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Subtopic, Defenitions fulfilled.

While in the resolutory


Chapter 4 Section 1- Payment and Performance condition, when the parties agree that
II. Discussions the obligations in the contract will be
1. Illustrate an obligation subject to: terminated upon a certain future time.
(a) Suspensive Condition This exact time is certain to happen, but
- When an obligation is subject to a suspensive the exact date is unknown.
condition, the creation of the obligation will 2. Give two (2) cases when the conditional obligation is
depend on the occurrence of an event or on the valid although the condition depends entirely upon the
certainty that the event will not occur; thus, the will of the debtor. Explain.
condition delays the creation of a relationship - First case is when the debtor promises to pay
between the parties. As long as the condition has when his means permit him to do so. In this case,
not occurred, the very existence of the obligation what depends upon the will of the debtor is the
is not yet arises. For example, If your rent is due duration of the period when he is capable on
on the 30th, you have an obligation to pay the paying his debt and not whether he should
rent. The performance to pay occurs on the 30th. comply or not. For example, Mr. G binds himself
The performance is suspended until the 30th. to pay Ms. Y of his debt that costs ₱10,000 little
(b) Resolutory Condition by little. This obligation is valid and it shall be
● Resolutory condition refers to a condition deemed to be one with a period of time.
whereby, upon fulfillment terminates an already - Next case is when the debtor is capable of doing
enforceable obligation. The continuance of such a the said obligation. For example, Marie borrowed
contract is made dependent upon the happening 5,000 to Rose payable on September 13. Due to
of an uncertain future event. However, there is no the review of financial reverses, Marie now is not
postponement or suspension of the contract and capable on paying the debt to Rose but Marie is
all rights and obligations come into existence willing to pay the said debt. The remedies of
immediately upon conclusion of an agreement Rose will arise
between the parties. For instance, You have a car 3. May an obligor be liable under an obligation subject
note over the next 10 years. Once you pay the last to a suspensive condition although the condition has not
payment at the end of 10 years, the obligation yet been fulfilled? Explain.
ends. - Under the suspensive condition, the obligation
● What is the effect of the fulfillment of the will arises when the said condition is already
condition in a conditional obligation? fulfilled. Therefore, under this type of condition,
○ The suspensive condition is when the the obligor or the debtor is not yet liable. The
parties agree that the duty to perform is debtor would be liable if the condition is already
postponed until a determined or fulfilled.
determinable date due to the pending 4. In obligation to give a parcel of land subject to a
event, and that this event is certain to suspensive condition, who is entitled to the fruits that
happen. However, the exact date is accrued during the pendency of the condition once said
unknown. The obligation will arises condition is fulfilled?
when the said condition is already
Upon the fulfillment of the obligation, the seller has the they agreed on the promise of the third person to
right to keep to himself all the fruits and interests he may pay the creditor if the third person wants.
have received during the pendency of the condition, unless Therefore, the creditor cannot demand to the
a contrary intention by the seller that he shall render an debtor if the due date is not yet passed.
accounting of fruits received during its pendency. 2. Suppose in the same problem, D obliges himself to
5. State the rules in case the thing to be delivered: pay C 10,000 after C has paid his obligation to T. Is the
(a) is lost with the debtor’s fault; without his fault; obligation valid?
- If the delivery lost is due to the debtor’s fault, the - The said condition is considered as the
debtor has an obligation to pay the damages that suspensive condition wherein the obligation will
incurred and the price of the thing that is lost also only arises if the condition is already fulfilled.
can be demand. If the delivery lost without the The debtor obliges himself to pay the creditor if
fault of the debtor, the debtor is not liable for any the creditor already paid the third party. If the
obligation or the obligation shall be extinguished. creditor has not yet fulfilled his obligation to the
We are not liable for the fortuitous event or any third party, he cannot demand the debtor to pay
event that beyond our powers. him immediately. Therefore, the obligation of the
(b) Deteriorates with the debtor’s fault; without his debtor is invalid. The debtor is not liable to pay
fault the creditor if the creditor is not yet paid to the
- If it deteriorates through the fault of the debtor, third party.
the creditor may choose between the 2 remedies 3. S (Seller) agreed to sell to B (buyer) a specific car for
as a creditor, which is the rescission or the 200,000, delivery of the car and the payment of the price
fulfillment of the obligation, with damages that to be made on June 15. Suppose S delivered the car on
incurred in either case. As a creditor, you only June 15 but B failed to pay the price, what are the
have to choose one of the remedies that are given. remedies of S?
