ZCWD CONTRACT CARD

A. WHAT IS A CONTRACT?

Article 1305. A contract is a meeting of minds between two persons whereby one
binds himself, with respect to the other, to give something or to render some service.
(1254a)

Article 1306. The contracting parties may establish such stipulations, clauses, terms
and conditions as they may deem convenient, provided they are not contrary to law,
morals, good customs, public order, or public policy. (1255a)

Article 1347. All things which are not outside the commerce of men, including future
things, may be the object of a contract. All rights which are not intransmissible may
also be the object of contracts.

No contract may be entered into upon future inheritance except in cases expressly
authorized by law.

All services which are not contrary to law, morals, good customs, public order or
public policy may likewise be the object of a contract. (1271a)

Article 1348. Impossible things or services cannot be the object of contracts. (1272)

B. REQUISITES OF A CONTRACT

If a contract brings you to court, it’s a poorly-prepared contract. The rationale for this
statement is this – if the rights and obligations of the parties are clearly provided and
defined, there’s a lesser chance of misinterpretation. This, of course, is not
necessarily true. Even a carefully drafted contract, prepared by the big law firms,
may still end up in court if the parties do not comply in good faith with their respective
obligations. Still, it would be better to know the basic elements of a contract.

A contract is a meeting of the minds between two persons whereby one binds
himself, with respect to the other, to give something or to render some services. A
contract is also defined as “a juridical convention manifested in legal form, by virtue
of which one or more persons bind themselves in favor of another or others, or
reciprocally, to the fulfillment of a prestation to give, to do, or not to do.” A contract
binds both contracting parties and has the force of law between them.

There are different kinds of contracts and there may be a host of additional
provisions to a basic contract. These flavors and add-ons will be further discussed in
this series on contracts. Right now, let’s start with the basics – the 3 elements or
requisites of a contract. There can be no contract unless the following requisites are
present:

(1) consent of the contracting parties;

(2) object certain which is the subject matter of the contract; and
(3) cause of the obligation which is established.

1|ZCWD Contract Card – What is A Contract?

Consent. Contracts are generally perfected by mere consent, which is the reason
why there’s such a thing as oral contracts. It’s a meeting of the minds between the
parties: there’s a definite offer by one person and there’s an absolute acceptance by
another.

Subject Matter. A thing, right or service may be the object or subject matter of a
contract. All things that are outside the commerce of man (e.g., the moon) may not
be the object of a contract. Rights that are transmissible (e.g., the right to possess a
real property) may be the subject of a contract. Services, on the other hand, must not
be contrary to law, morals, good customs, public order of public policy (e.g., services
of an assassin or a prostitute).

Cause. The cause varies according to the type of contracts: (a) for onerous
contracts, the cause is the promise of a thing or service by the other; (b) for
remunatory contracts, the cause is the service or benefit which is being
remunerated; and (c) for contracts of pure beneficence, the cause is the mere
liberality of the benefactor. These concepts may appear alien, but since this is
merely a brief discussion, suffice it to state that a “cause” is technically different from
a contract’s object (or subject matter, as discussed above) or motive.

These three requisites are important because there’s no perfected contract without
them. This discussion is just the tip of the iceberg, so to speak, and future
discussions will hopefully clarify certain matters that may be of interest to Pinoy
Entrepreneurs, considering that contracts are inseparable from business
transactions. (END)

2|ZCWD Contract Card – What is A Contract?