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CONTRACT- meeting of the minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. Essential Elements: (without them a contract cannot exist) 1. 2. 3. 4. 5. Consent (presupposes legal capacity) Object Cause/Consideration Form Delivery 2. Gratuitous or Lucrative (free; one party receives no equivalent prestation except a feeling that one has been generous) 3. Remunerative (one prestation is given for a service that had been rendered previously) According to IMPORTANCE or DEPENDECE of one upon another

Natural Elements: (presumed to exist) 1. Warranty against eviction Accidental Elements: (may be present or absent depending upon the parties) 1. Stipulation to pay credit 2. Stipulation to pay interest Classification of Contracts: According to PERFECTION or FORMATION

1. Principal (the contract may stand alone by itself) Sales, Lease 2. Accessory (the principal contract is one of LOAN) Mortgage 3. Preparatory (contract as means of future transaction) Agency, Partnership According to PARTIES OBLIGATED has obligation)

1. Unilateral (only one of the parties Commodatum 2. Bilateral (both parties are obligated) Sale According to NAME or DESIGANTION

1. Consensual (perfected by mere consent; no form required; can be perfected orally) Sale 2. Real (perfected by delivery) Loan, Pledge, Mortgage 3. Formal or Solemn (requires special formalities; in a public instrument) Donation inter vivos According to CAUSE or EQUIVALENCE of the Value of Prestations

1. Nominate (contract is given special name) Commodatum, Partnership, Sale, Agency, Deposit 2. Innominate (no special name) I give that you may give According to RISK of FULFILLMENT

1. Commutative (equivalent values are given) Sale, Lease 2. Aleatory (values vary because fulfilment depends on chance) Insurance Contract

1. Onerous (there is interchange of equivalent valuable consideration)

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According to TIME of FULFILLMENT 2. Contract of Adhesion (prepared by real estate company or insurance company) According to NATURE of CONTRACT

1. Executed 2. Executory According to SUBJECT MATTER

1. Personal 2. Impersonal STAGES OF CONTRACT 1. Preparation (Conception) - negotiation 2. Perfection (Birth) with definite agreement, object and cause are accepted by mutual consent. 3. Consummation (Death/Termination) terms are performed, thus, contract is fully executed. BASIC PRINCIPLES/CHARACTERISTICS OF CONTRACT 1. 2. 3. 4. 5. Freedom/Liberty to Stipulate (provided not contrary to laws) Obligatory Force and Compliance in good faith Perfection by mere consent Both parties are mutually bound Relatively (binds only the parties, their assigns, and heirs)

1. Contract involving things Sale 2. Contracts involving rights or credits Usufruct, Assignment of Credits 3. Contracts involving services Lease of Services, Carriage According to OBLIGATIONS IMPOSED/REGARDED BY THE LAW

1. Ordinary Sale 2. Institutional Contract of Marriage According to EVIDENCE REQUIRED for its proof

1. Those requires oral or parol evidence 2. Those requires written proof Contracts under Statute of Frauds According to NUMBER of CONTRACTING PERSONS

LIMITATIONS ON THE NATURE OF STIPULATION 1. 2. 3. 4. 5. Law Morals Good Customs Public Order Public Policy

1. Ordinary (two parties represented by different persons) Sale 2. Auto-Contracts (one person represents two opposite parties but in different capacities) Agent and Buyer at the same time According to NUMBER OF PERSONS DRAFTED the Contract

4 KINDS OF INNOMINATE CONTRACTS 1. Do ut des (I give that you may give) 2. Do ut facias (I give that you may do) 3. Facio ut des (I do that you may give)

1. Ordinary Ordinary Sale

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A Person may contract in the name of another, provided: 1. he is duly authorized 2. by law, has the right to represent 3. the contract must be subsequently ratified (express/implied) REQUISITES OF CONSENT 1. there must be 2 or more parties 2. parties must be capable or capacitated (if one party be insane, the contract becomes VOIDABLE) 3. there must be no vitiation of consent (the presence of fraud or intimidation makes the contract VOIDABLE) 4. there must be no conflict between the express declaration and the true intention. Remedy: reformation, or else contract becomes VOID. 5. the intent must be declared properly (whatever legal formalities are required must be complied with) A CERTAIN offer is one which is NOT: 1. vague 2. misleading 3. made as a joke FORMS of ACCEPTANCE: 1. express 2. implied 3. presumed (by law) THINGS an OFFERER may fix: 1. the time 2. the place 3. the manner of acceptance Persons who CANNOT give consent to a contract: 1. unemancipated minors 2. insane or demented persons, and deaf-mutes who do not know how to write and read. Two Classes of VOIDABLE Contracts: 1. One party is incapacitated to give consent 2. Consent of one party is vitiation (by error, fraud, violence, intimidation, undue influence) REQUISITES of Object of Contract: 1. Within the commerce of man 2. Transmissible 3. Not contrary to law, morals, good customs, public order and policy 4. Not be impossible 5. Determinate/determinable (without the need of a new agreement) REQUISITIES for ACTION for REFORMATION (Prescriptive Period: 10 years) 1. 2. 3. 4. 5. There must be meeting of the minds True intention is not expressed in the instrument. There must be clear and convincing proof thereof. Must be brought within the proper prescriptive period. Document must not refer to simple unconditional donation where the real agreement is VOID.

REFORMATION is NOT allowed: 1. Simple Donations 2. Will 3. Void Agreement