TITLE II. CONTRACTS b.
Real- requires not only the consent for
CHAPTER 1- GENERAL PROVISIONS
Article 1305. A contract 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.
Once the minds of the contracting
parties meet, a VALID CONTRACT exists,
whether it is reduced to writing or not.
When the terms of an agreement have
been reduced to writing, it is considered
as containing all the terms agreed upon.
Essential Elements of a Contract:
1. Consent of the contracting parties
2. Object certain which is the subject
matter of the contract
3. Cause of the obligation which is
established.
Classification of contracts
1. According to their relation to other
contracts
a. Preparatory- which have for their
object the establishment of a condition
in law which is necessary as a preliminary
step towards the celebration of another
subsequent contract. (Partnership,
Agency)
b. Principal- can subsist independently
from other contracts and whose purpose
can be fulfilled by themselves. (Sale,
Lease)
c. Accessory- can exist only as a
consequence of, or in relation with,
another prior contract. (Pledge,
Mortgage)
2. According to their perfection
a. Consensual- are perfected by mere
agreement. (Sale, Lease)
their perfection, but also the delivery of
the object by any one of the party to the
other. (Commodatum, Pledge, Deposit)
*Loan for consumption- Mutuum
*Loan for use- Commodatum
3. According to their form
a. Common or informal- do not require
some particular form (Loan, Lease)
b. Special of formal- requires some
particular form (Donation, Chattel
Mortgage)
4. According to their purpose
a. Transfer of ownership- Sale
b. Conveyance of use- Commodatum
c. Rendition of service- Agency
5. According to their subject matter
a. Things- Sale, Deposit, Pledge
b. Services- Agency, Lease of service
6. According to their vinculum which
they produce.
a. Unilateral- gives rise to an obligation
for only one of the parties
(Commodatum, Gratuitous deposit)
b. Bilateral- gives rise to reciprocal
obligations for both parties- (Sale, Lease)
7. According to their cause
a. Onerous- each of the parties aspires to
procure for himself a benefit through the
giving of an equivalent or compensation
(Sale)
b. Gratuitous- one of the parties proposes
to give to the other a benefit without any
equivalent or compensation
(Commodatum)
8. According to risk involved
a. Commutative- ech of the parties
acquires an equivalent of his prestation
and such equivalent is pecuniarily
appreciable and already determined
from the moment of the celebration of
the contract. (Lease)
b. Aleatory- each of the parties has to
account the acquisition of an equivalent
of his presatation, but such equivalent is
not yet determined at the moment of the
celebration, since it depends upon the
happening of an uncertain event, thus
charging the parties with risk of loss or
gain. (Insurance)
9. According to their names or norms
regulating them
a. Nominate- have their own individuality
ad are regulated by special provisions of
law (Sale, Lease)
b. Innominate- lacks individuality and
are not regulated by special provisions

Article 1306. The contracting parties may

establish such stipulations, clauses, terms
and conditions as they may deem
convenient, provided they are not
contrary to law, morals, good customs,
public order, or public policy.

Article 1307. Innominate contracts shall

be regulated by the stipulations of the
parties, by the provisions of Titles I and II
of this Book, by the rules governing the
most analogous nominate contracts,
and by the customs of the place.

Article 1308. The contract must bind both

contracting parties; its validity or
compliance cannot be left to the will of
one of them.