Art.1305 Contracts is a meeting of minds between two persons whereby bind themselves with respect to the other to give something, or to render some services.

  • All agreement between parties are binding provided that is not contrary to law, public customs, public policies and morals.
  • Constitutional limitations – no law shall be pass impairing the law of obligations and contracts.
  • Agreement in restraint of trade is void because this is against public policy.
  • Interest per annum of 66% or 5.5% per month is void.

Essential Elements of Contract:

  1. Consent
  2. Object
  3. Cause
  4. Delivery – there is no perfected contract without delivery in real contract

*Absent of one of the elements, the contract is void.

Kinds of Contract:

Consensual – mere consent. Ex. Contract of sale, agency and partnership

Principal – can stand alone.

Accessory – depend upon the existence of another contract.They cannot exist without the principal contract. Ex. Mortgage, Pledge.

Preparatory – ex. Partnership – beginning contract to enter other contract.

Unilateral – only one party has obligation.

Bilateral – both party has obligation.

Nominate – contract has a name.

Innominate contract – no name given by law.




About Jonathan Ruiz CPA

Newbie Mentor and one of the influential author in the Philippines setting. His also the founder of PAM Academy and Developer of PAM PSE TRACKER application.
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