CIVIL LAW REVIEW
CONTRACTS Q: What are contracts that are not in writing that can
Jan. 11, 2019
Part 2
PROBLEM: A owns a bar with a singer while B owns
the adjoining bar without a singer. So, most of the
customers will go to A’s bar because there is a singer.
The singer in A’s bar went to B and said “If you are
willing to give me a double pay I will sing for you” B
said “yes, I will give you double pay” So singer has an
active contract decided to transfer. Owner A sued the
singer and the owner of Bar B. What are the causes of
action of A against the two?
A: Against the singer- Breach of contract
Against bar owner B- Abuse of right, the source of
obligation is quasi-delict, but owner of Bar A will not
be successful against Bar owner B. Art. 1314 is not
applicable because B did not induce the singer to
breach the contract. It was the singer who
approached B, there was no bad faith on his part.
Requisites of 1314: (Interference with contract)
a.) There is a valid contract
b.) The third person must be aware of the
existence of the contract; and
c.) The interference of the third person must be
without legal justification.
Art. 1314. Any third person who induces another to
violate his contract shall be liable for damages to the
other contracting party.
Note: 1314, 1313, 1312 are an exception to the
relativity of contract: you may not be involved/party
in the contract between A and the singer but you can
still be liable provided all the requisites are present.
Art. 1312. In contracts creating real rights, third
persons who come into possession of the object of the
contract are bound thereby, subject to the provisions of
the Mortgage Law and the Land Registration Laws.
Art. 1313. Creditors are protected in cases of contracts
intended to defraud them.
Q: What are the essential requisites of a contract?
A:
A.) object
B.) consideration
C.) consent
NOTE: FORM-if the law requires it as enumerated
below.
be considered void?
A: In sale of real property by and agent, the authority
must be in writing otherwise it is void. Donation of
immovable has to be in a private writing to be valid.
So, if the law specifies that it should be in writing to
be valid. Like when you contribute immovable
property in a partnership, also in antichresis.
The following must be in writing to be valid or
enforceable:
 Art. 1874. When a sale of a piece of land or any
interest therein is through an agent, the authority
of the latter shall be in writing; otherwise, the sale
shall be void.
 Art. 748. The donation of a movable may be made
orally or in writing.
 An oral donation requires the simultaneous delivery
of the thing or of the document representing the
right donated.
 If the value of the personal property donated
exceeds five thousand pesos, the donation and the
acceptance shall be made in writing, otherwise, the
donation shall be void. (632a)
 Art. 749. In order that the donation of an
immovable may be valid, it must be made in a
public document, specifying therein the property
donated and the value of the charges which the
donee must satisfy
 Art. 2132. By the contract of antichresis the creditor
acquires the right to receive the fruits of an
immovable of his debtor, with the obligation to
apply them to the payment of the interest, if owing,
and thereafter to the principal of his credit.
 Art. 2134. The amount of the principal and of the
interest shall be specified in writing; otherwise, the
contract of antichresis shall be void.
 Art. 1773. A contract of partnership is void,
whenever immovable property is contributed
thereto, if an inventory of said property is not made,
signed by the parties, and attached to the public
instrument.
 1403(d) An agreement for the sale of goods,
chattels or things in action, at a price not less than
five hundred pesos, unless the buyer accept and
receive part of such goods and chattels, or the
evidences, or some of them, of such things in action
or pay at the time some part of the purchase money;
but when a sale is made by auction and entry is
made by the auctioneer in his sales book, at the time
of the sale, of the amount and kind of property sold,
terms of sale, price, names of the purchasers and
person on whose account the sale is made, it is a
sufficient memorandum;
 Art. 1443. No express trusts concerning an
immovable or any interest therein may be proved by
parol evidence.
 Art. 1956. No interest shall be due unless it has been
expressly stipulated in writing.
