Chapter 2

ESSENTIALS REQUISITES
OF CONTRACTS

General Provisions

Section 1 - Consent
Consent
Manifested by the meeting of the offer and acceptance
upon the thing and the cause which are to constitute the
contract.

Requisites:
1.
2.
3.

4.

Legal capacity of the contracting parties.

Manifestation of the conformity of the contracting parties
The parties conformity to the object, cause, the terms and
conditions of the contract must be
intelligent
spontaneous and free from all vices of consent.
The said conformity must be real and not simulated or
fictitious

Requisite 1

Legal Capacity

Incapacitated to give
consent
A. Minor, UNLESS, the minors
consent is operative in contracts
For necessaries(Art. 1427)
When the minor actively
misrepresents his age (estoppel)
B. Insane or demented persons,
UNLESS, they contract during a
lucid interval
C. Deaf-mutes who do not know
hoe to read and write

Disqualified to Contract (Art. 1329)

Those under Civil interdiction for transaction inter

vivos
Undischarged insolvents
Husband and wife: cannot donate to each other,
nor sell if the marriage is under ACP
Members of Ethnic Minorities: their contracts
(excluding sale of personal property or personal
service contracts) must be approved by the
Governor or his representative
The ff. cannot purchase
The guardian: his wards properties
The agent: the principal property
Executors and administrators: property under
administration
Public officers: state property under their
administration

Incapacity to Give Consent (Art. Disqualification to contract (Art.

1327)
1329)
Restrains the right to exercise
the right to contract

Restrains the very right itself

Based on subjective
circumstances of certain
persons

Based on public policy and

morality

Voidable

Void

Requisite 2

Concurrence
Offer
Acceptance

Offer a proposal made by one party to another to

enter into a contract. (Definite, Intentional,
Complete)
Acceptance manifestation by the offeree of his
assent to the terms of the offer.

The offer must be certain and the acceptance absolute

Consensual contracts are perfected from the moment
there is a manifestation on concurrence between the
offer and the acceptance regarding the object and the
cause.
Real contracts like deposit, pledge and commodatum
requires delivery of object for perfection.
Contracts under the Civil Code generally adhere to the
Cognition Theory, while transactions under the Code of

Offer Terminates Upon:

Rejection by the offer

Incapacity (death, civil interdiction,
insanity, or insolvency) of the
offeror or offer before acceptance is
conveyed
Counter-offer
Lapse of the time stated in the offer
without acceptance being
conveyed
Revocation of the offer before
learning of acceptance

Acceptance
Requisites:
Unqualified and Unconditional: i.e it
must conform with all the terms of
the offer, otherwise it is a counteroffer (Art. 1319)
Communicated to the offeror and
learned by him (Art 1319, 1322). If
made through an agent, the
offer is accepted from the time the
acceptance is communicated to
such agent

Option Contract
A preparatory contract in which one
party grants to the other, for a fixed
period of, the option to decide
whether or not to enter into a
principal contract. (Art. 1324)

Requisite 3
The parties conformity to the object, cause, the
terms and conditions of the contract must be
intelligent spontaneous and free from all vices
of consent

Vices of Consent (MIVUF)

1.

2.

3.
4.

5.

Mistake 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.
Intimidation when 1 of the contracting parties is
compelled by a reasonable and well-grounded fear of
an imminent and grave evil upon his person or prop
of his spouse, descendants or ascendants, to give his
consent.
Violence when in order to wrest consent, serious or
irresistible force is employed.
Undue influence when a person takes improper
advantage of his power over the will of another,
depriving the latter of a reasonable freedom of choice.
Fraud when through insidious words or
machinations of 1 of the contracting parties, the other
is induced to enter into a contract which without

Fraud

Art 1339, Civil Code. Failure to disclose facts,

when there is duty to reveal them, as when the
parties are bound by confidential relations,
constitutes fraud
Art 1340, Civil Code. The usual exaggeration in
trade, when the other party had an opportunity
to know the facts, are not in themselves
fraudulent
Art 1341, Civil Code. A mere expression of an
opinion does not signify fraud, unless made by
an expert and the other party had relied on the
formers special knowledge.
Art 1342, Civil Code. Misrepresentation by a third
party does not violate consent, unless, such
misrepresentation has created substantial

Section 2 Object of Contracts

Object
Requisites:
1. Transmissible: It must be within the commerce of man.
2. Lawful: It must be licit or not contrary to law, morals, good
customs, public order or public policy.
3. It must be possible.
4. It must be determine as to its kind.

All things or services may be

the object of contracts EXCEPT

Things which are outside the commerce

of men
Intransmissible things
Future inheritance except in cases
authorised by law
Impossible things or services
Objects which are indeterminable as to
their kins, the genus should be expressed

In order that a thing, right or service may

be the object of a contract, it should be in
existence at the moment of the

A FUTURE thing may be the object of a

contract, such contract may be
interpreted as a :

Conditional Contract- the efficacy

should depend upon the future
existence of the thing
Aleatory Contract- one of the
contracting parties assumes the
risk that the thing will never come
into existence. e.g insurance

Section 3 Cause of Contracts

Cause
The immediate, direct and most proximate reason which explains and justifies the
creation of obligation.
Requisites:
1.
Cause should be in existence at the time of the celebration of the contract.
2.
Cause should be licit or lawful.
3.
Cause should be true.
Rules:
4.
In onerous contracts, the cause is understood to be, for each party, the prestation
of promise of a thing or service by the other.
5.
In remuneratory contracts, the service or benefit which is remunerated.
6.
In contracts of pure beneficence, the mere liberality of the benefactor.

Cause
1.

Absence of cause

2.
4.

Failure of cause
Illegality of cause
Falsity of cause

5.

Lesson

3.

Effect

1. The contract confers no

right and produces no legal
effect.
2. Does not render the
contract void.
3. The contract is null and
void.
4. The contract is void, unless
the parties show that there
is another cause which is
true and lawful.
5. Does not invalidate the
contract, unless (1) there is
fraud, mistake, or undue
influence; or (2) when the
parties intended a donation
or some other contract.