Contract Law and Validity Principles

Questions and Answers

Which statement about the validity of contracts is true?

The validity of a contract can be left to the will of one party.

A party can easily invalidate a contract without evidence.

Contracts have no effect if one party disagrees with the terms.

A contracting party must provide convincing evidence to prove any defect in the contract. (correct)

Contracts are always superior to the law in determining obligations between parties.

False

What standard must be met for a bonus to be considered a demandable obligation?

The bonus must have been a long and regular practice of the company.

A compromise agreement is immediately __________ and not appealable, except for vices of consent or forgery.

executory Signup and view all the answers

Match the following legal principles with their descriptions:

Lex loci contractus = Law governing the place a contract is made Bonus obligation = Not enforceable unless consistently practiced Compromise agreement = Immediately effective and not appealable Contract supremacy = Cannot override provisions of positive law Signup and view all the answers

Which of the following is NOT a source of obligations as stated in the content?

Customs Signup and view all the answers

According to Article 22 of the Civil Code, every person who unjustly enriches themselves at the expense of another must return the acquired possession.

True Signup and view all the answers

What is the principle embodied in Article 22 of the Civil Code?

No person may unjustly enrich himself at the expense of another. Signup and view all the answers

Obligations derived from law are not __________.

presumed Signup and view all the answers

Match the legal principle with its description:

Unjust Enrichment = Acquiring possession without legal ground Contractual Obligations = Responsibilities arising from agreements Quasi-delicts = Obligations established through negligence Lawful Judgment Execution = Actions taken under a court's authorization Signup and view all the answers

Study Notes

Sources of Obligations

Obligations arise primarily from law and contracts.
Quasi-contracts, crimes, and quasi-delicts are not considered direct sources of obligations.

Unjust Enrichment

Article 22 of the Civil Code prohibits unjust enrichment, requiring the return of benefits gained without legal ground.
Aggrieved parties must not have other legal actions to invoke this principle.
Remedies for unjust enrichment can extend beyond substantive rights to procedural measures.

Legality and Validity of Contracts

Custom or practice is generally not a base for enforceable rights.
A contract's validity must be established through convincing evidence; mere allegations of defects do not suffice.
Contracts created under clear terms must be enforced as written.

Lex Loci Contractus

The law of the place where a contract is made governs the obligations of Filipino workers under contracts approved by the Philippine Overseas Employment Administration.

Bonuses as Obligations

Bonuses are not enforceable obligations unless they have been a consistent practice by the company over time.

Good Faith in Compliance

Parties must act in good faith during the performance of a contract, avoiding unfair advantages.
Evasion of legitimate obligations after accepting benefits leads to unjust enrichment.

Breach of Contract Liability

Each breach of contract incurs actionable injury, regardless of explicit penalties within the contract.

Rights of the Creditor

Creditors are entitled to the fruits of the obligation from the moment it arises, protecting their interests against delays.

Delivery Obligations

The obligation to deliver arises upon contract perfection, defined as the point of mutual agreement between the parties.
In contracts subject to conditions, obligations arise upon fulfillment of conditions or arrival of stipulated periods.

Example of Delivery Obligations

In a sale agreement where a horse gave birth to a colt while the seller retained possession, the buyer holds the right to the colt upon contract perfection, highlighting the immediate transfer of rights.

Remedies for Non-Compliance

In case of failure to perform real obligations (e.g., delivery of a specific item), creditors may demand:
- Specific performance or fulfillment of the obligation, with potential indemnity for damages.
- Rescission or cancellation of the obligation, also accompanied by a right to recover damages.
- Sole payment of damages if other remedies are not viable.

Indeterminate and Generic Obligations

If the thing to be delivered is indeterminate, the creditor may request compliance at the debtor's expense.
Debtors are responsible for any fortuitous events until the delivery is finalized.

Specific Real Obligations

Creditors can compel the debtor to deliver a determinate thing, ensuring exclusive obligation compliance by the debtor.

Description

Explore the principles of contract law and the importance of proving defects in a contract. This quiz covers legal standards surrounding the validity of contracts and the responsibilities of signatories. Test your knowledge on the nuances of contractual obligations and liabilities.