PARTI

MELAWS

1
 REPUBLI
COFTHEPHILIPPINES
CONGRESSOFTHEPHILIPPI
NES
METROMANI
LA

TENTHCONGRESS

THI
RDREGULARSESSI
ON

Begunandhel
dinMet
roMani
l
a,onMonday,thet
wenty-
eightdat
eofJuly,
ni
neteenhundr
edandni net
yseven.

[REPUBLI
CACTNO.8495]

ANACTREGULATI
NGTHEPRACTI
CEOFMECHANI
CALENGI
NEERI
NG
I
NTHEPHILI
PPI
NES

Beitenact
edbythesenateandHouseofRepr
esent
ati
vesoft
hePhi
l
ippi
nes
i
nthecongressassembl
ed:

ARTI
CLE1
TI
TLE,STATEMENTOFTHEPOLICYAND
DEFINI
TIONOFTERMS

Sec,
1.Tit
le-Thisactshal
lbeknownast
he“
Phi
l
ippi
neMechani
cal
Engi
neeri
ngActof1998.
”

Sec,2.StatementofPol i
cy–Thest aterecognizestheimportanceof
mechanicalengineersi n nati
on bui
ldi
ng and devel opment .Theirtalent
s
thr
oughsust ai
nablehumandevel opmentshoul dbepr omoted.Thus,t he
Stateshalldevel
opandnur t
urecompetent ,virt
uous,productiveandwel l
-
roundedmechani calengineerswhosest andar dsofpr of
essionalpracti
ce
and service shallbe excel lent
, quali
tative, worl
d-cl
ass and gl oball
y
competit
ivethr
oughr egul
atorymeasures,pr ogramsandact ivi
ti
es.

Sec,3.Defi
nit
ionofTer
ms–Asusedi
nthi
sAct
,thef
oll
owi
ngt
erms
shal
lmeanasfol
lows:

a)Pr act
iceofMechani
calEngineer
ing–Apersonshal
lbedeemedt o
bepr acti
ci
ngmechani calengi
neeri
ngofr enderi
ngmechani
calengi
neer
ing
servi
cewi thint hemeaningandintentoft hi
sActwhenheper for
mst he
fol
l
owi ng:

(1)Consul
tat
ion,valuat
ion,i
nvest
igat
ionandmanagementser
vices
r
equi
ri
ngmechani
calengineeri
ngknowledge:

2
 (2)Engineer
ing design,preparat
ion ofpl
ans,speci
fi
cat
ions and
pr
ojectstudi
es orest i
mates formechanicalequi
pment,machiner
y,or
pr
ocessesinmechanicalworks,pr
oject
sorplant
;

(3)Managementorsuper vi
si
onoft heerect
ion,i
nst
all
ati
on,alt
erat
ion,
t
esti
ng and commi ssioni
ng of mechani calequipment, machinery, or
pr
ocessesinmechanicalworks,pr
ojectorplant
;

(4)Management,super
visi
on,oper
ati
on,tendi
ngormaintenanceof
anymechanicalequi
pment,machiner
yorpr ocessesinmechanicalwor
k,
proj
ect
sorpl
ants;

(
5)Managementorsupervi
si
onofthemanufacture,sal
e,suppl
yor
di
str
ibuti
onofmechani
calequi
pment
,par
tsorcomponents;

(6)Teaching ofmechani
calengi
neeri
ng professi
onalsubj
ect
sin
gover
nmentrecogni
zedaccr
edit
edengi
neer
ingschools;and

(7) employment in gover nment as a prof

essionalmechani cal
engineer,r
egist
eredmechani calengineer
,orcer
ti
fi
edplantmechani cifthe
natureandt hecharacterofhiswor kisinli
newit
hhisprofessi
onr equir
ing
professi
onalknowledgeofthescienceofthemechani
calengineer
ing;

b)Mechani calequi pmentormachi nery–i ncludesal lprimemoves

suchasst eam engi nesandt urbines,i nt
ernalc ombust ionengi nesandgas
engi nes and t urbi
nes;st eam gener ator
s such as boi l
er;f urnaces;heat
exchangersuchascool ingt ower s,kil
nsanddr yers,cool ersandheat ers;
mat erialshandl i
ng equi pment ,such aspumps ,cranes,conveyor s,hoi st
elevat ors, escal ators, mechani zed dump- waiters, movi ng r amps and
walkways;heat ing,ai rconditioning,ventil
atingandr ef
rigerationequi pment
and machi neryi ncluding compr essors and cent ri
fugalf ans,mechani cal
poll
ut ionabat ementandenvi ronment alcontrolsystem;pi pi
ngsyst em witha
wor king pr essure ofnotl ess t han 70 kPa. ,fi
red and unf i
red pr essure
vessel s,pr i
ntingmachi ne;mechani calwor kingmachi nesf ormet all
icand
non- met all
ic mat erials and ot hermechani calequi pmentand machi ner y
whet heri nstal
ledonl and,under ground,oronboar dwat ercraft.

c)Mechani calpr ocesses,wor ks,pr oj

ects orpl ants shal linclude
st
eam pl ants,geother malpl ants,dendr o-t
her malplants,nucl earpl ants,
ocean t hermalener gy conser vat
ion (OTEC)pl ant
s,i nternalcombust i
on
plants,hydrauli
cplant s,pumpi ngplant
s,compr essedgaspl ants,allkindsof
mill
s, shops, f actories, shipyard dr ydocks, heati
ng, ai r conditioning,
venti
latingandr ef
rigerati
onpl antscont aini
nganymechani calequi pment ,
machi neryorpr ocessesder i
vingpowerf rom steam,fossi lfuels,wi nd,air,
solarheat,nuclearener gy,oceanwavesandt i
des,orotherener gysour ces.

3
 d)Capacityofpr ocesswor ks,pr oject
sorpl ant-r
ated capacityin
ki
lowattofmechanicalwor ks,proj
ectsorpl ant
sf orthepur poseoft hisAct
shallbethetot
alkil
owattratingsofal lengines,mot ors,boil
ers,turbi
nes,or
otherpri
mersinstal
l
edforsuchi nsuchwor ks,projectsorplants,whetherin
operati
onornot ,andwi thoutr egardt ot henumberofcapaci t
iesoft he
mechanicalequipment,machi neryorpr ocessesr ecei
vingpowerf rom or
i
ntendedtobedr i
venbysuchpr i
memover s.

ARTI
CLEII
BOARDOFMECHANI
CALENGI
NEERI
NG

SEC.4.Cr eat i
on and Composi ti
on oft he Board ofMechani cal
Engineer i
ng.–t hereisher ebycreatedaBoar dofMechani calEngineeri
ng,
hereinaft
ercalledt heBoar d,tobecomposedofaChai rmanandt wo( 2)
member stobeappoi ntedbyt hePresidentsoft hePhil
i
ppinesf r
om al i
stof
thr
ee( 3)recommendeesf oreachposi t
ion,chosen,r ankedi ntheor derof
pref
er ence and submi tt
ed by the Pr ofessionalRegul at
ion commi ssi
on,
hereinaft
err ef
erredtoast hecommi ssi
on,f orm al i
stoffive(5)nomi nees
submi tt
edbyt hedul yaccr edi
tedassociati
onofmechani calengineersinthe
Phil
ippines.Theboar dshal lbeorganizednotl atert
hansix( 6)monthf r
om
theef f
ecti
vit
yoft hi
sAct .

Qual
SEC 5. i
fi
cat
ionofMembersoft heBoar
d.A memberofthe
Boar
d shall
,atthe t
ime ofthi
s appoi
ntment
,possess t
he f
oll
owi
ng
qual
i
fi
cati
on:

(
a)Nat
uralbor
nci
ti
zenandr
esi
dentoft
hePhi
l
ippi
nes;

(
b)Mustbeatl
eastt
hir
ty-
fi
ve(
35)year
sofage;

(c)Hol
deroft he degr
ee ofBachelorofSci
ence i
n Mechanical
Engi
neeringorit
sequivalent
,confer
redbyaschool
,academy,col
lege,or
uni
versi
tyint
hePhili
ppinesorabroadthati
saccr
edi
tedbytheCommi ssi
on
onHigherEducat
ion(CHED) ;

(d)A Professi
onalMechanicalEngineerwithaval
i
dprof
essi
onal
l
icenseandanact i
vepr act
it
ionerassuch,fornotlesst
hanten(
10)years
pri
ortohi
sappointment;

(e)Mustnot,f
oraper iodofthree(3)consecuti
veyearspriorto
appoint
ment,beamemberoft hef acul
tyofany,school
,academy,instit
ute,
col
legeoruniversi
tywherear egularcoursei
nmechani calengi
neeringi s
beingtaught
,norhavepecuniaryi nt
erestinoradminist
rat
ivesupervisi
on
overanysuchinsti
tut
eofl
ear
ning;

4
 (
f)Mustnot,foraper i
odofthree(3)consecut
iveyear
spr i
orto
appointment,be connected wit
har evi
ew centerori n any gr
oup of
associat
ion wherereview classes orlect
ures i
n prepar
ati
ons forthe
l
icensureexaminat
ionareofferedorconduct
edatt het
imeofappointment
;
and

(
g)Hasneverbeen convi
cted ofanyof
fense i
nvol
vi
ng mor
al
t
urpi
tude.

SEC6.Ter m ofOff
ice.–Amemberoft heBoar dshal lholdof f
ice
forat erm ofthree( 3)yearsf rom thedat eofhi sappoi ntmentorunt ilhis
successorshal lhavebeenqual i
fi
edanddul yappoi nt
ed,unl ess,however ,
thatsuchi ncumbentmembershal lbeenr eappoi ntedforanot herthree( 3)
yeart erm.Nomemberoft heBoar dshallservef ormor ethant wo( 2)regular
terms.Any vacancy occur r
ing wi t
hint he t erm ofa memberdue t o
resignation,convicti
onofanyki nd,disabil
ityordeat h,shal lbef il
ledwi th
appoi ntmentby t he Pr esi
dentoft he Phi li
ppines;and such member
appoi ntedshal lser
vef oranunexpi r
edpor tionoft het erm vacat edwi t
hout
prejudicet oser vef oramaxi mum oft wo( 2)f ullterms.I ftheappoi ntee
comesf rom theincumbentBoar d,heshallser vether emai ni
ngvacat edterm
i
n addi t
ion tot he previous years he had al ready ser ved and shal lbe
qual i
fi
edf orreappointmentforhisnewposi tion:

Pr
ovi
ded,hisaggr
egat
enumberofyear
sser
viceshal
lnotexceed
t
wo(
2)r
egul
arful
lter
ms.

Eachmemberoft
heBoardshal
ltakehi
soat
hofof
fi
cepr
iort
othe
of
fi
ci
alper
for
manceoft
heduti
es.

SEC 7.Compensat
ionandAl l
owancesoft heBoar dMember s.–
TheChai r
manandmember softheBoar dshallreceivecompensat i
onand
al
lowancescomparabl
etothecompensationandal l
owancesbei ngr ecei
ve
by the Chai
rmen and members ofexisti
ng r
egulatory boar
ds wi ththe
Commi ssi
onandasmaybepr ovi
dedforintheGener alAppropr
iat
ionsAct.

SEC 8.Super vi
sion oft he Board,Cust odian ofits Records.
Secret ariatand Suppor tSer vices.– The Boar d shallbe undergener al
super visi
on oft he Commi ssion.Al lrecords oft he Board,includi
ng
applicationsf orexamination,exami nati
onpaper sandr esult
s,minutesof
deli
ber ation,admini
strati
vecl asses,andotheri nvest
igati
vecasesinvolvi
ng
the pr ofession shal
lkeptby t he commission.The Commi ssi
on shall
designat ebyt hesecretaryoft heboardands hallprovi
det heSecretar
iat
andot hersupportservicestoi mplementtheprov i
si
onsoft hi
sact.

SEC9.Powerandduti
esoftheBoard.–TheBoardshal
lexer
cise
t
hef
oll
owi
ngspeci
fi
cpower
s,f
uncti
ons,dut
iesandr
esponsi
bil
i
ti
es:

5
 (a)Topromulgateandadoptther
ulesandr
egul
ati
onsnecessar
y
f
orcar
ryi
ngouttheprovi
sionsoft
hisact
;

(b) To super
vise t
he regi
str
ati
on,l
i
censur
e and pr
act
ice of
mechani
calengi
neersi
nthePhil
ippi
nes;

(c) To admini
ster oat
hs in connect
ion withthe successf
ul
ex
ami
neesenter
ingthePract
iceofMechani
calEngineer
ing;

(
d)Toi
ssuet
hecer
ti
fi
cat
eofr
egi
str
ati
ont
osuccessf
ulexami
nees;

(e) To issue, suspend and/or revoke, af

ter due process,
cert
if
icat
es ofregi
strati
on and issue,canceland suspend prof
essional
l
icenseorcancelspecialper
mitsforthepr
acti
ceofmechanicalengi
neer i
ng,
forcauseprovi
dedbyl aw;

(
f)Toadoptanof
fi
ci
alsealoft
heBoar
d;

(g) To look int he conditi

ons aff
ecti
ng the pr
act
ice ofthe
mechanicalengineeri
ngprofessionandwhenevernecessar y,adoptsuch
measuresasmaybedeemedpr operfortheenhancementandmaint
enance
ofhi
ghpr of
essionalandet
hicalstandardsforpr
ofessi
on;

(
h)Toprescr
ibeand/oradoptaCodeofet hi
calandprof
essi
onal
St
andar
dsfort
hepract
iceoft
hemechanicalengi
neer
ingprof
essi
on;

(i
)Tohearandt ryadmini
str
ati
vecasesi nvolvi
ngviol
ati
onsofthe
act,itsImplementi
ng Rules and Regulati
ons ,the Code ofEt hi
cs f
or
Mechanicalengineers,and forthi
s pur pose,t oi ssue subpoena and
sudpoenaducest ecum tosecuretheappear anceofwi t
nessesandt he
product
ionofdocumentsi
nconnecti
ontherewith;

(j
)Prescr
ibeguidel
inesintheConti
nuingProfessi
onaleducat
ion
(CPE)pr
ogram i
ncoordi
nati
onwithaccr
edi
tedassoci
ati
onofthemechanical
engi
neer
s;

(k)Pr
epar
e,adopt
,issueoramendt
hesyl
l
abioft
hesubj
ect
sfor
ex
ami
nat
ion;

(l
)Approve,issue,l
i
mit
,orr
evoket
empor
aryl
i
censet
opr
act
ice
mechani
calengi
neeri
ng;and

(m)Dischar
gesuchot
herdut
iesandf
unct
ionsasmaybedeemed
necessar
yf ort
heenhancementofthemechani
calengi
neer
ingpr
ofessi
on

6
and the upgr
adi
ng,devel
opmentand gr
owt
h ofmechani
calengi
neer
ing
educati
oninthePhi
l
ippi
nes.

