Contracts- involves the power to end the agreement incase the other party does not fulfill their

part of the deal. There is progressive spiritualization of obligations, before if it was not in proper form there is no obligation. An essential principle of contracts and obligations is autonomy. Requisites of prestation 1. 2. 3. 4. Must be agreed upon Must not be contrary to law. Must be possible. Must be determinable.

Quasi contract is a rule of equity,

Personal right- jus in personam; jus ad rem Real right- jus in re

Kinds of delivery 1. Actual delivery 2. Contructive- physical transfer is implied A tradition simbolica-(keys of an apartment is give) B tradition longa manu- delivery by mere consent or pointing out of the object C tradition brevi manu- delivery by the sort hand; that delivery whereby the possessor of the thing not as the owner becomes the owner. D tradition consitutum possessorium- opposite of bravi manu E tradition by the execution of legal forms and solemnities.

Kinds of Damages 1. 2. 3. 4. 5. 6. Moral- mental and physical anguish Exemplary- corrective or to set and example Nominal- to vindicate a right when no other kind of damage may be recovered Temperate- when the exact amount of damages can not be determined Actual- actual loss as well as unrealized profit Liquidated- predetermined beforehand by agreement.

Mora Solvendi- debtor Mora accipiendi- creditor Compensation morae If there is a grace period or extension there is no longer any need for demand. F.E. only excuse if it can affect the obligation Accion direccta- provided by the law Real contract- contract perfected by delivery

Effect when resolutory condition is fulfilled: 1. Obligation is extinguished. 2. Parties should restore to each other what they have received. 3. Fruits or the interests should be returned. 4. Rules in art 1189 would apply to whoever has the duty to return in the case of the loss deterioration or improvement of the thin 5. Courts given power to determine the retroactivity of the fulfillment of the resolutory conditions. Characteristics of the right to rescind 1. It exists only in reciprocal obligations 2. It can be demanded only if the plaintiff is ready, willing and able to comply with his own obligation, and the other is not. 3. The right to rescind is not absolute.

Different kinds of period 1. Definite- indefinite 2. Legal (granted by provision of the law)- conventional or voluntary (agreed upon or stipulated by parties)- judicial (fixed by the courts.) 3. Ex die (period with suspensive effect) In diem (period with resolutory effect. Debtor loses the benefit of the period : 1. When after the obligation has been contracted he becomes insolvent, unless he gives a guaranty or security for the debt. 2. When he does not furnish to the creditor the guarantee or securities which he has promised.

3. When by his own acre he has impaired said guaranties or securities after their establishment and when through a f.e. they disappear 4. When the debtor violates any undertaking in consideration of which the creditor agreed to the period. 5. When the debtor attempts to abscond. 6. Art. 2109 Right of choice-debtor

General rule- joint obligations

Exceptions1. When there is a stipulation in the contract that the obligation is solidary. 2. When the nature of the obligation requires liability to be solidary. 3. When the law declares the obligation to be solidary.

Passive solidary- debtors Active- creditors

Novation- is modification of an obligation by changing its object or principal conditions or substituting the person of the debtor or by subrogating the person of the debtor. Compensation- is that which takes place when two persons in their own right are creditors and debtors of each other. Confusion or merger is that which takes place when the characters of creditor and debtor are merged No need to judicially rescind, you can do it without going to court- but the buyer can question it in court You can rescind verbally- real property must be done notarized As a rule delivery transfers ownership- unless there is reservation in ownership (expressed). Contract of sale, execution of the deed of sale transfers ownership. Different from contract to sell. Specific performance rescission- remedies available to you unless there is something else stipulated in the contract.

