finals reviewer - contracts

7/27/2019 Finals Reviewer - Contracts

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CONTRACTS REVIEWER

QUIJANO MICOLE

CONTRACTS:

A. GENERAL PROVISIONS

1305

Requisites: 1318) 1. Consent – meeting of minds2. Object of the contract – to do 3/13/09Created by , not to

do, to give3. Cause – parties involved, not only 2 persons – since there are joint

and solidary obligations

*Not necessary written form

Phases:

1. Negotiations – price, payment, date, parties2. Perfection – have the meeting of minds, then a contract is born3. Performance – do the object of the contract

*Agreement – social meeting of the minds, not legally enforced*Contract – legal

1306 Example: Drug dealers contract – no contract at all since DRUGS areillegal, takes effect on both parties

1307

Innominate contracts, page 289

1308 Binds both parties, not according to will of one, must be of both

1309 Third person can determine performance, ONLY IF MADE KNOWN to thecontracting parties

1310

Refer to 1309, determination NOT obligatory if INEQUITABLE. Courtsdecide if inequitable or not.

1311 GENERAL RULE: Between parties, ASSIGNS, SUCCESSORS and HEIRS – ifheir, not liable beyond property received from decedent

EXCEPTION:1. By nature – implied already like talents, intransmissible rights



CONTRACTS REVIEWER

QUIJANO MICOLE

2. By stipulation – they alone3. By provision of law - see page 294

Examples:

A, father ! B 10 MillionC, daughter ! B 10 Million, but inherited only 5 Million because other 5Million donated to Church (Valid donation), B can only receive 5 Million ifVALID donation

A, father !B 10 MillionC, daughter ! 10 Million, received 5 Million but became insolvent. ! BCANNOT RECEIVE FROM B since liability only up to what has beenreceived from A

1312 – see book

1313 Creditors protected in cases of contracts intended to defraud them

1314 Interference of Contracts: Third person induces another to VIOLATEcontract laible for DAMAGES

Example:A works for company B, C, third person PIRATES by INCREASE in salary(Buy Employee)Labor law - in favor of employee

1315 – SEE BOOK

1316 – SEE BOOK

1317 No one may contract in the name of another WITHOUT BEINGAUTHORIZED by the latter, or unless he has by law a right to representhim.

A! B 10 Million

D, driver – act in behalf of A –CANNOT BE UNLESS AUTHORIZED BYPRINCIPAL

1318 – SEE ABOVE (1305)



CONTRACTS REVIEWER

QUIJANO MICOLE

B. CONSENT

1319 Consent

1. Offers – it is certain, priced explicitly*If any change in offer – counteroffer, STILL NO CONTRACT2. Accepts – absolute – agreeing to all terms and conditions –THEN

THE CONTRACT IS BORN1320

Payment is implied when accepted – perfection and performance

1321 – SEE BOOK

1322Offer made through an agent is accepted from the time acceptance iscommunicated to him

1323 Offer ineffective upon DEATH, CIVIL INTERDICTION, INSANITY orINSOLVENCY of either party

1324

One who offered allow period to accept ! offer may be WITHDRAWN

anytime BEFORE ACCEPTANCE by COMMUNICATING the withdrawal

Exception:Option Contract – giving person a consideration a certain period withinwhich to accept the offer

Example: Big deals between companies, pay for the time – SEE BOOK

1325 - 1326 (SEE NOTES)Advertisements – NOT OFFER, only an INVITATION, not a breach

MARKETER ! PERSON ! STOREMarketer - inviting only, not offeringPerson ! Store; there the contract lies, Person is OFFERER and StoreACCEPTS

When ACCEPTANCE came to knowledge of OFFERER



CONTRACTS REVIEWER

QUIJANO MICOLE

1327 – 1328

Consent is DEFECTIVE if

1329 SEE BOOK – NOT DISCUSSED IN CLASS

1330 – VITIATION – VOIDABLE (Valid until ANNULLED)

1. Error (1331, 1332) –object of the contract, cause of the contract,condition (Reason why parties entered the contract)

*If one party unable to read/in language not understood by one,MISTAKE/ERROR! person enforcing contract must show terms andfully explained to the one unable to read/misunderstood language

*1333-1334 – SEE BOOK

2. Violence (1335, 1336)a. Physicalb. Seriousc. Irresistible forcesd. Directed against party whose consent is acquirede. See notes – if punched by 3rd person to be employed

3. Intimidation – produces fear-Intimidation to person, propertyof one party, spouse, descendants and ascendants

- 1335 – 1336

- Directed to person himself – threats not performed specificthings and people !INTIMIDATION

- VIOLENCE—if threat is performed

4. Undue Influence (1337) – improper advantage; more powerful thanthe other; 2 parties and unequal footing

5. Fraud 1338)

a. Causal fraud – fraud before enter the contract – annul contract

Inca acitated

Hypnotic

Drunk

Insane (NOTES)

