CONTRACTS GRATUITOUS

GENERAL PROVISIONS NO EQUIVALENT CONSIDERATION

1305 “A contract is a meeting of minds between two persons (DONATION, COMMODATUM, REMISSION)
whereby one binds himself, with respect to the other, to give
something or to render some service.” CLASSIFICATION OF CONTRACTS: FORM

STAGES OF A CONTRACT INFORMAL OR COMMON

PREPARATION NO PARTICULAR FORM

NEGOTIATIONS ARE IN PROGRESS FORMAL OR SOLEMN

PERFECTION SPECIAL AS REQUIRES A PARTICULAR FORM

 BIRTH OF CONTRACT CLASSIFICATION OF CONTRACTS: RISK

 MEETING OF THE MINDS, OFFER, AND ACCEPTANCE COMMUTATIVE

PERFORMANCE WHEN THE UNDERTAKING OF ONE PARTY IS CONSIDERED THE

EQUIVALENT OF THAT OF THE OTHER
 EXECUTION
(SALE OR LEASE)
 CONSUMMATION
ALEATORY
 TERMINATION
WHEN IT DEPENDS UPON AN UNCERTAIN EVENT OR CONTIGENCY
CLASSIFICATION OF CONTRACTS: NAME OR DESIGNATION BOTH AS TO BENEFIT OR LOSS

NOMINATE (INSURANCE)

HAS INDIVIDUALITY, HAS NAME UNDER THE LAW COMMUTATIVE =FULFILLMENT IS PREDETERMINED

(LOAN, SALE, BARTER) ALEATORY= FULFILLMENT IS DEPENDENT UPON CHANCE

INNOMINATE CLASSIFICATION OF CONTRACTS: LIABILITY

LACKS INDIVIDUALITY, WITHOUT ANY NAME UNDER THE LAW UNILATERAL

(Do ut des = I give that you may give) WHEN IT CREATES AN OBLIGATION ON THE PART OF ONLY ONE OF
THE PARTIES
CLASSIFICATION OF CONTRACTS: PERFECTION
(COMMODATUM, GRATUITOUS DEPOSIT)
CONSENSUAL
BILATERAL OR RECIPROCAL
PERFECTED BY MERE AGREEMENT OR CONSENT
WHEN IT GIVES RISE TO RECIPROCAL OBLIGATIONS FOR BOTH
REAL PARTIES

REQUIRES CONSENT OF PARTIES AND DELIVERY OF THE OBJECT (SALE, BARTER)

^ COC PLUS DELIVERY CLASSIFICATION OF CONTRACTS: STATUS

CLASSIFICATION OF CONTRACTS: CAUSE EXECUTORY

ONEROUS WHEN IT HAS NOT YET BEEN COMPLETELY PERFORMED BY BOTH

PARTIES
THERE IS AN EXHANGE OF VALUABLE CONSIDERATION
EXECUTED
(SALE, LEASE, BARTER)
WHEN IT HAS BEEN FULLY AND SATISFACTORILY CARRIED OUT BY
REMUNERATORY OR REMUNERATIVE BOTH PARTIES

SERVICE OR BENEFIT

REMUNERATED OR PAID
CLASSIFICATION OF CONTRACTS: DEGREE OF DEPENDENCE CHARACTERISTICS OF CONTRACTS

PREPARATORY 1. MUTUALITY OF CONTRACTS

WHEN IT IS ENTERED INTO AS MEANS TO AN END
(PARTNERSHIP)
ACCESSORY
WHEN IT IS DEPENDENT UPON ANOTHER CONTRACT IT SECURES OR
GUARANTEES FOR ITS EXISTENCE AND VALIDITY (MORTGAGE AND
PLEDGE)
PRINCIPAL
WHENIT DOES NOT DEPEND FOR ITS EXISTENCE AND VALIDITY UPON
ANOTHER CONTRACTS BUT IT IS INDISPENSABLE CONDITION FOR
THE EXISTENCE OF AN ACCESSORY CONTRACT
(SALE OR LEASE)
PREPARATORY – MEANS BY WHICH OTHER CONTRACTS MAY BE
ENTERED INTO
PRINCIPAL - CAN STAND BY ITSELF / INDEPENDENT
ACCESSORY – DEPENDS UPON ANOTHER
CLASSIFICATION OF CONTRACTS: DIVISIBILITY
INDIVISIBLE
WHEN EACH PART OF THE CONTRACT IS DEPENDENT UPON THE
OTHER PARTS FOR SATISFACTORY PERFORMANCE (SALE OF DINING
TABLE AND 4 MATCHING CHAIRS)
DIVISIBLE
WHEN ONE PART OF THE CONTRACT MAY BE SATISFACTORY
PERFORMED INDEPENDENTLY OF THE OTHER PARTS (SALE OF
ROCKING CHAIR AND A PAIR OF SHOES)
CLASSIFICATION OF CONTRACTS: PURPOSE
TRANSFER OF OWNERSHIP
- BIND BOTH CONTRACTING PARTIES
2. AUTONOMY OR FREEDOM
- LIBERTY OR FREEDOM TO STIPULATE
3. CONSENSUALITY
- PERFECTED BY MERE CONTRACT
4. RELATIVITY OF CONTRACT
- TAKE EFFECT ONLY BETWEEN THE PARTIES, THEIR
ASSIGNEES AND HEIRS, EXCEPT WHERE THE RIGHTS AND
OBLIGATIONS ARE NOT TRANSMISSIBLE BY LAW,
STIPULATIONS, OR NATURE
5. OBLIGATORY FORCE OR OBLIGATORINESS
- COMPLIANCE IN GOOD FAITH
CHARACTERISTICS OF CONTRACTS: MUTUALITY
ARTICLES 1308-1310, 1473
1308: “The contract must bind both contracting parties; its validity
or compliance cannot be left to the will of one of them”
 POTESTATIVE CONDITION (DISCRETIONARY OF ONE) IS
VOID
 CONTRACTS ARE AGREED UPON BY MUTUAL CONSENT;
COMPLIANCE OR VALIDITY MUST ALSO BE MUTUAL
 THERE ARE INSTANCES WHEN EXTINGUISHMENT OF AN
OBLIGATION ARISING FROM CONTRACT CAN BE
TERMINATED AS LONG AS SUCH TERMINATION IS MUTUAL
 A PARTY CANNOT UNILATERALLY GIVE UP OR MODIFY
WHAT IS INCUMBENT UPON HIM UNDER THE CONTRACT
CHARACTERISTICS OF CONTRACTS: AUTONOMY
1306: “The contracting parties may establish such stipulations,
clauses, terms and conditions as they may deem convenient,
provided they are not contrary to law, morals, good customs,
public order, or public policy.”
Morals deal with norms of good and right conduct evolved in a
community.

