OBLICON_GENERAL PROVISIONS ON CONTRACT PART 2
Summary
TLDRThis video script delves into the three stages of contract law: preparation or negotiation, perfection or birth, and consummation or termination. It explains that a contract is perfected when parties reach a definite agreement, creating obligations to fulfill stipulated terms in good faith. The script also covers exceptions involving third parties, essential elements of contracts, and the importance of consent. It clarifies the difference between void and voidable contracts and illustrates the process of offer and acceptance, emphasizing the legal capacity of parties to enter into contracts.
Takeaways
- 📝 The video discusses the three stages of contracts: preparation or negotiation, perfection or birth, and consummation or termination.
- 🤝 Preparation or negotiation involves the steps taken by parties leading to the perfection of the contract.
- 🎯 A perfected contract exists when parties are in negotiation about the price or other terms, indicating a mutual agreement is yet to be fully established.
- 🌟 Perfection or birth of a contract occurs when there is a definite agreement or meeting of the minds regarding the subject matter and cause of the contract, as per Article 1319 of the Civil Code.
- 📚 Once a contract is perfected, obligations arise between the parties, and they are bound to fulfill what has been expressly stipulated in good faith, as per Article 1315.
- 🔄 Consummation or termination is when parties have performed their respective obligations, fully accomplishing or executing the contract, which results in its extinguishment.
- 🚫 Exceptions exist where contracts are only effective between parties, and rights and obligations are not transmissible, such as in the case of personal services like painting or singing.
- 📜 Third parties generally have no rights or obligations under a contract unless it is specifically stipulated in favor of a third person, creating an exception to the general rule.
- 🔑 Essential elements of contracts include consent of the parties, a certain object or subject matter, and a cause or purpose for the obligation, as outlined in Article 1318.
- 📬 Acceptance is a critical component, manifesting when one party agrees to the terms of the offer, and it must be absolute for a contract to be valid.
- 📝 The legal capacity of parties is crucial for a contract to be valid; the law presumes everyone has capacity unless proven otherwise.
Q & A
What are the three stages of contracts mentioned in the script?
-The three stages of contracts mentioned are: 1) Preparation or Negotiation, 2) Perfection or Birth, and 3) Consummation or Termination.
What does the term 'preparation or negotiation' in the context of contracts entail?
-Preparation or negotiation refers to all the steps taken by the parties leading to the perfection of the contract, which is self-explanatory and involves discussions and agreements on the terms of the contract.
Can you explain what is meant by a 'perfected contract'?
-A perfected contract is one where the parties have come to a definite agreement or meeting of the minds regarding the subject matter and cause of the contract, as per Article 1319 of the Civil Code.
What happens when there is a 'meeting of minds' between the parties in a contract?
-When there is a meeting of minds, obligations between the parties arise, and they are bound to the fulfillment of what has been expressly stipulated, in compliance with the law and in good faith, as per Article 1315 of the Civil Code.
What is the significance of 'consummation' in the context of contracts?
-Consummation refers to the stage when the parties have performed their respective obligations, and the contract is fully accomplished or executed, resulting in its extinguishment or termination.
What are the exceptions when contracts are effective only between the parties?
-Contracts are effective only between the parties when the rights and obligations arising from the contract are not transmissible, such as in personal services like painting or singing, as discussed in previous modules.
According to Article 1178 of the new Civil Code, what happens when death extinguishes legal relationships?
-According to Article 1178, death extinguishes the legal relationships whether it involves the parties themselves or third persons affected by a contract. However, third persons have no rights and obligations under a contract since they are not privy to it.
What are the essential requisites of contracts as per Article 1318 of the Civil Code?
-The essential requisites of contracts are the consent of the contracting parties, a certain object which is the subject matter of the contract, and a cause of the obligation, which are the elements without which no contract can validly exist.
What is the difference between 'void' and 'voidable' contracts as mentioned in the script?
-A void contract is one that is inexistent or not existent from the beginning, such as in the case of a simulated contract where there was no intention to be bound. A voidable contract, on the other hand, is one that is valid until it is avoided due to certain defects like fraud, error, or undue influence.
What is the importance of 'consent' in the formation of a contract?
