, the age, sex and condition of the person shall be borne in mind.

A threat to enforce one’s claim through competent authority, if the claim is just or legal, does not vitiate consent.

Question 32

Article 1336

Answer 32

Violence or intimidation shall annul the obligation, although it may have been employed by a third person who did not take part in the contract.

Question 33

Article 1337

Answer 33

There is undue influence when a person takes improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice. The following circumstances shall be considered: the confidential, family, spiritual and other relations between the parties, or the fact that the person alleged to have been unduly influenced was suffering from mental weakness, or was ignorant or in financial distress.

Question 34

Article 1338

Answer 34

There is fraud when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to.

Question 35

Article 1339

Answer 35

Failure to disclose facts, when there is a duty to reveal them, as when the parties are bound by confidential relations, constitutes fraud.

Question 36

Article 1340

Answer 36

The usual exaggerations in trade, when the other party had an opportunity to know the facts, are not in themselves fraudulent.

Question 37

Article 1341

Answer 37

A mere expression of an opinion does not signify fraud, unless made by an expert and the other party has relied on the former’s special knowledge.

Question 38

Article 1342

Answer 38

Misrepresentation by a third person does not vitiate consent, unless such misrepresentation has created substantial mistake and the same is mutual.

Question 39

Article 1343

Answer 39

Misrepresentation made in good faith is not fraudulent but may constitute error.

Question 40

Article 1344

Answer 40

In order that fraud may make a contract voidable, it should be serious and should not have been employed by both contracting parties.

Question 41

Article 1345

Answer 41

Simulation of a contract may be absolute or relative. The former takes place when the parties do not intend to be bound at all; the latter, when the parties conceal their true agreement.