Article 1305

March 26, 2016

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.
(125a)

Ang kontrata ay pagpupulong ng kaisipan sa pagitan ng dalawang tao na kung saan

ang isa ay binibigkis ang kanyang sarili sa isa na magbigay o maggawad ng serbisyo.

Discussion:

Dean Ernesto Pineda, in his book, suggested a definition of a contract:

It is a meeting of the minds between two or more parties, whereby one party binds
himself with respect to the other, or where both parties bind themselves reciprocally,
in favor of one another, to fulfill a prestation to give, to do or not to do.
Three stages in making a contract:

1. Conception or Generation – This is the stage where the parties begin their intial
negotiation, bargaining for the formation of the contract and ending at the moment of
agreement.  It is also called the preparatory stage.
2. Perfection or Birth – This is the stage where the contract is said to have been born,
where the parties had a meeting of minds as to the object, cause or consideration and
other terms and conditions of the contract.  It has passed the preparatory state, thus
giving birth to the contract.
3. Consummation or Fulfillment – This is the last stage which consists the performance or
fulfillment by the parties of their obligations under the terms of the perfected contract.
Consummation means the accomplishment, death or termination of the contract where
the parties cease to be contractually related to one another.

Classifications of contracts

1. By name

a.  Nominate – those which have been given particular names (i.e. sale, barter,
mortgage, lease, carriage, agency, etc.)

b.  Innominate – those which have not been given a particular name and not regulated
by special provision of law.  Roman law has classified them as  follows:   Do ut des (I
give that you may give); Do ut facias (I give that you may do); Facio ut facias (I do that
you may do); Facio ut des (I do that you may give).

     2.  By subject matter

a.  Contracts covering things (i.e. contract of sale, deposit, pledge)

b. Contracts covering services (i.e. contract of carriage)

c. Contracts covering tranmissible rights or credits (i.e. contract of usufruct, assignment

of credits.)

      3.  By formation or perfection

 a. Consensual – perfected by mere consent (i.e. sale)

 b. Real – cannot be perfected without delivery (i.e. commodatum, depositum, pledge,
loan)

 c. Formal or Solemn- cannot be perfected without compliance with the special
formalities or solemnities required by law, otherwise they are void  (i.e.   donations,
mortgages of real property)

      4.  By  Cause       

 a. Onerous – contracts that provide for exchange of valuable considerations (i.e. sale
where the seller delivers the object of the contract and the buyer pays  the purchase
price)

 b. Gratuitous – contracts where one of the parties gives something or renders service
to the other without receiving any equivalent or compensation (i.e.  pure donation,
commodatum).  It is also called the lucrative contract because it provides gain to the
other party for free.

 c. Remunerative – contracts where one party gives something or renders service to
another in consideration of a previous or past deeds of the other.

      5.  By vinculum produced or according to the party or parties obligated

 a. Unilateral – contracts where only one of the parties is bound to fulfill and obligation
(i.e. commodatum, promissory note)

 b. Bilateral – contracts where both parties have reciprocally bound themselves to fulfill
their obligations in favor of the other (i.e. sale) Also known as synalagmatic contracts.

      6.  By certainty or fulfillment

 a. Commutative – contracts where the contracting parties contemplate the assured
fulfillment of the terms and conditions of their agreement, and there is no risk to
anticipate (i.e. contracts of mortgage and pledge)

 b.  Aleatory – contracts where the fulfillment is dependent on chance or event which
may not happen within the period stipulated, and the loss contempated may not
happen.  (i.e. insurance contract)

      7.  By completion or performance

  a. Exceuted – contracts which are already completed when formally entered into (i.e.
sale of a thing)

  b. Executory – contracts where the prestation promised by the parties have yet to be
fulfilled at some future date (i.e. a unilateral promise to sell which has been accepted,
but the sale is not yet executed)