(SALE) Customs consist of habits and practices which through long usage
have been followed and enforced by society or some part of it as
RENDITION OF SERVICE binding rules of conduct.

(AGENCY) Public order refers principally to public safety although it has been
considered to mean also the public weal.
CONVEYANCE OF USE
con. AUTONOMY
(COMMODATUM)
GENERAL RULE: FREEDOM TO CONTRACT (ART 1306)
CLASSIFICATION OF CONTRACTS: OBLIGATORY FORCE
EXCEPTIONS:
1. VALID
2. RESCISSIBLE (1) WHEN INEQUITABLE OR UNJUST (ARICLE 1310)
3. VOIDABLE
4. UNFORCEABLE (2) SPECIAL DISQUALIFICATIONS (ART.87 FAMILY CODE,
5. VOID OR INEXISTENT ARTICLES 1490-91 AND 1782 OF THE CIVIL CODE)

(3) CONTRARY TO LAW, MORALS, GOOD CUSTOMS, PUBLIC

ORDER, AND PUBLIC POLICY
-PACTUM LEONINA (1799) STIPULATION EXCLUDING PARTNER/S
FROM SHARE TO PROFIT/LOSS IS VOID
CHARACTERISTICS OF CONTRACTS: CONSENSUALITY
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 in keeping with good
faith, usage and law.”
CONTRACTS ARE PERFECTED BY THE MEETING OF THE MINDS OF
THE CONTRACTING PARTIES.
THEY ARE OBLIGATORY IN ANY FORM (ORAL OR WRITTEN) AS LONG
AS THE PARTIES HAVE AGREED TO UNDERTAKE THEIR OBLIGATIONS
UNDER THE CONTRACT
CHARACTERISTICS OF CONTRACTS: RELATIVITY
1311: “Contracts take effect only between the parties, their assigns
and heirs, except in case where the rights and obligations arising
from the contract are not transmissible by their nature, or by
stipulation or by provision of law. The heir is not liable beyond the
value of the property he received from the decedent.
If a contract should contain some stipulation in favor of a third
person, he may demand its fulfillment provided he communicated
his acceptance to the obligor before its revocation. A mere
incidental benefit or interest of a person is not sufficient. The
contracting parties must have clearly and deliberately conferred a
favor upon a third person.”
PRIVITY OF CONTRACTS
- NOT ALL PEOPLE CAN BE HARMED OR BENEFITED BY A CONTRACT;
ONLY THE PARTIES ARE AFFECTED
- WHEN RIGHTS UNDER A CONTRACT ARE ASSIGNABLE AND
ASSIGNED, ASSIGNEE MAY BE HARMED OR AFFECTED; SAME GOES
FOR HEIRS OF A CONTRACTING PARTY WHO DIED
con. RELATIVITY (1311)
GENERAL RULE: CONTRACT PRODUCE EFFECT BETWEEN PARTIES
WHO EXECUTE IT
EXCEPTIONS:
(1) PARTY EXECUTING THE CONTRACT IS AN AGENT,
HIS PRINCIPAL IS THE REAL PARTY IN INTEREST
(2) RIGHTS AND OBLIGATIONS MAY BE TRANSMITTED TO
HEIRS AND ASSIGNEES
con. RELATIVITY (1311 & 1317)
GENERAL RULE: NO ONE MAY CONTRACT IN THE NAME OF
ANOTHER WITHOUT BEING AUTHORIZED BY THE LATTER, OR UNLESS
HE HAS BY LAW A RIGHT TO REPRESENT HIM
EXCEPTIONS:
(1) INTRANSMISSIBLE CONTRACT
(2) STIPULATION POUR AUTRUI
RES INTER ALIOS ACTA OR A CONTRACT CAN’T ADVERSELY AFFECT
THE RIGHTS OF ONE WHO IS NOT A PARTY TO THE CONTRACT
INTRANSMISSIBLE - PURELY PERSONAL (EX. PARTNERSHIP).
con. RELATIVITY, RE: CLASSES OF STIPULATION POUR AUTRUI
1. STIPULATION IS INTENDED FOR THE SOLE BENEFIT OF
SUCH PERSON. THIS CORRESPONDS ALMOST ALWAYS TO
