General provisions Art 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. (1254a)

Essential requisites of Contracts  Art 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. (1261)

Classes and Elements of a Contract  Essential elements-or those without which no contract can validly exist; also known as requisites of a contract a. common b. special  Natural elements- or those that are presumed to exist in certain contracts unless the contrary is expressly stipulated by the parties  Accidental elements- or the particular stipulations, clauses, terms, or conditions established by the parties in their contract

SECTION 1. - Consent  Art Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified acceptance constitutes a counter-offer. Acceptance made by letter or telegram does not bind the offerer except from the time it came to his knowledge. The contract, in such a case, is presumed to have been entered into in the place where the offer was made. (1262a)

Meaning of consent  Consent is the conformity or concurrence of wills (offer and acceptance) and with respect to contracts, it is the agreement of the will of one contracting party with that of another or others, upon the object and terms of the contract; it is the meeting of minds between parties on the subject matter and cause which are to constitute the contract even neither has been delivered.

Meaning of offer  Offer is a proposal made by one party to another to enter into a contract.  An offer must be certain. It must be certain or definite so that the liability (or the rights) of the parties may be exactly fixed because it is necessary that the acceptance be identical with the offer to create a contract.

example  “Will you buy this watch for 5,000Php?”  “I am willing to consider the sale of my land to you for 1,000,000Php.”

Meaning of acceptance  Acceptance is the manifestation by the offeree of his assent to the terms of the offer. Without acceptance there can be no meeting of minds between the parties  Acceptance must be absolute. The acceptance of an offer must be absolute or unqualified, that is it must be identical in all respects with that of an offer so as to produce consent or meeting of minds.

Art An acceptance may be express or implied  Form of acceptance of offer An express acceptance may be oral or written. An implied acceptance is one that is inferred from act or conduct.

Art The person making the offer may fix the time, place, and manner of acceptance, all of which must be complied with. (n)  Matters may be fixed by the offerer The person making the offer may prescribe the time, place, and the manner of acceptance, all of which must be complied with. An acceptance departing from the offer constitutes a counter-offer.  A counter-offer has the effect of extinguishing the offer.

example  R, as offerer, may tell E, the offeree, that the latter must accept the offer personally on December 14,2005 before 5:00 o’clock P.M. in the office of R, all of which must be complied with E to create a contract.

Art An offer made through an agent is accepted from the time acceptance is communicated to him. (n)  Communication of acceptance to an agent By legal fiction, an agent is considered an extension of the personality of his principal. If duly authorized, the act of the agent is, in aw, the act of the principal.

Art An offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either party before acceptance is conveyed. (n)  When an offer becomes ineffective An offer may be withdrawn before it is accepted. After acceptance, the contract is already perfected. Even if the offer is not withdrawn, its acceptance will not produce a meeting of the minds in the case the offer has already become ineffective because of the aforementioned.

Art When the offerer has allowed the offeree a certain period to accept, the offer may be withdrawn at any time before acceptance by communicating such withdrawal, except when the option is founded upon a consideration, as something paid or promised. (n)  Option contract is one giving a person for a consideration a certain period within to accept the offer of the offerer  Option period is the period within which the offeree must accept the offer  Option money is the money paid or promised to be paid for the option.

Example  Lance offers to construct the house of Tahnee for a very reasonable price of 1,000,000Php giving the latter 10 days within which to make up her mind. Under art 1324, Lance may withdraw the offer even before the elapse of 10 days unless Tahnee has already accepted the offer. After acceptance, withdrawal is not possible as there is n more offer to withdraw. Even before acceptance Lance may not withdraw the offer if the option is covered by a consideration as when Tahnee paid or promised to pay a sum of money to Lance for giving her the 10 day period. There is here an option contract. After the 10 day period, in the absence of acceptance, the offer becomes ineffective

Art Unless it appears otherwise, business advertisements of things for sale are not definite offers, but mere invitations to make an offer. (n)  Business advertisements of things for sale are not definite offers acceptance of which will perfect a contract but are merely invitations to the reader to make an offer.  Example For sale: 200 sqm lot at Paradise Village, Banilad for 1,000,000Php- Tel. no For sale: 200 sqm lot at Paradise Village, located at the corner of War and Peace st. for 1,000,000Php cash- Tel. no

Section 2.-Object of Contracts  Art All things which are not outside the commerce of men, including future things, may be the object of a contract. All rights which are not intransmissible may also be the object of contracts. No contract may be entered into upon future inheritance except in cases expressly authorized by law.  All services which are not contrary to law, morals, good customs, public order or public policy may likewise be the object of a contract. (1271a)

Art Impossible things or services cannot be the object of contracts. (1272)  Concept of object of a contract The object of a contract is its subject matter. In reality, the object of every contract is the obligation created. But since a contract cannot exist without an obligation, it may be said that the thing, service or right which is the object of the obligation is also the object of the contract

Kinds of object of Contract  Object certain is the second essential element of a valid contract. The object may be: things (as in sale) rights (as in assignment of credit) services (as in agency)

Requisites of things as object of the contract  In order that the things may be the object of a contract, the ff. requisites must be present: 1) the thing must be within the commerce of men, that is, it can legally be the subject of commercial transaction 2) it must not be impossible, legally or physically 3) it must be in existence or capable of coming into existence 4) it must be determinate or determinable without the need of a new contract between the parties.

Requisites of services as object of contract  In order that service may be the object of a conract, the ff. requisites must concur: 1) the service must be within the commerce of men 2) it must not be impossible, physically or legally 3) it must be determinate or capable of being made determinate.

Rights as object of Contract  As a general rule, all rights may be the object of a contract. The exceptions are when they are intransmissible by nature, or by stipulation, or by provision of law. example: political rights such as right to vote; family, marital, parental rights, right to public office, or to run for public office

Kinds of impossibility  Physical- when the thing or service in the very nature of things cannot exist (mermaid, talking monkey) or be performed a) absolute- when the act cant be done in case so that nobody can perform it (fly like a bird etc.) b) relative-when it arises from special circumstances of the case ( to make payment to a dead person, to drive a car on a flooded highway, etc) or the special conditions or qualifications of the obligor( to paint a portrait by a blind person, etc)  Legal-when the thing or service is contrary to law, morals, good customs, public order, or public policy. An act is contrary to law, either because it is forbidden by penal aw ( to sell shabu) or a rule of law makes it impossible to be done (to make a valid donation of real property without a public instrument, to make a valid will, where the testator is under 18 yrs of age.

Art The object of every contract must be determinate as to its kind. The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties. (1273)  Quantity of object of contract need not be determinate. The object of a contract must be determinate as to its kind or at least determinable without the necessity of a new or further agreement between the parties. The same is true of the quantity of the object of the contract. It is sufficient that is possible to determine the same without the need of a new contract between the parties.

Example  Ian sold Christian all the chickens in his poultry. Here, the object itself (chickens) is determinate but the quantity though not yet determined can be ascertained without the necessity of entering into a new contract  Zih binds herself to delver one of her carabaos to Tahnee. Here, the object is determinable without the need of a new contract between the parties. It becomes determinate the moment the carabao is delivered