Elements of contract - Cause, object, consideration

Under the rule 4 years, u can rescind until lumaki ka na

c. Forms of contracts – (Art. 1356 – 1358)

Article 1356
Contracts shall be obligatory, in whatever form they may have been entered into,
provided all the essential requisites for their validity are present. However, when the law
requires that a contract be in some form in order that it may be valid or enforceable, or
that a contract be proved in a certain way, that requirement is absolute and
indispensable. In such cases, the right of the parties stated in the following article
cannot be exercised.
- Contracts shall be required. In whatever form, even if its oral, writing, or
partly oral and writing. However, if in law requires the contract to be in
some form it is necessary that you need to prove it in a certain way.
- Contracts are binding upon the contracting parties in whatever form they may
have been entered into as long as all the essential requisites for their validity are
present.

The form of a contract is essential:

1. When the law requires that a contract be in certain form for its validity; (refers to
solemn or formal contracts).
2. When the law requires that a contract be in certain form for its enforceability.
(refers to the agreements covered by the Statute of Frauds. (Art. 1403, par 2.)

d. Reformation of instruments
i. Definition – (Art. 1359)
Article 1359
- When, there having been a meeting of the minds of the parties to a contract, their
true intention is not expressed in the instrument purporting to embody the
agreement, by reason of mistake, fraud, inequitable conduct or accident, one of
the parties may ask for the reformation of the instrument to the end that such true
intention may be expressed.
- If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the
minds of the parties the proper remedy is not reformation of the instrument but
annulment of the contract.
- hence, a contract exists but the written instrument purporting to embody the
contract does not express the true intention of the parties by reason of mistake,
 fraud, inequitable conduct, or accident. Under the technical rules of law, the real
contract cannot be enforced until it is reformed.

- It appears dito sa contract na Yung true intention does not express sa

parties by reason of mistake, fraud, inequitable, or accident. Under the
technical rules of law, hindi raw pwedeng ienforce o iexecute and contract
until it is reformed.

ii. When reformation not allowed – (Art. 1366)

Article 1366
There shall be no reformation in the following cases:

(1) Simple donations inter vivos wherein no condition is imposed;

(2) Wills;
(3) When the real agreement is void.
- Hindi na kailangan ng reformation unless hindi complete o hindi
enforceable ang description ng person or property. Donation and wills are
all acts of pure liberality so there is no need a reformation.
- Donations and Wills. Both donations and wills are essentially acts of pure
liberality. Reformation is not required unless there is an imperfect or erroneous
descriptions of persons or property ensuring that the manner of property disposal
remains.

Void Agreements. Stated in Article 1409 are contracts that are void and inexistent from
the beginning. These are

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.

Reformation is not allowed in case the real agreement is void because such a
procedure would be useless. Once reformation is made, the new instrument would be
void precisely because the true agreement and intention are void.
-
e. Interpretation of contracts – (Art. 1370 – 1379)
Article 1370
- If the terms of a contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control.
- If the words appear to be contrary to the evident intention of the parties, the latter
shall prevail over the former.
- The Court must not read into any other intention of the contracting parties
contradictory to the plain meaning.
- If yung terms sa contract is clear and the intention is there, the stipulations
or conditions shall control.
- The terms of an agreement or writing are presumed to have been used in their
primary and general acceptation. However, evidence may be admitted to show
that they are used in a local, technical or otherwise peculiar signification.
-

f. Defective Contracts - A defective contract is one which is lawful in its essence but not in
form, and if the cause of the defect is removed, the contract becomes valid.
i. Rescissible

Under rescissible:
- Any contracts entered into by guardians when their wards suffer lesion by more
than one-fourth of the items that are the object thereof.
- A contract agreed to in representation of an absentee, if the absentee suffered
the lesion mentioned above.
- Any contracts relating to fraud of creditors when the creditors cannot collect what
is owed to him or her in any other manner.
- Anything in litigation if it was entered into by the defendant without the knowledge
or approval of the litigants themselves or a competent judicial authority.
- Any other type of contract the law declares subject to rescission.

- capable of being rescinded

 - is one that was entered into legally by the contracting parties but has resulted in
economic damage to one of the parties or an outside party. The court can
therefore rescind, or set aside, the contract for equitable reasons.
- A contract na ang defect is cause, benefit ng kailangan kunin ay kulang.
1. Instances – (Art. 1381)
Article 1381
- The following contracts are rescissible:
(1) Those which are entered into by guardians whenever the wards whom they
represent suffer lesion by more than one fourth of the value of the things which
are the object thereof;
- (2) Those agreed upon in representation of absentees, if the latter suffer the
lesion stated in the preceding number;
- (3) Those undertaken in fraud of creditors when the latter cannot in any other
manner collect the claims due them;
- (4) Those which refer to things under litigation if they have been entered into by
the defendant without the knowledge and approval of the litigants or of
competent judicial authority;
- (5) All other contracts specially declared by law to be subject
to rescission.

2. Remedy -
3. Nature of Rescission as a Remedy – (Art. 1383)

4. Effects of Rescission – (Art. 1385)

5. Prescription – (Art. 1389)
6. Rescission v. Art. 1191 - END-
ii. Voidable
1. Instances – (Art. 1390)
2. Prescription – (Art. 1391)
3. Remedies -
4. Ratification and its effects – (Art.1392, 1396)
5. Annulment and its effects – (Art. 1397, 1398)
iii. Unenforceable
1. Instances – (Art. 1403)
2. Remedies -
3. Partially or totally performed contracts
a. Averia v. Averia, GR No. 141877, 13 August 2004
4. Whether unenforceability can be raised by third persons –
(Art. 1408)
iv. Void and inexistent
1. Instances – (Art. 1409)
2. In pari delicto – (Art. 1411)
a. Ranara v. Zacarias, GR No. 200765, 8 August 2016
3. Prescription – (Art. 1410)
4. Whether defense of illegality can be raised by third persons
– (Art. 1421)