BM1707

STAGES IN THE LIFE CONTRACTS AND UNAUTHORIZED CONTRACTS

Stages in the Life of Contracts

1. Preparation or negotiation – the stage when bargains are usually made. This includes offer and
counter-offer.
2. Perfection or birth – the stage when the parties come to a definite agreement.
Three (3) ways on how contracts are perfected:
• Consensual - the contract comes into existence upon the perfection by mutual consent even if
the subject matter or the consideration has not been delivered.
• Real - the contract is perfected not merely by mutual consent but by the delivery, actual or
constructive, of the object of the obligation.
• Solemn - the contract is perfected upon the execution of the form required by law.
3. Consummation or termination – the stage when the parties have performed their respective
obligations and the contract may be said to have been fully accomplished or executed.
Unauthorized Contracts
• A person is not bound by the contract of another of which s/he has no knowledge or to which s/he has
not given any consent. Therefore, a contract entered into in the name of another by one who has no
authority is unenforceable against the former unless ratified by him/her before it is revoked by the
other contracting party.
• The third person cannot demand or be made to fulfill his/her supposed obligation.
• Lapse of time cannot remedy such unauthorized contract except insofar as it has been subsequently
ratified by the person in whose name the contract was entered into or by his/her duly authorized
representative.

References
Civil Code of the Philippines
De Leon, H. S. & De Leon Jr., H. M. (2014). The law on obligations and contracts. Philippines: Rex Book
Store.
Paras, E. (2016). Civil code of the Philippines annotated prescription; obligations and contracts article
1106-1457. Philippines: Rex Book Store.
Pineda, E. (2009). Obligations and contracts. Philippines: Central Book Supply, Inc.

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