SEC.10.AnnualRepor t.–TheBoar dshall,atthecloseofeach

calendaryear ,submi tanannualr epor
ttothePr esi
dentoft hePhi l
ippi
nes
throught hePr ofessionalRegulat
ionCommi ssi
on,givingadet ai
ledaccount
ofi ts proceedings and accompl i
shment
s during the yearand maki ng
recommendat ions fort he adopt
ion ofmeasur es thatwi l
lupgr ade and
i
mpr ovet hecondi t
ionsaffect
ingthepract
iceofmechani calengineeri
ngin
thePhilippines.

SEC.11.Removalofboar d member.– The Pr esi

dentupon
recommendati
onoft heCommi ssi
onmayremoveanymemberoft heBoar d
on the f
oll
owing gr
ounds:negl ectofdutyofincompetence,violat
ion or
t
ol er
anceoftheviolat
ionoft hi
sActoftheCodeofEt hicsformechani cal
Engineeri
ng,f
inalj
udgmentofcr imesi
nvol
vingmoralt
urpit
ude,aft
erhaving
giventhemember sanoppor tunit
ytobeheardand/ordependhi mselfina
properadmini
str
ati
veinvest
igati
on.

ARTI
CLEII
I
EXAMI
NATI
ON,REGI
STRATI
ONANDLI
CENSE

12.Exami
SEC. nat
ionRequired.–Allappli
cant
sforregi
str
ati
onf
or
t
hepract
iceofmechanicalengineeri
ngshallber equir
edtounder goand
passawr
itt
ent
echni
calexami nat
ionasprovi
dedf ori
nthisAct
.

SEC.13.Categor
ies.–Cert
if
icatesofr
egi
str
ati
onfort
hepr
act
ice
ofmechani
calengi
neer
ingshallbeofthree(3)cat
egori
esandinor
derof
rankasf
oll
ows:

(
a)Pr
ofessi
onalMechani
calEngi
neer
;

(
b)Mechani
calEngi
neer
;and

(
c)Cer
ti
fi
edPl
antMechani
c.

SEC.14.Quali
fi
cat
ionsofAppli
cant
sf orprof
essionalMechani
cal
Engineer.– Any appl
icanttot he pr
ofessi
onalmechani calengineer
ing
exami nat
ionmust,att
het i
meoff i
ll
i
ngofhi sapplicat
ion,establ
i
sht othe
sat
isfacti
onoft
heBoardthat:

(
a)Hei
saci
ti
zenoft
hePhi
l
ippi
nes;

(b)Hemustnothavebeenconvi
ctedbyacour
tofl
awofacr
ime
i
nvol
vi
ngmoralt
urpi
tude;

7
 (c)Hehasval i
dcer
ti
fi
cat
eofr egi
str
ati
onandhei sar
egi
ster
ed
mechani
calengi
neerandahol
derofval
i
dpr of
essi
onall
i
cense;

(
d)Hehasgraduatedf
rom anengi
neeri
ngschoolorcol
l
egeof
recogni
zedstandi
ng,af
tercompl
eti
nganapprovedcourseinmechani
cal
engineer
ing;

(e)Hehasspeci f
icrecordofat ot
aloff
our(4)yearsormor eof
ac
tivemechani
calengi
neeri
ngpr act
ice,r
eckonedf
ort
imehei sregi
ster
eda
mechani
calengi
neeri
ngpracti
ce;and

(
f)Heiscompetenttopract
ice,asat
test
edt
obyatl
eastt
wo(
2)
pr
ofessi
onalmechani
calengi
neer
s.

SEC.15.Qual if
icat
ionsofAppli
cat
ionsf
orMechanicalEngi
neer
.–
Anypersonappl yi
ngforexami nati
onf
oraCer ti
fi
cat
eofRegi str
ati
onas
mechani
calEngineershal
l,priortoadmi
ssi
ont ot
heexaminati
ons,est
abl
i
sh
t
othesati
sfact
ionoftheboardt hat:

(
a)Hei
saci
ti
zenoft
hePhi
l
ippi
nes;

(b)Hemustnothavebeenconvi
ctedbyacour
tofl
awofacr
ime
i
nvol
vi
ngmoralt
urpi
tude;

(c)Heholdst hedegr
eeofBachelorofSciencei
nmechanical
Engineeri
ngfr
om auni ver
sit
y,school
,col
l
ege,academyorinst
it
uteduly
consti
tut
edandrecogni
zedassuchbythegover
nment.

SEC.16.Qualif
icat
ionsofApplicant
sforCer t
if
iedPlantMechanic.
– Anyper son appl
yi
ng forexami nati
on forcert
ifi
cate ofregi
str
ati
on as
Cert
if
iedPlantMechani
cshallestabl
ishtothesati
sfact
ionoftheBoardthat;

(a)Hemustnothavebeenconvi
ctedbyacour
tofl
awofacr
ime
i
nvol
vi
ngmoralt
urpi
tude;

(b)He hasgr aduat

ed fr
om a vocat
ionalortrade schooldul
y
r
ecognizedbyt hegover
nmentaftercompl
eti
nganappr ovedcourseofnot
l
essthant wo(2)yearsinstati
onaryorpowerpl antengi
neeri
ngofany
mechanicalpl
antoper
ati
on;and

(c)Hehasaspeci f
icr ecor dofanaddi t
ionalone(1)yearormor e
ofact i
ve pr act
ice in mechanicalpl antoper at
ion ofsuch char acteras
i
ndicatedinanaf fi
davitofar egi ster
edpr of
essionalmechani calengi neer
,
andlikewiseest abl
ishtothesat isfactionoftheBoar d,t
hattheappl icantis
compet enttot heunder t
aketheoper at
ion,tendingandmai ntenanceand

8
mechanicalwor
ks,pr
oject
sorpl
antofnotl
esst
hanonehundr
ed(
100)
ki
l
owatts.

SEC.17.Scopeofexami nat
ion.–Thescopeoft heexaminat
ion
andthemethodsofprocedureshallbepr escr
ibedbytheBoardwi t
hspecial
ref
erencetotheappl
icant’
sabil
it
yt operformt hetypeofengineer
ingwor k
pert
aini
ngtot
heparti
cularcat
egoryheist ober egi
ster
edi
n.

(
a) Pr ofessional Mechani cal Engi neer – The gr ant
ing of
prof
essionalmechani calengi neer Cer t
if
icat
e ofRegi str
ati
on shallbe
t
estimonialinnaturewhi chshal lincl
udet hesubmi ssionofanenumer at
ion
ofanappl icantsexper iencei ncludingt hepr esent
ationofanengi neer
ing
report
/t
echnicalpaperper t
inentt ohislineofexper ienceatt
estedtobytwo
(2)ormor e professionalmechani calengi neersin an aff
idavi
tforthis
purpose;

(b)Mechani calEngineer– The applicantshallpassa wr it

ten
examinat
ionondi ff
erentsubjectsorgroupsofsubj ectsprescr
ibedbyt he
Board,andwi t
hint
hesyl l
abipreparedbytheBoar dwi t
hemphasi sofpower
pl
antandi ndust
ri
alplantengi
neer i
ng,mathemat
ics,engineeri
ngeconomics,
economicanalysi
slawsandet hicsandmachinedesi gn.

Thesubj
ect
sinwhi
cht
heappl
i
cantf
orMechani
calEngi
neer
sshal
l
beexami
nedare:

1.Machi
neDesi
gn,mat
eri
als&shopPr
act
ice

2.I
ndust
ri
al&PowerPl
antEngi
neer
ing

3.Mat
hemat
ic
s,Engi
neer
ingandbasi
cengi
neer
ingsci
ences

(c)Cer
ti
fi
edPl antmechani
c–Theexaminat
ionf
orcert
if
iedPlant
Mechani
cmaybewr i
tt
enororalonsubj
ectmat
ter
sbasedont hefol
lowi
ng
submi
tt
edstat
ementofexperi
ence:

1.El
ement
sofPowerPl
antMachi
ner
y

2.El
ement
sofI
ndust
ri
alPl
antMachi
ner
y;and

3.Shopmachi
ner
yPr
act
ice

Subj
ecttotheappr ovaloftheCommissi
on,t
heBoar dmayamend
orrev i
sethesubjects,theirsyl
labi
,passingaver
age,andthesyst
em and
procedureint he li
censure examinati
onsforthe pr
act
ice ofmechani
cal
engineeri
ngandt hecor respondingweightpur
suantt
oi mpl
ementi
ngrul
es
andr egul
ati
onsissuedforthispurpose.

9
 Thesai
dsubjectsandthei
rsyl
l
abimaybeamendedbytheBoard
soastoconformt otechnol
ogi
calchangesbr
oughtaboutbycont
inui
ng
tr
endsi
nthepr
ofessi
on.

SEC.18.Rat
ings.–Topasst heexaminat
ion,acandi dat
efora
professionalmechani
calengineer
,a mechanicalengineer,and cert
if
ied
plantmechani cmustobtainanaver ageofsevent
yper cent(70%)onal l
subjects,withnor
ati
ngbelowfi
ft
ypercent(
50%)inanysubjects.

SEC.19.Repor tsofRati
ngs.–TheBoar dshoul
dsubmi
ttothe
commissi
on,t
heratingsobtai
nbyeachcandi dat
ewithi
nfi
ft
een(
15)days
aft
ert
heexaminat
ions,unl
essext
endedforj
ustcause.

SEC.20.Re-exami
nat
ion.–Anappl
i
cantwhofail
stopassthe
examinati
onfort
hethi
rdti
meshallbeal
l
owedt
otakeanot
herexami
nat
ion
onlyaft
erthel
apseoft
heyear
.

SEC.21.Oat h.– Allsuccessfulcandi

datesintheexaminat
i
on
shallberequi
redtotakeanoat hofpr ofessi
onbeforetheBoardorany
governmentof
fi
ci
alaut
horizedt
oadmi nist
eroaths,pr
iort
oenter
inguponthe
practi
ceoft
hemechanicalengi
neeri
ng.

SEC.22.IssuanceofCer ti
fi
catesofRegistrat
ionandPr of
essi
onal
Li
cense.– Upon paymentoft he registr
ati
on fee asest abl
ished byt he
Commi ssi
on,the Board shallissue a certi
fi
cate ofr egi
str
ation to any
appl
icantwhohasmetal lther equirementsspecifi
edi nt hi
sActf orthe
part
icul
arcat
egor
yhei sregi
steredin.

Al
lcer ti
fi
catesofregist
rat
ion shal
lindicatetoful lname oft he
regist
rant
s,signedbyal lt
hemember softheBoar d,andtheCommi ssion
andaf fi
xedwi tht heoffi
ci
alsealoft heCommi ssion.Thei ssuanceofa
certi
fi
cateofr egistr
ati
onbyt heBoar dofr egist
rantisevi dencet hatt he
personnamedt hereinisent
it
ledtoal lthepri
vil
egesofar egister
edand
l
icensepr of
essionalmechanicalengineer,mechanicalengineerorcer t
if
ied
plantmechanic,ast hecasemaybe,f oraslongassai dcer ti
fi
edr emains
vali
d.

A professionalli
censebear i
ngt her egi
str
ationnumber ,dateof
i
ssuance,ex pirydat eanddul ysignedbyt hec hair
manoft heBoar d,shall
l
ikewisebei ssuedt oev eryregist
rant,providedthatprofessionalf
eeshave
beenpai d.Noper sonshallpracti
cemechani calengineeringinthi
scount ry
unlesssuchper sonshal lhavesecur edal i
censetopr act
icemechani cal
engineeri
ngi nthemat t
erhereinpr ovi
ded.Al i
censedi sentit
ledtopracti
ce
t
hepr ofessi
onwi t
hal lt
hepr i
vi
legesappur tenanttheretountiltheexpi
rat
ion
ofthevalidi
tyofhislicense.

10
 Subjectt
ot heapprovaloft heCommi ssion,certi
fi
catesofspecialty
shallbei ssuedbyt heBoar d,t opr ofessi
onalmechani calengi neer
swho
have been scr eened and r ecommended by accr edit
ed mechani cal
engineersassociati
on.Thesear eforspecifi
cfi
elds,inwhi cht heappli
cant s
havespeci al
izedknowledge,t r
aini
ngandexper i
enceandhavedocument ed
thei
rcompet enceandexper t
ise.TheBoar dshallsubjecttotheappr ovalof
theCommi ssion,andaf t
erconsul tati
onwi t
hsai dassoci ati
onconcer ned,
prescri
be and issue the necessarygui deli
nesf orthe issuance oft hese
cert
if
icat
es.

SEC.23.I ntegrationandAccr editati

onofMechani calEngi neer s.–
Ani ntegratedor gani zati
onofmechani calengi neer sshal lbecr eat edand
accredit
edbyt heBoar dofmechani calEngi neeringandt hePr ofessional
Regul at
ionCommi ssion.Al lper sonswhosenamesnowappeari nt her ol lof
professi
onalmechani calengi neer s,andcer ti
fiedpl antmechani csundert he
custodyoft heBoar dandt heCommi ssion,ort hosewhomayher eafterbe
i
ncludedt her einuponr egistrationandpaymentoft her equiredf eesshal l
automat i
cal l
y become member s of t he i ntegr ated and accr edited
organizati
onofmechani calengi neers.Thei ntegrationoft hemechani cal
engineeringpr ofessi ons hallnotbeabart ot hef ormat i
onoft hevol untar y
organizati
on oft he mechani calengi neer s whi ch may coexi stwi t
ht he
i
ntegratedandaccr editedor gani zati
onofmechani calengi neer s.Theboar d,
subjecttot heappr ovalbyt hecommi ssionandaf terconsul t
at i
onwi tht he
existi
ngaccr edi tedor gani zati
onofmechani calengi neer sandot heraf f
il
iated
organizati
onofmechani calengi neersand,i fpossi blewi t
ht hesubst ant i
al
numberoft hemechani calengi neerswhoar enon- organizationmember s,
shallprovi de t he gui deli
nesand mechani smsf ort he establ i
shmentand
creati
on,cont inuedsuper visionoft hei ntegratedandaccr editedor ganizat i
on
ofmechani calengi neer s.The r egistered and l icensed engi neer s and
certi
fi
ed pl ant mechani cs shal lr ecei ve t he benef i
ts and pr i
vil
eges
appur t
enant f or t he member ship i n dul yi ntegr ated and accr edited
mechani calengi neer ingassoci ationonl yuponpaymentoft her equi redf ees
anddues.

