Icpa Contracts
Icpa Contracts
Is a meeting of minds between two persons whereby one binds himself, with respect to the other,
to give something or to render some service.
Stages of a contract
Stages of a contract
b. Perfection or birth stage is the point when there is meeting of minds between the parties on a
definite subject matter and valid cause.
c. Termination or consummation stage is the point when the contract has been fulfilled resulting
in its accomplishment.
Stages of a contract
Stages of a contract
b. Perfection or birth stage is the point when there is meeting of minds between the parties on a
definite subject matter and valid cause.
c. Termination or consummation stage is the point when the contract has been fulfilled resulting
in its accomplishment.
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Characteristics of Contracts
Characteristics of contracts
a. Obligatory force of contract means that the contractual agreement constitutes the law as
between the parties. Obligations arising from contracts have the force of law between contracting
parties.
b. Mutuality of contract means that the validity and performance cannot be left to the will of only
one of the parties.
i. Determination of the performance of contract
1. The determination or validity or compliance of a contract cannot be left to the judgment of one
the parties only because it violates mutuality of contract.
2. The determination of the performance of contract may be left to a third person, whose decision
shall not be binding until it has been made known to both contracting parties.
c. Relativity of contract which it is binding only upon the parties and their successors such as
heirs and assignees.
a. The heirs are liable to the debts of decedent but only up to the extent of the property they
inherited.
i. Rights and obligations arising from contracts which are intransmissible
c. The contracting parties must have clearly and deliberately conferred a favor upon a third
person and not a mere incidental benefit or interest.
d. The favorable stipulation should not be conditioned or compensated by any kind of obligation
whatever.
e. The third person must have communicated his acceptance to the obligor before its revocation.
f. One of the contracting parties does not bear the legal representation or authorization of the
third party.
b. Before acceptance by the third person, the contracting parties; by mutual agreement, may
modify the contract or revoke it.
c. A mere incidental interest or benefit is not within the doctrine of stipulation pour autrui.
d. The stipulation pour autrui does not exist if the contract is considered null and void.
e. When third person induces a party to the contract to violate the contract
d. Liberality of Contract or Freedom to Contract means that the parties may establish such
stipulations, clauses, terms, and conditions as they may deem convenient provided they are not
contrary to any of the following:
i. Law
ii. Morals
v. Public policy
e. Consensuality of contract which means that contracts are perfected by mere consent except in
real contracts and formal or solemn contracts which require additional requirements.
f. Legality of contract which means that contracts should not be contrary to law.
a. Essential elements refer to those which are required in order for a contract to exist. They are
necessary for validity of contract and may not be waived by the parties. Absence of one of the
essential elements will make the contract and void.
b. Natural elements refer to those which already exist in certain contract unless set aside or
suppressed by the parties. They may be waived by the parties as long as the waiver is made in
good faith.
c. Accidental elements refer to those that do not normally exist in a contract unless stipulated or
provided by the parties.
Types of Contracts
1. Contract of lease.
2. Contract of sale.
3. Contract of partnership.
4. Contract of agency.
ii. Real contract is a contract perfected by the delivery of the object of the contract.
1. Contract of deposit
2. Contract of pledge
4. Contract of commodatum.
iii. Solemn or Formal contract is a contract perfected by the execution of the formality required by
law.
1. Negotiable instruments must be made strictly in the form provided by the Negotiable
Instruments Law to be valid in ordered to be considered negotiable.
2. Contract of donation of personal property in excess of P5,000 must be made and accepted in
writing to be valid.
4. Contract of antichresis requires that the agreement of antichresis including the principal and
interest of secured contract of loan a must be specified in writing to be valid.
5. Agreement or stipulation to pay interest in contract of loan must be in writing in order for such
agreement to be valid.
7. Contract of partnership to which real properties or real rights are contributed must be in a
public instrument, with an inventory of real property attached thereto, for the contract of
partnership to be valid.
8. Sale of a piece of land by the agent in the name of the principal, the authority of the agent to
sell the land must be in writing for the contract sale of such land to be valid.
9. Sale of community or conjugal property by one of the spouses, there must be authority given
by the other spouse to the selling spouse.
a. Remedy to compel the other party to observe the formality for mere convenience
b. Contracts required to be in Public Document merely for convenience but not for validity
i. Acts or contracts which have for their object the creation, transmission, modification or
extinguishment or real rights over immovable property.
ii. The cession, repudiation or renunciation of hereditary rights or of those of the conjugal
partnership of gains.
iii. The power to administer property, or any other power which has for its object an act appearing
or which should appear in a public document, or should prejudice a third person
iv. The cession of actions or rights proceeding from an act appearing in a public document
v. Contracts where the amount involved exceeds five hundred pesos. (Private written instrument
only)
1. Contract of sale
2. Contract of lease
3. Contract of barter
ii. Gratuitous contract is a contract whereby one party receives no equivalent consideration.
These contracts are referred to as contracts of pure beneficence, the cause of which is the
liberality or generosity of the benefactor.
1. Contract of donation
2. Contract of commodatum
iii. Remuneratory contract is a contract whereby the cause here is the service or benefit
remunerated.
i. Accessory contract is a contract whose existence depends upon another contract known as
principal contract.
1. Contract of pledge,
3. Contract of antichresis
5. Contract of guarantee
ii. Preparatory contract is a contract which serves as a means by which other contracts may be
entered into.
1. Contract of agency
2. Contract of partnership.
1. Contract of sale
2. Contract of loan.
iv. Nominate contract is a contract which has a name under the Civil Code or special law.
1. Contract of sale
2. Contract of agency
3. Contract of partnership
4. Contract of insurance
5. Contract of marriage
v. Innominate contract is a contract without any name under the Civil Code or special law.
vi. Commutative contract is a contract whereby the parties give almost equivalent values; hence,
there is real fulfillment.
1. Contract of sale
2. Contract of lease
3. Contract of barter
1. Contract of insurance
viii. Unilateral contract is a contract whereby only one of the parties is obligated to give or to do
something.
1. Contract of sale
2. Contract of lease
x. Reciprocal contract is a contract whereby the cause on the other party is the object on the
other party.
1. Contract of sale
2. Contract of barter
xii. Contract of adhesion is a contract wherein one party has already prepared the form of the
contract, containing the stipulations he desires, and he simply asks the other party to agree to
them if he wants to enter into the contract.
1. Contract of insurance
2. Contract of enrollment
xiii. Executory contract is a contract that has not yet been performed. Certain executory contracts
are covered by Statute of Fraud and required to be in writing in order for them to be enforceable.
XIV. Executed contract is a contract which has been performed. It is a contract not covered by
Statute of Fraud.
Instances before acceptance make the offer ineffective
Instances which if happened to either party before acceptance make the offer ineffective
a. Civil interdiction
b. Insanity
c. Death
d. Insolvency
Nature of contract
Principles of Consent
a. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the
cause which are to constitute the contract.
From the time the acceptance came to the knowledge of the offerer also known as Cognitive
Theory.
Requisites of an offer
Requisites of an offer
a. It must be definite.
b. It must be certain.
c. It must be complete.
d. It must be intentional.
c. An offer made through an agent is accepted from the time acceptance is communicated to the
agent not necessarily to the principal.
d. When the offerer has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal, except when the
option is founded upon a consideration, something paid or promised.
Principles of Acceptance
Principles of Acceptance
a. An option contract supported by consideration or option premium is valid and binding and may
not be withdrawn.