CHAPTER 2 : Essential Requisites of contract

General provisions
Article 1318
3 ESSENTIAL ELEMENTS OF A CONTRACTS (1318)

1. CONSENT of contracting parties

2. OBJECT certain w/c is the subject matter of a contracts
3. CAUSE OF OBLIGATION which is established

CLASSES OF ELEMENTS OF THE CONTRACT

1. ESSENTIAL ELEMENTS OR THE REQUISITES OF CONTRACTS

1. Common or those present in all contracts, namely, consent, object, and cause.
2. Special or those not common to all contracts or those may be present only in, or peculiar, certain specified contracts, and
such peculiarity may be: form, subject matter, considerations.
2. NATURAL ELEMENTS-presumed exist in a contracts
3. ACCIDENTAL ELEMENTS- particular stipulations, clauses, terms and etc.

HOW CONSENT IS MANIFESTED?

Consent is manifested by the meeting of the offer and acceptance upon the thing and the cause which are to constitute the
contract. The offer must be certain and the acceptance is absolute.

CONSENT- is the conformity or concurrence of wills (offer and acceptance) and with respect to contracts, it is the agreement of
the will of one contracting parties with that another upon the object and terms of the contract.

OFFER- is a proposal made by one party to another, indicating a willingness to enter into a contract. OFFER MUST BE
CERTAIN AND SERIOUSLY INTENDED

ACCEPATANCE- is the manifestation by the offeree by his assent to all terms of the offer. ACCEPATANCE OF OFFER
MUST BE CLEAR AND ABSOLUTE.

Section 1 : Consent
Article 1319
Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the
contract. The offer must be certain and the acceptance absolute. A qualified acceptance constitutes a counter-offer.

Acceptance made by letter or telegram does not bind the offerer except from the time it came to his knowledge. The contract, in
such a case, is presumed to have been entered into in the place where the offer was made. (1262a)

ARTICLE 1320
An acceptance may be express or implied.

Article 1321
The person making the offer may fix the time, place, and the manner of acceptance, all of which must be complies with.

Article 1322
An offer made through an agent is accepted from the time acceptance is communicated to him.

GROUNDS (Article 1323)

An offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either party before acceptance is
conveyed.

Option contract- is one giving a person for a consideration a certain period to the offer of the offerer. Option period- period given
within which the offeree to accept an offer.

Option money- is the money paid or promised to be paid in consideration for the option.

Article 1325
Unless it appears otherwise, business advertisement of things for sale are not definite offers, but mere invitations to make an
offers.

Business advertisement generally not definite offers

PERSONS WHO CANNOT GIVE CONSENT (1327)

1. Unemancipated minors- they refer to those persons who have not reached the age of majority (18 years old) and are
subjected still to parental consent.
2. Insane or demented persons- (Epso jure) insanity must exist at the time of contracting unless proved otherwise, a person is
presumed sane. 3. Deaf-mutes- persons who are deaf and dumb.

HOWEVER deaf- mutes who can able to write can give consent.

Parents is an EPSO JURE- the guardian of their children.

Article 1328
Contracts entered into during a lucid intervals are valid. Contracts agreed to in a state of drunkenness or during a hypnotic spell
are voidable.

LUCID INTERVAL- a temporary period of sanity.

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. (1264)

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
(2) It is free and voluntary
(3) It is conscious or spontaneous
GROUNDS OF ANNULLMENT OF VOIDABLE CONTRACTS/ VICES OF CONSENT

1. Error or mistake
2. Violence or force
3. Intimidation or threat or duress
4. Undue influence
5. Fraud or deceit

Article 1331
In order that mistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or to
those conditions which have principally moved one or both parties to enter into the contract. Mistakes as to the identity of
qualifications of one of the parties will vitiate consent only when such identity or qualification have been the principal cause of a
contracts.

Mistake or error- is the false notion of a thing or a fact material to the contracts.

