Article 1317.

No one may contract in the name of another without being authorized by the
latter, or unless he has by law a right to represent him.

A contract entered into in the name of another by one who has no authority or legal
representation, or who has acted beyond his powers, shall be unenforceable, unless it is
ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is
revoked by the other contracting party.

Requisites for a person to Contract in the Name of Another:

a. He must be duly authorized (expressly/impliedly)

b. He must have by law a right to represent him (guardian/administrator)
c. Contract must be subsequently ratified (express/implied, by word or deed)

When a person enters into a contract for and in the name of another, without authority to do
so, the contract does not bind the latter, unless he ratifies the same.

Example: In a sale with Lyndon, Daveau claimed that he was an agent of Bridget. It was later
found out by Lyndon that Bridget never gave Daveau any authority to act as her agent. The
contract cannot be enforced against Bridget. If she later ratifies the sale between Lyndon and
Daveau, then the sale becomes valid.

Article 1318. There is no contract unless the following requisites concur:

1. Consent of the contracting parties;
2. Object certain which is the subject matter of the contract;
3. Cause of the obligation which is established.

If any of the given requisites is ABSENT, the contract is VOID. If the consent given by a party is
VITIATED by any of the vices of consent (fraud, violence, intimidation, undue influence), the
contract is VOIDABLE.

Example: Conrado wants to buy Edwin’s car, but Edwin does not consent to the sale. The
contract of sale will not happen unless Conrado obtains Edwin’s consent. If Conrado forces
Edwin to sell the car to him, the vitiated consent makes the sale voidable and Edwin can later
question the validity of the sale.

Article 1319. Consent is manifested by the meeting of the offer and the acceptance upon the
thing and the cause which are to constitute the contract. The offer must be certain and the
acceptance absolute. A qualified acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not bind the offerer except from the time it came
to his knowledge. The contract, in such a case, is presumed to have been entered into in the
place where the offer was made.

Requisites for Meeting of Minds

a. An offer must be certain - An offer must be definite, complete and intentional
b. And an acceptance that must be Unqualified and absolute - If there are 2 contracts and
they are independent of each other, acceptance of one does not imply acceptance of
the other. A qualified acceptance constitutes a counter-offer.

The acceptance must be ABSOLUTE meaning unequivocal and unconditional. It must NOT
qualify the offer. If it does, the offer is MODIFIED. The offeror is freed from the consequences
of his offer – unless he accepts the counter-offer.

Example: Claire wants to sell apples at 50/kl to Lois. Lois wants to buy 10 kilos of apples but
offers to buy them at 40/kl. There is no perfected sale in this case because the offer to buy 10
kilos is qualified by the decrease in the price originally offered.

Article 1320. An acceptance may be express or implied. (n)

Forms of Acceptance
1. express
2. implied
3. presumed (by law)

Example: Rudith sells highlighters to her classmates as a part-time business. She offers the
highlighters to her classmate Renz for P50 per highlighter. Renz does not say anything but gives
Rudith P50 and takes the highlighter. There is implied acceptance of the sale in this case due to
the tender of payment and the taking of the object of the sale.

Article 1321. The person making the offer may fix the time, place, and manner of acceptance,
all of which must be complied with. (n)

The offeror when making the offer decides the details by which his offer may be accepted.
When there is no compliance with them, there is deemed to be no acceptance, or the
acceptance is one which is qualified. When the offeror has not fixed a period and the offer is
made to a person present, the acceptance must be made immediately.

Example: Conrado offers Lyndon his motorbike for only P50,000 if Lyndon goes to the Tagum
City Hall on Friday at 3pm and pay fully in cash. If Lyndon complies with all the requirements,
the offer is deemed accepted and the sale can be perfected. If Lyndon goes to the City Hall on
the exact date and time, but does not present the money in cash, there is deemed to be no
acceptance, but Lyndon may present Conrado with a counter-offer which Lyndon may accept or
not.

Article 1322. An offer made through an agent is accepted from the time acceptance is
communicated to him.

An agent is an extension of the principal, such that acceptance made to the agent is one made
to the principal as well.

Example: Edwin constituted Bridget as his duly authorized agent for the sale of his fishpond.
Bridget presented Lois with the offer and gave her three days to accept. On the third day, Lois
communicates her acceptance of the offer to Bridget. The communication of Lois to Bridget of
the acceptance binds Edwin from the moment it was made.

Article 1323. An offer becomes ineffective upon the death, civil interdiction, insanity, or
insolvency of either party before acceptance is conveyed. (n)

Offer and acceptance takes effect only from the time knowledge is acquired by the person to
whom it is directed. If during intervening time, the offer or acceptance is extinguished by
death/insanity, such offer or acceptance has no more effect.

Example: In a letter, Luna offered pieces of jewelry to Claire on March 22. The letter reached
Claire only on April 1. Between March 22 and April 1, Luna still had time to change her mind
and rescind the offer. If on March 30, Luna dies, Claire cannot claim the same offer against
Luna’s heirs if the offer was personal between them. The offer is deemed revoke from the
moment of Luna’s death, even if Claire did not know of such fact when she accepted the offer.

