I'm Giancarlo Enrico S. Pozon, a Wushu instructor, investor and Barrister... That's right, Barrister; I graduated from law school and took the Bar Exams, now I'm waiting for the results. I created this blog to make Philippine Law easy to understand for the average person. It's all about free legal advice. There are many law blogs. But the problem is that many of them are written for lawyers and law students. They use words that can't be understood by ordinary people.
Many lawyers, judges and law students consider themselves as superior to most human beings because of their knowledge of the law. It bothers me since the law is supposed to serve society. Since the law is meant to serve society as a whole, it is important that is must be understood by everybody.
This does not mean that we should all become lawyers. It means that although law is a highly specialized profession, the first duty of everybody in this profession is to make the law understandable to all; that's why all these articles are free legal advice.
Like I said, this blog is about law -but it's for the ordinary people, not the lawyers. It's for the ordinary folk so they will know what is good and bad for them, and that making them aware of the law will help us all improve society as a whole. This is free legal advice for everybody!
Commercial Contracts
Contracts entered into by merchants in pursuit of their activities as merchants, those involving articles of commerce or those defined as such contracts by special commercial laws. Commercial contracts, therefore, don't necessarily have to be entered into by merchants.
The Code of Commerce is still the law governing commercial contracts except those expressly or impliedly repealed by later laws. The Civil Code has repealed the Code of Commerce's provisions on Sales, Partnerships, Agency, Loans, , Deposits and Guaranty.
Commercial contracts are generally consensual as to perfection, but there are commercial contracts that require specific forms (Letters of Credit, Charter Parties, Loan on Bottomry and Respondentia, etc.) Perfection is made when the parties (buyer ans seller) agree to enter into a sale (the legal term is "meeting of the minds.") An offer can be withdrawn before perfection.
If a period is given to the offeree but no amount is paid, the offer can still be withdrawn as a matter of right. If, however, the withdrawal of the offer was made arbitrarily or whimsically, the offeree can demand damages. If there is a consideration (read: payment) for the period given to the offeree, an option contract is considered in effect and the offeror can no longer go back on his offer.
If there is perfection by correspondence (the parties writing to each other instead of physically meeting) the Cognition Theory applies (perfection happens when the offeror learns that the offer was accepted.) The Cognition Theory applies to all consensual contracts under commercial laws.
There is another theory which applies to all contracts under the Code of Commerce: the Manifestation Theory. Here, there is perfection of the contract when the acceptance of the offer is manifested (read: made.)
If, however, the contract is perfected by delivery (a real contract, like a contract of carriage, for instance,) or execution of formalities (formal contracts) neither manifestation nor cognition will apply even if the contract is governed by the Code of Commerce.
Joint Accounts
A business arrangement where one merchant is interested in the transaction of another merchant and consequently contributes capital participates in its results.
The contributing merchant and contractees of the managing merchant have no contractual cause of action against each other. The contributing merchant should also not hold himself out as a partner, whether by representation or his acts, or his relationship with the managing merchant will be covered by the Civil Code's rules on partnership.
Transfer of Non-Negotiable Credits
Commercial credits that are neither negotiable nor payable to bearer can be transferred by the creditor without the debtor's consent -informing the debtor is sufficient (pure credit.) By virtue of the notification, the debtor will be obliged to the new creditor and from the time the notification is made, only payment to the new creditor will be valid. The transfer binds the creditor upon notification.
The assignor (old creditor) will be liable for the credit's legality for the capacity in which he made the transfer, but not for the debtor's insolvency unless there is an express agreement for such.
When the credit is assigned, the assignee (new creditor) takes the assignor's place and is subject to the same claims and defenses. Assignment won't remove liens or restrictions on the assigned rights and the assignee can't acquire greater rights than the assignor.
A right of credit with a concomitant obligation of, or reciprocal undertaking by, its holder (expressed in the document of credit itself) can't be assigned without the debtor's consent. The assignment would be a novation of the obligation by conventional subrogation -which requires the consent of all the parties.
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