TITLE II

CONTRACTS

CHAPTER 1 — GENERAL PROVISIONS

ART. 1305

MEANING OF CONTRACT
- Kasunduan ng dalawang party kung saan ang isa sakanila ay may obligasyong
magbigay or to render service.
- latin word “contractus” meaning ay contract
- based on law, contract daw ay isa sa mga sources ng obligation.

CONTRACT AND OBLIGATION DISTINGUISHED

CONTRACT - source of obligation

OBLIGATION - legal tie that exists after a contract has been entered into.

NOTE: Pwedeng mag-exist ang obligation kahit walang kontrata. For example,
paying taxes.

Example: Contract of sale. A binds himself to B to deliver a specific car.

Classification of contracts
- According to dependence to another contract:
A) Principal- this contract can exist on its own
B) Accessory- it will exist depende sa principal contract
Ex. Yung contract of pledge GINAGAWA ITO PARA MASECURE ANG ISANG
OBIGATION (nangutang si A kay B at may kasunduan sila na babayaran, para maging
sure si B na babayaran sya ay dapat may isanla na bagay si A kay B.)
C) Preparatory- para rin siyang principal contract na can exist on its own, it is
a commitment to enter into another contract for the future
 - According to liability
A) Unilateral- only one party is obliged
Ex. Commodatum o pagpapahiram ng walang kapalit, tulad ng pinahiram kita ng
cellphone ng walang kapalit
B) Bilateral- both parties are obliged
Ex. Sa mga seller sa fb, bibili ka sakanila ng product and ikaw naman ay magbabayad

- According to risks
A) Commutative - equivalent value example agad jan yung binibigay ng seller
at buyer sa isa’t isa (equivalent exchange)
B) Aleatory - tulad nung sa insurance depende sa uncertain event. Tulad ng
sa mga lotto ticket, fix yung amount na 20pesos kada ticket pero di ka sure
kung mananalo ka ng milyon o wala (sale of hope).

ART. 1306
VALID CONTRACTS - Legally binding and enforceable. Meaning, lahat ng nasa
kontrata ay legal.
Limitations:
CONTRACT MUST NOT BE CONTRARY TO LAW
- Hindi pwedeng lumabag sa batas ang kontrata because law is superior to a contract.
So kung may nilabag sa provisions of laws, the contract is considered void unless
pahintulutan ng batas ang validity ng contract.

Ex. Pagbili ng mga boto para iboto ang gustong manalo. (applicable rin ito sa
CONTRARY TO PUBLIC POLICY)

CONTRACT MUST NOT BE CONTRARY TO MORALS

MORALS - ito yung nga norms of good and right conduct in a community. Iba iba sila
depende sa society at sa tao.
Ex. Ay ang pagpapasa ng isang studyante kapalit neto ay gagawing alipin ang
studyante.

CONTRARY TO GOOD CUSTOMS

EX. Bibigyan ni A si B ng pera sa isang condition sampalin ni B ang kanyang pamilya
upang maibigay ang pera. Dahil pagkakaroon ng respeto ng sa magulang ay habits
and practices enforced by society.
CONTRARY TO PUBLIC ORDER
EX. Yung landlord A gumawa ng kontrata na sasaktan nya si B pag hindi ito nagbayad,
dahil hindi ito napapakita ang public safety

ART.1307
- It provide rules that govern innominate contract (It has no name or specific
designation in law)

Rules governing innominate contract

- agreements of the parties
- title 1 and 2 or the civil code on obligation and contracts
- most analogous or similar to nominate contracts(contract that has name)
- the customs of place (???)

Kinds of innominate contracts

- do ut des (I give that you mave give) ex. Barter or exchange
- do ut facias (I give that you may do)
- facio ut des (I do that you may give)
- facio ut facias(I do that you may do)

Art.1308
- Contract must bind both contracting parties (equality of the parties) magiging
valid lang pag pareho sila nag agree.
- Dito papasok ang Principle of mutuality of contracts

Fundamental rule
- No party can renounce the contract without the consent of the other party.
Ex. A sell his car to B, nagkasundo sila at pumayag si B sa presyong 1M

Article. 1309
“The determination of the performance may be left to a third person, whose
decision shall not be binding until it has been made known to both contracting
parties.”
Determination of performance by a third person.
- Under the preceding article, compliance with a contract cannot be left to the will of
one of the contracting parties. However, under the above provision, the determination
of its performance may be left to a third person.
> Dito, yung compliance ng contract ay hindi pwedeng maiwan o mahiwalay sa will ng
isa sa contracting parties. Di pwedeng sa kanya lang siya yung magdedecide.
However, under dito kay Art.1309 ang determination of its performance may be left to
a third person.
Example: Si Jordan binenta nya yung kanyang lupa kay Kobe so this time nag agree
silang dalawa may magdedetermine ng price ng lupa who’ll be beauty kasi beauty pala
is a Real Estate Appraiser so siya ngayon ang magdedetermine ng reasonable price
of the land.

Article. 1310
“The determination shall not be obligatory if it is evidently inequitable. In such
case, the courts shall decide what is equitable under the circumstances.
Effect where determination inequitable.
- A contracting party is not bound by the determination if it is evidently inequitable or
unjust as when the third person acted in bad faith or by mistake.
> Dito yung decision ni third person ay hindi rin binding if yung determination niya is
evidently inequitable. It is unjust kasi baka nga naman yung third person ay nag act in
bad faith. kung kaya yon determination niya is nahahalata it is actually inequitable
talaga unfair to the highest level, pero in evidently naman evidently inequitable. if
ganon yung court na yung magdedecide.

Article. 1311
“Contracts take effort only between the parties, their assigns and heirs,
except in case where the rights and obligation arising from contract are not
transmissible by their nature, or stipulation or by provision of law. The heir is
not liable beyond the value of the property he received from the decedent.”
- Dito natin pwede mapasok yung isang principle or characteristics ng isang contract,
ang principle of relativity of contracts, meaning yung contracts ay generally effective
only between the parties, their assigns, and their heirs.
(1) General Rule – katulad at sinabi sa Article 1311, ang isang contract ay effective
lamang between the parties, their assigns, and their heirs.
Example: Si A ay nangutang kay B ng 2,000,000 silang dalawa yung parties and the
contract will take on effect on them, and if ever namatay si B, ang per ana dapat na
ibabayad ni A sa kanya ay mapupunta sa successors or heirs ni B. Pero if ever mag
assign si B kung kanino mapupunta yung bayad sa kanya ni B. Pwede rin naman dahil
nasa contact pa rin. Vice versa rin ito kay A.
(2) Exceptions – kapag yung rights and obligation from the contract are not
transmissible or hindi pwedeng ipasa.
Example: A is obliged to paint a portrait of B. In case na mamatay si A, hindi naman
pwedeng ipasa sa anak niya yung pagpipinta lalo na kung hinaman hindi naman ito
marunong sa larangang iyon.
MEANING OF STIPULATION POUR AUTRUI
- Ito yung kasama sa kontrata si third person na nagsasabing may karapatan siyang
magdemand ng fulfillment of obligation provided that he communicates his
acceptance to the obligor bago pa irevoke ng original parties.
Example: A owes B the amount of 10,000 payable after a year with 12% interest.
Nagkasundo yung parties na ibibigay yung interest na 1,200 kay C since may utang
din si B doon. In this case, kailangan makipag-usap ni C kay A para maacknowledge
siya as part of the contract otherwise hindi siya magbebenefit sa contract. Then, after
the communication of acceptance is made, then C is now a party of the contract.

Article. 1312
“In contracts creating real rights, third persons who come into possession of
the object of the contract are bound thereby, subject to the provisions of the
Mortgage Law and the Land Registration laws.”
Third person are bound by contracts; creating real rights.
- This article is an exception to the general rule that a contract binds only the parties.
Third person who come into possession of the subject of a contract over which there
is a real right, are bound thereby even if they were not parties to the contract.
> Kasi sabi dito yung third person is bound by contracts creating real rights.
Example: Si A minortgage niya yung kanyang lupa kay B, so merong mortgage as to
the parcel of land ni A in favor of B as a security for his debt. Now yung mortgage na
yon is duly nakaregister of property. So since owner pa rin naman si A ng kanyang
lupa after niyang imortgage yon kay B since gipit pa rin siya kulang pa rin yung pera
niya binenta niya ngayon itong lupa kay C, in this case binili nga ni C at don sa pagbili
niya alam natin na meron siyang incombrance. Dahil yung lupang yon ay mayroon
mortgage na in favor kay B. in other words kahit pa si B ay hindi party ng contract of
sell between A and C. Dahil sa contract of mortgage dahil mayroong free existing
contract of mortgage which is actually are real rights dahil naka register siya register
of property then si C will be bound by the contract between A and B. nirerespeto niya
yon kahit pa ng asana hindi naman party si B nirerespeto niya yung rights ni B. sa
contract ni A and B third person si C, sa contract ni A and C third person si B pero
kailangan irespeto ni C yung rights ni B over the property don sa mortgage kailangan
niyang irespeto yung mortgage dahil ayon yung sabi dito ni Art. 1312.

Article. 1313
“Creditors are protected in cases of contracts intended to defraud them”
Rights of creditors to impugn contracts intended to defraud them.
- Art. 1313 is another qualification to the rule that contracts take effect only between
the parties. The creditor is given the right to impugn the contracts of the debtor
intended to defraud him.
Example: Si Wade may utang siya kay Jordan ng 1,000,000 tapos itong si Wade may
property siya may lupa siyang nakapangalan sa kanya at dahil ayaw niyang ma-attach
ang property na iyon. Bago pa man ang due date ng utang niya kay Jordan kasi wala
siyang pambayad at alam niya na ang mangyayari ay ia-attach ang lupa na yon as
pambayad don sa utang niya kay Jordan. So ang ginawa niya to defraud Jordan
dinonate niya yung lupa kay James para wala ng mahagilap si Jordan wala siyang
makuhang property pambayad sa utang niya, in this case dahil si Jordan is actually a
Defrauded Creditor siya ay may right including the contracts between Wade and
James although he is not party to that contract he is stranger. He is given by law there
right to ask for the rescission of that donation in order that he may be paid.

