CONSENT (1319)

Jardine Davis vs. CA

Facts:
The case happened during the power crisis in 1992. To curtail further losses
due to the power outages, PUREFOODS Corp. decided to install two 1500 Kw
generators in its food processing plant in Marikina City.
A bidding was held for the generators wherein respondent Far East Mills and
Supply Corporation (FEMSCO) won.
PUREFOODS confirmed the award of the project to FEMSCO through a
letter. Such letter contained several terms and conditions which required
FEMSCOs compliance. FEMSCO complied with some of such terms and
conditions.
However, PUREFOODS unilaterally cancelled the project due to reasons
which forced it to revisit and rebid the project.
FEMSCO protested. But, before matters could be resolved between the
parties, PUREFOODS had already awarded the project to petitioner Jardine
Davies.
FEMSCO wrote PUREFOODS demanding it to award it the project and also
wrote Jardine Davies demanding it to cease and desist from delivering and
installing the generators. With both letters unheeded, FEMSCO decided to sue
both PUREFOODS and Jardine Davies.
The RTC decided in favor of FEMSCO and the CA likewise affirmed such
decision upon the appeal of PUREFOODS.
PUREFOODS asserts that its letter to FEMSCO was not an acceptance but
rather more of a counter-offer which required FEMSCOs conformity. Hence,
no contract could have been perfected between them as PUREFOODS
allegedly never received FEMSCOs acceptance of the counter-offer. As such,
it is within the powers of PUREFOODS to revoke the counter-offer.
Issue: WON a contract had already been perfected between FEMSCO and
PUREFOODS
Held:
Yes
First of all, there can be no contract unless the following requisites are met:
first, consent of the contracting parties; second, object certain which is the
subject matter; and third, the cause of the obligation which is established.
Contracts are perfected by mere consent upon the acceptance of the offer made
by the offeror. From that moment on, both parties are bound to its fulfillment
as well as to its consequences. To produce a contract, the acceptance must not
qualify the terms and conditions of the offer. It may be express or implied and
must be made known to the offeror and can be revoked by the offeror before
such is made known to him.
In the instant case, only the consent of the parties is in question.
PUREFOODS initiated the process of the contract by conducting a bid.
According to Art. 1326, a bid is simply an invitation to make a proposal. In

this case, the proposal sent by FEMSCO constitutes the offer while the letter
sent by PUREFOODS constitutes either its acceptance or rejection of such
offer.
According to the SC, the letter was obviously an acceptance because the
wordings and the tenor of such said that it had confirmed the awarding of the
project to FEMSCO.
Furthermore, the conditions on the letter did not constitute a counter-offer
because these conditions were imposed on the performance of the contract and
not on its perfection.
In Babasa vs. CA, the Court distinguished the two. In conditions imposed on
the perfection, failure to comply with the conditions prevents the contract from
taking place. In conditions imposed on the performance, failure to comply
with the conditions merely gives the other party remedies in order to protect
their interests.
In this case, the conditions were merely imposed on the performance because
they only prescribe the manner in which FEMSCO was to comply with its
work and obligation to PUREFOODS.
Even assuming arguendo that such letter was indeed a counter-offer, it was
already impliedly accepted because FEMSCO had already complied with
some of the conditions indicated on said letter. Therefore, the contract had
already been perfected and PUREFOODS cannot just unilaterally cancel it.