1
Q
A ________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.
A
CONTRACT
2
Q
Article???? The contracting parties may establish such stipulations, clauses, terms, and conditions as they may deem convenient, provided they are not contrary to
A
Article 1306 – Freedom to Contract
3
Q
_________ are valid and governed by stipulations, general rules, analogous contracts, and custom.
A
ARTICLE 1307 – INNOMINATE CONTRACTS
4
Q
The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them.
A
ARTICLE 1308 – Mutuality of Contracts
5
Q
The determination of the performance may be left to a third person, whose decision shall not be binding until it has been made known to both contracting parties.
A
ARTICLE 1309 – Determination by a Third Person
6
Q
The determination shall not be obligatory if it is evidently inequitable. In such case, the courts shall decide what is equitable under the circumstances.
A
ARTICLE 1310 – Inequitable Determination by Third Person
7
Q
provides that contracts bind only the parties, their heirs, and assigns, except in cases of stipulation pour autrui, real rights, fraud of creditors, and tort interference.
A
ARTICLE 1311 – Relativity of Contracts
8
Q
If contract creates a real right, third persons must respect it.
A
ARTICLE 1312 – Real Rights
9
Q
Creditors may rescind contracts made to defraud them.
A
Art. 1313 – Fraud of Creditors
10
Q
A third person who induces breach is liable for damages.
A
Art. 1314 – Inducing Breach
11
Q
Contracts are perfected by consent.
A
Art. 1315 – Perfection
12
Q
Some contracts require delivery to be perfected.
A
Art. 1316 – Real Contracts
13
Q
No one may contract in another’s name without authority.
A
Art. 1317 – Unauthorized Contracts
14
Q
Consent, Object, Cause.
A
Art. 1318 – Essential Requisites
15
Q
Consent is meeting of offer and acceptance.
A
Art. 1319 – Consent
16
Q
Acceptance must not change the offer.
A
Art. 1320 – Acceptance Must Be Absolute
17
Q
Acceptance binds offeror only when he knows of it.
A
Art. 1321 – Offer Through Correspondence
18
Q
Acceptance must be communicated to agent.
A
Art. 1322 – Offer Made Through Agent
19
Q
Offer becomes ineffective upon death, insanity, etc.
A
Art. 1323 – Offer Becomes Ineffective
20
Q
Offer may be withdrawn unless supported by consideration.
A
Art. 1324 – Option Contracts
21
Q
Advertisements are invitations to make offers.
A
Art. 1325 – Business Advertisements
22
Q
are invitations to make proposals. The advertiser is not bound to accept the highest or lowest bid unless stated
A
Art. 1326 – Advertisements for Bidders
23
Q
Cannot give valid consent:
Unemancipated minors
Insane or demented persons
Deaf-mutes who do not know how to write
A
Art. 1327 – Incapacitated Persons
24
Q
Contracts entered during a lucid interval are valid.
A
Art. 1328 – Lucid Interval
25
Incapacity must exist at the time the contract was entered into.
Art. 1329 – Incapacity at Time of Contract
26
Contracts where consent is given by mistake, violence, intimidation, undue influence, or fraud are voidable.
Art. 1330 – Vices of Consent
27
Mistake must refer to substance or essential conditions.
Art. 1331 – Mistake
28
If one party cannot read and was misled, mistake is presumed.
Art. 1332 – Illiterate or Ignorant Person
29
Mistake of law does not invalidate consent, unless it results in injustice.
Art. 1333 – Error of Law
30
Mutual mistake may invalidate contract.
Art. 1334 – Mutual Error
31
Consent obtained through force or grave fear makes contract voidable.
Art. 1335 – Violence or Intimidation
32
Even if intimidation comes from a third person, contract is voidable.
Art. 1336 – Intimidation by Third Person
33
Improper advantage taken over another.
Art. 1337 – Undue Influence
34
Serious deception that induces consent makes contract voidable.
Art. 1338 – Fraud (Dolo Causante)
35
Failure to disclose facts when duty exists may be fraud.
Art. 1339 – Failure to Disclose
36
Dealer’s talk does not amount to fraud.
Art. 1340 – Usual Exaggerations
37
Expression of opinion is not fraud unless made by expert and relied upon.
Art. 1341 – Opinion
38
Misrepresentation without intent to deceive is not fraud.
Art. 1342 – Misrepresentation in Good Faith
39
Fraud by third person does not invalidate unless party benefited knew of it.
Art. 1343 – Misrepresentation by Third Person
40
Incidental fraud does not void contract but gives right to damages.
Art. 1344 – Incidental Fraud
41
__________may be absolute or relative.
Art. 1345 – Simulation
42
Art. 1346 – Absolute mean?
Absolute simulation → void
43
Relative simulation mean??
valid as to true agreement
44
All things not outside commerce may be object. Future things allowed.
Art. 1347 – Object Must Be Within Commerce
45
46
things cannot be object.