Article. 1314
“Any third person who induces another to violate his contract shall be liable
for damages to the other contracting party.”
Liability of third person responsible for breach of contract.
- This is a rule of American law, It is also proper under the general principles of the
Philippine law, because a contractual right is property.
> Itong contracting party ay may right to claim for damages against that person who
induces diba yung kanyang contrata to violates his contract. Kahit stranger pa siya sa
contract pwede siyang makasuhan.
Example: Si Bianca ay isa siyang movie actress isa siyang sikat na artista who has 1
year contract in ABC Studio. Itong si Beauty kaibigan ni Bianca in-induces si Bianca
without any justifiable cause to break the contract then itong si ABC Studio can so
Beauty for damages. Actually wala naman contrata between Beauty and that Studio
pero dahil sa Art. 1314 pwedeng makapag file ng case or makapag claim ng damages
si ABC Studio against Beauty. Dahil si Beauty she actually induces Bianca to violate
her contract with ABC Studio. Now is third person is not liable where sufficient
justification for interference or inducement can be showed.

ARTICLE 1315
- Ang mga kontrata na naperpekto sa pamamagitan ng pahintulot, at mula sa
panahon na ang mga patido ay obligado hindi lamang sa katuparan ng nabangit
na stipulasyon kundi pati na rin sa mga kahihinatnan na kung saan, ayon sa
kanilang likas, ay pag sunod ng buong pagtitiwala, pag gamit at batas.

ARTICLE 1316
- Tunay na kontrata katulad ng paglalagak, pagsasanla at pagpapahiram ay hindi
wagas / sukdulan hangang sa maibigay na ang bagay ng obligasyon.
Classification of Contracts according to perfection
1. Consensual contract- ito ay kasunduan na valid ang kontrata basta sumang ayon
ang both parties kahit consent lang
Example: When Jennie an employer hires Beatrice an employee, as soon as both
have agreed on the terms of employment, a contract is commences.
2. Real Contract- Kontrata na napeperfect sa pamamagitan ng paghahatid ng bagay
na nasa kontrata

Example: Xyna borrowed from Yanyan 10,000. As Xyna’s security for the debt, Xyna
promised to pledge her diamond ring to Yanyan
3. Solemn contract- Dito hindi sapat lang na may meeting of minds kailangan may
certain formality prescribe by law para maging valid.

Example: Jen and Aldo finally reached a price. Jen offered Aldo $200,000 for the
classy condo and Aldo accepted the offer. Quick to the typewriter, Aldo typed up a
written agreement, including:

o Jen's offer of $200,000

o Aldo's acceptance of the offer
o The collection of Jen's $200,000, also known as consideration
o The actual description, including lot, block, city, state, and anything
included in the sale Date and signature lines, and Transfer of the title,
changing owners from Aldo to Jen
Stages in the life of a contract
1. Preparation or negotiation- kabilang dito ang lahat ng mga hakbang na
ginawa ng mga partido na humahantong sa pagiging perpekto ng kontrata sa
yugtong ito ang mga partido ay hindi pa nakakarating sa anumang tiyak na
kasunduan.

Example: Jef offers to sell her house to Kristine for 1.2 million. Kristine wants to see
the house first. Later Jef brought kristine to her house, Kristine offers to pay 1 million
for the house.

2. Perfection or birth- Ito ay kapag ang mga partido ay nagkaroon ng isang tiyak
na kasunduan o meeting of minds ptungkol sa paksa at dahilan ng kontrata

Example: Janine agrees to sell the house for 3 million, the contact now is perfect
because of the contract about selling the house.

3. Consummation or termination- ito ang huling part ng kasunduan binubuo ng

pagganap o katuparan ng mga partido ng kanilang mga obligasyon sa ilalim ng
mga tuntunin ng perpektong kontrata. Ang katuparan ay nangangahulugan ng
katuparan, pagkamatay o pagwawakas ng kontrata kung saan ang mga partido
ay huminto sa kontrata na may kaugnayan sa isa't isa.
Example: The contract is complete will be complete if the seller delivers the
motorcycle to buyer and buyer pays 100,000 the buyer becomes the owner of the car
and seller the owner of the money paid by buyer.
How contracts are perfected.
1. Consensual contract- As a general rule, ang kontrata maaring sa pagsang-
ayon ng dalawang partido sa kahit na ano mang dahilan ng kontrata. Ang
dalawang party ay obligado sa kung anong kasunduan ang pinasok nila hindi
to real right pero magkakaroon pa rin ng obligation sa pagsang-ayon ng
dalawang party.
Example: Last week, Ericka and Ibhan entered into a contract whereby Ericka binds
herself to give the consolation price to Ibhan for participating into her game.
2. Real contracts- Ito ay ang kontrata na ginagawang perfect hindi lang sa
pagsang-ayon ngunit sa pamamagitan ng pagdedeliver ng bagay na merong
obligation. Ito ay ang kontrata na ang layunin ay maibalik sa kabilang party ang
kung ano ang natanggap nila mula rito na maaring sa pamamagitan ng ibang
bagay.

Example: Andrea borrowed Shesun’s car for 1 month for Andreas security for the car,
Andrea gave her house key to Shesun as pledge for borrowing her car.
3. Solemn contract- Hindi lamang meeting of minds ang dapat kailangan may
formality sa kontrata na sinasabi sa batas.

Example: Jennie and Althea finally reached a price. Jennie offered Althea 500,000 for
the classy condo and Althea accepted the offer. Quick to the lawyer and typed the
following:

o Jennie offer of 500,000

o Althea acceptance of the offer
o The collection of Jennie 500,000, also known as consideration
o The actual description, including lot, block, city, state, and anything
included in the sale Date and signature lines, and Transfer of the title,
changing owners from Jennie to Althea

Effect of perfection of the contract

Mula sa sandaling ang mga party ay nagkaroon ng kasunduan sa isang sigurado na
kasunduan at wastong pagsasaalang-alang sila ay nakasalalay hindi lamang:
(1) sa pagtupad ng kasunduan o contract kundi pati na rin sa:

Example: Mel sold his car to Niña for 100,000. There is no when and where to deliver
and pay the car. Those are not included to the contract yet it is given by law and
various civil code.

(2) Kakalabasan na naaayon sa nature, good faith, paggamit at sa batas:

Example: Abegail agreed to sell her condo to Kyle. It was set as condition to deliver
the condo key to Kyle by the next day.

ARTICLE 1317
- Walang kahit na sino man ang makikipag kontrata sa pangalan ng iba nang
walang consent ng tao na yon maliban nalang kung sinabi ng batas na pwede
siyang kumatawan para sa tao na yon. Ang kontrata na ginamit ang ibang
pangalan ay walang kapangyarihan na kumatawan sa lampas na kakayahan,
maliban nalang kung pumayag ang tao na yun na gamitin ang kanyang
pangalan bago ipawalang bisa ang nakapagkasunduan.

Unauthorized contracts are unenforceable

As a general rule, ang tao na walang kaalaman o consent ng ibang tao ay walang
karapatan na makipag kontrata sa iba
(1) Ang isang kontrata ay malayang pakikipagkasunduan pero sa Article 1317 ang
isang kontrata na ginamit ang ibang pangalan ay hindi puwedeng ipatupad sa
kabilang party maliban nalang kung napagtibay ito bago bawiin ng kabilang
party na nakikipagkontratra
Example: In a sale with Lydon, Dave claimed that he was an agent of Bridget. It was
later found out by Lydon that Bridget never gave Dave any authority to act as her
agent. The contract cannot be enforced against Bridget. If she later ratifies the sale
between Lydon and Dave, then the sale becomes valid.
(2) Ang isang kontrata na walang bisa ay hindi dapat imali para mapakinabanggan
ng third person na puwedeng magdemand ng fulfillment na sinasabi sa
requisites na nabanggit sa art. 1311

Example:Cristemar is indebted to Abegail in the amount of Php 5,000.00. If Abegail

dies, Cristemar must pay the heir of Abegail, Ericka. If Cristemar dies and Ibhan is her
heir, then Ibhan assumes the obligation of Cristemar to Abegail. Ibhan, however, is
not liable beyond the value of the property she inherited from Cristemar.

Unauthorized contracts can be cured only by ratification

(1) Ang isang kontrata na may depekto ay hindi malulunasan maliban nalang kung
ipagtitibay at papatunayan ito ng tao na nakapangalan sa kontrata o binigyan
niya ng consent na makipag kontrata, walang power ang taong walang consent.
(2) Ang pagpapatibay ng kontrata ay puwede na sabihin perp dapat ito ay malinaw
para hindi magkaroon ng pagdududa at kalabuan
(3) Ang pagtitibay ng kontrata ay dapat maaalala sa oras na ito ay muling babalikan

Example: Nanghiram si Christian ng 20,000 kay Aries at nagbigay siya ng promissory

note. Sa promissory note sinabi ni Christian na siya ay inutusan lamang ni Niña na
manghiram ng pera kay Aries. Sa katotohanan hindi binigyan ni Niña ng consent si
Christian na manghiram kay Aries.

Sa kaso na to walang bisa ang kasunduan ni Aries at Niña maliban nalang kung
pagtitibayin ni Niña na talagang binigyan niya si Christian ng consent bago
ipagwalang bisa ni Aries ang kasunduan. Sa pamamagitan ng pagtitibay ni Niña ng
kasunduan hindi na to puwedeng ipag walang bisa ni Aries.

When a person is bound by contract of another

Upang ang isang tao ay magkaroon ng karapatan sa isang kontrata ng iba, mayroong
dalawang kinakailangan:
(1) Ang tao na papasok sa isang kontrata ay dapat may consent ng tao na
irerepresent niya or dapat siya ay binigyan ng karapatan ng batas na irepresent
ang tao na iyon.

Example: Si John binigyan niya ng consent si Kyle na ibenta ang kanyang condo
sa halagang 1.2 million. Naibenta ni Kyle kay Gibson ang condo ni John,
installment babayaran ni Gibson ang condo for 5 months. Sa consent na binigay
ni John kay kyle nakalagay lang na 2 months lang puwede na magbayad ang buyer
pero gumawa ng sariling desisyon si Kyle a pumayag sa 5 months installement.

(2) Dapat ay umarte siya na naayon sa hanggang saan ang power niya. Kapag
pumasok sa kontrata ang isang tao na binigyan lang ng consent pero sumobra
siya sa karapatan lang niya sa pag gamit ng consent at iniba ang kung ano lang
ang nakasulat sa consent ito ay mapapawalang bisa at maaring magkaroon ng
personal na pananagutan ang tao na yon sa kabilang party.

