CONTRACTS

CHAPTER 1- GENERAL PROVISIONS (ART. 1305-1317)

ART. 1305. A contract is a meeting of the minds between 2 persons whereby one binds
himself, with respect to the other, to give something or to render some service.
- It takes place when an offer by one party is accepted by the other.
3 ELEMENTS:
1. Essential
2. Accidental
3. .
COMMON ELEMENTS:
a. Consent
b. Object/ subject matter
c. Cause/ the consideration
SPECIAL ELEMENTS:
Contract of sale- real contracts, solemn contracts
Natural- derived from the nature; presumed by law
Accidental- conditions, terms, modes of payment (mayroong stipulations)

STAGE IN THE LIFE OF A CONTRACT

1. Preparation or conception/generation
 Preparatory stage
 Bargaining point
 Negotiation stage

2. Perfection/ Birth of the contract

 Meeting of minds regarding the subject matter and the cause of the contract.
 Meeting of the minds as to object, consent, and cause or the consideration

3. Consummation/Fulfillment of the contract

 Parties performed their respective obligations, and so the contract is put to an end.
 Execution of the contract
CLASSIFICATION OF CONTRACTS:
ACCORDING TO NAME OR DESIGNATION:
1. NOMINATE
 - A nominate contract is one which has a name and is regulated by special provisions of
law (i.e. sale, deposit, agency, lease)
2. INNOMINATE
- No specific name or designation in law
4 KINDS OF INNOMINATE CONTRACTS
1. Do ut des (I give that you may give)
2. Do ut facias (I give that you may do)
3. Facio ut des (I do that you may give)
4. Facio ut facias (I do that you may do)

ACCORDING TO SUBJECT MATTER:

1. INVOLVING THINGS/ COVERING THINGS
- Example: sale, deposit, pledge
2. INVOLVING RIGHTS OR CREDITS
- Example: usufruct, assignment of credits
3. INVOLVING SERVICES/ COVERING SERVICES
- Agency, lease of services
- Assignment of credits

ACCORDING TO PERFECTION OR FORMATION:

1. CONSENSUAL
- Perfected by mere agreement of the parties (i.e. sales, lease)
2. REAL
- Requires not only the consent of the parties for their perfection, but also the delivery of
the object by 1 party to the other (i.e. commodatum, deposit, pledge)
- Cannot be perfected w/o delivery
3. FORMAL
- Requires some particular form (i.e. donation, chattel mortgage)
- Cannot be perfected w/o compliance

ACCORDING TO CAUSE OR EQUIVALENT VALE OF PRESTATION:

1. ONEROUS
- Each of the parties aspires to procure for himself a benefit through the giving of an
equivalent or compensation (i.e. sale).
- Exchange of valuable consideration
2. GRATUITOUS
- One of the parties proposes to give to the other a benefit without any equivalent or
compensation (i.e. commodatum)
- An act of generosity (lucrative contract)
3. REMUNERATIVE
- For service previously rendered
- Contracts where one party gives/ renders service and other party receives
wages/salaries
- Wages- blue collar
- Salary- white collar
ACCORDING TO PARTIES OBLIGATED:
1. UNILATERAL
- A unilateral contract is one which gives rise to an obligation for only 1 of the parties (i.e.
commodatum, gratuitous deposit)
2. BILATERAL
- A bilateral contract is one which gives rise to reciprocal obligations for both parties (i.e.
sale, lease)

ACCORDING TO RISKS:
1. COMMUTATIVE
- Contracting parties contemplate
- No risk to anticipate
- Pledge, mortgage
2. ALEATORY
- Insurance, life plan
- Fulfillment is dependent on chance/ uncertain event

ACCORDING TO PERFORMANCE:
1. EXECUTORY- contract where the prestations have not yet performed
2. EXECUTED
ACCORDING TO DEGREE OF DEPENDENCE:
1. PRINCIPAL
- A principal contract is one which can subsist independently from other contracts and
whose purpose can be fulfilled by themselves (i.e. sales, lease)
- Can exist alone; w/o depending on another contract
2. ACCESSORY
- An accessory contract is one which can exist only as a consequence of, or in relation
with, another prior contract (i.e. pledge, mortgage)
- Dependent on another contract (mortgage, guaranty)
3. PREPARATORY
- A preparatory contract is one which has for its object the establishment of a condition in
law which is necessary as a preliminary step towards the celebration of another
subsequent contract (i.e. partnership, agency)
- Entered into for the creation of another contract
ACCORDING TO NUMBER OF PERSON WHO PARTICIPATED IN THE DRAFTING OF
CONTRACTS:
1. ORDINARY (sale)
2. CONTRACT OF ADHESION (Insurance contract)
- Provisions are drafted by only one party and the only participation of the other party is to
sign his name, his signature or his adhesion to the contract.
AUTO-CONTRACT- two parties are representative in one contract

1. EXPRESSED- written/ verbally

2. IMPLIED- with consent of the parties but the contract is not expressly given; it is
deduced from the conduct
3. PRESUMED- consent is not given by the parties (quasi-contract)