Law on Contracts, Sales, and Business Organizations

Vocabulary flashcards covering the concepts, articles, characteristics, and classifications of contracts, sales, partnerships, and corporations.

Article 1305

States that a contract is a meeting of minds between 2 persons.

Article 1308

States that there is no contract unless there is consent and an object certain.

Article 1319

States that consent is manifested when there is a meeting of the offer and acceptance.

Article 1320

Specifies that an acceptance may be express or implied.

Article 1321

Provides that the person making the offer may change the details, such as time and place.

Vices of Consent

Factors that impair consent, which include mistake, violence, intimidation, undue influence, and fraud.

Object of a Contract

The subject matter of a contract, which could be a thing, a right, or a service.

Cause

The reason why parties entered into contracts.

Onerous Contract

A contract where the parties are reciprocally obligated to one another.

Gratuitous Contract

A contract in which one party gives something out of generosity.

Remunerative Contract

A contract made to give remuneration for services rendered by the previous party.

Mutuality of Contract

The principle that the contract cannot be left to the will of only one party.

Autonomy of Contract

The freedom of the parties to establish terms as long as they are not contrary to law, morals, public order, and other standards.

Obligatory Force

The characteristic of a contract dictating that it must be followed by the parties.

Relativity of Contract

The contractual principle concerning who is affected by the contract.

Negotiation (Generation)

The stage of a contract where the parties start to negotiate.

Perfection (Birth)

The stage of a contract where the parties determine whether to accept.

Consummation (Termination)

The final stage where the contract ends because it has been fulfilled.

Solemn Contracts

Contracts that must follow the specific form prescribed by law as an exception to the general rule.

Statue of Frauds (Article 1403 (2))

A provision of the Civil Code where the law requires written proof of terms.

Recissible Contract

A defective contract that may be cancelled due to injury or damage.

Voidable Contract

A contract that is voidable if a party is incapable of giving consent, or when consent is tainted by mistake, violence, or fraud.

Unenforceable Contract

A contract that is defective due to having no authority and both parties being legally incapable.

Void Contracts

Contracts that are equivalent to nothing but demand civil effects.

Vendor

The seller in a sales transaction.

Vendee

The buyer in a sales transaction.

Article 1458

Governs the contract where one party transfers ownership and the other party pays the equivalent, comprising the elements of consent, object, and consideration.

Article 1874

Requires that a sale made through an agent must have authority; otherwise, the contract shall be voided.

Absolute Sale

A kind of sale where there is no stipulation attached to the conveyance.

Conditional Sale

A sale where the property shall not pass to the buyer if it is not fully paid.

Article 1477

States that ownership transfers upon actual delivery.

Resperit Domino

The legal rule providing that the owner of the thing shall bear the risk of loss.

Article 1505

Provides that if a property is sold and the seller is not the owner, the buyer shall not gain the title of ownership.

Article 1484

Governs transactions where the property is payable in installments.

Article 1544

Rules that if property is sold to different vendees, the first to confirm ownership gets title for movable property, whereas the first to record gets ownership for immovable property.

Sole Proprietorship

A business structure where the owner is in command of the entire business and stands to lose as much as he loses.

Partnership

An association where two or more persons bind themselves to contribute money, property, or industry to a common fund.

Delectus Personae

The right to choose one's partner in a partnership.

Article 1772

Mandates that a partnership capital of $3000\text{ pesos}$ shall appear in a public instrument.

Corporation

An artificial being created by operation of law, having the right of succession and authorized powers.

Creature of Law

The legal doctrine stating that a corporation cannot come into being by mere consent of the parties, but requires a law granting it.