Department of Mechanical and Manufacturing
Engineering
THE MECHANICAL ENGINEERING PROFESSION
A Report in ME 3118
ME Laws, Ethics, Contracts, Codes and Standards
Submitted by:
(Angana, Marc Jayson, F, Anor, Jonas Andre, S,
Balandra, Sherry G, Dano, Rowell I,
Daño, Renzty Jade, Enriquez, Franklin James, O
Paredes, Paolo Dominic, R, Samson, Mark Joseph N)
Submitted to:
Engr. Khareljoy S Sungcad, MSc
October 2021
ME 3118/521A/521M ME LAWS, ETHICS, CONTRACTS, CODES AND STANDARDS
Introduction to Contracts
Without being aware of it, each one of us enters into a contract as often
as the need arises. When we do little things like buying a stick of cigarette or
a detergent soap nearby, or ride in a jeep or tricycle to or from the school or
office, we in fact enter into a contract which gives rise to rights and
obligations. Contracts of bigger scale surely await us in the future especially
when we become professionals or businessmen, hence, the need to study the
law on contracts to which the law on obligation is integrated.
Obligation defined
An obligation is a juridical necessity to give, to do or not to do. 1 It
comes from the Latin word ‘obligare’ which means to bind through giving,
doing or not doing something. It is a juridical necessity because the rights and
duties emanating from obligation may be enforced in courts of justice which
may order their performance if refused or neglected.
Meaning of obligation
To give, to do or not to do. The obligation to give is in essence a real
obligation because a physical thing is involved and delivery of the same
extinguishes the obligation
Requisites of an obligation.
Every
obligation
has
4
essential
requisites
a.) Juridical tie or Vinculum - Which is the link that binds the
parties
b.) The prestation which is the giving, doing or not doing of
something
c.) The active subject which is the person who holds the right to
demand the prestation, called obligee or credito
d.) The passive subject which is the person against whom the
prestation may be demanded, called obligor or debtor.
Sources of Obligations
Article 1157 of the Civil Code enumerates the sources of obligations,
namely
LAW, CONTRACTS,
QUASI-CONTRACTS,
ACTS
OF
OMISSIONS PUNISHABLE BY LAW, & QUASI-DELICTS.
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Obligations arising from LAW
Law is a rule of conduct, just, obligator and laid down by the legitimate
authority for common Observance and benefit. Without it there will be no
order in a society which will be ruled by the maxim of what is might is right.
Thus, everyone is presumed to know the law, as ignorance of the law excuses
no one in compliance therewith.
Obligations arising from CONTRACTS
A contract is the meeting of minds between two persons whereby one
binds himself with respect to the other to give something or render some
services. When duly entered into, the obligation arising from contract has the
full force of law between the parties, hence should be complied with in good
faith.
Obligations arising from QUASI-CONTRACTS
A quasi~contract is a juridical relation arising from lawful, voluntary
and unilateral acts by virtue of which the parties become bound to each other
even if they have not consented to be obliged, to the end that no one shall be
unjustly enriched or benefited at the expense of another.
Two Kinds of Obligations arising from QUASI-CONTRACTS
Negotiorum Gestio - the voluntary administration or management of an
abandoned business or property belonging to another without his consent.
For the relationship to exist, the following elements must be present:
1.) The management must refer to specific affairs
2.) The business or property is neglected or abandoned
3.) There is no express or implied authority from the owner
4.) There is no prohibition from the owner
5.) The management must be for an intention to protect the interest of the
owner.
Solutio Indebiti - is the juridical relation which is created by virtue of a
payment by mistake consequently, obliging the payee to return to payor
what he has received.
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Obligations arising from CRIMES
Acts or omissions punishable by law are better known as crimes or
delicts, like homicide or damage to property through reckless imprudence.
Obligations arising from QUASI-DELICTS
A Quasi-delict is a legal wrong committed through fault or negligence
causing damage to a person or property thereby obliging the wrongdoer to
pay for the damage done, provided that there exists no contractual relation
between them.
Diligence required in the performance of obligation
Every person obliged to give something is also obliged to take care of
it with the diligence of a good father of the family, unless the law or
stipulation of the parties requires another standard of care.
Rights to the fruits of the thing to be delivered
The creditor has the right to thl! fruits of the thing from the time the
obligation to deliver arises. However, he shall acquire no real right over it
until the same has been delivered
Rule when obligor incurs delay
Those obliged to deliver or to do something incur in delay from the
time the obligee judicially or extra judicially demands from them 'the
fulfillment of their obligation. However, the demand by the creditor shall not
be necessary in order that delay may exist:
l.) When the obligation or the Jaw expressly so declares; or
2.) When from the nature and circumstances of the obligation it
appears that the designation of the time when the thing is to be
delivered or the service is to be rendered was the controlling motive
for the establishment of the contract; or
3.) When demand would be useless, ns when the obligor
has rendered it beyond his power to perform.
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Liability of obligor for Fraud, negligence, delay, etc.
Those who in the performance of their obligation are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor
thereof are liable for damages.
Liability arising from fortuitous event
Except in cases expressly specified by law, or when it is otherwise
declared by stipulation, or when the nature of the obligation requires the
assumption of risk, no person shall be responsible for those events which
could not be foreseen, or which though foreseen, were inevitable.
