Contracts

TITLE II

CONTRACTS

(Arts. 1305-1422, Civil Code)

I. GENERAL PROVISIONS

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 some service. (1305) |

Classification of Contracts

1. As to perfection

a. Consensual

b. Real

c. Formal/solemn

2. As to cause

a. Onerous

b. Gratuitous

c. Remunerative

3. As to importance or dependence of one upon another

a. Principal

b. Accessory

c. Preparatory

4. As to parties obliged

a. Unilateral

b. Bilateral

5. As to name or designation

a. Nominate

b. Innominate

Characteristics of Contracts

1. Autonomy of Contracts- parties may stipulate anything as long as not illegal, immoral, etc.

Limitation

Stipulations must not be contrary to:

(1) Law

(2) Morals

(3) Good Customs

(4) Public Order

(5) Public Policy

2. Mutuality of Contracts- performance or validity binds both parties; not left to will of one parties. (1308)

3. Obligatory Force-means that once a contract is perfected, it shall be of obligatory force upon both parties

4. Relativity of Contracts-binding only between the parties, their assigns and heirs; strangers cannot demand enforcement.

5. Exception to Relativity

1. Accion pauliana

2. Accion directa

3. Stipulation pour auturi

Requisites of stipulation pour auturi

1. Parties must have clearly and deliberately conferred a favour upon a 3rd person

2. The stipulation in favor of a 3rd person shoukd a part of, not to the whole contract

3. That the favorable stipulation should not be conditioned or compensated by any kind of obligation whatsoever

4. Neither of the contracting parties bears the legal representation or authorization of 3rd party

5. The third person communicates his acceptance before...