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CONTRACTS

Contract A meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. A promise or a set of promises which the law recognizes as a duty and when the duty is not performed, the law provides a remedy. KINDS OF CONTRACTS 1. Formal Contract- refers to an agreement among parties involved and is required to be in writing by some special laws. 2. Informal Contract- result of a written document or correspondence where the law does not require the same to be in writing, or as the result of oral and spoken discussion between the parties or conduct between the parties, evidence and intention to contract. 3. Express Contract- the conditions and terms of the contract are given orally or in writing by the parties concerned. Facio ut des- means I do that you may give. 4. Implied Contract- result of acts of conduct of the parties to which the law ascribes an objective intention to enter into a contract. 5. Void Contract- one that is inexistent from the very beginning and therefore may not be enforced. 6. Illegal Contract- expressly prohibited by law.

REQUISITES OF A CONTRACT 1. To have a contract, two or more persons must participate. 2. The parties involved must give consent to the contract. 3. The object which is the subject matter of the contract must be specified such as: a. all things which are not outside the commerce of man; b. all rights which are not in transmissible; c. future inheritance in cases expressly authorized by law; d. all services which are not contrary to law, morals, good customs, public order and public policy. 4. The cause of obligation is established. The time, price and subject matter are expressed. 5. Contracting parties must have the legal capacity to enter into a contract. They must:

a. b. c. d.

be of legal age; be of sound mind; not be under the influence of intoxicating drugs or fear of bodily harm; not be suffering from physical disability such as those who are mentally incompetent.

INEXISTENT CONTRACTS The following contracts are void or inexistent from the beginning. 1. Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy. 2. Those whose cause or object did not exist from the time of transaction. 3. Those whose object is outside the commerce of man. 4. Those which contemplate an impossible service. 5. Those where the intention of the parties relative to the principal object cannot ascertained. 6. Those expressly prohibited or declared void by law. 7. Those which are absolutely simulated or fictitious.

VOIDABLE CONTRACTS The following contracts are voidable or annullable, even though there may have been no damage to the contracting parties. 1. Those contracts wherein one of the parties is incapable of giving consent to a contract. 2. Those whose consent is vitiated by mistake, violence, intimidation, undue influence or fraud.

ILLEGAL CONTRACTS Contracts obtained through use of fraud (deception and trickery), undue (unlawful) influence or duress (coercion) in securing such, and those that are expressly prohibited by law are illegal. Following are examples: 1. Those that are made in protection of the law. 2. Consent obtained by fraud. 3. Those obtained under duress.

4. Those obtained under undue influence. 5. Those obtained through material misrepresentation.