What is substantial will depend on the circumstances. Possible to extra-ju. Rescission then go to court to confirm

Penal clause not enforceable 1. 2. 3. 4. 5. 6. Impossible performance of principal due to f.e. Creditor prevented the debtor from fulfillment Penalty is contrary to good morals or good customs Both parties are guilty of breach of contract Breach of contract by the creditor None of the parties committed willful or culpable violation of the agreement

Obligations are extinguished: 1. 2. 3. 4. 5. 6. By payment or performance By the loss of the thing due By the condonation or remission off the debt By confusion or merger of the rights of the creditor and debtor By compensation By novation

If the judgment upon which the obligation consists has been completely delivered is null and void the payment made is also null and void. Requisites of a valid payment. 1. The very thing or service contemplated must be paid 2. Fulfillment must be complete Compensation can also be done on appeal

Father in support cant claim compensation while the child can claim Applies to past/accrued support, not future If foreign currency, ok but you have to change the value first then pay in pesos\

When investing in a money market transaction you already presume that your debt will be assigned

Elements of a contract 1. Essential elements- without them contract cannot exist 2. Natural elements- found in certain contracts, presumed to exist unless otherwise stipulated 3. Accidental elements- present or absent depending on whether or not stipulated Classifications of a contract 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. According to perfection or formation- consensual; real; formal or solemn According to cause or equivalence- onerous; gratuitous or lucrative; remunerative According to importance or dependence- principal; accessory; preparatory According to parties obligated- unilateral; bilateral According to name- nominate; innominate According to risk of fulfillment- commutative; aleatory According to time of performance-executed; executor According subject matter- involving things; involving rights or credits; involving services According to obligations imposed and regarded by the law- ordinary; institutional According to evidence required for its proof- oral proof; written proof According to number of persons actually entering into the contract- ordinary; autocontracts 12. According to the number of persons who participate in the drafting- ordinary; contract of adhesion 13. According to nature of contract- personal; impersonal Stages of a contract 1. Preparation 2. Perfection 3. Consummation Basic principles or characteristics of a contract 1. 2. 3. 4. 5. Freedom Obligatory force and compliance in good faith Perfection be mere consent Both parties are mutually bound Relatively (generally, it is binding only between the parties, their assigns, and heirs

Exceptions to the principle of relativity 1. Where the obligations arising from the contract are not transmissible by their nautr, by stipulation or by provision of law 2. When there is a stipulation in favor of a third party 3. Where a third person induces another to violate the contract 4. When, in some cases, third persons maybe be adversely affected by a contract where they did not participate (eg. Insolvency act) 5. Where the law authorizes the creditor to sue on a contract entered into by his debtor Requisites for a person to contract in the name of another 1. He must be duly authorize 2. Or, he must have by law a right to represent him 3. Or, the contract , must be subsequently ratified Essential requisites of a contract 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 Real contracts require delivery

If there is vice of consent (vitiated) such as error, fraud, undue influence, etc the contract is merely voidable Requisites of consent 1. 2. 3. 4. 5. There must be 2 or more parties Parties must be capable or capacitated There must be no vitiation of consent There must be no conflict between what was expressly declared and what was really intended. The intent must be declared properly

Requisites for the meeting of the minds 1. An offer that must be certain 2. And an acceptance that must be unqualified and absolute Kinds of void contracts 1. Those where one party is incapacitated to give consent 2. Those where the consent of one party has been vitiated.

Persons incapacitated to consent 1. Unemancipated minor 2. Insane or demented person 3. Deaf-mutes who do not know how to write Incompetents under the rules of court (must be place under guardianship but presumed capacitated) 1. 2. 3. 4. 5. 6. Those under civil interdiction Hospitalized lepers Prodigals (spendthrifts) Deaf and dumb who are unable to read and write Those of unsound mind even though they have lucid intervals Those who by reason of age, disease, weak mind, and other similar cases cannot with out outside aid, take care of themselves and manage their property, becoming thereby an easy prey for deceit and exploitation.