-Consent is crucial as it is manifested by the meeting of the offer and acceptance upon the thing and the cause which are to constitute the contract. It presupposes legal capacity and the fulfillment of conditions if any are attached.
What happens if an offer is withdrawn before acceptance?
-If an offer is withdrawn before the acceptance is communicated, the offeror is allowed to do so by law, as there was no meeting of the minds between the parties yet, hence no contract had been perfected.
Outlines
📝 Stages of Contract Formation
The first paragraph introduces the three stages of contract formation: preparation or negotiation, paradigm perfection or birth, and consummation or termination. It explains that preparation involves steps taken by parties leading to a perfected contract. A perfected contract is characterized by a definite agreement or meeting of the minds regarding the subject matter and cause of the contract, as per Article 1319 of the Civil Code. The obligations between parties arise once there is mutual agreement, and parties must fulfill what has been stipulated in good faith, as per Article 1315 and 1159 of the Civil Code. Consummation occurs when parties perform their obligations, leading to the contract's full accomplishment and termination.
👥 Contract Parties and Third Parties
The second paragraph discusses the exceptions to the general rule that contracts are only effective between the parties involved. It explains that rights and obligations from contracts are not transmissible to third parties, except in specific cases. These include contracts containing stipulations in favor of a third person, contracts creating real rights, contracts entered into to defraud creditors, and contracts violated due to the inducement of a third person. The paragraph also touches on the concept of a 'stranger' to a contract, who has no rights or obligations under it, unless they fall into one of the exceptions mentioned.
📜 Essential Elements of Contracts
The third paragraph outlines the essential elements of contracts as per Article 1318 of the Civil Code. It states that a contract cannot exist without the consent of the parties, a certain object which is the subject matter of the contract, and a cause or consideration. These elements are necessary for the validity of any contract. The paragraph also differentiates between general provisions applicable to all contracts and special elements that are peculiar to certain specified contracts. It further explains the concept of offer and acceptance, which are crucial for consent to be manifested, and the legal implications of qualified acceptance or acceptance made by letter or telegram.
🔍 Legal Capacity and Consent in Contracts
The fourth paragraph delves into the concept of legal capacity and consent in the context of contracts. It emphasizes that for a contract to be valid, the parties must have the legal capacity to enter into it, which is generally presumed unless proven otherwise. The paragraph also discusses the importance of consent, stating that without it, there can be no contract. It highlights situations where consent might be lacking, such as in jokes or simulated contracts, and the legal consequences of such scenarios, including the contract being void or voidable.
📨 Offer, Acceptance, and Legal Capacity
The fifth paragraph focuses on the process of offer and acceptance in contract formation and the role of legal capacity. It explains that an offer is a proposal to enter into a contract and must be more than just an expression of desire; it should be a promise to act or refrain from acting if accepted. Acceptance is the manifestation of agreement to the offer's terms. The paragraph also discusses the right to withdraw an offer before acceptance occurs, using an example to illustrate the point. It reiterates the importance of legal capacity, noting that without it, a person cannot enter into a contract.
Mindmap
Keywords
💡Contract
💡Preparation or Negotiation
💡Perfection or Birth
💡Consummation
💡Meeting of the Minds
💡Good Faith
💡Legal Capacity
💡Offer and Acceptance
💡Stipulation
💡Third Party
💡Void and Voidable
Highlights
Introduction to the three stages of contracts: preparation or negotiation, perfection or birth, and consummation or termination.
Explanation of a perfected contract during the negotiation stage.
The importance of definite agreement or meeting of the minds for contract perfection under Article 1319 of the Civil Code.
The binding nature of a perfected contract and the obligations arising from it.
The requirement of good faith in fulfilling contractual obligations as per Article 1159 of the Civil Code.
The concept of consummation as the full accomplishment or execution of a contract.
Exceptions when contracts are effective only between parties and non-transmissible rights and obligations.
Article 1178 of the New Civil Code discussing the extinguishing of legal relationships upon death.
The rights and obligations of third persons in contracts, including stipulations in favor of a third person.
Contracts creating real rights and their stipulations under Article 1312 of the New Civil Code.
The impact of contracts on creditors and fraudulent contracts under Article 1313 of the New Civil Code.
