1) What is the legal definition of a contract?

Give its essential requisites or elements and briefly

explain each.

A contract is a legally enforceable agreement between two or more parties. It may be oral or

written. A contract is essentially a set of promises. Typically, each party promises to do

something for the other in exchange for a benefit.

Essential requisites????

Offer- is defined as an expression of willingness to contract on specific terms,

and it is made with the intention that it will become binding on the parties as

soon as it is accepted by the person to whom it is being addressed to (the

“offeree”).

Acceptance- is the unconditional acceptance of all the terms stated in the offer.

Consideration- is something that has value in the eyes of the law and given in

exchange for a promise. It can be understood using the “benefit-detriment

analysis’’.

Competency

Legal intent.

2) Enumerate and briefly explain five basic principles or characteristics of a contract.

Legal purpose. A contract must have a legal purpose to be enforceable. 

Mutual Agreement. All parties to the contract must have reached a "meeting of the minds."

That is, one party must have extended an offer to which the other parties have agreed.

Consideration. Each party to the contract must agree to give up something of value in exchange

for a benefit.

Competent Parties. The parties to a contract must be competent. That is, they must be of sound

mind, of legal age, and unencumbered by drugs or alcohol.

Genuine Assent. All parties must engage in the agreement freely. A contract may not be

enforced if mistakes have been made by one or more parties. Likewise, a contract may be voided

if one party has committed fraud or exerted undue influence over another. 

3) What is reformation of a contract or instrument? Give the essential requisites or elements for

an action for reformation. Give an example of a contract that cannot be reformed.

Reformation is that remedy allowed by law by means of which a written instrument is amended

or rectified so as to express or conform to the real agreement or intention of the parties when by

reason of mistake, fraud, inequitable conduct or accident, the instrument fails to express such

agreement or intention.

Example: S sold his horse “X” to B under a written contract of sale. What B thought S was

selling him is horse “Y”. Can S ask for the reformation of the contract against the objection of B

who is agreeable to the sale of horse “X”?

The instance resulted to mutual mistake of fact which the written instrument failed to express the

true intention of the contracting parties. S can ask for the reformation of the contract due to the

mutual mistake even though B agreed to receive the horse X.

4) a) In case of conflict between the words of a contract and the evident intention of the parties,

which one should prevail? Explain

5) Must a contract always be in writing? Justify your answer.

No, because most contracts can be either written or oral and still be legally enforceable, but

some agreements must be in writing in order to be binding. However, oral contracts are very

difficult to enforce because there's no clear record of the offer, consideration, and acceptance.

Still, it's important to understand which types of contracts absolutely must be written in order to

be valid.

QUIZ NO. 8

6) Enumerate contracts that are considered unenforceable.

The following article is an enumeration of what are unenforeceable contracts:

Art. 1403. The following contracts are unenforceable, unless they are ratified:
(1) Those entered into in the name of another person by one who has been given no

authority or legal representation, or who has acted beyond his powers;

(2) Those that do not comply with the Statute of Frauds as set forth in this number. In

the following cases an agreement hereafter made shall be unenforceable by action,

unless the same, or some note or memorandum, thereof, be in writing, and subscribed

by the party charged, or by his agent;

(3) Those where both parties are incapable of giving consent to a contract.

7) When is a contract considered void? Give the requisites of a void contract.

A contract otherwise legal in object and operation is voidable because of a defect caused by

either:

 Legal incapacity to give consent, where one of the parties is incapable of giving consent

to the contract; or

 Violation of consent, where the vitiation is done by mistake, violence, intimidation,

undue influence, or fraud.

8) Identify various contracts that are considered void.

Art. 1409. The following contracts are inexistent and void from the beginning: (1) Those

whose cause, object or purpose is contrary to law, morals, good customs, public order or

public policy; (2) Those which are absolutely simulated or fictitious; (3) Those whose
cause or object did not exist at the time of the transaction; (4) Those whose object is

outside the commerce of men; (5) Those which contemplate an impossible service; (6)

Those where the intention of the parties relative to the principal object of the contract

cannot be ascertained; (7) Those expressly prohibited or declared void by law. These

contracts cannot be ratified. Neither can the right to set up the defense of illegality be

waived. 

9) Differentiate a void contract from a voidable contract.

The main difference between the two is that a void contract cannot be performed under the law,

while a voidable contract can still be performed, although the unbound party to the contract can

choose to void it before the other party performs.

10) What are natural obligations? Explain its effects