Oblicon
Oblicon
1643, 1644)
CONTRACTS (GENERAL PROVISIONS)
- liberality in commodatum (Art. 1935)
ART. 1318 - There is no contract unless the
following requisites concur: A valid contract is one that manifests all the
essential elements of a contract.
(1) Consent of the contracting parties;
2) NATURAL ELEMENTS or those that are
(2) Object certain which is the subject matter presumed to exist in certain contracts unless the
of the contract; contrary is expressly stipulated by the parties, like
warranty against eviction (Art. 1548) or warranty
(3) Cause of the obligation which is
against hidden defects in sale (Art. 1561)
established. (1261)
3) ACCIDENTAL ELEMENTS or particular
CLASSES OF ELEMENTS OF A stipulations, clauses, terms or conditions
CONTRACT established by the parties in their contract (Art.
1) ESSENTIAL ELEMENTS or those without 1306) like conditions, period, interest, penalty
which no contract can validly exist regardless of etc. and therefore, they exist only when they are
the intentions of the parties. expressly provided by the parties.
(ii) As regards the SUBJECT MATTER - Because of this connection of cause and effect
between the capacity and consent, the law does
EX. real property in antichresis (Art. 2132) not expressly enumerate the former as a separate
- personal property in pledge (Art. 2094) requisite for the validity of contracts.
- The area of agreement must extend to all points - Consent is manifested by the concurrence of
that the parties deem material or there is no offer and acceptance with respect to the object
consent. and the cause of the contract.
- But if by reason of the form or the circumstances - To produce a contract, the acceptance must not
surrounding it or because of the fault of the qualify the terms of the offer.
offeror, the offeree is induced to take it seriously, - It is necessary that the acceptance be
it becomes necessary to determine whether the unequivocal and unconditional, and the
real intention or the manifested intention should acceptance and the proposition shall be without
prevail. any variation whatsoever; and any modification
- In other legislations, like the German (Art. 118), or variation from the terms of the offer annuls the
such declaration of will is considered void. latter and frees the offeror.
- In our code, there is no provision on the matter * ACCEPTANCE is the manifestation by the
but applying general principles, the rule is offeree of his assent to all the terms of the offer. -
acceptable in our law and the act must be held
- Without acceptance, there can be no meeting of - The acceptance may be inferred from the failure
the minds between the parties. of either party to immediately reject the offer of
the other.
- A contract consists of an offer and an acceptance
of that offer. - Before acceptance, either party may still revoke
his own offer.
- The acceptance of an offer must not only be
clear; it must be absolute, unconditional or SUCCESSIVE AGREEMENTS
unqualified, that is, it must be identical in all
respects with that of the offer so as to produce - A contract may be so complicated that the
consent or meeting of the minds. parties come to agreement on certain points at
different successive stages.
- If the acceptance is qualified, as when it is
subject to a condition, it merely constitutes a - it should be noted that the present article of the
counter-offer which, in law, is considered a code requires the concurrence of offer and
rejection of the original offer and an attempt by acceptance only as to the thing and the cause
the parties to enter into a contract on a different which are to constitute the contract and not as to
basis. all matters. We believe that intention of the
parties should control.
- A qualified acceptance must be accepted
absolutely in order that there will be a contract. - if the intention of one or both parties is that there
be concurrence on all points, the contract is not
AMPLIFIED ACCEPTANCE perfected if there is a point of disagreement, even
if there is already agreement on the essential
- Under certain circumstances, a mere
elements of the contract.
amplification on the offer must not be understood
as an acceptance of the original offer, plus a new - Thus, in a contract of sale, the parties may have
offer which is contained in the amplification. already agreed on the thing and the price but not
on who should bear the expenses of
- The intent of the offeree, however, controls.
transportation of the thing upon delivery. If either
COMPLEX OFFERS or both parties have declared that there must be
agreement on this point, the contract is not yet
- In cases where a single offer involves 2 or more perfected.
contracts, the perfection where there is only
partial acceptance will depend upon the relation - If theres no declaration that agreement on an
of the contracts between themselves, whether due accessory or subordinate matter is necessary , the
to their nature or due to the intent of the offeror. contract will be perfected as soon as there is
concurrence on the object and the cause.
SIMULTANEOUS OFFERS
- The regulation of the accessory points will then
- As a rule, the offer and the acceptance must be be determined by future agreement and if there is
successive in order that a contract may arise. no agreement, by the general rules established by
law for the particular case in the absence of
- One of the parties to the future contract should
agreement, such as the place of performance,
take the initiative in making an offer.
expenses for the delivery of the thing etc.
