Report for CLJ

Art. 1305 – Art. 1317

Article 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 some service
Definition: A contract, from the Latin "contractus" and from the French "contract," is "a juridical
convention manifested in legal form, by virtue of which, one or more persons (or parties) bind themselves
in favor of another or others, or reciprocally, to the fulfillment of a prestation to give, to do or not to do."
Ex: one of an example of this article: Is A rental agreement. A landlord agrees to let a tenant live in an
apartment for a set time in exchange for rent. The contract details things like rent amount, lease duration,
responsibilities for utilities and maintenance, and any rules for the apartment. Both parties are bound to
the contract, ensuring a habitable apartment for the tenant and timely rent payment from the tenant.
Article 1306: The contracting parties may establish such 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.
Ex: You buy a car from a dealership. The purchase agreement includes terms like price, payment details,
warranties, and delivery date. Both you and the dealership agree to these terms, which must comply with
laws, morals, and public policy. This contract protects both parties and provides a legal framework for
any disputes.
Article 1307: Innominate contracts shall be regulated by the stipulations for the parties, by the provisions
of title I and II of this book, by the rules governing most analogous nominate contracts, and the by the
customs of the place.
Must say: Article 1307 of the Civil Code of the Philippines states that innominate contracts are governed
by the stipulations agreed upon by the parties, the provisions outlined in Title I and II of the Civil Code,
rules applicable to similar named contracts, and customs of the location where the contract is executed.
This article emphasizes that innominate contracts, which are contracts not falling under specific named
categories, should be regulated based on the agreements made by the parties, relevant legal provisions,
similar contract rules, and customary practices in the area where the contract is enforced.
Tittle I and II:
Title I of the Civil Code of the Philippines pertains to "Persons," which includes provisions related to the
rights and obligations of individuals, citizenship, family relations, and other matters concerning legal
personality and capacity.
Title II of the Civil Code of the Philippines focuses on "Civil Personality," covering topics such as natural
persons, juridical persons (corporations, partnerships, associations), domicile, and the rights and
obligations of individuals in legal relationships.

Scenario:
  Person A: Owns a collection of rare books.
 Person B: Owns a vintage bicycle.
Provision: They agree to barter Person A's rare books for Person B's vintage bicycle, creating an
innominate contract.
Application of Article 1307:
1. Stipulations of the Parties:
o Person A gives Person B the rare books.

o Person B gives Person A the vintage bicycle.

o They agree on a specific date and location for the exchange.

2. Provisions of Title I (Obligations):

o Both must act in good faith and fulfill their obligations.

o If Person B fails to deliver the bicycle, Person A can demand fulfillment or seek
compensation.
3. Provisions of Title II (Contracts):
o The agreement is valid with consent, lawful objects (books and bicycle), and a lawful
cause (exchange).
o Ambiguities are resolved based on the mutual intent of the parties.

4. Analogous Nominate Contracts:

o If a dispute arises about the quality of items, rules for sales contracts may apply by
analogy.
5. Customs of the Place:
o They follow local customs, like inspecting items beforehand.

Example Application: Person A and Person B meet to exchange items. Person A finds the bicycle in
worse condition than described.
1. Stipulations of the Parties: They review their agreement for condition specifications.
2. Title I Provisions: They act in good faith to resolve the issue.
3. Title II Provisions: They interpret the contract to understand the intent regarding quality.
4. Analogous Nominate Contracts: They might use sales contract principles to assess the bicycle's
condition.
5. Customs of the Place: They consider local bartering practices, like renegotiating terms or
providing compensation.
By applying Article 1307, the barter agreement is regulated, ensuring a fair and enforceable exchange.
Article 1308: The contracts must bind both contracting parties; its validity or compliance cannot be left to
the will of one of them.
Must say: This article emphasizes the principle of mutual agreement and commitment in contracts,
ensuring that both parties are equally responsible for upholding their respective obligations and honoring
the terms of the agreement.
Ex: In a scenario where a freelance graphic designer contracts with a small business owner to create a
logo, the agreement typically covers the scope of work, timeline, compensation, intellectual property
rights, and confidentiality. Both parties are obligated by the contract terms: the designer commits to
delivering the logo as specified and on time, while the business owner agrees to pay according to the
terms and respect the designer's rights. This contract serves as a legal agreement ensuring clarity,
protection of rights, and fulfillment of responsibilities between the parties involved.
Breaching a contract can lead to several legal consequences. The non-breaching party might seek
damages for losses, get a court order for specific performance to enforce the contract, terminate the
agreement, claim liquidated damages, obtain injunctions to prevent or require certain actions, and have
the breaching party cover legal costs. Understanding these repercussions and fulfilling obligations in
good faith is crucial to avoid such outcomes.
Article 1309: The determination of the performance may be left to a third person, whose decision shall
not be binding until it has been made known to both contracting parties.
Must say: Article 1309 pertains to situations where the details of how a contract will be performed are
left to the discretion of a third person. The decision made by this third person only becomes binding once
it is communicated to both parties involved in the contract.
Key Points:
1. Third Person's Role: A third person can be given the authority to determine how the contract
will be carried out.
2. Non-Binding Until Notified: The decision of the third person is not effective or binding until
both contracting parties are informed.

