Contracts

• Love and affection, though not valuable consideration, is still a consideration that can complete the requisites of a valid contract like donation.
• Obligatoriness refers to the force and effect of contract as law between the contracting parties.
• Relativity of contracts refers to the binding effect of a contract to its contracting parties, their heirs, and assigns.
• Mutuality of contracts refers to the equality of standing of contracting parties in a contract.
• Autonomy of contracts refers to the freedom of the contracting parties to agree to any term or condition provided it is not contrary to law, public policy, good morals, and good customs
• The Philippines follows the Cognition Theory (when the acceptance comes to the knowledge of the offeror) when it comes to perfection of contracts.
• Before an offer is accepted, it may be withdrawn by the offeror, except if there is consideration given in order for the offeree to decide on the offer.
• When an offeror is convicted for a crime which is punishable by imprisonment of at least reclusion temporal, the offer is considered withdrawn because civil interdiction is deemed imposed with the prison sentence.
• Stipulations in favor of third persons only bind the third persons upon their acceptance. Prior to said acceptance, contracting parties may withdraw said stipulations.
• In case a minor enters into a contract, the other contracting party, who is capacitated, cannot seek the annulment of the voidable contract.
• If the lesion or damage suffered by a minor, ward, or absentee in a contract entered into by the guardian or representative is exactly 25% of the property, the contract is valid. It must be more than 25% to be rescissible.
• An action for rescission is a subsidiary remedy or a remedy of last resort
• Unenforceable contracts may be ratified by partial performance no matter how small since such performance is deemed an admission to the existence of said contract.
• For an oral sale of chattel to be enforceable, the price of the chattel sold must be less than P500. If the price is exactly P500, such sale of chattel must be in writing to be enforceable.
• A minor who entered into a contract cannot ratify said voidable contract during his minority. Only his or her guardian can ratify said contract. Once he or she reaches the age of majority, his or her guardian cannot ratify said contract anymore.
• The prescriptive period to annul a voidable contract is 4 years.
• A contract entered into by two persons legally incapacitated to enter into a contract is unenforceable; but those entered into by two persons whose consents are both vitiated are voidable.
• Void contracts are imprescriptible and not capable of being ratified.
• When contracting parties are in pari delicto, the law leaves where they are. They cannot go to courts to enforce the contract
• A sale of shabu is void even if the document is couched as a sale of baby powder. A sale of baby powder is valid even if the document is couched as a sale of shabu. It is the parties’ intention that prevails.