- Although there is opinion to the contrary, when
there are crossed offers, no contract is formed KNOWLEDGE OF OFFEROR
unless one of the parties accepts the offer - Even if there has been an unconditional
received by him. acceptance of the offer by the offeree, no contract
will arise unless that acceptance is made known BY TELEPHONE
to the offeror.
- A contract entered into by telephone is deemed
- Unless the offeror knows of the acceptance, to have been made between persons present.
there is no meeting of the minds of the parties, no
real concurrence of offer and acceptance. - It is considered as entered into at the place
where the offer was made.
- This rule is expressly recognized in the second
paragraph of the article respect to acceptance by EFFECT OF SILENCE
letter. - Whether or not silence can be considered as an
- The same rule shall apply in case of acceptance expression of the will, depends upon the
by telegram, cable or even by telephone, although circumstances.
in the last case, the contract may be generally be - Modern jurists require the following in order
considered as between persons present. that silence produce the effect of TACIT
THROUGH INTERMEDIARIES ACCEPTANCE:
- An intermediary who has no authority to (1) that there is a duty or the possibility to express
contract, but is limited to the transmittal of the oneself
offer, the acceptance or both, may be treated in (2) That the manifestation of the will cannot be
the same light as the mail service. interpreted in any other way.
- If he carries the offer and the acceptance in (3) that there is a clear identity in the effect of the
written form, the rule applicable to acceptance by silence and the undisclosed will.
letter will apply.
- Our code does not have an express provision on
- If he carries the offer verbally and the the juridical effect of silence. Hence, it depends
acceptance is also verbal, the perfection of the upon what has been stipulated or on specific legal
contract will be at the moment he makes the provision or on mercantile usage.
acceptance known to the offeror.
- In the code, theres an express provisions on
BY CORRESPONDENCE consent deduced from silence,. Thus, under Art.
1670, a contract of lease may be renewed by the
- When the offer to buy was written or prepare in
acquiescence of the lessor to the continuation of
Tokyo, Japana and the acceptance thereof in
the enjoyment of the thing leased for 15 days after
Manila was sent by the offeree by airmail to and
the expiration of the original period of lease.
received by the offeror in Tokyo, the contract is
presumed to have been entered into in Tokyo. - Under arts. 1870-1873, acceptance of an agency
may be implied from the silence of the agent
- Where the offeror delays in bad faith taking
under certain circumstances.
cognizance of the acceptance, by not reading or
opening the letter of acceptance although he can APPLICABLE DOCTRINES
do so, the contract must be considered perfected.
- The following principles have been developed
- It cannot have been the intention of the law to in French jurisprudence and with slight variations
leave the perfection of the contract to the caprice by writers have been recognized as acceptable
of the offeror. doctrines:
- The perfection must take place as soon as the (1) As between persons present: If the silence is
will of the parties concur. entirely unconnected with any fact, there can be
no contract
(2) As between persons absent: If there has been - If the first offer is not revoked by him before it
no antecedent relation between the parties, is accepted, then he becomes liable for damages
silence will not give rise to a contract. to the first offeree for culpable impossibility of
performance.
WITHDRAWAL OF OFFER
- As between the 2 offerees, the one whose
- Both the offer and the acceptance can be acceptance is perfected a contract first is given
revoked before the contract is perfected. priority; the other party is only an action for
- Since the contract is perfected only from the damages.
time the acceptance is known to the offeror, it is
PUBLIC OFFERS
clear that said offeror may withdraw his offer at
any time before he learns of the acceptance, even - A promise may be made publicly by advertising
if such acceptance has already been made, but not a reward, compensation or prize for any person
made known to him. who performs or executes a particular act or
obtains a particular result, such as the making of
- At that time there is as yet no contract and the
a scientific discovery, the perfection of an
withdrawal of the offer cannot legally give rise to
invention, the discovery of a crime, the
any injury or damage which he would be bound
apprehension of a criminal, the return of a lost
to repair.
object, the winning of a contest or the giving of
- If the revocation is made in abuse of right, the information about the missing person.
other party may recover damages he may have
TWO THEORIES AS TO THE
suffered, in the belief that the contract would be
JURIDICAL NATURE OF SUCH
perfected.
PROMISE
LAPSE OF TIME (1) that of an obligatory unilateral promise
- An offer without a period must be considered sufficient to create a valid legal tie
as becoming ineffective after the lapse of more
(2) that of an offer which gives rise to a contract
than the time necessary for its acceptance, taking
upon acceptance
into account the circumstances and social
conditions. - Under the first theory, the reward can be
recovered by one who performs the desired act,
REVOCATION OF ACCEPTANCE even when he did not do it in consideration of the
- The acceptance may be revoked before it comes promise
to the knowledge of the offeror. - Under the second theory, a binding obligation
- Thus, where the offeree has sent his acceptance, arises only when the act is done with the intention
but then sends a rejection or a revocation of the of accepting the promise.
acceptance, there is no meeting of the minds, - There are only 5 sources of obligations
because the revocation has cancelled or nullified enumerated in Art. 1157.
the acceptance which thereby ceased to have any
legal effect. - A unilateral promise is not recognized by our
Code as having obligatory force.
