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Vgabeto OBLICON-003: 1. Elements

The document discusses key aspects of contract law in the Philippines, including essential elements of a contract, limitations on contractual freedom, consent requirements, valid contract objects, consideration, formalities, reformation, and interpretation. Specifically, it outlines essential and natural elements of a contract, limits that cannot be violated like prohibiting upset prices in mortgages, capacity and vices of consent, requirements for valid contract objects, different types of consideration, forms required based on validity and enforceability, reformation criteria for mistakes, and basic interpretation rules.

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44 views3 pages

Vgabeto OBLICON-003: 1. Elements

The document discusses key aspects of contract law in the Philippines, including essential elements of a contract, limitations on contractual freedom, consent requirements, valid contract objects, consideration, formalities, reformation, and interpretation. Specifically, it outlines essential and natural elements of a contract, limits that cannot be violated like prohibiting upset prices in mortgages, capacity and vices of consent, requirements for valid contract objects, different types of consideration, forms required based on validity and enforceability, reformation criteria for mistakes, and basic interpretation rules.

Uploaded by

jumel deluna
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ACLC COLLEGE OF TACLOBAN

REGULATORY FRAMEWORK AND BUSINESS TRANSACTIONS LAW ON CONTRACTS

1. Elements
a. Essential elements ( Consent; object; cause )
b. Natural elements ( Presumed to exist )
c. Accidental elements ( Stipulation )

2. Principle of freedom and Limitation


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

Examples of limitations:
a. Pactumcommissorium is null and void.
b. Upset price is not allowed in mortgage contract ( An upset price is a
specified price below which the mortgaged property is not supposed to
be sold at the execution sale. )
c. The parties to a contract cannot deprive the court of competent
jurisdiction.

3. Consent
Persons capable of giving consent to a contract:
a. Unemancipated minors;
b. Insane or demented persons;
c. Deaf mutes who do not know how to write;
d. Persons who are suffering from civil interdiction;
e. Incompetents under guardianship.

Requisites of consent:
a. Must be given by 2 or more persons;
b. Parties are capacitated to a contract;
c. Consent must be intelligently or freely given;
d. Express manifestation of the will of the contracting parties.

Vices of consent:
a. Mistake or error;
b. Intimidation or threat;
c. Violence or force;
d. Undue influence;
e. Fraud or deceit.

There is violence when in order to wrest consent, serious or irresistible force


is employed.

Vgabeto OBLICON-003
ACLC COLLEGE OF TACLOBAN

REGULATORY FRAMEWORK AND BUSINESS TRANSACTIONS LAW ON CONTRACTS

There is intimidation when one of the contracting parties is compelled by a


reasonable, of an imminent and grave evil upon his person or property, or
upon the person or property of his spouse, descendants or ascendants to
give his consent.

There is undue influence when a person takes improper advantage of his


power over the will of another, depriving the latter of reasonable freedom of
choice.

4. Objects of contracts
Object of contract ( thing, rights or services )
a. Must be within the commerce of men
b. Transmissible
c. Licit
d. Possible
e. Determinate

5. Consideration of contracts
In onerous contracts, the cause is understood to be, for each contracting
party, the prestation or promise of a thing or service by the other.

In remuneratory contracts,the cause is the service or benefit


remunerated.

In contracts of pure beneficence the ( gratuitous ), the mere liberality of


the benefactor.

Cause is the essential and impelling reason why a party assumes an


obligation.
In reciprocal contracts, the subject matter for one is the cause for the
other.

6. Formalities of contracts
A contract shall be obligatory or binding in whatever form it may have
been entered into provided all the essential requisites ( consent, object
and cause; and in certain specified contracts, delivery or form of for its
validity are present.

In the following cases, the form of the contract is essential:

Vgabeto OBLICON-003
ACLC COLLEGE OF TACLOBAN

REGULATORY FRAMEWORK AND BUSINESS TRANSACTIONS LAW ON CONTRACTS

a. When the law require that the contract be in some form to be valid
( for validity );
b. When the law requires that a contract be in some form to be
enforceable or proved in a certain way ( for enforceability ) ;.
c. When the law requires that a contract be in certain form for the
convenience of the parties ( for convenience ).

7. Reformation
Reformation is that remedy in equity by means of which a written
instrument is made or constructed so as to express or conform to the
real intention of the parties when some error or mistake has been
committed.

Requisites of reformation:
1. Meeting of the minds between the parties;
2. Instrument does not express the true intention of the parties;
3. The failure of intention is due to mistake, fraud, inequitable conduct
or accident;
4. There must be clear and convincing proof.

The following instruments are not subject to reformation:


1. Simple donations inter vivos wherein no condition is imposed;
2. Wills;
3. The real agreement is void.

8. Interpretations of contracts

Basic rules in the interpretation of contracts:


1. If the term of the contracts are clear, the literal meaning of its
stipulations shall control;
2. The evident intention of the parties shall prevail over the words of the
contract;
3. The contemporaneous and subsequent acts of the parties shall be
principally considered in order to ascertain their intention;
4. Obscure words or stipulations in a contract shall not favour the party
who caused the obscurity;
5. Doubts in gratuitous contracts shall be settled in such a way that the
least transmission of rights and interests shall prevail;
6. Doubts in onerous contracts shall be settled in favour of the greatest
reciprocity of interests.

Vgabeto OBLICON-003

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