REPUBLIC ACT NO. 386 AN ACT ART. 1328.

Contracts entered during a lucid interval

TO ORDAIN AND INSTITUTE THE are valid. Contracts agreed to in a state of
CIVIL CODE OF THE PHILIPPINES drunkenness or during a hypnotic spell are voidable.

ART. 1305. A contract is a meeting of minds between ART. 1330. Contract where consent is given through
two people whereby one binds himself, with respect mistakes, violence, intimidation, undue influence, or
to the other, to give something or to render service. fraud is violable.

ART. 1306. The contracting parties may establish ART. 1332. When one of the parties is unable to read,
such stipulations, clauses, terms and conditions as or if the contract is in language not understood by
they may deem convenient, provided they are not him, and a mistake or fraud is alleged, the person
contrary to law, morals, good customs, public order, enforcing the contract must show that the terms
or public policy. thereof have been fully explained to the former.

ART. 1308. The contract must bind both ART. 1333. There are no mistakes if the party alleging
contracting parties; its validity or it knew doubt, contingency risk affecting the object of
compliance cannot be left to the will of one the contract.
of them.
ART. 1348. Impossible things or services cannot be
ART. 1318. There is no contract unless the following the object of contracts.
requisites concur:
1. Consent of the contracting parties ART. 1349. The object of every contract must be
2. Object certain which is the subject matter of the determined as to its kind. The fact that the quantity is
contract not determined shall not be an obstacle to the
3. Cause of the obligation which is established existence of the contract, provided it is possible to
determine the same, without the need for a new
SECTION 1. CONSENT ART. 1319. contract between the parties.
Consent is manifested by the meeting of the offer
and the acceptance upon the thing and the cause ART. 1356. Contracts shall be obligatory, in whatever
which are to constitute the qualified acceptance form they may have been entered, provided all the
constitutes a counteroffer. essential requisites for their validity are present.
However, when the law requires that a contract be in
ART. 1320. An acceptance may be express or implied. some form in order that it may be valid or
enforceable, or that a contract be proved in a certain
ART. 1321. The person making the offer may fix the way, that requirement is absolute and indispensable.
time, place, and manner or importance, all which In such cases, the rights of the parties stated in the
must be complied with. following article cannot be exercised.

