ECE CONTRACTS

By. Group 6
• John Vincent Perez
• Christelle Lota
• Eirron Carl Ramirez

Before a CONTRACT...there’ s an OBLIGATION.

OBLIGATION
Obligation Defined:
The term Obligation is derived from the Latin word “obligatio” which means tying or
bonding.
Civil Code on Obligation:
Article 1156, An obligation is a juridical necessity to give, to do or not to do.

Nature of Obligation under Civil Code:

• Civil Obligations – legally demandable and the courts of justice may compel their
performance.
• Natural Obligations – based on morality, natural law and conscience, they are not
legally demandable.

Essential Requisited of an Obligation

1. Passive Subject (debtor or obligator). The person who is bound to the fulfillment of
the obligation.
2. Active Subject (creditor or oblige). The person who is entitled to demand the
fulfillment of the obligation.
3. Object or Prestation (subject matter of the obligation). The conduct required to be
observed by the debtor.
4. Juridical or legal tie (efficient cause). This is what binds or connects the parties to
the obligation.
Forms of Obligations
The form of an obligation refers to the manner in i an obligation is manifested or incurred. It
may be:

• Oral
• Written
• Partly oral and partly written.
Source of Obligations
1. Law – when they are imposed by law itself.
Ex. Obligation to pay taxes; obligation to support one’s family.
Legal Obligations are obligations arising from law. They are not presumed because they are
considered a burden upon the obligor. They are the exception, not the rule. To be
demandable, they must be clearly set forth in the law.
1.1. Quasi-contracts – the act of a person, permitted by law, by which he obligates
himself towards another, or by which another binds himself to him, without any
agreement between them.
1.2. Quasi-delicts – a legal wrong, committed through fault or negligence, on a
person or property, independent of contract.
1.3. Crimes or acts or omissions punished by law – when they arise from civil liability
which is the consequence of a criminal offense
1.4. Quasi-delicts or torts – when they arise from damage caused to another through
an act or omission, there being fault or negligence, but no contractual relation exists
between the parties
2. Contracts – when they arise from the stipulation of the parties
Ex. Obligation to repay a loan or indebtedness by virtue of an agreement

CONTRACTS
Contracts Defined:
Art. 1305, 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. (1254a)
Elements of Contracts:

• Essential Elements
➢ Consent (both parties)
➢ Object (subject matter)
➢ Cause (consideration)
• Natural elements – are those the existence of which is presumed by law unless there
is an agreement to the contrary
• Accidental elements – consist of the unusual stipulation of the parties such as
conditions, terms, etc.
Stages of Contracts

• Preparation or Conception – includes all the initial stages up to the time the parties
agree upon the terms of the contract.
• Perfection or Birth – the time when the minds of the parties meet in agreement
upon the object or subject matter as well as to the price or consideration.
• Consummation or Termination
Classification of Contracts
Express and Implied Contracts – is one written in the intent of the parties is shown by
words, oral or written.
Executory and Executed contract contracts
• Executory contract – is one that is not yet performed
• Executed contract – is one that has already been performed

Consensual and Real Contracts

• Consensual contract – is one perfected by mere consent
• Real contract – is one perfected by the delivery of the thing which is the object of the
contract
Unilateral and Bilateral Contracts
• Unilateral contract – only one of the parties has an obligation
• Bilateral contract – both parties has an obligation

Requisites of a Contract:
1. There is consent among the contracting parties.
2. There is a certain object that is the subject matter of the contract.
3. There is a cause or consideration for which the obligation is established.

Cause of Contracts
- the immediate, direct and proximate reason which justifies the creation of an
obligation thru the will of the contracting parties.

Classification of Contract to its Cause

• Onerous Contract – the cause is the mutual undertaking or promise of either of the
contracting parties.
• Remunetory Contract – the cause is the service or benefit for which the
remuneration is given
• Gratuitous Contract – the cause is the pure liberality of the giver.
REFORMATION OF INSTRUMENTS
• Reformation is a remedy in equity by means of which a written instrument is made
or construed to express or conform to the real intention of the parties when some
error or mistake has been committed.
REQUISITES OF REFORMATION
• There is a valid contract;
• The contract is in writing;
• The written contract fails to express the true intention of the parties.
• The failure of the written contract to express the true intention is due to mutual
mistake, fraud, inequitable conduct, or accident.