Topics: Contract, Contract law, Unenforceable Pages: 26 (5190 words) Published: September 26, 2010

Stages in the life of a contract:

1. Preparation/Generation
2. Perfection/Birth
3. Consummation/Death

Characteristics of Contracts: (ROMA)

1. Relativity (Art. 1311)
2. Obligatoriness & Consensuality (Art. 1315)
3. Mutuality (Art. 1308)
4. Autonomy (Art. 1306)

Stipulation pour Autrui - stipulation in favor of a 3rd party.

1. The stipulation must be part, not whole of the contract;
2. the contracting parties must have clearly and deliberately conferred a favor upon a 3rd person; 3. the 3rd person must have communicate his acceptance;
4. neither of the contracting parties bears the legal representation of the 3rd party.

General Rule: Contracts (except real contracts) are perfected from the moment there is a manifestation of concurrence between the offer and the acceptance regarding the object and the cause. Except: Acceptance by letter or telegram which does not bind the offerror except from the time it came to his knowledge.

Theories applied to perfection of contracts:
1. Manifestation theory - the contract is perfected from the moment the acceptance is declared or made; 2. Expedition theory - the contract is perfected from the moment the offeree transmits the notification of acceptance to the offerror; 3. Reception theory - the contract is perfected from the moment that the notification of acceptance is in the hands of the offerror; 4. Cognition theory - the contract is perfected from the moment the acceptance comes to the knowledge of the offerror. This is the theory adopted in the Philippines.

Persons incapacitated to give consent:
1. Unemancipated minors;
1. Contracts for necessaries;
2. Contracts by guardians or legal representatives;
3. Contracts where the minor is estopped to urge minority through his own misrepresentation; 4. Contracts of deposit with the Postal Savings Bank provided that the minor is over 7 years of age. 2. Insane or demented persons unless the contract was entered into during a lucid interval; 3. Deaf-mutes who do not know how to write.

The following may not acquire by purchase, even by public or judicial auction, in person of though the mediation of another:

1. the guardian, with respect to the property of his ward;
2. agents, with respect to the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given; 3. executor or administrator, the property of the estate under administration; 4. public officers and employees, with respect to the properties of the government, its political subdivisions, GOCCs, that are entrusted to them; 5. judges, justices, prosecuting atty.’s, clerks of courts, etc., the property in custogia legis; and 6. any other person specially disqualified by law.

Simulation of a contract

Kinds of simulation:

1. Absolute - no real transaction is intended;
Effect: simulated contract is inexistent.
2. Relative - the real transaction is hidden;
Effect: the apparent contract is void, but the hidden contract is valid if it is lawful and has the necessary requisites. : as to third persons without notice - the apparent contract is valid on the principle of estoppel.

Effect of:
|Absence of cause |the contract confers no right | | |and produces no legal effect | |Failure of cause |does not render the contract | | |void | |Illegality of cause |the contract is null and void | |Falsity of cause |the contract is void unless | | |the parties can show that | | |there is another cause which | | |is true and lawful | |Lesion |does not invalidate the | | |contract unless: | | |there...
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