Contracts and Obligations: Key Elements

Contracts and Obligations

• Article 1305 defines a contract as a meeting of minds where one party commits to give something or provide some service to another.
• A contract is an agreement creating legally enforceable obligations between two or more parties.
• Essential elements for a contract entail consent, a defined object, and a valid cause or reason.

Essential Characteristics of Contracts

• Article 1306 lets parties set stipulations, clauses, and terms in a contract if they are within legal and ethical boundaries.
• Contractual autonomy from 1306 allows parties freedom to comply with laws, morals and public policy.
• Article 1307 states that innominate contracts are regulated by party stipulations, Titles I & II provisions, analogous nominate contracts, and local customs.
• Article 1307 establishes that validly agreed upon contracts hold the force of law between parties.
• Innominate contracts include "Do ut des" (barter), "Do ut facias", "Facio ut des", and "Facio ut facias".
• Rules for innominate contracts are agreements between the parties, rules on obligations and contracts, and general principles of justice.

Obligatory Force and Mutual Obligations

• Article 1308 mandates that contracts must bind participating parties, and compliance cannot be up to one party's will.
• Both parties are equally bound by contracts and unilateral variation is prohibited.
• Article 1309 allows a third party to determine the performance, but their decision is non-binding until both parties know.
• Contracts must be performed in good faith.
• If the determination is evidently inequitable, Article 1310 says, courts must decide what is equitable.
• Unless via mutual agreement or legal grounds, contracts cannot be arbitrarily revoked.

Effect of Contracts on Third Parties

• Except for non-transferable rights/obligations or legal/stipulation provisions, Article 1311 specifies that contracts only affect involved parties.
• An heir's liability is capped at the inherited property's value.
• A third person can demand fulfillment if a contract contains a stipulation in their favor, given acceptance is communicated before contract revocation.
• For third-party favor stipulations, a mere incidental benefit or interest is insufficient, and parties must expressly grant a favor to the third person.
• Contracts generally bind only involved parties including heirs/assigns
• Rights and obligations may not be transmissible by nature, stipulation, or by law.
• Third parties generally have no contractual legal rights or obligations.

Third-Party Involvement Exceptions

• Stipulation pour autrui enables benefits for a third party.
• Real rights creation binds property agreements.
• Defrauding creditors involves third parties.
• Breach of contract induced by a third party.
• Establishing legal status includes marriage contracts.
• A stipulation pour autrui contract benefits a third party who can demand fulfillment.
• A donee-beneficiary receives a gift-like benefit, while a creditor-beneficiary gains fulfillment.
• Article 1312 binds third parties possessing the contract's object in real rights contracts, regulated by the Mortgage and Land Registration Laws.
• Contracts generally bind involved parties only. Exceptions to the General Rule
• Article 1312 establishes contracts creating real rights
• Those possessing the contract's object are bound.
• Real rights are enforceable and attach to the property.
• Legal effect occurs after property registration, which protects good faith third parties if unregistered.
• Creditors are protected from contracts intending to defraud them, referencing Article 1313.

Third-Party Liability for Breach of Contract

• Article 1314 imposes liability for damages on third parties inducing contract violations.
• "Interference with contractual relations" is a legal tort
• The interfering third party must know of the contract, persuade or intimidate a party into breaching it and is liable for damages if proven.

Effect and Perfection of Contracts

• Article 1315 determines perfection through mere consent, legally binding parties to stipulations, good faith, usage, and law.
• Parties must fulfill stipulations and adhere to legal consequences.
• Real contracts like deposit are perfected upon obligation delivery, referencing Article 1316.
• An agreement can be reformed if it does not mirror the parties' true intent.
• Article 1317 specifies that contracting on another's behalf requires authorization or legal right, otherwise, it's unenforceable without ratification.

Essential Requisites of Contracts: General Provisions

• According to Article 1318, a the essential elements must be manifested for it to be a contract.
• Essential elements include free consent, object, cause
• Absence of the essential elements would make it an invalid, or void contract
• Essential elements facilitate its existence while natural elements exist unless expressly excluded, and accidental elements modify effects.

Formation and Perfection of Contracts.

• Article 1319 showcases that offer and acceptance make up consent, absolute acceptance means a certain offer and a qualified acceptance is a counter offer.
• Acceptance via letter/telegram binds when it is received by the offerer, and is presumed to have been entered into when the offer was made.
• A contract is perfercted when offer and acceptance come together.
• Consent meaning is volutary and mutual agreement of parties
• Consent must be free, and can not be influenced by error
• Seriousness is also and essential aspect of the offer
• Unqualified agreement is the meaning of acceptance, which makes binding contracts, and clear acceptance
• Acceptance that is not clear is defined as a counter offer
• Communicate acceptance is also an essential part of a contrqct

Forms and Conditions of Acceptance

• Acceptance can be express or an implied action
• A valid contract need a clear and abosulte acceptance.
• Article 1321 states that you must fix the time, place and manner for which an offer
• Conditions must be followed for valid contracts
• The condition of the offer must be comucated to the to the offeree to be completed.
• No knowedege of the offer means invalid acceptance
• Article 1322 - Acceptance is from the time of agent communication
• Agent acceptance is what matters
• communication acceptance must be with the Principle or the Agent.
• Article 1323 showcase the ineffetiveness of an offer after an acceptance is convereyed

Circumstances That Render an Offer Invalid

• Death
• Legal Constraints
• Inability to understand contracts
• Bankruptcy
• An offer becomes invalid from time, time and the above circumstances
• Revocation of the offeror
• Counter offer cancels original
• Illegal object renders invalid offers
• Article 1324 determines that an option may be withdrawn unless something as been paid
• Option Contract grants the privelige to accept within a fixed period
• Option period has to remain for principal contract
• Consideration can be paid with the option money
• Article 1325 detemines adverstisments are not invitations to be made to an offer, unless specific details are included
• General Offers can be accepted before withdrawl\
• Article 1326 determines advertisements are an invitation for proposals but adversters are not bound to accept the highest bidder.
• Advertisements for bids are not definite and Government must ensure fairness for contracts.