- If it deteriorates without the fault of the debtor, - If the buyer does not comply with his obligation
the value of thing that delivered will be to pay, the seller may choose between the two
depreciated and the value will be reduced due to remedies: (a) action for specific performance
the deterioration of the thing. (fulfillment) of the obligation with the damages;
III. Problems or (b) action for the rescission of the obligation
1. D (debtor) borrowed 20,000 from C (creditor) also with damages. The seller has the privilege to
payable on or before August 30. Before the arrival of choose only one of the remedies, and not both. If
the due date, C agreed to the promise of B to pay C if B the creditor chosen rescission, he cannot demand
wants. Can C insist that B pay not later than August the fulfillment of obligation to the buyer. Same
30? as, if he chosen the buyer to fulfill the obligation,
- On this situation, the conditional obligation he cannot practice the rescission later on.
whose fulfillment depends partly on the will of 4. S sold a parcel of the land to B for 240,000 payable in
the debtor and partly upon the will of the third installment of 20,000 a year. The land was delivered to
person is perfectly valid. In this case, it shows B who obtained ownership thereof. After B had paid
that the creditor demands the third person to pay 200,000, he could no longer continuing paying in view of
him not later than August 30 but on the said case, financial reverses but he was willing to pay the balance
of 40,000 if given more time. Thereupon, S sued for 1. Legal impossibility – occurs when the
obligation cannot be
rescission under Article 1191. If you were the judge, performed because it is rendered impossible by
would you grant rescission? provision of law, although physically it may
still be possible of performance.
- If I were the judge, I would grant the rescission 2. Loss of thing – occurs when the object
of Seller in default a term or period for the perishes, or goes out of commerce, or
disappears in such a way that its existence is
performance of the Buyer. The buyer is willing to unknown or it cannot be recovered.
3. Difficulty of performance- performance has
comply with his obligation to pay the maintaining become so
balance that cost 40,000 but needs time to do so difficult as to be manifestly beyond the
contemplation of both parties.
due to the view of his financial reverses, not II. Discussions
because he doesn’t want to pay the maintaining 1. Give two cases when a person may be
released from an obligation validly entered
balance that he’d left. into.
· According to Art.1266, a person
5. D (debtor) binds himself to pay C (creditor) a sum of may be released from an
money. Give the three (3) cases when the obligation of D obligation if the prestation
becomes legally or illegally
is demandable at once by C? impossible without the fault of the
1. When the obligation is pure- An obligation is obligor. Another case is when
(according to Art.1267) the
demandable at once if it is pure obligation which service has become so difficult, as
to be manifestly beyond the
one is not suspended by any condition, whether it contemplation of both parties, the
has been contracted without any condition, or obligor may be released in whole
or part
when thus contracted, the condition has been 2. Give the cases when loss of the specific
performed. It is immediately demandable. Their thing to be delivered will not exempt the
obligor from liability even in the absence of
agreement doesn’t have specific date, and fault or delay.
· According to Art.1262, the
conditions so the creditor can demand to pay the obligor will not be exempt from
said amount to the debtor. liability if it is stated by law or
stipulation. This also applies when
2. When the obligation is subject to a resolutory the nature of the obligation
requires the assumption of risk.
condition- On the above description of resolutory
3. Will partial loss of the specific thing to be
obligation, once the condition is already fulfilled, delivered extinguish the obligation? Explain
· According to Art.1264, the courts
the obligation will be extinguish. The creditor can will determine if the partial loss of
demand to the debtor during the fulfilling of the the object of the obligation is so
important as to extinguish the
condition. obligation.
