CONTRACTS

Jardine Davies vs CA

A contract is defined as a juridical

convention manifested in legal form by
virtue of which one or more persons
bind themselves in favor of another or
others or reciprocally, to the fulfillment
of a prestation to give, to do or not to
do.
Requisites:
Consent-object-consideration
To produce a contract there must be
acceptance, which may be express or
implied but must not qualify the terms
of the offer

Province of Cebu vs Heirs of Rufina

Morales

ABS CBN VS CA

Ayala Corp. vs Ray Burton

Goldloop Properties vs GSIS

Advertisements to bidders are simply

invitations to make proposal
A sale by public auction is perfected
when the auctioneer announces its
perfection by the fall of the hammer or
in other customary manner and it does
not matter that another is allowed to
match the bid of the highest bidder at
the said auction sale
Elements
Meetings of the minds
Subject matter
Price certain in money
Stages of a contract: Preparationperfection-consummation
Offer must be certain (counter offer)
Contract of adhesion wherein one party
imposes a readymade form of contract
on the other are not entirely prohibited.
The one who adheres to the contract is
in reality free to reject it entirely.
Accorded inordinate vigilance by the
court because of their nature
Contract is the law between the parties
Parties may validly stipulate the

unilateral rescission of a contract

In cases involving recission under 1191
of the civil code, mutual restitution is
required

De Leon vs Ong

If it cannot be determined which of the

parties first violated the contract, the
same shall be deemed extinguished
and each shall bear his own damages
Contract to sell vs Contract of Sales
(Distinguish)
Execution of a notarized deed of sale is
equivalent to the delivery of the thing
sold
The condition is deemed fulfilled when
the obligor prevents its fulfillment

Autonomy/Freedom to stipulate
Azcuna Jr vs CA

Acol vs PCCI

Piltel vs Tecson

carmelCraft vs NLRC

Manila Bay Club Corp vs CA

The freedom of the contracting parties

to make stipulations in their contract
provided they are not contrary to
law,morals, etc.
A stipulation in a credit card that the
cardholders responsibility for all
chargers made through the use of his
card shall continue until reasonable
time after receipt of card issuer of
written notice of loss card rest entirely
beyond the control of the cardholder
A contract of adhesion is just as binding
as ordinary contracts even as the courts
remain careful in scrutinizing the
factual circumstances underlying each
case to determine the respective claims
of contracting parties
Quitclaims of the workers benefits will
not estop them from asserting the
same (against public policy)
Contract law between the parties
The trial court had the authority to fix
the reasonable value for the continued
use and occupancy of the leased
premises after the termination of the

Allied Banking Corp. vs CA

lease contract.
There must be mutuality between them
based essentially on their equality
under which it is repugnant to have one
party bound by the contract while
leaving the other free therefrom
A right of renewal constitutes a part of
lessees interest in the land and forms
substantial and integral part of the
agreement

Ortigas vs CA

The fact that an option to renew is

binding only to the lessor and can only
be exercised by the lessee does not
render it void for lack of mutuality
( lessor: option to give or not to give
the lease)
A LATER LAW WHICH ABRIDGES
ENLARGES OR IN ANY MANNER changes
the intent of the parties to the contract
necessarily impairs the contract itself
and cannot be given retroactive effect
without violating the constitutional
prohibition against impairment of
contract
A law enacted in the exercise of police
power to regulate or govern certain
activities or transactions could be given
retroactive affect and may reasonably
impair contracts

MIAA vs Avia Filipinas International

Restrictions in a contract of sale limiting

all constructions on the subject lot to
single-family residential buildings
deemed extinguished by the retroactive
operation of a zoning ordinance
reclassifying the area as a commercial
zone
In construing a contract, the provisions
thereof should not be read in isolation
but in relation to each other, in its
entirety
When the oblige accepts the
performance knowing its

incompleteness and irregularity and w/o

expressing any protest or objection, the
obligation is deemed fully complied
The lessor is obliged to maintain the
lessee in the peaceful and adequate
enjoyment of the lease for the entire
duration of the contract
Mutuality of contracts
Jespajo Realty vs CA

UCPB vs Sps beluso

PNB vs CA

Serra vs CA

Philiipines bank vs IAC

PSB vs Sps Castillo

Art 1687 of the CC finds no application

in the case of a lease contract with a
period subject to a resolutory condition
The exercise of the option is as much in
the fulfillment of the contract as any
other act which may have been the
subject of agreement (personal service,
resolutory condition)
In order that obligations arising from
contracts may have the force of law
between the parties, there must be
mutuality between the parties based on
their essential equality
Estoppel cannot be predicated on an
illegal act
A contract containing a condition which
makes its fulfillment dependent
exclusively upon the uncontrolled will of
one of the contracting parties is void
In a unilateral promise to sell,where the
debtor fails to withdraw the former
before the acceptance by the creditor
the transaction becomes bilateral
contract to sell and buy and the parties
may reciprocally demand performance
Automatic rescission cannot be availed
of where there is a clear waiver of
stipulated right of automatic rescission
as evidence by many extensions
granted to private respondents
Contract changes must be with consent
of the contracting parties
Escalating clauses are generally valid
and do not contravene public policy

Integrated PACKAGING Corp vs CA

Principle of relativity of contracts

provides that contracts can only bind
the parties who entered into it and it
cannot favor a third person even if he is
aware of such contract and acted with
knowledge thereof