 Art. 1724. The contractor who undertakes to
build a structure or any other work for a
stipulated price, in conformity with plans and
specifications agreed upon with the land-owner,
can neither withdraw from the contract nor
demand an increase in the price on account of the
higher cost of labor or materials, save when there
has been a change in the plans and specifications,
provided:
 Such change has been authorized by the
proprietor in writing; and
 The additional price to be paid to the contractor
has been determined in writing by both parties.
 Art. 1784. A partnership begins from the moment of
the execution of the contract, unless it is otherwise
stipulated.
 Art. 1744. A stipulation between the common
carrier and the shipper or owner limiting the
liability of the former for the loss, destruction, or
deterioration of the goods to a degree less than
extraordinary diligence shall be valid, provided it
be:
 In writing, signed by the shipper or owner
 Art. 1758. When a passenger is carried gratuitously,
a stipulation limiting the common carrier's liability
for negligence is valid, but not for wilful acts or
gross negligence
 Art. 2140. By a chattel mortgage, personal property
is recorded in the Chattel Mortgage Register as a
security for the performance of an obligation. If the
movable, instead of being recorded, is delivered to
the creditor or a third person, the contract is a
pledge and not a chattel mortgage. (As long as it is
in writing it is binding between parties-
pledge/deposite/loan can be oral)
 Art. 1624. An assignment of creditors and other
incorporeal rights shall be perfected in accordance
with the provisions of Article 1475
 Art. 2096. A pledge shall not take effect against
third persons if a description of the thing pledged
and the date of the pledge do not appear in a public
instrument. (PLEDGE is valid even if it is not be in
writing, to affect third person it must be in a public
instrument)
 Art. 1625. An assignment of a credit, right or action
shall produce no effect as against third person,
unless it appears in a public instrument, or the
instrument is recorded in the Registry of Property in
case the assignment involves real property. (if
merely assignment to be effective to third person it
must be in a public instrument.)
 Art. 2140. By a chattel mortgage, personal property
is recorded in the Chattel Mortgage Register as a
security for the performance of an obligation. If the
movable, instead of being recorded, is delivered to
the creditor or a third person, the contract is a
pledge and not a chattel mortgage.
 Art. 1771. A partnership may be constituted in any
form, except where immovable property or real
rights are contributed thereto, in which case a
public instrument shall be necessary.
 Art. 1773. A contract of partnership is void,
whenever immovable property is contributed
thereto, if an inventory of said property is not made,
signed by the parties, and attached to the public
instrument.
Another essential requirement:
Q: Is delivery an essential requisite for the perfection
of the contract?
A:
 Sale- No. Perfected by the meeting of the
minds even if there is no delivery.
 Partnership- No. perfected by mere consent
unless there is immovable.
 Loan- Yes. It is a real contract therefore
Perfected by amount, interest or manner of
payment and delivery is an essential
requisite.
 Commodatum-Yes. It is a real contract
 Deposit- Yes. It is a real contract you must
give the money to the bank to perfect the
contract of deposit
Art. 1316. Real contracts, such as deposit, pledge and
Commodatum, are not perfected until the delivery of
the object of the obligation.
NOTE: The essential requisite is not always just
consent, object and consideration under the law it
may require the form as mention previously and
delivery to be perfected (in real contracts).
PROBLEM: A borrowed money and executed a loan
agreement with a security over a car. Was the
agreement of the loan and security upon execution of
the document already perfect the contract?
A: No, there was no delivery of the loaned money.
Although delivery is not needed for the car since the
security is only the accessory.
*Loan money must be given to perfect the contract,
the car is not required to be govern because it is only
an accessory contract.
Q: Aside from the statute of frauds which is
unenforceable, give other 2 situations which are
unenforceable:
A: Agent without written authority and even if given
authority but exceeded the authority. when contract
is entered by a Minor and Insane. When it it is
unenforceable it can be nullified
PROBLEM: A died, succeeded by his wife B and his 3
minor children, C, D and E. B executed a deed of sale
in favor of the third party for herself and in
representation of her 3 minor children. When the
children were of age they decided to have the sale as
to the third person nullified only as regard to their
share. Can the mother enter into a contract regarding
the shares of their minor? What kind of defective
contract is this?
