Professional Documents
Culture Documents
Reformation of instruments:
Requisites:
1. those entered into by guardians where the ward suffers lesion of more than ¼ of the value of the things which
are objects thereof;
2. those agreed upon in representation of absentees, if the latter suffer lesion by more than ¼ of the value of
the things which are subject thereof;
5. transfer is made between father and son, where there are present some or any of the above circumstances;
6. failure of the vendee to take exclusive possession of the property;
Distinctions:
RESCISSION RESOLUTION
(Art. 1191)
1. Action by the 1. Action only by
contracting the injured party;
parties even by
a 3rd party; 2. based on non-
2. based on fulfillment of the
lesion/fraud of obligation;
creditors; 3. courts may grant
3. courts cannot periods
grant periods for
compliance
VOIDABLE CONTRACTS
Modes of Ratification:
1. For contracts infringing the Statute of Frauds:
• expressly
• impliedly - by failure to object to the presentation of oral evidence to prove the contract, or by the
acceptance of benefits under the contract.
2. If both parties are incapacitated, ratification by their parents or guardians shall validate the contract
retroactively.
Art 1305
ELEMENTS OF A CONTRACT
a. Essential Elements
1.Consent
2.Subject Matter
3.Cause or Consideration
Classification of Contracts
a. According to perfection or formation
1. Consensual
2. Real-perfected by delivery
3. Formal or Solemn
k. According to the number of persons actually and physically entering into the contracts
1. Ordinary – two parties are represented by different persons
2. Auto Contracts –where only one person represents two opposite parties, but in different capacities
l. According to the number of persons who participated in the drafting of the contract
1. Ordinary
2. Contract of Adherence
STAGES OF A CONTRACT
a. Preparation
b. Perfection
c. Consummation (or death or termination)
Art 1307
Art 1308-1310
MUTUALITY OF CONTRACTS
• The validity or fulfillment of a contract cannot be left to the will of one of the contracting parties.
• The validity or fulfillment may be left to the will of a third person.
• The validity or fulfillment may be left to chance.
Art 1311
Exceptions:
a. Where the obligation arising from the contract are not transmissible by their nature, by stipulation, or by provision of law.
b. Where there is stipulation pour atrui (a stipulation in favor of a third party)
c. Where a third person induces another to violate his contract
d. Where, in some cases, third persons may be adversely affected by a contract where they did not participate.
e. Where the law authorizes the creditor to sue on a contract entered into by his debtor.
Art 1312
A real right binds the property over which it is exercised.
Exception to the general rule that a contract binds only the parties.
Art 1313
Right of defrauded creditor.
Art 1314
Requisites before a third person in this article can be held for damages
a. Existence of a valid contract
b. Knowledge on the part of the third person of the existence of the contract
c. Interference by the third person without legal justification or excuse
Art 1315-1316
Perfection of contracts
Art 1317
Requisites for a Person to Contract in the Name of Another
a. He must be duly authorized (expressly or impliedly)
b. Or he must have by law a right to represent him
c. Or the contract must be subsequently ratified
Art 1318
Requisites of Contracts
a. Consent (Art 1319-46)
b. Object (Art 1347-1349)
c. Cause (Art 1350-55)
Art 1319
Definition of Consent
-Art 1319,first paragraph
Requisite of Consent
a. There must be two or more parties
b. The parties must be capable or incapacitated
c. There must be no vitiation of consent
d. There must be no conflict between what was expressly declared and what was really intended
e. The intent must be declared properly
Art 1320
Forms of Acceptance
Art 1322
Acceptance of an Offer made thru an agent
Art 1323
Other instances when the offer becomes ineffective
a. When the offeree expressly or impliedly rejects the offer
b. When the offer is accepted with qualification or condition
c. When before acceptance is communicated, the subject matter becomes illegal or impossible
d. When the period of time given to the offeree within which he must signify his acceptance has already lapsed
e. When the offer is rejected in due tome
Art 1324
Option Contract
Option- it is a contract granting a person the privilege to buy or not to buy certain objects at anytime within the agreed period at a fixed
price
Perfection of Option
When there is a meeting of minds on the option
Art 1325-1326
If the advertisement contains all the specific particular needed in a contract, it is a definite offer.
If important details are left out, the advertisement is not a definite offer, but a mere invitation to make an offer.
Art 1328
Voidable contracts by reason of incapacity
Art 1330
This article enumerates causes or vices of consent.
Kinds of Mistake
a. Mistake as to the object
1. Mistake as the identity of the thing
2. Mistake as to the substance of the thing
3. Mistake as to the conditions of the thing
4. Mistake as to the quantity of the thing
b. Mistake as to person
1. Mistake must be either with regards to the identify or with regard to the qualification of one of the contracting parties
2. Such identity or qualification must have been the principal consideration for the celebration of the contract
Art 1332
Burden of proof in case of mistake
Art 1333
Effect of knowledge of risk
Art 1334
Mistake of Law
Is that which arises from an ignorance of some provision of law, or from an erroneous interpretation of its meaning, or from an
erroneous conclusion as to the legal effect of the agreement, on the part of one of the parties.