III. Problems
3. When the obligation is subject to a resolutory
1. X obliged himself to deliver to Y a specific
period- same as the case above, the creditor can carabao to Y on July 31. The Carabao died
on July 25. Y has no proof that X was
demand to the buyer while in the process of negligent.Is X liable to Y?
fulfilling the condition. If the creditor and the ● Yes. According to Art.1265, if the object is lost
in the possession of the debtor, it shall be
debtor agree on the period wherein the obligation presumed that the loss was due to his fault, unless
there is proof to the contrary. Thus, X is still
is extinguished, he can demand to the buyer to
liable to Y unless he proves the contrary.
pay the amount he borrowed. 2. X obliges himself to deliver a specific thing
to Y on a certain date. The thing was lost by
X without his fault and before he has
Chapter 4, Sec.2: Loss of the Thing Due Study Guide incurred in delay. Does it mean that X is
I. Definitions already exempt from his liability.
● Yes. According to Art 1262, the · According to Art.1271, the
obligation which consists in the delivery of a private credit
delivery of a specific thing shall be evidencing a credit, made
extinguished if it should be lost without voluntarily br the creditor to the
the fault of the debtor, and before he debtor, implies the renunciation of
has incurred in delay. Since the thing the action which the former had
was lost without X’s fault and he is not against the latter. Thus the
yet in delay, then he is already exempt presumption is that C has
from his liability. renounced his rights against D and
3. Suppose in the preceeding problem, the a remission of debt occurred.
thing was lost through the fault of Z, a third 2. It is found in the possession of D?
person. State the effects of loss as far as X, · According to Art.1272, whenever
Y, and Z are concerned. the private document in which the
● According to Art.1269, the creditor shall have the debt appears is found in the
rights of action which the debtor may have possession of the debtor, it shall
against the third persons by reason of the loss. be presumed that the creditor
Thus the obligation of X is extinguished and he is delivered it voluntarily. Thus it is
no longer liable to Y. However, Y has the right to presumed that C delivered the
bring an action against Z to recover the price of promissory note to D and the debt
the thing with damages. has been remitted.
Chapter 4, Sec.3: Condonation or Remission of Debt b. When will the presumption of remission arise?
Study Guide - The presumption of remission will arise when the
I. Definitions private document in which the debt appears is
1. Condonation or remission of debt – the found in the possession of the debtor.
gratuitous 2. Suppose in the same problem, the debt of D, aside from
abandonment by the creditor of his right against being guaranteed by G, is secured by a pledge of a
the debtor. It is thus a form of donation certificate of shares of stock delivered by D to C. What
2. Inofficious remission – when the remission presumption arises if:
given is more than that which the creditor a. The debt is condoned by C?
can give by will. ● According to Art.1273, the renunciation of the
II. Discussions principal debt shall extinguish the accessory
1. Give the requisites in order that a obligations. Thus, if C condoned the debt, then
condonation or remission of debt may be the guaranty and security is likewise
valid. extinguished.
· According to Art.1270, the b. The certificate is later found in the possession
requisites of remission or of D?
condonation are: (1) it must be ● According to Art.1274, it is presumed that the
gratuitous, (2) it must be accepted accessory obligation of pledge has been remitted
by the obligor, (3) the parties must when the thing pledged, after its delivery to the
have capacity, (4) it must not be creditor, is found in the possession of the debtor.
inofficious, and (5) if made Thus, it is presumed that D’s pledge of shares of
expressly, it must comply with the stock has been remitted.
forms of donations. Chapter 4, Sec.4: Confusion or Merger of Rights
2. When is the condonation or remission of I. Definitions
debt considered inofficious? What is the 1. Confusion – meeting in one person of the
remedy of the party adversely affected qualities of creditor and debtor with respect
thereby? to the same obligation
· According to Art.1270, the 2. Merger – when the creditor is in itself his
condonation or remission of the own debtor.
debt is considered inofficious if it II. Discussions
is more than that which the 1. What is the rationale behind confusion or
creditor can give by will. The merger as a mode of extinguishing an
remedy is that the testamentary obligation?
dispositions which impair the · According to Art.1275, the
legitime shall be reduced on obligation is extinguished if the
petition of the heirs. roles of creditor and debtor are
III. Problems merged into the same person. This
1. D borrowed money rom C evidenced by a is so because it becomes absurd
promissory note signed by D. since a person cannot claim
a. What presumption arises if: payment from himself.
1. The promissory note is voluntarily 2. Give the effect of merger when it takes
given by C to D? place:
a. In the person of the principal debtor or 3. May there be compensation although the
creditor things due are not consumable? Explain.
