Obligations and Contracts: General Provisions (Articles 1305–1318)

Vocabulary flashcards defining fundamental principles, classifications, essential requisites, and rules governing contracts under Articles 1305 through 1318 of the Civil Code.

Contract

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

Autonomy of Contracts

The principle under Article 1306 allowing contracting parties the freedom to establish stipulations, clauses, terms, and conditions, provided they are not contrary to law, morals, good customs, public order, or public policy.

Obligatory Force of Contracts

The principle that valid contract stipulations, terms, and conditions have the force of law between the contracting parties and bind them to fulfillment from the moment of perfection.

Nominate Contracts

Contracts that have a proper or peculiar name and form, traditionally classified as real (ex re), verbal (ex verbis), literal (ex literis), or consensual (ex consensu).

Innominate Contracts

Unclassified contracts that do not belong to a specific named class and are regulated by the stipulations of the parties, general contract provisions, analogous nominate contract rules, and local customs (Article 1307).

Mutuality of Contracts

The legal characteristic requiring that a contract must bind both contracting parties, meaning its validity, compliance, or performance cannot be left solely to the will of one party (Article 1308).

Relativity of Contracts

The principle stating that contracts take effect and bind only the contracting parties, their assigns, and their heirs, with heirs liable only up to the value of the inherited property (Article 1311).

Transmissible Rights

Contractual rights and obligations that pass to legal representatives and heirs upon death, excluding those relying on unique personal skills, talent, trust, or those forbidden from transfer by law or agreement.

Stipulation Pour Autrui

A clear, deliberate, unconditional, and uncompensated stipulation in a contract conferring a specific favor upon a third person, which can be enforced if the third person communicates acceptance before revocation.

Registration of Real Rights

The statutory act under Article 1312 that makes real rights over property binding upon third persons who come into possession of the object, subject to the Mortgage Law and Land Registration Laws.

Contracts in Fraud of Creditors

Agreements intentionally entered into to prejudice or block creditors from collecting debts, which creditors have the legal right to ask the court to rescind (Article 1313).

Badges of Fraud

Recognized circumstantial indicators of fraudulent conveyance, such as fictitious consideration, transfers while suits are pending, credit sales by an insolvent debtor, or a buyer failing to take exclusive possession.

Interference with Contractual Relations

A tort under Article 1314 where a third person, possessing knowledge of a valid contract and acting with malice or impious motives, induces a party to violate the contract without legal justification or excuse.

Consensual Contracts

Contracts that are perfected upon mere consent or the meeting of the minds of the parties without requiring delivery of the object or specific formalities (e.g., sales, compromise agreements).

Compromise Agreement

A consensual contract defined under Article 2028 whereby parties, through making reciprocal concessions, avoid litigation or put an end to an action already commenced.

Real Contracts

Contracts that are not perfected by mere consent but require the actual delivery of the object of the obligation (e.g., deposit, pledge, commodatum, and mutuum) under Article 1316.

Deposit

A real contract wherein a person receives an object belonging to another with the principal obligation of safely keeping and returning it (Article 1962).

Pledge

An accessory, real, and unilateral contract by which a debtor or third person delivers movable property to a creditor or third person as security for the performance of a principal obligation.

Commodatum

An essentially gratuitous real contract wherein one party delivers something non-consumable to another for temporary use, with the bailor retaining ownership of the loaned item (Article 1933).

Simple Loan (Mutuum)

A real contract whereby one party delivers money or other consumable/fungible goods to another, who acquires ownership thereof and is bound to pay an equal amount of the same kind and quality (Articles 1933, 1953).

Formal or Solemn Contracts

Contracts that require compliance with legal formalities as an essential element for validity, such as the donation of real property requiring a public instrument under Article 749.

Unauthorized Contract

A contract entered into in the name of another without authority or beyond legal powers, which is unenforceable unless ratified by the represented person before the other party revokes it (Article 1317).

Contract of Agency

A contract wherein a person binds himself to render service or do something in representation or on behalf of another, with the consent or authority of the latter.

Ratification

The voluntary confirmation by a principal, possessing full knowledge of all material facts, of an act done in their name without prior authority.

Essential Requisites of a Contract

The three elements that must concur under Article 1318 for a valid contract to exist: consent of the contracting parties, object certain as the subject matter, and cause of the obligation.