CONTRACTS Flashcards
is meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service
Contract
contract or that which has a specific name or designation in law
Nominate Contract
In a contract there must be at least _ persons or parties
2
that which has no specific name or designation in law
Innominate Contract
are those that meet all the legal requisites for the type of agreement involved and the limitations on contractual stipulation and are, therefore, legally binding
Valid Contracts
is a fundamental requirement that the contract entered into must be in accordance with, and not repugnant to, an applicable statue
Law
when there is no law in existence, the will of the parties prevail.
Police power
deal with norms of good and right conduct evolved in a community
Morals
consists 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.
Customs
refers to the principally to public safety although it has been considered to mean also the public weal
Public Order
is broader that the public order, as the former may refer not only to public safety but also to considerations which are moved by the common good
Public Policy
Hypothetical case: A entered into a contract whereby A binds himself to slap his mother in consideration of P10,000 to be given by Z, What is the status of the contract?
This contract is VOID because it is against the good custom of showing respect to our parents.
Kinds of innominate contract
a. Do ut des (I give that you may give)
b. Do ut facio (I give that you may do)
c. Facio ut des (I do that you may give)
d. Facio ut facias (I do that you may do)
is no longer an innominate contract. It is now called BARTER or EXCHANGE
Do ut des
I give that you may do
Do ut facio
I do that you may give
Facio ut des
I do that you may do
Facio ut facias
Article 1309. The determination of the performance may be left to a ________________, whose decision shall not be binding until it has been made known to both contracting parties.
Third Person
Hypothetical case: S agrees to sell her antique coin collection to B. they both agree that the price will be determined by a coin appraiser, C, who is a third person not directly involved in the contract.
C’s determination of the price shall not be binding until it has been made known to both S and B
is one who has not taken part in a contract and is therefore, a stranger to the contract.
Third person
is a stipulation in a contract clearly and deliberately conferring a favor upon a third person who has a right to demand it’s fulfillment provided he communicated his acceptance to the obligor before it’s revocation by the obligee or original parties
Stipulation pour autrui
Requisites of stipulation pour autrui
- The contracting parties by their stipulation must have clearly or deliberately conferred a favor upon a thirdperson;
- The third person must have communicated his acceptance to the obligor before its revocation by the obligee or the original parties
- The stipulation in favor of the third person should be a part not the whole, of the contract;
- The favorable stipulation should not be conditioned or compensated by any kind of obligation whatever; and
- Neither of the contracting parties bears the legal representation or authorization of the third party for otherwise, the rules on agency will apply
Hypothetical Case: D is indebted to C in the amount of P10,000. What would happen if one of them died?
A. If C Dies, D must pay the heirs of C.
B. If C assigns his credit to X, then D is liable to pay X.
C. If D Dies and H is the heir, Then H assumes the obligation of D to C. H is bound by the contract entered into by D. However H is not liable beyond the value of the property he inherits from D, the decedent
Classification of contracts according to perfection
a. Consensual Contract
b. Real Contract
c. Solemn Contract
A contract that which is perfected by mere consent
Consensual Contract
A contract which is perfected by the delivery of the thing subject matter of the contract.
Real Contract
A contract which requires compliance with certain formalities prescribed by law, such prescribed from being thereby an essential element thereof
Solemn Contract
Stages of life in a contract
- Preparation or negotiation
- Perfection or birth
- Consummation or termination
the parties have not yet arrived at any definite agreement
Preparation or negotiation
the parties have come to a definite agreement or meeting of minds
Perfection or Birth
parties have performed their respective obligations and the contract may be said to have been fully accomplished or executed.
Consummation or Termination
Article 1317. Requisites in order a person be bound by the contract of another
a. He must be duly authorized (Expressly or Impliedly)
b. He must have by law, a right to represent him
c The contract must be subsequently rattified
d. He must act within his power
Hypothetical Case: A has a car and that car was sold by B in the name of A but he does not have the authority from A. B then sold it to C.
According to Article 1317, the contract is uneforceable since B is not authorized by A to sell the car to C.
What are the Essential Requisites of a contract?
- Consent
- Object
- Cause
is the conformity or concurrence of wills (offer and acceptance and with respect to contracts), it is the agreement of the will of one (1) contracting party with that of another of others, upon the object and terms of the contract
Consent
Requisites of CONSENT
- There must be 2 Parties;
- The parties must be CAPABLE and CAPACIATATED
- There must be NO VITATION of consent;
- There must be NO CONFLICT between what was expressly declared and what was really intended;
- Intent must be declared PROPERLY.
is the manifestation by the offeree of his assent to all terms of he offer. Without this, there can be no meeting of minds between the parties
Acceptance
Requisites of Acceptance
- It must be absolute
- It must be unconditional
- It must be unqualified
Hypothetical Case: 1. Sonny offer to buy the watch of Patricia for P5,000, Patricia accept Sonny’s offer. What is the status of Patricia’s acceptance?
- If Patricia proposes to sell the watch to sonny for P6,000. What is the status of the offer and acceptance?
- The acceptance of Patricia here is absolute and Unconditional
- her acceptance is qualified and it becomes a counter offer
Article 1322. An offer made through an ______ is accepted from the time acceptance is communicated to him
Agent
is considered an extension of the personality of his principal, If duly authorized, the act of the agent is, in law, the act of the principal
Agent
Hypothetical Case: Daniela is a sales agent of Luna Homes Subdivision, She offered to sell a 15 bedroom mansion to Theo at the price of 15 million, Theo agrees and accepts the offer to buy the property for the stipulated price. What is status of the contract?
The contract of sale is valid even though the acceptance was made with the agent
Article 1324.
General Rule: the offer may be withdrawn as a matter of right anytime before acceptance.
Exception: ???
when the option is founded upon a consideration, as something paid or promised
Is one giving a person for a consideration a certain period within which to accept the offer of the offerer.
Option Contract
is the period given within which the offeree must accept the offer
Option Period
is the money paid or promised to be paid in consideration for the option
Option Money
They refer to those persons who have not yet reached the age of the majority (18) years.
Unemancipated minors
According to Art. 1327, Who cannot give consent to a contract?
- Unemancipated minors
- Insane or demented persons, and deaf-mutes who do not know how to write
These are person who are deaf and dumb
Deafmutes
When offer and/or Acceptance is made during lucid interval
VALID
When offer and/or Acceptance is made during drunkenness
VOIDABLE
When offer and/or Acceptance is made during drunkenness
VOIDABLE
True or False
A contract is VALID if entered into through a guardian or legal representative
True
True or False
A contract is not valid where the minor misrepresented his age and convincingly led the other party to believe in his legal capacity
False
Characteristics of CONSENT
- It is intelligent
- It is free and voluntary
- It is conscious and spontaneous
What are the VICES of consent?
- Mistake
- Violence
- Intimidation
- Undue Influence
- Fraud
A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is ????
VOIDABLE
a wrong or false notion about such matter, a belief in the existence of some circumstances, fact or event which in reality does not exist
MISTAKE