OBLIGATIONS AND CONTRACTS

minds

Book IV: Civil Code of the Philippines

Finals Reviewer (Judge Fransiscos lectures || Mixed
notes and discussion by Tolentino and Jurado)

I. CONTRACT:

CONTRACT

OBLIGATION

One of the sources of

Obligation is the legal tie or

obligation as provided for

relation itself that exist after

under Article 1157

a contract has been entered

into.

Stages of a contract:
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 of the minds

Contracts Phases:
1.

Preparatory Stage and Generation

- Preliminary preparation, conception of

generation, period of negotiation, ending

Has a sense of autonomy

at the moment of agreement of the

-

A contract does not have to be in writing

parties

2.
Contracts

Quasi-Contracts

Perfection

Law
Set of rules or rule

Bilateral act which

Unilateral act by a

of conduct

involves two (2)

person which

observed by

persons

creates an

persons.

- Birth of the contract

- Moment when parties come to an
agreement on the terms of the contracts

obligation who
enjoyed the benefit Element of
from another

consensuality is
not present

terms agreed upon in the contract

which do not arise

out of an
understanding
between the parties
but when law
demands it.
With meeting of the Without meeting of No need for the

the minds

Consummation
- Fulfillment or performance of the

These are contracts

minds

3.

meeting of the

II. CLASSIFICATION OF CONTRACTS:

2. Accessory those which can exist only as a

consequence of, or in relation with another prior
contract. E.G: Chattel Mortgage

A. AS TO THE PERFECTION OF THE CONTRACT:

1. Consensual contract perfected by mere consent.

C. ACCORDING TO THE PRIVITIES OBLIGATED BY

THE CONTRACT

2. Solemn contracts requires certain formalities /

special formalities in order to be perfected.

1. Unilateral those which give risk to an obligation

for only one of the parties

3. Real contracts Delivery is required in the

perfection of the contract

2. Bilateral those which give rise to reciprocal

obligation for both parties

4. Contracts of Pledge and Mortgage:

ART 2085: The following requisites are
essential to the contracts of pledge and
mortgage:
(1) That they be constituted to secure the
fulfillment of a principal obligation;
(2) That the pledgor or mortgagor be the
absolute owner of the thing pledged or
mortgaged;
(3) That the persons constituting the pledge or
mortgage have the free disposal of their
property, and in the absence thereof, that
they be legally authorized for the purpose.

D. TIME OF FULFILLMENT

1. Executory contract that the promises of the

contract are not fully performed immediately. An
example of an executory contract would be an
apartment lease.

2. Executed contract A contract in which the

promises are made and completed immediately, like in
the purchase of a product or service

B. AS TO THEIR RELATION TO OTHER

CONTRACTS / DEPENDENCE TO OTHER

3. Partially executed contract - if some obligations

have been performed, it will be a partly executed
contract and a partially executory contract.

1. Principal those which can subsist independently

from other contracts and whose purpose can be
fulfilled by themselves.

E. ACCORDING TO NAMES/ NORMS REGUALTING

THEM

3. Remuneratory - one where a party gives

something to another because of some service or
benefit given or rendered by the latter to the former,
where such service or benefit was not due as a legal
obligation

1. Nominate those which have their own

individuality and are regulated own individuality and
are regulated by provisions of law (e,g sale, lease)

III. CHARACTERISTICS OF CONTRACTS:

1. Autonomy

2. Innominate those which lack individuality and

are not regulated by special provisions of law.

2. Consensuality
3. Mutuality

F. ACCORDING TO THE FULFILLMENT

4. Obligatory Force
5. Relativity

1. Commutative when the undertaking of one party

is considered the equivalent of that of the other.

I. AUTONOMY
Art. 1306. The contracting parties may establish such

2. Aleatory when it depends upon the happening of

an uncertain event or contingency both as to benefit or
loss.