NEW CONTRACT BEFORE
ACCEPTANCE - In order that such promise can be enforced, there
must be an acceptance that will convert it into a
- Pending the acceptance of an offer, the offeror contract.
can perfect a new contract over the same thing
with another person.
- The performance of the act for which a reward merchandise or property, at any time within the
or prize is promised can be considered as an agreed period, at fixed price.
acceptance.
- This being his prerogative, he may not be
- This is the rule in this jurisdiction, except as to compelled to exercise the option to buy before the
things for sale. time expires.
- A REVOCATION must be made with the same CASE: ANG YU ASUNCION VS. CA
publicity as the offer itself and expenses after
such revocation are not recoverable against the - Until the contract is perfected, it cannot, as an
offeror. independent source of obligation, serve as a
binding juridical relation.
- But when the act has already been
accomplished, a subsequent revocation is - In sales, to which the topic for discussion about
ineffective, because the contract would already the case at bench belongs, the contract is
have been formed. perfected when a person called the seller,
obligates himself, for a price certain, to deliver
CASE: SERRA V. CA and to transfer ownership of a thing or right to
another, called the buyer, over which the latter
- Art. 1324 of the Civil Code provides that when
agrees.
an offeror has allowed the offeree a certain period
to accept, the offer maybe withdrawn at anytime - When the sale is not absolute but conditional
before acceptance by communicating such such as in a Contract to sell where invariably
withdrawal EXCEPT when the option is founded the ownership of the thing sold is retained until
upon consideration, as something paid or the fulfillment of a positive suspensive condition,
promised. the breach of the condition will prevent the obli
to convey title from acquiring obligatory force
- On the other hand, Art. 1479 provides that an
accepted unilateral promise to buy and sell a DIGNOS VS. CA
determinate thing for a price certain is binding
upon the promisor if the promise is supported by - Although denominated a deed of conditional
a consideration distinct from the price. sale, a sale is still absolute where the contract is
devoid of any proviso that title is reserved or the
- In a unilateral promise to sell, where the debtor right to unilaterally rescind is stipulated.
fails to withdraw the promise before the
acceptance by the creditor, the transaction - Ownership will then be transferred to the buyer
becomes bilateral contract to sell and buy because upon actual or constructive delivery of the
upon acceptance by the creditor of the offer to sell property sold.
by the debtor, there is already a meeting of the - Where the condition is imposed upon the
minds of the parties as to the thing which is perfection of the contract itself, the failure of the
determinate and the price which is certain. condition would prevent such perfection.
- In which case, the parties may then reciprocally - If the condition is imposed on the obligation of
demand performance. a party which is not fulfilled, the other party may
- Jurisprudence taught us that an optional contract either waive the condition or refuse to proceed
is a privilege existing only in one party the with the sale.
buyer. Where a period is given to the offeree within
- for a separate consideration paid, he is given the which to accept the offer, the following rules
right to decide to purchase or not, a certain generally govern:
(1) If the period is not itself founded upon or IMPLIED ACCEPTANCE may arise
supported by a consideration, the offeror is still from acts or facts which reveal the intent to
free and has the right to withdraw the offer before accept such as the consumption of the things
its acceptance or if an acceptance has been made, sent to the offeree or the facts of immediately
before the offerors coming to know of such fact, carrying out the contract offered.
by communicating that withdrawal to the offeree.
- If the offeror asks for the immediate
- The right to withdraw must not be exercised performance of the contract and does not ask for
whimsically or arbitrarily otherwise, it could give a previous answer of acceptance (the necessity of
rise to a damage claim under Art. 19 of the Civil which may sometimes be excluded by general
Code. commercial usage), the contract is perfected as
soon as the other party begins to carry it out.
