Contracts Flashcards
Stages of Contract (NPC)
- other term is preparation or conception
Negotiation
Stages of Contract (NPC)
- other term is birth
Perfection
Stages of Contract (NPC)
- other term is death or termination
Consummation
Stages of Contract (NPC)
- this is where bargaining and negotations happen
Negotiation
What characteristic of Contract
- contract must bind both contracting parties
- validity or compliance cannot be left to will of one of them
Mutuality
Can one party unilaterally cancel contract?
- No (violates mutuality)
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)
What characteristic of Contract
- may establish terms as they deem convenient
- provided not contrary to law, morals, public policy
Autonomy
What characteristic of Contract
- take effect or binding only between the parties, their heirs and assigns
Relativity
As a general rule, rights and obligations from contracts are transmissible. True or False?
True
- XPN : Those purely personal
As a general rule, third parties are bound by the terms of a contract. True or False?
False (GR : Not Bound)
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
What characteristic of Contract
- perfected by mere consent
Consensuality
Exceptions where Delivery and Form is Required
- pledge
- deposit
- commodatum (borrow then use)
Yes
What characteristic of Contract
- have force of law
- should be complied with in good faith
Obligatory Force
When does a contract starts to have obligatory force?
once it is perfected
Innominate Contracts
- Do ut Facias
I give, you do
Innominate Contracts
- Facio ut Facias
I do, you do
Is do ut des an innominate contract?
No (I give, you give is a nominate contract. Specifically, it is a barter)
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
Offer must be certain.
Acceptance must be absolute.
A qualified acceptance constitutes a counteroffer.
Yes
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
Can advertisement be considered as offer?
No (they are mere invitations)
Absolute Simulation vs Relative Simulation
- Absolute = void
- Relative = bound by their real agreement
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)
- Pertains to the object / subject
- Pertains to principal condition
- 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
- within commerce of men (lawful)
- not impossible
- determinate thing
- transmissible
- 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
Who can ask for reformation?
- meeting of minds (if wala = annulment)
- written instrument
- true intention not expressed
injured party
Agreement that cannot be reformed
- simple donation inter-vivos (no condition imposed)
- wills
- 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)
- Unauthorized Contracts
- do not comply with Statute of Frauds
- Both 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