G. ACCORDING TO CAUSE

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

II. CONSENSUALITY
Denoting a contract founded upon and completed by

1. Gratuitous those in which one of the parties

the mere consent of the contracting parties.

proposes to give to the other a benefit without any

equivalent or compensation.
Art. 1356. Contracts shall be obligatory, in whatever
form they may have been entered into, provided all the
2. Onerous those in which each of the parties
aspires to procure for himself a benefit through the
giving of an equivalent or compensation.

essential requisites for their validity are present.

However, when the law requires that a contract be in
some form in order that it may be valid or enforceable,
or that a contract be proved in a certain way, that
requirement is absolute and indispensable. In such
cases, the right of the parties stated in the following
article cannot be exercised.

1311 P2: If a contract should contain some stipulation

III. MUTUALITY
Art. 1308. The contract must bind both contracting
parties; its validity or compliance cannot be left to the
will of one of them.

in favor of a third person, he may demand its

fulfillment provided he communicated his acceptance
to the obligor before its revocation. A mere incidental
benefit or interest of a person is not sufficient. The
contracting parties must have clearly and
deliberately conferred a favor upon a third person.
REQUISITES:

IV. OBLIGATORY FORCE

Art. 1159. Obligations arising from contracts have the
force of law between the contracting parties and
should be complied with in good faith.

1. Contain some stipulation in favor of a third

person.
2. Clear and deliberately conferred in favor a
third person
3. Communication

Art. 1315. Contracts are perfected by mere consent,

and from that moment the parties are bound not only
to the fulfillment of what has been expressly stipulated
but also to all the consequences which, according to
their nature, may be in keeping with good faith, usage

(2) Accion Directa - Allows the creditor to sue the

debtors debtor by way of direct action

and law.
(a) Lessor v Sublessors (1651 1652)
See also 1356

(b) Laborers / Material men v Owner (1729)

(c) Negotiorum Gestio (2150, 2151)

V. RELATIVITY

(d) Creditor may rescind contracts intended to

defraud them (1313 & 1381)

GR: Art. 1311: Contracts take effect only (1) between

the parties, (2) their assigns and heirs, except in
case where the rights and obligations arising from
the contract are not transmissible by their nature,
or by stipulation or by provision of law. The heir is

(e) Tortuous contractual interference

(1314: Any third person who induces another
to violate his contract shall be liable for
damages to the other contracting party.)

not liable beyond the value of the property he received

from the decedent.

IV. ESSENTIAL REQUISITES OF CONTRACTS

XPT: (1) Stipulations in favor of a third party

A. Consent
B. Object

C. Consideration/ Cause / Causa

How is consent manifested?

A. CONSENT

Concept: the meeting or the accord of the intent and

desire of the parties upon its physical matter or
course.
-

Concurrence of the wills of the contracting

parties with respect to the object and cause

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.

which shall constitute the contract.

***Offer = Acceptance***

Essential requisites of CONSENT:

(1) Consent must be manifested by the concurrence of

Offer Proposal made by one party to another to enter

into a contract.

the offer and acceptance (Arts 1319 1326)

Must be certain or definite.
(2) The contracting parties must possess the
necessary legal capacity (Art1327)
(3) The consent must be intelligent, free, spontaneous,
and real (Arts 1330 1346)

Perfection of Contract
Article 1315. Contracts are perfected by mere
consent, and from that moment the parties are
bound not only to the fulfillment of what has been
expressly stipulated but also to all the
consequences which, according to their nature,
may be in keeping with good faith, usage and law.
(1258)

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

Acceptance Also be certain and definite.

-Must be absolute.
Art. 1320. An acceptance may be express or implied.

*The acceptance of an offer must be absolute or

(1) Consent must be manifested by the concurrence of
the offer and acceptance (Arts 1319 1356)

unqualified, that is, it must be identical in all respects

with that of the offer so as to produce consent or
meeting of the minds. If the acceptance is qualified, as
when it is subject to a condition, it merely constitutes

a counter-offer which, in law, a considered rejection of

If the option is founded upon a consideration, the

the original offer and an attempt by the parties to

offeror cannot withdraw his offer.

enter into a contract in different basis.