Exce tion: Lucid Interval

Deaf-Mute cannot

read or write

Minors

REASON



CONTRACTS REVIEWER

QUIJANO MICOLE

Example: Deliver a dozen shirts, know and sell FAKE shirt but toldbuyers ORIGINAL, fraud existed from start and person guilty of fraudeither acted/performedb. If incidental fraud – liable for damagesExamples: Sell dozen shirts, real – sell real, buyer bought/ordered,when delivered FAKE (performed) ! not annul contract but onlydamages

1339

Failure to disclose facts ! FRAUD

Example: Sell steel – build bridge – inform strength and life spanIf expert’s opinion and if wrong ! FRAUD

1340 Ads are not fraudulent

1341 (Refer to 1339 )

1342, 1343, 1344, 1345 (SEE BOOK)

1346 - simulated – pretend to have contract but there is really none

*Absolute simulation – VOID contract, none at all

*Relative simulation – there is contract but the one revealed in public isnot the REAL contract ! ONLY VOIDABLE

C. OBJECT OF CONTRACT

1347 - all outside commerce of men –NEVER object of contract, shouldbe according to LAW, MORALS, PUBLIC ORDER

1348 – IMPOSSIBLE things cannot be objects of the contracts

1349 – OBJECT must be DETERMINATE

D. CAUSE OF CONTRACTS

E. FORM OF CONTRACTS

F. REFORMATION OF INSTRUMENTS

G. INTERPRETATION OF CONTRACTS



CONTRACTS REVIEWER

QUIJANO MICOLE

H. DEFECTIVE CONTRACTS

RESCISSIBLE

(1380-1389)

VOIDABLE UNENFORCEA

BLE

VOID

Grounds Guardian/Ward,

Rep/Absentee,

In fraud of

creditors,

Litigation,

Others,

Payments made

in state of

insolvency

Incapacity

and

Vitiation

(both

under

consent)

No authority

to represent,

statute of

fraud (see

notes), both

parties

incapacitat

ed

Obj/Purpose

contrary to

Law,

Absolutely

Simulated,

Object

impossible,

cause and

object do not

exist, outsidecommerce of

men

Status Valid –

damage, injury,

lesion

Valid UNTIL

annulled

Valid but

UNENFORCE

ABLE – no

damages,

no specific

performanc

e

Does not Exist

Remedy - Rescind –court,

- Ratification –

cleanses all

defects

(retroacts, as if

nothing wrong)

-Damages

-Ratification

– by

guardian or

minor when

legal age

-Annul the

contract

Ratification(express,

acceptanc

e of

benefits, no

objection)

No remedy

Effectof

Remedy

- Restitution (if

rescission)

-If cannotreturn,

DAMAGES

Mutual

Restitution

No

restitution

Whento file

First 2! as soon

as incapacity

ceases, Third,

fourth and sixth

! 4 years

contract is

constituted

4 years

*incapacity

! until it

ceases

*mistake/fr

aud! from

time of

discovery*UI,

(NA)



CONTRACTS REVIEWER

QUIJANO MICOLE

Violence,

Intimidation

! time of

consent

ceases

*Note for VOIDABLE: Reform? If TRUE intention is reflected in written,and if CONSENT is WRONG, by mutual mistake and true intention notwritten

Art. 2176. Whoever by act or omission causes damage to another, therebeing fault or negligence, is obliged to pay for the damage done. Such

fault or negligence, if there is no pre-existing contractual relationbetween the parties, is called a quasi-delict and is governed by theprovisions of this Chapter. (1902a)

Art. 2177. Responsibility for fault or negligence under the precedingarticle is entirely separate and distinct from the civil liability arising fromnegligence under the Penal Code. But the plaintiff cannot recover damagestwice for the same act or omission of the defendant. (n)

Art. 2178. The provisions of Articles 1172 to 1174 are also applicable to a

quasi-delict. (n)

Art. 2179. When the plaintiff's own negligence was the immediate andproximate cause of his injury, he cannot recover damages. But if hisnegligence was only contributory, the immediate and proximate cause ofthe injury being the defendant's lack of due care, the plaintiff mayrecover damages, but the courts shall mitigate the damages to beawarded. (n)

Art. 2180. The obligation imposed by Article 2176 is demandable not onlyfor one's own acts or omissions, but also for those of persons for whom oneis responsible.

The father and, in case of his death or incapacity, the mother, areresponsible for the damages caused by the minor children who live in theircompany.

Guardians are liable for damages caused by the minors or incapacitatedpersons who are under their authority and live in their company.



CONTRACTS REVIEWER

QUIJANO MICOLE

The owners and managers of an establishment or enterprise are likewiseresponsible for damages caused by their employees in the service of thebranches in which the latter are employed or on the occasion of theirfunctions.

Employers shall be liable for the damages caused by their employees andhousehold helpers acting within the scope of their assigned tasks, eventhough the former are not engaged in any business or industry.

The State is responsible in like manner when it acts through a specialagent; but not when the damage has been caused by the official to whomthe task done properly pertains, in which case what is provided in Article2176 shall be applicable.

Lastly, teachers or heads of establishments of arts and trades shall beliable for damages caused by their pupils and students or apprentices, solong as they remain in their custody.

The responsibility treated of in this article shall cease when the personsherein mentioned prove that they observed all the diligence of a goodfather of a family to prevent damage. (1903a)

finals reviewer - contracts

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