      8.  By dependence of one contract on the other

  a. Principal – contracts which can exist by themselves alone without depending on

another (i.e. sale, lease, deposit, commodatum)

  b. Accessory – contracts which cannot exist alone but mut depend on another contract
(i.e. mortgage – depends on the contract of loan)

  c. Preparatory – contracts entered into for the creation of another contract  (i.e.
agency, the principal gives authority to the agent through a Special Power of Attorney)

      9.  By the actual number of person/s participating in the contract

  a.  Ordinary – contracts where two (or more) parties are represented by different
persons (i.e. sale – there is a seller and a buyer)
  b.  Auto-contracts – contracts where the two parties are represented by the one and
the same person, who represents and acts in different capacities  (i.e. agent
representing his principal who authorized him to borrow money)

     10.  By the dignity accorded by law

   a.  Institutional – contracts which are given special digniy by law (i.e. contract of
marriage which is considered a “social inviolable institution)

   b. Ordinary – contracts which are not institutional (i.e. sale, lease, deposit, etc)

     11.  By freedom of bargain

   a.  Ordinary – contracts where both parties are palce on equal footing in the
negotiation and perfection stages.

   b.  Contracts of adhesion – contracts where one of the parties had drafted the contract
for the other party to accept or not to accept (i.e. insurance contract which is already
printed)

      12.  By the evidence needed to prove their existence

   a.  Contracts covered by the Statute of Frauds – requires written evidence, note or
memorandum to prove their existence

   b.  Contracts which be be proven by oral or parol evidence  (i.e. lease contract for one
year)

      13.  By the personality of the parties

    a.  Personal – contracts where the person of the party is essential to the existence of
teh contract (i.e. contract for life insurance where the contract shall cease to exist upon
the death of the insured)

    b.  Impersonal – contracts where the person/s of a part or parties are not essential to
the continuity of the contract (i.e. contract of lease – the heirs may continue the
contract)

      14.  By manner the consent is given

     a.  Express – contracts where the consent of the parties is given expressly in writing
or verbally

     b.  Implied – contracts where the consent of the parties is not given expressly but is
deducible from the conduct or acts of the parties (i.e. implied agency when the principal
fails to repudiate the acts of the person on his behalf)

     c.  Presumed – contracts where the consent was not given by the parties but is
presumed or provided by the law itself, to prevent unjust enrichment on the part of one
party to the prejudice of the other, such as quasi-contracts

Case Illustration: Ong Yiu vs. CA (91 SCRA 223)

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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…
March 25, 2016
In "Chapter 2: Essential Requisites of Contracts"

Article 1407
In a contract where both parties are incapable of giving consent, express or implied ratification by
the parent, or guardian, as the case may be, of one of the contracting parties shall give the contract
the same effect as if only one of them were incapacitated. If ratification is made…
March 25, 2016
In "Chapter 8: Unenforceable Contracts"

Article 1159
Obligations arising from contracts have the force of law between the contracting parties and should
be complied with in good faith. Ang mga obligasyon na nag simula sa mga kontrata at nagkaroon ng
bisa sa batas sa pagitan ng mga nagkasundong partido ay dapat gampanan ito ng may mabuting
kalooban.…
March 26, 2016
In "I. Obligations"

Posted in Chapter 1: General Provisions of Contracts, Daisy Cayos, II. Contracts

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 Obligations
o Chapter 1: General Provisions of Obligations
o Chapter 2: Nature and Effect of Obligations
o Chapter 3: Different Kinds of Obligations
 Section 1: Pure and Conditional Obligations
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o Chapter 4: Extinguishment of Obligations
 Section 1: Payment or Performance
 Subsection 1: Application of Payments
 Subsection 2: Payment by Cession
 Subsection 3: Tender of Payment and Consignation
 Section 2: Loss of the Thing Due
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  Section 4: Confusion or Merger of Rights
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 Section 1: Consent
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o Chapter 4: Reformation of Instruments
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OBLIGATIONS AND CONTRACTS
Laguna State Polytechnic University. Second Semester. Academic Year 2015-2016
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