PROJECT JURISPRUDENCE

Reformation is that remedy by means of which a written instrument is amended or rectified so as to express or conform to the real agreement or intention of the parties when by reason of mistake, fraud, inequitable conduct, or accident, the instrument fails to express such agreement or intention. 

Reformation is that remedy by means of which a written instrument is amended or rectified so as to express or conform to the real agreement or intention of the parties when by reason of mistake, fraud, inequitable conduct, or accident, the instrument fails to express such agreement or intention.[1] In Veluz v. Veluz,[2] the Supreme Court laid down the differences between reformation of instruments and annulment of contract, to wit: The reformation of instruments presupposes a valid, existing contract , in which there had been a meeting of the minds of the parties but the instrument drawn up and signed by them does not correctly express the terms of their agreement while annulment presupposes a defective contract in which the minds of the parties did not meet, or the consent of one was vitiated. Moreover, for the reformation of instruments, equity of reformation is ordinarily limited to written agreements, and its purpose is to establish a...

Article 1359 of the Civil Code of the Philippines provides:  ART. 1359. When, there having been a meeting of the minds of the parties to a contract, their true intention is not expressed in the instrument purporting to embody the agreement, by reason of mistake, fraud, inequitable conduct or accident, one of the parties may ask for the reformation of the instrument to the end that such true intention may be expressed. If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the minds of the parties, the proper remedy is not reformation of the instrument but annulment of the contract. Reformation is that remedy by means of which a written instrument is amended or rectified so as to express or conform to the real agreement or intention of the parties when by reason of mistake, fraud, inequitable conduct, or accident, the instrument fails to express such agreement or intention.[1] For reformation to concur, the following requisites must be present: a) t...

Cause is the essential and impelling reason why a party assumes an obligation. The following are the classification of contracts according to cause: Onerous  or one the cause of which is the undertaking or the promise of the thing or service by the other party. Renumeratory  or one the cause of which is the service or benefit which is remunerated. Gratuitous  or one the cause of which is the mere liberality of the benefactor.

Article 1351 of the Civil Code provides: ART. 1351. The particular motives of the parties in entering into a contract are different from the cause thereof. (n) Motive is the purely personal or private reason which a party has in entering into a contract. It is different from the cause of the contract. Article 1351 embodies “a principle which is common to both Philippine law and American jurisprudence.”[1][2] The cause of the contract is the proximate reason of the parties to enter into a contract while motive is the remote reason of the parties in entering into a contract. The former is always the same for the contracting parties while the latter differs for each contracting party. Moreover, the illegality of the cause affects the existence or validity of the contract while the illegality of the motive does not affect the existence or validity of the contract. [1] Report of the Code Commission, p. 137. [2] De Leon. (2014). Obligations and Contracts.

Cause is the essential and impelling reason why a party assumes an obligation. Cause and object are different from each other. As to remuneration, cause is the service or benefit which is remunerated while object is the thing which is given remuneration.  As to donation, cause is the liberality of the donor or benefactor while object is the thing which is given or being donated.  As to the thing, cause is the prestation or promise of a thing or service by the other while object is the thing or service itself.  As to contracting parties, cause is different with respect to each part while object may be the same for both parties.

Article 1350 of Civil Code provides:  ART. 1350. In onerous contracts the cause is understood to be, for each contracting party, the prestation or promise of a thing or service by the other; in remuneratory ones, the service or benefit which is remunerated; and in contracts of pure beneficence, the mere liberality of the benefactor. (1274)  Cause (causa) is the essential or more proximate purpose or reason which the contracting parties have in view at the time of entering into the contract,[1] or, as expressed in another case, it is the “why of the contract, the essential reason which moves the contracting parties to enter into the contract.’’[2] It is the Civil Code term for consideration in Anglo-American or common law.[3] For cause to exist, the following requisites must concur: a) exists at the time the contract is entered into;[4] b) lawful;[5] and c) true or real.[6] [1] 8 Manresa 697; Republic vs. Cloribel, 36 SCRA 534 (1970).  [2] Gonzales vs. T...