Requisites:
a. There must be mutual error
b. The error must refer to the legal effect of the agreement
c. The real purpose of the parties is frustrated
Art 1335-1336
Violation refer to physical coercion
Intimidation refers to moral coercion
Art 1337
Requisites for undue influence to vitiate consent
a. Improper advantage
b. Power over the will of another
c. Deprivation of the latter’s will of a reasonable freedom of choice
Art 1338-1341
Kinds of Fraud
a. Fraud in the celebration of the contract
1. Dolo Causante or causal fraud (Art 1338)
2. Dolo Incidente of incidental fraud
b. Fraud in the performance of the obligations stipulated in the contract
Art 1342-1344
Speaks about misrepresentation
Art 1345-1346
Simulation
Kinds
a. Absolute; Effect; the contract is void
b. Relative; Effect; the parties are bound to the real or true agreement except-
a. If the contract should prejudice third persons
b. Or if the purpose is contrary to law, morals, public order, policy or good customs
Requisites
a. An outward declaration of will difference from the will of the parties
b. The false appearance must have been intended by mutual agreement
c. The purpose is to deceive third persons
Art 1347-1349
Objects (Subject Matter) of a contract
- A thing or a service
Requisites
a. The thing or service must be within the commerce of man
b. Must be transmissible
c. Must not be contrary to law, morals, good customs, public order, or public policy
d. Must not be impossible
e. Must be determinate as to its kind or determinate without the need of a new contract or agreement
CAUSE OF CONTRACTS
Art 1350
“Cause” defined
-It is the essential and impelling reason why a party assumes an obligation
Art 1351
Motive – is the purely personal or private reason which a party has in entering into a contract
Cause
a. Always the same
b. Always known
c. Cannot cure the absence of cause
Art 1352-1355
Requisites for cause
a. It must be present
b. It must be true
c. It must be lawful
CHAPTER 3
FORM OF CONTRACTS
Art 1356
Meaning of form of contracts
-Refers to the manner in which a contract is executed or manifested
CHAPTER 4
REFORMATION OF INSTRUMENT
Reformation – is that remedy by means of which a written instrument is amended or rectified so as to express or conform to the real
agreement or intention of the parties when by reason of mistake, fraud, or inequitable contract, or accident the instrument fails to
express such agreement or intention.
Art 1360-69
Art 1360
Rule in case of conflict
Art 1366
Instances when reformation is not allowed
CHAPTER 5
INTERPRETATION OF A CONTRACT
Art 1370
Definition of interpretation of contract
-Is the determination of the meaning of the terms or words used by the parties in their contract
Requisites of rescission
a. The contracts must be validly agreed upon
b. There must be lesion or pecuniary prejudice to one of the parties or to a third person
c. The rescission must be based upon a case especially provided by law
d. There must be no other legal remedy to obtain reparation of the damages
e. The party asking for rescission must be able to return what he is obliged to restore by reason of the contract
f. The object of the contract must not legally
g. The object of the contract must not legally be in the possession of third persons who did not act in bad faith
h. The period for filing the action of rescission must have not prescribed
Meaning of Rescission
-Remedy granted by law to the contracting parties and sometimes even to third persons in order to secure reparation of
damages caused by them by a valid contract, by means of the restoration of things to their condition in which they were prior to the
celebration of the said contract.
Art 1385
Effects of rescission
Art 1324
Prescription
VOIDABLE CONTRACTS
Definition
-Are those which possess all the essential requisites of a valid contract but one of the parties is incapable of giving consent, or
consent is vitiated by mistake, violence, intimidation, undue influence, or fraud
Characteristics
a. Their defect consist in the vitiation of consent of one of the contracting parties
b. They are binding until they are annulled by competent court
c. They are susceptible of convalidation by ratification or by prescription
Voidable
a. Defect is intrinsic
b. Contract is voidable even if there is no damage or prejudice
c. Annulability of the contract is based on law
d. Susceptible of ratification
e. The causes of annulment
The causes of rescission
Rescissible
a. Defect is extrinsic
b. Contract is not rescissible id there is no damage or prejudice
c. Rescissibility of the contract is based on equity
d. Not susceptible of ratification
e. Are different form
Art 1390
Voidable contracts
Art 1391
Prescription
Art 1392-96
Concept of Ratification
-By virtue of which efficacy is given to a contract which suffers from a vice of curable nullity
Art 1398-99
Effects of annulment
Art 1400-02
- Effect pf failure to make restitution
-Where loss is due to fault of plaintiff
-Where loss is due to fault of defendant
-Where loss is due to fortuitous event
CHAPTER 8
UNENFORCEABLE CONTRACTS
Kinds:
a. Those entered into in the name of another by one without or acting in excess of authority
b. Those that do not comply with the statute of fraud
c. Those where both parties are incapacitated of giving consent
Unauthorized contracts
-Those entered into in the name of another person by one who has been given no authority or legal representation on who has
acted beyond his powers.
STATUTE OF FRAUDS
Purpose
-Not only to prevent fraud but also to guard against the mistakes of honest men by requiring that certain agreement specified
must be in writing.
Application
a. Not applicable in actions which are neither for damages because of a violation of a contract, nor for the specific performance
thereof
b. Applicable only to executory contracts and not to contracts which are totally or partially performed
c. Not applicable where the contract is admittedly expressly, or impliedly by the failure to deny specifically its existence, no further
evidence thereof being required in such case.
d. Applicable only to the agreements enumerated therein
e. Not applicable where a writing does not express the true agreement of the parties
f. It does not declare the contracts infringing it are void but merely unenforceable
g. The defense of the statute of frauds may be waived
h. The defense of the statute of frauds is personal to the parties and cannot be enforced by strangers to the contract
Effect of Non-Compliance
-The contract or agreement is unenforceable by action
CHAPTER 9
Void Contracts
-Those, which of certain defects generally produce no effect at all
Inexistent Contracts
-Refer to agreements which lack one or some or all the elements or do not comply with the formalities which are essential for the
existence of a contract
Art 1410
-Imprescriptibility of void or inexistent contract
Art 1411-1412
Where both parties are in pari delicto
a. The parties shall have no action against each other
b. Both shall be prosecuted
c. The things or the price of the contract, as the effects of the crime shall be confiscated in favor of the government