Contracts

Question 1

Requisites for stipulation pour autrui

Answer 1

1) parties must have clearly and deliberately conferred a favor upon a third person
2) 3rd person mustve communicated his acceptance to obligor before its revocation
3) Should be a part and not whole of the contract itself
4) Favorable stipulation shouldnt be conditioned or compensated by any kind of obligation whatever
5) Neither of the parties bears the legal representation/authorization of the third party

Question 2

Elements of tort interference

Answer 2

(1) existence of a valid contract;
(2) knowledge on the part of the third person of the existence of contract;
(3) interference of the third person is without legal justification or excuse

Question 3

Liability for a non-trespassory invasion of another’s property

Answer 3

a) one has property rights with respect to the use or enjoyment interfered with
(b) invasion is substantial
(c) defendant’s conduct is a legal cause of the invasion
(d) invasion is either intentional and unreasonable/unintentional and actionable

Question 4

Contract

Answer 4

Meeting of minds which takes place between at least two parties when an offer by one party is accepted by the other.

Question 5

Characteristics of contracts

Answer 5

1) Freedom of contracts
2) Obligatoriness
3) Mutuality
4) Consensuality
5) Relativity

Question 6

Termination vs. rescission

Answer 6

Termination - enforcements of terms prior to the declaration of its end. No judicial intervention necessary

Rescission - restores status quo ante.

Question 7

Kinds of innominate contracts

Answer 7

1. Do ut des (I give that you may give)
   * no longer innominate; it has already been given a name, i.e. barter/exchange
2. Do ut facias (I give that you made do)
3. Facio ut des (I do that you may give)
4. Facio ut facias (I do that you may do)

Question 8

Elements of a contract

Answer 8

1) Consent
2) Object certain
3) Cause of the obligation

Question 9

Consent

Answer 9

The conformity of wills upon the object and cause

Question 10

Meeting of mind

Answer 10

concurrence of offer and acceptance that expresses intent in entering a contract

Question 11

Offer

Answer 11

Proposal made by one party toa nother. A promise to act or refrain from acting on condition that the terms are accepted by the offeree

Question 12

Acceptance

Answer 12

Manifestation by the offeree of his assent. to the terms. Must be Absolute, Unconditional.

Question 13

Option contract

Answer 13

preparatory contract giving a person for a consideration a certain period and
under specified conditions within which to accept the offer. It is separate and distinct from the principal contract.

Question 14

Option contract vs. Right of First refusal

Answer 14

Option: one party grants to another, for a fixed period and at a determined price, the privilege to buy or sell

First: contractual grant of the first priority to buy the property.

Question 15

Option contract vs. Sale

Answer 15

Option: Can’t be enforced yet as its an unaccepted offer

Sale: Fixes definitively the rights and obligation of both parties

Question 16

Who cannot give consent to a contract

Answer 16

1) Unemancipated minors

2) Insame or demented persons, and deaf-mutes who do not know how to write

Question 17

Consent must be:

Answer 17

1) Intelligent
2) Voluntary
3) Conscious and spontaneous

Question 18

Consent is vitiated by

Answer 18

Mistake, violence, intimidation, undue influence, or fraud.

Question 19

For mistake to vitiate consent, it must refer to:

Answer 19

1) Substance of the thing, object
2) Conditions that principally moved parties to enter
3) Identity or qualifications of parties if it was the principal cause

Question 20

Requisites for mutual error provision

Answer 20

1) Error must be mutual
2) Error is re legal effect of the agreement
3) Must frustrate the real purpose of the parties

Question 21

There is violence, intimindation when:

Answer 21

Violence: serious or irresistible force is employed

Intimidation: Party was compelled by a reasonable and well-grounded fear of an imminent and grave evil upon his persons or property

Question 22

Requidites for intimidation

Answer 22

1) Produces a reasonable and well-grounded fear of an evil
2) Evil is imminent and grave
3) Evil is on his person or property, or that of his spouse, descendants, or descendants
4) Was the reason for his entry into the contract

Question 23

There is undue influence when:

Answer 23

person takes improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice

Question 24

There is fraud when:

Answer 24

Through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract w

Question 25

Fraud is committed through

Answer 25

1) Insidious words 2) machinations 3) concealment

Question 26

Requisites of causal fraud

Answer 26

1) There must be misrepresentation or nondisclosure 2) Serious in character 3) Must have been employed by one of the parties 4) Made in bad faith 5) Must have induced the consent 6) Alleged and proved by clear and convincing evidence

Question 27

Requisites for causal fraud

Answer 27

1) Serious 2) Not employed by both parties (In pari delicto) 3) Should not have been known by the other party

Question 28

Causal fraud v. Incidental fraud

Answer 28

Causal: ground for annulment Incidental: Makes person liable for damages

Question 29

Simulation of contract

Answer 29

Act of deliberately deceiving others by feigning or pretending by agreement, the appearance of a contract which is either non-existent or concealed, or is different from that which was really executed.

Question 30

Requisites for simulation

Answer 30

1) Outward declaration of will different from the will of parties 2) False appearance was intended by mutual agreement 3) purpose is to deceive 3rd persons

Question 31

Kinds. of simulation

Answer 31

1) Absolute simulation (contracto simulado) - contract doesn't actually exist -> void 2) Relative simulation (contractor disimulado) - different from the true agreement

Question 32

Simulated v. Fraudulent contracts

Answer 32

Simulated: Fictitious contract meant to hide the violation of a law Fraudulent: Real contract meant to attain a prohibited result.

Question 33

What may be the object of a contract?