Example: Sa bagay na to hindi pupwedeng pilitin ni Gibson si John na tanggapin ang

montly payment ni Gibson dahil si Kyle lumagpas siya sa hangganan ng kanyang
power sa pakikipagkasundo, maliban nalang kung sinabi ni Johm na puwede itong
gawin ni Kyle. Sa pagkakataon na to may personal na pananagutan si kyle kay gibson
para sa mga damages.

CHAPTER 2 — ESSENTIAL REQUISITES OF CONTRACTS:

GENERAL PROVISION

ARTICLE 1318
ESSENTIAL REQUISITES OF CONTRACTS: GENERAL PROVISION
Sa pagkakaroon ng isang kasunduan kinakailangan na ito ay naglalaman ng mga
sumusunod:
(1) May consent sa kasunduan ng parties
(2) na ang pinagkakasunduan ay tiyak at tukoy;
(3) kinakailangan na ang dahilan ng obligasyon ay malinaw na nabuo
Classes of elements of a contract
(1) Essential elements or yung kung wala ang kontrata na walang bisang umiiral
anuman ang mga intensyon ng mga partido. Kilala rin ang mga ito bilang mga
kinakailangan ng isang kontrata. Maari sila ay nahahati sa:
(a) Common or mga present sa lahat ng kontrata kagaya ng ibig sabihin,
pahintulot , bagay at dahilan ng kontrata

Example: Agreement for the sale of goods. Isang kontrata na

naglalaman ng transaction ng bagay at dahilan ng pagbili ng isang
goods.
(b) Special or yung mga hindi common na makikita sa mga kontrata, pero
dapat present sa isang kakaiba pero tiyak na tinukoy na kontrata, ang
kakaibang kontrata na maaring;
1. As regards to form/ tungkol sa itsura o anyo mga halimbawa
ng public instrumemt donation of immovable property, delivery
in real contracts, registration in real estate mortgage etc.
Example: Sa public instrument in donation of immovable
property na contract dapat merong deed of donation na
nakapublic documents nakalagay ang details ng property na
ibibigay and mga conditions kinakailangan rin na ang taong
tumatanggap ng donasyon ay hayagang magpakita ng kanyang
pagsang-ayon sa pagtanggap ng donasyon sa parehong
dokumento ng donasyon o sa isang hiwalay na dokumento.
2. As regards the subject matter halimbawa real property in
antichresis, personal property in pledge etc.
Example: Umutang si Jennie kay Marvin ng 200,000 sa
kontrata nila sinabi ni Jennie na iooffer niya ang personal
property niya na condo kay Marvin as pledge sa debt niya
3. As regards the consideration or cause halimbawa price of in
sale and in lease, liberality in commodatum etc.
Example: Sa contract dapat may consideration, Si A bumili siya
ng kotse kay B sa halagang 200,000 ang consideration ni A ay
ang pera samantalang kay B naman ay yung kotse.

(2) Natural elements or yung mga dapat nakalagay or inaassume natin na nasa
isang kontrata maliban nalang kung kabaligtaran to sa nakaset na usapan ng
parties.

(3) Accidental elements or partikular na ginawa ng dalawang party like

conditions, period, interest, penalties sa madaling salita nag eexist lamang ito
kapag pinagkasunduan ng dalawang party.

Section 1. - CONSENT
ART. 1319
- Ang pagsang-ayon ay maihahayag lang kapag nagkasundo yung bawat party
na tinatanggap nila yung nakalagay sa kasunduan. Ang pag-aalok ay dapat na
 tiyak at naaayon sa kontrata. Magiging qualified acceptance lang kapag
naunawaan ng bawat isa yung nakalagay sa kontrata.

- Yung acceptance na ginawa sa pamamagitan ng liham or telegram hindi

magbabind yun sa offerer maliban na lang kung yun ay dumating sa kanyang
kaalaman. Ang kontrata sa mga ganitong kaso ay ipinagpapalagay na
tinanggap kung saang lugar ito nagawa.

Meaning of consent.
Consent - yung pagkakasundo or pagsang ayon sa kalooban dun sa mga offer at
pagrespeto sa kontrata, ang consent ay agreement sa isang partido kasama ang ibang
partido sa mga bagay at kasunduan na nakalagay sa kontrata.

Ito daw yung pagsang ayon sa isa’t-sa ng bawat partido dun sa subject matter
na magiging dahilan na bumubuo sa kontrata. Kahit hindi pumirma ang bawat partido,
if sumang ayon sila parehas dun papasok yung agreement. (not sure)

Meaning of offer.

Offer - isang proposal na galing sa isang partido (offerer) sa isa pang partido
(offeree), nagpapahiwatig ng pagpayag na pumasok sa isang kontrata. Ito ay isang
pangako na susunod sa mga nakasulat sa kontrata na pinagkasunduan ng bawat
partido na tinanggap ng isa pang partido (offeree) kung para kanino ito.

Offer must be certain and seriously intended.

1. Ang offer ay dapat tiyak para maayos ang bawat utang or karapatan ng parties
ay maayos dahil kailangan na ang acceptance ay pareho sa offer to create a
contract without any further act sa parte ni offeror.

2. Ang offer na nagawa sa isang biro or galit, or ito’y di magkapagisip ng tama

dahil sa emosyon niya ay hindi valid na offer.

Example: Si S ay nagjoke na siya ay nagoffer ng watch na worth 50,000 kay B na

alam ang totoong halaga nung watch na 10,000 lang. There is no valid offer. But kapag
nag offer ng si S ng watch nya na 40,000 ang halaga kay B na hindi alam na nagjojoke
lang si S at inaccept nya ang offer na akala nya ay seryoso, nandun yung pagsang
ayon na magreresulta sa existence nung contract of sale.

Meaning of acceptance.

Acceptance - pagpapakita ng pagsang ayon nung offeree sa lahat ng terms

ng offer. Kung walang acceptance, walang ding pagsang ayon sa bawat
partido.

Acceptance of offer must be clear and absolute.

Ang lahat ng kontrata ay naglalaman ng offer at acceptance sa offer.

Ang pagtanggap sa alok ay hindi lamang dapat malinaw, ito ay dapat tiyak, ito
dapat ay magkapareho sa lahat ng aspeto ng offer upang gumawa ng consent
or pagsang ayon ng bawat partido.
 Kung ang acceptance ay qualified, kapag ito ay subject to condition, ito
ay bumubuo sa counter-offer, na considered as hindi pagpayag ni offeree sa
original offer, at pagtangka ng bawat partido na pumasok ulit sa kontrata pero
may ibang batayan.

Yung qualified acceptance daw ay dapat ganap na tinatanggap sa ayos

na magkakaroon ng kontrata.

Example: S asked B this question: “Will you buy my (specific) car for 200,000?” If B
answers “yes, I accept your offer”, or “yes, I agree”, or just “yes”, the acceptance of B
is absolute or unconditional. (ganap or walang kondisyon)

But if B proposes to pay only 160,000 for the car or to buy instead another car or a
land of S for 200,000, his acceptance is qualified at ito ay magiging offer in response
to another (counter-offer). In this case, si B ang bagong offerer and si S, na dating
offerer ay magiging bagong offeree.

ART. 1320
- Ang pagtanggap ay maaaring ipahayag o ipahiwatig.

Form of acceptance of offer.

Ang pagtanggap sa anyo ng pangako na magbabayad ng tiyak na

halaga or to do something, ay maaaring sa salita or sa kasulatan. Ang implied
acceptance ay hinuha (inferred) galing sa akto or pag-uugali. As a rule, silence is not
equivalent to consent or acceptance.

Example:
1. X promises to pay Y 3,000 for repairing his refrigerator and making it run
again. Only X has promised to do something. By doing the requested
act, Y accepts the offer. (wala silang kasulatan pero ginawa ni Y yung
offer ni X because of the promise)

If Y accepts the offer by promising to do the requested act, a bilateral

contract results (binding agreement sa bawat parties where both exchange promises
and fulfil one side of the bargain). There are promises on both sides.
2. In the same example, if X remains silent to the proposal of Y to repair his
refrigerator for 3,000, X’s silence cannot be construed or in acceptance. (ang pag
tahimik ni X ay hindi maaaring binibigyang kahulugan or pagtanggap)

Kapag tinanggap ng isang tao ang service ng isang tao, kahit pa ito ay hinihingi o
hindi, may obligasyon pa din siyang bayaran ito sa makatwirang halaga ng serbisyo
na nai-render sa implied contract of lease of service). Unless pinapakita na ang
serbisyo as nai-render ng walang bayad or walang expectation na siya ay
magbabayad para sa serbisyo.

ART. 1321
Ang taong nagsusulong ng kontrata ang siyang maaaring magtalaga ng oras,
lugar at paraan ng pagtanggap, at lahat ay kinakailangang sundin.
Matters that may be fixed by the offeror.

Ang taong gumawa ng offer ay may karapatang magtakda ng oras, lugar, at

paraan ng pagtanggap, lahat ng ito ay dapat masunod. Ang pagtanggap ng
kasunduan sa alok ay bumubuo ng counteroffer( offer made in response to another.)
Take note that ang counter offer ay may epekto na mawala ang offer (hindi ako sure).
In effect, bumubuo ng bagong offer which the original offer ay maaari pa ding
tanggapin or tanggihan.

Example:

R(offerer), may tell E(offeree), na ang huli ay dapat tanggapin ang offer
personally on Jan. 15, before 5 pm, in the office of R, lahat ng yun ay dapat sundin ni
E upang sila ay makagawa ng kontrata.

Communication of the offer.

Ang alok ay dapat maiparating at matanggap ng offeree. Ito ay maaaring letter,

telephone, email, or etc. Ito ay maaaring ipahayag or ipinahihiwatig sa pamamagitan
ng salita or akto ng offeror na naiintindihan ng kabilang party.

Example:
B attended an auction sale. When the auctioneer asked for a bid at a certain
price on an antique furniture, B nodded after getting the auctioneer’s attention. The
nod by B constitutes an implied offer. It was sufficient communication to the auctioneer
of B’s intention to make a valid offer. ( yung pagtango ni B sa auctioneer ay naging
akto upang maintindihan ng kabilang partido na tumatanggap siya ng offer)

ART. 1322
Ang alok na ginawa sa pamamagitan ng isang ahente ay masasabing
tinanggap ng pinag-alukan sa oras na tinanggap nito ang alok ng ahente.

