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Real- requires not only the consent for

their perfection, but also the delivery of
the object by any one of the party to the
Article 1305. A contract is a meeting of other. (Commodatum, Pledge, Deposit)
minds between two persons whereby
*Loan for consumption- Mutuum
one binds himself, with respect to the
*Loan for use- Commodatum
other, to give something or to render
some service. 3. According to their form
a. Common or informal- do not require
Once the minds of the contracting
some particular form (Loan, Lease)
parties meet, a VALID CONTRACT exists,
b. Special of formal- requires some
whether it is reduced to writing or not.
particular form (Donation, Chattel
When the terms of an agreement have Mortgage)
been reduced to writing, it is considered 4. According to their purpose
as containing all the terms agreed upon. a. Transfer of ownership- Sale
b. Conveyance of use- Commodatum
Essential Elements of a Contract: c. Rendition of service- Agency
1. Consent of the contracting parties 5. According to their subject matter
2. Object certain which is the subject a. Things- Sale, Deposit, Pledge
matter of the contract b. Services- Agency, Lease of service
3. Cause of the obligation which is 6. According to their vinculum which
established. they produce.
a. Unilateral- gives rise to an obligation
Classification of contracts for only one of the parties
1. According to their relation to other (Commodatum, Gratuitous deposit)
contracts b. Bilateral- gives rise to reciprocal
a. Preparatory- which have for their obligations for both parties- (Sale, Lease)
object the establishment of a condition 7. According to their cause
in law which is necessary as a preliminary a. Onerous- each of the parties aspires to
step towards the celebration of another procure for himself a benefit through the
subsequent contract. (Partnership, giving of an equivalent or compensation
Agency) (Sale)
b. Principal- can subsist independently b. Gratuitous- one of the parties proposes
from other contracts and whose purpose to give to the other a benefit without any
can be fulfilled by themselves. (Sale, equivalent or compensation
Lease) (Commodatum)
c. Accessory- can exist only as a 8. According to risk involved
consequence of, or in relation with, a. Commutative- ech of the parties
another prior contract. (Pledge, acquires an equivalent of his prestation
Mortgage) and such equivalent is pecuniarily
2. According to their perfection appreciable and already determined
a. Consensual- are perfected by mere from the moment of the celebration of
agreement. (Sale, Lease) 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.