CONTRACTS 4.

Form
Concept
- is a meeting of minds between two or more
persons, whereby one binds himself, with respect
to the other, to give something or to render some
service.
Elements of a Contract
1. Essential Elements
- without which: NO CONTRACT
a) Consent
b) Object
c) Cause
2. Natural Elements
- those presumed to exist in certain contracts
unless set aside or suppressed by the parties
3. Accidental Elements
- Particular stipulations
Classifications of Contracts
1. Name/Designation
a) Nominate
b) Innominate
i. Do ut des - I give that you may give
(BARTER) - no longer innominate
ii. Do ut facias - I give that you may do
iii. Facio ut des - I do that you may give
iv. Facio ut facias - I do that you may do
Rules governing innominate contracts
1. Stipulation
2. Provisions of civil code on ObliCon
3. Rules governing most analogous
nominate contracts
4. Customs of the place
2. Perfection
a) Consensual -by mere consent
b) Real - perfected by mere delivery of the
object
3. Cause
a) Onerous - there is exchage of valuable
considerations
- the cause for each contracting party is
the prestation or promise of a thing pr
service by the other
b) Remuneratory or remunerative - the
cause is the service or benefit
remunerated
c) Gratuitous -the cause is the liberality of
the benefactor or giver
a) Informal, common or simple
b) Formal or Solemn - requires certain
compliance/form under law
5. Obligatory force
a) Valid
i. COC
ii. LMGcPoPp
b) Rescissible
i. Economic Damage (8)
c) Voidable
i. MIFUV
ii. 1 incapacitated to give consent
d) Unenforceable
i. Both incapacitated to give consent
ii. Statute of Fraud
iii. Unauthorized person
e) Void or Inexistent
i. Void - against LMGcPoPp
ii. Inexistent - lacking COC
6. Persons obliged
a) Unilateral - only one of the parties is
obliged to give or to do something
b) Bilateral - (synalagmatic) where both
parties are required to give or to do
something
7. Risks
a) Commutative - parties give equivalent
values
b) Aleatory - fulfillment depends upon an
uncertain event or contingency or by
chance
8. Liability
a) Unilateral - only one obligation is created
b) Bilateral - gives rice to reciprocal
obligations
9. Status
a) Executory - not yet completely performed
b) Executed - has been performed
10. Dependence to other contracts
a) Principal - can stand by itself
b) Accessory - dependent upon another
contract
c) Preparatory - means to an end
11. Dependence of part of contract to other parts
a) Indivisible - each part of contract is
dependent upon other parts for
performance
b) Divisible - one part may be satisfactorily
performed independently
Stages of Contracts
1. Preparation or Conception
- all the steps taken leading to the perfection
of the contract
- not yet arrived at any definite agreement
2. Perfection or Birth
- definite agreement or meeting of the minds
3. Consummation or Death or Termination
- parties have performed their obligations and
the contract has been fully accomplished
Basic Principles of Contract
1. Liberty of contract or Freedom to stipulate
- may establish stipulations, clauses, terms,
and conditions, provided they are not contrary
to LMGcPoPp
Stipulations held to be VOID:
a. Pactum Commissorium, stipulation where
creditor automatically becomes the owner of the
property pledged or mortgaged if the debtor
defaults in his payment
b. Stipulation in a mortgage contract providing for
a specified price. Tipo or upset price, below which
the mortgaged property is not supposed to be sold
at the foreclosure sale is VOID
c. Agreement to pay an unconsionable rate of
interest is VOID
d. Agreement by debtor to work without pay until
he could find mney to pay the debt is VOID
(involuntary servitude)
e. Agreement to hide a crime, suppress evidence
and to stifle the prosecution of the offender is
VOID
2. Mutuality of Contracts
- The contract must bind both contracting parties
- Its validity or compliance cannot be left to the will
of one of them, if so, VOID
- If the fulfillment of a suspensive condition
depends upon the sole will of the debtor,
obligation and condition is VOID
a. Contract which appears to be heavily weighed in
favor of one of the parties so as to lead to an
unconscionable result is VOID
b. Determination of performance
- may be left to a third person, but not obligatory if
it is evidently inequitable, the courts shall decide
what is equitable
3. Relativity of Contracts
- take effect only between parties, their assigns
and hiers, except where rights and obligations are
not transmissible:
a. By law
b. By stipulation
c. By nature
Note: with respect to their heir, he shall not be
liable beyond the value of the property he received
from the decedent.
When a contract may be enforced by or against a
third person
a. Stipulation Pour autrui - stipulation in a contract
that clearly and deliberately confers a favor upon a
third person
- third person: may demand its fulfillment provided
he has communicated his acceptance to the
obligor before its revocation
- mere incidental benefit or interest is not
sufficient
b. Third person: induces another to violate his
contract, such third person may be liable for
damages by other contracting party
c. In contracts creating real rights, Third persons
who come into possession of the object of the
contract are bound thereby
d. In contracts intended to defraud creditors, the
law gives them protection. True if the third person
is in bad faith
4. Consensuality of Contracts
- perfected by mere consent, except when
additional requirements are required:
a. In real contracts (deposit, pledge and
commodatum) which are perfected upon the
delivery of the object of the obligation
b. In formal/solemn contacts, where it needs to be
in specific form to be perfected. Donation of
immovable property: Public instrument w/
acceptance
5. Obligatory force of contract and compliance in
good faith
- shall have the force in law between the
contracting parties and should be complied with in
good faith
- upon the perfection of the contract, the parties
are bound to the ff.:
a. Fulfillment what has been stipulated
b. All the consequences of which, according to
their nature, may be in keeping with good faith,
usage and law

Essential Requisites of Contracts

Consent of contracting parties

Consent
- the manifestation of the meeting of the offer and
the acceptance upon the thing and the cause
which are to constitute the contract.

Rules on Offer