THE JURIDICAL CONCEPTION OF A GIFT, IT BEING
NECESSARY IN SUCH CASE TO APPLY THE RULES RELATING
TO DONATIONS IN SO FAR AS THE FORM OF ACCEPTANCE
IS CONCERNED;
2. OBLIGATION IS DUE FROM THE PROMISEE TO THE THIRD
PERSON WHICH THE FORMER SEEKS TO DISCHARGE BY
MEANS OF SUCH STIPULATION,
con. RELATIVITY (1311, 2)RE: REQUISITIES OF POUR AUTRUI
1. STIPULATION MUST BE A PART
OF THE CONTRACT
2. CONTRACTING PARTIES MUST HAVE CLEARLY AND
DELIBERATELY CONFERRED A FAVOR UPON A THIRD PARTY
3. FAVORABLE STIPULATION SHOULD NOT BE CONDITIONED
OR COMPENSATED BY ANY KIND OF OBLIGATION
4. THIRD PERSON MUST HAVE COMMUNICATIED HIS
ACCEPTANCE BEFORE ITS REVOCATION
5. NEITHER OF THE CONTRACTING PARTIES IS A
REPRESENTATIVE OR AGENT OF THE THIRD PERSON
CHARACTERISTICS OF CONTRACTS: OBLIGATORY FORCE
1308: “The contract must bind both contracting parties…”
1159: “Obligations arising from contracts have the force of law
between the contracting parties and should be complied with in
good faith.”
BEING AN AGREEMENT IT NEEDS TO BE COMPLIED AS THEY
UNDERTAKE (ORAL/WRITTEN) THEIR OBLIGATION
ESSENTIAL REQUISITES OF CONTRACTS
CHAPTER 2
1318“There is no contract unless the following requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established”
KINDS OF ELEMENTS OF A CONTRACT
NATURAL ELEMENT
• DERIVED FROM THE NATURE OF THE CONTRACT AND
ORDINALLY ACCOMPANY THE SAME
• ALTHOUGH CAN BE EXCLUDED, IT IS PRESUMED BY LAW
ACCIDENTAL ELEMENT
• IT EXISTS ONLY WHEN THE PARTIES EXPRESSLY AND
PARTICULARLY STIPULATED
• IT IS INCIDENTAL
ESSENTIAL ELEMENTS OF CONTRACT
1. CONSENT
2. OBJECT
3. CAUSE/ CONSIDERATION
ESSENTIAL REQUISITESOF CONTRACTS:
CONSENT
CONSENT
“MANIFESTATION OF THE MEETING OF THE OFFER AND
ACCEPTANCE UPON THE THING AND THE CAUSE”
CONSENT IS THE CONFORMITY OF WILLS AND WITH RESPECT TO
CONTRACTS, IT IS THE AGREEMENT OF THE WILL OF ONE
CONTRACTING PARTY WITH THAT OF ANOTHER OR OTHERS, UPON
THE OBJECT AND TERMS OF THE CONTRACT.
CONSENT: OFFER
OFFER IS A PROPOSAL MADE BY ONE PARTY (OFFERER) TO ANOTHER
TO ENTER INTO A CONTRACT.
IT IS MORE THAN AN EXPRESSION OF DESIRE OR HOPE.
IT IS REALLY A PROMISE TO ACT OR TO REFRAIN FROM ACTING ON
CONDITION THAT THE TERMS THEREOF ARE ACCEPTED
BY THE PERSON (OFFEREE) TO WHOM IT IS MADE
CONSENT: RULES ON OFFER
- THE OFFER MUST BE CERTAIN OR DEFINITE AND
SERIOUSLY INTENDED
- AN OFFER BECOMES INEFFECTIVE UPON DEATH,
INSOLVENCY, CIVIL INTERDICTION, AND INSANITY
- WHEN THE OFFEROR HAS ALLOWED THE OFFEREE A
CERTAIN PERIOD TO ACCEPT, THE OFFER MAY BE
WITHDRAWN AT ANY TIME BEFORE ACCEPTANCE BY
COMMUNICATING SUCH WITHDRAWAL, EXCEPT WHEN
THE OPTION IS FOUNDED UPON A CONSIDERATION AS
SOMETHING PAID OR PROMISED
CONSENT: ACCEPTANCE
ACCEPTANCE IS THE MANIFESTATION BY THE OFFEREE OF HIS
ASSENT TO THE TERMS OF THE OFFER.
WITHOUT ACCEPTANCE, THERE CAN BE NO MEETING OF THE MINDS
BETWEEN THE PARTIES.
A MERE OFFER PRODUCES NO OBLIGATION
WITH REGARD TO CONTRACTS BETWEEN ABSENT PERSONS, THE
ACCEPTANCE MAY BE TRANSMITTED BY ANY MEANS WHICH THE
OFFERER HAS AUTHORIZED THE OFFEREE TO USE.