Art. 1348 – Impossible Things
47
Object must be determinate or determinable.
Art. 1349 – Determinate Object
48
In onerous contracts → cause is prestation of the other.
Art. 1350 – Cause Defined
49
Personal motive does not affect validity unless unlawful.
Art. 1351 – Motive
50
Contracts without cause or with illegal cause are void.
Art. 1352 – No Cause / Unlawful Cause
51
False cause makes contract void unless true lawful cause exists.
Art. 1353 – False Cause
52
Cause is presumed to exist and be lawful unless proven otherwise.
Art. 1354 – Presumption of Cause
53
Except in special cases, lesion alone does not invalidate contract.
Art. 1355 – Lesion
54
Contracts are valid in any form as long as essential requisites exist, unless law requires a specific form.
Art. 1356 – Form
55
If law requires a document for enforceability or registration, parties may compel each other to observe proper form.
Art. 1357 – When Form Required
56
Certain contracts (e.g., real property transactions) must be in public instrument for convenience and registration.
Art. 1358 – Contracts That Must Appear in Public Document
57
If written document does not express true agreement due to mistake, fraud, inequitable conduct, or accident → reformation allowed.
Art. 1359 – Reformation
58
If mistake is mutual, instrument may be reformed.
Art. 1360
59
If one party was mistaken and the other acted fraudulently, reformation allowed.
Art. 1361
60
If one party was mistaken and the other knew but hid it → reformation allowed.
Art. 1362
61
If mistake due to negligence of drafter → reformation allowed.
Art. 1363
62
If parties agreed on mortgage but document states sale → reformation allowed.
Art. 1364
63
If real intention is donation but document says sale → may reform.
Art. 1365
64
No reformation if no meeting of minds.
Art. 1366
65
Reformation not allowed after action to enforce contract is filed.
Art. 1367
66
Procedure rules apply.
Art. 1368
67
Instrument interpreted according to true intention.
Art. 1369
68
If words appear contrary to intention → intention prevails.
Art. 1371
69
General terms include only things intended.
Art. 1372
70
If stipulation admits several meanings → choose most effective.
Art. 1373
71
Various stipulations interpreted together.
Art. 1374
72
Usage and custom may explain ambiguity.
Art. 1375
73
Ambiguity interpreted against party who caused it.
Art. 1376
74
If doubt in gratuitous contract → least transmission of rights.
Art. 1377
75
Art. 1378
76
Art. 1379
77
If doubt in onerous contract → greatest reciprocity.
Art. 1378
78
If doubt cannot be resolved → contract null.
Art. 1379
79
Valid contracts subject to rescission.
Art. 1380
80
Lists rescissible contracts (e.g., lesion, fraud of creditors).
Art. 1381
81
Payments made in insolvency may be rescinded.
Art. 1382
82
Rescission is subsidiary remedy.
Art. 1383
83
Rescission only to extent necessary.
Art. 1384
84
Rescission requires mutual restitution.
Art. 1385
85
Rules on third persons and bad faith.
Art. 1386–1388
86
Action prescribes in 4 years.
Art. 1389
87
Voidable due to incapacity or vices of consent.
Art. 1390
88
Action for annulment prescribes in 4 years.
Art. 1391
89
Ratification extinguishes action.
Art. 1392
90
Ratification may be express or implied.
Art. 1393–1396
91
Who may file annulment.
Art. 1397
92
Annulment requires mutual restitution.
Art. 1398–1402
93
The following are unenforceable unless ratified:
Those entered into in the name of another without authority
Those that do not comply with the Statute of Frauds
Those where both parties are incapable
UNENFORCEABLE CONTRACTS
Art. 1403
94
Unauthorized contracts may be ratified by the person in whose name they were executed.
Art. 1404
95
Unauthorized contracts may be ratified by the person in whose name they were executed.
Art. 1404
96
Contracts infringing the Statute of Frauds are ratified by failure to object to oral evidence or by acceptance of benefits.
Art. 1405
97
When a contract is enforceable under the Statute of Frauds and a public document is required for registration, parties may compel each other to execute the proper document.
Art. 1406
98
If both parties are incapacitated:
Ratification by parents/guardians validates it.
Ratification by one makes it voidable.
Art. 1407
99
Unenforceable contracts cannot be assailed by third persons.
Art. 1408
100
Contracts are void if:
Cause, object, or purpose is illegal
Absolutely simulated
Cause or object did not exist
Object is outside commerce
Impossible service
Intention cannot be ascertained
Expressly prohibited by law
VOID AND INEXISTENT CONTRACTS
Art. 1409
101
Action to declare inexistence of void contract does not prescribe.
Art. 1410
102
If illegal act is a crime and both are guilty → no recovery; instruments confiscated.
Art. 1411
103
If illegal act is not a crime:
If both at fault → no recovery
If only one at fault → innocent may recover
Art. 1412
104
If doubt in onerous contract → greatest reciprocity.
