OBLICON M5 Flashcards
FINALS
Is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service (NCC, Art.1305).
Contracts
Is a meeting of the minds between two or more parties, whereby one party binds himself with respect to the other, or where both parties bind themselves reciprocally, in favor of one another, to fulfill a prestation to give, to do or not to do. (Pineda, 2009)
Contracts
Speaks of the intention of the parties in entering into the contract respecting the subject matter and the consideration thereof. As a rule therefore, a contract is perfected by mere consent. It does not require any special form, as a rule, and is binding from the moment that the essential requisites are present. Thus, the meeting of the minds between the parties rise to the binding contract although they have not affixed their signature to its written form (Rabuya, 2017).
Meeting of the Minds
While a contract is one of the sources of obligations, an obligation is the legal tie or relations itself that exists after a contract has been entered into.
Obligation v. Contract
Hence, there can be no contract if there is no obligation. But an obligation may exist without a contract.
Obligation v. Contract
What are the Three stages in the making of a contract (CPC)?
- Conception or Generation – the first stage where the parties begin their initial negotiation and bargaining for the formation of the contract ending at the
moment of agreement of the parties. - Perfection or Birth – Here, the parties had a meeting of minds as to the object, cause or consideration and other terms and conditions of the contract.
- Consumation or fulfillment – This the last stage which consists in their performance or fulfillment by the parties of their obligations under the term of
the perfected contract.
What are the Characteristics of a Contract?
The following are the characteristics of a contract (AMOR):
- Autonomy (NCC, Art. 1306);
- Mutuality (NCC, Art. 1308);
- Obligatoriness (NCC, Art. 1315);
- Relativity (NCC, Art. 1311)
- Consensuality (NCC, Art. 1315)
Contracts take effect only between the parties or their assigns and heirs.
Principle of relativity or Principle of limited effectivity of contracts (2011 BAR) General Rule
A thing done between others does not harm or benefit others
Res inter alios acta aliis neque nocit prod est
A contract can only obligate the parties who entered into it, or their successors who assumed their personalities, and that, concomitantly, a contract can neither favor nor prejudice
third persons (Vitug, 2006).
Res inter alios acta aliis neque nocit prod est (a thing done between other does not harm or benefit others)
Rights and obligations that are not transmissible by their nature, or by the
stipulation or by provisions of law (NCC, Art. 1311);
Principle of relativity or Principle of limited effectivity of contracts (2011 BAR) Exception
Benefits clearly and
deliberately conferred by parties to a contract upon third persons (NCC, Art. 1311) and
which stipulation is merely part of a contract entered into by the parties, neither of whom
acted as agents of the third person and which favor can be demanded by the third person if duly accepted by him before it could be revoked;
Stipulation pour autrui (stipulation in favor of a third person)
Requisites of stipulation pour atrui:
a. Stipulation in favor of a third person;
b. Stipulation is just part and not the whole obligations of the contract;
c. Contracting parties must have clearly and deliberately conferred a favor upon third person;
d. Favor or benefit conferred is not just an incidental benefit or interest;
e. Third person must have communicated his acceptance; and
f. Neither of the contracting parties bears the legal representation of the third person (Young v. Court of Appeals, G.R. No. 79518, January 13, 1989).
Third persons coming into possession of the object of the contract creating real rights subject to the provisions of Mortgage Law and the Land Registration Law (NCC, Art. 1312);
Principle of relativity or Principle of limited effectivity of contracts (2011 BAR) Exception
Contracts entered into in fraud of creditors; (NCC, Art. 1313);
Principle of relativity or Principle of limited effectivity of contracts (2011 BAR) Exception
When a third person induces a party to violate the contract (NCC, Art. 1314). (1991, 1998 BAR)
Principle of relativity or Principle of limited effectivity of contracts (2011 BAR) Exception
Contracts shall be obligatory, in whatever form they may have been entered into, provided
all the essential requisites for validity are present (NCC, Art. 1356).
Obligatory Force of Contracts
Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. (NCC, Art. 1159)
Obligatory Force of Contracts
This provision must fall within the other characteristic of a contract
Obligatory Force of Contracts
Requisites for the application of the principle
Before a contract may be considered obligatory, it is necessary that:
- It is perfected;
- It is valid; and
- It is enforceable (Rabuya, 2017).
The contract must bind both contracting parties and its validity or compliance cannot be left to the will of one of them (NCC, Art. 1308).
Mutuality of Contracts
If a party alleges defects in the contract so that it could be set aside, he must prove
conclusively the existence of the defects because the validity and fulfillment of the contract
cannot be left to the will of one of the contracting parties. (Pineda, 2009)
Mutuality of Contracts
It is the freedom of the parties to contract and to stipulate provided the stipulations are not contrary to law, morals,
good customs, public order or public policy (NCC, Art. 1306).
Autonomy of Contracts or Liberty of Contracts
An agreement to pay unconscionable interests on a loan is against morals. (Medel, et al. vs. Ca, 299 SCRA 481)
Autonomy of Contracts or Liberty of Contracts
