CHAPTER 3. FORM OF CONTRACTS

Article 1356. Contracts shall be obligatory, in whatever form they may 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 a contract be proved in a certain way, that requirement is absolute and indispensable. In such cases, the right of the parties stated in the following article cannot be exercised.

By: Algy Riguer

Contracts are binding upon the contacting parties in whatever form they may have been entered into as long as all the essential requisites for their validity are present.

Form of a contract-refers to a manner in which a contract is executed or manifested.

When form is Essential:

1. when the law requires a form for the validity of the contract.

2. When the law requires certain agreements to be in writing to be enforceable, or that contracts must be proven in a certain way.

3. When the law requires a special form.

Examples:

Beth left a note in the store of Nathy offering Php 1,000.00 for a table Nathy is selling. The following day Nathy called Beth by phone accepting the offer of Beth who promised to pay the next day.

The note and the oral acceptance constitute a legally enforceable contact and both Beth and Nathy are fully bound.

Article 1357. If the law requires a document or other special form, as in the acts and contracts enumerated in the following article, the contracting parties may compel each other to observe that form, once the contract has been perfected. This right may be exercised simultaneously with the action upon the contract.

By: Rose Ann Villanueva

Kung hinihingi ng batas, ang isang dokumento o iba pang espesyal na porma, na tulad ng gawa at mga kontratang nabanggit sa mga sumusunod na artikulo, ang nakikipagkontratang partido ay maaring pilitin ang bawat isa na sundin ang itsura hanggang sa mabuo ang kontrata. Ang karapatan na ito ay maaaring gawin ng tuloy-tuloy na may pagkilos sa kontrata.

Example:

Kristia donated a real property to Bryan in a private instrument. The donation is void.

Donation of real property is required to be in a public instrument to be valid.

Sale of Real property orally executed is valid but unenforceable because the law requires it to be in writing. While exchange of land is valid although not in writing.

Article 1358. The following must appear in a public document:

(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 of an interest therein a governed by Articles 1403, No. 2, and 1405;

(2) The cession, repudiation or renunciation of hereditary rights or of those of the 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 document, or should prejudice a third person;

(4) The cession 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 sales of goods, chattels or things in action are governed by Articles, 1403, No. 2 and 1405.

By: Jayson Calventas

Ang sumusunod ay dapat lumitaw sa isang pampublikong dokumento:

(1) Mga gawain at kasunduang na may layong lumikha, maghatid, magbago o magwakas ng mga tunay na karapatan sa hindi nalilipat na ari-arian; mga benta ng tunay na ari-arian o ng isang interes sa loob nito na pinamamahalaan ng Artikulo 1403, Blg. 2, at 1405;

(2) Ang pagsasalin, pagtatakwil o pagtalikod sa mga karapatan ng pagmamana o yaong mga naipundar sa ilalim ng kasal;

(3) Ang kapangyarihang mangasiwa ng ari-arian, o anumang iba pang kapangyarihan na may layong gumawa ng gawaing ilalagay o kaya’y dapat ilagay sa isang pampublikong dokumento, o kaya’y makasasama sa ibang tao;

(4) Ang pagsasalin ng mga aksyon o mga karapatang nagmumula sa isang gawaing umiiral na sa isang pampublikong dokumento.

Lahat ng iba pang mga kasunduan kung saan ang sangkot na halaga ay lampas sa limang daang piso ay dapat nakasulat, gayon din yaong pribado. Ngunit ang bentahan ng mga kalakal, chattels o mga bagay sa aksyon ay pinamamahalaan ng Artikulo, 1403, Blg. 2 at 1405.

Article 1358 NCC | speaks of…

Contracts which must appear in a public document

• The law does NOT require the accomplishment of certain acts OR contracts in a public instrument in order to validate the act OR contract
  • BUT ONLY to insure its efficacy so that after the existence of the act OR contract has been admitted/established, the party bound may be compelled to execute the document.
  • Formal requirements are for the benefit of third parties
    • for the purpose of informing as well as binding them.
    • Non-compliance does NOT adversely affect the validity of the contract NOR the contractual rights and obligations of the parties.
    • Public document/instrument
      • one which is acknowledged before a notary public OR any official authorized to administer oath, by the person who executed the same;
      • any other instrument is private, UNLESS it becomes part of an official record and is certified by a public officer duly authorized by law

      Article 1358 NCC | example:

      • As security for his debt, Ryan mortgaged his land to Elsa.
      • The mortgage must appear in a public document.
      • The extinguishment of the mortgage, upon payment of the debt by Ryan, must likewise appear in a public document.