Counter-offer Qualified acceptance; involves a new

proposal; rejection of the original offer.

(2) The contracting parties must possess the

necessary legal capacity (Art1327)

Amplified acceptance There is a perfected contract

with regard the original offer but with regard to the
additional, the offense is now making a counter offer.

Art. 1327. The following cannot give consent to a

contract:
(1) Unemancipated minors;

Effect of period to decide

(2) Insane or demented persons, and deaf-mutes

who do not know how to write.

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.

EFFECTS:
Defective contract effect of incapacitated persons
entering into a contract not through a parent or
agent.
Voidable contracts only one of the contracting
parties is incapacitated to give consent.
Unenforceable contracts when both parties are
incapacitated to give consent.

Withdrawal of the offer:

(3) The consent must be intelligent, free, spontaneous,
and real (Arts 1330 1346)
GR: Offeror may still withdraw the offer so long as he
still has no knowledge of the acceptance by the offeree.
-

Effect of withdrawal is immediate

Implied from the rule that he is not bound by

the acceptance except from the time it comes to
his knowledge; its confirmed to certain intent
by Article 1324.

1330: A contract where consent is given through

mistake, violence, intimidation, undue influence, or
fraud is voidable.
Vitiated Consent
Article 1331. 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.
Mistake as to the identity or qualifications of one of
the parties will vitiate consent only when such
identity or qualifications have been the principal

cause of the contract. A simple mistake of account

shall give rise to its correction. (1266a)
Violence and Intimidation
Article 1335. There is violence when in order to
wrest consent, serious or irresistible force is
employed. 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. To determine the degree of
intimidation, the age, sex and condition of the person
shall be borne in mind.
A threat to enforce one's claim through competent
authority, if the claim is just or legal, does not vitiate
consent. (1267a)
Violence and Intimidation - Effects
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. (1268)
Undue Influence
Article 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)
Fraud
Article 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)
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. (n)
Misrepresentation - Effects
Article 1342. Misrepresentation by a third person
does
not
vitiate
consent,
unless
such
misrepresentation has created substantial mistake
and the same is mutual. (n)
Fraud - Effects

Article 1344. In order that fraud may make a

contract voidable, it should be serious and should
not have been employed by both contracting parties.
Incidental fraud only obliges the person employing it
to pay damages. (1270)

B. OBJECT OF CONTRACTS

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.
XPT: (1) 1080: Should a person make partition
of his estate by an act inter vivos, or by will,
such partition shall be respected, insofar as it
does not prejudice the legitime of the
compulsory heirs.
(2) Marriage Settlements in future spouses.
Article 1349. The object of every contract must be
determinate as to its kind. The fact that the quantity
is not determinate shall not be an obstacle to the
existence of the contract, provided it is possible to
determine the same, without the need of a new
contract between the parties.
Essential Requisites of OBJECT:
(1) Must be within the commerce of man
-susceptible of appropriation and transmissible from
one person to another
(2) The object should be real or possible;
- it should exist at the moment of the celebration of
the contract, or at least, it can exist subsequently or
in the future.
(3) The object should be licit or lawful;
-should not be contrary to law, morals, good
customs, public order or public policy.
(4) The object should be determinate
- possible of determination as to its kind since
Article 1378 P2 unequivocally states that If the
doubts are cast upon the principal object of the
contract in such a way that it cannot be known what

may have been the intention or will of the parties, the

contract shall be null and void.

C. CAUSE OF CONTRACTS

Cause of Contract
Article 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.
Art. 1351. The particular motives of the parties in
entering into a contract are different from the cause
thereof.

Article 1353. The statement of a false cause in

contracts shall render them void, if it should not be
proved that they were founded upon another cause
which is true and lawful.
RIGHT TO REPURCHASE - Presumed simulation.
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.

