Law on Contracts

Flashcards covering key concepts in contracts and obligations law, useful for exam preparation.

Contract

A meeting of minds between two persons where one binds himself to give something or render a service.

Obligatory Force of Contracts

Contracts shall be obligatory provided all essential requisites for validity are present.

Relativity of Contracts

Contracts take effect only between the parties or their assigns and heirs.

Mutuality of Contracts

A contract must bind both parties; its validity cannot be determined by the will of a single party.

Contract of Adhesion

A contract where one party prepares the stipulations and the other must accept or reject without modification.

Consent

The concurrence of the wills of the contracting parties regarding the object and cause of the contract.

Vices of Consent

Defects in consent that may arise from mistake, intimidation, violence, undue influence, or fraud.

Rescissible Contract

A contract that is validly constituted but can be set aside due to economic damage suffered by a party.

Voidable Contract

Contracts where consent is vitiated by incapacity, mistake, violence, intimidation, undue influence, or fraud.

Unenforceable Contract

Contracts which cannot be enforced by action unless ratified by the party who did not give consent.

Void Contract

Contracts that lack essential elements, making them invalid from the beginning.

Statute of Frauds

Law requiring certain contracts to be in writing to be enforceable.

Cause

The essential and impelling reason why a party assumes an obligation.

Fraud

Inducing one party to a contract through insidious words or actions.

Intimidation

Compelling one of the parties to give consent through fear of an imminent evil.

Reformation

A remedy to conform to the real intention of the parties due to mistake or fraud.

Prenuptial Agreement

A contract regarding property and financial obligations made before marriage.

Alice and Bob sign a contract. Alice later assigns her rights to Carol. Can Carol legally demand performance from Bob?

Yes, because of the Relativity of Contracts, which states that contracts take effect not only between the parties but also their assigns and heirs.

A person signs a mobile phone service agreement where all terms are pre-printed by the provider and no negotiations are allowed. What is this specifically called?

A Contract of Adhesion.

An elderly man is pressured by his primary caregiver to sign over his land, fearing he will be left without care if he refuses. What vice of consent is likely present?

Undue Influence, which makes the contract Voidable.

Two parties reach an oral agreement for the sale of a car worth $\$10,000$. If one party refuses to honor it, can the other party immediately sue for specific performance if the law requires a written memo for sales over $\$500$?

No, it is an Unenforceable Contract unless ratified, because it violates the Statute of Frauds.

A contract was drafted to sell a shipment of prohibited drugs. What is the legal status of this contract?

Void Contract, as it lacks a lawful object or cause and is considered non-existent from the beginning.

Due to a clerical error, a written deed of sale lists the price as $\$5,000$ instead of the $\$50,000$ agreed upon by both parties. What is the appropriate legal remedy?

Reformation, a remedy used to conform the written instrument to the real intention of the parties.

A guardian sells the property of their ward, causing the ward to suffer a financial loss (lesion) of more than one-fourth of the property's value. What can the ward do upon reaching majority age?

The ward can seek to have the agreement declared a Rescissible Contract to set it aside due to economic damage.