(2) If the period has a separate consideration, a
contract of option is deemed perfected and it WAIVER OF ACCEPTANCE
would be a breach of that contract to withdraw the
offer during the agreed period. - The German Code (Art. 151) permits the offeror
to waive the declaration of acceptance and in such
- The option is an independent contract by itself case, as well as when according to usage of
and it is to be distinguished from the projected commerce such declaration need not be expected,
main agreement (subject matter of the option)
which is obviously yet to be concluded/ - the contract is perfected from the moment the
intention to accept can be inferred from the
- If the optioner-offeror withdraws the offer conduct of the offeree and according to the usages
before its acceptance by the optionee-offeree, the of commerce. This rule can be accepted under our
latter may not sue for specific performance on the code.
proposed contract (object of the option) since it
has failed to reach its own stage of perfection. EFFECT OF SILENCE
- The optioner-offeror renders himself liable for - As a rule, silence is not equivalent to consent
damages for breach of the option. but there are specific legal provisions which
make silence, under certain circumstances,
- In these cases, care should be taken of the real amount to consent.
nature of the consideration given for in fact it has
been intended to be part of the consideration for - Silence of a party may constitute a manifestation
the main contract could be deemed perfected. of the will. But this cannot be accepted without
qualification in law.
- A similar instance would be an earnest money
in a contract of sale that can evidence its - Silence, because of its ambiguity, lends itself to
perfection. error, but there may be circumstances where
silence may be as eloquent as the express
ART. 1320 - An acceptance may be express or manifestation of the will.
implied.
ART. 1321 - The person making the offer may
FORM OF ACCEPTANCE OF OFFER fix the time, place, and manner of acceptance,
all of which must be complied with. (n)
- An EXPRESS ACCEPTANCE in the form of a
promise to pay a certain amount or to do MATTERS THAT MAY BE FIXED BY
something, may be oral or written. THE OFFEROR
- An IMPLIED ACCEPTANCE is one that is
inferred from act or conduct.
- The person making the offer has the right to one must be accepted (as the offer of a thing for
prescribe the time, the place and the manner of sale or for lease) or that not must be accepted.
acceptance, all of which must be complied with.
- An acceptance which is not made in the manner
- An acceptance departing from the terms of the prescribed by the offeror is not effective, but
offer constitutes a counter-offer. constitutes a counter-offer which the offeror may
accept.
- Take note that a counte-offer has the effect of
extinguishing the offer. It, in effect, constitutes a ART. 1322 - An offer made through an agent
new offer which the original offeror may accept is accepted from the time acceptance is
or reject. communicated to him. (n)
- If the option is not supported by an independent - The advertiser is free to reject any offer that may
consideration, the offeror can withdraw the be made.
privilege at any time by communicating the
withdrawal to the other party, even if the option DEFINITE OFFERS TO PUBLIC
had already been accepted. - Generally, an offer must be made to the person
with whom a contract is desired
- This is particularly so in a promise to buy or to
sell, for under art. 1279. - it is not necessary, that the offeror should know
the person who receives his offer.
- An accepted unilateral promise to buy or to sell
a determinate thing for a price is binding upon the - A valid offer to the public can be made. One
promissor if the promise is supported by a who installs a slot machine makes an offer to the
consideration distinct from the price. public, and the offer becomes a contract with any
person who puts in the necessary coin.
- A merchant who places articles for sale in his party taking part in the auction and if his bid is
store, with a price tag on each, makes an offer to rejected, he cannot compel the party who called
the public and anyone can accept the offer by for bids to accept his bid or execute a deed of sale
paying the price fixed. in his favor.
ART. 1326 - Advertisements for bidders are
simply invitations to make proposals, and the
advertiser is not bound to accept the highest or
lowest bidder, unless the contrary appears. (n) JUDICIAL SALES
ADVERTISEMENTS FOR BIDDERS - This provision is not applicable to bids in
GENERALLY NOT DEFINITE OFFERS judicial sales, where the highest bid must be
necessarily be accepted.
- In an advertisement for bidders, the advertiser is
not the one making the offer.
- In reality, the bidder is the one making the offer
which the advertiser is free to accept or reject.
- Acceptance by the advertiser of a given bid is
necessary for a contract to exist between the
advertiser and the bidder, regardless of the terms
and conditions of his bid.
- As a GENERAL RULE, the advertiser is not
bound to accept the highest bidder (as when the
offer is to buy) or the lowest bidder (as when the
offer is to construct a building) unless the
contrary appears.
- In judicial sales (ie, sales ordered by a court)
however, the sheriff or the auctioneer is bound to
accept the highest bid.
EFFECT OF BIDDING
- When in the advertisement it can be inferred
with the certainty that the best bid will be
considered as giving rise to a binding contract,
each bid will imply the perfection of a contract,
although subject to the condition that no better
bid is made.
- If this is not especially provided in the
advertisement, then each bid is merely an offer,
which the advertiser is free to reject.
- thus, where the notice calling for bids a public
auction indicated that the party offering the
property at an auction expressly reserved the right
to reject any and all bids, it was held that any