Section 3 Cause of Contracts

Problems 2 and 3
ECE70/B11
Zulueta, Christelle Jianne T.
School of Electrical, Electronics, and Computer Engineering Department
Mapua Institute of Technology
Muralla st., Intramuros, Manila Philippines
tellezulueta@gmail.com

Abstract This paper is part of the

requirements for this course which should
represent as a reaction paper for the topic
discussed by the reporting group. Herewith are
some concepts, problems, solutions, and
questions to presenters.
Keywords contracts, cause,
motive, lesion.

declared void by the court on the ground of

absence of cause for non-payment of the price?

consideration,

I. INTRODUCTION
Section 3 deals with cause of contracts.
Cause is the essential reason or purpose which the
contracting parties have in view at the time of
entering into the contract which is a binding
agreement enforceable through legal proceedings.
Cause distinguished from object is the reciprocal
contract of purchase or sale of the subject matter.
The classification of contracts according to cause
are (1) Onerous where the parties are reciprocally
obligated to each other. (2) Remuneratory or
remunerative which rewards the service that had
been rendered by the party remunerated. (3)
Gratuitous which is the liberality of the
benefactor. The cause distinguished from motive
may be regarded as the cause in a contract if it is
founded upon a fraudulent purpose to prejudice a
third person. In cause presumed to exist and
lawful, the presumption is not conclusive but only
prima facie and may be contradicted by contrary
evidence.
II. PROBLEMS
Problem 2 page 287
S sold to B a specific parcel of land for P500, 000.
B failed to pay. Has C the right to have the sale

Problem 3 page 287

X gave P10,000 to Y who signed a receipt stating:
This is to acknowledge payment by X in the
amount of P12,000. X later complains that he
received nothing from Y for the P10,000. Is Y
bound to return the P10,000?

III. SOLUTIONS
Problem 2
Solution:
C has no right to have the sale declared
void, by the court on the ground of absence of
cause for non-payment of the price, because C is
only a third person who doesnt concern any
fulfillment of obligation on the contract. C didn't
exist at the time of the transaction of the

contracting parties and it is not his obligation to

declare the contract of sale to be void. Only the
agreement of the contracting parties has the rights
to do anything about the contract. This answer is
based in accordance with the Article 1352 which
states that:
Contracts without cause, or with unlawful
cause, produce no effect whatever. The cause is
unlawful if it is contrary to law, morals, good
customs, public order or public policy. (1275a)
Problem 3
Solution:
In the problem, the cause is not
specifically stated in the contract, the law
presumes that X must have received a service
from Y which is lawful. Y is not obliged to return
the P10,000 unless X proves that he received
nothing in return, according to Article 1354
which states that:
Although the cause is not stated in the
contract, it is presumed that is exists and is
lawful, unless the debtor proves the contrary.
(1277)

IV. QUESTIONS
Problem 2:
If B was able to pay but S and C declare
otherwise, what will happen if B cannot
show proof of payment?
If B was able to pay but S and C declare
otherwise, what will happen if B cannot
show proof of payment but there was a
witness when the payment was given?
If the papers and transactions were given
to C by S, as caretaker, will he then have
the right?
Problem 3:
If the cause was stated, what are the
possible outcomes based on different
scenarios?

Reference
[1] H. S. De Leon and H. M. De Leon, Jr., The Laws on
Obligations and Contracts, 2014.