Communication of acceptance.
1. To offerer- ang pagtanggap ng offer ay dapat na ganap. The other requisite is
that ang pagtanggap ay dapat maiparating sa offerer. Ang pagtanggap ay
maaring express (writing or verbally) or implied (akto or pag uugali) batay sa
mga tuntunin ng offer.
2. To agent- By legal fiction, siya yung tumatayo para sa principal. If duly
authorized, the act of the agent, in law, is considered na act of principal.

Article 1322 applies only if yung offer ay ginawa through the agent and yung
acceptance ay maiparating sa pamamagitan niya.

Hence, there would be no meeting of the minds if the principal himself made the offer
and the acceptance is communicated to the agent unless, of course, the latter is
authorized to receive the acceptance. ( hindi ko gets)

ART. 1323
Ang alok ay mawawalan ng saysay sa pagkamatay, pagbabawal na sibil,
pagkasira ng pag-iisip, kawalan ng ibabayad ng partido bago pa man nya tanggapin
ang bagay.
When an offer becomes ineffective.

Ang alok ay maaaring binawi or bawiin anumang oras bago pa ito tanggapin
basta sa pamamagitan ng pakikipag usap sa kabilang party. Pagkatapos tanggapin,
dun lang maging perfect ang kontrata.

Under Article 1323, kahit na hindi pa binabawi ang alok, ang pagtanggap nito
ay hindi gumagawa ng intention sa bawat partido na gumawa ng kontrata in case na
ang alok ay maging ineffective dahil sa pagkamatay, pagbabawal na sibil, pagkasira
ng pag-iisip, kawalan ng ibabayad ng partido bago pa man nya tanggapin ang bagay.
Ito ay dapat obserbahan batay sa batas na tumutukoy sa alinman sa mga partido(hindi
ko sure). Sa oras ng mapag usapan na ang pagtanggap dapat both parties, offerer at
offeree, ay buhay at may kapasidad na tuparin ang nakalagay sa offer.

Article 1324
“When the offerer has allowed the offeree a certain period to accept, the offer
may be withdrawn at any time before acceptance by communicating such
withdrawal, except when the option is founded upon a consideration as
something paid or promised.”

Option contract- is one giving a person a consideration a certain period within which
to accept the offer of the offeror. Meaning, ito yung pinag usapan or agreement nila at
kasama na rito yung mga conditions sa pag accept ng offer.
Option period- time frame ng contract
Option money- it is the money paid or promised to be paid in consideration for the
option. Ito yung pera na binayad.
*Magkaiba ang earnest money at option money, earnest money ito yung partial
payment of the purchase price at kinoconsider siya as a proof sa isang contract.
Option money ito yung pera na binayad for the option.

*Withdrawal of offer where period stipulated for acceptance.

- Meaning, if the offeror has allowed the offeree a certain period of time to accept,
binigyan niya ng certain period like 30 days to accept the offer based on Article 1324
yung offer ay pwedeng ma-withdraw anytime before yung acceptance ni offeree.
Papaano mawiwithdraw? By means of communicating such withdrawal, ipaalam mo
lang na you are no longer interested. But then, this is not absolute, may exception pa
rin gaya sabi sa last sentence, hindi mo na pwedeng ma-withdraw yung offer pag may
naganap na promised or option money.
For example, Ganda offer to sell her house to Pogi for ₱2 million. Ganda give him 10
days to decide. But after 4 days, Ganda withdraw her offer to sell her house. Pero
hindi na pwede i-withdraw ni Ganda kung nagbigay na ng option money si Pogi.
 Article 1325
“Unless it appears otherwise, business advertisement of things for sale are
not definite offers, but more invitations to make an offer.
*Business advertisements generally not definite offers
- Malalaman lang na definite offer if all the specific particulars needed in a contract ay
nandon na, pero kung hindi ito ay mere invitations to offer.
Example of definite offer:
FOR SALE: 100 square meter lot, with 2-storey house located at 123, ABC St, Malate,
Manila for ₱10 million cash.
Example of mere invitation:
FOR SALE: 100 square meter lot, at 10 million to 20 million at Malate, Manila.

Article 1326
“Advertisements for bidders are simply invitations to make proposals, and the
advertiser is not bound to accept the highest or lowest bidder, unless the
contrary appears.”

*Advertisements for bidders generally not definite offers.

- Meaning, ang gumagawa ng offer ay ang mga bidders, yung mga nag aadvertise
they are just inviting bidders to make proposals. So, the advertiser is free to accept
and reject kasi hindi naman definite offer. Para magkaroon ng contract kailangan i-
accept ni advertiser yung proposal or yung offer ng bidder. And general rule,
Advertisements are just mere invitations.

Article 1327
“The following cannot give consent to a contract: (1) Unemancipated minors;
(2) Insane or demented persons, and deaf-mutes who do not know how to
write.”
(1) Unemancipated minors- persons who have not reached the age of majority (18
years) and are still subject to parental authority.
(2) Insane or demented persons- the insanity must exist at the time of contracting,
if hindi magiging valid ang contract.
(3) Deaf-mutes- if the deaf-mute knows how to write, the contract is valid. If the
deaf-mute who knows how to read although he/she cannot write, the contract
is also valid.
*Reason for disqualification
- those persons mentioned can easily be the victims of fraud as they are not capable
of understanding or knowing the nature or impotance of their actions. They can enter
into a contract only through a parent or guardian.

Article 1328
“Contracts entered into during a lucid interval are valid. Contracts agreed to in
a state of drunkenness or during a hypnotic spell are voidable.”
*Contracts entered into during a lucid interval
- a contract entered into by an insane or demented person during a lucid interval is
valid it just need to prove that the contract was entered during lucid interval.
*Effect of drukenness and hypnotic spell
- during that state (drukenness & hypnotic spell) nagkakaroon ng temporary complete
lost ng understanding equivalent to temporary insanity. It is voidable, meaning it is
valid until annulled.

Article 1329
“The incapacity declared in Article 1327 is subject to the modifications
determined by law, and is understood to be without prejudice to special
disqualifications established in the laws”
- It talks about modifications incapacity, yung incapacity declared in Article 1327
is subject to modification determined by law kasi may mga instances rin naman
although ang mga taong ito are incapacitated they can still enter into a valid
contract. Law also said that a contract is valid if entered into a guardian or legal
representative. Example, si Minor although incapacitated to give consent,
however,si Minor actually can enter into a contract for life, health, and accident
insurance.

Article 1330
“A contract where consent is given through mistake, violence, intimidation,
undue influence, or fraud is voidable.”

*Characteristics of consent
(1) it is intelligent- yung nagbibigay ng consent has the capacity to act
(2) free & voluntary- there is no violence or intimidation. hindi pinilit at hindi sinaktan.
(3) it is conscious or spontaneous- there is no vitiation of consent by reason of mistake,
undue influenc, or fraud.
 ART. 1330
- Enumerates causes of vitiated consent: mistake, violence, intimidation, undue
influence or fraud. If present ang alinman sa kanila then that means contract is
voidable.

CHARACTERISTIC OF CONSENT:
- In order for a contract to be valid, dapat hindi lang basta nag eexist ang contract.
Dapat it has the requisites or characteristic of a consent and those are:
(1) Consent must be intelligently given
- Dapat yung nagbigay ng consent has the capacity to give that consent.
(2) Consent must be free and voluntary.
- Hindi dapat napilit lang at hindi talaga gusto for the reason of violence or
intimidation.
(3) It is conscious or spontaneous
- Yung consent ay binigay hindi dahil sa pagkakamali, fraud or undue influence.

ART. 1331
- States that here are the requisites for mistake to vitiate consent.
/Note: (*) Yung mistake ay substantial regarding;

(1) Object of the Contract:

- Paano masasabi na nagkaroon ng mistake sa object of contract? /Explained
thru examples/

EX: Alex and Ara entered into contract, wherein alex has to deliver a 50kg sack of rice
to Ara however, upon delivery it turns out na 25kg sack of rice lang yung dumating.
EXPLANATION:
May mistake talaga sa object of the contract kasi kung alam lang ni Ara na 25kg sack
of rice lang ang darating ‘di na sana siya nag enter into contract with Alex.

(2) Condition which have principally moved one or both parties to

enter into the contract
- Mistake regarding to the condition of contract.

EX: Alex deliver a Chanel bag to Ara, thinking that Ara will pay kapag may pera na
siya However, Ara believes na it was donated to her by Alex.
EXPLANATION:
May mistake sa condition ng contract.
 (3) Identity or qualifications of one of the parties
- Mistake regarding the identity or qualification of one party.
EX: Alex donated a car to Ara, thinking that Ara is a Lawyer, who really is a Doctor.
EXPLANATION:
The mistake is not substantial or material to void the contract.
EX: Alex donated a House to Ara, thinking that it was her Mother but turned out that
Ara is not Related to Alex.
EXPLANATION:
The mistake as to the identity of Ara is material dahil yung identity niya yung dahilan
kung bakit nagbigay si Alex ng bahay kay Ara.

“Simple mistake of account shall give rise to its Correction”

EX: Alex buys a 20pieces of lanyard to Ara, but only 15 was delivered to Alex.
EXPLANATION:
Dito, yung mistake is not that substantial kasi nagkamali lang naman sa quantity na
imbes na 20, 15 lang yung dumating. There’s no need for annulment of contract pero
dapat itama yung quantity.

ART. 1332
- Kapag yung isang party is unable to read, and the language is not
understandable at mistake and fraud is alleged, the other person enforcing the
contract is in burden to show na terms are fully explained to the former.

It contemplates 2 situations:
(1) One of the party is unable to read:
EX. Alex (Blind) businessman sign a contract believing that it is a contract of will but
really is a deed of sale.
EXPLANATION:
If alex claim fraud or mistake, Ara has the burden of proving na hindi siya nag take
advantage sa sitwasyon ni Alex. If Ara fails to do so then the contract deed of sale can
be void.
(2) If the contract is in language not understood by one of the parties.
EX. Pumirma yung isang IP’s ng contract kahit di niya lubos na naintindihan yung
nilalaman nito, thinking na it will benefit them all but is really a property of sale.
EXPLANATION:
If the IP’s claim for fraud or mistake, then Ara has the burden na mapatunayan na
hindi siya nag take advantage sa sitwasyon ng mga IP’s. Then if failure to do so the
property of sale contract will be annuled.

