CMPM (Contracts and Specifications)

Extracts from the New Civil Code of the Philippines (RA 386)

REPUBLIC ACT NO. 386

is an act to ordain and institute the Civil Code of the Philippines.

BOOK IV

Obligations and Contracts

Contents under Book IV

• TITLE II Contracts

• CHAPTERS

• SECTIONS (not all chapters have sections)

• ARTICLES

ART. 1305.

A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render service.

ART. 1306

The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

ART. 1308.

The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them.

ART. 1318.

There is no contract unless the following requisites concur:

1. Consent of the contracting parties.

2. Object certain which is the subject matter of the contract.

3. Cause of the obligation which is established.

ART. 1319.

Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract.

ART. 1320.

An acceptance may be express or implied

ART. 1321.

The person making the offer may fix the time, place, and manner or importance, all which must be complied with

ART. 1322

An offer made through an agent is accepted from the time acceptance is communicated to him.

ART. 1323.

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

ART. 1327.

The ff. cannot give consent to a contract:

1. Unemancipated minors

2. Insane or demented person, and deaf-mutes who donot knowhowto write

ART. 1328

Constracts entered into during a lucid interval are valid. Contracts agreed to in a state of drunkenness or during a hypnotic spell are voidable.

ART. 1330

A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable

ART. 1332

When one of the parties is unable to read, or if the contract is in language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former.

ART. 1333.

There is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object of the contract.

ART. 1348.

Impossible things or services cannot be the object of contracts.

ART. 1349.

The object of every contract must be determine as to its kind. The fact that the quantity is not determine 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

Art. 1356

Contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present. However, when the law requires that a contract be in some form in order that it may be valid or enforceable, or that a contract be proved in a certain way, that requirement is absolute and indispensable. In such cases, the right of the parties stated in the following article cannot be exercised.

Art. 1358.

The ff. must appear in a public document:

1. Acts or contracts involving the creation, transfer, modification, or extinguishment of real rights over immovable property (e.g., sale of land).

2. Cession, repudiation, or renunciation of hereditary rights or conjugal partnership gains.

3. The power to administer property, or any authority affecting rights that should be public.

4. Cession of actions or rights arising from an act that appeared in a public document.

Art. 1370.

If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former.

defective contract

A _________ is a contract that appears valid but has a flaw that affects its legality or enforceability. It’s called “defective” because something is wrong with how it was made, even if the parties agreed on the terms.

There are four kinds of defective contracts:

1. Rescissible contracts (Chapter 6)

2. Voidable contracts (Chapter 7)

3. Unenforceable Contracts (Chapter 8)

4. Void or inexistent contracts (Chapter 9)

Rescissible contracts

Contracts are valid because all the essential requisites of a contract exist but by reason of injury or damage to one of the parties or to third persons, such as creditors, the contract may be rescinded

Art. 1380.

Contracts validly agreed upon may be rescinded in the cases established by law.

Art. 1390.

The following contracts are voidable or annullable, even though there may have been no damage to the contracting parties:

1. Those where one of the parties is incapable of giving consent to a contract

2. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud. These contracts are binding, unless they are annulled by a proper action in court. They are susceptible of ratification

Art. 1403.

The following contracts are unenforceable, unless they are ratified:

1. Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers

2. Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum, thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents

Art. 1409.

The following contracts are inexistent and void from the beginning:

1. Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy

2. Those which are absolutely simulated or fictitious; transaction

3. Those whose cause or object did not exist at the time of the

4. Those whose object is outside the commerce of men

5. Those which contemplate an impossible service

6. Those where the intention of the parties relative to the principal object of the contract cannot be ascertained

7. Those expressly prohibited or declared void by law.

Art. 1410.

The action or defense for the declaration of the inexistence of a contract does not prescribe

SPECIFICATION

A ______________is a detailed description of the particulars of some projected work in any scientific, manufacturing process or engineering discipline by stating the dimensions, material content, quantities, and performance of the work.

TECHNICAL SPECIFICATIONS

It gives the directions to be followed by the designer, builder or constructor

Specifications serve three purposes.

• make sure the client gets the product or service required

• are a means of equating expenditure with a budget

• specify to the contracting party precisely what is wanted.

Well-written specifications must:

• Avoid contractual commercial difficulties

• Meet performance objectives

• Avoid maintenance problems

• Meet budget objectives

Different Types of Specifications

1. Concept Specifications

2. Design Specifications

3. Design Description Specifications

4. Construction and Manufacturing Specifications

5. Process Specifications

6. Standards Specifications

Concept Specifications

These are written in general terms to define a product or major undertaking. They serve as a foundation for conducting an investigation, feasibility study, and the probable life cycle cost of an undertaking.

