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Third-Party Rights in Contracts

A third person has no rights or obligations under a contract they did not participate in. However, if a contract contains a stipulation in favor of a third party, that third party can demand its fulfillment if they communicate their acceptance to the obligor before revocation. A contract between parties A and B that is not specifically provided in the Civil Code is still valid and binding if both parties consented, with their consent being demonstrated through a meeting of offer and acceptance regarding the thing and cause of the contract. Upon perfection by consent alone, a contract obligates the parties not just to the express terms but also to consequences in keeping with good faith, usage, and law. The parties must comply with the contract

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Denise Margaret Cabagui
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159 views1 page

Third-Party Rights in Contracts

A third person has no rights or obligations under a contract they did not participate in. However, if a contract contains a stipulation in favor of a third party, that third party can demand its fulfillment if they communicate their acceptance to the obligor before revocation. A contract between parties A and B that is not specifically provided in the Civil Code is still valid and binding if both parties consented, with their consent being demonstrated through a meeting of offer and acceptance regarding the thing and cause of the contract. Upon perfection by consent alone, a contract obligates the parties not just to the express terms but also to consequences in keeping with good faith, usage, and law. The parties must comply with the contract

Uploaded by

Denise Margaret Cabagui
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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1.

May a third person acquire rights under a contract to which he is a stranger or be bound
thereby? Explain

A third person has no rights and obligations under a contract to which he is a stranger or be
bound thereby. According to Article 1311 of the new Civil Code, contracts take effect only between
the contracting parties such as their assigns and heirs, except only when the rights and obligations
arising from the contract are not transmissible by their nature, or by stipulation or by provision of
law. In such case, if a contract should contain some stipulation in favor of a third person, he may
demand its fulfilment provided he communicated his acceptance to the obligor before its
revocation. In other words, a contract cannot be enforced by or against a person of whom he was
not a party. As regards obligations, the heirs shall not be liable beyond the value of the property
they receive from the decedent. A mere incidental benefit or interest of a party is never enough.
Both the contracting parties must have a clear and deliberate approval upon a third person.

2. A and B entered into a contract not specifically provided in the Civil Code. Is the contract valid
and binding?

The contract is valid and binding because A and B both have consent to constitute the contract.
Consent, based on Article 1319, is manifested by the meeting of the offer and the acceptance upon
the thing and the cause which are to initiate the contract. The offer must be certain and the
acceptance absolute. A qualified acceptance constitutes a counter-offer. In order for the contract to
exist, there should be a conformity of wills between the parties and must create obligations that are
demandable. Also, consent must be intelligently given and both parties have acceptance and are
capable of understanding the subject matter of the contract as well as the cause of the obligation
which was established.

3. Give the effect of the perfection of a contract.

The effect of the perfection of a contract by mere consent based on Article 1315, are bound not
only to the fulfilment 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. Under Article 1159,
obligations arising from contracts must comply with additional requirement before they can be
perfected as well as the consequence of perfection which is related to the principle of consensuality
and obligatory force of contracts and should be complied with in good faith.

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