Kind of Obligations
a.) Pure and conditional - A pure obligation is one which is not subject
to any condition or burden and whose fulfillment is neither dependent
upon a future or uncertain or even a past event unknown to the parties,
hence, immediately demandable.
b.) Obligation with a Period - An obligation with a period is one
in which a day certain has been fixed for its fulfillment.
c.) Alternative and facultative - An Alternative Obligation is one where
various prestations are due, but the performance of one, usually chosen
by the obligor, is sufficient. In Facultative Obligation only one
prestation is due but the obligor or debtor may substitute another in
lieu of the prestation due/ The loss or deterioration of the thing
intended as a substitute does not render him Hable except when the
substitution has already been communicated and on account of
negligence, delay, and fraud.
d.) Joint and Solidary - A Joint Obligation is one where the entire
obligation is to be fulfilled proportionately by the various obligors or
debtors. and Each one of the obligees or creditors is entitled and can
demand a proportionate part of the credit due from each of them. A
Solidary Obligation is exactly the opposite of a joint obligation in the
sense that each of the solidary A solidary obligation is exactly the
opposite of a joint obligation in the sense that each of the solidary.
e.) Divisible and Indivisible - A Divisible Obligation is one capable of
being performed partially. Indivisible Obligation on the other hand is
the exact opposite of divisible obligation as no partial performance is
permitted.
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f.) Obligation with a penal all clause - An obligation which contains an
accessory undertaking to assume a greater liability in case of breach is
an obligation with 8 penal clauses. The penal clause is attached to the
principal obligation to insure its fulfillment.
Modes of Extinguishing Obligations
Payment of Performance - This mode consists not only of delivery of money
but also the performance of an obligation in any other manner. :It is the
essence of this mode that there must be a pre-existing obligation, (not option)
otherwise, no payment could be made. Thus, a debt is not considered to have
been paid unless the thing or service in which the obligation consists has been
completely delivered or rendered, as the case may be.
1.) Dacion in Payment - Dacion en pago is the conveyance of the
ownership of a thing which is accepted by the obligee (creditor) as
payment of a debt in lieu of money, thereby extinguishing the
obligation.
2.) Payment by cession - Payment by cession consists of the assignment
of all the properties of the debtor to his creditors in order that the same
may be sold by the creditors to satisfy their credits. Unless there is a
stipulation to the contrary, the cession shall extinguish the liability of
the debtor to the extent of the net proceeds of the sale.
Cession or assignment may be of two kinds, namely: (1) the voluntary
session in which the consent of the creditors is needed, and (2) the legal
or judicial session where the approval of the court is required. The
latter is governed by the Insolvency law.
3.) Tender of payment and consignation - This special form of payment
is done through the actual offering (not just a proposal) by the debtor
to the a creditor of the thing or sum which he considers to be due. If
this tender is unjustly refused, the debtor shall complete this by making
a consignation, by depositing the thing or the amount due with the
court of competent jurisdiction in accordance with the formalities
required by law.
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Loss of the thing
The thing due is considered lost when it penshes, or goes out of
commerce, or disappears in such a way that its existence is unknown or
cannot be recovered.
Condonation or Remission
It is an act of liberality by which the obligee, who receives no price or
equivalent thereof, renounces the enforcement of an obligation, which is
extinguished in whole or in part.
Confusion of merger
This mode takes place when the qualities of the obligor and that of the
obligee meet in one person, the effect of which generally extinguishes the
obligation.
Compensation
Compensation takes place when ·two or more persons, in their own
rights are creditors and debtors to each other.
Distinction between Confusion and Compensation
The differences are: (1) In confusion, there is only one person who
becomes both a creditor and debtor but in compensation, the personality of
the debtors and creditors is preserved; and (2) There is only one obligation
in confusion but ·not in the other where·There are two.
Novation
Novation is the change, substitution, or renewal Of an obligatory
relation, with the intention of extinguishing or modifying essentially the
former, debitum pro debito {new debt for an old debt). :It may take place by
changing the object or principal
Personal novation - may either be in the form of expromision or
delegacion. Expromision takes place when a third person of his own accord
and even without the knowledge of the original debtor assumes the
obligation, with the consent of the creditor.
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Definition of contract
The law defines a contract as a “meeting of the minds between two
persons whereby one binds himself, with respect to the other, to give
something or to render some service.
Stages of Contract
1.) Preparation or Conception - starts from inception and negotiation that
may lead to the parties coming to the terms of contract.
2.) Perfection or Birth - marks the time the parties agree upon the object
or subject matter and the cause or consideration of the contract
3.) Consumption or Termination - is simply the implementation of the
term of the contract, and simultaneous documentation in formal once.
Contract differentiated from agreement
A contract forms a subdivision of the genus “agreement” from which
follows that, while every contract is based on agreement, not every
agreement is a contract. In order for an agreement to qualify as a contract,
the parties much have clearly intended to be bound by a legal tie, as
distinguished from other relationships like social and political.
Freedom in contracts
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, and public policy. This simply
mean that for a contract to be valid, the terms and conditions
Contrary to law
The parties cannot stipulate on matters against the law. If the object
and cause of the contracts is prohibited or against the law, the contract will
be null and void.
Contrary to morals and good customs.
Contract offending morals or good customs are void and without effect
like for instance.
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Contracts against public order and public policy.