CONSENT: RULES ON ACCEPTANCE
ACCEPTANCE MUST BE CLEAR AND ABSOLUTE
IF THE ACCEPTANCE IS QUALIFIED, IT CONSTITUTES A
COUNTEROFFER
IF THE OFFER FIXES THE TIME, PLACE, AND MANNER OF
ACCEPTANCE, ALL MUST BE COMPLIED WITH (1321)
ACCEPTANCE MAY BE EXPRESS OR IMPLIED
EXPRESS (ORAL OR WRITTEN) -1320
IMPLIED (THROUGH ACTIONS OR INFERRED FROM THE CONDUCT OF
THE PARTIES) -1320 QUALIFIED - 1319
ACCEPTANCE MADE BY LETTER OR TELEGRAM DOES NOT BIND THE
OFFERER
EXCEPT FROM THE TIME IT CAME TO HIS KNOWLEDGE
AN OFFFER MADE THROUGH AN AGENT IS ACCEPTED FROM THE
TIME IT IS COMMUNICATED TO HIM (1322)
CONSENT: ACCEPTANCE AND OFFER FOR ADVERTISEMENTS
ARTICLE 1325. UNLESS IT APPEARS OTHERWISE, BUSINESS
ADVERTISEMENTS OF THINGS FOR SALE ARE NOT DEFINITE OFFERS,
BUT MERE INVITATIONS TO MAKE AN OFFER.
ARTICLE 1326. ADVERTISEMENTS FOR BIDDERS ARE SIMPLY
INVITATIONS TO MAKE PROPOSALS, AND THE ADVERTISER IS NOT
BOUND TO ACCEPT THE HIGHEST OR LOWEST BIDDER, UNLESS THE
CONTRARY APPEARS.
CONSENT: OPTION
OPTION PERIOD
PERIOD GIVEN WITHIN WHICH THE OFFEREE MUST DECIDE
WHETHER OR NOT TO ENTER INTO THE PRINCIPAL CONTRACT.
OPTION CONTRACT
PREPARATORY CONTRACT GIVING A PERSON FOR A CONSIDERATION
A CERTAIN PERIOD AND UNDER SPECIFIED CONDITIONS WITHIN
WHICH TO ACCEPT THE OFFER OF THE OFFERER
OPTION MONEY
MONEY PAID OR PROMISED TO BE PAID AS A DISTINCT
CONSIDERATION FOR AN OPTION CONTRACT
OPTION - PRIVILEGE ITSELF GIVEN TO THE OFFEREE TO ACCEPT AN
OFFER WITHIN A CERTAIN PERIOD.
EARNEST MONEY IS A PARTIAL PAYMENT OF THE PURCHASE PRICE
AND IS CONSIDERED AS PROOF OF THE PERFECTION OF THE
CONTRACT.
RULES ON CONSENT
1. INCAPACITATED TO GIVE CONSENT
2. STATE OF DRUKENESS & HYPNOTIC SPELL
3. 1330: VICES OF CONSENT (VIMFU)
ROC: INCOMPETENTS AND MAY BE PLACE IN GUARDIANSHIP
1. PERSONS SUFFERING THE ACCESSORY PENALTY CIVIL
INTERDICTION (ART 34,RPC)
2. HOSPITALIZED LEPERS
3. PRODIGALS (SPENDTHRIFTS)
4. DEAF AND DUMB WHO ARE UNABLE TO READ AND WRITE
5. THOSE WHOSE ARE OF UNSOUND MIND
6. THOSE WHO, BY REASON OF AGE, DISEASE, WEAK MIND,
AND OTHER SIMILAR CAUSES, CANNOT WITHOUT OUTSIDE
AID, TAKE CARE OF THEMSELVES AND MANAGE THEIR
PROPERTY
VICES: MISTAKE OR ERROR
- IT IS THE FALSE NOTION OF A THING OR A FACT
MATERIAL TO THE CONTRACT
- MUST REFERS TO THE SUBSTANCE OF THE OBJECT OF THE
CONTRACT (EXAMPLE: NATURE AND CONDITION)
- QUALIFICATIONS OF THE OTHER PARTY IF SUCH
QUALIFICATION IS THE PRINCIPAL CAUSE OF CONTRACT
- TEST OF THE ERROR IS ITS UNFLUENCE UPON THE PARTY:
IF THE PARTY WOULD NOT HAVE ENTERED INTO THE
CONTRACT HAD HE KNOWN THE TRUE FACT, THEN THAT
ERROR INVALIDATES THE CONTRACT
VICES: MISTAKE OR ERROR: MISTAKE OF FACT
MISTAKE MAY VITIATE CONSENT (VOID), IF IT REFERS TO:
1. THE SUBSTANCE OF THE THING, WHICH IS THE OBJECT OF
THE CONTRACT
2. THOSE CONDITIONS WHICH HAVE PRINCIPALLY MOVED
ONE OR BOTH PARTIES TO ENTER INTO THE CONTRACT
3. THE IDENTITY OR QUALIFICATIONS OF ONE OF THE
PARTIES PROVIDED THE SAME WAS THE PRINCIPAL CAUSE
OF THE CONTRACT
VICES: MISTAKE OR ERROR: EFFECT OF MISTAKE