ART. 1322. An offer made through an agent is ART. 1358. The ff. must appear in a public document:
accepted 1. Acts and contracts which have for their object the
creation, transmission, modification or
ART. 1323. An offer becomes ineffective upon death, extinguishment of real rights over immovable
civil interdiction, insanity or insolvency of either party property, sales of real property or of an interest
before acceptance is conveyed. therein are governed by articles 1403, No. 2, and
1405.
ART. 1327. The following cannot give consent to a 4. The cession of actions or rights proceeding from an
contract. act appearing in a public document.
1. Unemancipated (under parental authority) minors
2. Insane or dementated person and deaf minutes
who do not know how to write.
Art. 1370. If the terms of the contract are clear and 2. Vitiation of Consent - Consent of one or both
leave no doubt upon the intention of the contracting parties were obtained by means of fraud,
parties, the literal meaning of its stipulations shall be intimidation, violence, undue influence, or mistake.
controlled. If the words appear to be contrary to the
evident intention of the parties, the latter shall prevail Characteristics of Voidable Contracts
over the former. 1.Validity Until Annulled - Voidable contracts are valid
and binding upon the parties until annulled. This
Four kinds of defective contracts: means that they produce all legal effects as if they
1. Rescissible contracts were valid.
2. Voidable contracts 2. Right of Action for Annulment - The injured party or
3. Unenforceable Contracts the party suffering from lack of capacity may bring an
4. Void or inexistent contracts action to annul the contract. This action is
discretionary and may be waived, expressly or
Rescissible contracts are those validly agreed upon impliedly.
because all the essential elements exist and, 3. Capable of Ratification - Voidable contracts may
therefore, are legally effective, but in the cases be ratified, which confirms their validity and bars
established by law, the remedy of rescission is future annulment.
granted in the interest of equity. 4. Susceptible to Prescription - Actions to annul
voidable contracts are subject to prescription. The
Article 1381. The following contracts are rescissible: right to file an action to annul a contract is not
(1) Those which are entered into by guardians indefinite and may be lost due to the lack of time.
whenever the wards whom they represent suffer
lesion by more than one fourth of the value of the Causes of Voidability: Lack of Capacity
things which are the object thereof; The Civil Code identifies two primary types of
(2) Those agreed upon in representation of incapacity:
absentees, if the latter suffer the lesion stated in the 1.Absolute Incapacity: Involves those who cannot
preceding number; contract at all, such as minors below 18 years of age
(3) Those undertaken in fraud of creditors when the and insane or demented persons.
latter cannot in any other manner collect the claims 2.Relative Incapacity: Affects certain classes of
due them; people due to particular relationships or
(4) Those which refer to things under litigation if they circumstances, e.g., contracts between a guardian
have been entered into by the defendant without the and ward, or contracts made by a spouse without the
knowledge and approval of the litigants or of other spouse’s consent.
competent judicial authority;
(5) All other contracts specially declared by law to be Causes of Voidability: Vitiated Consent
subject to rescission. Voidable contracts due to vitiated consent arise in
situations where a party’s consent is obtained
Article 1390. Voidable contracts are those contracts through:
that, despite having apparent validity, suffer from 1. Mistake (Article 1331) – Refers to error or
some legal infirmity or defect. This defect allows the misunderstanding of a fact that materially affects
party or parties adversely affected to bring an action the agreement.
to annul the contract. However, unless and until 2. Violence or Intimidation (Articles 1335-1336) –
annulled, these contracts produce legal effects as if Refers to physical or moral pressure, where one party
they were valid. compels another to agree through fear or threat of
harm.
Grounds for Annulment of Voidable Contracts 3. Undue Influence (Article 1337) – Refers to taking
Under Article 1390 of the Civil Code, contracts may advantage of the weakness of mind, age, or other
be voidable if: circumstances to influence the other party
1. Lack of Capacity - One or both of the parties suffer improperly.
from some defect in their capacity to contract, such 4. Fraud (Article 1338) – Refers to deliberate
as being a minor or suffering from insanity. deception to secure unfair or unlawful gain,
leading one party to enter the contract based on
misrepresentations.
Unenforceable Contracts Well-written specifications must:
Article 1403. The following contracts are ✓ Avoid contractual commercial difficulties
unenforceable, unless they ✓ Meet performance objectives
are ratified: ✓ Avoid maintenance problems
(1) Those entered in the name of another person by ✓ Meet budget objectives
one who has been given no authority or legal
representation, or who has acted beyond his powers; Concept Specifications
(2) Those where both parties are incapable of giving These are written in general terms to define a product
consent to a contract. or major undertaking. They serve as a foundation for
investigating, feasibility study, and the probable life
Void or Inexistent contracts cycle cost of an undertaking.
Art. 1409. The following contracts are inexistent and
void from the beginning: Design specifications are used to define system or
❑ Those whose cause, object or purpose is contrary equipment performance, output capacity, and the
to law, morals, good customs, public order or public range of design licenses open to the designer.
policy;
❑ Those which are absolutely simulated or fictitious Design description specifications are normally those
(fabricated); produced by the designer. They are not the same as
❑ Those whose cause or object did not exist at the design specifications (see the preceding item), which
time of the transaction; govern the designer's work. The design description
defines and specifies a design solution that meets
❑ Those whose object is outside the commerce of
the design specification
men;
Specifications in this category serve two purposes.
❑ Those which contemplate an impossible service;
❑ They are submitted to the organization by issuing