ART. 1333
- If may knowledge ng doubt, contigency or risk naman yung isang party then
there’s no vitiation of consent. It will just assume na yung party was willing na
i-take yung risk despite knowing the possible consequences, and so He/She
can’t claim for mistake afterwards.
EXAMPLE & EXPLANATION.
Alex buy Ara’s house despite knowing na konting ulan lang ay binabaha na kaagad
ito and later on if rain comes in at binaha ng sobra yung bahay niya, Alex can’t claim
for mistake to Ara because she knew the risk of the house but still buys it.

ART. 1334
Provide requisites kung kailan and mutual error nakaka vitiate ng consent.
Requisites for Application of Art. 1334
(1) The error is mutual
(2) Must refer to the legal effect of an agreement
(3) It must frustrates the real purpose of the parties

Example: Fermin and Nicolas entered into a written contract affecting the land
belonging to Fermin, for and consideration of P500. At the time the contract was
entered into, Fermin thought that he was given P500 by Nicolas for the mortgage of
his (Fermin’s) land. Nicolas, on the other hand, thought that by giving Fermin P500
he had purchased the land. The contract is voidable and may annul in
court. However, if there has been a meeting of minds as the object of the contract,
the proper remedy is reformation of the instrument.

REQUISITES FOR APPLICATION OF ART. 1334

(1) The error must be mutual
- parehong parties ay parehas na may mali.
EX. Alex is selling her House to Ara for 2,000,000 kaso si Ara akala niya binibili niya
ito sa halagang 1,500,000 at pumirma sila sa contract ng deed of sale at ang
nakalagay talaga sa contract is 2,000,000. The remedy for this situation is annulment.
EXPLANATION.
Annulment yung remedy niya kasi parehas silang nagkamali at there’s no meeting of
minds.
 2. It must be as to legal effect of an Agreement.
EX. Nagkasundo na si Alex at Ara na ibebenta yung bahay sa halagang 1,500,000
nag execute sila ng contract na deed of sale ngunit nakasulat rito na 2,000,000.
EXPLANATION.
Ang remedy dito ay reformation, kasi nagkasundo na sila pero hindi nakasulat sa
contract yung real intention nila.

ART. 1335
-May violence in order to wrest consent kapag may serious or irresistible force na
naemploy.
VIOLENCE: Use of Physical Force/Physical Coercion na nagcacause ng external
damage.

3. Employment of serious and irresistible force

4. The reason why the contract was entered into

EXAMPLE:
A signed a document na he actually didn’t want to sign. B pointed knife at his neck
and slash a bit of his skin causing it to bleed. Here, may violence dahil sa pagexecute
ng serios or irresistible force ni B to wrest consent of A and because of this, A had a
fear for his life dahil sa pagforce ni B sa kanya to sign the document dahil sa kanyang
own will at dahil dito, si B ay magiging ONLY PARTY at since walang will ni A magiging
unforceable yung contract.

INTIMIDATION: Use of Moral/Mental Coercion na nagcacause ng internal damage.

EX.: Dun sa preceding example, if ponoint naman ni B ang knife sa bandang puso ni
A para i-sign nito ang contract at takutin na papatayin nya ito ay wala nang dahilan pa
si A para di maniwala since kita niyang gagawin talaga ito ni B because of this, the
intimidation would vitiate consent.

Requisites of Intimidation:
3. It must produce a reasonable and well-grounded fear of an evil (WHEN?
Para madetermine ang degree ng intimidation, ang Age, Sex at kondisyon nung
tao ay icoconsider or dapat itatak sa utak) BUT.. kapag nag-signed out ng
Reverential Fear magiging valid ang contract becusse it doesn’t annul consent
sa absence of the actual threat.
4. The evil must be imminent and grave.
5. The evil must be upon his PERSON (not exclusive) or PROPERTY, OR
THAT OF HIS SPOUSE, DESCENDANTS, OR ASCENDANTS (includes)
 6. The reason why the party entered the contract 5. The threat must be of
unjust act (THERE IS AN EXCEPTION) – Threat to enforce just or legal claim.
Ex.: I owes J 10k, pag di nabayaran ni I ang utang nya pwede syang takutin ni J na sa
korte nya ito sisingilin dahil sa di pagbayad and it doesn’t vitiate consent dahil ito ay
legal act.
ART. 1336

- Ang violence or intimidation shall annul the obligation, pero minsan ang 3rd
person ang nagemploy na hindi naging parte ng contract. Magiging voidable or
annullable lang ang contract kapag may nai-present sa Requisites ng Violence
or Intimidation.
ART. 1337
- Ang Undue Influence ay nagooverpower sa mind ng isang party to prevent him
na umakto ng tama or voluntarily according sa kanyang own judgement and
discretion. Ang influence ay dapat undue or improper para maavoid ang
contract. Pero ang mere general or reasonable influence ay hindi sapat, kagaya
ng argument and persuasion.

Circumstances to be considered.
1. Confidential, family, spiritual and other relations between the parties
2. Mental weakness
3. Ignorance or
4. Financial distress of the person alleged to have been unduly influenced.

Example: V is a tenant at need nya na ibigay ang rent nya na 12k kay X na kanyang
landlord at pag di sya nagbigay ay papaalisin na sya nito. Tinry ni V mangutang kay L
pero sinuggest nito na ibenta nalang nya ang videoke set nito ng 12k. If V doesn’t want
to sell the videoke set kahit need nya na dahil wala syang pera. Pwedeng maavoid
ang pagbenta dahil ito ay isang undue influence.

ART. 1338
- May fraud kapag may insidious words or machinations sa isa sa contracting
parties.
Casual fraud/Dolo Causante:
- Fraud na nagvivitiate ng consent at kung wala ang fraud na ito ay wala ring
mag-eenter na other party. It can be committed through insidious words,
machinations or concealment. Insidious words or machinations includes any
misrepresentation in words or actions na sinadya talaga upang mandaya.
Requisites of Casual Fraud:
1. Dapat ay may misrepresentation or concealment sa katotohanan ng isang
bagay na ang ibibigay ay false information.
 2. It must be serious
3. Dapat isang party lang ang gagawa ng fraud, kapag both parties ang gumawa
ay magiging valid parin ang contract nila.
4. Dapat ay may bad faith ang fraud or gusto talaga nilang i-deceive yung other
party.
5. Dapat ay naindiced ang consent ng other contract party.
6. Dapat ay mapatunayan ng malinaw at kapani-paniwalang ebidensya.
Ang maling pagrepresent ay napoprove agad sa mismong representation neto at mga
circumstances na nakaunder sa pangyayari.
Example:
(1) Nagpanggap si G na wala syang sakit upang makakuha ng insurance contract.
(2) Bumili si L (buyer) kay N (seller) ng kwintas na diamond daw ang stone pero
made of glass lang naman talaga ito.

ART. 1339
- Kapag nag-fail na idisclose ang facts kahit na eto ay duty mo para i-reveal yon,
macoconsider eto na FRAUD.
Example:
Si H at K ay magpartner sa isang real estate kaya sila ay may confidential relations,
nalaman ni H na may 3rd party which is si O na gustong bilhin ang isang land sa
mataas na presyo na pag mamay-ari nilang dalawa ni K. So, cinonvince ni H si K na
ibenta sa kanya ang lupa at nung naibenta na ito ay ibinenta nya ulit kay O sa higher
price. May fraud na nangyari since cinonceal ni H ang information na to kay K kahit
sila ay mag-partner. Dapat i-disclose ni H kay K ang facts na ito dahil eto ay duty nya
at dahil ito ay Concealment fraud, magiging voidable ang contract ni H at O.

ART. 1340
- It talks about the Usual Exaggerations ng mga merchants or traders sa kanilang
product para tumaas ang sale nila pero hindi naman eto fraudulent dahil sa
mga advertisement gumagamit talaga sila ng over expressions sa binebenta
nila.
Example: nakalagay sa advertisement na kapag binili mo ang ballpen nila, tataas ang
grade mo or ng anak mo sa paggamit non.