· According to Art.1276, merger in · According to Art.1279, there will
the person of the principal debtor be no compensation if both debts
or creditor extinguishes the are NOT in the form of sums of
obligation. money or consumable things of
b. .in the person of the guarantor of the principal the same kind and quality.
obligation. 4. When may compensation take place when
- According to Art.1276, confusion which takes only one of the debts is due?
place in the person of the guarantor does not · According to Art.1279,
extinguish the obligation. It only extinguishes the compensation may take place
guaranty. when A has not yet paid B on the
III. Problems date that B’s obligation is due.
1. A, B, and C are jointly liable to D in the III. Problems
amount of P15,000. Subsequently, D 1. D borrowed P50,000 as character loan (no
assigned his credit to C in consideration for security) from a bank. Despite demands for
goods sold by C to D. Give the effect of the payment after the loan fell due, D did not
assignment. pay the bank. D has a savings deposit of
● According to Art.1277, confusion does not P40,000 with the bank. Has the bank the
extinguish a joint obligation. Since C, who is right to apply the deposit to the payment of
originally a joint debtor, becomes the creditor, D’s debt?
then A and B are now liable to him for their share - Yes. According to Art.1287, since the other party
of P5000 each. is a bank deposit, it may apply the deposit to the
2. Assuming the obligation of A, B and C is payment of D’s debt.
solidary, distinguish the effect of the 2. D owes C P10,000 payable on November
assignment from the first problem. 20. C owes D P10,000 payable on October
● According to Art.1277, merger in the person of 20. Can compensation also take place
one of the solidary debtors shall extinguish the although the debts are not payable on the
entire obligation. Thus, the solidary obligation of same debt?
A, B, and C to D is extinguished. However, C can - According to Art.1282, the parties may agree
still ask for reimbursement from A and B of their upon the compensation of debts which are not yet
share in the obligation of P5000 each. due. Thus, if C and D would agree, compensation
Chapter 4, Sec.5: Compensation Study Guide can take place. It can also happen if by Oct20, D
I. Definitions hasn’t paid C yet.
1. Compensation – the extinguishment to the 3. Illustrate compensation which can be set up
concurrent by one of the parties.
amount of the debts of two persons, who, in their - According to Arts.1287,1288, If A deposited an
own right, are debtors and creditors of each object to B, B the depository cannot claim
other. compensation. However, A can set up his deposit
2. Legal compensation– when it takes place by as a compensation to B. Also If B borrowed the
operation of law even without the thing, only A can set up the compensation.
knowledge of the parties 4. After contracting a debt in the amount of
3. Facultative compensation- when it can be P10,000 in favor of C, D succeeded through
set up only by one of the parties. fraudulent means to make C liable to him in
II. Discussions the same amount. Assuming that both
1. What are the distinctions between confusion obligations are now due, may the two debts
and compensation as modes for be compensated against each other? What is
extinguishing an obligation? the effect if the debt of C is later annulled in
· According to Art.1278, there is court at the instance of D?
compensation when TWO persons - According to Art.1284, they may be
are creditors and debtors of each compensated. However, when C’s debt is later
other. Confusion occurs when annulled, D is still liable to C because the
ONE person is his own creditor annulment will make it seem like as if there had
and debtor. been no compensation.
2. In what way is compensation similar to Chapter 4, Sec.6: Novation Study Guide
payment? I. Definitions
· According to Art.1289, 1. Novation – the extinction of an obligation
compensation and payment is through the creation of a new one which
similar in way due to the fact that substitutes it.
application of payments can be 2. Mixed novation– when the object and/or
applied to compensation. principal conditions of the obligation and the
debtor or creditor, or both parties, are debtor to which C agreed. Is D still liable to
changed. C in case of insolvency of T?
