Different Classes of Contracts

Contract

Definition of a Contract
 A meeting of the minds
 Between two persons
 Whereby one binds himself, with respect to the other
 To give something or to render some service

Different phases or stages in the life of a contract

1. 1. Preparation – Preliminary to formation
2. 2. Perfection – birth of the contract
3.3. Consummation - fulfillment

Essential characteristics of Contracts

1. 1. Obligatory force – must be complied with in good faith
2. 2. Autonomy – parties are free to enter such stipulations, clauses, terms
and conditions
–– Clauses and conditions must not be contrary to:

 LAW
 Morals
 Good Customs
 Public Order
 Public Policy
3. 3.
Mutuality – contract must bind both parties

Determination can be left to third party, whose decision
shall be binding only when communicated to both parties

Unless such determination be evidently inequitable
4. 4.
Relativity – takes effect only bet parties, their assigns and
heirs

Stipulation pour autrui accepted by third party

Where third persons comes into possesion of the object of
contract creating real rights

Where contract is to defraud a third person
 Where third person induces a contracting party to violate his
contract
a. a.