Contracts

Chapter 2

Article 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. (1261)

1. What are the essential requisites of a contract?

Consent of the Contracting Parties
Object Certain
Cause of the Obligation
(Real Contracts) Delivery
(Solemn or formal contracts) compliance with formalities required by law

2. What does consent presupposes?

Legal capacity

3. What is the effect if there is no consent(as in the case of a JOKE)?

Void

4. What is the effect if there is a vice of consent(such as error, fraud, or undue influence)?
Not void but merely voidable

5. Is transportation ticket a contract?

Yes. It has all the elements of a contract
a. Consent= manifested by the fact the passenger boards the ship and the shipper consents or
accepts him in the ship for transportation
b. Cause or consideration= which is the fare paid by the passenger as stated in the ticket
c. Object= which is the transportation of the passenger from the place of departure to the
place of destination as stated in the ticket.
Article 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. The offer must be certain and the acceptance
absolute. A qualified acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not bind the offerer except from the time it came to his
knowledge. The contract, in such a case, is presumed to have been entered into in the place where
the offer was made. (1262a)

6. Define Consent.
The manifestation of the meeting of the offer and acceptance upon the thing and the cause
which are to constitute the contract
7. What are the requisites of Consent?
2 or more parties(1 person may represent 2 or more persons)
Capacity of the parties
No vitiation of consent
No conflict bet. what was expressly declared and what was really intended.
-remedy if there’s conflict: reformation
Intent must be declared properly

8. How is intent declared properly?

-by complying whatever legal formalities required
9. Requisites for the meeting of the minds?
- offer must be CERTAIN
- acceptance must be UNQUALIFIED and ABSOLUTE/UNCONDITIONAL

10. What is a counter-offer?

An acceptance which is qualified and conditional(as in negotiating)
It extinguishes the offer of an offeror thereby creating a new one. It may or may not be
Accepted by the original offeror

11. When is an offer certain?

It must not be vague, misleading, or made as a joke
Note: a declaration of a person of his intention to enter into a contract is not an offer that is CERTAIN.

12. “I am in position and am willing to entertain the purchase of it under the following terms” is
this offer certain?
No. Because the offer is neither definite nor certain. Jurisprudence provides that to
convey the idea of a resolution to purchase, a man of ordinary intelligence would use clear and
simple words such as: I offer to purchase, I want to purchase, I am in a position to purchase.
The word ‘entertain’ applied to an act does not mean the resolution to perform said act,
but simply a position to deliberate for deciding to perform said act.

13. What is a qualified acceptance?

This is where in an acceptance a thing regarding the offer is specified/qualified which
Was not specified in the offer. i.e. manner of payment, amount of downpayment.

14. “willing to accept the offer/proposition”. Is there meeting of the minds?

•No. Acceptance was not definite. The phrase “willing to accept” merely indicates a
disposal to accept in principle subject to certain considerations.

15. What is the rule on acceptance through correspondence?

•Acceptance made by letter or telegram does not bind the offeror except from the time
it came to his knowledge.

16. What is the rule if the letter of acceptance is withdrawn or revoked?

 •If the letter revoking the acceptance was received before the letter of acceptance even
if such letter of acceptance was made prior to the former, there is no meeting of the minds.
•If the letter revoking the acceptance was received after the letter of acceptance, there
is already meeting of the minds.

Article 1320. An acceptance may be express or implied. (n)

17. kinds of acceptance

•Express
•Implied – ex. Full compliance with the rules of a contest implies acceptance.
•Presumed by law

Article 1321. The person making the offer may fix the time, place, and manner of
acceptance, all of which must be complied with. (n)

18. Enumerate the things that may be fixed by the offerrer.

•The time
•The place
•The manner of acceptance
•Note: any act contrary to the prescribed terms constitutes a counter-offer or counter-proposal

19. What is a Contract to Purchase?

It is a mere preliminary agreement where it does not give a specific description of the
objects to be purchased the price nor the rate of exchange to be used, hence no meeting of the
minds.

Article 1322. An offer made through an agent is accepted from the time acceptance is
communicated to him. (n)

Article 1323. An offer becomes ineffective upon the death, civil interdiction, insanity, or
insolvency of either party before acceptance is conveyed. (n)

20. When does offer becomes ineffective?

Article 1323

21. What are the other instances when the offer becomes ineffective?
•When the offeree expressly or impliedly rejects the offer
•When the offer is accepted with a qualification or condition
•When before acceptance is communicated, the subject matter has become illegal or
impossible
•When the period of time gived to the offeree within which he must signify his
acceptance has already lapsed
• When the offer is revoked in due time(that is before the offeror has learned of its
acceptance by the offeree)
Article 1324. When the offerer has allowed the offeree a certain period to accept, the offer
may be withdrawn at any time before acceptance by communicating such withdrawal, except
when the option is founded upon a consideration, as something paid or promised. (n)

22. What is the rule on Options?

GR: To be binding on the person who made a unilateral promise, the promise must be
supported by a cause or consideration distinct from the price
XPN: When the option is founded upon a consideration as something paid or promised.

23. What is Option? Definition

It is a contract granting a person the privilege to buy or not to buy certain objects at any
time within the agreed period at a fixed price. It is distinct and separate from the contract which
the parties may enter into upon the consummation of the contract. Therefore an option must
have its own cause or consideration.

Article 1325. Unless it appears otherwise, business advertisements of things for sale are not
definite offers, but mere invitations to make an offer. (n)

24. Are business advertisements of things for sale definite offers?

GR: No. they are merely invitations to make an offer
XPN: if it contains all the specific particulars needed in a contract.

Article 1326. Advertisements for bidders are simply invitations to make proposals, and the
advertiser is not bound to accept the highest or lowest bidder, unless the contrary appears.
(n

25. What is the rule in advertisement for Bidders?

GR: The advertiser is not bound to accept the highest or lowest bidder
XPN: the contrary is proved

Article 1327. The following cannot give consent to a contract:

(1) Unemancipated minors;

(2) Insane or demented persons, and deaf-mutes who do not know how to write. (1263a)

26. What are the 2 classes of voidable contracts?

•Those where one party is incapacitated to give consent.
•Those where the consent of one party has been vitiated

27. Who are the persons incapacitated to consent?

•Unemancipated minors
•Insane or demented (xpn. Act during lucid interval)
•Deaf-mutes who do not know how to read and write. (if read only and not write = valid)

28. XPN on the rule that on minors entering into contract

•Ratification upon reaching age of majority
 •Entered into through a guardian
•Contracts of life insurance in favor of their parents, spouse, children, brothers, sisters
•In the form of savings account in the Postal Savings Bank, provided furthermore that
the minor was at least seven years old.
•Contracts for necessities such as food, but here the people who are legally bound to
give them support should pay therefor.
•Minor misrepresented his age and pretended to be of major age is thus in ESTOPPEL.

29. What is the effect if both parties to a contract are minors?

The contract is unenforceable.