Example:
 Construction Contract: Imagine a contract between a homeowner and a builder where they
agree that an architect will decide on the specific materials to be used. The architect's decision on
the materials will only be binding once the architect communicates their decision to both the
homeowner and the builder.

Article 1310: The determination shall not be obligatory if it is evidently inequitable. In such case, the
courts shall decide what is equitable under the circumstances.
Must say: Article 1310 says that if an agreement or decision seems obviously unfair, it doesn't have to be
followed. Instead, the courts will step in and decide what is fair based on the situation.
1. Unfair Agreement: If an agreement is clearly unfair, it doesn't have to be followed.
2. Court's Role: The courts will decide what is fair.
3. Purpose: To make sure things are fair for everyone involved.
This means that the law wants to make sure that agreements or decisions are fair and reasonable for
everyone. If something isn't fair, the courts can change it to make it fair.
Ex: Imagine two friends, Alex and Ben, make a deal where Alex agrees to sell his bike to Ben for 10,000.
Later, they find out that the bike is actually only worth 2,000. This deal is obviously unfair to Ben.
According to Article 1310, Ben doesn't have to pay the 10,000 because the deal is clearly unfair. Instead,
they can go to court, and the court will decide what a fair price for the bike should be, likely closer to
2,000.
Article 1311: Contracts take effect only between the parties, 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 of law. The heir is not liable beyond the value of the property he received from the decedent.
Must say: Article 1311 states that contracts generally only affect the people who made the agreement, as
well as their assigns (those who the contract is assigned to) and heirs (those who inherit from them).
However, if the contract says that the rights and obligations can't be transferred, or if the law states so,
then it can't be passed on to others.
Additionally, if someone inherits a contract, they are only responsible for it up to the value of what they
inherited. They won't owe more than what they received from the person who passed away.
1. Who is Affected: Contracts are usually only for the people who signed them and their heirs or assigns.
2. Exceptions: Some contracts can't be passed on if the contract itself or the law says so.
3. Limit of Liability: Heirs only have to honor contracts up to the value of what they inherited.
Ex: Imagine Maria signs a contract to pay for a car loan of ₱500,000. If Maria passes away and her
daughter Anna inherits her estate, Anna would only need to continue paying the loan if she inherits
property worth ₱500,000 or more.
If Anna only inherits property worth ₱300,000 from Maria, Anna is only responsible for paying ₱300,000
towards the car loan. She doesn't have to pay the remaining ₱200,000 out of her own pocket because her
liability is limited to the value of what she inherited.
If ma’am ask me who’s going to pay 200k: If Anna is only responsible for paying ₱300,000, the
remaining ₱200,000 of the debt may not be fully paid off from the inheritance. In such cases, the
remaining debt would typically be settled according to the laws on debt and inheritance. This might
include:
1. Other Assets: If there are other assets in Maria's estate, those might be used to cover the remaining
₱200,000.
2. Creditor's Loss: If there are no other assets, the creditor might have to accept the loss of the remaining
₱200,000, as Anna is not personally liable beyond the value of what she inherited.
In essence, Anna does not have to pay more than what she inherited, so any remaining debt might not be
paid unless there are additional assets in Maria's estate.
Scope of Intransmissibility:
1. By Nature: Contracts involving personal skills or qualifications can't be transferred. For example, if a
famous artist is hired to paint a picture, this contract can't be transferred to another artist.
2. By Stipulation: The contract may explicitly state that certain rights and obligations cannot be
transferred. This is based on the principle of autonomy, where parties can agree on the terms of their
contract.
3. By Provision of Law: Some legal relationships end upon death. For example, a contract to perform a
personal service may end if the person who is supposed to perform the service dies.
Exceptions Where Contracts Affect Third Parties:
1. Article 1311: Contracts with stipulations in favor of third parties.
- Example: If a contract clearly gives a benefit to a third person, that third person can demand the
benefit if they accept it before the contract is revoked.
2. Article 1312: Contracts creating real rights.
- Example: Property rights created by a contract, such as a mortgage, can affect third parties.
3. Article 1313: Contracts intended to defraud creditors.
- Example: If a contract is made to cheat creditors, it can be challenged by those creditors.
4. Article 1314: Contracts violated by third-party inducement.
- Example: If a third person induces someone to break a contract, the affected party can take action
against that third person.