Public policy is much broader than public order. It refers to higher
goals of the state for the good of all, like free enterprise to promote the
national economy or family planning policy to arrest population growth
whereas, public order refers not essentially to peace and order but also to
existing institutions of a people, like transgresses public policy or public
order the contract is void.
Equality of parties under the contract.
The law gives equal standing or treatment upon the parties such that
the validity or compliance with the contract cannot be left to the sole will of
one of them.
Parties bound under the contract, exception.
The rule is that only the parties to the contract and their assigns and
heirs are bound thereto unless the rights and obligation arising therefrom
cannot be transferred to the heirs and assigns of the parties because of their
nature, or by stipulation or, by specific provision of law.
Stipulation in favor of non-parties to the contract.
If a contract should contain stipulation granting a favor to a person not
party to the contract, the latter may demand its fulfillment provided he
communicates his acceptance to.
Third parties interfering in the contract.
Any third person who induces another to violate his contract shall be
liable for damages to the other party
.
Consensual contracts.
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 for the consequences which, according to their nature,
may be in keeping with good faith, usage, and law.
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Contracts creating real right.
Real rights are those right relating to immovable properties, i.e. land
and buildings, like the right belonging to a mortgagee or lessee of a piece of
land. The law provides that in contracts creating real rights third persons who
come into possession of the object of the contract are bound thereby subject
to the provision of the Mortgage Law and Land Registration Law.
Protection to creditors
Creditors care protected in cases of contracts intended to defraud
them.
Contracts entered in the name of another.
A contract entered into in the name of another without his authority,
or without a legal right to represent him or in excess of the authority given is
unenforceable by action unless the contract is ratified expressly or impliedly
by him before the other party revokes.
Requisite of contract
ELEMENTS OF A CONTRACT
There is no contract unless the following elements are present:
1. Consent of the contracting parties
2. Object certain which is the subject matter of the contract
3. Cause of the obligation which is established
If the contract lacks any of the elements, contract is null and void.
CONSENT
Consent is the conformity of wills of both the parties involved upon the
objects and cause as wells as to the other terms and conditions of the contract
For a contract to be consensual, the meeting of offers must be certain
and the acceptance be absolute
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Counter offer — pertains to an offer where offeree’s acceptance is qualified
or has modified terms to the original offer. There will be no consent unless
the offeror accepts the counter offer unqualifiedly.
For the offer to be certain, there must be no possible doubt arising on what
the object and the cause is. In the same manner that acceptance must in every
respect meet and coincide exactly with the object and the cause offered.
If the offer is uncertain or indefinite, or that the acceptance is not absolute,
there is no meeting of the minds, hence no contract is inked.
ACCEPTANCE MADE THROUGH LETTER, ETC.
Generally, acceptance should be made right after the offer has been made of
immediately thereafter. Acceptance made through letters or telegrams does
not bind the offeror except from the time it comes to his knowledge. In such
case, the contract is presumed to have been entered into the place where the
offer was made.
In law, the declaration as to where the contract was entered into is necessary
to determine which court will resolve the controversy that may arise between
the contracting parties.
RULE ON OFFER AN ACCEPTANCE
General rule: The person making the offer, or the offeror, has the inherent
rights to fix the time, place and manner of acceptance. Once fixed, the
acceptance must be made strictly in such manner for the agreement to be
consensual. If this fixation is not observed, consent may not be achieved.
Likewise. the offeror may give the offeree a period within which to accept
the offer and he may withdraw it any time by communicating such
withdrawal before the offer has been accepted by the offeree However, when
the offeree had paid or promised the offeror a consideration for the granting
of a period within which to accept, the offeror cannot revoke the option.
WHEN OFFER BECOMES EFFECTIVE
An offer may be ineffective if before the acceptance by the offeree, the
offeror will die or suffer civil interdiction or become insane or insolvent. If
any of these circumstances may supervene after the acceptance has been
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made, the contracts will continue to have force and effect, but the rights and
obligations arising therefrom will descend to the heirs and assigns of the
parties depending upon whether they are transmissible by nature, by law or
by stipulation.
OFFER MADE THROUGH AGENT
An agent in legal contemplation is the extension of his principal so whatever
he does for whom he is agent to will be binding to the principal.
An offer made through an agent is accepted from the time acceptance is
communicated to him by the offeree.
PUBLISHED ADVERTISEMENT NOT AN OFFER
Business advertisements to purchase goods are not considered offers.
Invitations to make an offer are not considered offers and/or proposals as
well.
In either cases, advertises are not bound to get into an agreement with a
potential buyer and may reject the purchase, unless otherwise stated.
Exemption: Take the form of a reward of an act specified in an
advertisement. If one acts on that advertisement and the task has been done
conformably with the advertisement, the reward can be claimed even if the
ad was revoked as long as the action was done before the revocation, or prior
to being informed re: the revocation.
Such cases are prevalent in the rewards for the capture of criminals, or
becoming a lead informant to detection of criminals.
PERSONS WHO CANNOT GIVE CONSENT
Consent can only be given to people who have the capacity to act.
Contract cannot be inked if consent was given by a person without the
capacity to act or with other disqualifications, except through their natural or
legal guardians. Contracts inked under a state of inebriation or hypnosis are
voidable.