MISTAKES OF FACTS WHICH DOES NOT VITIATE A CONTRACT.

1. Error as regard the incidents of a thing or accidentalqualities.

2. Mistakes as to quantity or amount
3. Error as regards to the motives of the contract
4. Mistake as regard the identity or qualifications of a party
5. Error which could have been avoided

ARTICLE 1332
When one of the contracting parties is unable to read, or if the contracts is in language not understood by him, and mistake or
fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former.
(Read and understand the contract.)

MISTAKES OF LAW is that which arises from the ignorance of some provision of law, or from an erroneous interpretation of
its meaning or from the erroneous conclusion as to the legal effect of an agreement, on the part of the parties.

EFFECT OF MISTAKES OF LAW- “ignorance of the law excuses no one from compliance therewith”.

Article 1332
When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is
alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former. (n)

Article 1333
There is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object of the contract. (n)

Article 1334
Mutual error as to the legal effect of an agreement when the real purpose of the parties is frustrated, may vitiate consent. (n)

ARTICLE 1335
There is violence when in order to wrest consent, serious or irresistible force is employed.

There is intimidation when one of the contracting parties is compelled by a reason able and well-grounded fear an imminent and
grave evil upon his person or property, or upon the person or property of his spouse, descendants or ascendants, to give his
consent.

To determine the degree of the intimidation, the age, sex and condition of the person shall be borne in mind.

“Violence and intimidation will vitiate the contract”

“Violence and intimidation shall annul the obligation, although it may have been employed by a third person who did not take
part in the contract.”

Article 1336
Violence or intimidation shall annul the obligation, although it may have been employed by a third person who did not take part
in the contract. (1268)
UNDUE INFLUENCE or the grounds to vitiate a contracts- is the influence of a kind that so overpowers the min of a party as
to prevent him from acting understandingly and voluntarily to do what he would have done of he had been left to exercise freely
his own judgment and discretion. (Article 1337)

ARTICLE 1338
There is fraud when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into
a contract which, without them, he would not have agreed to. (form of daya through insidious words that cause a person to
believe into it.)

CAUSAL FRAUD- is the fraud committed by one party before or the time of the celebration of the contract to secure the consent
of the other. It may be committed through insidious words or machinations or by concealment.

ARTICLE 1339
Failure to disclose facts, when there is a duty to reveal them, as when the parties are bound by confidential relations, constitutes
fraud.

CONCEALMENT- false representation.

ARTICLE 1340
The usual exaggerations in trade, when the other party had an opportunity to know the facts, are not in themselves fraudulent.

ARTICLE 1341
A mere expression of an opinion not signify fraud unless made by an expert and other party has relied on the former’s special
knowledge.

ARTICLE 1342
Misrepresentation by a third person does not vitiate consent, unless such misrepresentation has created substantial mistakes and
the same is mutual.

ARTICLE 1343
Misrepresentation made in good faith is not fraudulent but may constitute error.

ARTICLE 1345
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 FRAUD IN MAKING OF CONTRACT

1. CAUSAL FRAUD- which is ground for the annulment of a contract, although it may also give rise to an action for
damages.

REQUISITES OF CAUSAL FRAUD

 It should be serious
 It should not have been employed by both contracting parties.
 It should not have been known by the other contracting parties

2. INCIDENTAL FRAUD- which only renders the party who employs it liable for damages because the fraud was not the
principal inducement that led the other to give his consent.

SIMULATION OF A CONTRACT is the act of deliberately deceiving others, by feigning or pretending by agreement, the
appearance of a contract which is either non-existent or concealed.

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 law, morals, good customs, public order or public policy binds the parties to their real
agreement. (n)

KINDS OF SIMULATION

1. ABSOLUTE SIMULATION- when the contracts does not really exist and the parties do not intend to be bound at all.
2. RELATIVE SIMULATION- when the contract entered into by the parties is different from their true agreement. The
parties are bound by their real agreement. In other words there is a concealment of the real amounts.