LAW ON OBLICATIONS AND CONTRACTS 8th SESSION
Private Document
▫ Contracting Parties are the only one who has Binding Effects
▫ Not Notarized
KNOWN ALL MEN BY THESE PRESENTS:
▫ Not Issued by the Government Office
Public Document (2 Types)
▫ Issued by the Government by the Reason of its Function (Ex.
Mayor's Permit)
▫ Notarized by a Notary Public (Converting a private document
to a public document by notarization)
As a Rule, If notary public, He or she must be lawyer. But not all
lawyers are notary public because it needs to be applied to the
court
Lawyers are filing a petition before the court grants them the
commission to notarize public documents within the territorial
jurisdiction.
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 (1279a) Subject Matter of the Contract: A certain parcel of land situated
Question
As a Rule, a contract is perfected where the 3 essential
elements are present. What is the purpose why we need to (P200,000.00), Philippine Currency
notarize a private document to be converted into a public
document.
Answer:
Main Purpose of Notarization: Registration
Legal Effect if a Document is not notarized: Valid because
the 3 Essential elements are present, and it was made into
writing
Once Notarized, The document enjoys Presumption of Regularity
which means the contracting parties signed in the presence of the
lawyer, the parties understood what is written on the document,
and knows the legal consequence of the document.
OBLICON PRE-FINALS Page 1
Draft Dead of Sale
DEED OF ABSOLUTE SALE
I, COCO MARTIN, of legal age, single, Filipino, and Resident of
Brgy, Dinaga, Canaman, Camarines Sur, Hereafther referred
to as the "VENDOR / SELLER"
For and In consideration of the sum of TWO HUNDRED
THOUSAND PESOS (P200,000.00), Philippines Currency, to
me in hand paid by
RICHARD GOMEZ and IWA MOTO, both of legal age, married,
Filipinos and residents of #73 Zone 2, Brgy. Dinaga,
Canaman, Camarines Sur, hereafter referred to as the
“VENDEES / BUYERS”
Do hereby SELL, TRANSFER, and CONVEY, absolutely and
unconditionally, unto said VENDEES, their heirs and assigns,
a certain parcel of land, situated at Del Rosario, Naga City,
and more particularly described as follows, to wit:
Contracting Parties: Coco Martin, Richard Gomez, and Iwa Moto
at Del Rosario, Naga City
Consideration/Price: Sum of Two hundred Thousand Pesos
Question
How are we going to know that both of the parties - seller
and buyer, really consented to the object and
consideration?
Answer:
There should be a Signature on top of their Names
Question
Assuming the contracting parties signed the document,
what is the classification of the document? Is it a private
or public document? And Why?
Answer:
Private Document because it is not notarized by a lawyer
or attorney.
► Before you sell a property, you need to scrutinize it. If
there is a supporting document stating that this person is
really the owner of the property.
► The Parties should and must appear before the notary
public / there should be a personal appearance
Legal consequences if there is no personal appearance of the
parties:
o Lawyers can be suspended as a lawyer and notary public
o Lawyers can be reprimanded (there’s a warning)
o Lawyers can disbar
o Lawyers’ license can be revoked
o Lawyers can also be sued of criminal case for falsification of
documents
 LAW ON OBLICATIONS AND CONTRACTS 8th SESSION
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
from, once the contract has been perfected. This right may be
exercised simultaneously with the action upon the contract
(1279a)
In certain cases, PUBLIC INSTRUMENT is required for the
CONVENIENCE of the parties in order that the contract may be
registered in the proper registry to make effective, as against
third persons, the right acquired under such contract.
► Every Month, Lawyers as a notary public submit those
documents notarized by them to the court to make sure
that they are complying with 2004 notary public circular
of supreme court. If there is noncompliance, lawyers'
license as notary public can be revoked.
Samples of Transactions that needed to be in PUBLIC
INSTRUMENT:
1. Deed of Sale of Real (Building or Real / Lot Property)
2. Deed of Sale of Personal (Vehicle or Anything Detachable)
3. Deed of Donation of Real Property
4. Notarial Will
5. Loan / Mortgage of Real or Personal Property
6. Insurance Policy
7. Promissory Note of Real or Personal Property
8. Special Power of Attorney
9. Affidavits or Sinumpaang Salaysay
 If it Involves real property, it must be notarized
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 heredity
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.
 The Public Document is required only for the
Convenience and Greater Protection of the parties and ask for the reformation of the instrument to the end that such
Registration is needed only to make the contract
effective as against third person
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A Contract is Valid Even though it is not notarized but it cannot
be registered.
In other words, the law does not require accomplishment of
certain acts or contracts in a public instrument in order to
validate the act or contract but only to ensure its efficacy so
that after the existence of the act or contract has been
admitted or established, the party may be compelled to execute
the document (Cenido v. Apacionado, 318 SCRA 688)
Formal Requirements
Are for the benefit of the third parties for the purpose of
informing as well as binding them
Non-Compliance therewith does not adversely affect the
validity of the contract nor the contractual rights and
obligations of the parties thereunder
Public Document or Instrument
Is one which is acknowledge before a notary public or any
official authorized to administer oath, by the person who
executed them
• The party making the acknowledgement formally
declares that the instrument is his free act and
deed while the officer taking the same attests and
certifies that such party is known to him that he is
the same person who executed the instrument and
acknowledge that the instrument is his free act
and deed.
• Any other instrument is private in character
Probative Value of Public Instrument:
1. The effect of NOTARIZATION of a private document is to
convert the said document into a public one and render it
admissible in evidence in court while further proof of its
authenticity and due execution
2. Public Documents are entitled to full faith and credit on
their face in the absence of any clear and convincing
evidence that their execution was tainted by defects or
irregularities that would warrant a declaration of nullity
3. Public document enjoy the presumption of validity and
regularity. It is not however, the intention nor the
function of the notary to validate and make binding and
instrument never, in the first place, intended to have any
binding legal effect upon the parties thereto
When, there having been a meeting of minds of the parties to a
contract, their true intention is not expressed in the instrument
purporting to embody the agreement, by reason of mistake,
fraud, inequitable conduct, or accident, one of the parties may
true intention may be expressed
If mistake, fraud, inequitable conduct, or accident has prevented
a meeting of the minds of the parties, the proper remedy is not
reformation of the instrument but annulment of the contract
 LAW ON OBLICATIONS AND CONTRACTS 8th SESSION

