Contracts

• A contract is a meeting of minds between two persons where one binds himself to give something or render a service to the other
• In a contract, there must be at least two persons
• A single person may create a contract by himself if he represents distinct interests
• There can be no contract if there is no obligation accepted in return, but an obligation may exist without a contract
• All contracts are agreements, but not all agreements are contracts
• The contracting parties may establish stipulations, clauses, terms, and conditions as long as they are not contrary to law, morals, good customs, public order, or public policy
• Valid contracts meet all legal requisites and limitations, and must be enforceable and binding
• Limitations to freedom of contract include law and police power
• Contracts contrary to morals, customs, public order, or public policy are void
• Innominate contracts are regulated by stipulations of parties, provisions of Titles I and II, rules governing analogous nominate contracts, and customs of the place
• Contracts must bind both contracting parties; validity or compliance cannot be left to the will of one of them
• The determination of performance may be left to a third person, but it must not be obligatory if it is evidently inequitable
• Contracts take effect only between the parties, their assigns, and heirs, except when rights and obligations are not transmissible
• Unauthorized contracts are unenforceable unless ratified by the person on whose behalf it was executed
• Consent, object certain, and cause of the obligation are essential requisites for a valid contract
• Consent is manifested by the meeting of the offer and acceptance, with the offer being certain and the acceptance absolute
• Offer must be definite with a clear price, and acceptance made by letter or telegram does not bind the offerer until it is known
• An offer made in jest or anger is not a valid offer unless the person who accepts the offer acts in good faith
• If an offer is made and not apparent but the offeree honestly believes that the offer is serious, it does not invalidate the offer
• Acceptance is the manifestation by the offeree of his assent to the terms of the offer
• Acceptance must be clear, absolute, unconditional, or unqualified and identical to the offer to produce consent
• If acceptance is subject to a condition, it is not acceptance but merely a counter-offer
• Acceptance made by letter or telegram does not bind the offerer except from the time it came to his knowledge
• An acceptance may be express or implied
• Acceptance may be oral, written, or implied from an act or conduct
• Silence is not an acceptance
• The person making the offer may fix the time, place, and manner of acceptance, all of which must be complied with
• The offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either party before acceptance is conveyed
• An offer may be withdrawn before it is accepted. After acceptance, the contract is already perfected
• An offer made through an agent is accepted from the time acceptance is communicated to him
• Business advertisements of things for sale are not definite offers, but mere invitations to make an offer
• An offer is made to a particular person. Only such a person, and no other, can accept the offer
• A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable
• Mistake may invalidate consent if it refers to the substance of the thing that is the object of the contract or to conditions that have principally moved one or both parties to enter into the contract
• When one of the parties is unable to read or if the contract is in a language not understood by him, the person enforcing the contract must show that the terms have been fully explained to the former
• There is no mistake if the party alleging it knew the doubt, contingency, or risk affecting the object of the contract
• Mutual error as to the legal effect of an agreement when the real purpose of the parties is frustrated may vitiate consent
• There is violence when serious or irresistible force is employed to wrest consent
• There is intimidation when one of the contracting parties is compelled by a reasonable and well-grounded fear of an imminent and grave evil upon his person or property to give his consent
• Threat to enforce a just or legal claim through competent authority does not vitiate consent