SEC.24. SealofPr of
essi onalMechani calEngi neers.– A
professionalmechani calengineershal l,uponr egistr
ation,obt ainasealof
suchdesi gnpr escri
bedbyt heBoar d,bear i
ngt her egi str
ant’sname,t he
cert
ifi
cate numberand t he l egend “ Professi
onalMechani calEngi neer.”
Designs, pl ans, specifi
cati
ons, pr oject feasibil
it
y st udies, appr ai
sals,
recommendat ions,technicalr epor
ts,pr oposals and ot her pr ofessi
onal
document sinvolvi
ngmechani calequi pment ,works,pr ojectsorpl ant sshall
best ampedonever ysheetwi thsaidsealoft her egistrantwhenf il
ledwi t
h
governmentaut hori
ti
esorwhensubmi t
tedorusedpr ofessi onall
y:Pr ovi
ded,
thatitisshallbeunl awfulforanyonet ost amporsealanydocument swi t
h
thesaidsealaf t
erthecert
ifi
cateshal lhavebeenr evokedorcancel led.

11
 SEC.25.Non- issuanceofCer t
if
icateonCer tai
nGr ounds.–The
Boardshallnoti
ssueacer t
if
icateofregi
str
at i
ont oanypersonconvictedby
courtorcompet entjuri
sdicti
onofanycr i
mei nvol
vi
ngmor altur
pit
ude,or
i
mmor alordishonorableconductoranyper sonofunsoundmi nddeclared
byacourtofcompet entjurisdict
ion,f
urni
shingthepar t
lyconcernedawr itt
en
st
atementcontaini
ngt her easonsf orsuchact i
on,whichstatementshal lbe
i
ncorpor
atedintherecordsoft heBoard.

SEC.26.Revocat i
onandSuspensi onofCer t
if
icat
e.–TheBoar d
shallhavet hepower ,uponpr opernot i
ceandhear i
ng,tosuspendorrevoke
anycer ti
ficateofregi strat
ionofanyr egistr
antforanycausespeci fi
edint he
precedingsect i
on,orf ortheusei nwhateverwayofanyf raudordeceitin
containi
ng a cer ti
ficate of r egist
rati
on, or f or gross negli
gence or
i
ncompet ence or f or unpr ofessionalor di shonorable conductand f or
viol
ati
onoft hecodeofet hicsf orthemechani calengineersandcer t
if
ied
plantmechani cs:Pr ovided,Thatt heact i
onoft heBoar dshallbesubjectto
appealt hecommi ssionwi t
hinf i
fteendaysf r
om not ice,whosedecisi
onon
themat tershal lbefinal.

SEC.27.Gr oundf orSuspensi onandRevocat i

onofLi censes,
Cancel l
ati
onofTempor ary/
Speci alPermi t
.–TheBoar dshal lhavepower ,
upon due not i
ce and hear ing,t or evoke orsuspend t he l i
cense of
mechani calengineers,ort ocancelt empor ary/
speci alper mitf
oranycause
specif
iedint heproceedi ngsect i
ons,includingbutnotl imitedto:theuseof
perpetuati
onofanyf raudordecei tinobt ai
ningacer t
if
icateregistr
ation,or
forincompet ence,negligence,orf orabat ementoft hei ll
egalpr acti
ceof
mechani calengi neeri
ng, vi olati
on of t he pr ovisions of t his Act ,i t
s
i
mpl ement i
ng Rulesand Regul ati
onsand/ orv iolati
onsofPol i
ciesoft he
Boar dincludi
ngt heCodeofEt hicsformechani calEngi neering:Pr ovided
however ,thatsuchact ionoft heboar dshal lbesubj ecttoappealwi t
hout
prej
udice t othe rightoft he aggr ieved par t
yt o appl y wit
ht he pr oper
RegionalTr i
alCourtforappr opriaterel
ief

SEC.28.ReinstatementandRepl acementoft heCerti

fi
cates.–
TheBoar d,uponapplicati
onandf orr easonsofequi tyandjusti
ce,may
rei
nstatethevali
dit
yofar evokedcer t
if
icateofregistr
ati
onandprofessional
l
icense,uponpaymentoft herequiredf ees,atl easttwo(2)yearsaf t
er
revocati
on.A new cert
ifi
cateofr egistr
ationtor eplaceanycerti
fi
catel ost
,
destroyedormutil
atedmaybei ssued,subj ectt
ot her ul
esoft
heBoar d,and
uponpaymentoft herequiredfee.

SEC.29.RenewalofLi cense.– Thepr of

essi
onalli
censeshall
serveasevidencethattheli
censeecanlawfull
ypracti
cehisprof
essionunti
l
theexpi
rat
ionofitsvali
dit
y.However,renewaloflicensecanonlybedone
uponthepaymentofr enewalfeecor
respondingtothethree(3)consecut
ive

12
year
s.

SEC.30.VestedRight
s.– Aut omati
cr egi
str
ati
onofPr act
ici
ng
MechanicalEngi
neer
s.– Allpract
icing Mechani
calEngi neer
s who are
r
egist
eredatthet
imethi
sactt
akeseffectshal
laut
omatical
lyberegi
ster
ed.

SEC.31.Cover ageofTemporary/
Speci
alper
mit
s.–Thefol
l
owing
shal
lbe requi
red to secur
e Temporary/
Speci
alPermitfr
om t
he Board
subj
ectt
otheapprovalbytheCommission:

a)Mechanicalengi neers,installati
on,commi ssionorguar antee
engineersfrom othercountri
escal l
edinf orconsul t
ati
onorf oraspeci fi
c
design inst
all
ati
on,pr oj
ectnotr equir
ing mor et han three (3)mont hs
resi
dencei nthePhi l
i
ppinesinat welve( 12)mont hper od:Pr
i ovided,That
suchengi neer
sar elegall
yqual i
fiedt opr acticemechani calengineeringin
thei
rowncount r
yorst at
ei nwhi cht her equi rementsandqual i
fi
cationsfor
obtaini
ngacer t
if
icat
eofr egi
strat
ionar eatl eastequaltoormor et hatthose
specifi
edinthi
sactascer ti
fi
edbyt heBoar d;

b)Forei
gnersempl oyedast echnicaloffi
cers,trai
ningoff
icersor
consult
antsonsuchspeci albranchesofmechani calengineeri
ngwho,i nthe
j
udgmentoft heBoar d,arenecessaryandadvant ageousf orthecount r
y
part
icular
lyint he aspects oft he t
echnology transfer,may be i ssued
temporary permit
s: Provided, that such engagement s have sat i
sfi
ed
condit
ions,asmaybedeemednecessar y,asfoll
ows:

1)Non-avai
labi
l
ityofamechanicalengineerand/
ormechani
cin
t
hecount
rywhoiscompet ent
,abl
eandwi l
li
ngatthet i
meofengagementt
o
per
for
mtheservi
ceforwhichthef
orei
gneri
sdesiredfor;

2)The f or
eignermusthave been int he prioremploy ofthe
engagi
ngfi
rm,orit
sforeignbusi
nesspar
tner
,out
sideoft hePhil
ippi
nesfora
peri
odofnotlessthanone( 1)yeari
mmediatel
ypr ecedingthedateofhis
engagement
;

3)Anypart
icul
arorspecif
icengagementshallnotbeinexcessof
six(6)monthsbutmayber enewedonce,i fnecessar
y,exceptwhensuch
engagementisforanewl yestabli
shedf i
rminwhi chcaset heperi
odof
engagementmaybef oralongerterm butnott
oexceedat ot
alt
erm oft
wo
(2)year
s.

SEC.32.I ndi
cati
onofLicenseandPr ofessionalTaxReceipt.-
The Mechani calEngineershal
lbe requir
ed toi ndicate hi
sPr of
essi
onal
License number,the durati
on ofval
idi
ty,incl
uding the pr of
essi
onaltax
receipton the documents he si
gns uses orissues i n connect
ion wi
th
practiceofhi
sprof
ession.

13
 ARTI
CLEI
V
PRACTI
CEOFTHEPROFESSI
ON

SEC.33.Fi
eldofAct
ionAuthor
izedForEachCategoryProhi
bit
ion.
–I
tshal
lbeunl
awfulf
oranyreason,unl
essauthor
izedundert
hisAct:

a)tobei nresponsiblechargeofpr eparati

onofpl ans,designs,
i
nvesti
gati
ons,val
uati
on,technicalrepor
ts,speci
fi
cati
ons,projectst
udiesor
est
imates ort o be i
n per f
or mance ofot herpr of
essionalmechani cal
engi
neeri
ngact i
vi
ti
esunlesshei sdul yli
censedPr ofessi
onalMechani cal
Engineer
.

b)t oteach professi

onalsubj
ect
si n mechanicalengineeri
ng
cour
seunl essheisdulylicensedProf
essi
onalMechanicalEngineer,ora
Master
’sdegree,orDoct
oratedegreehol
deri
nmechanicalengineeri
ng.

c)t o be i nr esponsi
ble char
ge oft he constr
ucti
on,er ecti
on,
i
nstal
lat
ion,alterati
on,oroft heper f
ormanceofamechani calengineering
ser
viceinconnect i
onwi ththemanuf act
ure,sale,supplyordistr
ibuti
onof
anymechani calwor ks,proj
ectorplantei
therforhimsel
forforother,unless
heisdulyregisteredProfessi
onalMechanicalEngineer.

d)tooperat
e,tendormaint
ain,ortobein-chargeoftheoperati
on,
t
endingormaint
enanceofanymechani calwor
ks,projects,pl
antof100kW
ormorebutnotmor ethan300kW unlesshei sdulylicensedProfessi
onal
Mechani
calEngi
neer,Mechani
calEngi
neerorCertif
iedPl antMechani
c.

e)tooperate,tendormai nt
ain,orbein-chargeoftheoperati
on,
t
ending,ormai ntenance ofany mechani calequipment,machinery or
processofanymechani calworks,project
sorplantsor300ki l
owattsor
aboveornotmor et han2000kW unl esshei sdulyli
censedProf
essional
Mechanicalormechanicalengi
neer.

f
)tooperat
e,t endormaintai
n,orbei n-
char
geoftheoperati
on,
t
ending,ormaintenanceoranymechani calequipment
,machi
neryprocess
f
oranymechani calworks,proj
ect
sorplant
sofover2000kW unlessheisa
dul
ylicensedProf
essionalmechani
calEngineer
.

SEC.34.Per sonnelRequi red i

n Mechani
calPlant.– Every
mechanicalworkpr ojectorpl anti
noper at
ionshal
lhavenotlessthanthe
f
oll
owingcompl ementofr esidentli
censedprof
essi
onalmechani
calengi
neer
:
mechanicalengineer,orcerti
fi
edmechani c:

a)100kW oroverbutnot300kW:(
1)cer
ti
fi
edpl
antmechani
cor

14
one( 1)professi
onalmechanicalengineer:Provi
ded:Thateverymechani cal
work,projectorplanti
nthiscat egor
yinmor ethanoneshi f
tineverytwenty-
fourhours,shallhaveaddit
iont otheminimum personnelherei
nrequir
ed,or
one( 1)certi
fi
edplantmechani c,orone( 1)mechanicalengi
neer,orone( 1)
professi
onalmechani calengineerin-chargeofeachandever yaddi t
ional
shif
t.

b)300 kW orover ,butnotmor et han 2000 kW:one ( 1)

mechanicalengineerorone( 1)pr of
essionalmechanicalengineer
:Provided,
Thateverymechani calwor
k,pr oject,orplantinthiscategoryoperati
ngi n
morethanoneshi fteverytwenty- f
our(24)hoursshal lhave,inaddit
iont o
t
hemi ni
mum per sonnelhereinrequi r
edatleastone( 1)mechanicalengineer,
orone( 1)professi
onalmechani calengineerin-chargeofeachandever y
addi
ti
onalshif
t.

c)Over2000 kW:one ( 1)professi

onalmechani calengineer:
Provided,Thateverymechanicalwork,projec
torpl anti
nt hiscat
egor y
operati
ngi nmorethanoneshi f
tintwenty-f
our( 24)hoursshallhave,i n
addit
ion tothe mini
mum per sonnelhereinr equir
ed atl eastone ( 1)
prof
essionalmechani
calengi
neerin-char
geofeachandever yaddi
tional
shif
t.

SEC.35.Pr eparati
onofPl ansandSuper vi
sionofConstructionby
LicensedEngi neersrequir
ed.–I tshallbeunl awfulf
oranyper sontoor der
orot herwise cause t
he fabri
cat
ion,const r
uction,erect
ion,inst
all
ation,or
alter
ati
on ofany mechani calequipment ,machi ner
y orpr ocess forany
mechani calwor ks,project
s,orpl ant s,unless the designs,layout s or
specifi
cati
onshavebeenpr epar
edbyorundert heresponsibl
echar geof ,
anddul ysignedandseal edbyaPr ofessionalMechanicalEngineer.

Likewise,proposal
sandoper ati
onsf orthesupplyandf abri
cati
on
ofmechani calequi pment,works,projects,plants,mechani calpoll
uti
on
abatementsystems,mechani calfi
reprotecti
onsyst ems,pressuri
zedpipes
wit
hawor kingpr essureofnotlessthat70kPa,shal lbedulysignedand
seal
edbyaPr ofessionalMechani
calEngineer.

SEC.36.Pr act
iceNotAll
owedforFir
msandCor porat
ions.–The
pract
iceofmechanicalengineer
ingi
sapr of
essionalservice,admissi
onto
which shallbe det
ermined upon t
he basi
s ofan i ndividual
’
s personal
quali
fi
cat
ions.

Nofi
rm,companypart
nershi
passoci
ati
onorcorporat
ionmaybe
r
egi
ster
edorl
i
censedassuchfort
hepract
iceofmechani
calengi
neer
:

Pr
ovided,however,Thatper
sons pr
oper
lyregist
ered and l
i
censed as
mechanicalengi
neer
smayfor
m andobtai
nregistr
ati
onwithSecur
it
yand

15
exchangeCommi ssionofaf i
rm,part
nershiporusi
ngtheterm“ Mechanical
Engineer
s”,andor“ Archi
tectandMechanicalEngi
neers”butnobodyshal l
be a member ,partnerorassociat
e unlesshe isa dulyr egi
ster
ed and
l
icensed mechanicalengineer,and the members who ar e mechanical
engineershallonlyr enderwor k and servi
ces pr
operf ormechani cal
engineer
sasdefinedinthi
sAct .

SEC.37Post i
ngofCer t
if
icates.–Theowner ,manager ,orother
person i
n-charge ofany mechanicalwor ks,project
s,orpl ant s orone
hundred(100)kW ormor e,ofaf i
rm,co- part
nership,corporationorj oint
-
st
ockassociati
on,shallpostorcauset obepos t
edi naconspi cuouspl ace
wit
hinsuchpl antofbusiness,t
heor iginalcert
i
ficateofregistrationoft he
engineerorengineersandoft hecer tif
iedplantmechani c/sempl oyedi n
suchplant
,inaf r
amepr ot
ectedbytransparentglassoritsequival ent
.