Happened to correct a contract because there's a mistake

or accident in the contract. It can be corrected through
supplemental agreement.

 If there's a breach of contract: the first remedy is to send a

Demand Letter or communication letter. The purpose is to
inform the other party that there is an obligation, that he
failed, or there's a breach of contract, etc.

Question:

Is it required for a demand letter to be written by a lawyer?

Answer:

No, as long as you can communicate and inform the other

party that is well sufficient

If the terms of a contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its
stipulation shall control

If the words appear to be contrary to the evident intention of the

parties, the latter shall prevail over the former

 If there are misunderstandings and can still be settled by the

two parties, they can supplement the contract, they can
terminate the contract, or they can supersede the contract
provided both contracting parties agreed.

 If both or either of the contracting parties disagree, or they

are not amenable as to the proper interpretation of the
contract, supreme court will be involved

 Reformation, both parties signed the contract. Reformation

happened if along the way they see that there's a mistake in
the contract. Send a demand letter requesting for
reformation of a contract. If both parties agree, there will be
a new document. The new contract can be called a
Supplemental Contract - It will correct the previous contract
that's why there's a reformation. Assuming both or either of
the parties disagree, the court will now be involved for
reformation.

OBLICON PRE-FINALS Page 3

 LAW ON OBLICATIONS AND CONTRACTS 9th SESSION
RESCISSBLE CONTRACTS
Contracts Validly agreed upon may be rescinded in the case
established by Law.
- Pwede ma-cancel, Terminate. Provided the grounds
are established by law
- Almost Similar to Voidable Contracts.
Purpose of These Restrictions:
- For the Benefit and well fare of the ward
Sir Henry has a Grandmother who is Physically Incapable
because of her age. Sir was able to secure a court order,
because Sir Henry has a lot of cousins. In order to see who
is the most competent and Fit to administer the property
of his grandmother, They need a court order.

Assuming, the grandmother has 100Million and 99% of it is

- Valid Contract However there's an Economic Damage transferred to Sir Henry's name. The contracts can be
on the part of the Other Party. Especially on the Ward canceled because of no. 1

 The Rescissible Contracts under Art. 1380 are valid, but may Explanation: (Number 2)
subsequently be terminated on legal grounds.
- Pwede lang ma-terminate ang contract based on Can no longer be located or Found
justifiable grounds or basis.

 Their being rescissible is not principally premised on a breach
oof trust by the other party, but on some economic damage
as a result of Inequitable Conduct by one party.
- Nagkakaroon ng Termination of Trust because the
other party committed a certain Inequitable Conduct
or ibigsabihin may mga pagkakamali na ginawa.
The following Contracts are Rescissible:
Sir Henry is a Ship Captain, He went to America on a Boat or
Vessel.
Assuming, In the middle of his journey, Sir Henry went
missing for a few Months.
They will be appointing a Guardian or Administrator. The
administrator will manager Sir Henry's Property while he is
missing.

