 Essential elements of a contract – without which there is no contract; they are a)

consent, b) subject matter and c) cause

 A contract has three distinct stages: preparation, perfection, and consummation
 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
 Essential Elements - The elements of a contract without which a contract would not
exist
 Relativity of contract - Contracts take effect only between the contracting parties, their
assigns and heirs, except in cases where the obligations and rights arising from the
contract are not transmissible by their nature, or by stipulation or provision of law.
 Mutuality of contract - The contract must bind both contracting; its validity or
compliance cannot be left to the will of one of the parties.
 Consensuality of contract - Contracts are perfected by mere consent
 Real contracts, such as deposit, pledge or commodatum, are not perfected until the
delivery of the object of the obligation.

TEST III– TRUE OR FALSE.

1. TRUE - A voidable contract is binding until it is annulled. (Art.1390)

2. TRUE - Obligations arising from contracts have the force of law between the contracting
parties. (Art.1159)
3. FALSE - A contract is not a source of obligation.
4. TRUE - Statute of Frauds is applicable to executory contracts. (Art.1403)
5. TRUE - Deed of donation must be notarized to be valid. (Art.725 New Civil Code)
6. FALSE - Causal fraud makes the contract voidable. (It should be Incidental fraud)
7. FALSE - Contracts entered into with duress or with force or violence are valid
8. TRUE - Donation is a type of gratuitous contract. (Art.1350)
9. TRUE - Rescission is a proper remedy for a minor suffering from a lesion. (Art.1389)
10. FALSE - When the object is outside the commerce of man, the contract becomes
unenforceable. (Void Contract)
11. FALSE - Contract of sale of real property must be notarized to be valid.
12. FALSE- Parties’ agreement to a contract is not subject to law.
13. FALSE - Annulment is proper when the parties’ meeting of mind is not properly
expressed in a contract. (Reformation not Annulment)
14. FALSE - A contract becomes void when it is entered by an agent without authority (It
should be Unenforceable Art. 1403)
15. FALSE - All contracts need to be writing.

1. Voidable Contract - Valid but can be annulled

2. Ratification - A cure for unenforceable and voidable contract.
3. Consensual contract - A contract that is perfected by mere consent. (Article 1315)
4. Mutuality of contract- That it must bind both contracting parties and that its validity or
compliance cannot be left to the will of one of them. (Article 1308)
5. Real contract- The delivery of the object is required for the perfection. (1316)
6. Void contract - Contract not subject to ratification.
7. Statute of frauds - Requires writing to prove a contract.
8. Unenforceable Contract – Contract entered into without authority.

9. Rescissible Contract - Contract arising from defrauding a creditor.

10. Essential elements of contract -An absence of which a contract will not exist.