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