1. Those which are entered into by guardians whenever the Question:

wards whom they represent suffer lesion by more than one- Assuming Sir Henry was found and more than 40% of his
fourth of the value of the things which are the object property was already transferred to the administrator. Can
thereof; Sir file a case or Sue the administrator?
2. Those agreed upon representation of absentees, if the latter
suffer the lesion stated in the preceding number; ○ Yes, on the basis of Number 2. Because there is
3. Those undertaken in fraud of creditors when the latter Lesion or Economic Damage / Sabotage in Sir Henry's
cannot in any other manner collect the claim due them; Property.
4. Those which refer to things under litigation if they have
been entered into by the defendant without the knowledge Question:
and approval of the litigants or of competent juridical Does Article 1381 apply to those Indigent / Poor People?
authority;
Answer:
No. Because there is no subject matter because they have
Explanation: (Number 1)
no property or because they are poor. This provisions only
apply to those who have subject matter, or those who have
Example: Child Celebrities, Persons who are Physically money.
Incapable

As a Rule, when a Child celebrity or Ward enters a Contract,

It usually needs a Court Order.

Purpose of Court Order:

- Because If you are below 18 Years Old, you cannot entry a
contract
- There is a need for someone to Represent the Child To
confirm the validity of the contract.
- You have the authority to manage the property

Economic Damage, One fourth ng property ang nawala

OBLICON PRE-FINALS Page 4

 LAW ON OBLICATIONS AND CONTRACTS 9TH SESSION
Implies Economic Damage
 In case of a Guardian with respect to the properties of his
Ward, any act of ownership or disposition undertaken by the
guardian on behalf of his ward without court approval is Void.
If there is court Approval, the transaction is Valid whether or
not there is Lesion.
 If the guardian, however, performs acts of administration,
such as buying materials to repair the roof of the wards
house, and the ward suffers economic loss because there
was no need to make Useless Purchase, then the contract
entered into by the guardian is rescissible provided that the
ward suffers lesion by more than One-fourth of the value of
the things which are the object of the contract.
Mr. Etcay is Rich but unfortunately he became mentally
unstable, Sir Henry was able to secure a Court order to
administer Mr. Etcay's Property.
Assuming, Sir Henry bought Cars, Cellphone, etc not for Mr.
Etcay's well fare, not for his beneficial use but for Sir Henry's
own interest. This can be cancel for rescission on the basis
that there was Economic Damage on the part of Mr. Etcay
(TOO ADVANCE ACCORDING TO SIR)
1. Those where the consent is vitiated by mistake, violence,
intimidation, undue influence or fraud
 Example:
▪ A gun was pointed at you for your consent
▪ There's a Mistake or "Pan-loloko"
▪ Misrepresentation
 You will have the Burden to Proof that your consent was
really affected
These Contracts are binding, unless they are annulled by a proper
action in court. They are susceptible of ratification
 The only one who can annule a contract is the Court
 You will go to court only when the party failed to exhaust
the administrative remedies
- Meaning, they already sent a demand letter and
the other party didn't agree.
- When the other party doesn't agree, you can
already go to the court
Voidable Contracts are the same as annullable contracts. They
are valid until annulled
They are invalid from being unlike a void contract. Hence, any
defect or infirmity causing its annullable nature can be cured by
the party aggrieved or injured. This process of curing the defect
is called RATIFICATION

When a person Disappears from his domicile, his whereabouts being To cure, To remedy the Problem
unknown, and without leaving an agent to administer his property, 5 Years to commence an action - otherwise you are waving you
the judge, at the instance of an interested party, a relative, or a rights after 5 years.
friend, may appoint a person to represent him in all that may be
necessary. This is a case of provisional absence.

 Sir henry is missing, anyone who is interested in his property

can request for authorization from the court to administer
his property. This will allow them to access all his property.

VOIDABLE CONTRACTS

The following contracts are voidable or annullable, even though

there may have been no damage to the contracting parties:

1. Those where one of the parties is incapable of giving

consent to a contract;
- Meaning that One is Below 18 Years of age, Or One is
mentally incapable to give consent.
- When you are below 18 you are not matured enough
to understand going into a contract.

Question: To Ms. Lee

Can we consider being obsessed with someone as
classification of Incapable of giving consent?

Answer:
No. There is a need of Clinical Diagnostic for someone to be
classified as Incapable of giving consent.

The Law presumes that the Person is sane if there is no

Proper Diagnostic.

OBLICON PRE-FINALS Page 5

 LAW ON OBLICATIONS AND CONTRACTS 10th SESSION
are the same as annullable contracts. They are valid Question:
until annulled. X, known as an estafador (swindler) and fabricator of public
information in his barangay, entered a contract of sale of
property located in Daet, Camarines Norte, with Y, a known
To cure, to remedy the problem businessman in Quezon Province. In the contract agreed
upon between them, X sold the said property to Y in the
Question:
amount of P20,000,000.00 in the year 2016. Upon
At the age of 17, you entered a deed of sale. (Legal effect:
occupation in the aforesaid property in 2017, & discovered
contract is voidable)
that the real owner of the subject property is Z, a cousin of
X.
Can it still be corrected?

