OBLICON Final Exam Reviewer: Classification of Contracts

Classification of Contracts

• Consensual Contracts: perfected by mere consent, binding from the moment of consent
• Formal / Solemn Contracts: require a solemnity or formality in addition to essential requisites, valid and enforceable only if in a particular form
• Real Contracts: perfected by delivery of the object, not binding until delivery

Defective Contracts

• Void Contracts: no legal effect, cannot be ratified
• Voidable Contracts: valid until annulled, can be ratified
• Unenforceable Contracts: cannot be enforced unless ratified
• Rescissible Contracts: valid but can be rescinded due to damage or injury

Reformation of Instrument

• Occurs when a written contract does not reflect the true intention of the parties due to mistake, fraud, inequitable conduct, or accident
• Requisites: meeting of the minds, true intention not expressed in the instrument, and reason for non-expression (MARFI)
• Purpose: to make the written instrument conform to the true intention of the parties

Rescission

• Cancellation of a contract and return to pre-contractual position
• Occurs when contract is rescissible due to damage or injury to one of the parties or third persons

Elements of Contracts

• Consent: agreement of the parties to the terms of the contract
• Object: subject matter of the contract
• Cause: reason why the parties enter into the contract

Requisites of Consent

• Legal capacity of the contracting parties
• Manifestation of conformity of the contracting parties
• Conformity to the object, cause, terms, and conditions of the contract must be intelligent, spontaneous, and free from vices of consent
• Real intention to contract

Persons Incapacitated to Give Consent

• Deaf-mutes
• Insane or demented persons
• Minors

Vices of Consent

• Mistake
• Intimidation
• Violence
• Undue influence
• Fraud

Offer

• Expression of willingness to contract on certain terms, made with the intention of becoming binding upon acceptance
• Elements: definite, unequivocal, intentional, and complete

Kinds of Contracts

• According to perfection or formation:
  • Consensual contracts
  • Formal / solemn contracts
  • Real contracts
• According to the degree of dependence:
  • Principal contracts
  • Accessory contracts
  • Preparatory contracts
• According to their relation to other contracts:
  • Preparatory contracts
  • Principal contracts
  • Accessory contracts
• According to their form:
  • Common or informal contracts
  • Special or formal contracts
• According to their purpose:
  • Transfer of ownership
  • Conveyance of use
  • Rendition of services
• According to the nature of the vinculum:
  • Unilateral contracts
  • Bilateral contracts
• According to their cause:
  • Onerous contracts
  • Gratuitous contracts
  • Remuneratory contracts
• According to the risks involved:
  • Commutative contracts
  • Aleatory contracts

Cause of Contract

• Essential reason that moves the contracting parties to enter into the contract

Characteristics of Contract

• Autonomy: parties are free to stipulate terms as long as they are not contrary to law, morals, good customs, public order, or public policy
• Mutuality: contracts must bind both parties
• Relativity: contracts take effect only between the parties, their assigns, and heirs
• Obligatoriness: contracts have the force of law between the parties and must be complied with in good faith
• Consensuality: contract is born or exists since there is an agreement between the parties regarding the subject matter

Review and practice questions on the classification of contracts, including consensual and formal contracts, for the OBLICON final exam.