The impossibility of the object of a contract may be: Physical , or when the thing or service in the very nature of things cannot exist (e.g., a dog that can fly) or be performed. Moreover, when we talk of services, the impossibility may be:     a) Absolute , or when the act cannot be done in any case so that nobody can perform it; or     b) Relative , or when it arises from the special circumstances of the case (e.g., to make payment to a dead person, to drive a car on flooded highways, etc.) or the special conditions or qualifications of the obligor (to paint a portrait by a blind person, etc.).[1][2] Legal , or when the thing or service is contrary to law, morals, good customs, public order, or public policy. [1] Articles 1266 and 1267, Civil Code. [2] De Leon. (2014). Obligations and Contracts.

Contract is the meeting of the minds between two persons whereby one bind himself with respect to the other, to give something or to render some services.[1] There is no contract unless  the following requisites concur: a) consent of the contracting parties; b) object certain which is the subject matter of the contract; and c) cause of the obligation which is established.[2] The object of the contract is its subject matter .[3] It is the thing, right or service which is the subject matter of the obligation arising from the contract.[4] The object of the contract can be all things or services, which includes future things.[5] In order that a thing, right, or service may be the object of a contract, it should be in existence at the moment of the celebration of the contract, or at least, it can exist subsequently or in the future. For a thing to be the object of the contract it must be: a) within the commerce of men[6]; b) not legally or physically impossible[7]; c) in existence...

Articles 1345 and 1346 of the Civil Code provide: ART. 1345. Simulation of a contract may be absolute or relative. The former takes place when the parties do not intend to be bound at all; the latter, when the parties conceal their true agreement. (n)  ART. 1346. An absolutely simulated or fictitious contract is void. A relative simulation, when it does not prejudice a third person and is not intended for any purpose contrary to law, morals, good customs, public order or public policy binds the parties to their real agreement. (n) Simulation is the declaration of a fictitious will, deliberately made by agreement of the parties, in order to produce, for the purposes of deception, the appearances of a judicial act which does not exist or is different with that which was really executed.[1] There exists an instrument, but there is no contract. In Tongoy v. CA,[2] the Supreme Court held that simulation of a contract is the act of deliberately deceiving others, by feigning or pr...

Article 1338 of the Civil Code of the Philippines provides: ART. 1338. There is fraud when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to. (1269) There is fraud if the following elements are present: a) it is made in bad faith; b) one party employed fraud or insidious words or machinations; c) due to fraud, the other party is induced to enter into a contract; d) the other party suffered damage or injury; e) it must be serious; and f) it must have been employed by one contracting party upon the other and not employed by both contracting parties nor by third persons. In Article 1339, failure to disclose facts, when there is a duty to reveal them, as when the parties are bound by confidential relations, constitutes fraud. A neglect or failure to communicate that which a party to a contract knows and ought to communicate constitutes concealment. In thi...

The concept of undue influence that vitiates a contract is discussed in Article 1337 of the Civil Code, to wit: ART. 1337. There is undue influence when a person takes improper advantage of his power over the will of another , depriving the latter of a reasonable freedom of choice. The following circumstances shall be considered: the confidential, family, spiritual and other relations between the parties, or the fact that the person alleged to have been unduly influenced was suffering from mental weakness, or was ignorant or in financial distress. (n) [Emphasis supplied] For undue influence to vitiate the contract, the following requisites must occur: a) there is an improper advantage; b) power over the will of another; and c) deprivation of the latter’s will of a reasonable freedom of choice. In Coso v. Fernandez,[1] the Supreme Court held that the rule as to what constitutes undue influence has been variously stated but the substance of the different statements is that, to b...

The first paragraph in Article 1335 of the Civil Code provides: ART. 1335. There is violence when in order to wrest consent, serious or irresistible force is employed. Violence requires the employment of physical force . Under Article 1335, to make consent defective, the force employed must be either serious or irresistible. In either case, consent is not free.[1] It is essential that the force employed must be the determining cause or reason for giving consent.[2] Violence is determined by the intention and the means employed. Physical force employed must be irresistible, or of such degree that victim has no other recourse under the circumstances but to submit. Such force is the determining cause in giving of consent. Moreover in Article 1336, violence or intimidation shall annul the obligation, although it may have been employed by a third person who did not take part in the contract. [1] Report of the Code Commission, p. 136. [2] De Leon. (2014). Obligations and Contra...

