1:16:00 – 1:30:00

…Cont

RULE: An Offer is complete when theirs is certain Object and Cause. Anyone who will
receive that Complete Offer can accept and will be bound by that valid contract.

LETTER OF INTENT
If your intention is to create a contract, you prove there the definite terms. Like describe
the property, tell the price, terms, mode of payment, and other provisions. What’s left is for
the offeree to accept.
But if you want Legal Rule, you just say there: “other terms subject to the agreement of the
parties.” This means there is no contract yet. Parties still need to agree on the terms of the
contract.

GENERAL RULE: Advertisements of Sale is not yet a Complete Offer.

Unless, they appear to be given otherwise. That the Offer is Complete and an Acceptance
will result to a valid contract.

BIDDING
It is the same in Biddings. It is not yet a complete offer. The title is not yet transferred to the
highest or lowest bidder unless the contrary is stated.
To find out whether an Offer is Complete, you have to look at the content of the text. Look
at the Notice, the bidding rules are there. Look for the provision saying that the highest
bidder, for example, shall be awarded with the contract. Therefore, it is clear that whoever
makes the highest bid will have the contract.
However, it is normal that the one offering the bid may reject offers of bid. You will usually
see that in government ads for bidding. The government will always say that reservation.
The point of that, as seen in the case, is to prevent a party who may claim that he is the
highest bidder. Thus, the contract must be automatically awarded to him. The reservation
entitles the government to reject any bid, including the best bid.

If you have that provision (Reservation), you do not have any remedy. You cannot sue in
court or ask the court to award the contract in your favor being the best bid. There is no
civil remedy there.
BUT you may sue the one who organized the bidding (its officers) and claim that they are
unduly favoring another bidder to the detriment of the procedure, the government and the
public. You will then have a leverage so the next time around, you will not be able to
participate anymore in any bidding.

The Reservation Clause in biddings is not exclusive for government transactions. In fact, it
is being used by all who organize bidding procedures.
Why?
Because sometimes, you just want to reject a bid without giving any reasons.

CONSENT
Who can give consent to a Contract? Who has capacity to enter a Contract
Juridical Person – check the purpose of its incorporation. If the purpose matches the cause
of the contract, it will be valid. Otherwise, you will have to secure court approval first by
providing a Board Resolution to enter the contract.
As a general rule, if the contract is not in the purpose of incorporation of the company, you
will have to provide a Stockholders’ Resolution consenting to the contract. You will need at
least 2/3 votes.

Natural Persons – at least 18 years of age

If married, get spousal consent. For convenience, provide the consent of the spouse who is
not a party to the contract regardless of the Property Relation. Normally, a contract
entered into by a married person without spousal consent will be rejected by the Registry
of Deeds.
RULE: You need Spousal Consent
If you really do not want to inform your spouse of the contract, it is your call but the
contract can be assailed anytime.

WITHOUT LEGAL CAPACITY TO ENTER A CONTRACT

1. Minor
2. Insane or demented person
3. Deaf-Mute who cannot write
4. Person with impaired mental facilities or legal incapacity (under influence of drugs
or intoxicated)
5. Under hypnotic spell
6. Those suffering from special disqualifications

GENERAL RULE: Contracts entered into by these persons are VALID but voidable. It will be
a matter of proof later on. You have to prove that there is a Vice of Consent

Q: Can a 15-year-old enter into a contract?

A: Yes.
Q: What is the status of that contract?
A: Voidable because in the wordings of the law, that contract is valid until declared
otherwise.

Q: What do you need to do if you want a minor to enter into a completely valid contract?
For example, a minor has a property under his name.
A: It depends.
If it is just a matter of ADMINISTRATION (i.e. leasing), the Legal Representative or
Guardian can do it.
But if the transaction involves DISPOSITION (i.e. selling), you have to get court approval.
The parents or the legal representative cannot sign for the minor. I think the threshold now
is less than P100,000 or P50,000. If the property is more than that, you have to go to court
and secure approval for the Disposition.
Q: Was there a time when your parents put a property under your name when you were
still a minor?
A: Yes, kiddie bank account. That is a normal practice. But the downside of that is when the
property goes above the limit, your parents need court approval to dispose of that property