Essential requisites of contracts as outlined in Article 1318 of the New Civil Code.
The importance of consent in contracts and the manifestation of consent through offer and acceptance.
Legal capacity as a prerequisite for entering into a contract.
The distinction between void and voidable contracts based on consent and intention.
The process of offer and acceptance, and the conditions that must be met for a valid contract.
The role of legal capacity in the validity of a contract and the burden of proof regarding incapacity.
Transcripts
[Music]
hi
everyone welcome to my channel always
remember ignorance of the law excuses no
one
this is
three stages of contracts unai
preparation or negotiation second
paradigm perfection or birth
and impact law consummation or
termination
so let's proceed with the preparation
for negotiation i mean
it's self-explanatory this includes all
the steps taken
by the parties leading to the perfection
of the function
[Music]
[Music]
oh
is a perfected contract yes yes there is
a perfected contract
in that case i'm in a negotiation as to
the price
preparation preparation or medication
[Music]
[Music]
so next stage is perfection or birth of
a contract
this is when the parties have come to a
definite agreement
or meeting of the minds regarding the
subject matter and cause of the contract
under article 1319 of the civil code
by mere consent
[Music]
delivery
unless and until there is perfected
contract there is no
obligation
or negotiation
is a perfection or birth of the hundred
once the parties agree
i mean i'm a mutual meeting of my own
meeting of mines
so uh obligations between the parties
will arise
yes okay and uh by this the parties are
bound to the fulfillment of what has
been expressly
stipulated as according to article 13
15 of the civil code and compliance
thereof must be in good faith according
to article
1159 of the civil code
right so there must be good faith to
fulfill compliance in good faith
yes so the parties are also bound to all
the consequences
which according to their nature may be
in keeping with good faith
usage and law all right
so preparation
or negotiation that there is already a
perfection of the contract
and there is what we call consummation
or
so this is when the parties have
performed
their respective obligations and the
contract may be said to have been fully
accomplished or
executed resulting in extinguishment or
termination
8 000 pesos there is already preparation
negotiation and then perfection of the
contract
in certain cases okay so
self-explanatory the part
um
[Music]
okay
yes so exceptions the cases when
contracts are effective only between the
parties or when the rights and
obligations arising
from the function are not transmissible
intonations
such as painting singing we have
discussed this
in our previous modules so put it in
among
stipulations the parties may stipulate
that uh even if
[Music]
and when death extinguishes the legal
relationships
yes that's according to article 1178 of
the
new civil code right whether it is
young parties or your persons affected
by
a contra i young third person
but no one has a third persons
uh have no rights and obligations under
a contract since
of course they are not privy to the
contract
but uh of course um uh they are
well in that case the third persons are
a stranger
and therefore the third person has no
standing
in contract and again he has
no right to demand for the enforcement
of whatever it is that should be
enforced under the
contract right but
a third person we still have uh rights
and obligations
um arising from the contract even if in
this election example point
when third persons can be affected by a
contract among such cases or the
following according to
your number contracts containing a
stipulation in favor of a third person
or stipulation per attribute
by the amount contracts creating real
rights
under article 13 12 of the new civil
code
crediting in contracts entered into to
defraud the creditors
under article 13 13 of the new civil
code
by the contracts which have been
violated
at the inducement of a third person
under article 13
14. also yes so
mentioned apparently and the first one
is um when there is a stipulation of
we
or the person who procured such
insurance and yet this third person
designated as beneficiary has
the rights over uh the proceeds of that
insurance privacy so
i try stranger that's a third person it
uh is contract it is named that
uh he is a party let's say he is
affected by the contra
that's an exception another example is
entered into different creditors under
article 13 13 of the new zealand quote
obviously
would you have
me what's up an admin and their
obligations say one of the remedies of
the creditors whenever the debtor
wouldn't uh pay his uh or do
well could that satisfy the payment in
full
take note of that okay now um
after what we've talked about so far
um essential requests of contracts right
yes
um and uh under essential requests
of contracts um general provisions under
article 13 18 of the news
so article 13 18 there is no contract
unless the following requisites concur
first consent of the constructing
parties
second object certain which is the