ABSOLUTE FICTITIOUS

RELATIVELY

CONTRACT

SIMULATED

Intention is not to be

CONTRACT
when it does not

bound at all.

prejudice a third person

and is not intended for
any purpose contrary to
law, morals, good

Essential Requisites of CAUSE:

customs, public order or

(1) The cause should be in existence at the time of

the celebration of the contract (1352)
(2) The cause should be licit or lawful (1354); and
(3) Cause should be true (1353), if false it will render
the contract void.

parties to their real

Presumption in Cause:
Art. 1354. Although the cause is not stated in the
contract, it is presumed that it exists and is lawful,
unless the debtor proves the contrary.
Art. 1355. Except in cases specified by law, lesion or
inadequacy of cause shall not invalidate a contract,
unless there has been fraud, mistake or undue
influence (voidable contract if any of the three (3) is
present).
Effect of Void Cause:

public policy binds the

agreement.
VOID

Incidents that may involve cause/ cause /

consideration:
1. Non-existent contracts
2. False cause in an absolutely simulated contract
3. False cause in a relatively simulated contract
4. Inadequate cause

5. Contracts wherein there is defect in consent

and 1470 Gross inadequacy of price does not
affect a contract of sale, except as it may
indicate a defect in the consent, or that the
parties really intended a donation or some other
act or contract
6. Failure of Cause synonymous to Breach
(1170)
7. Anti-chresis (2134)

EXCEPTIONS: (When the law requires that a contract

be in some form in order that it may be valid os
enforeceable.)
Article 1358. The following must appear in a public
document:
(1) Acts and contracts which have for their object the
creation,
transmission,
modification
or
extinguishment of real rights over immovable
property; sales of real property or of an interest
therein are governed by articles 1403, No. 2, and
1405;
(2) The cession, repudiation or renunciation of
hereditary rights or of those of the conjugal
partnership of gains;
(3) The power to administer property, or any other
power which has for its object an act appearing or
which should appear in a public document, or should
prejudice a third person;
(4) The cession of actions or rights proceeding from
an act appearing in a public document.
All other contracts where the amount involved
exceeds five hundred pesos must appear in writing,
even a private one. But sales of goods, chattels or
things in action are governed by articles, 1403, No. 2
and 1405. (1280a)
Contracts that must be in writing:
1. Art 748 The donation of a movable may be made
orally or in writing.
An oral donation requires the simultaneous delivery
of the thing or of the document representing the right
donated.

FORMS OF CONTRACTS
Article 1356. Contracts shall be obligatory, in
whatever form they may have been entered into,
provided all the essential requisites for their validity
are present. However, when the law requires that a
contract be in some form in order that it may be valid
or enforceable, or that a contract be proved in a
certain way, that requirement is absolute and
indispensable. In such cases, the right of the parties
stated in the following article cannot be exercised.
GR: Contracts shall be obligatory, in whatever form
they may have been entered into, provided all the
essential requisites for their validity are present.

If the value of the personal property donated exceeds

five thousand pesos, the donation and the
acceptance shall be made in writing, otherwise, the
donation shall be void.
2. Art 749 In order that the donation of an
immovable may be valid, it must be made in a public
document, specifying therein the property donated
and the value of the charges which the donee must
satisfy.
The acceptance may be made in the same deed of
donation or in a separate public document, but it
shall not take effect unless it is done during the
lifetime of the donor.

If the acceptance is made in a separate instrument,

the donor shall be notified thereof in an authentic
form, and this step shall be noted in both
instruments
3. Art 1744 A stipulation between the common
carrier and the shipper or owner limiting the liability
of the former for the loss, destruction, or
deterioration of the goods to a degree less than
extraordinary diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than
the service rendered by the common carrier; and
(3) Reasonable, just and not contrary to public policy.
4. Art 1773 - contract of partnership is void,
whenever immovable property is contributed thereto,
if an inventory of said property is not made, signed
by the parties, and attached to the public
instrument.
5. Art 1874 - When a sale of a piece of land or any
interest therein is through an agent, the authority of
the latter shall be in writing; otherwise, the sale shall
be void

