David, Daniel Roy.

S 8/31/19

A-211

Definition

1. Contract
As stated in Article 1305 A contract is a meeting of minds between two persons whereby one
binds himself, with respect to the other, to give something or to render some service.
2. Stipulation pour autrui
Is a stipulation in a contract clearly and deliberately conferring a favor upon a third person who
has a right to demand its fulfillment provided he communicates his acceptance to the obligor
before its revocation by the oblige or the original parties.
3. Real contract
The exceptions are the so-called real contracts which are perfected not merely by consent but
by the delivery, actual or constructive, of the object of the obligation. These contracts have for
their purpose restitution because they contemplate the return by a party of what has been
received from another. Also, is perfected by the delivery of the thing subject matter of the
contract such as deposit, pledge and commodatum are not perfected until the delivery of the
object of the obligation.
4. Perfection of contract
Contracts are perfected by mere consent of the parties regarding the subject matter and the
cause of the contract. They are obligatory in whatever form they may have been entered into,
provided all the essential requisites for their validity are present.

Discussions

1. May a third person acquire right under a contract to which he is a stranger or be bound
thereby? Explain.
In general rule, a third person has no rights and obligations under a contract to which he is a
stranger. He has no standing in law to demand the enforcement of a contract or question its
validity. However, there are cases when a third person is affected by a contract such cases when
a stipulation is in favor of the third person. In contracts creating real rights and entered into to
defraud creditors and which have been violated at the inducement of a third person.
2. How are contracts perfected?
As stated in article 1315, contracts are perfected by mere consent, and from that moment the
parties are bound not only to the fulfillment of what has been expressly stipulated but also to all
the consequences which, according to their nature, may be keeping with good faith, usage and
law.
3. When will a person be bound by a contract entered into by another?
When that entering person represents the person who is originally bounded by the contract
such things happens like when he is the inheritor of the obligor/obligee. He must have the right
by law to represent him.
4. Give the effect of the perfection of a contract
From the moment the parties come to agreement on a definite subject matter or valid
consideration, parties are bound to the fulfillment of what has been expressly stipulated but
also to all consequences which according to their nature, may be in keeping with good faith,
 usage, and law.

Problems

Explain or state briefly the rule or reason for your answer

1. A and B entered into a contract not specifically provided in the Civil Code. Is the contract valid
and binding?
Yes, the contract is valid because there is an agreement between the two parties with the
contract the obligation will arise. It doesn’t matter whatever form they may have been entered
into. As stated in Article 1318 as long as the requisites concur the contract is valid. First, consent
of the contracting parties. Second, object certain which is the subject matter of the contract.
Lastly, cause of the obligation which is established.
2. S (seller) and B(Buyer) entered into a contract of sale. It was agreed that the price shall be
determined by T, a third person. Can S or B refuse to be bound by T’s determination of the price
if he does not agree with the amount thereof?
Either one of them can refuse because as stated in the 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. Because there should be an agreement between to the
parties and the third party in order for them to settle. In Article 1310 it is says that the
determination shall not obligatory if it is evidently inequitable. In such case, the courts shall
decide what is equitable under the circumstances.
3. D owes C P20,000. Both are house painters. It was agreed that D instead of paying C, will paint
the house of E to which E expressed his conformity to C whose service as painter was previously
contracted by E. Has B the right to enforce the stipulation between C and D?
Yes, he has the right to enforce the stipulation between C and D. If and only if it is in favor of a
third person, he may demand its fulfillment provided he communicated his acceptance to the
obligor before its revocation. The contracting parties must have clearly and deliberately
conferred a favor upon the third person as stated in article 1311.
4. X made an office desk for Y. X told Y that the latter may pay whatever amount he would like to
pay for it. When the desk was finished Y offered to pay P2,000 but X instead demanded P3,000,
its fair value. Is X entitled to P3,000?
No, X is not entitled to P3,000 because as for their agreement that Y may pay whatever amount
he would to. As stated in article 1308 the contract must bind both contracting parties, its validity
or compliance cannot be left to the will of one of them. It is a fundamental rule that no party
can renounce or violate the law of the contract without the consent of the other. Therefore, Y
isn’t oblige to pay P3,000 if he don’t want to.