VIDEO 9 - CHAPTER 9: Contracts

Contract
- is the meeting of the minds/agreement between 2 or more persons.
- There is a promise to do something: in return for a valuable benefit known as consideration

ARTICLE 1305 (New Civil Code). “A contract is a meeting of minds between two persons whereby one
binds himself, with respect to the other, to give something or to render some service.” (RA 386)

3 Elements of Contract
Article 1318. There is no contract unless the ff requisites concur:
1. Consent of the contracting parties; (at least 18 yrs old, sound mind, not coerced)
2. Object certain which is the subject matter of the contract; (ex rose) (must not be illegal)
3. Cause of the obligation which is established. (This is the consideration which is either the
money/price)

Kinds of Contract
1. Written
2. Oral
- Both are valid but there are contracts that must be written, example: sale of land (Aside from it
has to be written it has to be in a public instrument as well which means it has to be notarized
by a notary public), or object for more than 500 pesos. (The reason why the law requires written
when it is 500 pesos or over it’s because the memory of man is fickle baka makalimutan.

Unenforceable Contract
- This is an example of defective contract under the article 1403 or RA 386 or the new Civil code.

Types of Unenforceable Contract

1. Unauthorized representation- For example you, you sold the land of your parents while they are
still alive and they did not authorize you to do that. So that would be unenforceable, meaning
you cannot implement nor execute the contract because you do not have power to do so.
2. Statute of Frauds
- Contracts that are to be done after 1 year that are not written
- Promise to answer for debt of another that is not written
- Agreement made in consideration of marriage other than mutual promise to marry in return for
fortune etc
- Agreement to sell goods that are more than 500 pesos that is not written
- Agreement for leasing for more than 1 year or sale of real property or of an interest therein that
must be in writing. It’s because the memory of man last for only 1 year that’s the theory of Law
- Representation as to credit of a third person that is not in writing. (Example would be a friend
who wants to make utang, to utang she uses your name or help for her to borrow money. Your
part (guarantor) is you assure the accreditor (the person who lends money) that your friend can
pay for the borrowed money.)

Defective Contracts
1. Rescissible contract (Article 1381 of RA 386)
- Is valid until rescinded (ended)
- An example is the sale of property in fraud of creditors (when the latter cannot in any other
manner collect the claims due them)
- Defective because somebody else will experience damage if it is not rescinded. An example
would be owing money to a bank, when the bank finally sued you for collection of money you
 sold all your properties to your neighbor. Now, if it not stopped by the court the accreditor will
not recover what they have lent.
- Should be rescind within 4 yrs

2. Voidable Contract (Article 1390 of RA 386)

- This is a contract where there is a defect on the consent example, one of the contracting parties
is incapable of giving consent for example a minor. Which means it’s either there is no consent
or the consent is vitiated or weakened.
- A weakened consent is not a valid consent, for example, there is mistake (you wrongly entered a
contract thinking it’s a contract for something else. Akala mo you’re just going to donate only 5
pesos but it turns out you’re going to donate your entire fortune), violence, intimidation, undue
influence, or fraud
- Voidable contract is valid until annulled in a proper court action (within 4 years). For example,
forced marriage, you have 4 years to annul the marriage. After the violence, intimidation etc has
ceased it is only when the time starts counting.

3. Both parties’ incapable of giving consent (This is an example of unenforceable contract)

- Cannot be enforced
- Can be ratified (by failure to object to the presentation of oral evidence to prove the same; or by
acceptance of benefits under them). The explanation can better be explained by deed of sale
between 2 children, isang 12 year old at isang 12 year old nagbentahan sila the one is cheap and
the other is expensive. So long that the parents are okay with it then it is ratified.

4. Void or Inexistent Contract (Article 1409 or RA 386)

- This does not exist from the very start, the worst defective contract because it has no effect.
- Object or purpose is contrary to law, morals, good customs, public order or public policy (ex.
Ponzi scheme used in syndicated estafa)
- Absolutely simulated or fictitious
- Cause or object did not exist at a time of transaction
- For example you ordered shabu and paid P5k for it and the order does not come to you, you
cannot go to court and demand for the delivery of shabu you have both since it is illegal so it’s
void from the very beginning.
- Void contract are those object outside commerce of man (ex moon)
- Contemplate impossible service like flying to the moon
- Those were the intention of the parties relative to the principal object of the contract cannot be
ascertained
- Expressly prohibited or declared void by law (ex: foreigner cannot own land in the Philippines)
How do they get lands? Their lands are titled to their wives

PUNISHMENT FOR PEOPLE WHO BREACHED CONTRACT: DAMAGES (The amount of money you ask for
the stress that has been caused upon you or anxiety caused by the non-payment. It could be recission
with damages or enforcement with damages)

Scenario: You have an agreement with a person, you sell your house and lot to the person and he paid
for the 50% of it. After he occupied the place he no longer wants to pay for the remaining 50%. Eh pano
yan? You have two options you could either enforce the contract or rescind the contract. By enforcing
means you go to court and you force the other party to pay for the remaining 50%. For rescind, you
rescind or end the contract. Either enforcement or recission could either be accompanied by DAMAGES.

ARTICLE 1170 OF RA 386. Those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor thereof, liable for damages.
CASE: MORAL SEDUCTION
(Baksh v CA GR 97336/1993)

Moral Damages is not given in full amount to the girl because the girl and her family is partly at fault for
allowing their daughter cohabit with a boy without the benefit of marriage.
- (Qualified Seduction are virgin, below 18 and are seduced. )
- Girl was awarded Php 20k for moral damages (that was in 1993) (very small amount I submit).
Now, moral damages is at Php 50k (still small I submit)
- Igors stand: For me the girl should have asked for Exemplary damages [no limit]; but may be the
reason this wasn’t feasible was that the Supreme Court found out that the girl’s parents allowed
the girl and the suitor to live together in one room in the girl’s family home without marriage
[Supreme Court said it should have been the parents’ duty to protect their daughter’s honor]
- Some pertinent quotations of the case: “Article 21 (One of the last resorts of a lawyer). Any
person who willfully causes loss or injury to another in manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage.”
- “In short, the private respondent surrendered her virginity, the cherished possession of every
single Filipina, not because of lust but because of moral seduction—the kind illustrated by the
Code of Commission in its example earlier adverted to. The petitioner could not be held liable
for criminal seduction punished under either Article 337 or Article 338 of the Revised Penal Code
because the private respondent was above eighteen (18) years of age at that time of the
seduction.”