SEC.38.RosterofEngi neer
sandMechani cs.–Ar ostershowing
t
henamesandpl aceofbusi nessofallregi
ster
edprofessi
onalmechani cal
engineers,mechanicalengineersandcer ti
fi
edplantmechani cs,shal
lbe
prepared by the Commi ssion which shal
lbe made avai lablet o any
i
nterestedpar
ti
esuponf ormalwr i
tt
enrequest.

SEC.39.For ei
gnReci procit
y.Nof orei
gnmechani calengi
neeror
mechani cshallbeallowedt opracti
cemechani calengineeri
ngortobegiven
ac ert
if
icateofresignati
onorbeent i
tl
edt oanyoft hepr i
vil
egesunderthis
Actunlesshecanpr oveint hemat terprovi
dedbyt herul
esofCour torby
specif
ic provi
sions ofl aw or r egulati
ons,per mits Fil
ipi
no mechanical
engineerand/ormechani cstopr act
icewithinit
sterr
itor
iall
imit
sonthesame
basisast hesubjectorcit
izenofsuchcount r
yorstate.

SEC.40.Enf or
cementofActby t he Of fi
cial
s oflaw.– The
prof
essi
onalRegul at
ionCommi ssi
onshallbetheenf orcementagencyofthe
Board.Assuch,theCommi ssi
onshalli
mplementt heconcer nedprovi
si
onof
t
hisact,enforceitsimplementi
ngrulesandr egulati
onsasadopt edbythe
Board,conductinvesti
gati
onsorcomplaint
sincludingviolati
onsofthecode
ofconductoftheprofessi
onalandprosecut
ewhensowar r
anted.

I
tshallbethedul yconstit
utedauthori
ti
esthr oughtheoff
icersof
t
he law ofthe nat
ionalgover nment,oranypr ovincial,ci
tyormuni ci
pal
governmentoranypolit
icalsubdivi
si
onthereof,t
oenf orcetheprovi
sionsof
t
hisactandtoprosecuteanyper sonviol
ati
ngthesame.

SED.41.Qualif
icat
ionRequirements.–Inagovernmentorprivate
i
nstitut
ionwher eaposi ti
onr equi
resamat er’
sdegreeholder,aholdera
professionalmechanicalengineerli
censeshallbeeligi
bleforthepositi
on.
Likewise,whereaposi t
ionrequiresapr of
essionalmechanicalengi
neer’s
l
icense,a hol der ofa mast er
’s or doctorat
e degree in mechanical

16
engineer
ing, wit
h regi
ster
ed mechani
cal engi
neer
’sl
i
cense shal
l be
consider
edfortheposi
ti
on.

ARTI
CLEV
PENALANDCONCLUDI
NGPROVI
SION

SEC.42.Penal t
ies.–I nadditi
ont otheadmi nist
rat
ivesancti
ons
i
mposedundert hisActanyper sonwhovi olatesanyoft heprovisi
onsofthi
s
Actandi tsr ul
esandr egulati
onsshal l
,uponconvictionbepenal i
zedbya
fi
neofnotl essthanfi
ft
yt housandpesos( P50,000.00)notmor ethantwo
hundredt housandpesos( P200, 000.00)
,ori mpri
sonmentofnotl essthan
si
x( 6)mont hsnotmoret hant hree( 3)years,orbot
hf ineandi mpri
sonment
atthediscreti
onofthecour t
.

SEC.43.Impl
ement
ingRulesandRegul
ati
ons.–Theboar
dshall
f
ormul
ateandissuet
heimpl
ementi
ngrulesandr
egul
ati
onstocar
ryoutt
he
pr
ovi
si
onofthi
sAct.

SEC.44.Fundi ngPr ovi

si
ons.Suchsumsmaybenecessar yto
car
ry out provi
sions of thi
s act shallbe i ncl
uded i
n the General
Appropr
iat
ionsActoftheyearfoll
owingi
tsenact
mentintol
awandther
eaft
er.

SEC.46.Repeal i
ngCl ause.–Commonweal thAct .No.294,as
amendedbyRepubl i
cAct.No.5336,i st
herebyrepeal
edandl lot
herparts,
oflaw,ordinances,orregulationsorr el
ati
vetothepracticeofmechani cal
engineeri
ngwhi chareinconsistentwitht
heprovi
sionsofthisactarehereby
repealedormodi f
iedaccordi
ngl y.

SEC.47.Tr ansit
ory Pr ovisi
ons.- a)Mechani calEngineer
s
possessingvalidcert
ifi
catesofregistrati
onissuedunderCommonweal thAct.
No.294wi t
hBSMEdegr eeshal l
,aftertheappr ovalofthi
sact.Regist
erand
beissuedcer ti
fi
catesasPr ofessi
onalmechani calEngineerstorepl
acethei
r
ori
ginalcert
if
icateofregist
rat
ionuponpaymentoft herequiredfees.

b)Facul tyMember scur r

entlyteachi ng mechanicalengineering
prof
essionalsubj ectsi
nuni versi
ti
es,coll
eges,i nsti
tut
esorschool sshallnot
beallowedt obecont i
nuet eachingafterf
ive( 5)year sf
rom theappr ovalof
thi
sAct ,unlesstheyar eorhavebecomepr of
ess ionalMechanicalEngineers
oratl eastRegi steredMechani calEngineer swi ththemast er’
sdegr eei n
mechani calEngi neeri
ngfrom dul yrecognizedandaccr edi
teduni versi
ti
es,
coll
eges,instit
utesorschool s.

c)ThepresentBoar
dshallcont
inuetof
unct
ioni
nthei
nter
im unt
il
;
sucht
imeasthenewBoar dshal
lbeconst
itut
ed.

17
 SEC.48.Effecti
vi
tyCause.–ThisActshallt
akeeffectf
if
teen(15)
days f
oll
owing i
ts publi
cati
on i
nt he Of
fi
ci
algazette ora maj ordaily
newspaperofgener
alcircul
ati
oni
nt hePhil
i
ppines,whi
cheverisear
lier
.

Appr
oved.

JOSEDEVENECI A,JR. NEPTALIA.GONZALES

SpeakeroftheHouse Presi
dentoft
heSenat
e
OfRepresentat
ives

Thi
sAct,whi
chisaconsoli
dat
ionofSenateBil
lNo.1793and
HouseBi l
lNo.9806wasfinal
l
ypassedbytheSenateandtheHouseof
Represent
ati
veonFebr
uar
y3,1998andJanuar
y28,1998,r
espect
ivel
y.

ROBERTOP.NAZARENO HAZELP.GACUTAN
Secret
aryGeneral Secr
etar
yoft
he
Senate
HouseoftheRepresentat
ives

Appr
oved:Febr
uar
y12,1998

FI
DELV.RAMOS
Pr
esi
dentoft
hePhi
l
ippi
nes

Republ
icoft
hePhil
i
ppi
nes
Pr
ofessi
onalRegul
ati
onCommi
ssi
on
Manil
a

BOARDOFMECHANI
CALENGI
NEERI
NG

18
 Resol
uti
onNo.16
Seri
esof1998

____________________________________________________________

RULESANDREGULATI ONSI MPLEMENTI NG

REPUBLI CACTNO.8495
____________________________________________________________

The fol
lowi
ng rul
esand r
egulat
ionsarefor
mulated and i
ssued
pursuanttoSecti
on43andAr t
icl
eVofRepublicActNo.8495,knowast he
“Phil
i
ppineMechanicalEngi
neeri
ngActof1998”tocar
ryouttheprovisi
ons
ofthesaidAct.

RULEI
TI
TLE,STATEMENTOF
POLI
CYANDDEFI NITI
ONOFTERMS

SEC.1.Ti t
le.–Thisresol
uti
onshal
lbeknownanci
tedasthe
“
Rules and Regul ati
ons Implementi
ng the Phi
li
ppi
ne Mechani
cal
Engi
neer
ingActof1998”(RRI
PMEA) .

SEC.2 St atementofPol i
cy.– The Boar d ofmechani cal
Engi neer i
ng concurs with and abides by t he poli
cy oft he Statei n
recogni zingtheimportanceoft hemechani calengineersinnat ion-
buil
ding
and devel opment,in promoti
ng thei
rt al
entst hr
ough sustai nable human
devel opment and i n devel oping and nur turi
ng compet ent, virt
uous,
product ive and well
-r
ounded mechani calengi neers whose st andard of
professi onalpr
acti
ceandser viceshallbeexcel l
ent,quali
tat
ive,wor ld-
class
and gl oball
y competi
tive t
hrough regulatory measur es,pr ograms and
acti
vities.

SEC.3.Defi
nit
ionofTerms.–Unl
essot
her
wisepr
ovi
ded,t
he
f
oll
owi
ngshal
lbeunder
standmean:

a.Boar
d–Boar
dofMechani
calEngi
neer
ing(
BME)

b.Boar
dChai
rman–Chai
rman,Boar
dofmechani
calEngi
neer
ing

c.Commi
ssi
on–Pr
ofessi
onalRegul
ati
onCommi
ssi
on(
PRC)

d. Commissi
on Chai
rman – Commi
ssi
oner
, Pr
ofessi
onal
Regul
ati
onCommissi
on

e.CPE–Cont
i
nui
ngPr
ofessi
onalEducat
ion

19
 f.C.
A.No.294,asamendedbyR.
A.No.5336–Ol
dMechani
cal
Engi
neer
ingLaw

g.CHED–Commi
ssi
onofHi
gherEducat
ion

h.PME–Pr
ofessi
onalMechani
calEngi
neer

i
.RME–Regi
st
eredMechani
calEngi
neer

j
.CPM –Cer
ti
fi
edPl
antMechani
c

k.Integrat
ion–uni fi
cati
onofallmechanicalengineer
si ncludi
ng
cer
ti
fi
ed pl
antmechani cs i
nto one nat
ionalorgani
zati
on ofmechani cal
engi
neer
stobeaccr edi
tedbytheBoar dofMechanicalEngineer
ingandt he
Commissi
onwi thoutprejudi
cetothei
rmember shi
pi notherassoci
ationsof
mechani
calengineers.

l
.OTEC – Ocean Ther malEnergy Conser
vat
ion ut
il
i
zing t
he
di
ff
erence intemperat
ure ofdeep ocean wat
erand surf
ace waterto
generat
eelect
ri
ci
ty.

m.Pract
iceofMechani
calEngi
neer
ing–r
efer
stot
heper
for
mance
oft
hef
oll
owing:

(1) Consul
tat
i
on, valuati
on, i
nvest
igat
ion and management
ser
vicesr
equi
ri
ngmechanicalengi
neeri
ngknowl
edge;

(
2)Engi
neeri
ngdesi
gn,pr
eparat
ionofplans,speci
fi
cat
ionsand
pr
ojectst
udi
esorest
imat
esf
ormechani
calworks,pr
oject
sorpl
ans;

(
3) Managementor super vi
si
on ofthe erect
ion,inst
all
ati
on,
al
ter
ati
on,test
ingandcommissioni
nginmechani
calequipment
,machinery,
orpr
ocessesinmechani
calworks,proj
ect
sorpl
ant
s;

(4)Management,super
visi
on,oper
ati
on,tendi
ngormaint
enance
ofanymechanicalequi
pment
,machiner
yorprocessesi
nmechani
calworks,
proj
ect
sorplants;

(
5)Managementandsupervi
sionoft
hemanufact
ure,sal
esuppl
y
ordi
str
ibut
ionofmechani
calequi
pment
,part
sofcomponent
s;

(6)TeachingofMechani
calEngi
neer
ingprofessi
onalsubj
ect
sin
gover
nmentrecogni
zedandaccr
edi
tedengi
neer
ingschools;and

(7)Empl oymenti
n governmentas a prof
essi
onalmechani
cal
engi
neer
,regi
ster
edmechanicalengi
neer,orcer
ti
fi
edpl
antmechani
cift
he

20
nat
ureandcharact
erofhi
sworkisinli
newi
thhi
spr
ofessi
onalknowl
edgeof
t
hescienceofmechani
calengi
neer
ing.

n.Mechani calEngi neeri

ng orMachi nery– i ncludes allpri
me
moverssuchasst eam engi nesandt urbi
nes,i nternalcombust ionengines
andgasengi nesandt urbinesst eam gener ator
ssuchasboi l
er;fur
naces;
heatexchangersuchascool i
ngt owers,kil
nsanddyer scoolersandheat ers;
materi
alshandl i
ngequi pment ,suchaspumps,cr anes,conveyor s,hoists,
el
evators, escal ator
s, mechani zed dumb- waiters, movi ng r amps and
walkways;heat ing,airc onditi
oning,ventil
ati
ng,andr efri
gerati
onequi pment
and machi nery,i ncl
uding compr essorsand c entri
fugalfans,mechani cal
pol
luti
onabat ementandenvi ronment alcontrolsystem;pi pi
ngsyst em wit
ha
worki
ngpr essur eofnotl esst han70kPa,f iredandunf i
redpr essurevessels,
pri
nti
ng machi nes;mechani calwor ki
ng machi ne formet all
ic and non-
metall
icmat eri
alsandot hermechani calequipmentandmachi nerywhether
i
nstal
ledonl and,under gr ound,oronboar dwat ercraft
.

o.Mechani calprocesses,works,proj
ectsorpl ants–shal lincl
ude
steam pl ants,geomet r
icalplants,dendro-t
her
malpl ants,nuclearpl ants,
oc ean thermalener gy conservati
on (OTEC)pl ants,internalcombust i
on
plants,hydr aul
icplants,pumpi ngplants,compressgaspl ants,allkindsof
mills,shops,f actor
ies,shipyards,drydocks,heat i
ng,ai rcondit
ioningany
mechani calequi pment ,machineryorpr ocessder i
vingpowerf r
om st eam,
fossilfuel
s,wi nd,air,gas,wat er
,solarheat,nuclearener gy,oceanwaves
andt ides,orotherener gysources.

p.Capacityofprocesswor ks,projectsorplant-r
at edcapacit
yin
kil
owattofmechanicalwor
ks,pr oj
ect
sofpl ants–shal lbet het ot
alki
lowatt
rat
ingsofal lengi
nes,mot ors,boil
ers,turbines,orot herpr ime mover s
i
nstall
edforuseinsuchwor ks,proj
ectsorpl ants,whetheri noperat
ionor
not,and wit
houtregardtot he numberofcapaci t
iesoft he mechanical
equipment,machi
neryorprocessesr ecei
vi
ngpowerf rom ori nt
endedt obe
dri
venbysuchpr i
memover s.

q.S.O.– Speci
alOr
deri
ssued byt
he CHED aut
hor
izi
ng t
he
gr
aduat
ionofast
udent
.

r
.Syl l
abi–anout li
neort abl
eofspecif
icat
ionscompr i
si
ngt he
contentsofthesubj ect
sforli
censur
eexaminat
ionprescri
bedinacour seof
st
udyoft hesubj ectssyst
emat i
cal
l
yar r
angedaccordingtotopicsand/or
subtopicfrom whicht estquesti
onfortheli
censur
eexami nati
onshal lbe
preparedwi t
hini
tsscope.