Answer 33

All things not outside the commerce of man, inc future things. All rights not intransmissible. All services.

Question 34

Cause

Answer 34

The prestation or promise of a thing or service by the other. The essential, direct, or proximate purpose or reason

Question 35

Dual aspect of contract

Answer 35

1) Intent/will | 2) Expression of will

Question 36

Form is required when:

Answer 36

1) Donation of real property - public instrument 2) Donation of personal property that exceeds 50k - donation and acceptance must be in writing 3) Sale of land thru agent - authority of agent must in writing, otherwise VOID 4) Contract of antichresis - amount of the principal and interest is in writing 5) Stipulation to pay interest - in writing 6) Contract of partnership - If immovables, must be public instrument. 7) Transfer/sale of large cattle - needs registration 8) Negotiable instruments - writing

Question 37

Statute of Frauds

Answer 37

(a) An agreement that by its terms is not to be performed within a year from the making thereof; (b) A special promise to answer for the debt, default, or miscarriage of another; (c) An agreement made in consideration of marriage, other than a mutual promise to marry; (d) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them, of such things in action, or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum; (e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein; (f) A representation as to the credit of a third person.

Question 38

Requisites for reformation

Answer 38

1. A meeting of the minds of the parties to the contract. 2. The written instrument does not express the true agreement or intention of the parties. 3. Failure to express true intention is due to mistake, fraud, inequitable conduct, or accident. 4. The facts are put in issue by the pleadings. 5. There is clear and convincing evidence of the mistake, fraud, inequitable conduct, or accident.

Question 39

Facts to be alleged in an action for reformation

Answer 39

a. The true intention or agreement of the parties. | b. The instrument to be reformed, which does not express such agreement or intention.

Question 40

Reformation vs parol evidence rule

Answer 40

General rule: Can't introduce parol evidence Exception: CAN when it's alleged that it involves: (a) intrinsic ambiguity, mistake, or imperfection in the written agreement; (b) The failure of the written agreement to express the true intent and agreement of the parties thereto; (c) The validity of the written agreement; or (d) The existence of other terms agreed to by the parties

Question 41

Reformation vs. Annulment

Answer 41

Reformation: There exists a meeting of the minds. Real contract just can't be enforced until reformed Annulment: No meeting of minds bec consent was vitiated; nullifies contract.

Question 42

Requisites of mutual mistake for reformation

Answer 42

1. The mistake must be of fact, for if it is one of law, the remedy is annulment. 2. Such mistake must be proved by clear and convincing evidence. 3. The mistake must be mutual. 4. The mistake must cause the failure of the instrument to express the true intention.

Question 43

No reformation in the ff cases

Answer 43

1) Simple donations inter vivos with no condition imposed 2) Wills 3) Real agreement is void

Question 44

Who may bring action for reformation

Answer 44

1) Either party if mutual mistake 2) All other cases, injured party 3) Heirs/successors in interest in lieu of party entitled

Question 45

Interpretation

Answer 45

process or method of discovering and determining the meaning of the terms or words used by the parties in their written agreement.

Question 46

Rescissible contracts

Answer 46

1) entered into by guardians whenever the wards whom they represent suffer lesion by more than one-fourth of the value of the things 2) agreed upon in representation of absentees, if the latter suffer the lesion 3) undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them 4) refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants 5) all other contracts specially declared by law to be subject to rescission

Question 47

Requisites for rescission for reason of fraud for creditors

Answer 47

1. An existing credit prior to the contract to be rescinded. 2. The subsequent contract made by the debtor conveys a patrimonial benefit to a third person. 3. Fraud on the part of the debtor, which may be presumed or proved. 4. If contract is onerous, the third person has been a party to the fraud. 5. The creditor has no other legal remedy to satisfy his claim.

Question 48

Art. 1191 v. Art. 1381

Answer 48

1191: principal action, predicated on breach of faith 1381: subsidiary action, predicated on lesion or economic prejudice

Question 49

Who may bring action for annulment

Answer 49

1) Plaintiff who has an interest | 2) Victim

Question 50

Ratification

Answer 50

voluntarily adopts and gives sanction to some defective or | unauthorized contract,

Question 51

Rescission vs. Annulment

Answer 51

1) Predicated on what 2) Who may bring 3) Principal/subsidiary 4) Presupposes what re legal effectivity 5) Based on principle of 6) Relationship with indemnity

Question 52

Who may bring action for rescission

Answer 52

1) Injured party 2) Heirs, successors in interest 3) Creditors of the above

Question 53

Unenforceable contracts

Answer 53

1) Entered into in the name of another person by one with no authority or legal representation; acting beyond his powers 2) Don't comply with Statute of Frauds 3) Both are incapable of giving consent

Question 54

Application of statute

Answer 54

1) Presupposes existence of perfected contract 2) Only limited to listed transaction 3) Not applicable where the contract is admitted 4) Applicable only to executory contract 5) Not applicable where writing doesn't express truee agreement of the parties 6) Does not declare the contracts infringing it as void, only unenforceable 7) Does not determine credibility/weight of evidence; only regulates admission of it 8) Subject to waiver 9) Personal to the parties

Question 55

Satisfying the Statute

Answer 55

1) Giving of a note or memorandum 2) Acceptance and receipt of part of goods sold 3) Payment

Question 56

Void contracts

Answer 56

1) Contrary to law, etc 2) Absolutely simulated or fictitious 3) Cause or object doesn't exist at the time of the transaction 4) Contemplate an impossible service 5) Intention re the object can't be ascertained 6) Declared void by law 7) outside commerce of man

Question 57

Estoppel

Answer 57

An admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.