A.

Aleatory contract of their agreement, and there is no risk to anticipate

contracts where the fulfillment is dependent on (i.e. contracts of mortgage and pledge)
chance or event which may not happen within the
period stipulated, and the loss contempated may I. Mutuality of contract
not happen. (i.e. insurance contract) Its validity and performance cannot be left to the
will of only one of the parties.
B. Annulment
Annulment is a remedy provided by law, for reason J. Nominate contract
of public interest, for the. declaration of the those which have been given particular names (i.e.
inefficacy of a contract based on a defect or vice in sale, barter, mortgage, lease, carriage, agency,
the consent of one of the contracting parties in etc.)
order to restore them to their original position in
which they were before the contract was executed. K. Perfection of a contract
This is the stage where the contract is said to have
C. Preparation of a contract been born, where the parties had a meeting of
contracts entered into for the creation of another minds as to the object, cause or consideration and
contract (i.e. agency, the principal gives authority other terms and conditions of the contract. It has
to the agent through a Special Power of Attorney) passed the preparatory state, thus giving birth to
the contract.
D. Lucid interval
A temporary period of sanity L. Ratification
Refers to a brief period during which an insane Ratification means that one voluntarily adopts some
person regains sanity that is sufficient to regain the defective or unauthorized contract which, without
legal capacity to contract, make a will and to act on his subsequent approval or consent, would not be
his/her own behalf. binding on him.
Ratification cleanses the contract from all its
E. Cause defects from the moment it was constituted.
Cause (causa) is the essential or more proximate (Art. 1396)
purpose or reason which the contracting parties
have in view at the time of entering into the M. Auto contract
contract]. or, as expressed in another case, it is the
“why of the contract, the essential reason which contracts where the two parties are represented by
moves the contracting parties to enter into the the one and the same person, who represents and
contract.’’ acts in different capacities (i.e. agent representing
his principal who authorized him to borrow money)
F. Onerous contract
contracts that provide for exchange of valuable N. Consideration
considerations (i.e. sale where the seller delivers Consideration may consist either in some legal
the object of the contract and the buyer pays the right, interest, benefit or advantage conferred upon
purchase price) the promissor, to which he is otherwise not lawfully
entitled, or in some legal detriment, prejudice, loss
or disadvantage suffered or undertaken by the
G. Natural elements promisee other than to such as he is at the time of
those elements which are found in a contract by its consent bound to suffer.
nature and presumed by law to exist, such as
Warranty of hidden defects or eviction in contract of O. State of drunkenness
sale. Drunkenness and hypnotic spells impaired the
capacity of a person to give intelligent consent.
H. Commutative contract (8 Manresa 660-661)
contracts where the contracting parties contemplate
the assured fulfillment of the terms and conditions
P. Innominate contract
or that which has no specific name or designation
in law. The word “contract” literally means a drawing
together (cum-trahere). In the Philippine Civil Code
Q. Relativity of contract a contract is defined as “a meeting of minds
Contracts are binding only upon the parties and between two persons whereby one binds himself,
their successors-in-interest. with respect to the other, to give something or to
render some service.” (Article 1305, Civil Code).
R. Real contract
cannot be perfected without delivery (i.e. Art. 1318. There is no contract unless the following
commodatum, depositum, pledge, loan) requisites concur:
1. Consent of the contracting parties;
S. Essential elements 2. Object certain which is the subject matter of
Essential elements of a valid contract are the contract;
discussed including consent, an object certain, and 3. Cause of the obligation which is
consideration between contracting parties. established.

T. Consensual contract THE DEFECTIVE CONTRACTS

Consensual contracts are those which are
perfected by mere consent (i.e., sale, lease, A rescissible contract is one, which, though
agency) possessing all the essential requisites of contracts,
has caused a particular economic damage either to
one of the contracting parties or to a third person.
Invalidating a contract? TRUE OR FALSE
Art. 1381. The following contracts are
The usual exaggeration in traits when the other rescissible:
party had an opportunity to know the facts are not
in this held fraudulent. (False advertising) (1) Those which are entered into by guardians
Ans: Valid contract TRUE whenever the wards whom they represent suffer
lesion by more than one-fourth of the value of the
Incidental broadcast that refers to a contract things which are the object thereof;
voidable but only the obligees, the person,
employed the damages. (Is incidental fraud will (2) Those agreed upon in representation of
make a contract voidable?) absentees, if the latter suffer the lesion stated in the
Ans: Valid contract until annulled (kahit konting preceding number;
pagkakamali, voidable) TRUE
(3) Those undertaken in fraud of creditors when
Reformation cannot be availed in case of last will the latter cannot in any other manner collect the
and testament. (Reformation-changing of contract) claims due them;
Ans: FALSE (cannot be reformed)
(4) Those which refer to things under litigation if
Reformation is not available if the contract is void. they have been entered into by the defendant
Ans: TRUE (it is already void, as if there is no without the knowledge and approval of the litigants
contract) or of competent judicial authority;

(5) All other contracts specially declared by law to

be subject to rescission.”
A voidable contract is one in which the consent of
one party is defective, either because of want
DEFECTIVE CONTRACTS IN PHILIPPINE CIVIL of capacity, or because consent is vitiated.
LAW
(1) One of the parties INCAPABLE of giving account the sale is made, it is a sufficient
consent to a contract. memorandum;
E. An agreement for the leasing for a longer
(2) Those were consent vitiated by vices of
period than one year, or for the sale of real
consent. (MFVIU)
property or of an interest therein;
(3) Those agreed in the state of
drunkenness/hypnotic spell. A void contract is one which suffers from absence
of object or cause and is therefore an absolute
nullity and produces no effect.
An unenforceable contract is one that, for lack of
authority or of the required writing, or for (1) Those whose cause, object or purpose is a
incompetence of both parties, cannot be given contrary to law, morals, good customs, public order
effect unless properly ratified. or public policy;

(1) Those entered into in the name of another (2) Those which are absolutely simulated or
person by one who has been given no authority or fictitious;
legal representation, or who has acted beyond his
powers. (3) Those whose cause or object did not exist at
the time of the transaction;
(2) Those that do not comply with the Statute of
Frauds as set forth in this number. In the following (4) Those whose object is outside the commerce
cases an agreement hereafter made shall be of men;
unenforceable by action, unless the same, or
some note or memorandum thereof, be in writing, (5) Those which contemplate an impossible
and subscribed by the party charged, or by his service;
agent; evidence, therefore, of the agreement
cannot be received without the writing, or a (6) Those where the intention of the parties
secondary evidence of its contents: relative to the principal object of the contract cannot
be ascertained;
A. An agreement that by its terms is not to be
performed within a year from the making (7) Those expressly prohibited or declared void
thereof; by law.
B. A special promise to answer for the debt,
default, or miscarriage of another; These contracts cannot be ratified. Neither can the
C. An agreement made in consideration of right to set up the defense of illegality be waived.”
marriage, other than a mutual promise to
marry;
D. An agreement for the sale of goods, chattels
or things in action, at a price not less than
five hundred pesos, unless the buyer accept
and receive part of such goods and chattels,
or the evidences, or some of them, of such
things in action, or pay at the time some
part of the purchase money; but when a
sale is made by auction and entry is made
by the auctioneer in his sales book, at the
time of the sale, of the amount and kind of
property sold, terms of sale, price, names of
the purchasers and person on whose