Contracts of Adhesion are Just As

Binding as Ordinary Contracts

(Cabanting vs BPI, 2016)
Facts:
Cabanting bought from Diamond Motors / BPI a car on installment basis for which a promissory note
with chattel mortgage was executed. One of the stipulations was that any failure to pay an amount
on schedule will make the entire outstanding sum to become due and payable without prior notice
and demand. When the two Cabantings failed to pay some monthly amortizations, BPI sued them
for replevin and damages. Decision was rendered ordering them to pay the cars unpaid value with
damages. The respondents appealed the decision claiming that there has been no proof of prior
demand and that the stipulation on its waiver must be deemed invalid for being a contract of
adhesion.
Issue 1: W/N a stipulation waiving the necessity of notice and demand is valid
Held:
Yes. Article 1169 of the Civil Code provides that one incurs in delay or is in default from the time the
obligor demands the fulfillment of the obligation from the obligee. However, Article 1169 (1) also
expressly provides that demand is not necessary under certain circumstances, and one of these
circumstances is when the parties expressly waive demand.
Issue 2: W/N a contract of adhesion such as in this case is valid
Held:
Yes. A contract of adhesion is just as binding as ordinary contracts. Such are not invalid per se and
are not entirely prohibited because the one who adheres to the contract is in reality free to reject it
entirely. If the other party adheres, he gives his consent.
The court may strike down such contracts as void when the weaker party is deprived of the
opportunity to bargain at an equal footing. Here, there is no proof that petitioners were
disadvantaged, uneducated or utterly inexperienced in dealing with financial institutions; thus, there
is no reason for the court to step in and protect the interest of the supposed weaker party.

Issue 3: W/N a prior demand is required in actions for replevin

Held:
No. Prior demand is not a condition precedent to an action for a writ of replevin, since there is
nothing in Section 2, Rule 60 of the Rules of Court that requires the applicant to make a demand on
the possessor of the property before an action for a writ of replevin could be filed.