Design Specifications

are used to define system or equipment performance, output capacity, and the range of design license open to the designer.

Design Description Specifications

are normally those produced by the designer. They are not the same as design specifications, which govern the designer's work. The ____________ defines and specifies a design solution that meets the design specification.

Specifications in this category serve two purposes:

• They are submitted to the organization issuing the design specification as evidence that the specification has been met.

• They are used by other designers to produce equipment specifications, construction and manufacturing drawings.

Construction and Manufacturing Specifications

Specifications in this category consist of drawings and written details that cover the product, system, building, or service. They include references to regulatory controls, acceptable national, international and industry standards; specify criteria that must be met by contractors or suppliers who wish to submit bids; and limit products and services bidders may or may not include in their bids and proposals.

Process Specifications

Describe the technical processes that will be used in the manufacture of a product, or construction of a building or system. These processes include the heat treatment of foundry castings, rules for pre-stressing concrete beams, bolt torques on bridge anchors, seismic measurements, and specific chemical processes to name a few

Anatomy of Specifications

Refer to the structure and main parts that make up a specification document.

Parts of the Anatomy of Specifications

1. Identity

2. Revision Reference

3. Title

4. Introduction

5. Description

6. Performance

7. Construction

8. Reliability

9. Quality Assurance

10. Packaging and Storage

11. Standards and Specifications

12. Records

IDENTITY

Assign a number to identify the specification for use in the commercial contract, or other specifications.

REVISION REFERENCE

Specifications are often revised. Provide a reference for each revision issued. Use a letter or number designation and date it so that the user is aware of the version that applies.

TITLE

Provide a concise and distinctive title. Avoid using long titles; they are confusing.

INTRODUCTION

Say what the specification is about. This can include the scope of the specification, its type, form, purpose and application.

DESCRIPTION

Describe the product or service covered: dimensions; materials; tolerances; finish; required spares.

PERFORMANCE

Describe the performance criteria, operating conditions, expected service, life expectancy, and service factors. Other performance requirements depend on the product, structure, or service.

• For electrical, mechanical, hydraulic, aeronautical, and computer equipment, bio-medical, and chemical processing devices, performance will include power, speed, movement, pressures, operating temperatures, primary and stand-by power sources, and ratings.

• For engineering and building structures, performance will include floor loadings, finish, materials.

• Service factors for all products, structure or services could include environmental conditions: chemicals, temperature ranges, vibration, humidity, and dirt.

CONSTRUCTION

Also meaning manufacture, should include reference to processes, chemicals, solvents, product handling, and the use of special tools and devices.

RELIABILITY

The specification should include information on service and maintenance factors that affect reliability. It should state limits on down-time to effect repairs, the availability of specialists for servicing, and replacement parts.

QUALITY ASSURANCE

The purpose of imposing quality assurance standards, as opposed to standards in general, is to provide an organizing framework within which the contract is carried out. The specifications define the quality of the service. Inspection and test requirements, forming part of the quality assurance programme, do not improve the quality of product or service, but provide objective evidence of the quality of goods or services provided.

PACKAGING AND STORAGE

The specification should describe the packaging, handling, shipping and storage requirements of the product.

STANDARDS AND SPECIFICATIONS

Throughout the specification other specifications and standards will be referenced. A separate listing of all specifications and standards cited should be summarized in this section.

RECORDS

The retention of accounting records is required by law. The retention of manufacturing, inspection and performance test records is what any manufacturing or service contractor observes for self-protection. Clients who issue specifications frequently have to meet national and industry regulatory controls by maintaining manufacturing as well as operating records.

Specifications should include:

1. Direction to the contractor of exactly what construction records are needed and what drawings, spare parts information, operating manuals, installation information, and performance test records are required.

2. Direction to the contractor of what records are to be kept by the contractor and for how long.

SPECIFICATION WRITING

The objectives for which specifications are written were dealt with in the introduction to this session. _____________ as used here includes the text, drawings, illustrations and sketches. The basis for development of a specification is the same as that described for writing a technical report or procedure. To reiterate the advice given throughout these articles, the steps are:

REVIEW AND APPROVAL

Anyone who reviews a specification should do so from the viewpoint of the contractor. Here is a checklist for anyone who has to review and approve a specification:

• Is it grammatically correct?

• Are any necessary requirements omitted?

• Are any unnecessary requirements included?

• Is the specification concise and unambiguous?

• Is it clear as to the what, when, where, how and why?