Contracts

Contracts- a contract 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.
Limitations of contracts:
( law, morals, good customs, public
order, public policy)
Different kinds of contracts.
a. According to perfection.
Consensual- by mere
consent
Real- by the delivery
b. According to degree of
importance.
Preparatory-contract is
not an end by itself
Accessory-dependent
upon another contract
Principal- can stand
alone such as sale
c. According to subject matter..
Contract involving
things
Contract involving rights
or credits
Contracts involving
services
d. According to name.

Nominate- with a special

name
Innominate- without any
name.
i) Kinds of Innominate
contracts.
DO UT DES- I give
that you may give
DO UT FACIAS- I give
that you may do
FACTO UT DES- I do
that you may give
FACTO UT FACIAS- I
do that you may do
e. According to cause.
Onerous- exchange of
considerations
Gratuitous or lucrativeno consideration
received in exchange
Remuneratorysomething is given for
benefit Ex.bonus
f. Number of parties obligated.
Unilateral
Commodatum*******
Mutuum********
Bilateral
g. According to risk.
Commutative- equivalent
values
Aleatory- contract is
dependent upon chance

ART. 1314. Any third person who

induces another to violate this
contract shall be liable for damages
to the other contracting party.
ART. 1316. Real contracts, such as
deposit, pledge and commodatum
are not perfected until the delivery of
the object of the obligation.
A deposit is constituted from
the moment a person receives
a thing belonging to another
Pledge is the delivery of a
personal property by a debtor
to a creditor as security for a
debt
Commodatum is a contract
wherby one of the parties
delivers to another something
not consumable
Essential Requisites of Contracts
Consent
Object
Cause
Consent- is the manifestation of the
meeting of the offer and the
acceptance upon the thing and the
cause of the contract.
Five causes vitiating consent:
Error or mistake

Violence or force
Intimidation or threat
Undue in influence
Fraud or deceit

Cause of contracts
The cause of contract is the why
of the contract, the essential
reason which impels the
contracting parties to enter into
the contract
Forms of contract:
a. Validity- the form required or
specified by law is essential
otherwise the contract is
without effect
b. Enforceability- requires the
contract to be in writing
c. Convenience- requires a
certain form in order to make
effective the rights against
third persons.
Reformation of Instruments
Reformation of an instrument is
that remedy in equity by means of
which a written instrument is
made or construed to as to
express or conform to the real
intention of the parties when
some error or mistake has been
committed

Requisites of reformation:
a. Meeting of minds between the
parties
b. Instrument does not express
the true intention of the parties
c. The failure of intention is due
to mistake, fraud, inequitable
conduct, o accident
d. There must be clear and
convincing proof
There shall be no reformation in
the following cases:
a. Simple donations
b. Wills
c. When the real agreement is
void
Interpretation of contracts
Interpretation of a contract is the
determination of the meaning of
the terms or words used by the
parties in their contract.
Rescissible contracts
Requisites of rescission:
a. The contract entered into is
essentially valid
b. There is lesion or pecuniary
prejudice
i) Lesion defined as the injury
suffered, in consequence of
inequality of situation, by

one who does not receive

the full equivalent for what
he give in a commutative
contract
The four kinds of defective
contracts are:
a. Rescissible contracts valid
until rescinded.
b. Voidable contracts valid until
annulled
c. Unenforceable contracts
cannot be sued upon or
enforced unless it is ratified
d. Void contract is one that has
no effect at all
ART.1383 the action for rescission
is subsidiary; it cannot be
instituted except when the party
suffering damage has no other
legal means to obtain reparation
for the same
ART.1384 rescission shall be only
to the extent necessary to cover
the damages caused
Jurisprudence- a substantial
breach of a reciprocal obligation,
like failure to pay the price in the
manner prescribed by the
contract, entitles the injured party
to rescind the obligation

Presumptions of fraud in a
rescissible contract
a. Gratuitous contracts- contracts
entered into by the debtor,
when he did not reserve
sufficient property to pay his
debts before donation, are
considered fraudulent
b. Onerous contracts
Made by persons against
whom some judgement
has been rendered even
if not yet final
Made by persons against
whom some writ of
attachment has been
issued. The decision or
attachment need not

refer to the property

alienated
Essential features of
rescissible contracts:
a. The action for rescission
is subsidiary
b. Rescission shall be only
to the extent necessary
to cover the damaged
caused
c. Rescission creates the
obligation to return the
things which were the
object of the contract,
together with the fruits
and the price with its
interest

d. The action to claim

rescission must be
commenced within four
years