In the law, these disqualifications to provision of consent are:
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● Unemancipated Minors
● Insane or Demented Persons
● Deaf-Mutes who cannot write
The law, however, recognizes a situation when:
● a person subject to guardianship may have a period of lucid intervals
(temporary sanity) such that contracts entered into during this period
are valid.
● “necessaries” like those indispensable for sustenance, dwelling,
clothing, and medical attendance are sold and delivered to a minor or
other persons without capacity to act must be reasonably compensated.
VICES OF CONSENT
Five causes by which consent may be rendered defective by law:
●
●
●
●
●
Mistake
Violence
Intimidation
Undue Influence
Fraud
Contract becomes voidable if consent to the contract is secured through any
of those vices.
MISTAKES RENDERING CONTRACT DEFECTIVE
Mistake may invalidate consent if:
● The mistake referred to is the substance of the thing which is the object
of the contract.
● The mistake in the condition which has principally moved one or both
parties to enter into the contract.
● The mistake as to the identity or qualification of one of the parties will
vitiate consent only when such identity or qualification has been the
primary cause of the contract.
●
A simple mistake of an account will give rise only to the correction of the
account.
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A mistake in substance takes place when 'both parties thought that the subject
matter they are dealing into does not turn out to be what it exactly is, such as
when one sells and the other buys a sugar land believed by them to have an
area of twenty hectares and yielding 2,000 piculs per season which actually
had an area of eighteen hectares and producing only about 700 piculs.
Despite the consumation of the contract, the same may be annulled in court
at the initiative of the buyer.
A mistake of identity or qualification takes place when one party enters into the
contract primarily because of such identity or qualification of the other party
which is not actually the case.
CIRCUMSTANCES NOT INDICATIVE OF MISTAKE
There is no mistake if the party alleging it knew of the doubt, contingency or
risk affecting the object of the contract.
Ignorance of the law, likewise, does not constitute mistake because under our
legal system, “ignorance of the law excuses no one in compliance therewith”
except when the law is too difficult and controversial that even calibrated
lawyers and magistrates of high courts cannot come to unanimity in
interpretation.
MISTAKE OF FACT AND MISTAKE OF ACCOUNT DISTINGUISHED
Mistake of account, unlike mistake of fact, will not avoid the contract.
The remedy to a mistake of account is not its annulment but the correction
of its account.
LEGAL PROTECTION TO THE WEAK PARTY
Article 1332 of the Code states that when one of the parties is unable to read,
or if the contract is written in a language not understood by him, and mistake
is alleged, the person enforcing the contract must show that the terms thereof
have been fully explained to the former before its execution. Failure to do so
will render the contract voidable.
VIOLENCE AND INTIMIDATION EXPLAINED
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If the birth of a contract was due to proven allegations of employed Violence
and/or Intimidation, contract is voidable.
In violence, the victim’s will is substituted with that of the perpetrator
through the use of force. In intimidation, the intimidated party exercises his
will which is not free because of the fear of a forthcoming peril upon him or
his property or his loved one’s person or property. Either way, as
aforementioned, if the signing of a contract is proven to be involving either
or both of those acts, contract can be avoided.
DEGREE OF INTIMIDATION
In order to determine the degree of intimidation, the circumstance of age,
sex and condition of the person intimidated should be taken into account. If
the condition of the party claiming to have been intimated permits only a
remote possibility of harm upon him or his loved ones and their properties,
the contract will not be rendered void as his consent does not suffer from
infirmity.
A threat to enforce one’s claim through competent authority will not vitiate
consent when the claim is just and legal.
UNDUE INFLUENCE
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.
In order that undue influence may vitiate consent, it must be of the
magnitude that overpowers and subjugates the mind of the obligor such that
in effect, he does not express anymore his assent or will but that of the other
party to the contract.
FRAUD IN CONTRACTS
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.
Generally, fraud renders the contract voidable. To warrant avoidance of the
contract, however, the fraud alleged and proven must be serious and have
not been employed by both contracting parties.
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Two classifications of Fraud:
● Fraud at or before the perfection (dolo causante)
● Fraud after perfection
Fraud at or before the perfection of the contract render immediate void of
the contract unlike Fraud at perfection, where the clear case of fraud only
happens after the execution of the contract. In this case, if proven fraudulent,
offeree may only recover damage by reason of the replacement.
Instances not constituting fraud:
● Usual exaggerations in trade — when dealers or merchants exaggerate
their wares to insure the immediate sale of their products.
● Expression of a favorable opinion — A mere expression of an opinion by
a party does not signify fraud, unless the same is made by an expert
and the other party relied on the former's special knowledge.
● Misrepresentation in good faith — A misrepresentation in good faith is not
fraudulent but may constitute error. This means that a
misrepresentation based on an erroneous belief and without intent to
take undue advantage of the other party will not avoid the contract.
● Misrepresentation by a third person — Misrepresentation made by a third
person does not vitiate consent unless the same has created substantial
mistake and the same is mutual.
DUTY TO DISCLOSE MATERIAL FACTS
Failure of either party to disclose facts when there is a duty to reveal them as
when the parties are bound by confidential relations, constitute fraud (Art.
1339)
When there is a duty to disclose facts, as when they are abound by
confidential relations like that of lawyer and client, or principal and agent,
failure of the knowledgeable party to reveal such information amounts to
fraud, hence the contract is rendered voidable.
