Philippine Obligations and Contracts Quiz

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Questions and Answers

What is the primary purpose of contracts as outlined in the relevant articles?

  • To regulate criminal activities.
  • To provide guidelines for non-profit organizations.
  • To manage government expenditures.
  • To create legally binding agreements between parties. (correct)

Which of the following is NOT a requirement for a valid contract?

  • Consideration or the exchange of value.
  • Mutual consent of the parties.
  • Complete absence of any form of payment. (correct)
  • Lawful object of the agreement.

In the case of a contract breach, the remedies available typically do NOT include which of the following?

  • Restitution of benefits conferred.
  • Rescission of the contract.
  • Specific performance of the contract.
  • Imprisonment of the breaching party. (correct)

Which of the following best describes 'consideration' in contract law?

<p>The mutual exchange of value between parties. (D)</p> Signup and view all the answers

What is the legal remedy for a party who suffers damages due to misrepresentation in a contract?

<p>Compensatory damages for losses incurred. (A)</p> Signup and view all the answers

Flashcards

Contract Purpose

A legally binding agreement between parties, outlining their rights and obligations.

Consideration

Mutual exchange of something of value between parties. It can be money, goods, services, or even a promise.

Contract Breach

The violation or breaking of a contract's terms by one or more parties involved.

Compensatory Damages

Damages awarded to compensate a party for losses directly caused by a contract breach.

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Misrepresentation in Contract

A misstatement of fact that induces someone to enter into a contract, leading to potential legal action.

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Study Notes

Purpose of Contracts

  • Establish mutual obligations and expectations between parties.
  • Provide a legal framework for the enforceability of agreements.
  • Reduce uncertainty and foster trust in commercial transactions.

Requirements for a Valid Contract

  • Offer and acceptance must be present.
  • Parties must have the capacity to contract, meaning they are legally able to enter into agreements.
  • Mutual consent must be achieved without deception, coercion, or undue influence.
  • Must involve consideration, which refers to something of value exchanged.

Breach of Contract Remedies

  • Typically includes compensatory damages, specific performance, and rescission.
  • Remedies do NOT typically include punitive damages aimed at punishment rather than compensation.

Consideration in Contract Law

  • Refers to something of value exchanged between parties.
  • Can take the form of money, services, goods, or a promise to refrain from a certain action.
  • Essential to the formation and enforceability of a contract.
  • The injured party may seek rescission of the contract, nullifying the agreement.
  • Damages may also be awarded for losses suffered as a result of the misrepresentation.

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