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Jardinel Davis v CA

Facts:
- During the Power crisis of 1992, Purefoods decided to install 2 1500kw generators
- A bid was held and 3 bidders offered their bids. In December 1992, the bid was awarded to
FEMSCO.
- FEMSCO immediately complied with their requisites such as; performance bond and
contractor’s all-risk insurance policy which were acknowledged by the vice president of
Purefoods.
- Later on, Purefoods decided to unilaterally cancel the contract as “significant factors called for a
new bidding to take place”. FEMSCO protested this and sought a meeting but in 1993 before the
matter was resolved, the bidding was awarded to JARDINE.
- FEMSCO wrote to Purefoods to honour the initial contract and FEMSCO also wrote to JARDINE
to cease and desist from installing the generators
- Trial Court – July 1994, Purefoods must indemnify FEMSCO for the expenses including
engineering services (P2.3 mil) and contractor’s work (14,000 US $) Court of Appeals: affirm in
toto
Issue:
- Whether or not there was a perfected contract
Held:
- Yes
- A contract is defined as "a juridical convention manifested in legal form, by virtue of
which one or more persons bind themselves in favor of another for others, or reciprocally,
to the fulfillment of a prestation to give, to do, or not to do." 4 There can be no
contract unless the following requisites concur: (a) consent of the contracting parties; (b)
object certain which is the subject matter of the contract; and, (c) cause of the
obligation which is established. 5
- A contract binds both contracting parties and has the force of law between them.
Contracts are perfected by mere consent, upon the acceptance by the offeree of the
offer made by the offeror. From that moment, the parties are bound not only to the
fulfillment of what has been expressly stipulated but also to all the consequences which,
according to their nature, may be in keeping with good faith, usage and law. 6 To
produce a contract, the acceptance must not qualify the terms of the offer. However, the
acceptance may be express or implied. 7 For a contract to arise, the acceptance must be
made known to the offeror. Accordingly, the acceptance can be withdrawn or revoked
before it is made known to the offeror.
- The fact that Purefoods acknowledged the bond and contractor insurance shows that there as
consent between the parties. Additionally, There was a perfected contract since Purefoods
wrote in it’s cancellation letter that they were “cancelling the award to the project”. The
Supreme Court states that “There can be no cancellation if there was no perfected contract in
the first place”
- Petition denied