ART. 1341
A mere expression of an opinion does not signify fraud, unless made by an expert and
the other party has relied on the former’s special knowledge.
As a general rule, kapag human expression or just an opinion, it is not considered as
fraudulent. Ngunit kung ito ay galing sa expert ito ay maituturing na fraud.
Expression of opinion.
Under this provision, there are these following requisites in order for it to be amounted
to fraud.
1. Made by an expert.
2. The other party has relied on the expert’s opinion.
3. Opinions turned out to be false or erroneous.
Erroneous – means wrong or incorrect.
Example:
You have a land and you are not an expert with regards to it, and in your opinion, the
land is actually a first class, on the other hand, later on, it turns out that second class
lang pala. In this case, there is no fraud kasi the mere fact na hindi ka expert and then
mere expression of an opinion mo lang about sa land. Hindi rin ito maituturing na fraud
particularly if the buyer has the opportunity to examine the land for himself.
Another, pumunta ka sa isang seller, and that seller is selling a product and was an
expert, and ang dahilan kung bakit ka bumili ng product niya is that, nag-rely ka sa
expert’s opinion who is ‘yong seller, in this case, the contract is voidable, dahil ito ay
naging fraudulent.
Things to remember: Unless hindi siya expert’s opinion or kahit pa expert’s opinion
pero meron kang time to ascertain kung totoo ba ang sinasabi niya and that hindi
naman talaga opinion niya ang reason kung bakit mo binili ang product, hindi siya
voidable contract and hindi siya fraudulent.
ART 1342
Misrepresentation by a third person does not vitiate consent, unless such
misrepresentation has created substantial mistake and the same is mutual.
Misrepresentation – giving false information by one party to the other before the
contract is made.
Vitiate – to make legally defective or invalid; invalidate.
Si third person ay hindi kabilang sa nasabing kontrata, and siya ay considered as
stranger in the contract.
Fraud by a third person.
(1) General rule – misrepresentation by the third person does not vitiate consent,
and the presumption is that, both contracting parties are acting in good faith. Here, the
contract cannot be annulled maliban na lamang kung kasabwat or may alam ang isang
party sa fraud na naganap.
Example: Alex is the owner of a car worth P500,000. Alex sold it to Ben for P400,000
because Carlo misrepresented to Alex that his car is worth P400,000 only. Alex cannot
annul the contract on the ground of misrepresentation committed by Carlo, unless it
shown that Carlo connived with Ben in misrepresenting the value of the car.
Connived – means secretly allow (something considered immoral, illegal, wrong, or
harmful) to occur.
(2) Exception – the misrepresentation has created substantial mistake and the
same is mutual. Here, the contract may be annulled because of the substantial mistake
which is mutual.
Example: Si Don Emilio ay owner ng parcel of land sa Laguna. Michael is interested
in buying a land in Laguna para magpatayo ng isang factory. Juaquin tells Don Emilio
and Michael that, the place where the land of Don Emilio is situated is an industrial
zone. If on the strength of the representation made by Juaquin, binili ni Michael ang
lupa, and it turns out that place is residential zone, pwedeng ma-annul ang kontrata
because of substantial mistake on the part of the seller and the buyer.
Things to remember: Misrepresentation employed by the third person ay hindi vini-
vitiate ang consent and the contract cannot be annulled dahil both contracting parties
are acted in good faith, however, if one of the contracting parties is involved by the
misrepresentation by the third person, the contract is voidable.
It is also important to remember that, force or intimidation employed by the third person
on one of the parties make the contract voidable.
Article 1343
Misrepresentation made in good faith is not fraudulent but may constitute error.
Effect of misrepresentation made in good faith.
Kung ang misrepresentation ay hindi intensiyon but made in good faith, considered as
a mere mistake or error at hindi fraud. Ang fraud ay mas serious at mas malaki ang
kabayaran ng party na guilty. As an effect, the contract is voidable and the consent is
vitiated on the ground of mere mistake or error and not on the ground of fraud.
Example: Evershane sold Ma. Camille a diamond ring na akala niya ay totoong
diamond ring. However, it turned out that it was not a true diamond. Evershane cannot
be held liable for fraud but will be required to return Ma. Camille’s payment, and it
vitiate consent and the contract is voidable.
Article 1344
In order that fraud may make a contract voidable, it should be serious and
should not have been employed by both contracting parties.
Incidental fraud only obliges the person employing it to pay damages.
Two kinds of civil fraud in the making of contract.
(1) Causal fraud – vitiate consent, kasi ‘yong fraud is actually the cause kung bakit
nag-enter into a contract ang isang party.
- ground for annulment of the contract plus damages.
Example: Si Mike ay nagbenta kay Irish ng isang singsing at sinasabing ito ay diamond
ring, gayunpaman, ang singsing ay hindi naman talaga diamond but it is only made by
glass. Kung alam lang ni Irish na hindi naman diamond ang singsing, ay hindi sana
niya ito bibilhin. This is considered as fraud in obtaining the consent and ground for
annulment of a contract plus damages.
(2) Incidental fraud – hindi ground for annulment, and the party who commits the
fraud shall be liable for damages.
Example: Claire enter into a contract to deliver 500 cavans of rice to Sharmie with a
price per cavan of 1,300 pesos, Claire delivered 300 cavans but withheld the delivery
of the remaining, stating that the price went up and priced the rice to 1,600 per cavan.
The fraud here is dolo incidental or incidental fraud because it is committed to the
existing contract.
Requisites of causal fraud.
(1) Should be serious.
(2) Should not have been employed by both contracting parties or pari delicto.
(3) Should not have been known by the other contracting party.
Things to remember: The requirement that fraud should be serious excludes slight
and usual deviations from the truth which can amount to a serious breach of contract.
Kapag ang fraud ay employed by both parties, or pareho silang mandaraya,
wala sa kanila ang maaaring humingi ng annulment dahil ang fraud is neutralizes the
fraud of the other. Ico-consider siya ng batas na valid dahil pareho naman silang nag-
employed ng fraud, this rule is based from the principle “he who comes to court, must
come with clean hands”, meaning, if you will seek judicial relief, dapat ay wala karing
mali na ginawa or you are not a guilty party as well.
Article 1345
Simulation of a contract may be absolute or relative. The former takes place
when the parties do not intend to be bound at all; the latter, when the parties conceal
their true agreement.
Simulation of contract – ito ‘yong mga mutual agreement by parties pero hindi siya
nag-iexpress ng totoong intensiyon ng parties.
Article 1346
An absolutely simulated or fictitious contract is void. A relative simulation, when
it does not prejudice a third person and is not intended for any purpose contrary to
low, morals, good customs, public order or public policy binds the parties to their real
agreement.
Ang mga gawa-gawa o kathang isip lamang na kontrata ay walang bisa. Ang
medyo gawa-gawa, kapag hindi nito naapektuhan ang karapatan ng ibang tao at ang
dahilan ng paggawa ay hindi salungat sa batas, moralidad, mabuting kaugalian,
pampublikong kaayusan at pampublikong patakaran, bind the parties sa kanilang
tunay na napagkasunduan.
Meaning of simulation of a contract.
Mutual agreements by parties para manloko o linlangin ang ibang tao sa
pamamagitan ng hindi totoong kontrata or sa pamamagitan ng pagtago ng true
intentions.
Requisites for simulation.
(1) An outward declaration of will different from the will of the parties.
(2) The false appearance must have been intended by mutual agreement.
(3) The purpose is to deceive the third persons.
Kinds of simulation.
(1) Absolute simulation – this simulation is void, kasi both parties do not intend
to enter into a contract, nagpapanggap lang ang parties na may contract sila to deceive
other people.
Examples: - John and Fatima enter into a contract of marriage for just a joke.
- John and Fatima executed a contract of sale for purposes of deceiving other
people without any intention to be bound by the contract.
Bali wala talagang contract of sale sa pagitan ni John and Fatima because the parties
do not intend to be bound at all.
(2) Relative simulation – may nag-eexist na contract pero hindi ipinapakita ng
both parties ang true intentions kung bakit sila pumasok sa isang kontrata.
Example: Gustong i-donate ni Rayver ang kaniyang lupa at bahay kay Clea, pero ayaw
niyang magbayad ng malaking donors tax, so ang ginawa nila to avoid payment of
donors tax, they entered into a contract of sale, true intention is donation pero ‘yong
ginawa is contract of sale.
Referring to the book’s example, there are two involved acts; (1) Obstensible apparent
act (contract of sale) – it is the apparent but fictitious document or conduct executed
by the parties. It is always void. (2) Concealed or hidden act (contract of mortgage) –
it is the true or real agreement contemplated by the parties. It is valid if it is not contrary
to law, morals, good customs, public order and public policy.

SECTION 2. — OBJECTS OF CONTRACTS

ART. 1347 - 1348

All things which are not outside the commerce of men - lahat ng bagay na pwedeng
ibenta or ibigay ay pwedeng maging object of contract. Halimbawa ng outside the
commerce of men, public offices, honorary titles, properties pertaining to public
dominion.
All rights which are not instransmissible - lahat ng karapatan na pwedeng maipasa sa
iba can also be an object of contract. Halimbawa ng not transmissible, political rights,
the right to vote. Hindi siya pwedeng ipasa so it cannot be an object of contract.

CONCEPT OF OBJECT OF A CONTRACT

- The object of a contract is its subject matter. Ito yung napagkasunduang ibibigay o
gagawin. Katumabas na siya ng mismong obligation.
REQUISITES OF THINGS AS OBJECT OF CONTRACT
1.... Must be within the commerce of men... - lahat ng pwedeng ibenta ay pwedeng
maging object of contract.
Example: Properties lime houses, cars, etc.
2. It must not be impossible, legally or physically - Ibig sabihin, it cannot be an
object of contract if it's contrary to law, morals, good customs, etc. As well as if the
thing cannot exist.
Example: Monkey that can talk. Impossible siya physically kasi wala naman talagang
nag-eexist na ganoon.
3. It must be in existence or capable of coming into existence - dapat yung object
ay possible na mangyari.
4. It must be determinate or determinable without the need of a new contract -
dapat specific para hindi na kailangan gumawa pa ng bagong kontrata (?).
REQUISITES OF SERVICES AS OBJECT OF CONTRACT
Same lang sa requisites of things...

RIGHTS AS OBJECT OF CONTRACT

(umulit na lang sa part na to)
1. OUTSIDE THE COMMERCE OF MEN - mga hindi pag-aari ng tao kaya hindi niya
pwedeng ibenta or ibigay or gawing object of contract.
Example: Public places, bridges, streets, air, sunlight, sea, etc.
2. IMPOSSIBLE, PHYSICALLY OR LEGALLY - for example, pagbebenta ng illegal
drugs, puting uwak.
3. DETERMINABLE THINGS - dapat specific ang object.
Example: Specific car, chihuahua dog, etc.
4. FUTURE THINGS OR RIGHTS - mga bagay na pwedeng makuha or mag-exist in
the future.
Example: Rice to be harvested soon. Eggs from hens.
5. INTRANSMISSIBLE RIGHTS - Mga karapatang hindi pwedeng ipasa sa iba.
Example: Right to vote, right to run for public office.

DEFINITION OF FUTURE INHERITANCE

- Ito yung mana na matatanggap mo in the future which is uncertain or hindi mo pa
pag-aari kaya hindi pa siya pwedeng maging object of contract ng taong yun.
Makukuha lang ang mana upon death of the decedent. So kahit hindi pa determinate
kung anong parte o ilang parte ng mana mo ang para sayo talaga, pwede pa rin siyang
maging object of contract agad agad.
EXCEPTION: If it is expressly allowed by law.

KINDS OF IMPOSSIBILITY
(Umulit na lang din to.)
1. PHYSICALLY - imposibleng mangyari kasi the thing or service in very nature cannot
exist.
A. ABSOLUTE - walang kahit sino ang makakagawa. It automatically nullifies the
contract.
Example: Fly like a bird. Gain 10kg of weight in a day.
B. RELATIVE - possible pa ring mangyari pero hindi sa lahat ng pagkakataon. It does
not nullify the contract if temporary.
Example: Drive a car to a flooded highway.
2. LEGAL - the thing or service is contrary to law, morals, good customs, public order,
or public policy. Hindi pwedeng maging object of contract ang isang bagay if against
sa law or hindi pinahihintulutan ng batas na mangyari yun.
Example: Selling illegal drugs. Making an underaged person your guardian.

