FORMS OF CONTRACTS

As a general rule, conracts are valid and enforceable in whatever form they may
appear provided that consent, object and cause are present. Thus, contracts may
be made orally or in writing. However, the law may require certain contracts to
appear in some form, which form may be:
a) For validity:
If the form is required for validity, that form is indespensable and if it is not
followed it is void. For example donations of real property should be made and
accepted in a public document (Art. 748) and those of personal property in
excess of P5,000 should be made and accepted in writing (Art 748) to be
enforceable (Art 1403)
b) For enforceability:
Observance of this form is reuird only in order to be able to enforce the contract.
Thus, contracts covered by the Statute of Frauds are required to be in writing to
be enforceable.
c) For convenience.
Observance of this form is for the mere convenience of the parties. Hence, een if
that form is not observed, the contract is nevertheless valid and enforceable
between the parties.
Examples:
a) Mr. Castro donated a parcel of land to Mrs. Ignacio in a private document.
The latter accepted the donation in a private document. The donation is void. To
be valid, a donation of real property should be made and accepted in a public
document.
b) Mrs. Faelnar orally sold to Mrs. Sanchez a parcel of land worth P1million
pesos. The parties agreed that the delivery of the land and payment of the price
shall be made on January 21, 2008. The sale is valid but cannot be enforced.
c) Mr. Tan is indebted to Mr. Lim in the amount of P500,000.00 As a security of
his debt, Mr. Tan orally mortgaged his land to Mr. Lim. Although the mortgage
is not in a public document, the same is valid and enforceable between the
parties. Hence if the debt is not paid on maturity, Mr. Lim is given the right of
foreclosing the mortgage on the land.
RIGHT OF COMPELLING OBSERVANCE OF FORM REQUIRED BY LAW
When all requiremenhts for validity and enforceability of a contract are present,
but the contract is not executed in a form (convenience) required by law, the
contracting parties may compel each other to observe the form. This right cannot
however be exercised if the form is one for validity and enforceability.
Example:
Mr. Rollie Luna sold a parcel of land to Spouses Mrs. & Mrs. Martinez. After the
documents were signed, the spouses are interested in registering the the sale with
Register of Deeds but registration requires a public document. The spouses may

compel Mr. Luna to execute the contract of sale in a public document because
the sale is both valid and enforceable under the Statute of Frauds
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
(2) The cession, repudiation, or renunciation of hereditary rights or those of
conjugal partnership of gains.
(3) The power to administer property
(4) The cession of actions or rights proceeding from an act appearing in a public
document

Form for Convenience

The public document is for mere convenience of the parties and therefore the
contract is still valid and enforceable between the parties even if such form is not
observed.
For example:
(1) Spouses Gina and Manny are owners of a coconut plantation situated in
Alcoy Cebu. The spouses are now staying in Cebu City. The spouses appoints
Mr Cesar Maderazo to manage the said coconut plantation. The appointment of
Mr. Maderazo should be done in public document for the convenience of the
parties.
(2) Mr. Rudy Pino mortgaged a parcel of land to Joanna Corporation for the
payment of a loan. They executed the mortgage in a public document. The said
corporation assigns credit to Mr. Razon. The assignment of that credit is required
to appear in a public document for the convenience of the parties.
(3) Josephine borrowed from William P200,000.00 To secure its paymnt,
Josephine mortgaged a parcel of land to William. The mortgage is required to
appear in a public document and if the mortgage debt is paid, the extinguishment
of the mortgage should likewise appear in a public document for the
convenience of the parties.
(4) Nelson and Mario are the only heirs of their parents. Nelson is interested in
renouncing his hereditary rights in favor of Mario. The renunciation is required
to be done in a public document for the convenience of the parties