TITLE II.

CONTRACTS
Art. 1305. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the
other, to give something or to render some service.

Concept of Contracts
- In its derivative sense, the word contract (cum traho)
o simply means an agreement or convention.
o It must be noted, however, that a contract is not exactly synonymous with a convention.

Convention
- broad enough to include any kind of agreement which may create, modify or extinguish patrimonial and even
family relations.
- the genus
Contract
- limited exclusively to those agreements which produce patrimonial obligations.
- the specie

a Contract
- a juridical convention manifested in legal form,
- by virtue of which one or more persons bind themselves in favor of another or others, or reciprocally,
- to the fulfillment of a prestation to give, to do or not to do.

Distinguished from other terms. Contracts must not be confused with other juridical conventions such as
marriage,
adoption and succession.

There are some essential differences:

Contract Other juridical conventions
(OJC)
1. the principal source of the rights - is their agreement - it is the law itself
and obligations of the parties
2. rights and obligations arising - are concrete, limited and - are more or less elastic,
from contracts transitory (clt) absolute and permanent
(eap)

Ordinary contract and a contract of marriage

Ordinary contract Contract of marriage
1. the parties - may be two or more persons - it is necessary that the parties must
of the same or of different sexes be one man and one woman
2. the nature, - are governed primarily by the - are governed by law
consequences and agreement of the parties
incidents
3. execution/celebration - once the contract is executed, the - once the marriage is celebrated, the
result is a contract result is a status
4. can be terminated or - the mere agreement of the parties - the second cannot
dissolved by
5. in case of breach the - institute an action against the other - institute a civil action against the
usual remedy is for the party for damages other party for legal separation or a
injured party is to criminal action for adultery or
concubinage

Neither must contracts be confused with perfected or imperfect promises.

A perfected promise - merely tends to insure and pave the way for the celebration of a future contract.
An imperfect promise (policitacin) - is a mere unaccepted offer.
Nor must contracts be confused with either pacts or stipulations.
A pact - is an incidental part of a contract which can be separated from the principal agreement.
stipulation - is an essential and dispositive part which cannot be separated from such principal agreement.

The Basic Duties of Persons when entering into Contracts.

- All men are presumed to be sane and normal and subject to be moved by substantially the same motives.
- The law furnishes protection to both alike to one no more or less than the other. It makes no distinction
between the wise and the foolish, the great and the small, the strong and the weak.

The duty of the Courts in interpreting Contracts.

- is not the province of the court to
o alter a contract by construction or
o to make a new contract for the parties.
- Its duty is confined to the interpretation of the one which they have made for themselves
- without regard to its wisdom or folly as the court cannot supply material stipulations or read into the contract
words which it does not contain.

Elements of Contracts. The elements of a contract may be classified as follows: (ENA)

(1) Essential
o The essential elements are those without which there can be no contract.
o These elements, in turn are subdivided into
1. common (comunes)
2. special (especiales) and
3. extraordinary or peculiar (especialisimos).
The common elements
are those which are present in all contracts; such as
1. consent of the contracting parties;
2. object certain which is the subject of the contract; and
3. cause of the obligation which is established.
The special elements
are present only in certain contracts, such as
1. delivery in real contracts or
2. form in solemn ones.
The extraordinary elements
o are those which are peculiar to a specific contract, such as
1. the price in a contract of sale.

(2) Natural
o are those which are derived from the nature of the contract and ordinarily accompany the same.
o They are presumed by the law, although they can be excluded by the contracting parties if they so desire.
o Thus, warranty against eviction is implied in a contract of sale, although the contracting parties may
increase, diminish or even suppress it.

(3) Accidental
o are those which exist only when the parties expressly provide for them
o for the purpose of limiting or modifying the normal effects of the contract.
1. Examples of these are conditions, terms and modes.