1. SIMPLE MISTAKE OF ACCOUNT OR CALCULATION DOES
NOT AVOID A CONTRACT; REMEDY IS CORRECTION
2. GROSS MISTAKE AS IT WAS CLEARLY APPARENT TO ONE
PARTY AND THEREFORE WOULD BE IMPOSSIBLE TO
ESCAPE HIS NOTICE; REMEDY IS CANCELLATION OR
RESCISSION
VICES: MISTAKE OR ERROR: ERROR OF LAW
GENERAL RULE:
IGNORANTIA LEGIS NEMINEM EXCUSAT
ARTICLE 3, NCC: IGNORANCE OF THE LAW EXCUSES NO ONE
FROM COMPLIANCE THEREWITH
REQUISITES:
(1) THE ERROR MUST BE MUTUAL
(2) IT MUST BE AS TO THE LEGAL EFFECT OF AN AGREEMENT
(3) IT MUST FRUSTRATE THE REAL PURPOSE OF THE PARTIES
MISTAKE OF LAW ARISES FROM AN IGNORANCE OF SOME
PROVISION OF LAW OR FROM AN ERRONOUES
INTERPRETATION OF ITS MEANING OR FROM ERRONOUES
CONCLUSION AS TO THE LEGAL EFFECT OF AN AGREEMENT
VICES: MISTAKE OR ERROR: ERROR OF LAW
GENERAL RULE: IGNORANTIA LEGIS NEMINEM EXCUSAT
ARTICLE 3, NCC: IGNORANCE OF THE LAW EXCUSES NO ONE
FROM COMPLIANCE THEREWITH
EXCEPTIONS:
(1) WHEN ONE PARTY IS UNABLE TO READ (ART 1332)
(2) INEXCUSABLE MISTAKE (ART 1333)
• VIOLENCE OR INTIMIDATION (ART 1335)
• FRAUD OR DOLO (ART 1338)
VICES OF CONSENT: VIOLENCE
1335: PRESENT WHEN SERIOUS OR IRRESISTIBLE FORCE IS
EMPLOYED TO OBTAIN CONSENT
REQUISITE #1
PHYSICAL FORCE MUST BE IRRESISTIBLE OR OF SUCH A DEGREE
THAT THE VICTIM HAS NO OTHER COURSE, UNDER THE
CIRCUMSTANCES, BUT TO SUBMIT
REQUISITE #2
FORCE IS DETERMINING CAUSE IN GIVING CONSENT
VICES: INTIMIDATION
1335: ONE OF THE CONTRACTING PARTIES IS COMPELLED BY A
REASONABLE AND WELL-GROUNDED FEAR OF AN IMMINENT
AND GRAVE EVIL UPON HIS PERSON/PROPERTY, OR UPON
PERSON/PROPERTY OF HIS SPOUSE, DESCENDANTS,OR
ASCENDANTS, FORCING HIM TO GIVE HIS CONSENT
INTIMIDATION IS INTERNAL; VIOLENCE IS EXTERNAL
FACTORS TO DETERMINE DEGREE OF INTIMIDATION: AGE, SEX,
AND CONDITION
REQUISITES OF INTIMIDATION
1. IT MUST BE THE DETERMINING CAUSE OR MUST HAVE
CAUSED THE CONSENT TO BE GIVEN
2. THREATENED ACT MUST BE UNLAWFUL OR UNJUST
3. THREAT IS REAL AND SERIOUS
4. IT PRODUCES REASONABLE AND WELL-GROUNDED FEAR
VICES: INTIMIDATION
- IF A CONTRACT IS SIGNED MERELY OUT OF
REVERENTIAL FEAR OR THE FEAR OF DISPLEASING A
PERSON TO WHOM RESPECT AND OBEDIENCE ARE
DUE, THE CONTRACT IS VALID
- THE THREAT OF A COURT ACTION AS A MEANS TO
ENFORCE A JUST OR LEGAL CLAIM IS JUSTIFIED AND
DOES NOT VITIATE CONSENT
- VIOLENCE OR INTIMIDATION MAY BE EMPLOYED BY A
THIRD PERSON WHO DID NOT TAKE PART IN THE
CONTRACT (1336)
REASON: REVERENTIAL FEAR DOES NOT DEPRIVE ONE OF
REASONABLE INFERENCE
VICES: UNDUE INFLUENCE
PERSON TAKES IMPROPER ADVANTAGE OF HIS POWER OVER
THE WILL OF ANOTHER, DEPRIVING THE LATTER OF A
REASONABLE FREEDOM OF CHOICE
WHETHER U.I. EXISTS, CONSIDER:
(1) CONFIDENTIAL, FAMILY, SPIRITUAL AND OTHER
RELATIONS BETWEEN THE PARTIES, AND
(2) PERSON UNDUE INFLUENCES WAS SUFFERING FROM
MENTAL WEAKNESS, IGNORANCE, FINANCIAL DISTRESS
IT IS INFLUENCE OF A KIND THAT SO OVERPOWERS THE MIND OF A
PARTY AS TO PREVENT HIM FROM ACTING UNDERSTANDINGLY AND
VOLUNTARILY TO DO WHAT HE WOULD HAVE DONE IF HE HAD BEEN
LEFT TO EXERCISE FREELY HIS OWN JUDGMENT AND DISCRETION.
