Contract Law Basics

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Questions and Answers

What is a condition that indicates there is no perfected contract of sale?

The offer includes additional conditions. (correct)

The offer is accepted within a week.

The acceptance is communicated verbally.

The offeror and offeree meet in person.

Which of the following is NOT a requisite of acceptance?

Must be absolute or unconditional.

Must be communicated to the offeror.

Must be certain or definite.

Must be made known to the public. (correct)

In which scenario is acceptance considered not absolute?

An offeree accepts the offer in person.

An offeree immediately responds with an acceptance.

An offeree states acceptance but requests a modification. (correct)

An offeree waits for a confirmation response.

What can happen to an acceptance before it reaches the offeror?

It can be revoked. Signup and view all the answers

Which of the following illustrates a situation with a perfected contract?

A accepts a proposal without conditions. Signup and view all the answers

What is meant by 'meeting of the minds' in contract law?

Both parties must agree on all terms. Signup and view all the answers

If B responds to an offer by attempting to negotiate the price down, what is the status of the original offer?

The original offer is rejected. Signup and view all the answers

Which of the following is a requirement for the acceptance of a lease in relation to a sale?

The lease must be considered as a separate agreement. Signup and view all the answers

Who can challenge the validity of contracts in cases of prohibition?

Heirs, creditors, the State, and guardians Signup and view all the answers

In the event that a guardian purchases property from the ward, which statement is accurate?

The transaction is void regardless of the price paid. Signup and view all the answers

Which group cannot challenge the validity of contracts involved in prohibition?

Creditors who became such after the transaction Signup and view all the answers

Public officers and employees are restricted from contracts related to which type of property?

Property wholly owned by the State or its subdivisions Signup and view all the answers

What is the consequence if a guardian purchases a property valued at $1,000,000 for $10,000,000?

The transaction is considered void and not subject to validation. Signup and view all the answers

Which parties cannot acquire properties involved in litigation?

Justices and judges adjudicating the case Signup and view all the answers

What triggers the consideration of a property as 'in litigation'?

Upon the filing of an answer Signup and view all the answers

What is the status of an executor acquiring an heir's rights?

The executor can acquire hereditary rights of the estate under administration. Signup and view all the answers

Which state allows contracts to be valid if entered into during a lucid interval?

Contracts agreed during a lucid interval Signup and view all the answers

What is necessary to show in order to avoid a contract due to mental incapacity?

Reasonable clearness in understanding the transaction Signup and view all the answers

What characterizes a contract entered into by a person with absolute incapacity?

It impairs the exercise of the right to contract Signup and view all the answers

What is true of persons specially disqualified from entering into contracts?

They are prohibited from entering contracts with specific individuals regarding certain property Signup and view all the answers

What is the distinction between incapacity and disqualification?

Incapacity refers to an inability to consent, while disqualification is about legal restrictions Signup and view all the answers

How are contracts entered into by deaf-mutes who know how to write treated legally?

They are treated as valid contracts Signup and view all the answers

Which of the following generally does not justify a court to set aside a voluntarily entered contract?

Mental incapacity proven at the time of contract Signup and view all the answers

What is the presumption regarding individuals of legal age concerning contracts?

They are presumed to possess the necessary capacity for contracts Signup and view all the answers

What is defined as a Mistake of Fact?

A belief in a fact that does not exist. Signup and view all the answers

Which of the following describes a Mistake as to Object?

Confusing the object of the contract with another. Signup and view all the answers

Which scenario exemplifies a Mistake of Law?

Assuming a contract is legally binding without understanding its terms. Signup and view all the answers

What does the term 'Vices of Consent' refer to?

Factors that undermine genuine consent to a contract. Signup and view all the answers

In which of the following instances would a contract be considered voidable?

When consent is given through fraud or coercion. Signup and view all the answers

Which type of mistake applies when parties are misled about the substance of the item in a contract?

Mistake as to Substance. Signup and view all the answers

What is a common outcome of a mistake regarding the identity of the thing in a contract?

The contract becomes voidable by the aggrieved party. Signup and view all the answers

What must be true for conditions of a contract to be mistaken?

The mistaken conditions must have primarily motivated the parties. Signup and view all the answers

What legal implication does ratification have on a contract?

It retroactively validates the contract from the moment of its celebration. Signup and view all the answers

Which of the following is a consequence of not ratifying a contract?

The representative remains liable for damages to the other party. Signup and view all the answers

What must exist for a contract to be considered perfected?

Consent of the contracting parties must be present. Signup and view all the answers

What is the role of good faith in contract enforcement?

It influences the fulfillment of consequences aligned with the nature of the contract. Signup and view all the answers

What situation would make GMA7 liable for damages in relation to the contract between Sharon and TV5?

If Sharon violates her contract with TV5 without justification. Signup and view all the answers

Which contract types are referred to as 'real contracts'?

Contracts such as deposit, pledge, and sale. Signup and view all the answers

What action would be considered a violation of an exclusive contract?

Signing another contract with a different party before expiration. Signup and view all the answers

What is one of the general provisions required for a valid contract?

Consent from the contracting parties. Signup and view all the answers

Study Notes

Requisites of Acceptance

Acceptance must be certain or definite, absolute, and unconditional.
Acceptance should be directed to the offeror and communicated to them within a reasonable time.
A counter-offer modifies or negates the original offer, thus preventing a perfected contract.

Examples of Acceptance

An offer to sell a house for P 1,000,000 is not accepted if the buyer requests a lower price of P 850,000, resulting in no perfected contract.
A buyer’s acceptance of a car sale contingent on a mortgage being established leads to no perfected contract if the mortgage is not accepted.

Withdrawal of Acceptance

Acceptance can be revoked before the offeror is notified, meaning no meeting of the minds has occurred.

Mental Incapacity and Contracts

Contracts entered during a lucid interval are valid; those made while drunk or hypnotized are voidable.
Mental capacity is assessed at the time of contract formation; age or sickness alone does not invalidate a contract.

Distinction between Incapacity and Disqualification

Incapacity (absolute) impairs the right to contract; disqualification (relative) restricts the ability to contract in specific situations.
Deaf-mutes who cannot write may have voidable or unenforceable contracts, while those who can write can enter valid contracts.

Persons Disqualified from Contracts

Certain individuals, such as guardians, public officers, and judicial employees, are prohibited from contracting to prevent conflicts of interest or abuse of power.

Mistake of Fact

Mistakes regarding factual circumstances can invalidate consent, leading to voidable contracts.

Types of Mistakes

Mistake as to object: confusion between different objects in the contract.
Mistake as to substance: errors about the essential characteristics of a contract object.
Mistake as to legal questions or implications does not typically invalidate a contract but can affect its enforceability.

Contracts affected by mistakes, violence, intimidation, undue influence, or fraud are voidable.
Consent must be intelligent, free, and spontaneous to be valid.

Essential Requisites of Contracts

Contracts are perfected by mere consent and require the following key elements:
- Mutual consent of the parties.
- Consideration must be lawful and not against public policy.

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Description

Explore the fundamentals of contract law with a focus on acceptance and its requisites. This quiz covers concepts such as the necessity of certain and unconditional terms in forming a valid contract, illustrated through practical examples. Test your understanding of key legal principles!