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Stages of a contract (Phases)

Parties may stipulate anything but its not absolute (not contrary to)

1311 Effectivity / Relativity of Contracts

1311 Pour Autrui
1312 Real Rights
1313 Protection of Creditors
1314 Tortious Interference

GR: Cant enter into a contract in behalf of another (Unenforceable - can't go to court to
enforce it unless ratified)
1. authorized
2. right to represent by law (husband&wife)


1323. Offer becomes Ineffective upon death,ci,insolvency of either party before

acceptance is conveyed.

1324. Option contract. preparatory contract containing a certain period to accept may be
withdrawn anytime before acceptance by communicating such withdrawal, unless option
is founded upon a consideration as something paid or promised. (GR: separate and
distinct from the purchase price (E): if there is an agreement that it shall be part of
earnest money)

1327. Those who can't give consent

1328. Contracts entered into during a lucid interval

1330. consent thru Mistake, Violence, Intimidation, Undue Influence, Fraud = Voidable

1332. Unable to read.. must show terms have been fully explained

1335. Violence - serious of irresistible force

Intimidation - well grounded fear of imminent and grave danger

1337. Undue Influence - improper advantage..depriving the latter of a reasonable

freedom of choice

1338/1344. Fraud
1339. Failure to disclose facts when there is a duty to reveal them as when parties are
bound by confidential relations. - fraud
1340. Usual exaggerations in trade - not in themselves fraudulent
1341. Opinion - no fraud; Expert Opinion - fraud

1345. Simulation of a contract

Absolute - don't intend to be bound at all - Void
Relative - conceal true agreement - Binds to real agreement when doesn't affect
3rd person

1347. Objects
commerce of men
real or possible

1350. Cause

1356. Form
GR: Obligatory in whatever form
(E): Law requires form in order to be Valid or Enforceable

1359. Reformation of Instrument

must have been meeting of the minds
instrument doesn't express true agreement between parties
failure to

When Reformation Proper

1361. Mutual Mistake
1362. Mistake by one, concealment by another
1364. Ignorance, lack of skill, negligence or bad faith on part o one drafting instrument
1365. Mortgage/Pledge but instrument states absolute sale or with right of repurchase

1370. Interpretation of Contracts

1318. Valid Contracts

all reqs
lucid interval
relatively simulated contracts w/c do not prejudice 3rd person and not intended
for purpose contrary to..
Divisible contracts if same can be separated dtrom illegal provisions
1380. Valid until rescinded
1381. Economic/financial injury or damage to contracting party of 3rd person
lesion by more than 1/4 of value against ward,absentee,
fraud of creditors
Not susceptible to ratifiation
may be assailed also by 3rd person defrauded
Action for recession is subsidiary
Only to extent necessary to cover the damage caused
Mutual restition of object and cause
not 3rd person in GF
Indemnity for damages against person who caused the loss
effect or rescission retroact to date the action was instituted
4 years prescription period

Valid til annuled
incapable of giving consent
1390. Mistake intimidation, undue influence fraud
state of drunkeness or hypnotic spell
Susceptible of Ratification
1396. cleanses contract from all defects
1396. retroacts to constitution of contract
1393. effected expressly or tacitly
1392. extinguished action annul contract (mutually exclusive)
1395. needs no conformity of other party who has no right to bring action of
May be assailed ONLY by a contracting party (obliged principally or subsideiarily)
(E) capacitated party as to incapacity of other party
Mutual restoration of object and cause
4 year prescription from time defect of consent ceases

cannot be enforced by court action unless ratified (1403)
no authority or legal representation or beyond authority
didn't comply with Statute of Fraud (to evidence transaction of executory
Both contracting parties incapable of giving consent to a contract
Susceptible of ratification
Assailed only by contracting parties

No legal effects
one or some essential requisites of valid contract are lacking in fact or in law
not susceptible of ratification
may be assailed not only by contracting party but even 3rd person whose interest is
directly affected

Feb 4 , 2016

liability based on contracts v quasi delicts etc.
when no law prohibits, then theres right to collect (casino chips, trust indentures,
etc.)(no prohibiting law=respect provisions)
gr: valid tender of payment when making consignation
(e) willing to pay but do not know whom to make the payment
legal compensation
debtor and creditor of each other
amount sum of money
legal compensation not prohibited by law
payment in behalf of a third person, however there was a case that person was paying
on his own behalf thus you can't point towards the original debtor for compensation thus
the bank was liable to return money due to unjust compensation.
novation requisites
take note of "after thought acts" of parties..
manner of payment is important to consummate a contract of sale. but what are the
exceptions to this?
Requisites of Fraud (causal, serious, etc)