SIMULATED CONTRACT
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A contract is simulated when it is fictitious or pretended in order to defraud
the creditor or mislead the general public.
An absolutely simulated contract takes place when the parties do not intend to
be bound at all, hence, the contract is void or inexistent as there is no consent
or cause despite the objects being certain.
A relatively simulated contract takes place when the parties conceal their true
agreement, and the apparent contract is void but not as to the real agreement
of the parties.
OBJECT
An object which must be certain is the second element of a contract. All things
which are within the commerce of man including future things having
potential existence, rights which are not intransmissible and services which are
not contrary to law, morals, good customs, public order, and public policy,
and not impossible of compliance may be the object of a contract. No
contract may, however, be entered into upon future inheritance except in
cases expressly authorized by law.
Things or services, as object of the contract, must not be physically or legally
impossible, otherwise, the contract is void for lack of object
As to service, impossibility may be absolute or relative. Absolute
impossibility render the contract void. Relative impossibility may take place
when the prestation cannot be fully complied with.
OUTSIDE THE COMMERCE OF MAN
The municipal council cannot sell or lease public property, such as plazas,
streets, common lands, rivers, bridges, etc. because they are outside the
commerce of man. If it has been done so, the sale/lease is null and void for it
is contrary to law, and the thing sold/leased cannot be the object of a contract.
A thing or service may, though within the commerce of man, later on become
prohibited by law, hence, considered to be outside the commerce of man
already.
THINGS HAVING POTENTIAL EXISTENCE
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Things having potential existence are those which are sure to come, barring
only, or except those unforseen events although not yet possessed.
INTRANSMISSIBLE RIGHTS AND SERVICES
Personal rights, or rights that are not permitted by law to be the object of the
contract cannot be the object of a contract. Such rights like the right to vote
and be voted upon, those emanating from personal or marriage relationship
are among those than can be mentioned.
For services, it must only be physically and legally possible, and is not
contrary to law, morals, good customs, public order and public policy.
FUTURE INHERITANCE
A contract involving a future inheritance is void as this will likely entice an
instituted heir to end the life of a benefactor. Contract on inheritance is
removed from prohibition if the death of the benefactor had come ahead of
the contract, otherwise, contract is void.
OBJECT MUST BE DETERMINATE, EXCEPTIONS.
The object of the contract must be determinate to leave no doubt as to which
is intended from the kind where it belongs, or must have definite limits.
If the quantity is not determinate, it is not an obstacle to the existence of the
contract as long as the objects that is to be determined is possible to be
determinate without the need of a new contract.
Example: A contract whose object is described as the first batch of
lanzones from a five-hectare land in which the quantity is not determined at
the time of the contract is a determinate.
CAUSE OF CONTRACTS
CAUSE, MEANING OF.
An existing cause, or consideration, at the time of the contract is the last
element of a valid contract. It is the immediate, direct and proximate reason
why a party enters into the contract, and, without which, the contract
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becomes a nullity. The cause may either be onerous, remunatory or
gratuitous.
● Onerous Contracts — The cause or consideration is understood to be,
for each contracting part, the prestation or promise of a thing or service
by another.
● Remunatory Contracts — The cause or consideration is understood to
be the service or benefit which is remunerated or paid.
● Gratuitous Contracts — The cause or consideration is pure liberality
on the part of the benefactor where the obligor does not receive any
valuable or material consideration.
MOTIVES IN ENTERING INTO A CONTRACT
The particular motives of the parties in entering into a contract are different
from the cause thereof. The motive is the special or personal reason of a party
why he entered into contract, as distinguished from the cause of the contract.
Motives has reference to the person and cause refers to the contract.
Motive may be unknown to the parties. Illegality of motive does not
invalidate the contract, while illegality of cause renders the contract a nullity.
CONTRACTS WITHOUT CAUSE OR WITH ILLEGAL CAUSE.
Contracts without cause or with an illegal cause, produce no effect
whatsoever. The cause is unlawful if it is contrary to law, morals, good
customs, public order and public policy.
STATEMENT OF A FALSE CAUSE IN CONTRACT
The statement of a false cause in contracts shall render them void, if it should
not be proved that it is founded upon another cause which is true and lawful
— this means that it is incumbent upon the party enforcing the contract to
prove that there exists another cause which is lawful if the other party claims
the cause to be false.
PRESUMPTION OF CONSIDERATION
Although the cause is not stated in the contract, the same is presumed to exist
and is lawful, unless the debtor proves the contrary. This means that every
contract is presumed to be based on a cause or consideration which is lawful
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and existing, such that the party against whom the contract is enforced is
required to prove the lack of or illegal consideration, otherwise the contract
retains its validity
LESION OR INADEQUACY OF CAUSE.
Except in cases specified by law, lesion or inadequacy of cause shall not
invalidate a contract, unless there has been fraud or undue influence.
Form of contract
Form not essential to be binding. Contracts shall be obligatory in whatever
form they 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 the contract
be proved in a certain way, that requirement is absolute and indispensable.
When form is a requirement. A contract in whatever form - verbal or
written, is valid if all the essential elements are present, i.e., consent of
contracting parties, object certain which is the subject of the contract, and
cause or consideration. The exceptions to this rule are:
1.) When law requires form for validity. If the law requires a contract or
agreement to be in writing or to be in a public instrument, a contract which
is not in such form is not valid, hence, cannot be enforced. An example of the
former is an undertaking to answer for the debt or default of another, and in
the latter, a donation of a real property which must be in a public instrument
and also accepted in the same manner.
