chapter 345
DESCRIPTION
Chapter 345Form of Contracts, Informal Contract, Formal Contract, General Rule, Exceptions, Form of Validity of Contract, Reformation, Annulment, Mutual Mistake, Reformation of Instruments, , Interpretation of Contracts,TRANSCRIPT
Chapter 3Form of Contracts
CELIMEN, CHRISTOPHER JOHN
MUSNI, RALPH
ECE70/B11
ENGR. JOSE CARDENAS
The form of a contract refers to the manner in which a contract is executed or manifested.
It may be oral, or in writing, or partly oral and partly in writing. If in writing, it may be in a public or a private instrument.
Classification of Contracts According to Form
Informal/Common Contract May be entered into in whatever
form (oral or written)
An example is contract of sale
Formal/Solemn Contract Required by law to be in a certain
specified form
Rules Regarding Form of Contracts
General Rule Contracts are binding therefore
enforceable reciprocally by both parties
Exceptions The contract is required to be in
a specific form when the law requires it to be in that form for its a. validity
b. enforceability
c. convenience
Form of Validity of Contract
Donation of real property – it must be a public instrument
Donation of personal property the value of which exceeds P5,000 – the donation and acceptance must be in writing
Sale of land through an agent – the authority of the agent must be in writing; otherwise, the sale is void
Stipulation to pay interest – it must be in writing; otherwise, no interest is due
Contract of partnership – it must be a public instrument
Chapter 4Reformation of Instruments
CELIMEN, CHRISTOPHER JOHN
MUSNI, RALPH
ECE70/B11
ENGR. JOSE CARDENAS
Reformation
It is the remedy allowed by law by means of which a written instrument is amended or rectified so as to express or conform to the real agreement or intention of the parties when by reason of mistake, fraud, inequitable conduct, or accident, the instrument fails to express such agreement or intention.
Requisites of Reformation
Meeting of the minds
Written instrument does not express the true agreement
Failure to express the true intention is due to mistake, fraud, inequitable conduct, or accident
The facts upon which relief by way of reformation of the instrument is sought are put in issue by the pleadings
There is clear and convincing evidence of the mistake, fraud, inequitable conduct, or accident
Reformation vs Annulment
Reformation There has been a meeting of the
minds of the parties, a contract exists but the written instrument does not express the true intention of the parties
Annulment There has been no meeting of
the minds, the consent of one of the parties being vitiated by mistake, etc.
Mutual Mistake
Mutual mistake is mistake of fact that is common to both parties of the instrument which causes the failure of the instrument to express their true intention. If the mutual mistake is of law, the remedy is annulment.
Requisites for reformation:
o Mistake is a fact
o Mistake must be proved by clear and convincing evidence
o Mistake must be mutual
o Mistake must cause the failure of the instrument
Chapter 5Interpretation of
ContractsCELIMEN, CHRISTOPHER JOHN
MUSNI, RALPH
ECE70/B11
ENGR. JOSE CARDENAS
Interpretation of Contract
It is the determination of the meaning of the terms of words used by the parties in their written contract.
Evident intention of parties prevails over terms of contract.
Special intent prevails over a general intent.
Problem 1
S sold to B his condominium unit “including all its contents.” In the unit, there is an antique chair belonging to X which X agreed to sell to S. Is the chair to be included om the sale of the unit?
o Based on Art. 1372 which explained about the particular matter that may be included and excluded on the terms of the contract, if S already paid the antique chair to X, this chair can be considered part of the agreement. But if S is not yet paid, this chair still belongs to X and it is not included on the contract.
Problem 2
X, architect, designed and supervised the construction of the house of Y. The parties failed to agree beforehand the professional fee of X. How much is Y bound to pay X?
o Based on Art. 1376 which is about the doubtful or ambiguous in a contract which the contradicting parties are entered into, the amount must be determined by the rate customarily paid in the place where the services are rendered. They must also consider the quality of work and other factors that may affect the price of the work of X.
Problem 3
Suppose in the same problem, the professional fee was agreed upon, but it is not clear from the written contract prepared by X upon the request of Y whether it should be the fixed amount of P200,000 or 6% of the cost of construction. How much is Y liable to pay?
o X is the one who created the contract and could have prevented mistakes or ambiguity in the meaning by careful choice of words and also X is the party who causes the obscurity acts with ulterior motives. The terms of contract does not result to the mutual negotiation they’d created and most of it was based upon the one party which is X. The liability of Y is what Y will choose from the terms of the contract. Reformation also can be made if Y chooses to reform the contract.