❑ Those where the intention of the parties relative to
the design specification as evidence that the
the principal object of the contract cannot be
specification has been met.
ascertained;
❑ They are used by other designers to produce
❑ Those expressly prohibited or declared void by law.
equipment specifications, construction and
These contracts cannot be ratified. Neither can the
manufacturing drawing
right to set up the defense of illegality be waived.
Construction and Manufacturing Specifications
Art. 1410. The action or defense for the declaration of
In this category consist of drawings and written
the inexistence of a contract does not prescribe.
details that cover the product, system, building, or
service. They include references to regulatory
A specification is a detailed description of the
controls, acceptable national, international and
particulars of some projected work in any
industry standards; specify criteria that must be met
scientific, manufacturing process or engineering
by contractors or suppliers who wish to submit bids;
discipline by stating the dimensions, material
and limit products and services bids may or may not
content, quantities, and performance of the work.
include in their bids and proposals.
TECHNICAL SPECIFICATIONS
Process specifications describe the technical
It gives directions to be followed by
processes that will be used in the manufacture of a
the designer, builder or constructor.
product, or construction of a building or system.
These processes include the heat treatment of
Specifications serve three purposes:
foundry castings, rules for pre-stressing concrete
❖ make sure the client gets the productor service beams, bolt torques on bridge anchors, seismic
required; measurements, and specific chemical processes to
❖ are a means of equating expenditure with a name a few.
budget;
❖ specify to the contracting party precisely what is
wanted.
Standards Specifications
Standards, however, can be one of three types:
1. To provide specific requirements for products such
as material, fasteners and fittings that, among
various suppliers, are interchangeable.
2. Specify product material requirements as in the
first type, but suppliers are permitted some latitude
to meet the standards. In this case, however, the
products from different suppliers are not
interchangeable.
3. To cover processes and practices not specific to a
product or item. Standards of this type can be
recognized in titles such as Codes of Practice,
General Requirements, Guide, Test Methods, and
Quality Assurance.
Role of the Agency in Construction during construction:
▪ Agency’s project managers to assure good ▪ Receive and respond to construction contractor
performance during construction. Requests for Information (RFI),
▪ to make timely and decisive decisions. communicated from the contractor to the designer
▪ project organization and management approach through the CM. An RFI is a request by
defined by the project management plan (PMP) and the contractor for clarification of the design intent of
should have clear lines of communication and the drawings and specifications.
delegated authority. ▪ Review and recommend acceptance of contractor
submittals called for in the drawings and
Role of the Consultant Construction Manager specifications with respect to the construction
▪ The CM acts as the Agency’s representative with the deliverables.
contractors, oversees what work the contractors ▪ Review change requests and estimate costs for
perform pursuant to the contract drawings and change orders.
specifications, inspects the work as acceptable, and ▪ Make periodic visits to the site to assure design
recommends payment of contractor invoices. compliance and provide certification efforts
▪ The key CM staff is the resident engineer(RE) who is as required by the permitting agency.
principal point of contact with the contractor and is
stationed at the site for larger projects and for
smaller projects visits the construction site one or
more days a week.
Role of the Design Consultants in Construction
Design consultant(s) who produced the contract
drawings and specifications and “sealed” them
with their professional engineering seal, are referred
to as the designer(s) of record; and will
continue to provide the following design services
Role of the Contractor in Construction
The role of the construction contractor is to: ❖Project scope. A discussion of how to approach the
▪ Perform construction work defined by the contract project, the technological and resource feasibility,
drawings and specifications the major tasks involved, and a preliminary schedule;
using means and methods that are the contractor’s it includes a justification of the project and what
responsibility. constitutes project success.
▪ Obtain the permits related to the work for which the ❖Resources. The overall project budget for all
contractor is responsible. resource requirements and procedures for budgetary
▪ Develop and implement a quality control (QC) plan control.
for inspection and testing ❖Personnel. Identification and recruitment of
of the work. personnel required for the project team, including
▪ Develop and implement a safety plan to ensure a special skills and training.
safe work site.
❖Control Procedures for monitoring and evaluating
▪ Deliver submittals defined by the contract drawings
progress and performance, including schedules and
and specifications, such as
cost.
✓ Shop drawings, manufacturer’s drawings,
❖Risk and problem analysis. Anticipation and
calculations and data, and product information.
assessment of uncertainties, problems, and
✓ Contract schedule updated monthly noting
potential difficulties that might increase the risk of
progress and looking ahead to upcoming work.
project delays and/or failure and threaten project
✓ Requests for payment supported by reports as
success.
called for in the contract.
✓ Record drawings of the as-built work. ❖Contract requirements. A general structure of
✓ O&M manuals and training of Agency staff called managerial, reporting, and performance
for in the contract specifications. responsibilities, including a detailed list of staff,
▪ Submit RFIs to the CM to obtain clarification of the suppliers, subcontractors, managerial
design intent. requirements and agreements, reporting
▪ Submit Requests for Change (RFC). requirements, and a projected organizational
structure.
PROGRAM EVALUATION AND ❖Schedules. A list of all major events, tasks, and sub
REVIEW TECHNIQUE (PERT) schedules, from which a master schedule is
CRITICAL PATH METHOD (CPM) developed.