Defects in Contracts

• Article 1327 determines who cannot consent a contract such as minors or insane persons
• Minors, unless otherwise applied, are not capable persons
• Incapable persons face diasqualifications
• Article 1328 showcases contracts entered into during a lucid intterval are valid but ones states of drunkness or hypnosis are not
• Article 1329 showcase that capacity is subject to modification.

Modifying Contracts

• Minors can contract for goods
• Person 18 or older can contract insurance
• Emancipated minors have full capacity
• Persons under civil hospitalisation as under civil interdiction, unable to read or write or of mind
• A contracting under mistake can lead to an avoidable outcome

Article 1330 and Vitiated Constracts

• If mistakes take effect, it can be voidable
• Essential contract errors are voidable
• Contract literacy must be transparent
• Parties must have knowledge of all language
• No mistake will be made of the party
• Article 1334 determines mutual errors to be vitiated
• Violence and intimidatoon are present when there is no reasonable well grounded fear of evil
• Violence is the harm of force
• Intimidation is the force of threal
• Undue influence is harm to consent of contract
• Third parties following article 1335 will make an obligation annualed
• Abusing power over another is not a reasonable choice

Undue Influence

• Family will be subject the personal
• Through or machineations , a person can make another to agree
• When failing a contract or not showing certain fraud
• The requisites of fraud is serious missrepresentation or concelaemtn
• The fraud must intent to deceive and induce consent
• Its said to be casual fraud
• Article 1340 showcase that exaggeration is nothing fraudulent
• Opinion does not have to signify fraud
• Misteaks by third parties will not create substantive mistakes will not create confflict

Legal Fraud Articles

• MIsrepresenation os not always fradulent
• Bad faith will not costitute error
• It is said to be inceidental
• Artcle 1345 indicates simulation to be absolute or relaive, or intended parties
• Simulated is not to be real agreements

Law of Commerce

• Articles 1347 indicates is withing the commerce of men,
• You can't have illegal things or service in a object of contract
• 1349 showcase that there the object is to be determined as a contract

Contracts Causes

• 1350 - showcase an essential purpose for reaosn in a contract
• Is a different cause or consideraton, is it a broader scope or narror
• In addition, contracts can classify is under obligation
• All motives are different from the object of a contract
• Purely private reaosn can make contract
• Caused will be legal

Contract Validity

• Unlawful cause will not make it an effect , otherwise with certain morals, cause or policy
• Lawfullness and realities are needsd
• With and unlawfull causse wihtout a cause must be valid
• Inadaquency will create more than a cause
• Error and smulation makes a falisty cause

Cose in Contracts

• Even without the the cause specified , its is presumed it exist
• There are presmptions in this case
• Precence of eviudence also can be rebutted
• Caused can not incaldiate for lack of inflauntial caused
• Meaning lesion is injury suffering
• General rule and expections , caue are to to to violate a contract

Article 1356, Valid Contracts

• Contracts and what ever for, can be valid of they all had to be require valid
• However when it should be valud, and should be enfrorcable
• Meaninh of contract is in how it is manifsted itsels, may parol or written
• Intent is will, and it is neede for legal and will to be expressed
• There must be contracts and expression for all elements

Forms of Contratcs

• General elelmentos exist withing contracts
• There must be enforcment of the elemesnt
• Donations and instruments must be in public
• Sales of land must be through amngements
• Contracts for partenership and trsnasfer must be secured
• Instrument must be in wrriting
• Statute of fraudds is what creates the wrriitngs, if thye are nota , then thay arr unenfrocable
• This to pprevenht fraid and have compliance
• Blands helps safgare dishonety
• This would also require the law, the partiees can cocmpeel each other for their forms of the contract
• Parties should convent and notify
• 1358 Showcase thigns that has there object, power , for all

Reformation of Instruments - Article 1359

• Agreement for the true intenstion of expresed
• All mistkaes and faults are not the same, anullments are more
• The contract can simply just be corroected
• All pricinple are to be valid
• Mistake cannot be the reaosn fr the lack to form an document
• In order to corrreect, all things must be in order and shown
• One party might mistake it

1360 - 1370

• The true intention can be shown, by mistkae , ignorance or what not
• Can just say it with a siple way, and ask reformation
• Fraudlent is the hiding of mistkam
• Reformation can be ordered under certain cases
• Party can rewrirte or make it a mortagge under requirments
• REFORMATION IS NOT THE ANSWER
• Certain rules and ways it has to follow
• All elements will will require change
• 1270 Showcase when contract are clear, then there shall be no intention
• It may change it later _ There may be a way to judge 1371, and have all elements will be considered
• 1372 indicate what terms are general and distinct , however, 1373 showcase , if stipulation there is a term of efectivness
• Also to the terms of how to interprete it with how douybty