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TITLE II CONTRACTS

CHAPTER 1 - GENERAL PROVISIONS

1. D and Cs agreement that D will work without pay is an illegal and immoral agreement because it amounts tothe constitutional proscription against involuntary servitude. Under Article 1306, an agreement which is contrary to lawand morals is considered void and cannot, therefore, be enforced. Hence, C cannot force D to work against his will and

without pay. But since D has already rendered service to C, reasonable wages may be deducted from the P100,000debt of D to C. D can then pay C the balance after the deduction.

2. The contract is against public policy because it is to the interest of society that crimes be punished. To permitAllan to escape the penalties prescribed by law by the purchase of immunity from George, a private individual, wouldresult in a manifest perversion of justice. Under Article 1306, the contract is, therefore, void and cannot be enforced bythe parties thereto. Hence, Allan can no longer recover his P300,000. This is because the law will not aid either party toan illegal agreement. It leaves the parties where it finds them.

3. Pursuant to the principle of mutuality of contracts outlined under Article 1308, the parties are equally boundto fulfill the terms of their contract in good faith (Article 1159). Hence, neither of the parties can revoke or renege on their

contract without the consent of the other. In the instant case, Edna may be compelled by Elvie to honor their agreementand deliver the car on February 15, 2009 as stipulated in their contract. The fact that Ednas son needs the car fortransporting himself from and to his school is no justifiable reason for Ednas reneging on her contract.

4. Under the principle of relativity of contracts outlined under Article 1311, contracts take effect only between theparties, their assigns and heirs. As a consequence, contracts cannot favor nor prejudice a third person who is not a partyto the contract. And therefore, a third person cannot generally demand the enforcement of a contract. In the instantcase, the parties to the contract of sale are Carlito and Jowell. Ricky is not a party to the contract. As such, Ricky hasno legal standing to file an action for breach of contract against Carlito. The only proper party to file an action forCarlitos breach under the contract is Jowell.

CHAPTER 2 ESSENTIAL REQUISITES OF CONTRACTS

SECTION 1 CONSENT

1. YES, Bs contention finds support in law. Pursuant to the provisions of Article 1319, the offerreesacceptance of the offerors offer must be absolute. In the instant case, S offered to sell 80 copies of the books. When Bagreed to buy but for 120 copies, it was a qualified acceptance which, under the law, constitutes a counter-offer. In other

words, B here was not really accepting the offer of S but was making another offer, a counter-offer, which was notaccepted by the original offeror S. There being no meeting of the minds between S and B, there could have been noperfected contract. Hence, B is justified in refusing to accept delivery of the 80 copies of the books offered for sale.

2. NO, there is no legal basis to compel S to make the delivery of the BMW to Bs wife. It is clear from theprovisions of Article 1323 that an offer becomes ineffective upon the death of either party before acceptance is conveyed.In the instant case, it is undeniable that B was still alive when he mailed his letter of acceptance to S on January 4.However, when S received Bs letter of acceptance on January 6, B was already dead. Hence, since B was alreadydead at the time S received notice of the acceptance on January 6, it is as if no acceptance had been made. The offerthen becomes ineffective because there was in effect no meeting of the minds between the parties. There being noperfected contract between S and B,S is not bound to deliver the BMW object of the contract.

3. S can be compelled to accept the purchase price of P8M and to execute the necessary deed of sale over theproperty in favour of B. It is true that S made only an offer to sell. But when B gave S a consideration of P10,000 as

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option money, S could no longer withdraw the offer until after the 15-day period given to B had already expired.Therefore, when B tendered the purchase price to S, B was in effect exercising his option, resulting in the perfection ofthe contract of sale. Thus, Article 1324 states, (W)hen the offerer has allowed the offeree a certain period to accept, theoffer may be withdrawn at any time before acceptance by communicating such withdrawal, except when the option is

founded upon a consideration, as something paid or promised. Art. 1324

4. Pursuant to Article 1335, for intimidation to vitiate consent, the threat must be of an unjust act or an

actionable wrong. Hence, as stated in the fourth paragraph of the same article, a threat to enforce ones claim throughcompetent authority, if the claim is just or legal, does not vitiate consent. In the instant case, the threat of B that he willreport S to the BIR authorities for violating specific provisions of the Internal Revenue Code, which threat pressured Sinto signing the deed of sale in favour of B, does not constitute an unjust or illegal act. Hence, S cannot have thecontract annulled on the ground of intimidation.

SECTION 2 OBJECT OF CONTRACTS

1. NO, the sale is not valid because the object of the contract is future inheritance. Under Article 1347, par. 2,no contract may be entered into upon future inheritance except in cases expressly authorized by law.

SECTION 3 CAUSE OF CONTRACTS

1. No, the action of Tonys mother to have the sale declared null and void on the ground of illegality of cause willnot prosper. In the instant case, the object or subject matter of the contract between Tony and Fred is the Nikon cameraand the cause or consideration is the P100,000. The motive of Tony in selling his camera is to raise the amount to payBilly whom he has hired to kill Alvin. The contract between Tony and Fred is valid because there is consent, there is anobject, and there is a cause. While the motive in the instant case is unlawful, it does not affect the validity of the contractsince motive is not an essential element for the perfection or validity of contracts.

2. The remedy taken by Smith is not the proper remedy. In the instant case, as of January 15, 2009, a contractof sale was already perfected between Smith and Caloy by the concurrence of all the essential elements of consent,object(bike) and cause (P250,000). The subsequent failure to pay the stipulated price on the part of the buyer Caloycannot in any way convert the contract into one without cause or consideration. It is to be noted that it is not essential tothe existence of a valid cause that payment or full payment be made at the time of the perfection of the contract. Hence,in the instant case, the proper recourse of Smith is an action for specific performance to compel Caloy to comply with hisobligations under the contract of sale, and to claim damages under Article 1170 for the delay in delivering his payment.

3. YES, the promissory note is valid. Under Article 1354, although the cause is not stated in the contract, it ispresumed that the cause exists and is, at the same time, lawful. Of course, Susie, in the instant case, is not barred fromproving the contrary, i.e., that there was indeed no cause for the P50,000, or that, while a cause existed, the same was

unlawful.

4. NO. Article 1355 makes it clear that lesion or inadequacy of cause, by itself, is not a sufficient ground for thecancellation of a contract. Under the same article, for lesion to be a valid ground to invalidate the contract, Mrs. Reyesmust not only prove the fact of inadequacy of the consideration or price for the sale. Mrs. Reyes must likewise presentsubstantial evidence of the fact that she had sold her resort to Mr. Cayco for a price way below the propertys existingvaluation because of fraud or mistake or undue influence.