GEORGE W. BATCHELDER vs.
THE CENTRAL BANK OF THE PHILIPPINES, intimidation, or undue influence (Articles 1306, 1336, 1337, Civil Code of the
Likewise all commentators on the Civil Code have agreed that the birth or
perfection of a consensual contract, Article 1315, commences from the moment
the parties come to an agreement on a definite subject matter and valid
consideration.
CAPITOL MEDICAL CENTER, INC vs.THE COURT OF APPEALS
But even if it can be supposed that the enrollment of a student creates an implied
"binding contract" with the school to educate him for the entire course, since a
contract creates reciprocal rights and obligations, the obligation of the school to
educate a student would imply a corresponding obligation on the part of the
student to study and obey the rules and regulations of the school. When students
breach that supposed contract by refusing to attend their classes, preferring to
take to the streets to mount a noisy demonstration against their school, the latter
may cancel the contract and close its doors. Its action would neither be arbitrary
nor unfair.
Article 1191. The power to rescind obligations is implied in reciprocal ones, in
case one of the obligors should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the
obligation, with the payment of damages in either case. He may also seek
rescission, even after he has chosen fulfillment, if the latter should become
impossible. The court shall decree the rescission claimed, unless there be just
cause authorizing the fixing of a period. This is understood to be without
prejudice to the rights of third persons who have acquired the thing, in
accordance with articles 1385 and 1388 and the Mortgage Law. (1124)
REPUBLIC OF THE PHILIPPINES, vs. PLDT
We agree with the court below that parties cannot be coerced to enter into
a contract where no agreement is had between them as to the principal
terms and conditions of the contract. Freedom to stipulate such terms and
conditions is of the essence of our contractual system, and by express
provision of the statute, a contract may be annulled if tainted by violence,
Philippines).
EMETERIO CUI, vs. ARELLANO UNIVERSITY
And finally, in Gabriel vs. Monte de Piedad, Off. Gazette Supp. Dec. 6,
1941, p. 67 we read: 'In order to declare a contract void as against public
policy, a court must find that the contract as to consideration or the thing to
be done, contravenes some established interest of society, or
is inconsistent with sound policy and good morals or tends clearly to
undermine the security of individual rights.
Pakistan Int’l. Airlines v. Ople,
A contract freely entered into should, of course, be respected, as PIA
argues, since a contract is the law between the parties. 10 The principle of
party autonomy in contracts is not, however, an absolute principle. The rule in
Article 1306, of our Civil Code is that the contracting parties may establish
such stipulations as they may deem convenient, "provided they are not
contrary to law, morals, good customs, public order or public policy." Thus,
counter-balancing the principle of autonomy of contracting parties is the
equally general rule that provisions of applicable law, especially provisions
relating to matters affected with public policy, are deemed written into the
contract. 11 Put a little differently, the governing principle is that parties may not
contract away applicable provisions of law especially peremptory provisions
dealing with matters heavily impressed with public interest. The law relating to
labor and employment is clearly such an area and parties are not at liberty to
insulate themselves and their relationships from the impact of labor laws and
regulations by simply contracting with each other. It is thus necessary to
appraise the contractual provisions invoked by petitioner PIA in terms of their
consistency with applicable Philippine law and regulations.