Art. 1378
105
If doubt cannot be resolved → contract null.
Art. 1379
106
Valid contracts subject to rescission.
Art. 1380
107
Lists rescissible contracts (e.g., lesion, fraud of creditors).
Art. 1381
108
Payments made in insolvency may be rescinded.
Art. 1382
109
Rescission is subsidiary remedy.
Art. 1383
110
Rescission only to extent necessary.
Art. 1384
111
Rescission requires mutual restitution.
Art. 1385
112
Rules on third persons and bad faith.
Art. 1386–1388
113
Action prescribes in 4 years.
Art. 1389
114
Voidable due to incapacity or vices of consent.
VOIDABLE CONTRACTS
Art. 1390
115
Action for annulment prescribes in 4 years.
Art. 1391
116
Ratification extinguishes action.
Art. 1392
117
. Ratification may be effected expressly or tacitly. It is understood that there is a tacit ratification if, with knowledge of the reason which renders the contract voidable and such reason having ceased, the person who has a right to invoke it should execute an act which necessarily implies an intention to waive his right. (1311a) implied.
Art. 1393
118
Ratification may be effected by the guardian of the incapacitated person. (n)
ART. 1394.
119
. Ratification does not require the conformity of the contracting party who has no right to bring the action for annulment. (1312)
ART. 1395
120
Ratification cleanses the contract from all its defects from the moment it was constituted. (1313)
ART. 1396.
121
. The action for the annulment of contracts may be Instituted by all who are thereby obliged principally or subsidiarily. However, per- sons who are capable cannot allege the incapacity of those with whom they contracted; nor can those who exerted intimidation, violence, or undue influence, or employed fraud, or caused mistake base their action upon these flaws of the contract. (1302a)
ART. 1397
122
An obligation having been annulled, the contracting parties shall restore to each other the things which have been the subject matter of the contract, with their fruits, and the price with its interest, except in cases provided by law. In obligations to render service, the value thereof shall be the basis for damages. (1303a)
ART. 1398.
123
When the defect of the contract consists in the incapacity of one of the parties, the incapacitated person is not obliged to make any restitution except insofar as he has been benefited by the thing or price received by him. (1304)
ART. 1399.
124
Whenever the person obliged by the decree of annulment to return the thing cannot do so because it has been lost through his fault, he shall return the fruits received and the value of the thing at the time of the loss, with interest from the same date. (1307a)
ART. 1400.
125
The action for annulment of contracts shall be extinguished when the thing which is the object thereof is lost through the fraud or fault of the person who has a right to institute the proceedings.
If the right of action is based upon the Incapacity of any one of the contracting parties, the loss of the thing shall not be an obstacle to the success of the action, unless said loss took place through the fraud or fault of the plaintiff. (1314a
ART. 1401.
126
. As long as one of the contracting parties does not restore what in virtue of the decree of annulment, he is bound to return, the other cannot be compelled to comply with what is incumbent upon him. (1308)
Effect where a party cannot restore
ART. 1402
127
The following are unenforceable unless ratified:
Those entered into in the name of another without authority
Those that do not comply with the Statute of Frauds
Those where both parties are incapable
Art. 1403
128
Unauthorized contracts may be ratified by the person in whose name they were executed.
Art. 1404
129
Contracts infringing the Statute of Frauds are ratified by failure to object to oral evidence or by acceptance of benefits.
Art. 1405
130
When a contract is enforceable under the Statute of Frauds and a public document is required for registration, parties may compel each other to execute the proper document.
Art. 1406
131
If both parties are incapacitated:
Ratification by parents/guardians validates it.
Ratification by one makes it voidable.
Art. 1407
132
Unenforceable contracts cannot be assailed by third persons.
Art. 1408
133
Contracts are void if:
Cause, object, or purpose is illegal
Absolutely simulated
Cause or object did not exist
Object is outside commerce
Impossible service
Intention cannot be ascertained
Expressly prohibited by law
Art. 1409
134
Action to declare inexistence of void contract does not prescribe.
Art. 1410
135
If illegal act is a crime and both are guilty → no recovery; instruments confiscated.
Art. 1411
136
If illegal act is not a crime:
If both at fault → no recovery
If only one at fault → innocent may recover
1412
137
Interest paid above legal limit may be recovered by debtor.
1413
138
If money paid for illegal purpose but purpose not accomplished and repudiated before damage → may recover.
1414
139
If contract prohibited to protect plaintiff → he may recover what he paid.
1415
140
If contract prohibited but prohibition protects a class of persons → member may recover.
1416
141
Price paid for future illegal service may be recovered if service not yet performed.
1417
142
Money paid in excess of maximum price fixed by law may be recovered.
1418
143
Laborer may recover wages even if contract violates minimum wage law.
144
Laborer may recover wages even if contract violates minimum wage law.
1419
145
If terms are clear literal meaning controls.
1370
Obli
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