OBLI QUIZ 3

• Future inheritance


  Cannot be the object of a contract; cannot be sold as it will belong to you anyway when the person dies
• Impossible things


  Cannot be the object of contracts, e.g. selling a ghost, building a building in 1 day
• The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties
• Requisites for the object of a contract

  • The thing or service must be within the commerce of man
  • Must be transmissible
  • Must not be contrary to law, morals, good customs, public order, or public policy
  • Must not be impossible
  • Must be determinate as to its kind or determinable without the need of a new contract or agreement
• Things considered outside the commerce of men

  • Personal rights, the status and capacity of persons, honorary titles and distinctions
  • Public offices
  • Political rights of an individual or right of suffrage
  • Property pertaining to public dominion, such as roads, plazas, and rivers
  • Sacred or common things like the air and sea, as long as they have not been appropriated
• Before a land can be appropriated, there must be a declaration from the government of private ownership, except for ancestral lands
• CO2 is considered a common thing, but the chemicals in a hospital are not common as they have been appropriated
• When paying for air to inflate a tire, you are paying for the service, not the air itself
• Sale of future things (emptio rei speratae)

  Things having potential existence may be the object of a contract of sale, subject to the condition that it will come into existence. If the thing will not materialize, the sale is not effective.
• Sale of hope (emptio spei)


  The hope or expectancy already exists, but sale of vain hope or expectancy is void.
• Future inheritance cannot be the object of a contract, except under certain provisions in the Family Code and Civil Code
• Cause/Consideration


  The essential and impelling reason why a party assumes an obligation
• Cause


  The "why of the contract", the essential reason which impels the contracting parties to enter into the contract
• Requisites of Cause


  • It must exist
  • It must be real, that is, true
  • It must be lawful
• Kinds of contracts according to cause

  • Onerous - cause is the prestation or promise of a thing or service by the other or the promise that the parties are reciprocally obligated to each other
  • Remuneratory - cause is the service or benefit which is remunerated
  • Gratuitous - cause is the mere liberality of the benefactor or giver
• Motive


  The psychological, individual and personal reason which induces a party to enter into a contract
• If the consideration is legal but the motive is illegal, the contract may still be valid
• Cause vs Motive


  • Cause is the immediate, direct and most proximate reason; motive is the indirect and remote reason
  • Cause is the objective, intrinsic reason of the contract; motive is the individual and purely personal reason
  • The motive may be unknown to the other, the cause is always known
  • The motive may be lawful or unlawful, the cause must always be lawful
• If the cause of the contracting parties is unlawful, the contract is void. If only the motive is unlawful, the contract may still be valid if the cause is lawful.
• Example of valid contract with unlawful motive

  • K wanted to kill D and hired H to do it. K sold his land to B for P50k to fund the planned execution. The contract between K and B is valid because the object is the land, the cause is P50k, and the motive to kill D is unlawful but the cause is lawful.
• Cause distinguished from object and motive


  Cause is the essential reason, object is the thing/service, motive is the personal reason
• Falsity of cause


  The cause is false if it is fictitious or simulated. If the cause is false, the contract is considered voidable, not void, if there is another true and lawful cause.
• Example of false cause


  • Contract stated S delivered land to B and B paid P10k, but no payment was made. However, the contract may be valid if it can be proven the true cause was a donation.
• Want of cause, illegal cause, false cause


  • Want of cause - total lack of consideration (void)
  • Illegal cause - contrary to law, morals, etc. (void)
  • False cause - stated cause is not true (voidable)
• The cause of a contract need not be stated as it is presumed to exist and be lawful
• Lesion


  The insufficiency or inadequacy of the cause of a contract
• Lesion or inadequacy of cause does not invalidate a contract unless there is fraud, mistake or undue influence
• Gross inadequacy of price does not affect the validity of a contract of sale, unless it indicates a defect in the consent of the parties
• As a rule, a contract is valid and enforceable even if entered into orally, as long as the 3 essential elements are present
• Undue Influence


  Effect if the cause is inadequate: the contract remains valid, because lesion or inadequacy of cause shall not invalidate a contract unless there has been fraud, mistake or undue influence
• Undue Influence


  • S sold to B a specific parcel of land valued at P1M for P100K only. The contract of sale remains to be valid.
• Gross insufficiency does not mean the contract is invalid
• Gross insufficiency will not invalidate the contract, unless there is either fraud, mistake or undue influence
• Contract


  Perfected by mere consent, once agreed the contract is valid either written or not
• Classifications of contracts


  • Valid
  • Void
  • Voidable
  • Unenforceable
• Voidable contract


  Valid until annulled, e.g. due to problem with consent like minority
• Unenforceable contract


  Not enforceable but still valid
• Unenforceable contract


  • S sold to B a specific parcel of land orally for P10K. The sale is valid but unenforceable because the law requires sale of immovable property to be in writing.
• Oral contract for sale of land is valid but unenforceable
• Form required by law


  For validity, for convenience, for enforceability