CIVIL CODE OF THE PHILIPPINES

Contract 1) onerous — where there is an interchange of equivalent valuable

consideration
Elements of a Contract
2) gratuitous or lucrative — this is FREE, thus one party receives no
(a) essential elements — (without them a contract cannot exist)
equivalent prestation except a feeling that one has been generous or
(Examples: consent, subject matter, cause or consideration)
liberal
(NOTE: In some contracts, form is also essential; still in others,
3) remunerative — (one where one prestation is given for a benefi t or
delivery is likewise essential.)
service that had been rendered PREVIOUSLY)
(b) natural elements — (those found in certain contracts, and
(c) According to importance or dependence of one upon another:
presumed to exist, unless the contrary has been stipulated) (Example:
warranty against eviction and against hidden defects in the contract of 1) principal (here, the contract may stand alone by itself; examples:
sale) sales, lease)

(c) accidental elements — (These are the various particular 2) accessory (this depends for its existence upon another contract;
stipulations that may be agreed upon by the contracting parties in a example: mortgage) (Here the principal contract is one of LOAN.)
contract. They are called accidental, because they may be present or
3) preparatory (here, the parties do not consider the contract as an
absent, depending upon whether or not the parties have agreed upon
end by itself, but as a means thru which future transaction or
them.) (Examples: the stipulation to pay credit; the stipulation to pay
contracts may be made; examples: agency, partnership)
interest; the designation of the particular place for delivery or
payment.) (d) According to the parties obligated:
(3) Classification of Contracts 1) unilateral [where only one of the parties has an obligation;
example: commodatum (like the borrowing of a bicycle)]
(a) According to perfection or formation
(NOTE: Even here, the giving of consent must be mutual or bilateral.)
1) consensual (perfected by mere consent; example — sale)
2) bilateral (or synalagmatic) (here, both parties are required to
2) real (perfected by delivery; examples — depositum, pledge,
render reciprocal prestations; example: sale)
commodatum). (Art. 1316, Civil Code).
(e) According to their name or designation:
3) formal or solemn (those where special formalities are essential
before the contract may be perfected) (Example: A donation inter 1) nominate — (here the contract is given a particular or special
vivos of real property requires for its validity a public instrument.) name; examples: commodatum, partnership, sale, agency, deposit)
(b) According to cause or equivalence of the value of prestations:

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2) innominate — (also called contratos innominados) those not given
any special name; example: “do ut des,” meaning “I give that you may
give”)
(f) According to the risk of fulfi llment:
1) commutative — (here the parties contemplate a real fulfi llment;
therefore, equivalent values are given; examples: sale, lease)
2) aleatory — (here the fulfi llment is dependent upon chance; thus
the values vary because of the risk or chance; example: an insurance
contract)
(g) According to the time of performance or fulfi llment:
1) executed — (one completed at the time the contract is entered
into, that is, the obligations are complied with at this time; example: a
sale of property which has already been delivered, and which has
already been paid for)
(NOTE: In the case of personal property, this results in tangible
property itself, a “chose in possession.”)
2) executory — (one where the prestations are to be complied with at
some future time; example: a perfected sale, where the property has
not yet been delivered, and where the price has not yet been given)
(In the meantime, there is only a “chose in action.”)
(NOTE: If the whole or a part of the property or the price has been
delivered, the contract may be said to be “partially executed.”)
(h) According to subject matter:
1) contracts involving things (like SALE)
2) contracts involving rights or credits (provided these are
transmissible, like a contract of usufruct, or assignment of credits)
3) contracts involving services [like agency, lease of services, a
contract of common carriage, a contract of carriage (simple carriage)]
(i) According to obligations imposed and regarded by the law:
1) ordinary — (like sale; the law considers this as an ordinary contract)
2) institutional — [like the contract of marriage; the law considers
marriage also as an “inviolable social institution.” (Art. 52, Civil Code).]
(NOTE: Under Art. 1700 of the Civil Code, the law says that “the
relations between CAPITAL and LABOR are not merely contractual.
They are so impressed with public interest that labor contracts must
yield to the common good.”)
(j) According to the evidence required for its proof:
1) those requiring merely oral or parol evidence
2) those requiring written proof (example: contracts enumerated
under the Statute of Frauds)
(k) According to the number of persons actually and physically
entering into the contracts:
1) ordinary — (where two parties are represented by different
persons; example: sale)
2) auto-contracts — (where only one person represents two opposite
parties, but in different capacities; example: an agent representing his
principal sells a specifi c car to himself, as a buyer)
[NOTE: Such a contract is valid, for the law does not expressly prohibit
same except in certain specifi ed cases. Thus, an agent who has been
authorized to lend money from his principal cannot borrow it without
the consent of the principal; but if he has been empowered to borrow
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money, he may himself be the lender at the current rate of interest.

(Art. 1890, Civil Code).]

(l) According to the number of persons who participated in the

drafting of the contract:

1) ordinary — (like an ordinary sale)

2) a contract of adhesion (like one prepared by a real estate company

for the sale of real estate; or one prepared by an insurance company)
(Here, the buyer, or the person interested in being insured, signifi es
his consent by signing the contract. If he does not desire to enter into
the contract, it is his privilege to refuse.)

(m) According to the nature of the contract:

1) personal

2) impersonal

(4) Stages of a Contract

(a) Preparation (or Conception or “Generacion”) — Here the parties

are progressing with their negotiations; they have not yet arrived at
any defi nite agreement, although there may have been a preliminary
offer and bargaining.

(b) Perfection (or birth) — Here the parties have at long last came to a
defi nite agreement, the elements of defi nite subject matter and valid
cause have been accepted by mutual consent.

(c) Consummation (or death or termination) — Here the terms of the

contract are performed, and the contract may be said to have been
fully executed.

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