BM2304

FORM OF CONTRACTS
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 so that it may be valid or enforceable or that a contract be proved in a certain way, that
requirement is absolute and indispensable. The parties' rights stated in the following article cannot be
exercised in such cases.

Form of Contract
The manner in which the contract is executed and manifested. In general, contracts are valid and binding from
their perfection regardless of form, whether oral or written, provided the three essential requisites are
present: consent, object and consideration.

When a contract is considered in written form

A written contract must be written in all terms. So, a contract partly in writing and partly oral is, in legal effect,
an oral contract.

Classification of Contracts According to Form

1. Informal/common/simple contracts – These may be entered into in whatever form as long as all
the essential requisites for its validity are present. Also, these pertain to consensual contracts that
mainly require the consent of the parties as to the object of, as well as the consideration for, the
contract in order for the same to be valid.
2. Formal/solemn contracts – These are required by the law for the same to be effective in a certain
specified form.

Rules Regarding Form of Contracts

General Rule
Contracts are binding and, therefore, enforceable reciprocally by the contracting parties, whatever the form
the contract has been entered into, provided all three (3) essential requisites (consent, object, cause) for the
validity are present. So, a contract may be oral or written. A written contract may consist of a letter,
memorandum, note, or other instruments without following any particular form or language, it being sufficient
that the parties clearly express their intentions.

Three (3) exceptions to the general rule:

1. When the law requires that a contract be in some form to be valid. For example, an immovable
property may only be donated through a public instrument, while a movable property worth more
than P5,000.00 may only be donated in writing.
2. When the law requires that a contract be in some form to be enforceable or proved in a certain
way. Example: Armando and Bobby agreed that Armando should sell his jeepney to Bobby after
one (1) year from today. This is an agreement that, by its terms, is not to be performed within a
year from the making thereof, which agreement must be in writing to be enforceable.
3. When the law requires that a contract be in some form for the convenience of the parties or for
the purpose of affecting third persons. Example: Ana, Mara, and Janine entered into a partnership

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to establish a law office. Ana and Mara contributed to the land where the office will be built, while
Janine contributed to the office. Since their contributions are in the form of an immovable
property, the law requires that such contributions be made in a public instrument to affect third
persons.

Form for the validity of a contract

a. Donation of real property – Must be in a public instrument.
b. Donation of personal property, the value of which exceeds P5,000 – Donation and acceptance
must be in writing.
c. Sale of land through an agent – The authority of the agent must be in writing; otherwise, the sale
is void.
d. Stipulation to pay interest – Must be in writing; otherwise, no interest is due.
e. Contract of Partnership – Must be in a public instrument attached to a signed inventory of the
immovable property contributed.
f. Sale of large cattle - Must be registered, and a certificate of transfer is secured. Otherwise, the
sale shall not be void.

Form of enforceability of contract

The law requires the contract to be in writing for those covered by the Statute of Frauds. If the contract is not
in writing, the contract is valid (assuming all elements are present). Still, it cannot be proved and, therefore,
cannot be enforced by either party if the other refuses to perform the contract unless the latter ratifies it.

The following contracts must be in writing not for validity but for its enforceability, namely:
a. An agreement that by its terms is not to be performed within a year from the making thereof;
b. A special promise to answer for the debt, default, or miscarriage of another;
c. Agreement made in consideration of marriage, other than a mutual promise to marry;
d. An agreement for selling goods, chattels or things in action at a price not less than five (5)
hundred pesos, unless the buyer accepts and receives part of such goods or things in action or
pays some part of the purchase money at the time.
e. An agreement for the leasing for a longer period than one (1) year for the sale of real property or
of an interest therein;
f. A representation as to the credit of a third person.

Contracts which must appear in public instrument (Article 1358)

The contracts this article covers are valid and enforceable, though not contained in a public document,
instrument, or in writing. The public document is required only for the convenience and greater protection of
the parties and to make the contract binding against third persons. In other words, the law does not require
the 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, the court
may order the party bound in which the action or suit is filed to execute the document.

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References
Civil Code of the Philippines
De Leon, H. S. & De Leon Jr., H. M. (2014). The Law on obligations and contracts. Rex Book Store.
Paras, E. (2016). Civil code of the Philippines annotated prescription; obligations and contracts article 1106-
1457. Rex Book Store.
Pineda, E. (2009). Obligations and contracts. Central Book Supply, Inc.
Cagurangan, T. (2022). Essentials in Law on Obligations and Contracts

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