Contracts
Article 1305
A contract is a meeting of minds between two Characteristics of contracts.
persons whereby one binds himself, with respect to the
other, to give something or to render some service. They are:
(1) Freedom or autonomy of contracts. — The parties
Ang kontrata ay pagpupulong ng kaisipan sa pagitan ng
may establish such stipulations, clauses, terms, and
dalawang tao na kung saan ang isa ay binibigkis ang
conditions as they may deem convenient, provided,
kanyang sarili sa isa na magbigay o maggawad ng serbisyo
they are not contrary to law, morals, good customs,
public order, and public policy (Art. 1306.);
It is a meeting of the minds between two or more parties,
whereby one party binds himself with respect to the other, (2) Obligatoriness of contracts. — Obligations arising
or where both parties bind themselves reciprocally, in favor from contracts have the force of law between the
of one another, to fulfill a prestation to give, to do or not to contracting parties and should be complied with in
do good faith (Arts. 1159, 1315.);
Contract and agreement distinguished.
(3) Mutuality of contracts. — Contracts must bind both
Contracts are agreements enforceable through legal and not one of the contracting parties; their validity
proceedings. Those agreements which cannot be enforced or compliance cannot be left to the will of one of
by action in the courts of justice (like an agreement to go to them (Art. 1308.);
a dance party) are not contracts but merely moral or social
agreements. An agreement is broader than contract because (4) Consensually of contracts. — Contracts are
the former may not have all the elements of a contract. perfected, as a general rule, by mere consent,4 and
from that moment the parties are bound not only by
So, all contracts are agreements but not all agreements are
the fulfillment of what has been expressly
contracts.
stipulated but also to all the consequences which,
according to their nature, may be in keeping with
good faith, usage and law (Art. 1315.); and
, essential quality of the parties. It is incongruous to bind one
(5) Relativity of contracts. — Contracts take effect party and let free the other party from responsibility.
only between the parties, their assigns and heirs,
except in cases where the rights and obligations What is meant here is that the contract cannot have any
arising from the contract are not transmissible by stipulation authorizing one of the contracting parties:
their nature, or by stipulation, or by provision of
law. (Art. 1311.) v To determine whether or not the contract shall be
valid, or;
v To determine whether or not the contract shall be
Legal Definitions
fulfilled
The terms “agreement” and “contract” are often
interchangeable in common usage, but top law dictionaries Article 1311
offer two distinct definitions.
Contracts take effect only in between the parties, their
1. An agreement exists where there is a mutual assigns and heirs, except in case where the rights and
understanding regarding rights and responsibilities obligations arising from the contract are not
among parties to a business arrangement. transmissible by their nature, or by stipulation or by
2. A contract is an agreement between respective provision of law. The heirs is not liable beyond the value
parties that creates legally binding obligations. of the property he received from the decedent.
If a contract should contain some stipulation in favor of
Article 1308 a third person, he may demand its fulfillment provided
he communicated his acceptance to the obligor before
The contract must bind both contracting parties; its
its revocation. A mere incidental benefit or interest of a
validity or compliance cannot be left to the will of one of
person is not sufficient . The contracting parties must
them. (1256a)
have clearly deliberately conferred a favor upon a third
person.
Ang kasunduan ay dapat magbigkis sa isat isa, ang bisa o
pagtupad ay hindi maaring ipaubaya sa kagustuhan ng isa
Ang kontrata ay magkakaroon lamang ng bias sa pagitan
sa kanila.
ng partido, ang kanilang itinalaga, at ang taga-pagmana,
maliban kung sakali na kung saan ang karapatan at
Discussion: Mutuality of contracts. It is but natural and obligasyon ay magkaroon galling sa kontrata ay hindi
logical that the contract shall bind both contracting parties. maaaring mailipat ng sariling katangian, o ng mga
This is the principle of mutuality contract. It is based on the
, istipulasyon o ang probisyon ng batas. Ang parties, their assigns and heirs can have rights and
tagapagpamana ay walang pananagutan ukol sa halaga ng obligations under a contract.
ari-arian na kanyang tinanggap galling sa namatay.
