If through letter - when is the meeting of the minds? - What if one of the party died before knowledge of acceptance? - What if someone backed out and he send his letter, but the other party received the letter after knowledge of acceptance already?

the time the offeror knew of the acceptance of offeree - no meeting of minds - still, no meeting of minds

Contracts Flashcards by Paul Robert CPA

Stages of Contract (NPC)
- other term is preparation or conception

Negotiation

How well did you know this?

Not at all

Perfectly

Stages of Contract (NPC)
- other term is birth

Perfection

How well did you know this?

Not at all

Perfectly

Stages of Contract (NPC)
- other term is death or termination

Consummation

How well did you know this?

Not at all

Perfectly

Stages of Contract (NPC)
- this is where bargaining and negotations happen

Negotiation

How well did you know this?

Not at all

Perfectly

What characteristic of Contract
- contract must bind both contracting parties
- validity or compliance cannot be left to will of one of them

Mutuality

How well did you know this?

Not at all

Perfectly

Can one party unilaterally cancel contract?

No (violates mutuality)

How well did you know this?

Not at all

Perfectly

Can the determination of performance be left to a third person?

Yes (but it will be binding only after it is made known to both parties)

How well did you know this?

Not at all

Perfectly

What characteristic of Contract
- may establish terms as they deem convenient
- provided not contrary to law, morals, public policy

Autonomy

How well did you know this?

Not at all

Perfectly

What characteristic of Contract
- take effect or binding only between the parties, their heirs and assigns

Relativity

How well did you know this?

Not at all

Perfectly

As a general rule, rights and obligations from contracts are transmissible. True or False?

True
- XPN : Those purely personal

How well did you know this?

Not at all

Perfectly

As a general rule, third parties are bound by the terms of a contract. True or False?

False (GR : Not Bound)

How well did you know this?

Not at all

Perfectly

Exceptions to General Rule in Case of Third Persons
- stipulation pour autrui
- contract creating real rights
- accion pauliana
- 3rd person induces one of the parties

Stipulation Pour Autrui - in favor of 3rd party
Contract creating Real Rights - if registered to Registry of Deeds → notice to whole world (follows wherever the property is “e.g. mortgage”)
Accion Pauliana - rescission
3rd Person Induces - seller + 3rd person must pay damages

How well did you know this?

Not at all

Perfectly

What characteristic of Contract
- perfected by mere consent

Consensuality

How well did you know this?

Not at all

Perfectly

Exceptions where Delivery and Form is Required
- pledge
- deposit
- commodatum (borrow then use)

Yes

How well did you know this?

Not at all

Perfectly

What characteristic of Contract
- have force of law
- should be complied with in good faith

Obligatory Force

How well did you know this?

Not at all

Perfectly

When does a contract starts to have obligatory force?

once it is perfected

How well did you know this?

Not at all

Perfectly

Innominate Contracts
- Do ut Facias

I give, you do

How well did you know this?

Not at all

Perfectly

Innominate Contracts
- Facio ut Facias

I do, you do

How well did you know this?

Not at all

Perfectly

Is do ut des an innominate contract?

No (I give, you give is a nominate contract. Specifically, it is a barter)

How well did you know this?

Not at all

Perfectly

Essential Elements of Contract (COC)
- for consensual contracts
- for formal contracts
- for real contracts

If one of the COC is missing, there is no contract or contract is void. True or False?

consensual contracts = COC
formal contracts = COC + Required Form
real contracts = COC + Delivery

True

How well did you know this?

Not at all

Perfectly

Offer must be certain.
Acceptance must be absolute.
A qualified acceptance constitutes a counteroffer.

Yes

How well did you know this?

Not at all

Perfectly

If through letter
- when is the meeting of the minds?

What if one of the party died before knowledge of acceptance?
What if someone backed out and he send his letter, but the other party received the letter after knowledge of acceptance already?

the time the offeror knew of the acceptance of offeree

no meeting of minds
still, no meeting of minds

How well did you know this?

Not at all

Perfectly

Can advertisement be considered as offer?

No (they are mere invitations)

How well did you know this?

Not at all

Perfectly

Absolute Simulation vs Relative Simulation

Absolute = void
Relative = bound by their real agreement

How well did you know this?

Not at all

Perfectly

Persons who Cannot give Consent (MIDD) - Minor - Insane - Demented - Deaf-Mute (X write)

YES - Remember in Deaf-Mute = X write, **not** X read

What if a minor bought food? Is it voidable?

No (valid, it is for necessities)

What if a minor misrepresented his age? Is it voidable?

No (valid na)

What if insane then during lucid interval?

Valid

Vices of Consent (MVIUF) - Mistake of "FACT" (Requisites)

1. Pertains to the object / subject 2. Pertains to principal condition 3. Identity or qualifications

Vices of Consent (MVIUF) - Violence (Requisites)

- serious **OR** irresistible physical force (not "AND") - directed against the other party

Vices of Consent (MVIUF) - Intimidation (Requisites)

- real, serious **AND** unlawful - directed against the other party or other party

Vices of Consent (MVIUF) - Undue Influence (Requisites)

- one giving the influence **MUST** have moral ascendancy (professor - student)

Vices of Consent (MVIUF) - Causal Fraud (Requisites)

- serious **AND** not employed by both contracting parties (pari delicto)

In a market, the seller said something exaggerated for his product. The buyer, who believed the exaggerated claims, bought the product. Is there a fraud?