RULEI
I
OFFI
CIALSEALOFTHEBOARD

21
 SEC.4.Of f
icialSealoftheBoar d.–theof fi
ci
alsealoft heBoar d
shallber epr
esentedbyadr awingofHer o’
ssteam engine.1stCent uryA.D.
consisti
ngofacyl i
ndricalkettl
emount edonat hr
ee- l
eggedmet alsupport
,
heatedbyf i
rewoodundert hekettl
ewi t
hthet wot ubesattachedver ti
cal
ly
i
nsidet hekettl
eopposi teeachot herconnect
edbyat ubepassi ngthrougha
sphericalmetalballwhichr evol
vesoni t
saxisemi t
ti
ngst eam attheoppos i
te
si
deoft heballt
hroughsmal lpi
pes.

RULEII
I
COMPOSITI
ON,QUALI
FICATI
ONS,TERMSOF
OFFI
CEANDMEETINGSOFTHEBOARD

SEC.5.Composi ti
on oft he Boar d.– The Boar d shal
lbe
composedofachai rmanandofat wo( 2)member stobeappoi nt
edbyt he
PresidentofthePhili
ppinesf
rom alistofthree( 3)recommendeesf oreach
posit
ion,chosenandr ankedi
ntheor derofpr eferenceandsubmi t
tedbythe
Commi ssi
on,f r
om a listoffive (5)nomi nees submitt
ed by t he dul
y
accreditedassoci
ati
onofmechanicalengineersi nthePhil
i
ppines.

SEC.6.Qual
i
fi
cat
ionofMembersoftheBoar
d.–Amemberofthe
Boar
d shall
,atthe ti
me ofhis appoint
ment,possess t
he f
oll
owi
ng
qual
i
fi
cat
ions:

(a)nat
ural
-bor
nci
ti
zenandr
esi
dentoft
hePh8i
l
ippi
nesf
oratl
east
f
ive(
5)years;

(
b)Mustbeatl
eastt
hir
ty-
fi
ve(
35)year
sofage;

(c)Hol
derofthedegreeofBachelorofScienceinmechanical
Engi
neeringorit
sequiv
alent
,confer
redbyas chool
,academy,col
l
egeor
uni
versi
tyinthePhil
i
ppi
nesorabroadthati
saccredi
tedbythecommissi
on
onhigherEducat
ion;

(
d)AProfessi
onalMechanicalEngi
neerwit
havali
dpr
ofessi
onal
l
icenseandanactivepract
it
ionerofsuch,f
ornotlesst
hatt
en(10)years
pri
ortohi
sappoi
ntment;

(e)Mustnot,f oraperi
odofthree( 3)consecuti
veyearspri
orto
appoint
ment,beamemberofanyschool ,academy,i nsti
tut
e,col
l
egeor
uni
versit
ywherear egularcour
seinmechanicalengineeri
ngisbei
ngtaught
,
nothavepecuniaryinteresti
noradmini
strati
vesuper vi
si
onoveranysuch
i
nsti
tuti
onsofl
earni
ng;

(
f)Mustnot
,a per
iod oft
hree (
3)consecut
ive year
spr
iort
o

22
appointment,be connect
ed withar evi
ew centerorwi t
h any gr
oup or
associat
ionwherer evi
ew cl
assesorl
ecturesinprepar
ati
onfortheli
cense
examinationar
eofferedorconduct
edattheti
meoft heappoi
ntment
;

(g)Hasneverbeen convi
cted ofanyof
fense i
nvol
vi
ng mor
al
t
urpi
tude;and

(
h)Mustnotbeanati
onalof
fi
ceroft
heaccr
edi
tedassoci
ati
onof
Mechani
calEngineer
soft
hePhi
l
ippi
nesatthet
imeoft
heappoi
ntment(E.
O.
No.496,S.1991)
.

SEC.7.Ter m ofOf
fi
ce.–Amemberoft
heBoardshal
lholdOff
ice
foraterm ofthree(3)yearsfr
om t
hedateofhi
sappoi
ntmentorunti
lhis
successorshallhavebeendulyappoi
nted.Nomembershal
lservemor e
thantwo(2)regulart
erms.

SEC.8.Boar d,a Col legi

alBody.– The chai rman and the
membersoftheBoardshallactasacoll
egialbodyonallmat t
ersinvol
vi
ng
t
heexerci
seofi
tspowersanddutiesaswellaspoli
ciesl
aiddowni nR.A.No.
8496.Act
iononsuchmattersshallbeef
fect
iveonlywhenappr ovedbythe
Commissi
on.

SEC.9.Meet i
ngsoftheBoard.–TheBoar dshallhol
di t
sr egul
ar
meeti
ngonceamont hwit
hinthepremisesoftheCommi ssionori nsuch
ot
herplacesasmaybeagr eeduponbyt heBoar dandappr ovedbyt he
Chai
rman oft he Commissi
on.A specialmeeting maybe cal led byt he
Chai
rmanort hetwomember s.Thechai
rmanshal lpr
esideoverallmeet i
ngs
oft
heBoar d.Int
heabsenceoft heChair
man,theseni ormember ,ifany,or
t
hememberdesi gnatedbytheChair
manshallpreside.

RULEIV
DUTI
ESANDRESPONSIBI
LITI
ESOFTHE
CHAIRMANANDTHEMEMBERSOFTHEBOARD

SEC.10.Dut iesandFunct i
onsofChai rman.–Thechai rmanshal lbet he
headoft heBoar dandassuch,heshal lequitablyassi gnt hesubj ect sf
or
ex aminati
ontot hemember s;designatet hememberort hemember swho
shal lpr
eside duri
ng the hearing orinvest i
gat i
on ofadmi nistr
ative cases
wher et he i
ssue invol
ve concer nsthe pr actice oft he profession ort he
oc cupati
on;delegatethehear i
ngori nvestigationofadmi nistr
ativecases
fi
ledbef oretheBoar dt othel egalorhear i
ngof f
icersoft heCommi ssi
on
ex ceptwheretheissuestri
ctlyconcernst hepr acticeoft hepr ofessionandt o
as si
gnmember swhoshal lunder t
aket hevi sit
or i
alf unct
ionsoft heBoar d.
He shal lbe r esponsibl
ef ort he assi gnmentoft he otherdut i
es and
responsibil
i
ti
estot hemember saswel last hesuper vi
sionandmanagement

23
oft
hewor k.Thechai
rmanshallbethespokepersonoft
heBoar
dinthe
Commissi
onandinotherof
fi
cesandagenciesoft
hegover
nmenti
nallt
he
per
tai
nstoandconcer
nsthefunct
ionsoft
heBoard.Hemaydel
egat
esuch
f
uncti
ontoanyoft
hemembers.

SEC.11.Enf orcementand I mplementation ofR.A.No.8495

Incl
udingt heRul esandRegul ati
onsPromul
gatedTher eunder.–TheBoar d
shal
l,int heexer ci
seofi t
spower sandperf
ormanceofi t
sduties,functions
andr esponsibil
it
ies,beassistedandsupportedbyt heCommi ssionthrough
i
ts of f
ices, divi
sions, secti
ons and/or unit
si n t he enforcement and
i
mplement ati
onoft hepr ovi
sionofR. A.No.8495i ncl
udingtheRul esand
Regulat i
ons adopt ed by t he Boar d and, whenever appr opr
iate t he
Commi ssionshallrequestfort heBoardtheas si
stanceofdul yconstituted
l
awenf orcementof f
icer
stoenf orcet
hepenalprovi
sionofsaidAct .

SEC.12.Acti
ononDocument sandOtherPapersbytheBoard.–
TheBoardshallactonallpaper
s,communicat
ions,cer
ti
fi
cat
es,casesor
ot
herdocumentsonl
ywithi
nthepremisesi
ssecuredfrom t
heChairmanof
t
heCommi ssi
on.

SEC.13.Deci si
ons,Or ders orResol ut
ionsandOt herI ssuances
ofthe Boar d.– Inthe pr omul gati
on ofdecisionsorj udgment sand t he
i
ssuance ofor ders or r esoluti
ons which ar e notinterl
ocut oryi n an
admi nist
rati
vecaseandi nt heimplementat
ionoft hepr
ovisi
onofR. A.No.
8495 whi ch are notsel f
-executing,the Boar d shal
lmeeten bane t o
deli
ber at
eanddeci deonsuchmat t
ers.Thepresenceoft hequor um shallbe
suf
fi
ci entt odeli
berat
eandactupont hemat tersabove-ment i
onedanda
major i
tyvoteshallber equiredforthevali
dit
yoft heAct.Thepr esenceoft he
two( 2)member sshallconst i
tut
eaquor um andt hevoteoftwo( 2)member s
shallconst i
tut
eamaj orit
yvot e.

AnyactionoftheBoardmeeti
ngenbanconanymat ter,except
deci
si
onsofjudgment
sinorthosewhi
charei
nvolvedi
norhaveari
senfrom
anadmini
str
ati
vecase,shal
lbevali
dandenforceabl
eonl
yifapprovedby
t
heCommi ssi
on.

Resol
uti
onofot herissuanceoftheBoar dwhosepurposest
o
enf
orceofimplementR. A.No.8495orwhi chregulat
ethepubl
i
cmustbe
publ
ishedi
ntheOf f
ici
alGazet
teforthei
ref
fect
ivi
ty.

SEC.14.Of fi
ci
alBusi
nesswit
ht heCommi ssi
on.–Inalloffi
cial
busi
ness/
meeti
ngswiththeCommissi
on,eitheruponcal
lorbyitsrequest,
theBoardshal
lber epr
esent
edbyi t
schairmanori nhisabsencebyt he
seni
ormember,i
fany,orbymemberdesignated.

SEC.15.I
nter
pret
ati
onoft
hePr
ovi
si
onofR.
A.No.8495andt
he

24
Rulesandr egulat
ionsPromulgatedThereunder.–TheBoar dmayatf ir
st
i
nstance,resol
veissuesorquestionsari
si
ngfrom thei
mplementat
ionoft
he
pr
ovisi
onsofR. A.No.8495i nt hefor
m ofopinionsi
ssuedbyt heBoar d
t
hroughi t
schairman.Itmayal soissueopini
onsonquestionsari
singf
rom
t
hei mplementati
onofi t
sRul esandRegul ati
onsaswel lastheCodeof
Et
hicsformechanicalEngineers.

SEC.16.Recor dsoft
heBoar d;RemovalofsuchPaper s,etc.–
Allr
ecordsoft heBoardi ncl
udi
ngappl i
cat
ionsf
orexaminati
on,exami nati
on
papersandr esults,minutesofdeli
berati
on,admini
str
ati
vecasesshal lbe
keptbyt heCommi ssi
on.Nopaper s,communicati
ons,cert
if
icat
es,records
ofcasesandofot herdocument sshal
lber emovedfrom t
hepr emisesofthe
Commi ssionunlessexpresslyaut
horizedinwrit
i
ngbyt heChai rmanoft he
Commi ssion.

SEC.17.AnnualRepor t.–TheBoar dshal l

,atcl oseofeach
calendaryear ,submi tanannualrepor
tforthepr esidentofthePhi l
ippi
nes
throught hePr ofessi
onalr
egulat
ionCommi ssi
on,gi vingadet ail
edaccount
ofi ts proceedings and accompli
shments duri
ng t he yearand maki ng
recommendat i
onsf ortheadopti
onofmeasur ethatwi llupgr
adeandi nf
orm
the condi ti
on affect
ing t
he pract
ice ofmechani calengi neering i
nt he
Phi l
i
ppines.

RULEV
LICENSUREEXAMI
NATIONFORTHE
PRACTICEOFMECHANICALENGI
NEERI
NG

SEC.18.Exami nat
ion Requi
red orthe Practi
ce ofMechanical
Engineeri
ng.–Unl essexpr essl
yexempt edbyt hepr ovisi
onofR. A.No.
8495,allpersonsdesi
ri
ngt opract
icethemechanicalengineer
ingpr
ofessi
on
musttakeandpasst helicensureexaminat
ionforthepracti
ceofmechanical
engi
neer i
ng.

SEC.19.Appl i
cati
on.–Allapplicant
sforexami nat
ionshallfi
l
ean
computerizedappli
cat
ionsuppl i
edbyt heCommi ssion,freeofcharge,duly
accomplishedintheAppl i
cati
onDivi
sionoft heCommi ssionorinanyofi t
s
RegionalOf fi
ces which are al
so designed as the testcentersf orthe
prof
ession accompanied by authent
ic orunaut henti
cated copi
es oft he
requi
reddocument s.

A Fi
li
pino ci
t
izen who graduat
ed from a f
orei
gn educat
ional
i
nst
it
uti
onshal
lli
kewiseatt
acht ohisappli
cat
ionanendorsementforthe
Commissi
ononHigherEducat
ion(CHED).

SEC.20.Cat
egor
iesofMechani
calEngi
neer
s.–Cer
ti
fi
cat
eof

25
Regist
rati
onfort
hepracti
ceofmechanicalengi
neer
ingshal
lbeoft
hree(
3)
cat
egoriesint
heorderofrankasf
oll
ows:

a)Pr
ofessi
onalMechani
calEngi
neer

b)Mechani
calEngi
neerand

c)Cer
ti
fi
edPl
antMechani
c

SEC.21.Quali
fi
cati
onofAppli
cant
sforProf
essionalMechani
cal
Engineer.– Any appl
icanttothe prof
essi
onalmechanicalengineer
ing
exami nat
ionmust
,atthet i
meoff i
l
ingofhisappl
icat
ion,establ
i
sht othe
sat
isfacti
onoft
heBoardthat:

a)Hei
saci
ti
zenoft
hePhi
l
ippi
nes;

b)Hehasgr aduat
edfr
om anengi
neeri
ngschool
sorcol
l
egeof
recogni
zedst andi
ng,aft
ercompl
eti
nganapprovedcour
seinmechani
cal
engineer
ing;

c)He has a vali

d cert
if
icat
e ofregi
str
ati
on ora r egi
ster
ed
mechani
calengi
neerandahol
derofavali
dprof
essi
onall
icense;

d)Hehasspeci fi
crecordofat ot
aloffour(4)year
sormoreof
act
ivemechanicalengineer
ingpract
ice,r
eckonedfrom t
imehebecamea
Regist
eredMechanicalEngi
neeri
ng;

e)Heiscompet enttopract
ice,asat
test
edbyatl
eastt
wo(
2)
Pr
ofessi
onalmechani
calEngineer
;

f)Hemustnothavebeenconvi
ctedbyacour
tofl
aw ofacr
ime
i
nvol
vi
ngmoralt
urpi
tude;

SEC.22.Qual i
fi
cat
ionofAppl icant
sofMechani calEngineer
.–
Any per
son applyi
ng forexamination f
or Cer t
if
icat
e ofr egi
str
ati
on as
mechani
calEngineershal
l,pr
iortoadmissiontot
heexami nat
ions,est
abl
ish
t
othesati
sfact
ionoftheBoardthat:

a)Hei
saci
ti
zenoft
hePhi
l
ippi
nes;

(b)He hasgr aduat

ed fr
om a vocati
onalortrade schoolduly
recogni
zedbyt hegovernmentaft
ercomplet
inganapprovedcourseofnot
l
esst hant wo(2)yearsinstati
onaryorpowerpl antengi
neeri
ngofany
mechanicalplantoperati
on i
ncl
uding butnotlimit
ed to machine shop
equipmentandheavyequipment;

26
 (c)Hehasaspeci f
icr ecor dofanaddi t
ionalone(1)yearormor e
ofact i
ve pr act
ice in mechanicalpl antoper at
ion ofsuch char acteras
i
ndicatedi nanaf f
idavi
tofar egi ster
edpr of
essionalmechani calengi neer
,
andlikewiseest abli
shtothesat isfactionoftheBoar d,t
hattheappl icantis
compet enttot heunder t
aketheoper at
ion,tendingandmai ntenanceand
mechani calwor ks,proj
ectsorpl antofnotl esst hanonehundr ed( 100)
ki
lowatts.

d)Hehasawor
kingknowledgeofandcanr
ead,wr
it
eandspeak
Engl
i
shoranyoft
hemaj
orPhil
i
ppinesdial
ect
s;and

(e)Hemustnothavebeenconvi
ctedbyacour
tofl
awofacr
ime
i
nvol
vi
ngmoralt
urpi
tude.