ART. 1349
- Simply means, the thing must be determinate or at least determinable. If kailangan
pang gumawa ng bagong contract because it's indeterminate, then the contract will be
void. Because it is one the essential requisites to have a valid contract (refer to Art.
1318).
Example 1: A promised to give B one of his car. It is determinable without the need to
create a new contract so the contract is still valid. But if the case where A promised to
deliver B a thing, then the object is indeterminate. Hindi alam kung anong object yung
ibibigay. Thus, the contract is void.
Example 2: A promised B to give his December 2021 harvest of wheat. In this case,
indeterminate ang quantity ng palay but it is still considered valid. Magiging
determinate lang siya upon the delivery.

SECTION 3. — CAUSE OF CONTRACT

ART. 1350
MEANING OF CAUSE
CAUSE (CAUSA) - is the essential reason or purpose. Ito yung dahilan kung bakit
may kontrata. Kung ano ang purpose o kung para saan.
Example: In a contract of sale, A agreed to deliver a parcel of land to B. The main
reason of the contract sa side ni A ay para kumita ng pera, sa side naman ni B ay para
ma-acquire yung land.

CAUSE DISTINGUISHED FROM OBJECT

- The distinction is only a matter of viewpoint. Dahil yung subject matter of one party
will be the cause or consideration of the other party and vice versa.
Example: Same example, A agreed to deliver a parcel of land to B worth 100,000. Sa
side ni A, ang subject matter or object is the land, ang cause ay yung 100,000 na
presyo ng lupa. Kay B naman, the object is 100,000 while the cause is the land.
In a school of thought, the subject matter of the both parties is the parcel of land. At
ang cause naman for A is the delivery of the price and B, the delivery of the land.

CLASSIFICATION OF CONTRACTS ACCORDING TO CAUSE

1. ONEROUS - parehas may obligation ang both parties.
Example: Contract of sale.
2. REMUNETORY OR REMUNERATIVE - it is to compensate a past service or
benefit.
Example: A rendered a service to B as his engineer to build his mansion. B agreed to
pay 100,000 for the service rendered.
3. GRATUITOUS - the cause is the mere liberality of the benefactor or giver. Ito yung
kusang loob na binigay lang.
Example: Donations.

ART. 1351
MEANING OF MOTIVE
- Ito yung personal or private reason ng party kaya siya pumasok sa isang kontrata.
This is different from the cause of contract.
CAUSE DISTINGUISHED FROM MOTIVE
1. Cause is immediate or direct reason, while motive is the remote or indirect reason.
2. Cause is always known to contracting party, while motive may be unknown.
3. Cause is an essential element, while motive is not.
4. The illegality of the cause affects the validity of a contract, while the illegality of one's
motive does not render the contract void.
NOTE: Pwede pa ring mavoid ang contract kung ang motive ng other party is a
fraudalent purpose.
Example 1: A agreed to deliver a parcel of land to B worth 100,000. Para kay A, the
cause or consdideration is the 100,000 pero ang motive niya sa pagbebenta ng lupa
ay gamitin yung perang kinita para makapagpatayo ng business.
But in a case where A's motive is to defraud B, B can ask for rescission or cancellation
of the sale.
Example 2: A bought a gun to B. The cause or consideration of A is the gun but his
motive is to kill someone. In this case, kahit masama yung motive, the contract is still
valid. Kasi hindi naman yun nakaapekto sa validity ng contract. As motive is strictly
personal.

ART. 1352 - 1353

REQUISITES OF CAUSE
1. It must exists at the time the contract is entered into. Dapat present ang cause or
meron talagang purpose ang contract.
2. It must be lawful. Dapat nakaayon sa batas.
3. It must be true or real.
- Dapat ma-prove ng parties involved na true and lawful ang cause na nakasaad sa
kontrata nila. Kapag false cause then it will render them void.
Example: In a contract of sale, A sold his car to B for 100,000. When in truth, B did
not pay any amount. Kumabaga ginawa lang nila yung kontrata para masabing binili
ni B yung kotse when in reality hindi naman talaga. So dito the cause is false.
Pero kung ang kaso ay nagrender pala ng service si B worth 100,000 kay A, then the
contract is still valid kahit iba yung nakasaad sa contract na cause since yung true
purpose na hindi nakalagay sa kontrata is true and lawful.

EFFECT OF ABSENCE OF CAUSE

(Refer to page 350. Self explanatory na kasi siya.)
- ito yung total lack of valid consideration. Kumbaga hindi nakasaad yung mismong
cause (like prices) sa kontrata.

EFFECT OF FAILURE OF CAUSE

- Failure of cause does not render a contract void.
- di ko gets, pasensya

EFFECT OF ILLEGALITY OF CAUSE

- Dito, may cause na nakalagay sa contract pero unlawful or illegal. Thus, making the
contract null and void.
EFFECT OF FALSITY OF CAUSE
- Ang nakalagay sa contract na consideration is valid, pero in truth it is false cause.
(Naexplain na to sa taas)

Example: Example: In a contract of sale, A sold his car to B for 100,000. When in truth,
B did not pay any amount. Kumabaga ginawa lang nila yung kontrata para masabing
binili ni B yung kotse when in reality hindi naman talaga. So dito the cause is false.

Pero kung ang kaso ay nagrender pala ng service si B worth 100,000 kay A, then the
contract is still valid kahit iba yung nakasaad sa contract na cause since yung true
purpose na hindi nakalagay sa kontrata is true and lawful.

ARTICLE 1354
CAUSE PRESUMED TO EXIST AND LAWFUL
- Hindi necessary na expressly stated and cause sa kontrata. The presumption is that
the cause exists and is lawful unless proven otherwise.
Example: In a promissory note, A stated that he will pay the amount of 10,000, fifteen
days after due date to B. In this case, hindi nakasaad na kaya late magbabayad si A
dahil wala rin siyang natanggap na service kay B. Though wala ito sa as cause, the
promissory note is still considered valid. Because it is presumed that the cause exists
and is lawful.
ART. 1355
MEANING OF LESION
LESION - any damage caused by the fact that the price is unjust or inadequate. Hindi
nito naiinvalidate ang contract. Ibig sabihin, hindi porket napakamura or napakamahal
ng price na nakalagay sa kontrata, void na agad yun. Unless, proven na may fraud,
mistake or undue influence.
Example: A sold his million worth of house to B for 100,000. Obviously, may
inadequacy sa price kasi sobrang mura but it will not void the contract of sale. Unless,
may mali lang sa pagpepresyo or may ibang intensyong masama si A, then it will void
the contract.

CHAPTER 3 – FORMS OF CONTRACTS

ART. 1356.
Contracts shall be obligatory, in whatever form they may have been entered
into, provided all the essential requisites for their validity are present.
However, when the law requires that a contract be in some form in order that it
may be valid or enforceable, or that a contract proved in a certain way, that
requirement is absolute and indispensable. In such cases, the right of the
parties stated in the following article cannot be exercised.
Form of a Contract
- Refers to the manner in which a contract is executed or manifested.
Forms of Contract
1. A contract may be oral (verbally sinasabi), or in writing (sinusulat), or
partly oral and partly in writing. If in writing, it may be in a public or a
private instrument.
2. A contact may be express (kapag inexpress ng parties kung ano talaga
aim or intentions nila) or implied (kapag sa actions or conduct ng parties
nakabase yung intentions nila).
When contract considered in written form
Para masabing written form ang isang contract, dapat naka-written sya
ENTIRELY. Kapag ang contract is partly written and partly oral, in legal effect, ayun
ay isang ORAL CONTRACT.
Classification of contracts according to form.
1. Informal or common or simple contract
Informal contracts can be in whatever form basta lahat ng essential requisites
for their validity is present. Nagagamit ito sa mga consensual contracts: unanimous
agreement of parties (e.g. buy and selling: kapag nag-agree si buyer at seller sa price
to be sold ng isang item). Informal contacts can be oral, written, and implied.
2. Formal or solemn contract
Nirerequired ng LAW na ang contract must be executed in a certain specified
form for its efficacy.
Rules regarding form of contracts
1. The GENERAL RULE is that a contract is enforceable by both contracting
parties kahit ano man yung form nito AS LONG AS the three (3) essential
requisites are provided (consent, object, and cause) para masabi na valid yung
contract. It can be oral and written. Kapag written ang contract, it may consist
of a letter, memorandum, note, or other instrument na sufficient enough para
masabi yung intentions ng parties.
Example: Nag-iwan si Chris ng note sa store ni Meg na bibilhin nya yung table for
P1,000 na binebenta ni Meg. So, tinawagan ni Meg si Chris through phone para
sabihin na pumapayag sya sa offer ni Chris who promises to pay the next day. The
note and oral acceptance constitute a legally enforceable contract and both Chris and
Meg are fully bound.
2. EXCEPTIONS (in general rule)
The form is required in the following cases:
a. Kapag nirequire ng law that a contract must be in some form to be valid
b. Kapag nirequire ng law that a contract must be in some form para
maging enforceable ito at maprove in a certain way
c. Kapag nirequire ng law that a contract must be in some form for the
convenience of the parties of for the purpose of affecting third persons.
Form for validity of contract. (no. 1 sa exceptions)
There are rare cases when the law requires that a contract be in a certain form
for the validity of the contract. (The said rare cases are the ff.)
1. Donation of real property – must be in public instrument
2. Donation of personal property the value of which exceeds P5,000 – the
donation and acceptance must be in writing.
3. Sale of land through an agent – the authority (orders or commands) of the
agent must be in writing; otherwise, the sale is void.
4. Stipulation to pay interest – must be in writing; otherwise, no interest is due.
5. Contract of partnership – if immovables are contributed, it must be in a public
instrument to which shall be attached a signed inventory of the immovable
property contributed. (??)
Form for enforceability of contract (no.2 sa exceptions)
Sa mga contracts na covered ng Statute of Frauds, requirement that certain
kinds of contracts must be memorialized in writing to prevent frauds or other injury,
nirerequire ng law na DAPAT written ang contract para incase na nagrefuse yung
other party sa pagfulfill ng obligation nito, may proof or evidence na maeenforece yung
aggrieved party. Although valid pa rin ang oral contract dito assuming na naprovide
lahat ng essential requisites, pero hindi naman mapu-prove yung contract incase na
may fraud na nacommit since walang proof in writing.

