REQUISITES OF CONTRACTS

GROUP III
 REQUISITES OF CONTRACTS

The requisites of a valid contract are the elements or

details it must possess in order to be enforceable
under the law. Contracts are a normal part of the
everyday business world, and they're agreements that
are legally enforceable. All agreements are considered
to be contracts as long as they are made with the
requisites in place, such as freely consenting parties
who are competent to form a legal contract, for legal
purposes.
 CONSENT

OBJECT CAUSE
OF OF
CONTRACT CONTRACT
 CONSENT

Consent is the conformity of wills of the contracting

parties upon the object and cause as well as to the
other terms and conditions of the contract. It is
manifested through meeting of the offer which must
be certain and the acceptance which must be
absolute. If the acceptance by the offeree is
qualified, it becomes a counter-offer hence, there is
no consent unless the offerer accepts the counter
offer unqualifiedly.
 CONSENT

Acceptance made through letters,etc.

• Generally, acceptance should be made right after the offer

has been or immediately thereafter. Acceptance through
letters or telegrams does not bind the offeror.

Rule on offer and acceptance.

• The general rule is that the person making the offer has
the inherent right to fix the time, place and manner of
acceptance. Once fixed, the acceptance must be made
strictly in such a manner to give birth to the consent.
 CONSENT

Offer made through agent.

• An offer made through an agent is accepted from the time

acceptance is communicated to him by the offeree.

Published advertisement not an offer.

• Business advertisement of things which are for sale in

newspaper ads or media are not definite offers by mere
invitatons to make offer, and the same is true as regards
advertisements calling for bidders to make proposals
based on given specifications.
 CONSENT

Persons who cannot give consent

• Consents can only be given by persons who have the

capacity to act.

Vices of consent.

• The law enumerates five causes by which the consent may

be vitiated or rendered defective. These are mistakes,
violence, intimidation, undue influence and fraud. If the
consent of a party to the contract is given or secured
through the use of any of these vices the contract
becomes voidable.
 CONSENT

Mistake rendering contract defective.

• In order that mistake may invalidate consent, it should

refer to the substance of the thing which is the object of
the contract, or to those conditions which have principally
moved one or both parties to enter into the contract.

Mistake of fact and mistake of account

distinguished.
• Mistake of account unlike mistake of fact will not avoid the
contract.
 CONSENT

Legal protection to weak party.

• The law has its protective concern to the no-read no-write or
disadvantaged party to the contract. Article 1332 of the Code
states that when one parties is unable to read, or if the contract is
written in a language not understood by him, and mistake is
alleged, the person enforcing the contract must show that the
terms should have been fully explained.

Violence and intimidation explained.

• Using of violence and intimidation in order to secure a
consent .
 CONSENT

Undue influence.

• There is undue influence when a person takes improper

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

Fraud in contracts.

• There is fraud when through insidious words or

machinations of one of the contracting parties, the other is
induced to enter into a contract which, without them, he
would not have agreed to.
 CONSENT

Duty to disclose material facts.

• Failure of either party to disclose facts when there is a duty to

reveal them as when the parties are bound by the confidential
relations, constitute fraud (Article 1339).

Simulated Contracts

• A contract is simulated when it is fictitous or pretended in

order to defraud the creditor or mislead the general public.
 OBJECT OF CONTRACTS

• Object of contract is the thing, right or service which is the

subject matter of the obligation arising from the contract.
An object which must be certain is the second element of a
contract. All things which are within the commerce of man
including future things having potential existence, rights
which are not intransmissible and services which are not
contrary to law, morals, good customs, public order, and
public policy and not impossible of compliance may be the
object of contract. No contract may, however, be entered
into upon future inheritance except in cases expressly
authorized by law.
 OBJECT OF CONTRACT

Outside the commerce of man.

• It has been held that a municipal council cannot sell or lease

public property, such as plazas, streets, common lands, rivers,
bridges, etc. because they are outside the commerce of man; and
if it has been done so the contract is null and void.

Things having potential existence.

• Things having potential existence are those which are sure

to come barring only unforeseen events although not yet
possessed.
 OBJECT OF CONTRACT

Intransmissible rights and services

• Rights which are intransmissible cannot be the object of a

contract because they are either too personal to the parties or are
not permitted by law to be the object of contract.

Future inheritance.

• A contract involving a future inheritance is void as this will

likely entice an instituted heir or legatee to end up the life
of the benefactor.
 OBJECT OF CONTRACT

Object must be determinate, exceptions.

• The object of the contract must be determinate as to leave no

doubt as to which is intended from the kind where it belongs, or
must have definite limits.
 CAUSE OF CONTRACTS

• A cause is the “why” of the contract which must be in

existence at the time of the contract is the last element of a
valid contract. Cause or consideration is the immediate,
direct and proximate reason why a party enters into the
contract and without which the contract becomes nullity. The
cause may either be onerous, remuneratory or gratuitous.
 CAUSE OF CONTRACTS

Onerous Contracts
• The cause or consideration is understood to be,
for each contracting party, the prestation or
promise of a thing or service by another.

Remunatory Contracts
• service or benefit which remunerated or paid

Gratuitous Contracts
• or one of pure beneficence, the cause or
consideration is pure liberality on the part of the
benefactor.
 CAUSE OF CONTRACT

Motives in entering the contract.

• The particular motives of the parties in entering into a contract

are different from the cause thereof.

Contracts without cause or with illegal cause.

• Contracts without a cause or with an illegal cause, produce

no effect or whatsoever.
 CAUSE OF CONTRACT

Statement of a false cause in contract.

• The statement of a false cause in contracts shall render them

void, if it should not be proved that it is founded upon another
cause which is true and lawful.

Presumption of consideration.

• Although the cause is not stated in the contract, the same

is presume to exist and is lawful, unless the debtor proves
the contrary.
 CAUSE OF CONTRACT

Lesion or inadequacy of cause.

• Except in cases specified by law, lesion or inadequacy of cause

shall not invalidate a contract, unless there has been fraud or
undue influence.
FORMAL AND INFORMAL CONTRACTS

FORMAL CONTRACTS.

• A contract that requires a special form or method of formation/

creation in order to be enforceable like having a SEAL, an
ACKNOWLEDGEMENT IN COURT, NEGOTIABLE INSTRUMENT
like a check, note, draft or certificate and a LETTER OF CREDIT
that has an agreement to pay that is contingent upon the receipt
of documents.

INFORMAL CONTRACTS.

• A contract that does not require a specified form or method of

formation in order to be valid.