Feb 11, 2016

Contract of Sale v Contract to Sell

Contract of Sale v Contract of Agency to Sell (in behalf of the principal, agent accounts
for proceeds of sale to principal

Contract of Sale v Contract for a piece of work (Art. 1467)

Contract of Sale v Barter (*if thing is more valuable than the money, then it is barter)

Sale v Lease
Sale v Dacion en Pago

1. Policitation - unaccepted unilateral promise to buy or sell
2. Option Contract - for period only
3. Earnest Money
4. Right of First Refusal
5. Sale by Description
6. Sale by Sample (ex. sample to buy 100 doorknobs, should correspond to sample)

Art. 1475.

Kinds of Delivery
1. Actual/Real
2. Construtive
traditio symobolica
tradition long manu (merely points)
tradition brevi manu (already in possession)
traditio constitutum possesorum (ex. vedor as tenant of vendee)

Art. 1480. Loss/Deterioration of the Object

"Res Perit Domino"
Unpaid Seller: 2 kinds
Remedies: Recission
Special Remedies:
Recto Law - Sale of Personal Property in Installment (Art. 1484) (Alternative
a. Specific Performace in case buyer failed to pay
b. recession of sale in case of default of 2 or more installments
c. foreclose the chattel mortgage on the thing sold in case of default of 2
or more installments
Maceda Law - Sale of Real Estate in Installemnts (RA 6552) or realty installment
buyer protection act. (cumulative remedies)
a. specific performance - compel buyer to pay
b. Recission - notice of cancellation with notarial demand
c. right t retain installments

Double Sale
1. Personal
2. Real

Mirror Doctrine
one cannot close eyes to facts w/c should put a reasonable and prudent man
upon his guard, and then claim that he acted in gf under the belied that there was no
defect in the title of the vendor.

Implied(under the law)
Warranty against Eviction

Legal Redemption

Tacita Reconduccion (implied extension of lease)

Causes for Judicial Ejectment

Sale of Thing Leased

Loan (Real contract - you need to deliver the thing to perfect the contract)
Commodatum - non consumable thing to be returned after a certain time
a. ordinary
b. precarium

Mutuum - simple loan, any consumable thing

Distinguish Commodatum (may demand return o thing even before date agreed upon in
case of urgent need)(loss suffered by bailor) v Mutuum (ownership is now on bailee but
he must still return value)

Art. 1944

Principles in Mutuum
Art. 1956
Art. 1959
Art. 2212 interest due shall earn legal interest from the time it is judicially
demanded (when you go to court)

*sa Tondo prevalent and Sangle-Tira scheme where the creditors live in the house as
long as the load is outstanding

April 7, 2016

Guaranty v Surety

G Principles
2056. Qualifications
Excussion - 2058. right of the G to have properties of the debtor exhausted first before
the G can be made liable to the creditor
2060 conditions for the benefit of excision

When G not entitled to Excussion - 2059

G who pays for debtor must be indemnified by the latter - 2066

Extinguishment of Guaranty - 2076;20777

Mere failure to demand doesn't mean extension of time referred to herein - 2079


Requisites - 2085;2087

Obligations of Pledgee
Obligations of Pledgor

Requisites for the sale of thing pledged

2113 - pledgor/owner may bid
2114 - pay at once in cash. no check since its not legal tender
no right of redemption

Extinguishment of the Pledge


Real Estate Mortgage


Foreclosure of Mortgage
Equity of Redemption
Requisites for a Valid Redemption

2134 --in relation ro--> 2136
Antichresis(real)(consent) v Pledge(personal)(delivery)
Antichresis(delivered to creditor) v REM (debtor retains prop)
Chattel Mortgage

2184 0 motor vehicle mishap
2188 prima dace presumption of negli o defendant id feat or injury results from..

Res Ipsa Loquitur

Assumption of Risk
"Violenti Non Fit Injuria" one is not legally injured if he has consented to the act
complained of or was willing that it should occur. took it upon oneself to be injured.
Damnum Absque Injuria. LRT example where businesses suffered losses when it was
being constructed.
Emergency/Sudden Peril Doctrine
Action Based on Quasi-Delict - must be instituted within 4 years
Imputed Negligence - Vicarious Liability - 2180
Father, then Mother
Owner & Manager
Teacher or Heads

2190 Proprietor of a building or structure

2193 - Head of a family living in a building