No (the buyer has an opportunity to check or search facts before buying it)

Object / Subject Matter of Contract - thing, service, or right - Requisites

1. within commerce of men (lawful) 2. not impossible 3. determinate thing 4. transmissible 5. future things (exist **@ time of transaction**)

Can future inheritance be an object of contract?

No (compared to future things)

Unlawful cause - Valid or Void?

Void (autonomy of contract)

Statement of false cause - Valid or Void?

Void

Inadequacy of Price - Valid or Void?

Valid - Void for specifics of rescissible contract - Void if with fraud, mistake or undue influence

Bad motive (sell marijuana) - Valid or Void?

Valid (motive is different to cause)

As a general rule, no form is required for validity of contract. True or False?

True (can be oral or written, as long as with COC)

Exceptions for Validity - donation of real property - donation of personal property more than 5K

- public instrument - written

Exceptions for Enforceability - sale of real property

- written

Exceptions for Convenience - real estate mortgage - hereditary rights or CPOG - real rights over immovable property

- all public instrument

Reformation (remedy to amend to conform to real intention of parties) - requisites ## Footnote Who can ask for reformation?

1. meeting of minds (if wala = annulment) 2. written instrument 3. true intention not expressed ## Footnote injured party

Agreement that cannot be reformed

1. simple donation inter-vivos (no condition imposed) 2. wills 3. real agreement is void

Rescissible contracts are contracts that caused damage (lesion) to one of the parties or a 3rd person. Is rescissible contract valid?

Yes, valid until rescinded

What is the primary remedy for rescissible contracts?

ask that damages be repaired Rescission → only **subsidiary** (dapat hindi muna makaavail ng primary remedy)

Rescission shall only be up to the extent necessary to cover the damages caused. Who can ask for rescission?

Only the innocent party - injured party or defrauded creditor - their heirs or assigns

Examples of Rescissible Contracts - Guardian - In representation of absentee - In fraud of creditor - Things under litigation

Guardian - must suffer damage **MORE THAN** 1/4 of the value Absentee - must suffer damage **MORE THAN** 1/4 of the value Under litigation - whenever entered without knowledge and approval of litigants or court

In case of guardian or absentee, what if inapprove naman ng court yung contract. Is is still rescissible?

No (already valid)

How many years is the prescriptive period for Rescissible Contracts? - guardian - absentee - in fraud of creditor - things under litigation

4 years - **Guardian** = from termination of incapacity - **In representation of absentee** = from time absentee's domicile is known - **In fraud of creditor** = from discovery of contract - **Things under litigation** = from discovery of contract

Voidable contracts are contracts in which one consent of one party is defective [incapacity (MIDD) or vices of consent (MVIUF)]. Is voidable contract valid?

Yes, valid until annulled

What is the primary remedy for voidable contracts?

Annulment → **principal** However, it may be ratified

Who can ask for annulment?

Only the innocent party

How many years is the prescriptive period for Voidable Contracts? - Minor or incapacity - Mistake or Fraud - Violence, Intimidation, or Undue Influence

4 years - **Minor or incapacity** = from time guardianship ceases - **Mistake or Fraud** = from discovery of same - **Violence, Intimidation, or Undue Influence** = from time defect of consent ceases (end)

Is unenforceable contract valid?

Yes, valid but not binding until ratified

Examples of Unenforceable Contracts (USB) - **U**nauthorized Contracts - do not comply with **S**tatute of Frauds - **B**oth incapable of consent

- Unauthorized Contracts = no authority or **beyond** authority - do not comply with Statute of Frauds = must be written - Both incapable of consent = MIDD + MVIUF

Statute of Fraud - agreement not to be performed within 1 year

so dapat after 1 year tyaka lang siya iperform

Statute of Fraud - promise to answer for debt or default of another - agreement in consideration of marriage (other than mutual promise to marry) - a representation as to the credit of a third person

Yes

Statute of Fraud - sale of personal property

**at least** 500

Statute of Fraud - sale of real property

regardless of amount

Statute of Fraud - lease of real property

period is **more than** 1 year

Statute of Fraud - lease of personal property

X (walang ganon, lease of real property lang)

Paul and Juan orally agreed to a sale of real property. Paul already paid a downpayment of 500K. This sale is unenforceable since it did not comply with the statute of frauds. True or False?

False (statute of frauds only apply to executory contracts - no performance yet) - thus, this is valid

There is a legal remedy for unenforceable contracts. True or False? There is a prescriptive period for unenforceable contracts. True or False?

False (it can be ratified, but ratification is not a legal remedy) False (prescription does not apply)

Examples of Void Contracts - contrary to law - outside commerce of men - impossible service - intention cannot be ascertained - absolutely simulated - prohibited by law - object or cause → did not exist at time of transaction

Yes

There is a legal remedy for void contracts. True or False? There is a prescriptive period for void contracts. True or False? There is ratification for void contracts. True or False?

True (action for absolute nullity) False (action for absolute nullity does not prescribe) False

Out of the 4, who can be ratified - Rescissible - Voidable - Unenforceable - Void

- Voidable - Unenforceable

Out of the 4, who has prescriptive period - Rescissible - Voidable - Unenforceable - Void

- Rescissible - Voidable