Law on Obligations and Contracts

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CHAPTER 2CHAPTER 2

ESSENTIAL REQUISITES ESSENTIAL REQUISITES OF CONTRACTSOF CONTRACTS

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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.

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Classes of elements of a contarctClasses of elements of a contarct

1. Essential elements or those without which no contract can validly exist.

(a) Common

(b) Special

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2. Natural elements or those that are presumed to exist in certain contracts unless the contrary is expressed stipulated by the parties.

3. Accidental elements or the particular stipulations clauses, terms, or conditions establish by the parties in their contracts.

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Section 1. - ConsentSection 1. - Consent

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.

Consent is the conformity of wills (offer and acceptance) and with respect to contracts.

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Offer is a proposal made by one party to another to enter into a contract.

Offer must be certain or definite so that the liability of the parties my exactly fixed.

Characteristics of ConsentCharacteristics of Consent It is Intelligent It is free and voluntary It is conscious or spontaneous

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Acceptance is the manifestation by the offeree of his assent to the terms of the offer.

“Acceptance of the offer must be absolute”

Form of acceptance of offer.

Acceptance may be ORAL or WRITTEN.

Article 1320. an acceptance may be express or implied

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Matters that may be fixed by the offerer.

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

When offer becomes ineffective.

Article 1322. An offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either party before acceptance is conveyed.

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• Option Contract is one giving a person for a consideration a certain within which to accept the offer to the offerer.

• Option Period is the period given within which the offeree must accept the offer

• Option money is the money paid or promised to be paid in consideration for the option.

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Withdrawal of offer where period stipulated for acceptance.

Example: Mr. X offers to construct the house of

Mr. Y for a very reasonable price of P1,000,000 giving the latter 10 days within which to make up his mind.

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Capacity to give consent presumedCapacity to give consent presumed

Persons who cannot give consent.•Unemancipated minors They refers to those persons who have not yet reach the age of majority.•Insane persons •Deaf - Mutes

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Nature of mistakeNature of mistake

Mistake or Error Mistake or Error is the false notion of a thing or a fact material to the contract.

Nature of mistakeNature of mistake• Mistake may be of Fact or of LawMistake may be of Fact or of Law• Mistake contemplated by law is substantial mistake Mistake contemplated by law is substantial mistake

of factof fact

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Mistake of Fact which does not vitiate consentMistake of Fact which does not vitiate consent

• Errors as regards the incidents of a thing or accidental qualities

• Mistake as to quantity or amount• Error as regards the motives of the contract• Mistake as regards the identity or qualifications• Error which could have been avoided

(a) Mistake regarding object

(b) Mistake regarding condition of contract

(c) Mistake regarding identity

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Effect of simple mistake of account.Effect of simple mistake of account.

The mistake will not make the contract voidable. It will only give rise to its correction by putting the true amount.

Burden of proof in case of mistake or fraudBurden of proof in case of mistake or fraud

The party enforcing the contract who is duty-bound to show that there has been no fraud or mistake in terms of the contract have been fully explained to them.