Ch. 7 - Form of Contracts Flashcards
(Art. 1356) Contracts shall be obligatory, in whatever form they may 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.
A certain form may be prescribed by law for any of the following purposes:
- For validity
- For enforceability
- For greater efficiency
Form for validity of contract
When the form required is for validity, its non-observance renders the contract void and of no effect
Form of enforceability of contract
When the required form is for enforceability, non-compliance therewith will not permit, upon the objection of the party, the contract, although otherwise valid, to be proved or enforced by an action
Form for greater efficiency or convenience of contract
Formalities intended for greater efficacy or convenience or to bind third persons, if not done, would not adversely affect the validity or enforceability of the contract between the contracting parties themselves
The general rule is that contract exists when the three essential requisites are met. To this general rule, the code admits exceptions, set forth in the second portion of Art. 1356, Art. 1356 of the code establishes only two exceptions, to wit:
A. Contracts for which the law itself requires that they be in some particular form (writing) in order to make them valid and enforceable
B. Contracts that the law requires to be proved by some writing (memorandum) of its terms, as in those covered by the old Statute of Frauds, now Art. 1403(2) of the Civil Code.
(Art. 1357) If the law requires a document or other special writing 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.
(Art. 1358) The following must appear in a public document
- 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 are governed by Art. 1403, No. 2, and 1405;
- The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains
- 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;
- 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
What is a public document?
An instrument authenticated by a notary public or a competent public official with the formalities required by law
The requirement of a public document in Art. 1358 is
not for the validity of the instrument but for its efficacy
Art. 1358 nowhere provides that the absence of written form will
make the agreement invalid or unenforceable
Art. 1357 and 1358 in relation to Art. 1403 requires that
the sale of real property must be in writing for it to be enforceable. It need not be notarized.
Article 1357 on the necessity of a public document is only for
convenience
It is a settled rule that the failure to observe the proper form prescribed by Article 1358 does
not render the acts or contracts enumerated therein invalid. It has been uniformly held that the form required under the said Article is not essential to the validity or enforceability of the transaction, but merely for convenience