Article 1324. When the offerer has allowed the offeree a certain period to accept, the
offer may be withdrawn at any time before acceptance by communicating such
withdrawal, except when the option is founded upon a consideration, as something paid
or promised. (n)

GEN. RULE: If the offeror has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance (of thing being offered) by communicating such
withdrawal.

Exception: when the option is founded upon a consideration as something paid or promised.

OPTION CONTRACT– contract granting a person the privilege to buy or not to buy certain
objects at anytime w/in the agreed period at a fixed price.
- It must have its own cause/consideration because it is a distinct contract; and the grant
must be exclusive
 - The cause is not only price but something/anything of value; may also come in the form
of a forfeiture.
- It binds the party who has given the option not to enter into the principal contract with
any other person during the period designated and, within that period, to enter into
such contract with the one to whom the option was granted if the latter should decide
to use the option.

Lois offers to sell to Rudith stocks worth P300,000. Rudith, needing time to think on the offer
asks Lois 15 days to consider. So that Lois will not offer it to others within that time, Rudith pays
Lois P5,000. Rudith in this case is paying for extra time. The option contract is separate from the
contract of sale. Lois cannot sell the stocks to anybody else within that option period. If Lois
sells the stocks to someone else within the period, she is guilty of contractual breach.

Article 1325. Unless it appears otherwise, business advertisements of things for sale are
not definite offers, but mere invitations to make an offer. (n)

Business Advertisements of Things for Sale May OR May Not constitute definite offer. The
matter depends upon the circumstances:

1. If the advertisement contains ALL the necessary data needed in a contract, it is a DEFINITE
OFFER for the sale of the thing advertised;

2. If the advertisement does NOT contain all the important data for a future contract, it is NOT
a definite offer. It is a MERE INVITATION TO MAKE AN OFFER.

Example: Conrado in an advertisement offers the following properties:

a. FOR SALE: House & Lot located at #15 Doctolero Avenue, Tagum City. Lot Area: 500
sq.m.; House floor Area: 300 sq.m.; Price: P 5M. Payment in cash. Contact owner
Conrado Macasa at said address.

b. FOR SALE: Honda CMX250C Rebel in graphite black, 2016 model, P 2M: Negotiable.
Contact Conrado Macasa, owner, at 0917123456.

The first ad constitutes a definite offer as it lists down all the details which would give rise to a
valid sale upon the acceptance of the offer. The second ad is a mere invitation to make an offer
as it only lists characteristics of the object for sale and the price is deemed to be negotiable.

Article 1326. Advertisements for bidders are simply invitations to make proposals, and the
advertiser is not bound to accept the highest or lowest bidder, unless the contrary appears.
(n)

In an advertisement for bidders, the advertiser is not the one making the offer. In reality, the
bidder is the one making the offer which the advertiser is free to accept or reject.
Example: Daveau make an advertisement for bidding of a contract to construct a two-storey
building. Edwin offers an 8M contract to be finished in 3 months. Claire offers a 5M contract to
be finished in 8 months. Daveau in this case is free to accept whichever contract he deems best
regardless of who makes the highest or lowest bid. The discretion for acceptance goes to the
advertiser when no stipulation as to the awarding of the bid is made. He may accept Edwin’s
offer even if it were more expensive because it would be finished earlier.

Article 1327. The following cannot give consent to a contract:

1. Unemancipated minors;
2. Insane or demented persons, and deaf-mutes who do not know how to write.

A contract entered into where one of the parties is incapable of giving consent to a contract is
voidable. A voidable contract is valid and binding until it is annulled by a proper action in court.

In general, contracts which the above enter into are Voidable, unless ratified:
a) Upon reaching the age of majority, they ratify the same;
b) They were entered into through a guardian and the court having jurisdiction had
approved it;
c) Contracts of life insurance in favor of their parents, spouse, children, brothers and
sisters and provided furthermore that the minor is 18 years and above.
d) In the form of savings account, provided that minor was at least 7 years old.
e) They were contracts for necessities such as food, but here the people who are legally
bound to give them support should pay therefore.
f) They were contracts where the minor misrepresented his age and pretended to be one
of major age and is thus in Estoppel.

Example: Bridget, 16 years old, donates a piece of land she received thru inheritance to her
friend, Renz who is 20 years old. The donation made by Bridget is deemed to be one made
without her consent due to her minority and the same is voidable. When Bridget reaches the
age of majority, she can ratify the donation she made to Renz. Otherwise, the donation can be
annulled by a proper action in court.

Article 1328. Contracts entered into during a lucid interval are valid. Contracts agreed to in a
state of drunkenness or during a hypnotic spell are voidable. (n)

As long as the contract was entered into during his lucid interval, even if the insane person is
then under judicial guardianship, the contract is valid.

Example: Lyndon has been declared judicially insane. One day, during a lucid interval, Lyndon
decides to donate all his assets to his friend, Luna. The donation made is valid. If during the
lucid interval, Lyndon was drunk when he made the contract of donation, the donation is
voidable. If Lyndon sobers up and is still in his lucid interval, he may ratify the donation made to
Luna and it shall be deemed valid.