CONTRACTS CHAPTER 4 – REFORMATION OF INSTRUMENTS (JURADO

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DOCTRINE OF REFORMATION OF INSTRUMENTS - when the true intention of the parties to a perfected and valid contract are not expressed in the instrument purporting to embody their agreement by reason of mistake, fraud, inequitable conduct or accident, one of the parties may ask for the reformation of the instrument so that such true intention may be expressed. REQUISITES: 1) meeting of the minds 2) true intention is not expressed. 3) failure to express their true intention is due to mistake, fruad, inequitable conduct or accident. *if complaint failed to allege that instrument does not express real agreement, no cause of action since allegation is essential considering the fact that the object of an action for reformation is to make the instrument conform to the real agreement or intention of the parties. RATIONALE - in order that the true intention of the contracting parties may be expressed. - it is unjust and inequitable to allow the enforcement of a written instrument which does not reflect or disclose the real meeting of the minds of the parties. - Written instrument should be the final and inflexible criterion and measure of the rights and obligations of the contracting parties. DISTINGUISHED FROM ANNULMENT OF CONTRACTS Reformation of instruments- presupposes a perfectly valid contract. There is already meeting of minds Annulment of contract- defective contract in which there has been no meeting of the minds because the consent of one or both of the contracting parties has been vitiated. * if mistake, fraud, inequitable conduct prevented meeting of minds - proper remedy is annulment of comtract. CONTRACTS OF ADHESION - one of the parties imposes a ready made form of contract, which the other party may accept or reject, but which the latter cannot modify. - not in itself invalid agreement. It is binding as mutually executed transaction. - the one who adheres to the contract is in reality free to reject it entirely; if he adheres he gives his consent. - stand out from other contracts because it is accorded inordinate vigilance and scrutiny by the courts in order to shield the unwary from deceptive schemes contained in ready-made covenants. - this calls for greater strictness and vigilance on the part of the courts of justice with a view to protecting the weaker party from the abuses and imposition, and prevent their becoming traps for the unwary. - the validity thereof must be determined in the light of the circumstances under which the stipulation is intended to apply. Example: 492 CONTRACTS OF CREDIT CARDS - for cardholder to be absolved from liability for unauthorized purchases made through lost or stolen card. Two steps: 1) cardholder must give written notice to the credit card company 2) credit card company must notify its member establishments of such loss or theft, which, naturally it may only do upon receipt of a notice from the cardholder. - Both the cardholder and company have responsibility to perform to free cardholder from responsibility. *prompt notice by the cardholder is enough to relieve him any liability occasioned by the unauthorized use of her lost or stolen card. Example page 494

OASAN, WL | DLSU LAW

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