One party was mistaken and the other party acted

fraudulently (Art. 1362)
One party mistaken, the other knew or believed
that the instrument does not show their real intent
but concealed that fact to the former (Art. 1363)
Through the ignorance, lack of skill, negligence or
bad faith on the part of the person drafting the
instrument or the clerk or typist. (Art. 1364)
Parties agree upon the mortgage or pledge of a real
or personal property, but the instrument states that
the property is sold absolutely or with a right of
repurchase
(Art. 1365)
When there can be no reformation:
Simple donation inter vivos wherein no condition is
imposed
Wills
When the real agreement is void (Art. 1366)
When one of the parties brought an action to
enforce the instrument (Art. 1367)

6. Art 1956 - No interest shall be due unless it has

been expressly stipulated in writing.
7. Art 2134 - The amount of the principal and of the
interest shall be specified in writing; otherwise, the
contract of antichresis shall be void.

REFORMATION OF CONTRACTS
REFORMATION used when the true intention of
the parties to a perfected and valid contract are not
expressed in the instrument purporting to embody
their agreement by reason of mistake, fraud,
inequitable conduct or accident
based on justice and equity
Requisites:
Meeting of the minds of the contracting parties
True intention not expressed in the instrument
Such failure to express their true intention is due to
mistake, fraud, inequitable, conduct, or accident.
When can one party ask for the reformation of the
contract
(Art. 1360-1369)
Mutual mistake of the parties (Art. 1361)

10

INTERPRETATION OF CONTRACTS
Article 1378. When it is absolutely impossible to
settle doubts by the rules established in the
preceding articles, and the doubts refer to incidental
circumstances of a gratuitous contract, the least
transmission of rights and interests shall prevail. If
the contract is onerous, the doubt shall be settled in
favor of the greatest reciprocity of interests.
If the doubts are cast upon the principal object of the
contract in such a way that it cannot be known what
may have been the intention or will of the parties, the
contract shall be null and void.

Conditions of Recision:
1. Contract is valid and legally effective
2. Who may file? Injured party
3. Against whom? Persons responsible
4. Conditions for exercise of Recission:

DEFECTIVE CONTRACTS
1.
2.
3.
4.

Rescissible contracts
Voidable contracts
Unenforceable contracts
Void or inexistent contracts

Recissible Contracts
Article 1381. The following contracts are rescissible:
(1) Those which are entered into by guardians
whenever the wards whom they represent suffer
lesion by more than one-fourth of the value of the
things which are the object thereof;
(2) Those agreed upon in representation of absentees,
if the latter suffer the lesion stated in the preceding
number;
(3) Those undertaken in fraud of creditors when the
latter cannot in any other manner collect the claims
due them;
(4) Those which refer to things under litigation if they
have been entered into by the defendant without the
knowledge and approval of the litigants or of
competent judicial authority;
(5) All other contracts specially declared by law to be
subject to rescission. (1291a)
Recission Effects
Article 1385. Rescission creates the obligation to
return the things which were the object of the
contract, together with their fruits, and the price
with its interest; consequently, it can be carried out
only when he who demands rescission can return
whatever he may be obliged to restore.
Neither shall rescission take place when the things
which are the object of the contract are legally in the
possession of third persons who did not act in bad
faith.
In this case, indemnity for damages may be
demanded from the person causing the loss. (1295)

11

a. No other means to obtain reparation

b. He who demands recission must be able to
return what he may be obliged to restore
c. Recission shall not take place of the object
is legally in the possession of a 3 rd party who
acted in good faith,
d. the action must not have prescribed
Fraudulent transactions presumption
Article 1387. All contracts by virtue of which the
debtor alienates property by gratuitous title are
presumed to have been entered into in fraud of
creditors, when the donor did not reserve
sufficient property to pay all debts contracted
before the donation.
Alienations by onerous title are also presumed
fraudulent when made by persons against whom
some judgment has been rendered in any instance or
some writ of attachment has been issued. The
decision or attachment need not refer to the property
alienated, and need not have been obtained by the
party seeking the rescission.
In addition to these presumptions, the design to
defraud creditors may be proved in any other manner
recognized by the law of evidence. (1297a)
Prescription
Art. 1389. The action to claim rescission must be
commenced within four years.
For persons under guardianship and for absentees,
the period of four years shall not begin until the
termination of the former's incapacity, or until the
domicile of the latter is known.