(2) Exceptions. — The cases when a contract are effective
only be- tween the parties are when the rights and
Kung ang kontrata ng ilang istipulasyon na pumapabor sa
obligations arising from the contract are not
ibang tao, sya ay maghabol ng kanyang nagawa na
kondisyon na kanyang ipinagbibigya-alam ang pagtanggap transmissible:16
sa may obligasyon bago ang pagbawi. Ang kaugnay na
(a) by their nature (like a contract requiring or involving
benepisyo o ang interes ng isang tao ay hindi sapat. Ang
personal qualifications, as painting, singing, etc.); or
dalawang sumasang-ayon sa kontrata ay dapat mayroon na
malinaw at sadyang pakikipag-ugnayan at pumapanig sa (b) by stipulation (in accordance with the principle of
ibang tao. freedom to contract); or
One of the characteristics of contracts is that they are (c) by provision of law (as in agency, partnership, and
binding or effective only bet. The contracting parties, their commodatum, when death extinguishes the legal
assigns and heirs. The rights and obligation is relationships). (Art. 1178.)
transmissible, because if they are not transmissible they are
Cases when strangers or third persons affected by a
only binding between the contracting parties. Assigns and
contract.
heirs are excluded when the right or obligation is personal
to the party and better called as “Principle of Effectivity”
A third person is one who has not taken part in a contract
and is, therefore, a stranger to the contract.
Meaning of stipulation of pour autrui.
As a general rule, a third person has no rights and
It is a stipulation in a contract clearly and deliberately obligations un- der a contract to which he is a stranger.
conferring favor upon a third person who has a right to
There are cases, however, when third persons may be
demand its fulfillment provided he communicates his
affected by a contract. They are the following:
acceptance to the obligor before its revocation.
(1) In contracts containing a stipulation in favor of a third
Persons affected by a contract. person (stipulation pour autrui) (Art. 1311)
(1) General rule. — Contracts take effect only between the (2) In contracts creating real rights (Art. 1312.);
parties, their assigns and heirs. This means that only the
Article 1305
A contract is a meeting of minds between two Characteristics of contracts.
persons whereby one binds himself, with respect to the
other, to give something or to render some service. They are:
(1) Freedom or autonomy of contracts. — The parties
Ang kontrata ay pagpupulong ng kaisipan sa pagitan ng
may establish such stipulations, clauses, terms, and
dalawang tao na kung saan ang isa ay binibigkis ang
conditions as they may deem convenient, provided,
kanyang sarili sa isa na magbigay o maggawad ng serbisyo
they are not contrary to law, morals, good customs,
public order, and public policy (Art. 1306.);
It is a meeting of the minds between two or more parties,
whereby one party binds himself with respect to the other, (2) Obligatoriness of contracts. — Obligations arising
or where both parties bind themselves reciprocally, in favor from contracts have the force of law between the
of one another, to fulfill a prestation to give, to do or not to contracting parties and should be complied with in
do good faith (Arts. 1159, 1315.);
Contract and agreement distinguished.
(3) Mutuality of contracts. — Contracts must bind both
Contracts are agreements enforceable through legal and not one of the contracting parties; their validity
proceedings. Those agreements which cannot be enforced or compliance cannot be left to the will of one of
by action in the courts of justice (like an agreement to go to them (Art. 1308.);
a dance party) are not contracts but merely moral or social
agreements. An agreement is broader than contract because (4) Consensually of contracts. — Contracts are
the former may not have all the elements of a contract. perfected, as a general rule, by mere consent,4 and
from that moment the parties are bound not only by
So, all contracts are agreements but not all agreements are
the fulfillment of what has been expressly
contracts.
stipulated but also to all the consequences which,
according to their nature, may be in keeping with
good faith, usage and law (Art. 1315.); and
, essential quality of the parties. It is incongruous to bind one
(5) Relativity of contracts. — Contracts take effect party and let free the other party from responsibility.
only between the parties, their assigns and heirs,
except in cases where the rights and obligations What is meant here is that the contract cannot have any
arising from the contract are not transmissible by stipulation authorizing one of the contracting parties:
their nature, or by stipulation, or by provision of
law. (Art. 1311.) v To determine whether or not the contract shall be
valid, or;
v To determine whether or not the contract shall be
Legal Definitions
fulfilled
The terms “agreement” and “contract” are often
interchangeable in common usage, but top law dictionaries Article 1311
offer two distinct definitions.