SEC.24.ScopeofExami nati
on.–Thescopeofexami nat
ionand
t
hemet hodsofprocedurewithspecialreferencetotheappli
cant’
sabil
it
yto
per
for
mt hetypeofengineeri
ngwor kpertainingtothepar
ti
cularcat
egoryhe
i
storegist
eredi
nareher ebyprescr
ibeasf ollows:

I
.ProfessionalMechani calEngi
neer–Thegr anti
ngofpr of
essional
mechanicalengi neercer tif
icate ofRegi str
ati
on shallbe testimonialin
nature which shalli ncl
ude t he submi ssion ofan enumer ati
on oft he
appli
cant’
s exper i
ence i ncluding t he presentat
ion of an engi neeri
ng
report
/t
echnical paper per t
inent t o hi s l i
ne of exper i
ence
att
estedt obyatl easttwo( 2)Pr of
essi
onalMechani calEngineersinan
aff
idavi
tforthi
spur pose;

Gui
del
i
nesf
orAppl
i
cant
sinPr
ofessi
onalMechani
calEngi
neer
sExami
nat
ion:

1.Thef
oll
owi
ngdocument
s/paper
smustbesubmi
tt
edwi
tht
he
appl
i
cat
ion:

a.Cer t
if
icat
e ofCompet
ence underoat
h by a Pr
ofessi
onal
Mechani
calEngi
neer

b.Af
fi
davi
toft
heAppl
i
cant

c.Cer
ti
fi
cat
eofExper
ienceunderoat
hexecut
edbyhi
ssuper
ior

d.Det
ail
eddescr
ipt
ionofMachi
ner
iesandEqui
pment

e.Li
stofdesi
gns(
ifany)under
takenwi
tht
hesuper
visi
onofa
PME

f
.Cur
ri
cul
um Vi
tae

27
 g.Atleastt
wo( 2)ti
tl
esofproposedrepor
ts,eachwit
hashort
wri
te-
up and tabl
e ofcontent
s.Reports mustbe permanent
,all
i
ed or
r
elevantt
otheexperi
enceoftheappl
i
cant.

2. Computeri
zed appli
cat
ions dul
y accompl
ished shal
l be
submi
tt
edtotheAppli
cati
onDivi
si
onoft heCommi
ssionduri
ngoff
icehour
s
onanyworki
ngday.

3.Eval
uat
ionofsubmi
tt
edappl
i
cat
ionsshal
lbedonebyatl
east
t
wo(
2)member
soft
heBoard.

4.Appl
i
cantshal
lbeinf
ormedoft
heappr
ovalort
hedisappr
ovalof
hi
s appl
icati
on wit
hinar easonabl
e numberofdays from recei
ptof
appl
i
cati
on.

5.I
ntheeval
uat
ionoft
heexper
ienceofappl
i
cant
s,t
hef
oll
owi
ng
shoul
dbeconsi
der
ed:

DesignExperi
ence
MaintenanceandOper
ati
on
Fabri
cati
onandshopPract
ices
I
nstall
ati
on
Others

6.Everyappli
cantshal
lber
equir
edtopresenthi
msel
fbefor
eat
l
easttwo( 2)membersoftheBoardf
ortwo(2)membersoftheBoardfor
t
wo(2)int
ervi
ews.

Thefirsti
nter
view shallbemadebef oret
hesubmissi
onofthe
engi
neer
ingr eportandmaydealonanyf i
eldorpract
icei
nmechani cal
engi
neer
ing,incl
udingthemechani calengi
neer
inglawandCodeofEthi
cs.

Thesecondint
ervi
ewwi
l
lonl
ydealont
heengi
neer
ingr
epor
t
submi
tt
edbyt
heappli
cant.

I
nbot
hcases,t
heappl
i
cantshal
lbesentnot
icesf
ori
nter
view.

Excepti
nmer i
tor
iouscases,non-
appear
anceofappl
i
canti
nthe
schedul
edi
nter
viewshal
lmeanf ai
l
ure.

7.Rel ease ofthe Resul

tofthe Examinat
ion f
orPr of
essional
Mechani
calEngineersmayormaynotcoi nci
dewithther el
easeoft he
r
esul
tsoft he exami
nation f
orMechani
calEngineer
sand Cer ti
fi
ed Plant
Mechani
cs.Appli
cant
ss hal
lbeindi
vi
dual
l
yfrom t
hedateofthelasti
nter
view.

28
 8.Anyapplicantwhofai
l
edtopasstheexami
nat
ionmayappl
yfor
re-
examinati
onaf t
erthel apseofatl
eastone(1)yearfrom t
hedat
eof
noti
ceoflastf
ail
ure.

9.Theengi
neer
ingr
epor
tmustbeacc
ompani
edbyt
hef
oll
owi
ng:

a)Let
terofTr
ansmi
tt
aladdr
essedt
otheBoar
d

b)Af
fi
davi
tofappl
i
cant

c)Af
fi
davi
tofCompet
ency

d)Cur
ri
cul
um Vi
taeofAppl
i
cant

e)Cer
ti
fi
cat
eofExper
ience

f
)Engineer
ingr
epor
t
(Theengi
neeri
ngr
epor
tmustconf
orm wi
tht
hef
oll
owi
ngout
li
ne:
)

f
.1Ti
tl
ePage

f
.2.Tabl
eofCont
ent
s

f
.2.
1.Chapt
erI -I
ntr
oduct
ion
- Bri
ef Histor
y of Pl
ant
, Fi
rm, or
Est
abl
i
shment
-Subjectoft heRepor t
-Capitalizat
ion
-Owner shi p
-Organi zati
onalSet-upwi
thTechni
cal
Or ganizat
ion
-Location( wit
hmaps)

f
.2.
2.Chapt
erI
I -Repor
tPr
oper

f.
2.3.Chapt
erI
II - Engi
neer
ing economics anal
ysis,
obser
vat
ion, comment
sandrecommendat
ions

f
.3.Bi
bli
ography
Note:“b”and“
e”maybepl
acedasl
astpagesont
he
r
epor
t.

10.Appli
cant
smustpr epar
ef ive(5)copi
esoftheengi
neer
ing
repor
tinlegalsi
zebondpaper,typedoublespace,bookboundwi
thhard
coverandcolormaybeblue,mar
oon,black,gr
eenorred.

29
 11.Rat
ings

Per
cent
ageWei
ght

a)I
nter
view 50%

b)Repor
t 50%

II
.Mechani calEngineer–Theappl i
cantmustpassawr i
tt
enexaminati
onor
di
fferentsubject
sorgr oupwithemphasi
sonpowerplantandindust
ri
alplant
engineeri
ng,mat hemat i
cs,engi
neer
ingeconomi
cs,economicanal
ysis,l
aws
andet hi
csandmachi nedesign.

Thesubj
ect
sinwhichtheappl
i
cantforMechanicalEngi
neer
sshal
l
beexami
nedwitht
hei
rcor
respondi
ngpercent
ageweights:

Per
centWei
ght

1.Machi
nedesi
gn,mat
eri
alandShopPr
act
ice 30%

2.I
ndust
ri
alandPowerPl
antengi
neer
ing 35%

3.Mat
hemat
ics,Engi
neer
ingEconomi
cs&Basi
cEng’
g.Ser
vices 35%

I
II
.Cert
if
iedPlantMechani
c–Theexami nati
onforCert
if
iedPl
antMechani
c
maybewr i
tt
enoror alonsubmit
tedstat
ementofexperi
encebasedonthe
f
oll
owi
ngsubjectmatter
swit
hthei
rcorr
espondi
ngpercent
ageweighs:

Per
centWei
ght

1.El
ement
sofPowerPl
antMachi
ner
y 30%

2.El
ement
sofI
ndust
ri
alPl
antMachi
ner
y;and 35%

3.ShopMachi
ner
yPr
act
ice 35%

SEC.25.Hol dingofExami nati

on.–Exami nat
ionf orthepr
acti
ce
ofmechanicalengineer
inginthePhilippinesshal
lbegivent wiceayearin
t
hecityofMani laandinsuchot herpl acesasmaybedet erminedbythe
Boardandappr ovedbyt heCommi ssion.Thenames,dat esandvenuesof
Li
censur
eExami nati
onforeachyearshal lbeincl
udedint hescheduleof
Prof
essi
onalLicensureExami nat
ioni ssuedannuall
ybyt heCommi ssi
on.

30
Writ
tenorprint
ednot i
ceofsuchexami nati
onshallbepostedonthebul l
eti
n
boardsoftheMai nandRegi onalOff
icesoft heCommissi
onandfurnishedto
al
lschools,colleges and universi
ti
es offeri
ng t
he cour
ses f
orl i
censure
examinat
ionfordisseminat
iontotheirgraduates.

SEC.26.Pr ogram ofExami nat

ion.–TheBoar dshal lissuea
progr
am foreveryschedul edexami nati
onnotl at
erthant wenty(20)days
befor
ethe fir
stday ofexami nati
on whi ch shal
lcont ai
nt he foll
owing
i
nformat
ion;
a)Name/sofl i
censur
eexami nati
on/s
b)Subjectsforexaminationwi ththei
rcorrespondi
ngper centage
wei ght
s,ti
me,dat esandpl aces/
venuesofexami nat
ion.
c)I
nstr
uctiontoexaminees.
d)Namesandsi gnat
uresofChai rmanandMember softheBoar d.

SEC.27.Publ i
cati
onoft heExami nati
on–Thedat es,t
imeand
venues ofthe li
censure examinati
on shall,as faras practi
cable,be
publi
shedinanewspaperofgener alci
rcul
ati
onorinbroadcastmedi a.The
program ofexaminat
ion shal
l,upon it
si ssuance,be tur
ned to schools,
coll
egesanduniversi
ti
esof f
eri
ngmechani calengineer
ingcoursesf orthe
i
nformati
onandguidanceoftheirgr
aduates.

SEC.28.Rat i
ngs.–Topasst heex ami
nati
on,acandidat
ef or
pr
ofessi
onalmechani
calengineer
,mechanicalengi
neerandcer
tif
iedplant
mechanicmustobtai
nanaver ageofsevent
y(70%)percenti
nallsubj
ects,
wi
thnor at
ingbel
owfi
fty(50%)percenti
nanyofthesubj
ect
s.

SEC.29.Re-examinat
ion.–Anappl i
cantwhofail
stopassthe
examinat
ionfort
hethi
rdti
meshal lbeal
lowedtotakeanot
herexami
nat
ion
onlyaft
erthelapseofone(1)yearfrom thedat
eofthelastexami
nat
ion
t
aken.

SEC.30.For
mulat
ionofSyll
abi
.–Theboardshal
lprepar
e,adopt,
i
ssueoramendt hesyl
labusforeachofthesubj
ect
sforexaminat
ion.Test
quest
ionsthatwi
l
lbegivenintheexaminat
ionshal
lbewit
hinthescopeof
t
hesyllabi
.

SEC.31.FullComputer
izat
ionofExami nat
ion.–Thel icensure
examinat
ionforMechani
calEngi
neeringshallbef ul
lycomput er
ized.New
member softheBoardassi
gnedapar t
icul
arsubj
ectshallprepareatl east
500testquesti
onst
obeencodeint hetestquesti
onsdat abankfrom whi ch

31
thequest ionst obegi veni napar ti
cul
arli
censureshal lbeextract
edat
random f r
om t he comput er
.The t estquesti
onsdat a bankoft he Board
membershal lber eplenishedwi t
hin(60)daysfrom thereleaseoftheresul
t
ofexami nationwi t
hatl eastt hr
ee( 300)hundredtestquest i
onseveryaft
er
exami nati
onunt ilthebankhasr eachedat otaloftwo( 2,
000)thousand
questions.Ther eaft
er,ther epleni
shmentshal lbeequalt othenumberof
questionext racted.Thecor rect
ionoft heanswersheetsoft heexaminees
shallbedonebyt hecomput ers.

RULEVI
REGISTRATI
ONANDI SSUANCEOF
CERTI
FICATESOFREGISTRATIONANDLI
CENSES

SEC.32.Registr
ati
onofSuccessf ulExaminees.–Al lthosewho
passed t he l
icensur
e examinat
ion f
orPr of
ess i
onalMechani calEngi neer,
Mechani calEngineerandCer t
if
iedPlantMechanicshall,unlessspecifical
l
y
deferredf orcause,bytheBoar d,ber egi
steredaft
erthet akingoat hofa
professi
onalbef oret
hememberoft heBoar doranyper sonaut hori
zedby
l
awt oadmi ni
steroat
hsanduponpaymentoft heprescr
ibedfees.

SEC.33.IssuanceofCer t
if
icatesofRegi str
ationandPr ofessi
onal
Licenses.–Uponcompl i
ancewi t
hallt her equir
ement sforregi
strati
on,the
Professi
onalMechanicalEngineer,Mechani calEngi neerorCer ti
fiedPlant
Mechani csaft
erhi
snamehasbeenent eredt herein.Heshal lbei ssueda
certi
fi
cateofregi
str
ationandt hecorr espondingpr ofessi
onalli
censeupon
paymentoft hepr
escribedfees.