Voidable Contact
Article 1390. The following contracts are voidable
or annullable, even though there may have been no
damage to the contracting parties:
(1) Those where one of the parties is incapable of
giving consent to a contract;
(2) Those where the consent is vitiated by mistake,
violence, intimidation, undue influence or fraud.

These contracts are binding, unless they are

annulled by a proper action in court. They are
susceptible of ratification. (n)
Voidable Period to annul
Article 1391. The action for annulment shall be
brought within four years. This period shall begin: In
cases of intimidation, violence or undue influence,
from the time the defect of the consent ceases. In
case of mistake or fraud, from the time of the
discovery of the same. And when the action refers to
contracts entered into by minors or other
incapacitated
persons,
from
the
time
the
guardianship ceases. (1301a)

(3) Those where both parties are incapable of giving

consent to a contract.

Annulment Effects
Article 1398. An obligation having been annulled,
the contracting parties shall restore to each other the
things which have been the
subject matter of the contract, with their fruits, and
the price with its interest, except in cases provided by
law. In obligations to render service, the value thereof
shall be the basis for damages. (1303a)
Unenforceable Contract
Article
1403.
The
following
contracts
unenforceable, unless they are ratified:

are

(1) Those entered into in the name of another person

by one who has been given no authority or legal
representation, or who has acted beyond his powers;
(2) Those that do not comply with the Statute of
Frauds as set forth in this number. In the following
cases an agreement hereafter made shall be
unenforceable by action, unless the same, or some
note or memorandum, thereof, be in writing, and
subscribed by the party charged, or by his agent;
evidence, therefore, of the agreement cannot be
received without the writing, or a secondary evidence
of its contents:
(a) An agreement that by its terms is not to be
performed within a year from the making thereof;
(b) A special promise to answer for the debt, default,
or miscarriage of another;
(c) An agreement made in consideration of marriage,
other than a mutual promise to marry;

12

(d) An agreement for the sale of goods, chattels or

things in action, at a price not less than five hundred
pesos, unless the buyer accept and receive part of
such goods and chattels, or the evidences, or some of
them, of such things in action or pay at the time
some part of the purchase money; but when a sale is
made by auction and entry is made by the auctioneer
in his sales book, at the time of the sale, of the
amount and kind of property sold, terms of sale,
price, names of the purchasers and person on whose
account the sale is made, it is a sufficient
memorandum;
(e) An agreement for the leasing for a longer period
than one year, or for the sale of real property or of an
interest therein;
( f) A representation as to the credit of a third person.

Void Contracts
Article 1409. The following contracts are inexistent
and void from the beginning:
(1) Those whose cause, object or purpose is contrary
to law, morals, good customs, public order or public
policy;
(2) Those which are absolutely simulated or fictitious;
(3) Those whose cause or object did not exist at the
time of the transaction;
(4) Those whose object is outside the commerce of
men;
(5) Those which contemplate an impossible service;
(6) Those where the intention of the parties relative to
the principal object of the contract cannot be
ascertained;
(7) Those expressly prohibited or declared void by law.
These contracts cannot be ratified. Neither can the
right to set up the defense of illegality be waived.
Unlawful cause Rules
Article 1412. If the act in which the unlawful or
forbidden cause consists does not constitute a
criminal offense, the following rules shall be
observed:
(1) When the fault is on the part of both contracting
parties, neither may recover what he has given by
virtue of the contract, or demand the performance of
the other's undertaking;

(2) When only one of the contracting parties is at

fault, he cannot recover what he has given by reason
of the contract, or ask for the fulfillment of what has

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been promised him. The other, who is not at fault,

may demand the return of what he has given without
any obligation to comply his promise. (1306)