Contracts take effect only in between the parties, their
1. An agreement exists where there is a mutual assigns and heirs, except in case where the rights and
understanding regarding rights and responsibilities obligations arising from the contract are not
among parties to a business arrangement. transmissible by their nature, or by stipulation or by
2. A contract is an agreement between respective provision of law. The heirs is not liable beyond the value
parties that creates legally binding obligations. of the property he received from the decedent.
If a contract should contain some stipulation in favor of
Article 1308 a third person, he may demand its fulfillment provided
he communicated his acceptance to the obligor before
The contract must bind both contracting parties; its
its revocation. A mere incidental benefit or interest of a
validity or compliance cannot be left to the will of one of
person is not sufficient . The contracting parties must
them. (1256a)
have clearly deliberately conferred a favor upon a third
person.
Ang kasunduan ay dapat magbigkis sa isat isa, ang bisa o
pagtupad ay hindi maaring ipaubaya sa kagustuhan ng isa
Ang kontrata ay magkakaroon lamang ng bias sa pagitan
sa kanila.
ng partido, ang kanilang itinalaga, at ang taga-pagmana,
maliban kung sakali na kung saan ang karapatan at
Discussion: Mutuality of contracts. It is but natural and obligasyon ay magkaroon galling sa kontrata ay hindi
logical that the contract shall bind both contracting parties. maaaring mailipat ng sariling katangian, o ng mga
This is the principle of mutuality contract. It is based on the
, istipulasyon o ang probisyon ng batas. Ang parties, their assigns and heirs can have rights and
tagapagpamana ay walang pananagutan ukol sa halaga ng obligations under a contract.
ari-arian na kanyang tinanggap galling sa namatay.
(2) Exceptions. — The cases when a contract are effective
only be- tween the parties are when the rights and
Kung ang kontrata ng ilang istipulasyon na pumapabor sa
obligations arising from the contract are not
ibang tao, sya ay maghabol ng kanyang nagawa na
kondisyon na kanyang ipinagbibigya-alam ang pagtanggap transmissible:16
sa may obligasyon bago ang pagbawi. Ang kaugnay na
(a) by their nature (like a contract requiring or involving
benepisyo o ang interes ng isang tao ay hindi sapat. Ang
personal qualifications, as painting, singing, etc.); or
dalawang sumasang-ayon sa kontrata ay dapat mayroon na
malinaw at sadyang pakikipag-ugnayan at pumapanig sa (b) by stipulation (in accordance with the principle of
ibang tao. freedom to contract); or
One of the characteristics of contracts is that they are (c) by provision of law (as in agency, partnership, and
binding or effective only bet. The contracting parties, their commodatum, when death extinguishes the legal
assigns and heirs. The rights and obligation is relationships). (Art. 1178.)
transmissible, because if they are not transmissible they are
Cases when strangers or third persons affected by a
only binding between the contracting parties. Assigns and
contract.
heirs are excluded when the right or obligation is personal
to the party and better called as “Principle of Effectivity”
A third person is one who has not taken part in a contract
and is, therefore, a stranger to the contract.
Meaning of stipulation of pour autrui.
As a general rule, a third person has no rights and
It is a stipulation in a contract clearly and deliberately obligations un- der a contract to which he is a stranger.
conferring favor upon a third person who has a right to
There are cases, however, when third persons may be
demand its fulfillment provided he communicates his
affected by a contract. They are the following:
acceptance to the obligor before its revocation.
(1) In contracts containing a stipulation in favor of a third
Persons affected by a contract. person (stipulation pour autrui) (Art. 1311)
(1) General rule. — Contracts take effect only between the (2) In contracts creating real rights (Art. 1312.);
parties, their assigns and heirs. This means that only the
