FINALS Flashcards
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What is a contract?
A contract is a meeting of binds whereby one binds himself in respect to the other to give something or perform service.
What is the decisive factor in evaluating the agreement on the nature of a contract?
The intention of the parties
How can parties prove their intention in creating the contract?
By presenting Documentary and Parol Evidence
What is parol evidence?
It is also referred to as outside or external evidence that which are not included in the written contract or agreement
What are the characteristics of contracts?
Autonomy of Contracts
Obligatory Force
Mutuality
Relativity of Contracts
Are labor contracts akin or similar to private contracts?
No. Labor contracts are no ordinary private contracts as they are imbued with public interest and are subject to police power measures.
What is Pactum de non alienando?
This refers to an agreement not to sell or transfer encumbered property, especially mortgaged property. This is void,
What is Pactum Commissorium?
A stipulation empowering the creditor to appropriate the thing given as a guaranty for the fulfillment of the obligation in the event the obligor fails to live up to his undertakings. This stipulation is void.
Why is pactum de non alienando a void stipulation?
Article 2130 states that a stipulation forbidding the owner from alienating immovable mortgaged shall be void.
What is a dragnet clause?
What is the obligatory force all about?
What is mutuality all about?
What is a contract of adhesion?
Can the determination of the performance in contracts be left with third persons?
What is relativity of contracts?
As a general rule, only persons bound by the contract are affected by the same. In this light, can third persons be affected by a contract not involving them?
Yes. The exceptions to the general rule are:
- Contracts with stipulation pour autrui
- Contracts creating real rights
- Contracts in fraud of creditors
- Contracts violated at the inducement of third persons (Tortious Interference)
What is a stipulation pour autrui?
What are contracts creating real rights?
Third persons who come into possession of the object of the contract are also bound by it.
What is tortious interference?
What are the stages in the execution of contracts?
Negotiation
Perfection
Consummation or Termination
Can a person enter a contract with himself?
Can a person enter into a contract by himself?
What is the negotiation stage?
What is the perfection stage?
What is the consummation stage?
What are in rem contracts?
What is a consensual contract?
What is a solemn or formal contract?
What is a principal contract?
What is an accessory contract?
What is a preparatory contract?
What is an informal contract?
What is an onerous contract?
What is a remuneratory contracts?
What is a gratuitous contract?
A contract based on the generosity of the party
What are valid contracts?
What are rescissible contracts?
What are voidable contracts?
What are unenforceable contracts?
What are void contracts?
Differentiate unilateral vs bilateral contracts.
Differentiate nominate vs innominate contracts
What are the different kinds of innominate contracts?
Do ut des
Do ut facias
Facio ut des
Facio ut facias
What are the essential elements of a contract?
Consent
Object
Cause
What is an offer?
*OFFER-is a unilateral proposition made by one party to another for the celebration of a contract.
For an offer to be certain, a contract must come into existence by the mere acceptance of the offeree
without any further act on the offeror’s part.
What are the characteristics of an offer?
It is certain
The offer must be definite
The offer is concrete
What is the rule when an offer is made through an agent?
It is accepted from the time acceptance is communicated to him.
When does an offer become ineffective?
Upon death, civil interdiction, insanity, and insolvency.
If insanity happened before the acceptance of the offer, can the offer still be validly accepted?
Yes
What is acceptance?
What is an option contract?
it is a contract giving a party a specific amount of time to which an
acceptance may be made. Option contracts are usually for a consideration (Option Money).
What is option money? How does it differ from earnest money?
Option money is the money paid or promised to be paid in consideration for the option.
Earnest money is a partial payment of the purchase price and is considered as proof of the perfection of the contract.
Is an offer made in anger or or while emotionally upset valid?
No.
Who are those who cannot give consent?
Unemancipated minors
Insane or demented persons
Deaf-mutes who cannot read and write
If one of the parties who entered into a contract is a person who by law cannot give consent, what is the validity of the contract?
The contract is voidable.
If both of the parties are incapacitated to give consent, what is the validity of the contract?
The contract is unenforceable.
What is the validity of a contract involving minors pertaining to necessaries?
Valid
Can a minor who reaches the age of majority and thereafter ratifies the contract previously entered make it valid?
Yes
When can insane persons enter into contracts validly?
During lucid intervals
What is the validity of a contract entered into a state of drunkenness or under a hypnotic spell?
Voidable
What are the vices of consent?
Error or Mistake
Violence or Force
Intimidation/Threat/Duress
Undue Influence
Fraud or Deceit
What is the mistake referred to by the law that vices consent?
Substantial mistakes, the conditions which made the parties enter into the contract, the identity or qualification of one of the parties.
What is the remedy for mistakes of fact which does not vitiate consent?
If the party alleging knew the doubt, contingency, and risk of the contract, is there a mistake?
None
What is the difference between violence and intimidation?