3. Expromission- that which takes place when ● No. According to Art.1295, the insolvency of the
a third person of his own initiative and new debtor will not revive the creditor’s actions
without the knowledge or against the will of against the original one.
the original debtor assumes the obligation of ● *Old debtor is not liable in non-fulfillment of the
the latter with the consent of the creditor. new debtor. As a general rule, old debtor is not
4. Delegacion- that which takes place when the liable for insolvency of new debtor EXCEPT:
creditor accepts a third person to take place 1. The said insolvency was already existing and of public
of the debtor at the instance of the latter. knowledge at the time of delegacion
II. Discussions 2. The insolvency was already existing and known to the
1. Give the requisites of novation. debtor at the time of delegacion.
● According to Art.1292, the requisites of 3. T paid C the debt of D without objection
novation are (1) a previously valid from the latter. What are the rights of T?
obligation, (2) capacity and intention of ● According to Art.1302, There is a legal
the parties to modify or extinguish the subrogation if the creditor pays another creditor
obligation, (3) the modification or who is preferred without the debtor’s knowledge.
extinguishment of the obligation and Therefore, T has the all the previous rights that C
(4) the creation of a new valid had.
obligation. 4. Illustrate a mixed novation.
2. When there is subrogation, what rights are ● Jo will deliver to Jacq a sundae cone. In the
acquired by the new creditor? agreement of the parties, Jo will instead deliver a
● According to Art.1303, subrogation tetra pack of jungle juice to Nix.
transfers all the rights, either against
the debtor of against third persons, TITLE II CONTRACTS
subject to stipulation in a conventional CHAPTER 1: GENERAL PROVISIONS
subrogation. Study Guide
3. In novation, give the effect where: I.DEFINITIONS
a. The new obligation is voidable 1. Contract
● According to Art.1297, if the new obligation is ● As defined under Article 1305, a contract is a
void, the original one shall subsist, unless the meeting of minds between two persons whereby
parties intended that the former relation should be one binds himself, with respect to the other, to
extinguished in any event give something or to render some service
b. The old obligation is voidable. Explain 2. Stipulation of pour autrui
● According to Art.1298, the novation is void if the ● Stipulation in a contract clearly and deliberately
original obligation is void, except hen annulment conferring a favor upon a third person who has a
may be claimed only by the debtor or when right to demand its fulfillment provided he
ratification validates acts which are voidable communicates his acceptance to the obligor
4. In novation, are accessory obligations before its revocation by the oblige or the original
necessarily extinguished? Explain. parties
● According to Art.1296, when the principal 3. Real Contract
obligation is extinguished in consequence of a ● Which perfected by the delivery of the thing
novation, accessory obligations may subsist only subject matter of the contract
insofar as they may benefit third persons who did ● Ex. Depositum, pledge, commodatum
not give their consent. Thus if a third person is 4. Perfection of Contract
affected by the accessory in the original ● Stages in the life of a contract
obligation, it will not be extinguished without his 1. Preparation/ Negotiation – includes all the steps taken by
consent. the parties leading to the perfection of the contract. The
parties have not yet arrived at any definite agreement
III. Problems 2. Perfection/ Birth – this is when the parties have come to
1.T (3rd person) tells C (Creditor) that T will pay a definite agreement or meeting of the minds regarding to
the debt of D (debtor). C agrees. Is D the subject matter and cause of the contract
released from his obligation to C. 3. Consummation/ Termination – this is when the parties
● According to Art.1293, there is have performed their respective obligations and the
expromission only if D is released from contract may be said to have been fully accomplished or
his obligation to C. If T and C didn’t executed, resulting in the extinguishment or termination
agree as to such, D is not liable because thereof. A contract may also be terminated after its
T paid without his knowledge or perfection, not by performance but by mutual agreement of
consent. the parties.
2. Suppose in the above problem, D proposed
to C that T would substitute D as the new II. DISCUSSION
1. May a third person acquire rights under a - A contract entered into in the name of another by
contract to which he is a stranger or be bound one who has no authority or legal representation,
thereby? or who has acted beyond his powers, shall be
● Under Article 1311 unenforceable, unless it is ratified, expressly or
- Contracts take effect only in between the parties, impliedly, by the person on whose behalf it has
their assigns and heirs, except in case where the been executed, before it is revoked by the other
rights and obligations arising from the contract contracting party
are not transmissible by their nature, or by 4. Give the effect of the perfection of a contract
stipulation or by provision of law. The heirs is Under Article 1316
not liable beyond the value of the property he Real contracts, such as deposit, pledge and Commodatum,
received from the decedent. are not perfected until the delivery of the object of the
- If a contract should contain some stipulation in obligation. From the parties come to an agreement on a
favor of a third person, he may demand its definite subject matter and valid consideration, they are
fulfillment provided he communicated his bound not only
acceptance to the obligor before its revocation. A 1) To the fulfillment of what has been
mere incidental benefit or interest of a person is expressly stipulated.
not sufficient. The contracting parties must have 2) To all the consequences which
clearly deliberately conferred a favor upon a third according to the their nature may be in
person keeping with good faith, usage, and
Under Article 1312 law.