ART. 1357.
If the law requires a document or other special form, as in the acts and
contracts enumerates in the following article, the contracting parties may
compel each other to observe that form, once the contract as been perfected.
This right may be exercised simultaneously with the action upon the contract.
Form for the convenience of the parties
In certain cases, nirerequire ang isang certain form (e.g. public instrument) para
sa convenience ng parties at maging effective yung pag-aacquire ng rights, against
third persons, sa property under such contract. For example, a contract was made
between Peter (buyer) and Lois (seller) in sale of real property. Para maacquire ni
Peter yung rights nya sa land, dapat yung contract is made in public instrument
wherein it is registered in the proper registry para wala nang magclaim ng rights nya
sa land from third persons.
Non-compliance with the required form would not adversely affect the validity
nor the enforceability of the parties themselves.
As between the parties, hindi necessary yung required form (e.g. public
instrument) kasi allowed naman sila ng law napag usapan at iobserve yung proper
form habang ineenforce yung contract. PERO, bago pa nila iexecute yung required
form, DAPAT valid and enforceable na yung contract. For example, the contract was
made by Peter (buyer) and Lois (seller) in the form of a private instrument. Pwedeng
icompel ni Peter si Lois na ilagay sa public instrument yung contract to affect the third
persons. Pero bago nila gawin yon, dapat valid and enforceable muna yung contract
for their convenience.
 ART. 1358.
The following must appear in a public document:
1. Acts and contracts which have for their object, the creation, transmission,
modification or extinguishment of real rights over immovable property; sales of
real property or of an interest therein are governed by Articles 1403, No.2; and
1405;
2. The cession, repudiation or renunciation of hereditary rights or of those of the
conjugal partnership of gains;
3. The power to administer property, or any other power which has for its object
an act appearing or which should appear in a public document, or should
prejudice a third person;
4. The cession of actions or rights processing from an act appearing in a publc
document.
All other contracts where the amount involved exceeds Five hundred pesos must
appear in writing, even a private one. But sales of goods, chattels or things in action
are governed by Articles 1403, No. 2 and 1405.

Contracts which must appear in a public document

The contracts that are covered in this article are VALID and ENFORCEABLE
though not contained in a public document or instrument or in writing.
The public document is required only for the convenience and greater
protection of the parties and to make contract binding as against third persons.
In other words, the law does not require accomplishment of certain acts or
contracts in a public instrument in order to validate the act or contract but only to insure
its efficacy so that after the existence of the act or contract has been admitted, the
party bound may be ordered by the court in which the action or suit is filed to execute
the document.

1. Creation, etc, of real rights over immovable property – As security for his
debt, D mortgaged his land to C. This mortgage must appear in a public
document. The extinguishment of the mortgage, upon payment of the debt by
D, must likewise appear in a public document. Sales of real property or an
interest therein are governed by the Statute of Frauds. (Art. 1403 [2].)
2. Cession or renunciation of hereditary rights or those of conjugal
partnership of gains – X and Y are the heirs of Z, their deceased father. X,
being financially stable, renounces his share in the inheritance. This
renunciation must appear in a public instrument.
3. Power to administer property – P is leaving for the United Stated to study for
two years. He appoints A, agent, to manage his property. In this case, the
authority of A to administer the property of P must appear in a public document.
4. Cession of actions or rights – D mortgaged his land to C to secure the
payment of a debt. This mortgage appears in a public document. The decision
by C of his right, as mortgagee, to D must also be in a public document.
 CHAPTER 4: REFORMATION INSTRUMENTS
ART. 1359
- Kapag may meeting of the minds or nagkasundo ang dalawang party pero may
hindi na-express ang true intention in the instruments by reason of mistake,
fraud, or inequitable conduct or accident, then pwedeng mag-request for
reformation. But if there is no meeting of the minds, kumbaga umpisa palang
hindi na sila nagkasundo or nagkaintindihan, then annulment of the contract na
and not reformation.
Example: A agreed to sell his car to B for 1,000,000. But B is buying the car for
800,000. In this case, there is no meeting of the minds, so annulment of the contract
ang mangyayari kasi himdi sila nagkasundo sa totoong presyo ng kotse. Pero kung si
B ay nakipag-negotiate kay A na 800,000 na lang at pumayag si A. And since sa
contract nila, ang written instrument ay 1,000,000, then the remedy will be reformation.

MEANING OF REFORMATION
REFORMATION – ito yung remedy allowed by law by means of which instrument is
amended or rectified. Meaning, kapag may hindi pagkakasundo ang parties in contract
pwede pang baguhin kung ano yung nasa kontrata para masunod yung real
agreement or intention ng both parties.
REASON FOR REFORMATION
- Ginagawa ang reformation of instrument to conform to the real intention of
contracting parties. Since hindi magiging makatarungan kung itutuloy pa rin
yung original na nasa kontrata, knowing na hindi yun yung gustong mangyari
ng parties involved.
REQUISITES OF REFORMATION
- Basahin na lang sa book haha madali siyang intindihin.
REFORMATION DISTINGUISHED FROM ANNULMENT
- Sa reformation, there is meeting of the minds, kumbaga may napagkasunduan
naman talaga sila pero yung written instruments sa contract ay hindi na-express yung
real agreement nila by reason of mistake, fraud, inequitable conduct, or accident.
- Sa annulment, there is no meeting of the minds, umpisa pa lang hindi na sila
nagkasundo.
Example: Miss Minchin agreed to sell his mansion to Princess Sarah. They both
agreed na kasamang sa benta yung mga furniture and appliances. But, sa kontratang
pinirmahan, hindi ito kasama. In this case, there is meeting of the mind therefore
reformation is the remedy.
At kung sakaling, ang gusto ni Miss Minchin ay hindi kasama ang mga furniture and
appliances sa bentahan at si Princess Sarah naman ay gusto kasama yun, then there
is no meeting of the minds, kaya the remedy is annulment of contract.
NOTE: Written Instruments lang ang nirereform, hindi yung buong kontrata in order to
express the real intention or real agreement of the parties.
 ART. 1360
- Yung principles of the general law on the reformation of instruments ay
nakasunod sa Civil Code. In case of conflict, si Civil Code ang mago-govern or
masusunod.
ART. 1361
MUTUAL MISTAKE AS BASIS FOR REFORMATION
MUTUAL MISTAKE – is a mistake of fact (refer to Art. 1331). Parehas nagkamali yung
both parties sa paglalagay ng written instrument kaya hindi mae-express ng
instruments yung real agreement nila.
Example: A agreed to sell his car 1 to B. But the written instruments states car 2 ang
ibebenta dahil pwedeng nung nagda-draft na sila ng kontrata, nakalimutan nila
parehas na car 1 ni A ang bibilhin. Since it’s a mutual mistake, then remedy is
reformation.
If mistake is unilateral, or isang side lang ang nagkamali, then it will not afford grounds
for reformation, except sa nakasaad sa Art. 1662-1663.

ART. 1362
- Dito, kung yung isang party ay nagkamali in good faith or siya yung walang
intensyong masama, tapos yung kabilang party acted fraudulently or
inequitable, then the right to ask for reformation is granted only to the party who
was mistaken in good faith.
Example: A borrowed money to B worth 1,000,000. Pero instead na ang kontrata ay
about sa pagpapahiram ni B kay A ng pera, ang pinapirmahan ni B ay contract of sale
na nagsasabing A agreed to sell his car to B for 1,000,000. In this case, A has the right
to ask for reformation since he was mistaken in good faith while B acted fraudulently
or niloko niya si A into signing a contract of sale.
ART. 1363
- Dito naman, one party was mistaken pero yung other party alam niyang mali
yung written instrument pero hindi niya sinabi sa kasama niya therefore the
right to ask for reformation is granted to the party who was mistaken in good
faith while the other party constitutes fraud.
ART. 1364
- Dito, hindi kasalanan ng parties in contract yung mali sa instrument, pero ang
may mali ay yung nagda-draft ng kontrata, clerk or typist due to ignorance, lack
of skill, negligence or bad faith. So, both parties can ask for reformation.
ART. 1365
- Here, the intention is to mortgage pero yung instruments na nagawa ay for sale.
Example: A borrowed money from B and mortgaged his land to B to secure his loan.
Both agreed to the contract. However, their written instrument drafted absolute sale.
Meaning, nakasaad sa instruments nila na binibenta ni A kay B yung lupa instead na
mortgage lang. In this case, reformation of contract is proper.
 ART. 1366
There shall be NO REFORMATION in the following cases:
1. Simple donations inter vivos wherein no condition is imposed. Since donations are
acted by liberality or kusang loob then no need for reformation. Unless may condition
na nakasaad.
2. Wills. Will is strictly personal, since yung party lang naman ang nagdedecide ng
lahat kung kanino niya ibibigay yung ari-arian niya. Instead of reformation, pwedeng
irevoke ang will kung sakaling magbago ang isip ng gumawa.
3. When the real agreement is void. Ibig sabihin, yung mismong pinag-usapan ay void
then there is no need for reformation of the instruments.
ART. 1367
- In a case when one party demands compliance of the instruments, then he
cannot ask for reformation. Kasi naibigay na sakanya yung instrument so hindi
pwedeng magsabi siya bigla na hindi nagrereflect yung instruments sa real
intention nila.
Example: A sold his land to B. But in their written instruments provided a contract of
mortgage due to fraudulent act of A. Then, B has the right to ask for reformation of
instrument. However, if B foreclose the mortgage, then he can no longer ask for
reformation. Dahil nung inenforce niya yung nasa kontrata, inadmit niya na valid yun
and that it expresses the true intention of the parties.
CASES WHEN REFORMATION NOT ALLOWED
- Refer to Art. 1366.
ART. 1368
- Dito sinasabi lang kung sino yung may right to ask for reformation of
instruments, kapag mutual mistake, then either of the parties can ask for
reformation, pero if it’s unilateral, then only the injured party has the right to ask.
Example: Same example, A sold his land to B. But in their written instruments provided
a contract of mortgage due to fraudulent act of A. In this case, B has the right to ask
for reformation since siya ang aggrieved party. At kung sakaling mamatay si B, sa
anak niya mapapasa yung rights since successor siya ni B or sa kung sinumang
inassign ni B as an heir.
A cannot file for reformation since he acted in bad faith. Ganun din kung sa mga
successor niya.

ART. 1369
-Yung procedure or kung paano magpa-file ang isang party for reformation ay
governed by the rules of court to be promulgated by the Supreme Court. More on
procedural to.