Art. 1305. A contract is a meeting of minds between CONTRACT DISTINGUISHED FROM OTHER
two persons whereby one binds himself, with respect CONVENTIONS
to the other, to give something or to render some
Although a contract is a convention, or agreement of
service. (1254a)
wills, not every convention is a contract.
A contract is limited to agreements which produce
MEANING OF CONTRACT patrimonial liabilities. Contracts, therefore, are
distinguished from other acts based on the consent of 2 or
Sanchez Roman- a juridical convention manifested in more persons such as marriage, donation, adoption, and
legal form, by virtue of which one or more persons bind succession, in the following ways:
themselves in favor of another or others, or reciprocally,
to the fulfillment of a prestation to give, to do or not to do. 1. A contract creates obligations which are more
particular, concrete and transitory, because it establishes
The definition lays emphasis on the meeting of minds a relation which is more limited by reason of persons,
between 2 contracting parties which takes place when an effects and importance.
offer by 1 party is accepted by the other.
2. In contract, the freedom to stipulate predominates over
In a contract, there must be at least 2 persons or parties, necessity of the act; in other words, the intentions of the
because it is impossible for one to contract with himself. parties is the determining factor in contracts, while the
As a consensual relation, a contract must be shown to meeting of the minds is merely secondary in the other
exist as a fact, clearly and convincingly. acts.
CONTRACT AND OBLIGATION 3. The law is the principal source of rights and obligations
DISTINGUISHED in the other acts mentioned but in contracts the law has a
suppletory effect.
Contract is one of the sources of obligation while
obligation is the legal tie or relation itself that OTHER TERMS
exists after a contract has been entered into. CONTRACT PERFECT IMPERFECT
Hence, there can be no contract if there is no PROMISE PROMISE
obligation accepted in return for some benefit to The latter Tends only to Also designated
be enjoyed. But an obligation may exist without establishes and assure and pave as policitacion,
a contract such as the obligation imposed by law determines the the way for the constitutes a
to pay taxes. obligations celebration of a mere
arising contract in the unaccepted
CONTRACT AND AGREEMENT therefrom. future; until the offer.
DISTINGUISHED contract is
actually made,
Contracts are binding agreements enforceable the rights and
through legal proceedings in case the other party obligations are
does not comply with his obligation under the not yet
agreement. To be valid and enforceable, a determined.
contract must be lawful and all the requisites for
its validity must be present.
Those agreements which cannot be enforced by PACT STIPUATION
A special part of the Similar to a pact. When
action in the courts of justice (like an agreement
contract, sometimes the contract is an
to go to a dance party) are not contracts but
merely incidental and instrument, stipulation
merely moral or social agreements. An separable from the refers to the essential and
agreement is broader than the contract because principal agreement. dispositive part, as
distinguished from the STAGES OF CONTRACTS
exposition of the facts and
antecedents upon which it 1. Preparation- conception, or generation, which is the
is based. period of negotiation and bargaining, ending at the
moment of agreement of the parties.
MUTUALITY OF CONTRACT
DETERMINATION OF PERFORMANCE BY A
The binding effect of the contract on both parties is based
THIRD PERSON
on the principles:
Under the preceding article, compliance with a contract
1. That obligations arising from contracts have the force
cannot be left to the will of one of the contracting parties.
of law between the contracting parties; and
However, under the above provision, the determination of
2. That there must be mutuality between the parties based its performance may be left to a third person. In such case,
on their essential equality, to which is repugnant to have the obligation does not depend upon a potestative
one party bound by the contract leaving the other free condition.
therefrom.
The decision, however, shall bind the parties only after it
The ultimate purpose is to render void contract containing has been made known to both of them.
condition which makes its fulfillment dependent
Art. 1310. The determination shall not be obligatory if
exclusively upon the uncontrolled will of one of the
it is evidently inequitable. In such case, the courts shall
contracting parties.
decide what is equitable under the circumstances. (n)
UNILATERAL CANCELLATION
Once a contract is entered into, no party can renounce it
EFFECT WHERE DETERMINATION
unilaterally or without the consent of the other. It is a
INEQUITABLE
general principle of law that no one may be permitted to
change his mind or disavow and go back upon his own This article is a qualification to Article 1309. A
acts, or to proceed contrary thereto, to the prejudice of the contracting party is not bound by the determination if it is
other party. evidently inequitable or unjust as when the third person
acted in bad faith or by mistake. In such case, the courts
The unilateral act of one party in terminating the contract
shall decide what is equitable under the circumstances.
without legal justification makes it liable for damages.
XPN: When it is stipulated. An agreement of the parties
that either one of them may terminate the contract upon a
reasonable period of notice, is valid.
Judicial action for the rescission of a contract is not
necessary where the contract provides that it may be
revoked and cancelled for the violation of any of its terms
and conditions. The right of rescission may be waived.
EXPRESS AGREEMENT; Under this article, it is
perfectly licit to leave the fulfillment of the contract to the
will of either of the parties in the negative form of
rescission, a case which is frequent in certain contracts,
for in such case, neither is the article violated, nor is there
any lack of equality between the persons contracting,
since they remain with the same faculties in respect to
fulfillment. Thus, this article creates no impediment to the
insertion in a contract for personal services permitting the
cancellation of the contract by one of the parties.