- In contracts creating real rights, third persons III. Problems
who come into possession of the object of the 1. A and B entered in to a contract not specifically
contract are bound thereby, subject to the provided in the Civil Code. Is the contract valid and
provisions of the Mortgage Law and the Land binding?
Registration law. ● Under Article 1307
Under Article 1313 - Innominate contract shall be regulated by the
- Creditors are protected in cases of contracts stipulations of the parties, by the provisions of
intended to defraud them. the Titles I and II of this Book, by the rules
Under Article 1314 governing the most analogous nominate
- Any third person who induces another to violate contracts, and by the customs of the place.
his contract shall be liable for damages to the - If it is not contrary to law and is signed by all
other contracting party. parties it is binding
2. How are contracts perfected? 2. S and B entered in to a contract of sale. It was agreed
Under Article 1315 that the price shall be determined by T (third person). Can
Contracts are perfected by mere consent, and S or B refuse to be bound by T’s determination of the price
from that moment the parties are bound not only to the if he does not agree with the amount thereof?
fulfillment of what has been expressly stipulated but also to ● Under article 1309
all the consequences which, according to their nature, may - The determination of the performance may be left
be in keeping with good faith, usage and law. to a third person, whose decision shall not be
binding until it has been made known to both
Under Article 1316 contracting parties. (n)
Real contracts, such as deposit, pledge and ● Under Article 1310
Commodatum, are not perfected until the delivery of the - The determination shall not be obligatory if it is
object of the obligation evidently inequitable. In such case, the courts
shall decide what is equitable under the
Under Article 1356 circumstances.
Contracts shall be obligatory, in whatever form - Yes as long as the act of T is evidently
they may have been entered into, provided all the essential inequitable or unjust or when T acted in bad faith
requisites for their validity are present. However, when the or mistake. Because of this, the courts shall
law requires that a contract be in some form in order that it decide what is equitable under their
may be valid or enforceable, or that a contract be proved in circumstances/situation.
a certain way, that requirement is absolute and 3. D owes C P20,000, both are house painters. It was
indispensable. In such cases, the right of the parties stated agreed that D instead of paying C, will paint the house of E
in the following article cannot be exercised. to which E expressed his conformity to C whose service as
painter was previously contracted by E. Has B the right to
3. When will the a person be bound by a contract enforce the stipulation between C and D?
entered into by another? ● Under Article 1311 part 2
Under Article 1317 - If a contract should contain some stipulation in
- No one may contract in the name of another favor of a third person, he may demand its
without being authorized by the latter, or unless fulfillment provided he communicated his
he has by law a right to represent him. acceptance to the obligor before its revocation. A
mere incidental benefit or interest of a person is
not sufficient . The contracting parties must have land even decreased about P800,000. Is S liable to B
clearly deliberately conferred a favor upon a third for misrepresentation?
person Art.1340- The Usual exaggerations in trade, when the other
- Therefore, he has the right to enforce since the 3rd party had an opportunity to know the facts, are not in
party acknowledged and agreed to the contract. themselves fraudulent
4. X made an office desk for Y. X told Y that the latter ●
may pay whatever amount he would like to pay for it. 5.) Suppose in the same problem, what S sold to B,
When the desk was finished, Y offered to pay P2,000 but X hardware owner, are 500 bags of cement. S had every
finished instead demanded P3,000, its fair value. Is X reason to believe that the price of cement would go
entitled to P3,000? down. After two weeks, it did go down, Has B the
● Under Article 1308 right to have the sale annulled?
- The contract must bind both contracting parties; Art.1339- Failure to disclose facts, when there is a duty to
its validity or compliance cannot be left to the reveal them, as when the parties are bound by confidential
will of one of them. relations, constitutes fraud
- No, X is entitled to nothing as the agreement for
payment was “whatever amount he would like to Section 2: Object of contracts
pay for it”. Therefore X may demand whatever Problems
he wants to but Y is also free to ignore him and S sold to B for P100,000 a parcel of land belonging to S
pay nothing. located in his hometown without specifying its exact
Chapter 2: Essential Requisites of Contracts location and area. Is the sale valid?
