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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.
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.
Form of a contract
A manner in which a contract is executed.
Oral contract
A verbal agreement between contractual parties by which there is no evidence presented other than the parties or witnesses who heard it.
Written contract
An agreement between contractual parties that is presented in the form of a document;
Can be handwritten, typed or printed;
It may be in a public or private instrument; and
All its terms must be in writing
Mixed
A contract that is partly oral and partly in writing
Classification of contracts according to form.
Informal or common contract
A contract which may be entered into in whatever form (oral or written), provided, all the essential requisites for a contract to be valid are present
Requisites of a valid contract (under Article 1318 of the Civil Code)
Consent
Object
Consideration or causa
Formal or solemn contract
A contract that is required by law for its efficacy to be in a certain specified form.
Requisites of a solemn contract
Consent
Object
Consideration or causa
Solemnity or formality (depends on the applicable law to the contract)
Rules regarding form of contracts
General Rule
Form is not required for a contract to be valid and obligatory as long as the three essential requisites for a contract to be valid are present.
Exemptions
A certain form is necessary for any of the following purposes:
For validity of contract
a situation wherein the law requires that a contract be in a certain form for it to be valid
Example
Contracts Form of Contracts
Contract of partnership Public Instrument
Donation of real property Public Instrument
Contract of sale of immovable property Public Instrument
Stipulation of pay interest Private Instrument
Sale of land through an agent Private Instrument
For enforceability of contract
Law requires that a contract must be in a certain written document to be valid and enforceable.
If the contract is not in written document, it is still valid but its existence cannot be proven and it cannot be enforced.
For convenience of the parties
Note: When the law requires that a contract must be in a certain form for it to be valid, enforceable, or proven, it is absolute and indispensable.
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.
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.
Form for the convenience of the parties
Article 1357 grants the contracting party the right to compel the other party to execute the necessary form required by law. However, the contract must be valid and enforceable before a party may be compelled to execute the necessary form.
Example:
Billy sold his land to Fred but the contract appears in a private instrument. Fred decided to register the deed of sale, however, the registration requires that the deed of sale must be in a public instrument. Fred requests Billy to put down the deed of sale into a public instrument, unfortunately, Billy refuses. Fred filed a case against Billy to compel him to execute the necessary form. Can Billy be compelled to execute the necessary instrument?
Yes, Billy cannot compel because the deed of sale they executed in private instrument is valid and enforceable
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 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.
Public Document
A public instrument authenticated by a notary or by a competent public official, with the formalities required by law.
Necessity of public document
The necessity of a public document for certain contracts prescribed by Art. 1358 is only applicable for convenience; it is not necessary for validity or enforceability.
Effect of Non-compliance with the proper form prescribed by Art 1358
Failure to follow the proper form prescribed by Art. 1358 does not automatically invalidate the contract.
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