SEC.34.RenewalofPr of
essionalLicense.– the professi
onal
l
icenseissuedtoProfessi
onalmechani calEngineers,MechanicalEngineer s
orCer ti
fi
ed PlantMechanicsshal lbe val i
df orthree (3)yearsf r
om i ts
i
ssuanceandl essthehol derthereofisexemptf rom CPE r equir
ement s,
shallber enewedever yaf t
erthree( 3)year sont hebirt
hmont hoft he
Professi
onalMechanicalEngineer,Mechani calEngineerandCer t
if
iedPlant
Mechanic upon pr esentati
on/submission of t he r equi
red Cont i
nuing
Professi
onalEducat
ioncreditunit
searnedandpaymentofpr escri
bedfees.

SEC.35.t emporary Removalf rom the Rollofpr of

essional
MechanicalEngi neers,orCer ti
fi
ed Pl
antMechani cs.– A Pr of
essional
MechanicalEngineer,MechanicalEngi
neerorCer t
if
iedPlantMechanicwho
has been delinquenti nthe paymentofhi sl i
cense fees forfi
ve ( 5)
consecut
iveyear sormor efrom theyeari twaslastpaidshal l
,aft
erdue
processhasbeencompl iedwith,beconsideredsuspendedandhi sname
shallbe dropped from the RollofPr of
essionalMechani calEngineers,

32
MechanicalEngineersorCerti
fi
edPlantMechanicsfornothavingbeenin
goodstandingandmayber einst
atedonl
yuponappl i
cat
ion,compli
ancewit
h
CPE requirements and paymentoft he deli
nquentl i
cense f
ees and
sur
chargesandt hefeeforr
egist
rat
ionwi
thoutexaminat
ion.

SEC.36.Li fti
ngofDefermentofRegi
str
ation.–I fthecause/sof
defer
mentoft heregist
rati
onofthesuccessf
ulexami neehas/ havebeen
compliedwith,theexami neeshal
lbeal l
owedtor egist
erasPr of
essi
onal
MechanicalEngineer
,MechanicalEngineer
,orCert
ifi
edPl antMechanic,as
thecasemaybe,af tertaki
ngtheoathofprof
essi
onalandpaymentoft he
requi
redfees.

SEC.37.Aut omat ic Registrat

ion.– Al lpracti
ci
ng Pr of
essional
MechanicalEngineers,Mechani calEngineersandCer t
if
iedPlantMechani cs
who ar er egist
ered wi tht he Pr ofessionalRegul ati
on Commi ssi
on i n
accor
dancewi ththepr ovisionofCommonweal thAct.No.294,asamended,
areherebyaut omati
callyr egisteredwi t
houtt hepaymentofr egist
rati
onf ees
and are authori
zed t o cont inue pract i
cing the MechanicalEngi neering
Prof
ession,provi
dedt heirlicenseshavenotexpi r
ed.

ThosePr of
essionalMechani calEngineer
s,Mechani calEngineers
and Cer t
if
ied PlantMechani cs registered wit
h Prof essi
onalRegul at
ion
Commi ssi
oni naccor dancewi t
ht hesameActwhoar edelinquentint he
paymentoft heirli
censurefeesatt het imeR.A.No.8495t ook effectshal
l
l
ikewi
se be aut omati
call
yr egist
ered onl y upon compl i
ance wi th CPE
requi
rement s and payment s oft heirdelinquentlicense f ees incl
uding
penal
ties/
surcharges.Theycancont inuetopr act
icet heirprofessiononly
uponissuanceoft hei
rprofessi
onallicense.

SEC.38.Rei nst
atementofCert
if
icateofRegi str
ati
on.–TheBoar d
may,uponappl i
cati
onorpet i
ti
onandf orr eas onsorequi tyandjusti
ce,
r
einstat
ethevali
dit
yofar evokedcerti
fi
cat
eofr egistr
ati
onandprofessi
onal
l
icense,uponcompliancewi t
htheCPE r equirement sandpaymentoft he
r
equiredfeesatl
easttwo(2)yearsfr
om thedat eofr evocat
ion.

SEC.39.ReplacementofCer ti
fi
cat
es.–Uponpaymentofthe
r
equi
redfee,anew cert
if
icat
eofr egi
str
ati
onmaybeissuedtor
eplaceny
l
ost
,dest
royormut
il
atedcerti
fi
cat
e.

RULEVI
I

33
 ADMI
NISTRATI
VEPROCEEDI
NGS

SEC.40.Admi nist
rati
ve Investi
gati
ons.– The i nvest
igat
ionsof
casesagai nstar egisteredPr ofessionalMechani calEngineer,Mechani cal
EngineerorCer ti
fi
edPl antMechani cshallbec onductedbyt heBoar dwi t
h
the assistance wi t
ht he l egal
/hear i
ng offi
ces of t he Commi ssi
on i n
accordance witht he per t
inentpr ovisionsoft he “Rulesand Regul at
ions
Governingt heRegul at
ionandPr acticeofPr ofessi
onals”asamended,i s
i
ssuedbyt heCommi ssion.Ther evisedRul esofCour tshal
lbesuppletor
yt o
thesaidRul es.

SEC.41.Gr oundsf ort

heSuspensionorRevocat i
onofcer ti
fi
cates.
–TheBoar dmayaf t
erduenot iceandhear i
ng,suspendorr evoket he
cer
ti
ficateofregi
strati
onandl i
censeofar egi
steredPr ofessi
onalMechani cal
EngineerorCer t
if
iedPl antMechanicorthetempor ary/specialpermitissued
toforeign mechani calengi neer
sal l
owed byl aw t o practice mechani cal
engi
neer i
nginthePhi l
ippinesuponanyoft hefol
lowinggr ounds:

1)Useofperpetuat
ionofaf
raudordecei
tinobt
aini
ngcer
ti
fi
cat
e
of regi
str
ati
on.

2)Negl
i
gence

3)Unpr
ofessi
onalordi
shonor
abl
econduct

4)Unpr
ofessi
onalordi
shonor
abl
econduct

5)Abat
ementoft
hei
l
legalpr
act
iceofMechani
calEngi
neer
ing

6)Vi
olat
ionoft
heCodeofEthi
csf
ormechani
calEngi
neer
sand
Cer
tif
iedPl
antMechani
cs

7)Vi
olat
ionofpol
i
ciesoft
heBoar
d

8)Non-
compl
i
anceofCPEr
equi
rement
s.

RULEVII
I
REPORTONTHEPERFORMANCEOFTHE
CANDIDATESOFSCHOOL,COLLEGESAND
UNIVERSI
TIES

SEC.42. ReportoftheBoard. - TheBoardshal l

,wit
hthe
as
sist
ance of t
he Publ
i
cI nformat
ion and St
ati
sti
cs Sect
ion of t
he

34
ProfessionalRegul ati
onCommi ssion,pr eparear eportont heper formance
ofthe exami nees ofschool s,col leges oruni versiti
es int he licensur
e
exami nati
onsf orMechani calEngi neersandCer tifi
edPl antMechani cs.The
Boar d may r ecommend t ot he CHED: ( 1)the moni t
oring ofschool s,
coll
eges and uni versit
ies,whet herpubl ic orpr i
vate,whose successf ul
exami neesint hree(3)consecut ivelicensureexami nationislessthan5% of
thetotalnumberofi tscandi dat eswhot ookt hesai dli
censureexami nati
ons;
(2)thepubl i
cationoft henamesofschool s,coll
egesanduni versi
ti
eswhose
successfulexami neesi nf i
ve( 5)successi velicensur eexami nati
onsi na
part
icularpr ofession isl ess t han f ive (5)per centoft otalnumberof
exami neesofsai dschool s,col l
egesoruni versi
tiesineachoft helicensur
e
exami nati
onst aken;and( 3)thephase- outofthecour sepr ogram.

RULEI
X
SEALANDUSEOFSEALOF
PROFESSI
ONALMECHANICALENGI
NEERS

SEC.43.SealofPr ofessi onalMechani calEngineer.-Theseal

ofapr of essi onalmechani calengi neershal lbei naf orm ofagear . The
outerci rcle bei ng 40 mm i n diamet er,the innercircle bei
ng 20 mm i n
diameter ,i nside t he upperci r
cul arband shal lbe i nscri
bed the wor ds
“Regist
er edPr ofessional”andi nt hel owerci r
cularbandshal lbei nscri
bed
thewor ds“ Mechani calEngi neer ”t heirlett
ersequal l
yspacedandspr ead
i
nsidet heci rcularband;ar ectangul arbandpl acedhor i
zontall
yacr ossthe
centeroft hegearwher et henameoft hepr ofessionalshallnei nscribed;
twocircul arbandsi ntersectingatt hecent erofthegearj oinedatt hecent er
byaci rcleandbel ow t hel owerar coft hecircl
eshal lbet her egistr
ati
on
numberoft hepr of
essi onal.

SEC.44.UseofSeal .-EveryProfessionalMechani calEngineer

shall,upon r egi
str
ati
on,obt ai
n a sealabove- descri
bed whi ch shallbe
stamped/ aff
ixedoneverysheetofdesi gns,plans,speci f
icat
ions,pr oj
ect
feasibil
i
ty st udi
es, appraisal
s, recommendat ions, technical r eport
s,
proposal s and ot her professi
onal document s involvi
ng mechani cal
equipment ,wor ks,proj
ects,or pl ant
st o be submi t
ted or f i
l
ed wi th
gover nment authori
ti
es or t o be signed, issued or used or used
professional
ly.

RULEX
REGI
STRATIONWITHORWITHOUTEXAMINATIONAND/
ORISSUANCEOFSPECIAL/
TEMPORARY
PERMI
TSTOFOREIGNMECHANI CALENGI
NEERS

35
 SEC. 45. Appl i
cabil
it
y of Gui del
ines Pr omul gated by t
he
Commi ssi
on. - The “ Guidel
ines on t he Regist r
ati
on of For eign
Prof
essional
sAll
owedbyLawst oPr acti
cetheRegulatedPr ofessi
onsinthe
Phil
i
ppines”,as amended,promulgated by the ProfessionalRegul at
ion
Commi ssi
ononJanuary20,1998shal lbeappli
cabl
etof oreignPr of
essi
onal
MechanicalEngi
neer
sandMechani calEngineer
s.

The Boar d of MechanicalEngi neers shal

ladopt ,issue or
promulgater ul
espr ovidi
ngforthepr ocedur ef ort
hetakingbyf oreignersof
t
he licensur e exami nati
on of Prof essionalMechani calEngi neer and
MechanicalEngi neerandf ortheregi strat
ionwi t
horwi thoutexami nat
ion
andissuanc eofl i
censest hr
oughr eci procityaswel last heissuanceof
t
empor ary/speci
alper mit
stoforei
gnPr ofessionalMechanicalEngineersand
MechanicalEngi neersallowedbyot herl awst opracti
cet heirpr
ofessionsin
t
hePhi li
ppines.

RULEXI
PROHI
BITI
ONS,ENFORCEMENTANDPENALTI
ES

SEC.46.Pr ohibi
ti
ons.-( 1)Nopersonshal
lpract
icemechani
cal
engineer
inginthi
scountryunlesssuchpersonshal
lhavesecuredli
censet
o
practi
ceMechanicalEngineeri
nginthemannerprovi
dedinR.A.8495.

(
2)Unl
essaut
hor
izedunderR.
A.8495,i
tshal
lbeunl
awf
ulf
orany
per
son:

(
a)To be i nr esponsible char
ge oft he preparation ofplans,
designs, i nvesti
gat i
ons, val uat
ion, t echnical r eport
s,
specif
icat
ions, pr oject studi
es or est imates of ot her
prof
essionalmechani calengineeri
ng acti
viti
esunl esshe i s
dulyli
censedPr ofessionalMechanicalEngineer;

(
b)To teach professionalsubjectsin mechani
calengi neeri
ng
cour
se unl ess t hey ar e or have become Pr ofessional
MechanicalEngi neer s oratl eastRegist
ered Mechani cal
Engi
neerswi thMast er’
sDegr eeinMechanicalEngi neeri
ng
fr
om dulyrecognizedandaccr edit
eduni
versi
ti
es,col
legesand
i
nsti
tut
esorschool s;

(
c)To be r esponsibl
e charge ofthe const
ruct
ion,er ect
ion,
i
nstall
ati
on,alt
erati
on,oroftheperf
ormanceofamechani cal
engineeri
ngserviceinconnect
ionwit
hthemanuf act
ure,sale,

36
 supplyordi st
ri
buti
onofanymechanicalwor
ks,proj
ectorplant
eit
herf orhimselforf
orother
,unlesshei sadul yregist
ered
ProfessionalMechani
calEngi
neerorMechanicalEngineer;

(
d)Tooperate,tendormai nt
ain,orbein-char
geoftheoperat
ion,
t
ending,ormai nt
enanceofanymechani calwor
ks,proj
ect,
pl
antof100kW,ormor ebutnotmor ethan300kW unlesshe
i
s a dul yr egi
ster
ed Professi
onalMechani calEngineer,
MechanicalEngineerorCerti
fi
edPlantMechanic;

(
e)Tooper ate,tendormai ntai
n,ormai ntai
n,orbein-char
geof
t
he oper ati
on,tending ormai ntenance ofany mechanical
equipment,machi nery process forany mechanicalworks,
project
sorpl antsof300kW orabovemor ethan2000k W
unlesshei sdulylicensedPr of
essionalMechani
calEngineer
orMechani calEngi
neer ;

(
f) Tooper at
e,tendormai ntai
n,ortobei n-
char
geofoper at
ion,
t
ending or mai nt
enance of any mechanical equipment,
machinery process f
orany mec hani
calworks,proj
ects or
pl
antsf orover2000 kW unl ess he is a dul
yl i
censed
Prof
essionalMechanicalEngi
neer.

(3)Itshal
lal
sobeunlawfulforanyonet ostamporsealany
documentwithasealofaPr ofes
sionalMechani
calEngineer
aft
erthecert
if
icat
eofregi
str
at i
onshallhavebeenrevokedor
cancell
ed.

SEC.47.Enf orcement .- Wi thoutpr ej

udicetot heenforcementof
thepr ovisi
onofR. A.No.8495,par ticularl
ySect ion33and35amongot her s
byt hedul yconst i
tutedof f
icersoft hel aw oft henat i
onal,provi
ncial,ci
tyor
muni cipalgover nment ,the Commi ssi on through itshear i
ng/l
egalof f
icers
shallconducti nvesti
gat ionsoncompl aint
sunderoat hf i
l
edbyaggr i
eved
personsonanyvi olationoft hepenalpr ovi
sionsofR. A.No.8495and,i fthe
evidenceadducedt owar rant,shallfor wardt herecordsoft hecaset othe
off
iceoft heci t
yorpr ovi ncialprosecut orwhi chhasj uri
sdi
ctionovert hecase
forthepr osecutionoft heof fender/
violator.TheCommi ssionmayal sorefer
thecaset otheBoar df orhear i
ngwi t
ht heassi stanceoft hehear ing/
legal
off
icers oft he Commi ssion ifof fender woul dl i
kewise be l iablef or
admi 9nistr
ati
vesanct ions.

