Contracts (Ch 1-2)

Question 1

What is Article 1305

Answer 1

A contract is a meeting of the minds between 2 Persons whereby one binds himself with respect to the other, to give something, or to render some service

Question 2

What is Article 1306

Answer 2

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

Question 3

What is Article 1307

Answer 3

Innominate contracts shall be regulated by the stipulations of the parties by the provisions of Titles 1 and 2 of this book, by the rules governing the most analogous nominate contracts and by the customs of the place.

(Basically, contracts with no designation in law is regulated by party stipulation, then the provisions of the book and the rules governing most analogous nominate contracts and by the customs of the place.)

Question 4

What is Article 1308

Answer 4

Contracts must bind both contracting parties, its validity or compliance cannot be left to the will of 1 of them

Question 4

What is Article 1309

Answer 4

The determination of the 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 4

What is Article 1310

Answer 4

The determination shall not be obligatory if it is evidently inequitable, in such case, the courts shall decide what is equitable under the circumstances

(Basically if the determination made by a 3rd party is unjust or unequitable. then its non binding)

Question 5

What is Article 1311

Answer 5

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

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 or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person.

Question 5

What is Article 1312

Answer 5

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 5

What is Article 1313

Answer 5

Creditors are protected in cases of contracts intended to defraud them.

Question 5

What is Article 1314

Answer 5

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

Question 6

What is Article 1315

Answer 6

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 keeping with good faith, usage and law.

Question 6

What is Article 1316

Answer 6

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

Question 6

What is Article 1317

Answer 6

No one may contract in the name of another without being authorized by the latter 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 6

What is Article 1318 (This is the beginning of CH 2)

Answer 6

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 7

What is Article 1319

Answer 7

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 the place where the offer was made.

Question 7

What is Article 1320

Answer 7

An acceptance may be expressed or implied

Question 8

What is Article 1321

Answer 8

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

Question 8

What is Article 1322

Answer 8

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

Question 8

What is Article 1323

Answer 8

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

Question 8

What is Article 1324

Answer 8

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

( If the offeree has provided something of value (e.g., money or a promise) to keep the offer open, then the offer cannot be withdrawn until the specified period ends. )

Question 9

What is Article 1325

Answer 9

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

Question 9

What is Article 1326

Answer 9

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 10

What is Article 1327

Answer 10

The following cannot give consent:
1. Unemancipated Minors
2. Insane or Demented Persons, and deaf-mutes who do not know how to read and write

Question 11

What is Article 1328

Answer 11

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 12

What is Article 1329

Answer 12

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 13

What is Article 1330

Answer 13

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

Question 14

What is Article 1331

Answer 14

In order that mistake may invalidate consent, it should refer to the substance or 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 15

What is Article 1332

Answer 15

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 15

What is Article 1333

Answer 15

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

Question 16

What is Article 1334

Answer 16

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

Question 17

What is Article 1335

Answer 17

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 ascendents, to give his consent

To determine the degree of the 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 18

What is Article 1336

Answer 18

Violence or Intimidation shall annul the obligation, although it may have been employed by a 3rd person who did not take part in the contract

Question 19

What is Article 1337

Answer 19

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 20

What is Article 1338

Answer 20

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 21

What is Article 1340

Answer 21

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

Question 22

What is Article 1339

Answer 22

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

Question 23

What is Article 1341

Answer 23

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 24

What is Article 1343

Answer 24

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

Question 25

What is Article 1342

Answer 25

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

Question 26

What is Article 1344

Answer 26

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

Incidental fraud only obliges the person employing it to pay for damages

Question 27

What is Article 1345

Answer 27

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

Question 28

What is Article 1346

Answer 28

An absolutely simulated or fictitious contract is void. A relative simulation, when it does not prejudice a third person and is not intended for any purpose contrary to law, morals, good customs, public order/policy binds the parties to their real agreement.