Paragraph 2 of Article 1335 of the Civil Code provides: There is intimidation when one of the contracting parties is compelled by a reasonable and well-grounded fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse, descendants or ascendants, to give his consent. Consent is vitiated when intimidation is present. For intimidation to vitiate the consent of a party to a contract, the following requisites must be present: a) one party is compelled to give his consent by a reasonable and well-grounded fear of an evil; b) the evil must be imminent and grave; c) the evil must be upon his person or property, spouse, descendants or ascendants; and d) the evil must be unjust.  To determine the degree of intimidation, the age, sex and condition of the person shall be borne in mind.[1] If a contract is signed merely out of reverential fear or the fear of displeasing a person to whom respect and obedience are due, the contract i...

Article 1330 of the Civil Code provides: ART. 1330. A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable. (1265a) Mistake is "a misunderstanding of the meaning or implication of something ” or a “wrong action or statement proceeding from a faulty judgment ."[1] In order that mistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or to those conditions which have principally moved one or both parties to enter into the contract.[2] There is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object of the contract.[3] For a contract to be voidable due to mistake, the following requisites must concur: a. The error must be substantial regarding:  1. The object of the contract (error in re) which may be:  Mistake as to the identity of the thing (error in corpore); Mistake as to the substance of the thing (error in substa...

Article 1324 of the Civil Code discusses the contract of option, to wit:  ART. 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) width="0%" Option contract is a preparatory contract giving a person for a consideration a certain period and under specified conditions within which to accept the offer of the offerer.[1] It is a separate agreement distinct from the contract which the parties may enter into upon the consummation of the option.[2]  Moreover, if the option contract is with consideration, the offeror cannot unilaterally withdraw his offer. If it is without consideration, the offeror may withdraw by communicating withdrawal to the offeree before acceptance.  The pertinent provision provides the general rule regarding offer and acceptance: when the offerer ...

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.[1] The following are disqualified to enter into a contract: a. Those who are under civil interdiction for transactions inter vivos[2]; b. Undischarged insolvents[3]; c. Husband and wife cannot donate to each other [4], nor sell to each other if the marriage is under the regime of Absolute Community of Property [5]; and d. The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another:[6]  (1) The guardian, the property of the person or persons who may be under his guardianship;  (2) Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given;  (3) Executors and administrators, the property of the estate under administration;  (4) Public officers and empl...

Paragraph 2 of Article 1319 of the Civil Code discusses the theory of cognition: 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. (1262a) With regard to contracts between absent persons, the acceptance may be transmitted by any means which the offerer has authorized the offeree to use.[1] The above provision is the theory of cognition or information . An example of constructive knowledge is where the letter or telegram containing the acceptance is received by the offerer who for some reason did not read it but not where he could not have read it as when he was absent or physically incapacitated at the time of the receipt of the same. The presumption, however, is that the offerer read the contents thereof or came to know of the acceptance.[2] Furthermore, an offer can be revoked. In Laudicio v. Arias[3], the ...

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.[1] A contract is perfected by mere consent. From the moment of a meeting of the offer and the acceptance upon the object and the cause that would constitute the contract, consent arises. However, “the offer must be certain” and “the acceptance seasonable and absolute; if qualified, the acceptance would merely constitute a counteroffer.[2] An offer is a unilateral proposition which one party makes to the other for the celebration of the contract.[3] Offer is a proposal made by one party (offerer) to another to enter into a contract. It is more than an expression of desire or hope. It is really a promise to act or to refrain from acting on condition that the terms thereof are accepted by the person (offeree) to whom it is made.[4]  An offer is terminated if: a. there is a rejection by the oferee; b. incapacity of...

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.[1] The following are the classifications of a contract: As to subject matter.  a. Things; or b. Services. As to formation. a. Real - delivery, actual or constructive, is required in addition to consent; b. Consensual - consent is sufficient to enter into a contract; or c. Formal - there are special formalities required to enter into a contract, e.g. marriage. As to relation to other contracts. a. Principal - can exist alone; b. Accessory - depends on other contract for existence; or c. Preparatory - preliminary step towards the celebration of a subsequent contract. As to form. a. Formal - there are special formalities required to enter into a contract, e.g. marriage; or b. Informal - may be entered into in whatever form as long as there is consent, object and cause. As to cause. a. Onerous - there is an exchang...