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

Entrepreneur, CPA Mentor, Stock market Newbie Mentor, Influential Author and Master's Degree in International Business graduate in Hult International Business School, UK. A father of two lovely daughters.
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