PERT/CPM Project Team

➢ Network techniques used for project analysis ❖are made up of individuals from various areas and
➢ Widely used for project to help plan and display departments within a company.
the ❖The most important member of a project team is
coordination of all activities of the project the project manager
➢ There are available software packages (Project
Management Project Scheduling
Software, MS Project, etc.) ❖typically the most critical element in the project
management process
Elements of Project Management ❖it is the source of most conflict and problems
• Planning ❖the most important criterion for the success of a
• Scheduling project is that it be finished on time
• Control

Project Planning
❖ Objectives. A detailed statement of what is to be
accomplished by the project, how it will achieve the
company's goals and meets the strategic plan, and
an estimate of when it needs to be completed, the
cost, and the return.
Project Scheduling ➢ In 1956, prior to the development of PERT, the
Steps in developing a schedule: Critical Path Method, which is simply called CPM,
❖ Define the activities that must be performed to was developed by James E. KELLY of the Remington
complete the project; Rand Corporation and Morgan R. Walker of Du Point
❖Sequence the activities in the order in which they in an effort by commercial industry to make
must be completed; advanced scheduling and cost control methods.
❖Estimate the time required to complete each ➢ By April 1958, CPM was demonstrated to be a real
activity; success.
❖Develop the schedule based on the sequencing
and time estimates of the activities. CPM
➢ was designed as a tool for planning, scheduling
The GANTT CHART and control of construction work.
❖is a traditional management technique for ➢ Emphasized the work or activities to be managed.
scheduling and planning small projects that have ➢ The network diagram defined and focused
relatively few activities and precedence relationships attention on the job to be accomplished.
❖ is a graph or bar chart with a bar for each project ➢ The schedule derived the earliest and the latest
activity that shows the passage of time times for their start and finish.

PROJECT CONTROL Critical Path Method (CPM) offers the solution

❖is the process of making sure a project progresses through systematic approach. The specific
toward successful completion information provided by the CPM are the following:
❖ Time management is the process of making sure a ➢ PERT/CPM pinpoints the particular work
project schedule does not slip and that a project is operations whose completion times are responsible
on time for controlling the complete date.
❖Cost management is often closely tied to time ➢ It provides a means of speeding up a project
management because of the time cost trade-off without excessive costs for overtime. Without the use
occurrences (slack time where resources can be of PERT/CPM when speeding up the project overtime
shifted from them to activities that are not on expenditures may be in total waste.
schedule) ➢ It gives a time leeway or float available for each of
the non-critical work operations. The information on
PERT- CPM float time will give the project manager that
➢ Developed in the later part of 1950’s opportunity to maneuver in their planning and control
➢ The use of PERT began in 1958 through the efforts of the operations.
of Lockheed Aircraft, the US Navy Special Project ➢ It establish time boundaries for operations with
Office and the consulting firm of Booz, Allen and possibilities of shifting resources, equipment and
Hamilton in the efforts of the US Government to manpower to meet time requirements.
speed up the POLARIS MISSILE PROJECT. ➢ PERT/CPM indicates the earliest starting date for
➢A special operations research team was directed to each work operations and sub-contractors for supply
formulate a new approach considering that the and delivery of materials.
management concepts and methods at that time ➢ It shows the most advantageous scheduling for all
were not adequate. The concept was formulated by operations. This gives planning information as to time
the research team and is called Program Evaluation and cost in choosing methods, equipment, crew and
and Review Technique (PERT). work hours.
➢The POLARIS MISSILE PROJECT is a large one ➢ In case of a change of order where the owner
involving over 3,000 contractors and 11,000 sub- would not want to extend the contract time,
contractors which several thousands of work PERT/CPM offers a means of re-scheduling the
activities. The use of PRT in this large project scale operations but still to be completed at least increase
project was proven successful in shortening the in cost.
length of the project completion time.
➢ In case of serous delay due to weather, late
material or equipment delivery, the network can be
revised at that stage and new computation is made to
determine the new critical operation if any and
revised float times determined for the non-critical
operations.