VICES: FRAUD OR DOLO
EVERY KIND OF DECEPTION WHETHER INSIDIOUS
WORDS/MACHINATIONS, MANIPULATIONS, CONCEALMENT/
MISREPRESENTATION FOR THE PURPOSE OF LEADING ANOTHER
PARTY INTO ERROR AND THUS EXECUTE A PARTICULAR ACT
 FAILURE TO DISCLOSE FACTS; DUTY TO REVEAL THEM
(1339) IS FRAUD
 USUAL EXAGGERATIONS IN TRADE; OPPORTUNITY TO
KNOW THE FACTS; MERE EXPRESSION OF OPINION(1340-
1343) NOT FRAUDULENT ACTS
INSIDIOUS=DISHONEST
VICES OF CONSENT: KINDS OF FRAUD
DOLO CAUSANTE (1338)
- INSIDIOUS WORDS OR MACHINATIONS (1338)OR BY
CONCEALMENT (1339) INCLUDING ANY
MISREPRESENTATION IN WORDS OR ACTIONS DONE WITH
FRAUDULENT PURPOSE
- VOIDABLE AT THE TIME OF PERFECTION OF CONTRACT;
GROUND FOR ANNULMENT;
- DETERMINES/ESSENTIAL CAUSE OF CONTRACT
DOLO INCIDENTE (1344, 2)
PARTICULAR/ACCIDENT OF OBLIGATION;
DOES NOT ANNUL CONTRACT;
BUT OBLIGES THE PERSON EMPLOYING IT TO PAY DAMAGE (1344)
FRAUD BY CONCEALMENT – A NEGLECT OR FAILURE TO
COMMUNICATE OR DISCLOSE THAT WHICH A PARTY TO A
CONTRACT KNOWS AND OUGHT TO COMMUNICATE CONSTITUTES
CONCEALMENT
= MISREPRESENTATION OR FALSE REPRESENTATION
=INJURED PARTY IS ENTITLED TO RESCIND OR ANNUL THE
CONTRACT
MISREPRESENTATION BY THIRD PARTY (1342) IF IT HAS CREATED
SUBSTANTIAL MISTAKE, THE CONTRACT MAY BE ANNULLED
REQUISITES OF DOLO CAUSANTE
1. THERE MUST BE MISREPRESENTATION OR CONCEALMENT
OF A MATERIAL FACT WITH KNOWLEDGE OF ITS FALSITY
2. IT MUST BE MADE IN BAD FAITH OR WITH INTENT TO
DECEIVE THE OTHER PARTY WHO HAD NO KNOWELDGE OF
THE FRAUD
3. IT MUST BE ALLEGED AND PROVED BY CLEAR AND
CONVINCING EVIDENCE
4. IT MUST HAVE BEEN EMPLOYED BY ONE CONTRACTING
PARTY AGAINST THE OTHER
5. IT MUST HAVE INDUCED OTHER PARTY TO ENTER INTO
THE CONTRACT
6. IT MUST HAVE BEEN SERIOUS
7. IT MUST HAVE RESULTED IN DAMAGE/INJURY TO THE
PARTY SEEKING ANNULMENT (PECUNIARY)
1345-1346 SIMULATION OF A CONTRACT
ACT OF DELIBERATELY DECEIVING OTHERS, BY FEIGNING OR
PRETENDING BY AGREEMENT, THE APPEARANCE OF A CONTRACT
WHICH IS EITHER NON-EXISTENT OR CONCEALED
 THE PARTIES DO NOT REALLY WANT THE CONTRACT THEY
HAVE EXECUTED TO PRODUCE THE LEGAL EFFECTS
EXPRESSED BY ITS WORDINGS
 VICES OF DECLARATION
FEIGNING =FALSE APPEARANCE
KINDS OF SIMULATION OF A CONTRACT
ABSOLUTE
• DOES NOT REALLY EXIST AND THE PARTIES DO NOT
INTEND TO BE BOUND AT ALL.
• FICTITIOUS ARE INEXISTENT AND VOID AB INITIO
RELATIVE
• CONTRACT ENTERED INTO BY THE PARTIES IS DIFFERENT
FROM THEIR TRUE AGREEMENT
• PARTIES ARE YET BOUND
ABSOLUTE = ABOT KAMAY ANG PANGARAP, SELLING APEX TO
RELATIVE=DEED OF SALE PERO GINAWANG MORTGAGE
ESSENTIAL REQUISITESOF CONTRACTS:
OBJECT
1347“All things which are not outside the commerce of men,
including future things, may be the object of a contract. All rights
which are not intransmissible may also be the object of contracts…
All services which are not contrary to law, morals, good customs,
public order, or public policy may likewise be the object of a
contract.”
REQUISITES OF THINGS AS OBJECT
OBJECT
- IT IS THE SUBJECT MATTER OR OBLIGATION IN EVERY
CONTRACT.