Example:
Maria signs a contract to give a scholarship to a student named Ben. The contract states that if Maria dies,
the scholarship should continue to be given from her estate. Maria's daughter, Anna, inherits her estate
worth ₱500,000. If the scholarship is ₱300,000, Anna must honor the scholarship up to the value she
inherited. If Anna only inherited ₱200,000, she is only responsible for ₱200,000 towards the scholarship.

Exception Scenario:
If the contract explicitly states that only Maria can give the scholarship due to her unique qualifications,
then the contract ends with her death and the obligation does not transfer to Anna.
If Anna is asked who pays the remaining amount beyond what she inherited, it might be settled using
other assets in Maria's estate or the creditor (in this case, the scholarship recipient) may not receive the
remaining amount if there are no other assets.
Article 1312 - THIRD PERSONS ARE BOUND BY CONTRACTS CREATING REAL RIGHTS
 - In contracts creating real rights, third persons who come into possession of the object of the
contract are bound thereby, subject to the provisions of the Mortgage Law and the Land
Registration laws.
Must say: Article 1312 of the Civil Code of the Philippines states that third persons (people who were not
part of the original contract) are bound by contracts that create real rights if they come into possession of
the object of the contract. This is subject to the Mortgage Law and the Land Registration laws.
Example: Imagine Juan sells a piece of land to Maria, and they create a contract that includes a mortgage
on the land. Later, Maria sells the land to Pedro.
- Real Rights: The mortgage is a real right because it is related to the property.
- Third Person: Pedro, who bought the land from Maria, is considered a third person.
- Bound by Contract: Pedro must respect the mortgage because it was part of the original contract
between Juan and Maria. He cannot ignore the mortgage just because he was not part of the original
contract.
This means that even though Pedro was not involved in the original agreement, he must honor the
mortgage since it is attached to the property he now owns.
Article 1313 - RIGHT OF CREDITOR TO IMPUGN CONTRACTS INTENDED TO DEFRAUD
THEM
- Creditors are protected in cases of contracts intended to defraud them.
Must say: Article 1313 of the Civil Code of the Philippines states that creditors have the right to
challenge contracts that are intended to defraud them. This means that if someone makes a contract to
cheat their creditors, the creditors can legally contest that contract to protect their rights.
Example:
Imagine Clara owes money to her creditor, Alex. Clara sells her car to her friend Ben for a very low price,
hoping to keep the car out of Alex's reach. This sale is meant to cheat Alex by making it look like Clara
has no assets to pay him back.
- Fraudulent Intent: Clara's sale of the car to Ben is intended to prevent Alex from collecting his debt.
- Creditor's Right: Alex, the creditor, can challenge this sale in court.
- Protection: If the court finds that the sale was intended to defraud Alex, it can invalidate the sale,
meaning Alex can potentially claim the car to satisfy the debt.
In essence, Article 1313 ensures that creditors are not left helpless if a debtor tries to avoid paying their
debts by making deceitful contracts.
Article 1314: LIABILITY OF THIRD PERSON RESPONSIBLE FOR BREACH OF CONTRACT
- Any third person who induces another to violate his contract shall be liable for damages to the
other contracting party.
Must say: Article 1314 states that any third person who induces someone to violate their contract will be
liable for damages to the other contracting party. This means that if a third person convinces or persuades
one of the parties to break their contract, that third person can be held responsible for any damages caused
by the breach.
Example:
Imagine John has a contract with Mary to supply her with goods every month. Peter, a competitor of
Mary, convinces John to stop supplying Mary and sell the goods to him instead.
 Inducing Breach: Peter convinces John to break his contract with Mary.
 Liability: Mary can sue Peter for the damages she suffered because John stopped supplying her
with goods.
In summary, Article 1313 protects creditors from fraudulent contracts, and Article 1314 holds third parties
accountable if they induce someone to break their contractual obligations.
so what will happen to john?
In the scenario where Peter induces John to breach his contract with Mary:
1. John's Breach of Contract:
o John is still responsible for his own breach of contract with Mary. He may be sued by
Mary for not fulfilling his contractual obligations.
2. Liability for Damages:
o Mary can sue John for any losses or damages she incurs because he did not supply the
goods as agreed in their contract. This could include compensatory damages to cover her
losses.
3. Peter's Inducement:
o In addition to holding John responsible, Mary can also sue Peter for inducing John to
breach the contract under Article 1314. Peter would be liable for the damages resulting
from his interference.
Summary:
 John:
o John breached his contract with Mary and can be sued by Mary for damages.

