Article-1305- Contracts PDF

Preview

Summary

Article 1305 CONTRACTS Contracts is the meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or render something.CLASSIFICATIONS OF CONTRACTS NOMINATE- contracts with specific names or designation in law INNOMINATES- contracts with no specific ...

Description

Article 1305 CONTRACTS Contracts is the meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or render something. CLASSIFICATIONS OF CONTRACTS 1. NOMINATE- contracts with specific names or designation in law 2. INNOMINATES- contracts with no specific names or designation in law 3. UNILATERAL- when it creates an obligations on the part of only one of the parties 4. BILATERAL- when it give rise to reciprocal obligations for both parties 5. ACCESSORY- when it is dependent upon another contract it secures or guarantees for its existence and validity 6. PRINCIPAL- when it does not depend for its existence and validity upon another contract but is an indispensable condition for existence of an accessory contract. 7. INDIVISIBLE- when each part of the contract is dependent upon the others parts for satisfactory performance 8. DIVISIBLE- when one part of the contracts may be satisfactory performed independently of the other parts. LIMITATIONS OF CONTRACTS Article 1306- The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not: CONTRARY TO LAW - the fundamental requirements MORALS- deal with norms of good and right conduct GOOD CUSTOMS PUBLIC ORDER- refers principally to public safety although it has been considered to mean also the public weal. PUBLIC POLICY- is broader than public order, as the former may refer not only to public safety but also to considerations which are moved by the common good.

Valid Contracts- are those that meet all the legal requirement and limitations for the type of agreement involved and are, therefore legally binding and enforceable. KINDS OF INNOMINATES CONTRACTS 1. do ut des- I gave that you may give 2. do ut facias- I gave that you may do 3. facto ut des- I do that you may give 4. facto ut facias- I do that you may do ARTICLE 1308. The contract must bind both contracting parties, its validity or compliance cannot be left to the will of one of them. Article 1311 Contracts shall take effect only between the contracting parties, their assigns and heirs except in any case where the right and obligations arising from a contract are not transmissible by their nature, by the

liable beyond the value of the property he received from the descent. If the contract should contain some stipulation in favor of a third person, he may demanded its fulfillment provided that he communicate its acceptance to the obligor before the revocation. A mere incidental benefits or interest of a person is not sufficient. The contract must be clearly and deliberately conferred in favor upon a third person. ARTICLE 1313. Creditors are protected in case of contracts intended to defraud them. ARTICLE 1314. Any person who induces another to violate his contract shall be liable for the damages to the other contracting parties. (never ever induced another to violate a contract.) PERFECTION PF CONTRACTS 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 keeping with good faith, usage and law. CLASSIFICATIOONS OF PERFECTION OF CONTRACTS 1. Consensual Contracts- contracts that are perfected by mere consent of the parties regarding the subject matter and the cause of the contracts. e.g sales, lease, agency 2. Real Contracts – perfected by the delivery of subject matter of the contract. e.g depositum, pledge, commodatum. 3. Solemn Contracts- which requires compliance with certain formalities prescribed by law, such prescribed from being thereby an essential elements thereof. e.g donation of real property w/c must me in public instruments STAGES OF THE LIFE OF A CONTRACT 1. Preparation or negotiation- steps taken by the parties leading to the perfection of the contracts. 2. Perfection or birth- when parties have come to definite agreement or meeting of minds regarding the subject matter and cause of the contract 3. Consummation or termination ARTICLE 1317. 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. A contracts entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party. *UNAUTHORIZED CONTRACTS ARE UNFORCEABLE. *UNAUTHORIZED CONTRACTS CAN BE CURED ONLY BY RATIFICATION

stipulation or by the provision of law. The heir is not 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

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

CLASSES OF ELEMENTS OF THE CONTRACT 1. ESSENTIAL ELEMENTS OR THE REQUISITES OF CONTRACTS a. Common or those present in all contracts, namely, consent, object, and cause. b. 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.

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.

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.

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.

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 contracts. 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. 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 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 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

OF

VOIDABLE

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 accidental qualities. 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 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.” 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.

ARTICLE 1340. The usual exaggerations in trade, when the other party had an opportunity to know the facts, are not in themselves fraudulent. ARTCILE 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. 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. SECTION 2 OBJECTS OF CONTRACTS ARTICLE 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. No contracts may be entered into upon future inheritance except in cases expressly authorize by law. All services which are not contrary to law, morals, good customs, public order, or public policy may likewise be the object of a contract.

CONCEALMENT- false representation. “OBJECT OF THE CONTRACT is its subject matter.” But...