SECTION 2: REQUISITES OF CAUSE:
OBJECT OF CONTRACT
CONTRACTS
 Is its subject matter. The object of
every contract is the obligation
created. But since a contract cannot
exist w/out an obligation, it may be
said that the thing, service, or right
which is the object of the obligation
is also the object of the contract.
OBJECT OF CONTRACT :
A. The thing must be within the
commerce of men.
B. Future goods.
C. Licit.
CHARACTERISTIC OF CONTRACTS :
A. The thing must be within the
commerce of men.
B. Transmissible.
C. Possible.
D. Determinate.
RULES IN A CONTRACT OF SALES AS TO
FUTURE THINGS:
A. Under a contract of sale, things having
potential existence may be the object
of a contract of sale.
B. There may be a sale of expected
things, but subject to the condition that
it will come into existence. If the will
not materialize, the sale is not
effective. This is sale of future things (
emptio rei speratae).
C. There may be sale of hope itself, the
hope or expectancy already exists. This
called sale of hope ( emptio spei).
However, sale of vain hope or
expectancy is void.
FUTURE INHERITANCE- the source of
property is still alive cannot be the object of a
contract, except in cases provided by the law.
SECTION 3
CAUSE OF CONTRACTS
 The cause of a contract is the “ why
of the contract”, essential reason
which impels the contracting parties
to enter into the contract.
A. It must exist.
B. It must be real, that is, true.
C. It must be lawful.
KINDS OF CONTRACTS ACCORDING TO
CAUSE
A. ONEROUS- is the one the cause
which, for each contracting party, is the
presentation or promise of a thing or
service by the other, or the promise
that the parties are reciprocally
obligated to each other.
B. REMUNERATORY- one the cause of
the which is service or benefited which
is remunerated.
C. GRATUITOUS- one the cause of
which is the mere liberality of the
benefactor or giver.
CHAPTER 3
FORMS OF CONTRACTS
As a rule, the moment the three (3) essential
elements of a contract are present, the
contract is valid & enforceable even if it is
orally entered into. This is called “spiritual
system“ of the Spanish civil code by virtue of
which the law looks more at the spirit rather
than the form of contracts.
FORMS OF CONTRACTS - Refers to the
manner in which a contract is executed or
manifested. The contract may be written or
oral or partly oral, or in partly in writing. If in
writing, it may be in a public or a private
instrument.
FORM IS REQUIRED BY LAW IN EITHER OF
THREE WAYS:
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 subscribed
by the parties to be charge for its
enforcement as against such party,
as in the case of contracts covered
by the statue frauds.
 C. CONVENIENCE- requires a certain
form in order to make effective the
rights against third persons. But as
between the parties, it is no longer
necessary because the law allows
them to compel each other to put
in the proper form.
The following must appear in a public
instrument or document:
A. Acts & contracts which have for their
object the creation, transmission,
modification, or extinguished of real
rights over immovable property.
B. The cession, repudiation or
renunciation of hereditary rights or of
those of the conjugal partnership of
gains.
C. The power to administer property, or
any other power which has for its
object an act appearing o which should
appear in a public document, or should
prejudice a third person.
D. The cession of actions or rights
proceeding from an act appearing in a
public document.
CHAPTER 4
REFORMATION OF INSTRUMENTS
 The remedy in equity by means of
which a written instruments is made or
construed so as to express or conform
to the real intention of the parties
when some error or mistake has been
committed.
PURPOSE OF REFORMATION – to enforce
a written instrument which does not reflect or
disclose the real meeting of the minds of the
parties would be unjust & inequitable, so the
law allows the parties the “ doctrine of
reformation”.
REQUISITES OF REFORMATION:
A. Meeting of the minds.
B. Instrument does not express the true
intention of the parties.
C. There must be clear & convincing
proof.
MUTUAL MISTAKE – Is mistake of fact that
is common to both parties of the instrument
which causes failure of the instrument to
express their true intention.
REQUISITES OF MISTAKE:
A. The mistake is the mistake of fact.
B. Proof must be clear & convincing.
C. The alleged mistake must be common
to both contracting parties.
UNILATERAL MISTAKE- if the mistake is
unilateral & the other party acted fraudulently
or inequitably , or is guilty of concealment, the
party who was mistaken can ask for
reformation.
NOT SUBJECT TO REFORMATION:
 Simple donations inter vivos wherein no
condition is imposed;
 Wills;
 When the real agreement is void.
PERSONS TO FILE AN ACTION FOR
REFORMATION:
A. If mistake is mutual, either party or his
successors in interest.
B. If not mutual:
1. This injured part, or
2. His heirs & assigns.
CHAPTER 5
INTERPRETATION OF CONTRACTS
INTERPRETATION –interpretation of a
contract is the determination of the meaning
of the terms or words used by the parties in
their contract.
RULE IN CASE OF CONFLICT- Whenever
there is a conflict between the words used in
the contract & of that of the intention of the
parties, the intention must prevail. The words
appearing in the contract shall only be given
weight when they are so clear that there is no
doubt w/ regard to the intention of the parties.
Should there be a doubt, the intention must
prevail.
DOUBT AS TO INCIDENTAL
CIRCUMTANCES OF THE CONTRACT:
A. IF ONEROUS-in favor of the greatest
reciprocity of interest.
B. IF GRATUITOUS-in favor of the least
transmission of rights.