Podcast
Questions and Answers
What characterizes a voidable contract?
What characterizes a voidable contract?
- It is always created under duress.
- It remains valid until annulled. (correct)
- It is enforceable in court without any further action.
- It cannot be ratified under any circumstances.
Which of the following contracts is considered unenforceable?
Which of the following contracts is considered unenforceable?
- A contract written without a witness.
- A contract entered without authority by an agent. (correct)
- A contract that has been ratified by both parties.
- A contract made with a minor.
Which scenario would make a contract void?
Which scenario would make a contract void?
- There was a lack of consent from all involved parties. (correct)
- It was created for a legal purpose but without signatures.
- Both parties were intimidated during the agreement.
- It was signed by someone under the legal age.
What is a key feature of unenforceable contracts?
What is a key feature of unenforceable contracts?
What differentiates a void contract from a voidable contract?
What differentiates a void contract from a voidable contract?
Which type of contract is considered inexistent and void from the beginning?
Which type of contract is considered inexistent and void from the beginning?
What characteristic is true regarding void contracts?
What characteristic is true regarding void contracts?
Which of the following cannot invoke the nullity of a contract?
Which of the following cannot invoke the nullity of a contract?
Which of the following contracts is not valid?
Which of the following contracts is not valid?
Which of the following statements regarding the defense of contract nullity is correct?
Which of the following statements regarding the defense of contract nullity is correct?
What is a fundamental aspect needed for the creation of a contract?
What is a fundamental aspect needed for the creation of a contract?
Which type of contract is defined as one that has already been performed?
Which type of contract is defined as one that has already been performed?
What distinguishes a unilateral contract from a bilateral contract?
What distinguishes a unilateral contract from a bilateral contract?
What must the object of a contract be, according to essential requisites?
What must the object of a contract be, according to essential requisites?
Which of the following limitations on contracts involves ethical considerations?
Which of the following limitations on contracts involves ethical considerations?
In which stage of a contract do the parties agree upon the terms?
In which stage of a contract do the parties agree upon the terms?
What type of contract is perfected merely by consent?
What type of contract is perfected merely by consent?
Which statement correctly describes an executory contract?
Which statement correctly describes an executory contract?
What ensures that a contract's object is not deemed impossible?
What ensures that a contract's object is not deemed impossible?
Which classification of contracts requires obligations from both parties?
Which classification of contracts requires obligations from both parties?
Which type of contract has a cause based purely on the liberality of the giver?
Which type of contract has a cause based purely on the liberality of the giver?
What is a necessary condition for a valid cause or consideration in a contract?
What is a necessary condition for a valid cause or consideration in a contract?
What characterizes a rescissible contract?
What characterizes a rescissible contract?
Which of the following is NOT a requisite for reformation of a contract?
Which of the following is NOT a requisite for reformation of a contract?
What happens when a cause in a contract is found to be false?
What happens when a cause in a contract is found to be false?
Which type of defective contract includes contracts that can be rescinded to protect creditors?
Which type of defective contract includes contracts that can be rescinded to protect creditors?
What is an example of a situation that may result in a rescissible contract?
What is an example of a situation that may result in a rescissible contract?
Which of the following describes a voidable contract?
Which of the following describes a voidable contract?
Which of these is a requirement for a valid cause in a contract?
Which of these is a requirement for a valid cause in a contract?
Which contract type is defined by mutual promises between parties?
Which contract type is defined by mutual promises between parties?
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Study Notes
Contracts Definition
- The meeting of minds between two people where one binds themselves to give something or provide a service
- Derived from Latin "contractus”, signifying an agreement
General Provisions
- Essential Elements: Consent, Object, Cause
- Natural Elements: Presumed by law unless the contract states otherwise
- Accidental Elements: Unusual stipulations agreed upon by the parties
Stages of a Contract
- Preparation: Initial stages leading to agreement
- Perfection: Mutual agreement on the object, subject matter, and price
- Consummation: Completion and termination of the contract
Classification of Contracts
- Express: Intent expressed through written or oral words
- Implied: Intent demonstrated by actions
- Executed: Contract already performed
- Executory: Contract not yet performed
- Consensual: Perfected by consent
- Real: Perfected by delivery of the object
- Unilateral: Only one party has an obligation
- Bilateral: Both parties have obligations
Limitations on the Right to Contract
- Contrary to law: Objects or purposes of contracts cannot be against the law
- Against morals: Contracts must be ethically sound and virtuous
- Contrary to good customs: Cannot conflict with established practices and customs
- Contrary to public order: Must align with the public good
- Contrary to public policy: Beyond public safety, considers the common good
Essential Requisites of a Contract
- Consent: Meeting of offer and acceptance
- Object: Things, rights, or services
- Things: Must be within commerce, possible, and determinable
- Rights: May be transmissible or not transmissible
- Cause: Immediate reason behind creating the obligation
Classification of Contracts Based on Cause
- Onerous: Mutual undertaking or promise between parties
- Remuneratory: Service or benefit compensated by remuneration
- Gratuitous: Purely out of the giver's generosity
Requisites of a Valid Cause or Consideration
- Cause must exist
- Cause must be legal
- Cause must be true (false cause renders the contract void)
Reformation of Instruments
- Reformation: Remedy for correcting errors in written instruments to reflect the true intention of the parties.
- Requisites:
- Valid contract
- Contract in writing
- Written contract fails to express true intentions
- Failure due to mistake, fraud, inequitable conduct, or accident
Defective Contracts
- Types: Rescissible, Voidable, Unenforceable, Void
- Rescissible: Valid contract, but rescissible due to injury or damage to third parties
- Examples:
- Guardianship contracts causing ward's loss greater than one-fourth of the value
- Contracts for absentees with similar loss
- Contracts defrauding creditors
- Contracts involving things under litigation without court approval
- Contracts specifically declared rescissible by law
Defective Contracts
- Voidable: Possesses all essential requisites, valid until annulment.
- Examples:
- One party unable to consent
- Consent tainted by mistake, violence, intimidation, undue influence, or fraud
Defective Contracts
- Unenforceable: Valid but cannot be enforced in court, unless ratified.
- Examples:
- Contracts signed by unauthorized representatives
- Contracts not following the Statute of Frauds
- Contracts where both parties are incapable of consent
Defective Contracts
- Void: Has no legal force or effect, cannot be ratified
- Examples:
- Contracts with illegal, immoral, or contrary to public policy causes/objects
- Simulated/fictitious contracts
- Contracts with nonexistent cause/object
- Contracts with objects outside commerce
- Contracts involving impossible services
- Contracts with unclear intention
- Contracts explicitly prohibited by law
Characteristics of Void Contracts
- Have no legal effect
- Cannot be ratified
- Defense of inexistence cannot be waived
- Action/defense for inexistence is not subject to a time limit
- Inexistence can only be invoked by directly affected parties
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