2.) When law requires a form for enforceability. When the law requires a
contract or agreement to be in writing or noted in any manner to be
enforceable, i.e. those contained in the Statute of Frauds, such shall be
complied with otherwise no action can be allowed to enforce the contract.
3.) When law requires a form for convenience. If the contract is valid and
enforceable but not in a public instrument, a party interested in its
registration may compel the other party to rewrite it in the proper form or
complete it through placing the needed notarial acknowledgment.
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Remedy if valid contract, not in public instrument. If the law requires the
contract or agreement to be in a public
document or in a special form, the contracting parties may compel each
other to observe that form once the contract has been perfected. The remedy
is available simultaneously with the action upon the contract.
A public instrument may be defined as one where the act or contract and
other terms and stipulations thereof is acknowledged
and sworn to by the parties as their free and voluntary act or deed before a
government official authorized to administer oath or a
notary public bearing his seal. An act or contract embodied in a public
instrument is generally binding to the general public.
Acts which must appear in a public instrument. The following acts must
appear in a public instrument:
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 an interest therein are governed by Articles 1402, No.
2 and 1405.
2.) The cessation, repudiation or renunciation of hereditary rights or of those
of 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 instrument or
should prejudice third person.
4.) The cessation 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 sale of goods,
chattels or things in action are governed by Articles 1403, No. 2 and 1404.
Real rights over immovable properties. Immovable properties are those
which by nature, location or intention of the
parties are destined to be immovable, i.e., land or machineries or equipments
installed on surface or underneath the ground. Thus, any act or contract that
would create, transmit, modify or terminate a right over these, such as those
acquired by a mortgagee, possessor, lessee, or usufructuary are among those
which are included in this number.
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Cessation, repudiation or renunciation. Hereditary rights relate to the rights
of compulsory heirs to inherit from their parents upon the latters demise, or
vice versa, or the right of a designated heir to inherit as provided in the law
of succession, whereas conjugal rights refer to the right of a married spouse
to the one-half of the conjugal partnership of gains in case of dissolution or
death of a spouse. Example. Don Mariano dies survived by four children. X,
the eldest and a successful engineer and already stable, renounced his share
in the estate of his father. This renunciation must be in a public instrument.
Power of administration. This power must also be in a public instrument to
be binding to the whole world. The same is true with
any other power which has for its object acts appearing or which should
appear in a public instrument. A power to administer a business or a hacienda
given to a person while the owner is away properly fall under this group.
Cessation of actions or rights. Actions intended to be extinguished or rights
to be terminated like the release of a mortgage after payment of a loan or
mortgage debt or cancellation of an encumbrance on an immovable property
squarely falls under
this number.
Contracts partly written and partly oral, effect of. If a contract is partly in
writing and partly oral, the oral ones are generally
excluded from the written document. Such being the case, disputes not
resolvable by the written document is deemed not written at all unless the
matters claimed to have been orally agreed and form part of the written
instrument can be proven by other evidence sanctioned by the law.
Types of contract
From the text of the pertinent provisions of the code, the following
classes/types may be deduced;
1. Express and Implied Contracts - A contract is express when the intent of
the partes is shown by words which may be verbal or written, whereas,
a contract is implied when the intent is manifested by the conductor
behavior of the parties.
2. Unilateral and Bilateral Contracts - In a unilateral contract only one of
the parties has an obligation, as in commodatum or gratuitous deposit
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while, in a bilateral contract, both parties are bound as in a contract of
sale. A unilateral contract is synonymous with a gratuitous contract as
a bilateral is with an onerous one.
3. Consensual and Real Contracts - A consensual contract is one perfected
by mere consent as in a contract of sale, whereas, a real contract is one
perfected by the delivery of the thing which is the object of the
contract, as in pledge, deposit and commodatum.
4. Executed and Executory Contracts - An executory contract is one which is
not yet implemented as where none of the parties has performed the
prestation or only a part thereof has been performed by each party.
5. Nominate and Innominate Contracts - Nominate contracts are those which
the law gives a special name as in contract of agency, sale, partnership
etc. while those without designation are called innominate contracts.
The latter contracts are those which the parties may agree and no name
is given by law to their agreement, because they are too many and
cannot be forecasted or anticipated.
6. Common/Informal and Special/Formal Contracts - Common/Informal
contracts are contracts that do not require any formality such as loan
or lease, whereas, Special/Formal contracts prescribes some formalities
such as donation or chattel mortgage. They should be made in a public
document.
7. Onerous and Gratuitous Contracts - Onerous contracts are those where
benefit is derived through something which is given or promised, such
as in a contract of sale while Gratuitous contracts derives benefit
without giving any equivalent or compensation, such as simple
donation.
8. Commutative and Aleatory Contracts - In a commutative contract, what is
given by one party is considered an equivalent given by the other, such
as in a contract of lease while, in an Aleatory contract, the cause or
consideration is unequal and depend upon the happening of an
uncertain event such as in an insurance contract where the business is
either risk of loss or risk of gain.
9. Principal and Accessory Contracts - Principal contracts are those that exist
independently from other contracts such as contracts of lease and sale
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whereas Accessory contracts are those which cannot exist without
another prior contract, such as mortgage and pledge.