Section 1: Consent Art.1349- The object of every contract must be determinate
Problems as to its kind. The fact that the quantity is not determinate
1.) In a contract containing an option period, when is shall not be an obstacle to the existence of the contract,
the offerer not allowed to withdraw his offer even provided it is possible to determine the same, without the
before acceptance by the offeree? When is the offerer need of a new contract between the parties
allowed to withdraw his offer even after acceptance? ● The contract is void if the particular land sold
Art 1314- Any third person who induces another to violate cannot be determined without new agreement
his contract shall be liable for damages to the other between the parties
contracting party S has several pigs. Under a contract of sale, S binds himself
Art. 1479.- A promise to buy and sell a determinate thing to deliver a pig to a B for P3,000 if the pig has a weight of
for a price certain is reciprocally demandable. An accepted at least 30 kilos. State the binding effect of sale
unilateral promise to buy or to sell a determinate thing for a Art.1349- The object of every contract must be determinate
price certain is binding upon the promisor if the promise is as to its kind. The fact that the quantity is not determinate
supported by a consideration distinct from the price. shall not be an obstacle to the existence of the contract,
(1451a) provided it is possible to determine the same, without the
- need of a new contract between the parties
2.) S sold his house to B believing that B was C. Can ● The delivery of the pig should be determinate for
S legally withdraw from the contract on the ground of the reason that the object of every contract must
mistake? be determinate to its kind. Also, the contract is
Art. 1331, par.2- Mistake as to the identity or not perfected until the weight of the pig is agreed
qualifications of one of the parties will vitiate consent only upon.
when such identity or qualifications have been the principal
cause of the contract. - Section 3: Cause of contracts
● Therefore S can legally withdraw from the Problems
contract because there’s an erroneous belief of S 1. S sold his fishing boat to B who intends to use
to B. In such case, after the mistake was the boat for smuggling. Is the contract of sale illegal?
discovered, S can go to the court and ask for an Art.1351- The particular motives of the parties entering
annulment of contract or withdraw the contract. into a contract are different from the cause thereof.
3.) S agreed to deliver to B 500 cavans of rice at ● B has the right to ask the court for rescission or
P600 per cavan. S delivered only 490 cavans cancellation of the sale.
deliberately misrepresenting that the deliver consisted
of 500 cavans. Can B ask the court to annul the 2. S sold to B a specific parcel of land for P500,000.
contract on the ground of fraud? B failed to pay. Has C the right to have the sale
Art.1344- Mutual error as to the legal effect of an declared void by the court on the ground of absence of
agreement when the real purpose of the parties is frustrated, cause for non-payment of the price?
may vitiate consent Art.1352-Contracts without cause, or with unlawful cause,
● produce no effect whatever. The cause is unlawful if it is
4.) S sold to B a commercial land for P1,000,000. S contrary to law, morals, good customs, public order or
assured B that it is certain that in two years time, the public policy.
land would increase in market value by 50% or Art. 1409 (3)- Those whose cause or object did not exist at
P1,500,000. It turned out that the market value of the the time of the transaction
-
3. X gave P10,000 to Y who signed a receipt
stating: “This is to acknowledge payment by X in the
amount of P12,000”. X later complains that he
received nothing from Y for the P10,000. Is Y bound
to return the P10,000?
Art. 1354- Although the cause is not stated in the contract,
it is presumed that it exists and is lawful, unless the debtor
proves the contrary
● Yes, this is because o the receipt which was
acknowledged by the both parties. Therefore, the
law presumes that X must received P10,000 to Y
or there’s a consideration that should be received.

4. S sold to B his car worth of P250,000 for only
P200,000. There is no question that the purchase price
is grossly inadequate. Has S the right to have the sale
annulled?
Art.1355- Except in cases specified by law, lesion or
inadequacy of cause shall not invalidate a contract, unless
there has been fraud, mistake or undue influence.
● Contract is valid although the price is inadequate.
In addition, when both parties are form an
independent judgement regarding the transaction
does not mean that the contract between them is
cancelled.