Activities

In

Business Law

Submitted By:

Atenta, Alexis Joemel M.

Year & Section:

BSE – 3C
Activity no. 1:

I. Definition

Define or give the meaning of the following:

1. Contract - A contract is a legally enforceable promise in easy term. Contract also means is the
total legal obligation which results from the parties’ agreement as affected by this Act and any
other applicable rules of law.

2. Stipulation pour autrui - a contract or provision in a contract that confers a benefit on a third-

party beneficiary, a stipulation pour autrui gives the third-party beneficiary a cause of action
against the promisor for specific performance.

3. Real contract - Real contracts are agreements between parties to perform or refrain from
performing an action in respect to real property. A real contract is a contract in which money or
other property passes from one party to another. Real contract requires something more than
mere consent, such as the lending of money or handing over of a thing.

4. Perfection of contract - Perfection or birth, this is the stage where the contract is said to have
been born,  where the parties had a meeting of minds as to the object, cause or consideration
and other terms and conditions of the contract.  It has passed the preparatory state, thus giving
birth to the contract.

II. Discussions

1. May a third person acquire rights under a contract to which he is a stranger or be bound
thereby? Explain

No, strangers cannot be bound by a contract to which they are not parties. However, there are
exceptions to this rule. In other words, there are cases when even third persons (not parties to
the contract) may assume benefits, or may be held liable for damages, under the contract.

2. How are contracts perfected?

Contracts is perfected or given force when the components of consent, object and
consideration are present. When a seller offers to sell goods at an offer price plus a buyer
agrees to the cost, there's a perfected contract of sale.
3. When will a person be bound by a contract entered into by another?

A person will be bound by a contract entered into by another, by having the legal ability to form
a contract in the first place, called capacity to contract. A person who is unable, due to age or
mental impairment, to understand what she is doing when she signs a contract may lack
capacity to contract.

4. Give the effect of the perfection of a contract.

Effect of perfection of a contract, It is only after perfection of a contract that the following will

arise:

a. the obligation of the debtor to perform the prestation and/or to pay for damages.

b. the right of the creditor to compel performance of the obligation and/or claim for damages.
Activity no. 2:

I. Definition

Define or give the meaning of the following:

1. Consent – Consent essentially occurs when two parties mutually agree to form
a contract with each other. Consent cannot be given under pressure, If one or both parties
provided their consent under duress, the contract will not be legal.

2. Acceptance - Acceptance must be judged objectively, but can either be expressly stated or

implied by the offeree's conduct. To form a binding contract, acceptance should be relayed in a
manner authorized, requested, or at least reasonably expected by the offeror.

3. Natural Elements - Those which are part of the contract even if the parties do not provide
(stipulate) them, and is presumed by law to exists, such as a warranty of hidden defects or
eviction in contract of sale.

4. Option Contract - A promise which meets the requirements for the formation of
a contract and limits the promisor's power to revoke an offer.

5. Mistake of law - In contract law, a mistake of fact occurs when one or both parties in
a contract have mistaken a term that is essential to the meaning of the contract.

II. Discussions

1. When is a contract voidable or annullable?

A contract is voidable or annullable in the following:

a. Those where one of the parties is incapable of giving consent to a contract.

b. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or
fraud.

2. Is it always required that he who alleges fraud or mistake in entering into a contract, must
prove his allegation? Explain

Yes, it is always required that he who alleges fraud or mistake in entering into a contract, must
prove his allegation. Whoever alleges must always prove both in Criminal and civil cases,
however the standard of proof in civil cases is usually lower.
3. Give the requisites in order that intimidation may vitiate or annul consent of a party to a
contract.

 If the consent of one party is not freely given because such consent was obtained through
fraud, violence intimidation, undue influence, the contract is voidable. This is when it is said
that the consent is vitiated.

4. May fraud be commuted by a party to a contract though there is no misrepresentation on his

part? Explain

If a misrepresentation as to the character or essential terms of a proposed contract induces

conduct that appears to be a manifestation of assent by one who neither knows nor has
reasonable opportunity to know of the character or essential terms of the proposed contract,
his conduct is not effective as a manifestation of assent.

5. Will the acceptance of a business advertisement of a thing for sale produce the perfection on
a contract? Explain

Yes, if the advertisement is complete in all the particulars necessary in a contract, it may

amount to a definite offer which if accepted, will produce a perfected contract.
Activity no. 3:

I. Definition

1. Future inheritance - Article 1347 of the Civil Code provides that no contract may be entered
into upon a future inheritance except in cases expressly authorized by law. For
the inheritance to be considered "future", the succession must not have been opened at the
time of the contract.

2. Physical impossibility - Physical impossibility is impossibility due to the fact that the alleged
illegal act cannot be physically achieved. For example, trying to pick an empty pocket. Physical
impossibility is not a defense to the crime of attempt. Physical impossibility is also termed
factual impossibility.

II. Discussions

1. Give the requisites of things as object of a contract.

Requisites of things as object of contract:

1. The thing must be within the commerce of men, that is, it can legally be the subject of
commercial transaction;
2. It must not be impossible, legally or physically;
3. It must be in existence or capable of coming into existence; and
4. It must be determinate or determinable without the need of a new contract between the
parties.

2. Give the requisites of service as object of a contract.

Requisites of services as object of contract:

1. The service must be within the commerce of men;
2. It must not be impossible, physically or legally; and
3. It must be determinable or capable of being made determinate.

3. May a contract be entered upon future inheritance?

The law permits contracts on future inheritance:

1. In the case of donation by reason of marriage between future spouses with respect to their
future property to take effect, only in the event of death, to the extent laid down by law in
testamentary succession.
2. In the case of partition of property by act inter vivos by a person to take effect upon his
death.
Activity no. 4:

I. Definition

Define or give the meaning of the following:

1. Cause -  Something that precedes and brings about an effect or a result.

2. Motive - An idea, belief, or emotion that impels a person to act in accordance with that state
of mind. Motive is usually used in connection with Criminal Law to explain why a person acted
or refused to act in a certain way.

3. Inadequacy of cause - Inadequacy of cause is not a ground for relief and from failure of
cause which does not convert the contract into one without cause or consideration. It means
that the said contract failed to present the right cause for the contract.

II. Discussions

1. Give the requisites of cause in a contract.

Requisites of Cause CAUSE OF CONTRACTS (1350)

a. It must exist (no cause, no effect) Causa – the essential or more proximate purpose which
contracting parties have in view.

b. it must be lawful – not contrary to law, at the time of entering into a contract moral, xxx (Art.
1354) CLASSIFICATION OF CONTRACT 3.

2. State the effect if the cause of a contract is found to be false.

The contract states a valid consideration but such statement is not true is meant by falsity
of cause. This false statements cause the contracts tend to be void or null.

3. What is the object and what is the cause in a contract of sale?

The thing or the object of the contract of sale is a bilateral or reciprocal contract which is

the cause for one is the subject matter or object for the other, and vice versa.