Definition of Technical specifications
General Consideration. Knowing the nature of every material, machine, and
processes involves relevant factors like commercial and physical constraints
is a must for an engineer to make technical specifications. An engineer must
able to detail for appropriate guidance and appreciation b y the following:
1. Quantity, Quality, and Characteristics of various material
2. Regular and practicable strategies of executing the work to be done at
the cheapest without relinquishing the closes to be accomplished
3. Strategies commonly utilized within the making the product, machine
and within the development operation and support of the plant and
structure.
Lastly, an engineer must be able to designate in detail about the components
or elements of the material, process, or design to be detailed in structure or
machine. Engineer’s experience helps determine the needed materials and
methods to be used, difficulties and occurrences to be encountered within
the work area.
Needed Preparing Outline. When preparing for technical specification for
engineering and architectural works, materials and processes are so countless
that some materials or parts may be overlooked if special precautions are not
observed. Therefore, preparing an outline is needed to divide the work to be
done in various elements and by getting down to every detail, including
materials and processes. It is advisable for an engineer to have a notebook
when thinking about improvements.
Resorting to published specifications. In planning specifications on lines
diverse from the line of a design, the foremost common way is to choose
comparative ones that have been utilized on more or less comparative work
which in the discretion of the engineer is relevant and satisfactory. However,
if there are no available options, the safe guide is to select a precedent which
is well established and prepared by authoritative officials. But when the
engineer is selecting a precedent, he/she should modify them as the
conditions demand and copying it is an embarrassment for an engineer.
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Simple and detailed specifications. simpler specification is only advisable
to simpler forms of labor and simpler kinds of labors and simpler kinds of
materials or supplies and machines which have become a standard. If
specifications are simple, there is no need for special knowledge in the
preparation. It is necessary for the writer to explain the manner and method
in which they will be fulfilled.
Modifying the requirements in the specification. It is important that
provisions for modification of the method and materials to be used and the
ideal quality for specific conditions should be prescribed in each case.
Use of standard materials and methods. Specifications are bound to the
contractor to perform the work in the manner provided therein or furnish
the materials of a certain grade, but also the cost of the work and materials.
Standard specifications prescribed by technical societies. Various technical
societies have from time to time adopted standard specifications for certain
materials, processes, and structures.
Technical specifications: MATERIALS AND PROCESSES
Outlining technical specifications. Development works these days are
required to attempt into exchange lines with each exchange indicating in a
specific sort of work with the laborers that satisfactorily unionized. perfect
way "The most perfect way to get ready a great specialized determination is
to plan a great diagram. This diagram may be arranged by compiling a list of
all exchanges to total the specific extent at hand, and a segment of the
specialized detail is composed to cover each exchange.
Outlining trade technical specifications. When all the works for the extent
have been distinguished, each of the exchange specialized details ought to be
arranged. The exchange specialized details are advanced partitioned into
segments each of which presents in detail the data required.
Technical Specifications: For Machinery
Standard design machine. It is advisable to prescribe a standard design machine
if a maker of specification is not aware of a particular hand or preference that
would directly answer for his need.
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Avoidance of exclusive specifications. Specifications should not have only one
particular supplier to provide it. To avoid restriction specifications like the above
only details are necessary to operate the required operations should be included.
Accessory equipment. Complete machine installation will include many items
classified as accessories, moreover, to the basic machine. The inclusion or
exclusion of each accessory equipment in the specification must be decided on
the basis of necessity it bears on the operation and preference of the owner.
Service connection. Some machines are completely independent or selfcontained. Most of them required more service connections to make them
operational.
Installation conditions. On the off chance that the apparatus is being acquired
on an introduced course of action, the determinations ought to portray any
unordinary conditions which must be met.
Testing and guarantee. Most machines are purchased to perform some specific
test or functions in order to perform a high satisfactory level.
Design and specifications
Architectural Work
for
Engineering
and
This section of the report covers the preventive/ strategic methods engineers
abide by in order to avoid any mishaps in their profession. It also shows how
engineers prepare the information/ data in any projects that are necessary in
the design process and to satisfy the specifications. The violation of any law
committed knowingly or unknowingly and if the engineers had practiced
unethical acts in their projects is also discussed.
General consideration. A thorough investigation should be first conducted
to any projects or works that are made by the engineer, in the case of any
mistake that happens to occur, is determined whether to the type of materials
used in the project or an error committed by the worker. This further
supports the importance of an investigation in the nature of the material and
the foundation on which structures must rest. The quantities, physical
conditions, and characteristics must be determined and deemed practicable.
An investigation conducted is a priority to the design of any plant or structure
and for an engineer to avoid blame and responsibility for any trouble and
expense. One is the false idea of economy; it is where the decision to
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construct or raise improvement is followed immediately by a demand for
construction is set at the earliest date that a proper examination of the
conditions is impossible. Failure to make suitable investigations on such
conditions and secure important information that would help the engineer
in designing and estimating the cost of the project and for the bidder in his
proposal leads to wrong economy due to opposing an investigation to occur.
A preliminary information should be secured at least as it will permit plans
to be drawn to fit the actual local conditions, instead of assumed conditions
which do not actually exist. This saves the engineer and contractor from
acquiring more added expenses.