 Peter:
o Peter, who induced the breach, can also be sued by Mary for damages due to his
interference.
 Mary:
o Mary has the right to seek compensation from both John and Peter for the losses she
suffered due to the breach.
This legal framework ensures that all parties responsible for the breach and its consequences are held
accountable.
Article 1315 – Consensual Contract
- 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.
Must say: Article 1315 of the Civil Code of the Philippines states that contracts are perfected, or
considered valid, as soon as the parties involved give their consent. From that moment, the parties are not
only bound to fulfill what they have explicitly agreed upon but also to all the consequences that naturally
come from the contract, based on good faith, common practices, and the law.
Example:
Imagine Anna agrees to sell her laptop to Ben for ₱20,000.
 Consent: As soon as Anna and Ben agree on the price and the sale, the contract is perfected.
 Fulfillment: Anna is now obligated to deliver the laptop to Ben, and Ben is obligated to pay
Anna ₱20,000.
 Related Consequences: If the laptop turns out to be defective, Anna might be required to repair
it or give a refund based on common practices and consumer protection laws.
Summary:
 Perfection by Consent: A contract is valid once both parties agree.
 Obligations: Parties must fulfill their explicit agreements and any natural consequences.
 Good Faith: Parties must act in good faith, follow common practices, and adhere to relevant
laws.

Article 1316 - Real contracts

 Real contracts, such as deposit, pledge and commodatum, are not perfected until the delivery of
the object of the obligation.
 They are perfected by the delivery, actual or constructive, of the object of the obligation. These
contracts have for their purpose restitution because they contemplate the return by a party of what
has been received from another.
Must say: Article 1316 talks about real contracts in civil law, such as deposit, pledge, and commodatum.
These contracts are special because they are only considered valid when the item involved is actually
delivered.
Key Points:
1. Not Perfected Until Delivery: The contract is not binding until the item is delivered.
2. Purpose of Restitution: The main goal is to return the item to the original owner.
Simple Examples:
  Deposit: You give your friend a book to keep safe for you. The contract starts when your friend
physically takes the book.
 Pledge: You borrow money from someone and give them your watch as a guarantee. The contract
starts when they receive the watch.
 Commodatum: You lend your bicycle to your neighbor. The contract starts when they actually
take the bicycle from you.
Article 1356 - FORMAL or SOLEMN CONTRACTS
- When the law requires that a contract be in some form to be valid, this special form is necessary
for its perfection.
Must say: Article 1356 refers to formal or solemn contracts. These are contracts that must be in a specific
form as required by law in order to be valid and enforceable. The special form is essential for the contract
to be considered perfected or legally binding.
Key Points:
1. Specific Form Required by Law: The contract must follow a particular format or be
documented in a specific way as mandated by legal statutes.
2. Necessary for Perfection: The contract is only considered valid and legally binding when it
meets this form requirement.
Example:
 Real Estate Sale: A contract for the sale of real estate must be in writing and often must be
notarized or registered to be valid. Simply agreeing verbally or even through informal written
notes would not make the contract binding.
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.
Must say: Article 1317 deals with unauthorized contracts, specifying that contracts made in another
person's name are only valid if the person making the contract is authorized to do so or has the legal right
to represent the other party. If someone without authority or legal representation makes a contract on
behalf of another person, the contract is unenforceable unless the person on whose behalf the contract was
made ratifies it before it is revoked by the other party.
Key Points:
1. No Authority, No Valid Contract: You cannot make a contract on someone else's behalf without
their authorization or legal right.
2. Unenforceable Contracts: Contracts made without proper authority are unenforceable unless
ratified.
 3. Ratification: The person for whom the contract was made can approve it, either explicitly or
implicitly, making it valid. This must happen before the other party revokes the contract.
Example:
 Unauthorized Lease: Suppose Alice signs a lease contract on behalf of her friend Bob without
Bob's permission. The lease is unenforceable because Alice had no authority. However, if Bob
later agrees to the lease terms (ratifies the contract) before the landlord decides to revoke it, the
lease becomes valid.