Article 1306 Flashcards
Art 1306 states that
The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrart to law, morals, good customs, public order, or public policy
Meaning of valid contracts
Valid contracts are those ________
that meet all the legal requisites for the type of agreement is involved (ART 1318) and the limitiations on contractual stipulation (ART 1306) and are, therefore, legally binding and enforceable
Meaning of Valid Contracts
It is possible to have an agreement that meets all the criteria _______
of a valid contract but it is unenforceable in a court of law for failure to comly with the Statutes of Frauds** (ART 1403)**
Freedom of Contract guranteed
The righ to enter into contract is one of the liberties guranteed to the individual by the Constitution. However, ______
The constitutional prohibition against the impariment of contractual obligations refers only to legally valid contracts.
Freedom to Contract guranteed
The freedom of contract is both a constitutional and statutory right, to uphold
the right courts are enjoined to move with the necessary caution and prudennce in holding contracts void.
Limitations on contractual stipulations
What is the 1st limitation to the freedom to contract?
There are 2 limitations
Law - It is a fundamental requirement that the contract entered into must be in accordance with, and not repugnant to, an appilcable statute. Its terms are embodied in every contract.
Limitations on contractual stipulations
What is the 2nd limitation to the freedom to contract?
There are 2 limitations
Police power - When there is no law in existence or when the law is silent, the will of the parties prevails unless their contract contravenes the limitation of morals, good customs, public order, or public policy
Contract must not be contrary to law
Law has been defined as “______”
a rule of conduct, just, obligatory, promulgated by legitimate authority, and of common observance and benefit
Contract must not be contrary to law
A contract cannot be given effect if it is contrary to law because law is ______
superior to a contract (ART 1409)
Contract must not be contrary to morals
Morals deal with _____
norms of good and right conduct evolved in a community. These norms may differ at different times and places and with each group of people
Contract must not be contrary to good customs
Customs consist of habits and practices __________
which through long usage have been followed and enforced by society or some part of it as binding rules of conduct.
Contract must not be contracry to public order
Public order refers principally to _______
public safety although it has been considered to mean also the public weal
Contract my not be contrary to public policy
Public policy is broader than public order, as _____________
the former may refer not only to public safety but also to considerations which are moved by the common good
Contract my not be contrary to public policy
A contract which has a tendency to be injurious to the public or ________
is against the public good is contrary to public policy. Actual injury need not be shown.