- IT MAY REFER TO THINGS, RIGHTS, OR SERVICES.
1. THE THING MUST BE WITHIN THE COMMERCE OF MEN AND
CAN BE SUBJECT OF COMMERCIAL TRANSACTION
2. IT MUST BE LICIT OR NOT PHYSCIALLY/ LEGALLY IMPOSSIBLE
3. MUST BE IN EXISTENCE OR CAPABLE OF COMING INTO
EXISTENCE
4. MUST BE DETERMINATE OR DETERMINABLE WITHOUT THE
NEED OF A NEW CONTRACT BETWEEN THE PARTIES (1349)
REQUISITES OF SERVICE AS OBJECT
1. THE SERVICE MUST BE WITHIN THE COMMERCE OF MEN
2. IT MUST BE LICIT OR NOT PHYSCIALLY/ LEGALLY IMPOSSIBLE
3. IT MUST BE DETERMINATE OR CAPABLE OF BEING MADE
DETERMINATE
RIGHT AS OBJECT OF CONTRACT
GENERAL RULE: ALL RIGHTS MAY BE THE OBJECT
OF A CONTRACT
EXCEPTION:
(1) WHEN THEY ARE INTRANSMISSIBILE BY THEIR NATURE, OR
BY STIPULATION, OR BY PROVISION OF LAW.
FUTURE INHERITANCE
• ANY PROPERTY OR RIGHT, NOT IN EXISTENCE OR CAPABLE
OF DETERMINATION AT THE TIME OF THE CONTRACT.
THAT A PERSON MAY INHERIT IN THE FUTURE
• THE LAW PERMITS CONTRACTS ON FUTURE INHERITANCE:
• IN CASE OF DONATIONS BY REASON OF MARRIAGE
BETWEEN FUTURE SPOUSES WITH RESPECT TO THEIR
FUTURE PROPERTY
• IN THE CASE OF PARTITION OF PROPERTY BY ACT INTER
VIVOS BY A PERSON TO TAKE EFFECT UPON HIS DEATH
Inter vivos= during life time; mortis cause= death
KINDS OF IMPOSSIBILITY
PHYSICAL
• WHEN THE THING OR SERVICE IN THE NATURE OF THINGS
CANNOT EXIST OR BE PERFORMED
• ABSOLUTE = WHEN THE ACT CANNOT BE DONE IN ANY
CASE SO THAT NOBODY CAN PERFORM IT
• RELATIVE= ARISE FROM SPECIAL CIRCUMSTANCES,
CONDITIONS, OR QUALIFICATIONS OF THE OBLIGOR
LEGAL
• THING OR SERVICE IS CONTRARY TO LAW, MORALS, GOOD
CUSTOMS, PUBLIC ORDER, OR PUBLIC POLICY
ESSENTIAL REQUISITES OF CAUSE
CAUSE/ CAUSA/ CONSIDERATION
- IT IS THE ESSENTIAL REASON OR PURPOSE WHICH
THE CONTRACTING PARTIES HAVE IN VIEW AT THE
TIME OF ENTERING INTO THE CONTRACT.
- IT IS SOMETHING BARGAINED FOR OR GIVEN BY A
PARTY IN EXCHANGE FOR A LEGALL ENFORCEABLE
PROMISE OF ANOTHER.
REQUISITES OF CAUSE
1. IT MUST EXIST
2. IT MUST BE LAWFUL
3. IT MUST BE TRUE OR REAL
- ILLEGALITY OF CAUSE= THERE IS A CAUSE BUT THE SAME IS
UNLAWFUL OR ILLEGAL
- FALSITY OF CAUSE= THE CONTRACT STATES A VALID
CONSIDERATION BUT SUCH STATEMENT IS NOT TRUE; IT
MAY BE ERRONEOUS OR SIMULATED, THUS VOID
CAUSE/ CAUSA/ CONSIDERATION
- ABSENCE OR WANT OF CAUSE= THERE IS A TOTAL LACK
OF ANY VALID CONSIDERATION FOR THE CONTRACT
- FAILURE OF CASUE DOES NOT RENDER A CONTRACT VOID
- SIMULATED OR FICTITIOUS CONTRACT IS INEXISTENT AND
VOID.
- PROMISES TO MAKE A GIFT OR TO RENDERE SOME
GRATUITOUS SERVICE IN THE FUTURE ARE NOT
ENFORCEABLE AS CONTRACTS AS THEY CONTAIN NO
CONSIDERATION.
CLASSIFICATION OF CONTRACTS ACCORDING TO CAUSE
ONEROUS
THE CAUSE OF WHICH, FOR EACH CONTRACTING PARY IS THE
PRESENTATION OR PROMISE OF A THING OR SERVICE BY THE OTHER
REMUNERATORY
• CAUSE OF WHICH IS THE SERVICE OR BENEFIT WHICH IS
REMUNERATED
• PURPOSE OF THE CONTRACT IS TO REWARD THE SERVICE
THAT HAD BEEN PREVIOUSLY RENDERED BY THE PARTY
REMUNERATED
GRATUITOUS
CAUSE OF WHICH IS THE LIBERALITY OF THE BENEFACTOR TO GIVE FORMAL/SOLEMN