Answer: What is the legal effect of the contract between X and Y?

Yes, By Ratification
Answer:
Under the law on void contracts, as a rule there is a valid
To cure the previous voidable contract if the essential elements are present. Here, there
contract is a missing element of consent of Z and the subject
matter. Since there are two missing elements in this
There's a Prescription Period of filing a case to terminate a contract, the contract is void.
contract. From the communication of the contract or from the
discovery of the irregularity, you have 5 years to commence an Alternative answer: The contract is unenforceable since X
action otherwise you will be considered waiving your right to annul has no authority to sell the property of Z and he is not the
or to terminate or to cancel the contract. legal representative of Z’s property, and the contract is
not in writing.
Question:
X, a minor and a son of a corrupt district representative of
The contract is void. First, there is no consent from the real
Masbate Province, bought a parcel of land in Quezon City,
owner. Second, the subject matter is outside of the commerce of
owned by Y, in the amount of P20,000,000.00.
men which means the property is not owned by X but owned by Z.
What is the legal effect of the contract entered between X
and Y?

Answer:
Under the law on voidable contracts, when one of the
contracting parties is incapable of giving consent, the
contract entered is considered voidable.

Question:
Assuming both X and Y are minors, what is the legal effect
entered by them?

Answer:
Under the law on unenforceable contracts, when both of the
contracting parties are below 18 years of age, the contract
entered is unenforceable.

OBLICON PRE-FINALS Page 6

 LAW ON OBLICATIONS AND CONTRACTS 11th SESSION
Question:
X, Known as an estafador and fabricator of public information
in hiss barangay, entered a contract of sale of property
located in Daet, Camarines Norte, with Y, a known
businessman in Quezon Province. In the contract agreed upon
between them, X sold the said property to Y in the amount
of P20,000,000.00 in the year 2016. Upon occupation in the
aforesaid property in 2017, Y discovered that the real owner
of the subject property is Z, a cousin of X
1. What is the Legal effect of the contract between X and Y?
2. What will be the remedy available to Y?
Answer:
1. The contract is void. Because there is no consent from the
real owner, And the subject matter is outside of the
commerce of men meaning that the property is not owned
by X but is actually owned by Z.
a. Safe answer: Unenforceable Contract
2. Send a Demand Letter. The letter should inform X that the
property is bogus, and you can also inform the other party to
return the money, Or correct and tell Z to execute a Deed of
Sale in favor of Y.
Ratification extinguishes the action to annul a Voidable Contract.
Ratification may be effected expressly or tacitly. It is understood
that there is a tacit ratification if, with knowledge of the reason
which renders the contract voidable and such reason having ceased,
the person who has a right to invoke it should execute an act which
necessarily implies an intention to waive his right.
• Ratification is the act of Curing the defect which made the
contract annullable. It may be expressly or tacitly given. It
Extinguishes the action to annul a voidable contract
• Not applicable on Void Contracts
OBLICON PRE-FINALS Page 7
Problem:
A, alleged drug lord and advisor / consultant of a Congressman of
Quezon City, owns a 10-hectare agricultural property located in
Antipolo, Rizal. He was implicated to several graph and corruption
cases because of his involvement in an economic sabotage
transaction. The court recommended a bail of P10M. Because of his
dire need of amount of money for his temporary liberty, he offered
to sell his property in Antipolo, Rizal to B for P10M. B agreed to buy
the property. On September 15, 2019, B deposited the amount of
P10M to the personal bank account of A. A texted B that he can
already take possession of the Antipolo, Rizal property. One year
thereafter, A was found out to be not guilty and the case against
him was dismissed. A informed B that he will take over his Antipolo,
Rizal property from B on the basis that the sale is void for it was
not reduced into writing. B alleges that the sale is valid.
1. Who is correct between A and B? What is the legal effect
or status of the transaction between A and B? Explain
2. What will be the legal remedy of B in case the agreement
was found not to be in writing?
3. Assuming the Agreement was made into private writing /
document, what will be the legal effect? Explain.
Answer:
1. Neither A and B are correct because the contract between
A and B is Unenforceable.
Under the Law on Contracts, When an Agreement involves a
real property but it was not made in writing, the contract
is unenforceable.
Here, since the transaction entered between A and B was
not made in writing, the contract is unenforceable.
2. Send a Demand Letter to A stating that the Transaction is
Valid there is a text message saying that B can take over
the property.
3. The legal effect is that the contract will be valid because
agreement was made into writing.