Law on Contracts

Contracts

Art. 1305. meeting of minds between two persons whereby one binds himself, with respect to the other to give something or to render some service

• Essential

• Natural

• Accidental

Elements of Contracts

Essential elements of contract

Those without which contract cannot exist

(COC)

• Consent

• Object

• Cause

Essential Elements of Contracts

Natural elements of contracts

exist as part of the contract even if the parties do not stipulate because the law is deemed written therein.

Accidental elements of contracts

those which are agreed upon by the parties and which cannot exist without being stiuplated

• Negotiation

• Perfection

• Consummation

Stages in the life of a contract

Negotiation

Also called preparation/conception/generacion. Contract is not yet existing and no meeting of minds yet.

Perfection

or also called Birth of contract. There is already meeting of minds between parties

Consummation

Also called death or termination. Obligation is already fulfilled. No more contracts is involved.

Consent

meeting of the offer and the acceptance upon the thing and thee cause which are to constitute the contract.

• offer must be certain

• acceptance must be absolute

• qualified acceptance constitutes counter-offer

• acceptance may be express or implied

• person making the offer may fix the time, place, and manner of acceptance that must be complied with.

offer and acceptance in consent

• Cognition Theory

• Manifestation Theory

Schools of thoughts in consent of the contract

Cognition theory

acceptance takes effect from the time the offeror knew the acceptance of the offeree

Manifestation Theory

acceptance will take effect once it is manifested by the offeree

Cognition Theory

what schools of though we abide in the Philippines?

an offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either party before acceptance is conveyed.

are not definite offers, but mere invitations to make an offer.

Notes as to advertisements

Absolute simulation

one or both parties did not intend to be bound by the contract

Relative Simulation

parties merely conceal their true agreement, they shall be bound by real agreement.

Juridical capacity

fitness to be the subject of legal relations. It is inherent in every natural person and lost only through death.

void

what happens to the contract if incapacity pertains to juridical capacity

Capacity to act/Legal capacity

power to do acts with legal effect, acquired may be lost.

Absolute incapacity

party cannot give consent in any contract, with anyone, in whatever capacity over anything

• unemancipated minors

• insane or demented persons

• deaf-mutes who do not know how to write

• drunks or hypnotized

• those suffering civil interdiction (unless they will enter into contract to buy essentials)

the following cannot give consent to a contract:

• hospitalized lepers

• prodigals

• dead and dumb who are unable to read and write

• unsound of mind

• by reason of age, disease, weak mind, other similar causes

the following are incompetent under the rules of court who may be placed under guardianship

Relative incapacity

may be prohibited from entering specific contracts, he may be prohibited in a certain capacity

Pari delicto

means “in equal fault”