subject matter of the contract
and last uh cause of
the obligation which is established
mm-hmm
elements and essential elements they are
those without which no contract can
validly exist
yes and they are also known as requests
of a contra
first of which is common present in all
contracts
coc lagging may say in all kinds of
contracts
under article 13 18 of the
[Music]
[Laughter]
special elements eternal those
not common to all contracts or those
which must be present
only in or peculiar to
peculiar to certain specified contracts
and such specularity
may be as regards to form as regards to
subject matter or as regards the
consideration or cause
international
in a public instrument or the donation
of a real property must be embodied
in the public instrument instrument
same as sage same as the sale of real
property
[Music]
those that are presumed to exist in
certain contracts
unless the contrary is expressly
stipulated by the parties
like warranty against eviction or
warranty against
[Music]
[Music]
consent is manifested by the meeting of
the offer
and the acceptance upon the thing and
the costs which are to constitute the
contract
the offer must be certain and acceptance
absolute
a near qualified acceptance constitutes
a
counteroffer acceptance made by letter
or telegram does not bind the offer
except from the time it came to his
knowledge the contract in such a sense
in such a case is presumed to have been
entered into in the place
where the offer was made mm-hmm
of course it's the conformity or
occurrence
of wheels which means the offer
and acceptance and with respect to
contracts
it is the agreement of the will of one
contracting
party with that of another others upon
the object in the terms
of the contract so because consent is
manifested
by the meeting of the offer
and the acceptance upon the thing
and the costs which are to constitute
the
contra so it presupposes legal capacity
and the fulfillment of conditions
should any be attached
so you know that medical capacity to
give
so 18 years old and above
so if there is absolutely no consent
there is no contract um
[Music]
there is no intention to enter into a
contract
therefore there is no contract to begin
with
that but there must be an intention for
the parties to enter
into a contract
so if there is absolutely no consent
that's in the case of a joke
then there is no contract okay the
agreement may be considered
inexistent or not existent or void
and the same rule applies in the case of
absolutely simulated contract
one where the parties never intended to
be done so of course
there is never uh there is no intention
such as error fraud or injury influence
the function is not void
but merely voidable
they confuse void and avoidable
[Music]
19 offer and acceptor
so this is when one party makes a
proposal to another to enter
in a contract
it should be understood as more than
just an
expression of desire or hope it should
really be a promise to act or to refrain
from acting on condition
that the terms they're offer accepted by
the person to whom it is made
so no no
[Music]
[Music]
offer me acceptance acceptance is so
this is when the offering makes a
manifestation of his
ascent to the terms of the offer without
such
acceptance there can be no meeting of
the minds between the parties
so that's in article 1302 of the new
symbol
it's to wait but it's a relationship
[Music]
they decide yes
yep
love yourself
a particular house in love for let's say
three million pesos
before harry could communicate his
consent
panel decided to withdraw the offer
was panado allowed to do so and one
answer
is yes is allowed by law to withdraw
such offers since in this case there was
no meeting of the minds between the
parties yet
hence no contract had been perfected
between manalo and
heart
attorney there was no meeting of mine
yeah
the withdrawal by the offer was made
before
uh the acceptance was made by harry
perry
[Music]
and the meeting i offer and the
uh acceptance which is absolutely so
that's a great
uh way of approaching the problem what
uh we didn't know so
she looked on the essential elements no
existence no
[Applause]
okay
to be valid acceptance must be
manifested by the occurrence of the
offer
and acceptance with respect to object
and cost
[Music]
and there must be a legal capacity
of the parties so take note
that name may occur is not on an offer
and acceptance with respect to the
object
and then there must be legal capacity uh
given your name you cannot enter into a
contract unless
you you are legally capacitated so um
definition telegraph a civil code
consignment legally capacitated
or indefinition of legal capacity uh
there is no
uh there is nothing in the civil code
that defines
who has capacity it does however define
who have known who has no capacity
by which it can be thus inferred that
the general rule is capacity which
exists in
those of whom the law has not denied it
the burden of proof then is on the party
who asserts incapacity to the other
so everyone has capacity yes
everyone has the capacity
you have to prove that in fact she
doesn't have the capacity to enter into
such countries
[Music]
you
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