Undesirable practice. It is common practice to let a contractor assume all
risks and responsibilities related to the character and amounts of the different
kinds of materials used in a project or construction. It is cited that a contractor
is committing an undesirable practice when attempting to take risks to an
uncertain job because the chances of him securing the work are remote.
Likewise, an intelligent contractor will not bid at all on plans and
specifications which are unfair and utmost uncertain, because if he does, he
will add a considerable large sum to compensate for the uncertainties and
unfair treatment to protect himself. This, in effect, will have the client to pay
more than if it went through definite plans and specifications. Incomplete
investigations done by the engineer is when only contractors are usually
invited to make investigations on the conditions set by the nature of the
formation on which the work is to be built.
Basis of Design. In a structure being built, both utility and beauty are
involved. To achieve this, from a technical standpoint, the objects chosen
determine the accomplishment of certain definite results at expenses at a
minimum. Factors of safety are implemented and made necessary to any
uncertainties and consequences that the structure may be exposed. This
ensures if a structure is safe and if its degree of safety is carefully measured
by possible results of failure. Doing this, it establishes a balance between
expense and results with a proper equilibrium between these various factors
applied by a technical man as one of his responsibilities.
Design and false economy. To design properly any structure, the designer
must be familiar with the methods which must be used in the construction.
The design should not involve unreasonable requirements that will add
expense without the corresponding benefit. In making design, cost of
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maintenance and cost of operations, in certain cases, should be taken into
account.
Estimating the structure, etc.
Estimating the cost of the structure and materials is an important duty of the
engineer. But the question is how much would be the difference between the
actual cost of the construction and the estimated cost? This is because
financial success depends on the actual costs of such works, and the said
estimate is considered to be the basis for the financing of the given work.
Take for example, when the actual cost far exceeds the estimated cost, a
project which may have seemed financially doable is at risk of being a
financial failure, and if it doesn’t really yield failure but still overextends its
estimated cost, the necessary refinancing may become a budget handicap.
The estimated cost should be liberally prepared especially when the financial
feasibility is based on a limited budget, otherwise, it may place the owner
exhausted in funds, leaving the starting structure incomplete.
Preparing the contract and specifications
Basic consideration. Usually, drafting contracts are done by the lawyers,
however, this should not be an excuse for an engineering to prepare or help
in drafting a contract to avoid any omissions on what his opinion should be
embodied in the contract, as well as to the specifications, that are traditionally
and legally taken as part of the contract by reference.
Points to reckon in contract writing. The following points stated below are
to be considered in writing a contract. If these mentioned factors are satisfied,
then the writing of the contract may be undertaken.
a. the need of the client - it covers the clients’ wants that is personal to
the client
b. the terms and conditions desired including the subject matter and
considerations of the contract - it consists of the terms and conditions
agreed by both parties for their need and convenience
c. legality of the contemplated contract - it centers on whether the terms
and conditions conform with the legal requirements
Parts of a contract.
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1) Title of Contract. It is located at the top of the document and derived
from the agreement or dictated by the parties to the contract or their
representatives.
2) Salutation. Its mere purpose is for style. This is stated to impress the
parties and the public who may happen to read or glance at the
contract. It is worded in bold letters at the left top, reading: KNOW ALL
MEN BY THESE PRESENTS:
3) The BODY.
a. Introduction of the parties and the agreement.
b. Terms and conditions
b.1. the subject matter that may determinate things, rights, or
services as well as the cause or consideration of the contrast
b.2. the mechanics of what, where, when and how, and why in
some cases, and other details with regards to the object to be
delivered or service to be rendered
c. Dispositive clause. This part, reading “IN WITNESS WHEREOF,
we have hereunto set our signatures etc.” is the affirmation of the
parties to be bound by the contract.
d. Date and place of execution. This part states when and where the
contract has been perfected. These are needed for purposes of
prescription of actions upon the contract, as well as to determine
jurisdiction and venue of the courts when legal disputes of the
contract happen.
4) Signatures of the parties. The signatures of the parties or their legal
representatives are proofs of their consent and give binding effect
thereto, that without out the signatures, it would just be ordinary
writing.
Notarial acknowledgement. This is not part of the contract and may be
omitted in the document especially when the parties have known each other.
The document, its number, the book number, page number and series of
what year is stated to facilitate its identification when filed in the Notarial
Registry by the Notary Public.
Matters usually embodied in engineering contracts. The engineer
preparing the contract must always take note of the following that are stated
in many engineering contracts:
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1) workmanship according to agreed plans and specifications
2) materials which must be agreed quantity and quality or the average if
none is specified or available in the market
3) responsibility on compliance with legal requirements, i.e., licenses and
permit and posting of legal abstracts in the premises
4) control and supervision of the work by the engineer to fairly insure the
accomplishment of the project
5) bonds that must be put up to secure the performance of the contract
and other liabilities to which the client-owner may be exposed
6) contract modification of rescission for willful breach of the terms and
conditions of the contract
7) risk or additional cost or penalty by reason of defective workmanship
8) mode and conditions for payment
Other engineering documents. There are other documents that are typically
used to complement an engineering transaction. The following are:
a.
b.
c.
d.
specifications proper
advertisements or invitation to bidders
proposals
plans and designs and performance bond
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References
[1]
Mendoza, Q. (1985). Engineering contracts, specifications and ethics.
(Revised ed.) Rex Bookstore, Inc.