A: UNENFORCEABLE as to the share of the minors
because there as no consent. The authority of the
mother over the property of her minor children is
only for administration which she exceeded her
power therefore it is unenforceable. It is not
recissible because she was not exercising the power
authorized by the law.
NOTE: When a person exceeded the power granted to
her then it is unenforceable not voidable. Recissible
(1381) presupposes that there is a valid consent/ it is
authorized BUT there is an injury. If the mother had
authority from the court it is no longer recissible but
it is valid BUUUUT it can be recissible if the ward
(Children) suffered injury. Example the court said:
“you can sell it for this amount” but the mother sold it
for a very low amount then pwede pa recissible.
TOPIC: Perfection of contract
PROBLEM: while you are walking along the street
you saw this car that has a sign “for sale 1M contact
etc. etc” so you contact the person and said “I accept
the offer you posted in your car” is there a sale?
A: No. It is a mere invitation no meeting of the minds
yet. Art. 1325. Unless it appears otherwise, business
advertisements of things for sale are not definite offers,
but mere invitations to make an offer.
NOTE: Mere advertisements are offers unless it is a
definite offer but here it is not definite but it is not
specified. EVEN if the price is fixed but the manner of
payment is not indicated, it is not considered as
definite (according to tolentino) without manner of
payment then it cannot be considered as a definite
offer IF IT IS A BIG AMOUNT. If dli big amount like 10
pesos, 20 pesos okay ra, Definite na.
Q1: What if the car is described, Amount is one
million payable in 10 monthly installments but he
forgot to indicate the place of payment, which was
accepted. Is there a perfected contract?
A: Yes. The law states that it shall be presumed to be
the place where the car is situated if they know
where the car is. If they do not know, then the place
of seller.
Art. 1521. Whether it is for the buyer to take possession
of the goods or of the seller to send them to the buyer is
a question depending in each case on the contract,
express or implied, between the parties. Apart from any
such contract, express or implied, or usage of trade to
the contrary, the place of delivery is the seller's place of
business if he has one, and if not his residence; but in
case of a contract of sale of specific goods, which to the
knowledge of the parties when the contract or the sale
was made were in some other place, then that place is
the place of delivery.
Where by a contract of sale the seller is bound to send
the goods to the buyer, but no time for sending them is
fixed, the seller is bound to send them within a
reasonable time.
Where the goods at the time of sale are in the
possession of a third person, the seller has not fulfilled
his obligation to deliver to the buyer unless and until
such third person acknowledges to the buyer that he
holds the goods on the buyer's behalf.
Demand or tender of delivery may be treated as
ineffectual unless made at a reasonable hour. What is a
reasonable hour is a question of fact.
Unless otherwise agreed, the expenses of and incidental
to putting the goods into a deliverable state must be
borne by the seller.
Q: what if there is already a meeting of the minds
between the seller and buyer but subsequently, the
seller changed the terms but there was no acceptance
on the subsequent term by the buyer. Was there a
perfected contract?
A: There is a perfected contract with regard to the
first offer. The seller cannot change since the buyer
already accepted the first offer. In counter offer, the
change must be coming from the buyer for you to say
that there is no perfected contract because there is no
acceptance. Terms were definite already when the
buyer accepts and there is knowledge by the seller.
So in the negotiation stage, when you already
accepted then there is perfection because it is an
unqualified acceptance.
Stages of contract:
 Negotiation
 Perfection
 Performance

PROBLEM: A through text messages told his friend “
I’m leasing my house to you for 10k” so the other
person replied “yes I’m accepting the lease for 10k a
month for one year” was there a perfected contract?
A: Yes
Q: Is it enforceable?
A: Yes, because it a lease of one year. If it is beyond
one year then it should be in writing according to the
statute of frauds.
