CONTRACTS 2

• Art 1305 Definition of Contract


  A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service
• Essential Elements of a Contract

  1. Consent of the contracting parties

  2. Object certain which is the subject matter of the contract

  3.Cause of obligation which is established
• According to their relation to other contracts

  a. Preparatory

  b. Principal

  c. Accessory
• Preparatory


  Those which have for their object the establishment of a condition in law which is necessary as a preliminary step towards the celebration of another subsequent contract.

  
  

  Ex. Partnership, Agency
• Principal


  Those which can subsist independently from other contracts and whose purpose can be fulfilled by themselves

  Ex. sale, lease
• Accessory


  those which can exist only as a consequence of or in relation with, another prior contract
• According to their perfection


  Consensual

  Real
• Consensual Contracts


  Those which are perfected by the mere agreement of the parties
• Real Contracts


  Those which require not only the consent of the parties for their perfection, but also the delivery of the object by any one party to the other

  ex. commodatum, deposit, pledge
• According to their form

  a. Common or informal

  b. Special or Formal
• Common or informal contracts


  those which do not require some particular form

  ex. loan, lease
• Special or formal contracts


  Those which require some particular form

  ex. donation, chattel mortgage
• According to their purpose

  a. Transfer of ownership ex. Sale

  b. Conveyance of use ex. Commodatum

  c. Rendition of services ex. Rendition of Services
• According to their subject matter

  a. Things - ex. sale, deposit, pledge

  b. Services - agency, lease of services
• According to their vinculum which they produce

  a. Unilateral

  b. Bilateral
• Unilateral contracts


  those which give rise to an obligation for only one of the parties
• Bilateral


  those which give rise to reciprocal obligations for both parties
• According to their cause

  a. Onerous

  b. Gratuitous
• Onerous contracts


  those in which each of the parties aspires to procure for himself a benefit through the giving of an equivalent or compensation

  ex. sale
• Gratuitous Contracts


  those in which one of the parties proposes to give to the other a benefit without any equivalent or compensation
• According to risks involved


  a. Commutative

  b. Aleatory
• Commutative contracts


  when the undertaking of one party is considered the equivalent of that of the other

  ex. Sale, lease
• Aleatory contracts


  when it depends upon an uncertain event or contingency both as to benefit or loss.

  ex. insurance, sale of hope
• According to their names or norms regulating them

  a. Nominate

  b. Innominate
• Nominate contracts


  Those which have their own individuality and are regulated by special provisions of law
• Innominate


  Those which lack individuality and are not regulated by special provisions of law
• Contract of adhesion


  is a contract whereby almost all of its provisions are drafted by one party. the participation of the other party is limited to affixing his signature or his "adhesion" to the contract. For this reason, contracts of adhesion are construed against the party who drafted it.

  
  

  It is binding as ordinary contracts and the party is free to accept or reject it. It becomes void only when the dominant party takes advantage of the weakness of the other party,completely depriving the latter of the opportunity to bargain on equal footing.
• Article 1306: Autonomy of contracts or freedom of contracts


  The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.
• Autonomy of contracts or freedom of contracts


  Contracting parties are free to stipulate the terms of their contract for as long as the terms are not contrary to law, morals, good customs, public policy, public order, and national interests.Although it is a rule that a contract freely entered between the parties should be respected, since a contract is the law between the parties, said rule is not absolute. Laws in force at the time the contract was made generally govern its interpretation and application.
• Contracts must not be Contrary to Law


  a contract cannot be given effect if it is contrary to law because law is superior to any contract. The contracting party must respect the law which is deemed to be an integral part of every contract
• Contracts must not be Contrary to Morals


  Morals deal with norms of good and right conduct evolved in a community. These norms may differ at a different times and places and with each group of people.
• Compromise Agreement


  is a contract whereby the parties by making reciprocal concessions, avoid litigation or put an end to one already commenced. Compromise is a form of amicable settlement that is not only allowed but also encouraged in civil cases. It must be valid and not contrary to law, morals, good customs, public order, or public policy.
• Article 1307. Innominate contracts


  Innominate contracts shall be regulated by the stipulation of the parties, by the provisions of Titles I and II of this Book, by the rules governing the most analogous nominate contracts, and by the customs of the place.
• Nominate contracts


  those which have their own individuality and are regulated by special provisions of law.

  
  

  with specific name or designation in law

  ex. sale, lease
• Innominate contracts


  those which lack individuality and are not regulated by special provisions of law

  
  

  that which has no specific name or designation in law
• Kinds of innominate contract

  1. do ut des- I give that you give (now term barter or exchange, thus is no longer an innominate contract)

  2. do ut facias - I give that you do

  3. facio ut des - I do that you give

  4. facio ut facias - I do that you do

  
  

  "do/des" -give

  "facio/facias"- do
• Rules on innominate contracts

  1. stipulations of the parties

  2. the provisions of the civil code on obligations of contracts

  3. the rules governing the most analogous (similar in some way) nominate contracts; and

  4. the customs of the place
• Article 1458. Contract of sale


  By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.
• Article 1308. Mutuality of contracts


  The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them.
• Purpose of Mutuality of contracts


  to nullify a contract containing a condition which makes its fulfillment or pretermination dependent exclusively upon the uncontrolled will of one of the contracting parties.

  
  

  It is a fundamental rule that no party can renounce or violate the law of the contract without the consent of the other.