1355: LESION REQUIRED BY LAW FOR ITS EFFICACY TO BE IN A CERTAIN SPECIFIED

FORM
• ANY DAMAGE CAUSED BY THE FACT THAT THE PRICE IS
UNJUST OR INADEQUATE RULES REGARDING FORM OF CONTRACTS

• IT IS THE INJURY SUFFERED IN CONSEQUENCE OF GENERAL RULE

INEQUALITY OF SITUATION
GENERAL RULE
• LESION OR INADEQUACY OF CAUSE DOES NOT OF ITSELF
INVALIDATE A CONTRACT
EXCEPTION/S IT INVALIDATES A CONTRACT:
(A) WHEN THERE HAS BEEN FRAUD, MISTAKE, OR UNDUE
INFLUENCE
(B) IN CASES SPECIFIED BY LAW
1351 “THE PARTICULAR MOTIVES OF THE PARTIES IN ENTERING
INTO A CONTRACT ARE DIFFERENT FROM THE CAUSE THEREOF”
MOTIVE IS PURELY PERSONAL OR PRIVATE REASON WHICH A PARTY
HAS IN ENTERING INTO A CONTRACT.
CONTRACTS ARE BINDING AND ENFORCEABLE RECIPROCALLY BY THE
CONTRACTING PARTIES, WHATEVER MAY BE THE FORM IN WHICH
THE CONTRACT HAS BEEN ENTERED INTO, PROVIDED ALL THE 2
ESSENTIAL REQUISITES FOR THEIR VALIDITY ARE PRESENT
EXCEPTION/S
THE FORM IS REQUIRED IN:
(A) WHEN THE LAW REQUIRES THAT A CONTRACT BE IN SOME
FORM TO BE VALID, TO BE ENFORCEABLE OR PROVED IN A
CERTAIN WAY, OR FOR THE CONVENIENCE OF THE PARTIES
OR FOR THE PURPOSE OF AFFECTING THIRD PERSONS
IN THE CASE OF CONTRACTS COVERED BY THE STATUTE OF FRAUDS,
THE LAW REQUIRES THAT THEY BE IN WRITING
1358

“THE FOLLOWING MUST APPEAR IN A PUBLIC DOCUMENT:

(1) ACTS AND CONTRACTS WHICH HAVE FOR THEIR OBJECT

THE CREATION, TRANSMISSION, MODIFICATION OR
EXTINGUISHMENT OF REAL RIGHTS OVER IMMOVABLE
PROPERTY; SALES OF REAL PROPERTY OR OF AN
INTEREST THEREIN A GOVERNED BY ARTICLES 1403, NO.
2, AND 1405;

FORMS OF CONTRACT (2) THE CESSION, REPUDIATION OR RENUNCIATION OF

HEREDITARY RIGHTS OR OF THOSE OF THE CONJUGAL
FORM OF A CONTRACT PARTNERSHIP OF GAINS;

• IT REFERS TO THE MANNER IN WHICH A CONTRACT IS
EXECUTED OR MANIFESTED
• IT MAY BE ORAL, OR IN WRITING, OR PARTLY IN WRITING
AND PARTLY ORAL
KINDS OF CONTRACT AS TO INTENTION
EXPRESS
THE PARTIES EXPRESSLY SET FORTH THEIR INTENTIONS
(3) THE POWER TO ADMINISTER PROPERTY,
OR ANY OTHER POWER WHICH HAS
FOR ITS OBJECT AN ACT APPEARING OR WHICH SHOULD APPEAR IN
A PUBLIC DOCUMENT,
OR SHOULD PREJUDICE A THIRD PERSON;
(4) THE CESSION OF ACTIONS OR RIGHTS PROCEEDING FROM AN
ACT APPEARING IN A PUBLIC DOCUMENT.”

IMPLIED CONTRACTS ARE VALID AND ENFORCEABLE THOUGH NOT IN

WRITING. PUBLIC DOCUMENTS REQUIRED FOR CONVENIENCE AND
PARTIES’ INTENTION MAY BE INFERED FROM THEIR ACTIONS OR GREATER PROTECTION OF PARTIES
CONDUCT

KINDS OF CONTRACT AS TO FORM

INFORMAL/COMMON/SIMPLE

MAY BE ENTERED INTO IN WHATEVER FORM PROVIDED ALL THE

ESSENTIAL REQUISITES FOR THEIR VALIDITY IS PRESENT;
CONSENSUAL CONTRACT