Q: If 2 years, is it valid?
A: Yes there is perfection because lease is consensual
Q: is it unenforceable?
A: Yes. It has to be in writing according to the statute
of frauds.
ANOTHER PROBLEM: A by a letter said “ I’m leasing
to you my property for 2 years for 10k a month” the
friend sent the acceptance by letter. Subsequently,
they met and created a lease contract. When was the
lease contract perfected?
A: Perfected when the offerer knew the acceptance.
Q1: Sent a letter and send an acceptance but while
the acceptance is on the way ni withdraw and seller.
Nauna naabot ang acceptance. Was there a perfected
contract?
A: No perfected contract according to the case of
Laudico vs. Arias. When the acceptance was received
there was already withdrawal of the offer.
NOTE:
Art. 1319. Consent is manifested by the meeting of the
offer and the acceptance upon the thing and the cause,
which are to constitute the contract. The offer must be
certain and the acceptance absolute. A qualified
acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not bind
the offerer except from the time it came to his
knowledge. The contract, in such a case, is presumed to
have been entered into in the place where the offer was
made.
Art. 1323. An offer becomes ineffective upon the death,
civil interdiction, insanity, or insolvency of either party
before acceptance is conveyed.
Note: IF PERSON ACCEPTANCE RECEIVED BY
SELLER WHEN HE DIED then it is transmissible to
the heirs.
Art. 1311. Contracts take effect only between the
parties, their assigns and heirs, except in case where
the rights and obligations arising from the contract
are not transmissible by their nature, or by stipulation
or by provision of law. The heir is not liable beyond the
value of the property he received from the decedent.
If a contract should contain some stipulation in favor
of a third person, he may demand its fulfillment
provided he communicated his acceptance to the
obligor before its revocation. A mere incidental benefit
or interest of a person is not sufficient. The contracting
parties must have clearly and deliberately conferred a
favor upon a third person.
Q: insane when he offered but sane when he received
the acceptance. Valid?
A: It is voidable.
Q: when sane when he offered but insane when he
received the acceptance. What is the effect of the
contract?
A: It is an ineffective . Then there is no contract.
NOTE: It is voidable if he was insane when he offered
but was sane when it was accepted.
Q: A sent an offer which was accepted by B. when a
received the acceptance A was convicted by final
judgment with a penalty of prison mayor. valid?
A: yes kai civil interdiction is reclusion temporal up,
walay labot ang prision mayor.
PROBLEM: bureau of public highways said we are
accepting bids. Is DPWH bound by the highest
bidder?
A: No. Unless the contrary appears. (walay klaro ang
answer ni christal sorry)
PROBLEM: A was deaf mute (uses sign language) he
entered a contract buying a refrigerator a receipt was
issued to him. Can he have it annulled or is it valid?
A: It is valid. Contract is voidable only if the deaf mute
is illiterate. Here there is no mention in the facts that
the deaf mute is illiterate, as long as he can
understand then it is valid.
Note: if he is just illiterate and not a deaf-mute
Art. 1332. When one of the parties is unable to read, or
if the contract is in a language not understood by him,
and mistake or fraud is alleged, the person enforcing
the contract must show that the terms thereof have
been fully explained to the former.
Q: Illiterate buyer, receipt is in English and it was not
explained to him. Valid?
A: yes. For it to be void, you have to alleged fraud or
mistake According to 1332.
PROBLEM: A has title to land, B contested the title
saying it belongs to his father and the title of a was
issued fraudulently. There was a case between A and
B. A sold it to C, the latter knowing that there is a case
between A and B. The land was awarded to B. Can C
sue A to have the contract annulled?

A: No, because there is no vitiated consent. C knew of

the controversy surrounding the property between a
and B. However, he can sue for damages for warranty
against eviction but not annulment. If however, there
was a waiver then he cannot recover even on the
ground of warranty.

June’s Part…