Causes of vitiated consent 1. 2. 3. 4. 5. Mistake or error violence Fraud Intimidation Undue influence

There must be clear and convincing evidence mere preponderance of evidence is not sufficient.(above) Requisites for mistake to vitiate consent 1. There must be substantial error regarding: a. The object b. identity or qualification but only if such was the principal cause of the contract c. the conditions which principally moved or induced one of the parties 2. The error must be excusable 3. The error must be a mistake of fact, and not of law Person entering a contract is presumed to enter with full knowledge Presumption does not apply 1. When one of the parties is unable to read (including a blind person) 2. Or if the contract is in a language not understood by one of them Requisites for mutual error to vitiate consent 1. There must be mutual error

2. The error must refer to the legal effect of the agreement 3. The real purpose of the parties is frustrated Requisites for intimidation to vitiate consent 1. Reasonable and well-grounded fear 2. Of an imminent and grave evil 3. Upon his person, property or upon the person or property of his spouse, descendants or ascendants 4. It must have been the reason why the contract was entered into 5. The threat must be of an unjust act, an actionable wrong. Impossibility may be 1. Because of the nature of the transaction or because of the law 2. Absolute (no one can do it) 3. Relative (subjectively impossible) Prescription period for rescission- 4 years same with annulment Who can bring the action. 1. The injured party or the defrauded creditor 2. His heir or successor in interest 3. Creditors of 1 and 2 by virtue of the art 117 of the civil code Voidable contracts 1. Where one of the parties is incapable of giving consent to a contract 2. Where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud Grounds for annulment 1. Incapacity to consent 2. Vitiated consent Confirmation to cure a defect in voidable contract Ratification to cure defect of lack of authority in an authorized contract Acknowledgment to remedy a deficiency of proof ( when an oral loan is put into writing, or when a private instrument is made a public instrument.) Under new civil code all three terms are now considered as ratification. Effects of ratification 1. The action to annul is extinguished thus the contract becomes a completely valid one

2. The contract is cleansed of its defect from the beginning Requisites of ratification 1. 2. 3. 4. The contract must be a voidable one The person ratifying must know the reason for the contract being voidable The cause must not exist or continue to exist anymore at the time of ratification The ratification must have been made expressly or by an act implying a waiver of the action to annul. 5. The person ratifying must be the injured party. Creditors of the victim cannot ask for the annulment for they are not bound by the contract After contract is annulled innocent 3rd parties cannot be obliged to restore. The guilty party can be held liable for damages by art 20 and 21 of the civil code If the object of the voidable contract is lost due to F.E., it cannot be annulled anymore Kinds of unenforceable contracts 1. Unauthorized contracts 2. Those that fail to comply with the statute of frauds 3. Those where both parties are incapable of giving consent to a contract Art 1403 Review: Statute of Frauds Void contracts 1. Those whose cause, object or purpose is contrary to law, morals , good customs, public order or public policy 2. Those which are absolutely simulated or fictitious 3. Those whose cause or object did not exist ate time of the transaction 4. Those whose object is outside the commerce of men 5. Those which contemplate an impossible service 6. Those where the intention of the parties relative to the principal object of the canontract cannot be ascertained 7. Those expressly prohibited or declared void by the law Two kinds of void contracts 1. Inexistent 2. Illegal

Defense of illegality of a contract cannot be waived and may be considered on appeal even if not raised in the trial court Illegal contracts may or may not bring criminal offense Undue payment- not knowing that the obligation has prescribed, you can still recover the amount, on the ground of undue payment Christmas bonus is not a demandable/ enforceable obligation unless: 1. Part of the salary 2. Granted on equitable considerations Principles of estoppel are only suppletory. Kinds of estoppel: a. In Pais ( equitable estoppel)- this may be estoppel by: 1. 2. 3. 4. By conduct or by acceptance of benefits By representation or concealment By silence by omission By laches (unreasonable delay in suing)

B. Estoppel by deed (technical estoppel) 1. Estoppel by deed proper (written instrument may also be in the form of a bond or mortgage) 2. Estoppel by judgment as a court record Equitable defense of laches requires the elements: 1. 2. 3. 4. Conduct on the part of the defendant Delay in asserting the complainants rights Lack of knowledge or notice on the part of the defendant Injury or prejudice to the defendant

Cannot introduce oral evidence of contract, if there is already a written evidence- parole evidence rule If interest is by law, you can charge even if it is not stipulated in writing Note: Reformation needs clear and convincing evidence, unlike normal preponderance, just like disproving a notary public Unenforceable cannot prescribe If it is a court involved transaction, it is unlikely to be a resissible contract. Guardians can only do acts of administration and not ownership

Partial ressision can be allowed