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Module 8. Forms of Contracts

The document discusses different forms of contracts that are required by law. Some contracts must be in written form to be valid and enforceable, like donations over P5,000 and sale of land. Other contracts, such as those involving real property, must be in a public document for validity and convenience. Contracts can also be oral or verbal, requiring just agreement but no specific form. The document provides examples of contracts under the different categories and their legal requirements to establish the importance of ensuring contracts use the proper form.

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Krisha Mae Sangalang
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48 views

Module 8. Forms of Contracts

The document discusses different forms of contracts that are required by law. Some contracts must be in written form to be valid and enforceable, like donations over P5,000 and sale of land. Other contracts, such as those involving real property, must be in a public document for validity and convenience. Contracts can also be oral or verbal, requiring just agreement but no specific form. The document provides examples of contracts under the different categories and their legal requirements to establish the importance of ensuring contracts use the proper form.

Uploaded by

Krisha Mae Sangalang
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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LAW 101

LAW ON OBLIGATIONS AND


CONTRACTS

LEARNING MODULE
Module 8 FORMS OF CONTRACTS

 Overview

The form of contracts matters as there are contracts that becomes unenforceable
if not made on the required form as prescribed by law. Since, human mind by nature, is
prone to errors and sometimes memory is unreliable, some contracts have to be in
written form to be enforceable.
This module will detail the kinds of contracts that need to be in certain form in
order to be valid, enforceable and for convenience of the parties.
Illustrative examples as well as legal opinions were also included in this module
so that you will be guided on how to make decisions on cases concerning forms of
contracts. Let's start, learn and grow in knowledge together!

Learning Objectives
🎯

At the end of this lesson, the students are expected to:


□ Determine the different forms of contracts and its importance
□ Learn the applicable provisions of law governing forms of contracts
□ Decide on cases involving forms of contracts

Contents
🗐
This module will discuss the following topics:
 Why are forms of contract important?
 What are the different contracts that required a specific form?

🗪 Discussion
Forms of Contract

Form is required by law in three ways:


 Validity of the contract
 Enforceability of the contract
 Convenience of the parties

Spiritual system- Contract is valid and enforceable provided that all essential elements
of contract are present.

Art. 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. (1278a) 

Art. 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. (1279a) 

Art. 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 are 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. (1280a) 

Example of Formal Contracts


a. Donations of real property must be in a public instrument, otherwise void (Art
749, CC)
b. Donations of personal property exceeding P5,000 must be in writing, otherwise
void. (Art 748, CC)
c. Contributions of a partner in a partnership, if an immovable property, must be in
writing, otherwise void, (Art 1773, CC)
d. Sale of land thru an agent, the authority of the agent to sell must be in writing,
otherwise void. (Art 1874, CC).
e. Antichresis must be in writing, otherwise void. (Art. 2134)
f. Chattel Mortgage must be registered, otherwise void. (Art. 2140)
g. Agreements regarding payment of interests in contracts of loans must be in
writing, otherwise void (Art. 2314)

Contract Formality
Donations of real property (Art 749, CC) Must be in public instrument
Donations of personal property Must be in writing
exceeding P5,000. (Art 748, CC)
Contributions of a partner in a Must be in public instrument with
partnership, if an immovable property inventory of immovable contributed
(Art 1773, CC)
Sale of land thru an agent, (Art 1874, Contract of agency must be in writing
CC)
Antichresis (Art. 2134) Must be in writing
Chattel Mortgage (Art. 2140) Must be in registered
Agreements regarding payment of Payment of interest must be in writing
interests in contracts of loans (Art. 2314)

 Contracts that needs to be in certain forms for their enforceability (Art. 1403,
par. 2 and 1405. (1280a).

These contracts must be in writing to be enforceable:


o An agreement that by its terms is not to be performed within a year from the
making thereof;
o A special promise to answer for the debt, default, or miscarriage of another;
o An agreement made in consideration of marriage, other than a mutual promise to
marry;
o An agreement for the sale of goods, chattels or things in action, at a price not
less than five thousand pesos, unless the buyer accept and receive part of such
goods and chattels, or the purchase money; but when a sale, of the amount and
kind of property sold, terms of sale, price, names of the purchasers and person
on whose account the ale is made, it is a sufficient memorandum;
o An agreement for leasing for a longer period than one year, or for the sale of real
property of an interest therein;
o A representation as to the credit of a third person.
 Contracts that needs to be in certain forms for the convenience of the parties
(Art. 1358).

These contracts must be in public instrument for the convenience of both parties.
o 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 Articles 1403, No. 2, and
1405;
o The cession, repudiation or renunciation of hereditary rights or those of the
conjugal partnership of gains;
o 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;
o The cession of actions or rights proceeding from an act appearing in a public
document.
o The cession of actions or rights proceeding from an act appearing in a public
document.

4. Oral or verbal contracts - those that does not require a special form of
instrument, but mere agreement of the parties orally makes the contract valid and
enforceable.

 Summary

 Contracts must be in certain form for its validity, enforceability and convenience
of both parties.
 Some contracts must be in written form to be valid or enforceable while others
must be in public document for the convenience of both parties.

 References

A. Textbooks
De Leon, H. S. (2003). The Law on Obligations and Contracts. Rex Printing
Company, Inc. Quezon City.

Luna, M. Ancheta (1995). The Law on Obligations and Contracts (Revised


Edition). New Galaxie Lithographic Arts and Printing Press. Quezon City

B. Main Reference
Suarez, C. B. & Suarez, A. Q. (2011). The Law on Obligations and Contracts.
GIC Enterprises & Co., Inc. C.M. Recto, Manila
C. Other References

Chan Robles Virtual Law Library


chanrobles.com/civilcodeofthephilippinesbook4.htm

Youtube Channels:
Lecture Videos on Law on Obligations and Contracts
AKAWNTING.COM
Atty. Javier Law Vlog

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