Does violence or intimidation by a third party vitiate consent?
Yes
What is undue influence?
What kind of fraud vitiates consent?
Causal Fraud
Fraud by concealment
What is concealment
failure to disclose facts which the party ought to know
What is simulation of a contract?
The act of deliberately deceiving others, by feigning or pretending by agreement, the appearance of a contract which is either non-existent or concealed.
Differentiate absolute vs relative simulation.
Absolute simulation is when the contract does not really exist and the parties do not intend to be bound at all.
Relative simulation is when the contract entered by the parties is different from their true greenest,
What are the kinds of objects?
Things, rights, services
Can a thing that is not yet existing but will exist be the object of a contract?
Yes
Can future inheritance be the object of a contract?
No. The ownership is not yet by the heir. There is only expectancy but no right of the thing.
What is cause? How is it different from motive?
Cause is the essential reason or purpose which the contracting parties have in view at the time of entering into the contract.
Motive is the purely personal or private reason which a party has in entering into a contract.
Does the illegality of the motive carry with it the illegality of the contract?
No. Motive is not an essential requisite of a contract and not usually disclosed as it is personal.
What is the absence or want of cause?
What is the effect of an illegal cause?
It renders the contract void.
What is the falsity of cause?
The contract states a valid cause/consideration but such statement is not true.
Lesion
Damage caused by the fact that the price is unjust or inadequate
What are the examples of contracts that needs a specific form?
Donation of real property - public document
Sale of land through an agent - must be in writing thus the sale is void
Donation of personal property the value of which exceeds 5,000 - must be in writing
Stipulation to pay interest - must be in writing, otherwise, no interest is due
Contract of partnership - public document
What is the Statute of Frauds?
The act by which the law requires the contract be in writing for it to be valid.
What is reformation?
The remedy allowed by law by means of which a written instrument is amended or rectified as to express or conform to the real agreement or intention of the parties by reason of mistake, fraud, inequitable conduct, or accident, the instrument fails to express such agreement or intention.
When is reformation valid?
When there is a meeting of minds AND
When the true intention of the parties are not included in the WRITTEN contract by reason of mistake, fraud, inequitable conduct, or accident.
Who has the right to ask for reformation?
The party who was mistaken in good faith
When shall there be no reformation?
Simple donations inter vivid wherein no condition is imposed
wills
When the real agreement is void
when one of the parties has brought an action to enforce the instrument (him bringing about an action admits validity)
Where the words and clauses of a written contract are in conflict with the manifest intention of the parties, which should prevail?
The intention of the parties as it expresses their will.
What prevails in cases where a contract bears several meanings?
The meaning that renders the contract effectual.
What are the 4 kinds of defective contracts?
Rescissible contracts
Voidable contracts
Unenforceable contracts
Void contracts
What is rescission?
A remedy given by law where the parties may restore how things were before the contract and to repair damages from therewith.
What are the cases of rescissible contracts?
Contracts entered into in behalf of wards
Contracts agreed upon in representation of absentees.
Contracts undertaken in fraud of creditors.
Contracts which refer to things under litigation
What is the rule of 1/4 in rescissible contracts?
Contracts of sale entered into in behalf of wards where the lesion is more than 1/4 of the price the things was sold for is rescissible.
How is it said for someone to be insolvent?
Their liabilities are greater than their properties.
Their assets are insufficient to cover their obligations and debts.
The action to claim rescission must be commenced within how many years?
Four years
When does the period of 4 years to claim rescission start for
1.) persons under guardianship
2.) absentees
1.) upon the termination of incapacity
2.) upon the time the domicile is known
What are the cases when a contract is voidable?
When one of the parties are incapable of giving consent
When there is a vice of consent
What is annulment?
Remedy provided by law for reason of public interest, for the declaration of the inefficacy of a contract based on defect or vie of consent so the condition may be restored to how it was before the contract.
The action for annulment shall be brought within how many years?
4 years
What is ratification?
Where one voluntarily adopts or approves of some defective or unauthorized act or contract which without his subsequent approval or consent, would not be binding on him
What is the binding force of unenforceable contracts?
Ratification
What are the kinds of unenforceable contracts?
Those entered into in the name of another by one without, or acting in excess, of authority (unauthorized contracts)
Those that do not comply with the Statute of Frauds
Those where both parties are incapable of giving consent to a contract
Can unenforceable contracts be assailed by third persons?
No
What is the prescription of the action to declare the inexistence of a contract?
None
What does “in pari delicto” mean?
both parties are at fault
What is the effect of in pari delicto?
Both parties shall have no action against each other
What are the elements of an obligation?
Passive subject
Active subject
Object or Prestation
Juridical or legal tie
What is the ceiling law?
A statute fixing the maximum price of any article or commodity .
Can a void contract be novated?
No. There is none to novate.