SEC.48. Penal
ti
es. In addi
ti
on t
ot he admini
str
ati
ve sanct
ions
i
mposed underR.
A.No.8495,any per son who viol
ates any oft he
pr
ovi
si
onsofsaidActandr ul
esandr egul
ati
onspr omul
gatedthereunder

37
shall
,uponconvicti
on,bepenali
zedbyf i
neofnotlessthanfif
tyt
housand
pesos ( P50,
000.00) nor more than two hundred thousand pesos
(P200,000.
00)ori mpri
sonmentofnotlessthansi
x( 6)monthsnormor e
thanthree(3)years,orbot
hfineandimpri
sonmentatthediscr
eti
onofthe
court
.

RULEXI
I
I
NTEGRATI
ONOFMECHANICALENGI
NEERS

SEC.49. Al lregist
ered Professi
onalMechani calEngineer
s and
Cert
if
iedPlantMechanicsshallbeintegratedint
oonenat ionalor
gani
zati
on
ofMechani calEngi
neerst o be accredit
ed byt he Board ofMechanical
Engi
neer i
ngandtheProfessi
onalRegul at
ionCommi ssi
on.

Allpersonswhosemeansnow appeari nther ol

lsofprof
essional
mechanicalengi
neers,mechanicalengineer
sandcertif
iedpl
antmechani cs
underthecustodyoft heBoar dandt heCommi ssi
on,ont hosewhomay
hereaf
terbeincl
udedt herei
nuponregistr
ati
onandpaymentoft herequir
ed
f
ees shallautomati
cally become member s ofthe accr
edit
ed i
ntegr
ated
organi
zati
onofmechani calengi
neer
s.

The int
egrat
ion ofthe mechanicalengi
neer
si nto one national
or
ganizati
onshal
lnotbeabant otheformati
onofvol
unt
aryor gani
zati
onof
mechanicalengi
neers whi
ch may co-existwi
ththe accredit
ed int
egral
or
ganizati
onofmechani
calengi
neers.

TheBoard,subj ecttot heapprovaloftheCommi ssi

on,shalli
ssue
guidel
i
nes forthe integr at
ion ofallprof
essi
onalmechani calengi
neers,
mechanicalengineers and cer ti
fi
ed pl
antmechani cs i
nto one nat
ional
organi
zati
on ofmechani calengineer
swhi ch shal
lbe accredit
ed bythe
Boardandt heCommi ss i
on.

RULEXI
II
MI
SCELLANEOUSPROVI
SION

SEC.50.CodeofEt hicsandProfessionalStandar
ds.-TheBoar d
shall
,i n consultat
ion with the accredi
ted integrat
ed organizati
on of
mechanicalengi neer s,adoptand pr omulgate a Code ofEt hics and
Professi
onalStandar dsforthePract
iceofMechani calEngineer
ingsubj ect
totheapprovaloftheCommi ssi
on.

38
 SEC.51. I ndi
cati
onofLi censeandPr i
vi l
egeTaxRecei pt
.-A
mechanicalengi
neershal lindicate hi
sr egi
strat
ion/
professi
onalli
cense
number,itsexpi
rydat
e,includinghi spri
vi
legetaxr ecei
ptnumberont he
documentshesigns,usesori ssuesi nconnect
ionwi t
ht hepracti
ceofhis
prof
essi
on.

SEC.52.Teachi ngofMechani calEngi neeringProfessi

onalSubjects.
-Onl yadul yregi
steredandl icensedPr ofessi
onalMechani calEngineeror
Registered Mechani calEngi neer wi t
h Mast er’s degree in mechanical
engineering fr
om a publ i
c or gover nmentr ecognized and accr edi
ted
universit
y,coll
ege,insti
tut
eorschoolshal lbeallowedt oteachprofessi
onal
subjectsinmechani calengineeringcour sesof f
eredinpubl i
corgover nment
recognizedschool,coll
egesoruni ver
sit
ies.

SEC.53. Appoi ntmentofPr of

essionalMechani calEngi neersi n
Gover nment. - Wher e a posit
ion in a governmenti nstitut
ion requires
master ’
s degree hol der in mechani cal engineeri
ng, a hol der of a
prof
essionalmechani calengineer’sli
censeshal lbeeligiblef ortheposi t
ion.
Wher eaposi t
ionrequiresalicensedpr ofessi
onalmechani calengi neershall
be eligibl
ef or the positi
on. Wher e a positi
on r equi r
es a l i
censed
prof
essionalmechani calengi neer,a hol derofa mast er’s degree or
doctoratedegreei nmechani calengi neeri
ngwi thar egi steredmechani cal
engineer’sli
cense shal lbe qualif
ied forthe positi
on i nt he absence of
l
icensedpr of
essionalmechani calengineers.

SEC.54. Pr acticeofMechani calEngineeringnotal lowedi nFirms

and Cor porat
ions. - Fi r
ms,compani es,partnerships,associ ations or
corporati
onsar enotal l
owedt opr acti
cemechani calengi neeri
ng.However ,
personswhoar er egisteredandlicensedasmechani calengineersmayf orm
andr egisterwitht heSecur i
ti
esandExchangeCommi ssionapar tner shi
por
associati
onusi ngt het erm“ Mechani calEngineers”and/ or“ Ar
chi tectand
Mechani calEngi neer s”provided thati ts par
tners ormember s ar e duly
regi
stered and l icensed mechani calengi neers and member s who ar e
mechani calengi neer s shallonlyr enderwor k and ser vices pr operf or
mechani calengi neersasdef i
nedbyR. A.No.8495.

RULEXI
V
TRANSI
TORYPROVI
SIONS

SEC.55. Mechani calPl

antEngineer
s. - Mechani calPl
ant
Engi
neers possessi
ng val
i
d cer
ti
fi
cat
es of regi
str
ati
on i
ssued under

39
Commonweal t
hActNo.294wi t
hBSMEdegr eeshall
,aft
ert
heapprovalof
R.A. No. 8495, r
egist
er and be issued cer
ti
fi
cat
es as pr
ofessi
onal
mechani
calengineer
st or epl
ace t
hei
rorigi
nalcer
ti
fi
cat
esofregist
rat
ion
uponpaymentoftherequi
redfees.

SEC.56.Thepr
esentBoar
dshal
lcont
inuetofunct
ioni
nthei
nter
im
meet
ingsucht
imeast
henewBoardshal
lbeconst
it
uted.

SEC. 57. I ncumbent Facul ty Member s Teaching Mechani cal

Engineer i
ngProf
essionalSubj ects.- Facul t
ymember scurrentl
yt eachi
ng
mechani calengi
neer i
ng pr of
essi onalsubjectsi n universit
ies,col l
eges,
i
nstit
utesorschoolsshal lnotbeal l
owedt ocontinueteachingaf terfive(5)
yearsfrom theapprovalofR. A.No.8495unl esstheyar eorhavebecome
ProfessionalMechanicalEngi neers oratl eastRegi stered Mechani cal
Engineer swit
h a Mast er’
sdegr ee in MechanicalEngi neeri
ng f r
om dul y
recognizedandaccredit
eduni versiti
es,col
leges,inst
it
utesorschool s.

RULEXV
SEPARABI
LITYANDEFFECTI
VITYCLAUSE

SEC.58.Separ abi
li
tyClause.Ifanysec t
ion,paragraph,provisi
onor
clausehereofshallbedecl ar
edunconst i
tut
ionalori nval
id,suchj udgment
shallnotaff
ect,i
nval
idateorimpairanyotherparthereof,butsuchj udgment
shallbe mer elyconfi
ned tothe secti
on,par agraph,pr ovi
sion orclause
direct
lyinvol
ved int he contr
oversy i
n which such j udgmenthas been
rendered.

SEC.59.Eff
ecti
vi
ty.-ThisRulesandRegul ati
onsshallt
akeef
fect
af
tert
hir
ty(
30)daysfol
l
owingit
spubli
cat
ioninful
lintheOffi
ci
alGazett
eor
i
nanewspaperofgener
alcir
cul
ati
on,whi
chevercomesearli
er.

Donei
ntheCi
tyofMani
l
at s30thdayofSept
hi ember
,1998.

ANTONIOR.HERRERA
Chai
rman

40
DONATOK.KARAMI
HAN JUANI
TOA.ELERI
A
Member Member

ATTESTED:

CARLOSG.ALMELOR
Secr
etar
y,Pr
ofessi
onalRegul
ator
yBoar
d

APPROVED:

HERMOGENESP.POBRE
Chai
rman

ALFONSOG.ABAD AVELI
NADELAREA–TAN
Commissi
onMember Commi
ssi
onMember

41
 PARTI
I

CONTRACTS

CHAPTERI

I
NTRODUCTI
ONTOCONTRACTS

Generalconsiderati
on. Wi thoutbei ngawar eofit,eachoneofus
entersintoacont r
actasof tenastheneedar i
ses.Whenwedol it
tl
ethi
ngs
l
ikebuyi ngast i
ckofci garetteoradet ergentsoapnear by,orrideinajeep
ortricycl
et oorfrom t heschoolorof f
ice,wei nf actenteri
ntoacont ract
whichgi vesrisetorightsandobl igations.Cont ractsofbiggerscalesurely
awaits us int he future especially when we become pr ofessi
onals or
businessmen,hence,t heneedt ost udyt helaw oncont ract
st owhichthe
l
awonobl i
gati
onisintegrated.

Obl
igati
ondefi
ned.Anobli
gat
ionisaj ur
idi
calnecessit
yt ogive,todo
ornott odo. Itcomesfor
mt heLat
inwor dobl i
garewhi chmeanst obind
thr
oughgi vi
ng,doingornotdoingsomet hi
ng. I tisaj uri
dicalnecessit
y
becausetheright
sandduti
esemanatingfr
om obligati
onmaybeenf or
cedin
court
sofjusti
cewhichmayordert
hei
rperformancei fr
efusedornegl ect
ed.

42
 Meaningofobligatont
i ogive,todoornott odo.Theobl i
gati
onto
gi
ve i
sint he essence ofa realobligati
on because a physi
calthi
ng i
s
i
nvol
vedanddeliveryofthesameextinguishestheobli
gat
ion.

Exampl
e:Xobl
i
gedt
ogi
veYabi
cycl
e.

Requisit
es ofan obl i
gati
on. Ever y obl
igat
ion has fouressent ial
requisi
tes,namely:a)j uri
dicalti
eorvi nculum whi chi
sthel i
nkt hatbindsthe
parti
es;b)theprest at
ionwhi chist hegiving,doingornotdoingofsomet hi
ng;
c)theact i
vesubj ectwhichi stheper sonwhohol dstheri
ghtt odemandt he
prestat
ion,call
edobl i
georcr editor;andd)t hepassivesubj ectwhichi sthe
personagai nstwhom t hepr estationmaybedemanded,cal l
edobl i
goror
debtor. Exampl e:X ent eredi ntoacont ractwithY wher ebyxagr eedto
deli
veranel ectri
cgui tar.Thej uridi
caltieist hecontr
act,thepr estati
oni s
thedeliveryoft
hegui tar,theact i
vesubj ectisYandt hepassi vesubjectisX.

Sourcesofobli
gati
on.Ar t
icle1157oftheCi vi
lCodeenumeratest
he
sour
cesofobli
gati
ons,namely:1)laws;2)contr
act;3)quasi
-cont
ract
;4)act
s
oromissi
onspuni
shablebylaw;and5)quasi -del
icts.

Obligati
onsar i
si
ngfrom l
aw.Lawi sarul
eofconduct,just
,obli
gator
y
and l
aid down byt he l
egit
imat
e author
it
yforcommon obser vance and
benef
it
.Wi t
houtittherewil
lbenoor deri
nasocietywhichwi l
lberuledby
t
hemaxi m ofwhati smi ghtisri
ght
.Thus,everyoneispresumedt oknow
t
helaw,asi gnoranceofthelawexcusesnoonefrom compl
iancetherewit
h.

Thiski
ndofobligat
ioni
sdictat
edbylawli
ketheobl i
gat
ionofhusband
andwi fetolivewitheachother,obser
vemut ualrespectandf i
del
it
y,and
rendermut ualsupport,the obl
i
gati
on to pay t
axes undert he Nati
onal
I
nternalRevenueCode,andt heobli
gat
ionofanempl oyertopaymi ni
mum
waget othewor ker
s.

Obligati
onar i
singfr
om contracts.Acont r
actisthemeet i
ngofmi nds
bet
weent woper sonswher ebyonebi ndshimselfwi
threspecttotheotherto
gi
ve somet hi
ng orr endersome ser vices. When dul yentered i
nto,the
obl
igat
ionar i
si
ngfrom contracthasthef ul
lfor
ceoflawbetweent heparties,
henceshouldbecompl i
edwi t
hingoodf ait
h.

The contr
act
senumer ated and tr
eated i
nthe Civi
lCode,among
ot
hers,aresal
e,bar
ter
,lease,par
tnershi
p,agency,l
oan,deposi
t,i
nsur
ance,
guar
anty,pl
edge,mort
gageandant i
chresi
s.

43
 Obl
i
gati
onsar i
sing from quasi -
contr
acts. There aretwo ki
ndsof
quasi
-cont
ract
s,namel y:negot ori
um gesti
oandsol ut
ioindebi
ti
.Negotor
ium
gest
ioi st
he voluntaryadmi nist
rati
on ormanagementofan abandoned
busi
nessorpr opertybel onging to anotherwi t
houthi . Sol
sconsent uti
o
i
ndebit
iisthejuri
dicalr el
ationwhi chiscreatedbyvirtueofapaymentby
mist
akeconsequentlyobl i
gingthepayeet oreturntopayorwhatherecei
ved.

Obligat i
onsarisingfrom cr
imes.Act soromi ssi
onspunishablebyl aw
arebetterknownascr imesordel i
cts,li
kehomi ci
deordamaget opr operty
t
hroughr eckl essimpr udence.Undert helawaper sonwhoi sconvi ct
edf or
acriminalof fensemaybei mpri
soned,andi nadditi
on,wil
lber equiredt o
i
ndemni fythehei r
soft hevict
im.Thi sobl i
gati
oniswhati sknownasci vi
l
l
iabi
l
ityar i
singf rom crimesmaybecompl i
edwi t
hint hefor
m ofr esti
tut
ion,
i
ndemni fi
cation,orrepar at
ionofdamages.

Obligat
ionar i
singf r
om quasi-
deli . A quasi
ct -deli
ctisal egalwr ong
commi t
ted through faultornegl i
gence causing damage t o a person or
propert
yt hereby obliging the wr
ongdoert o pay forthe damage done,
provi
dedt hatthereexi stsnocontractualrel
ati
onbet weenthem.At ypical
exampleoft hisisapedest r
ianwhowashi tandsufferedinj
uri
esbyr eason
ofaspeedi ngvehicleanddeat hduet opoisoni
ngfrom beverages,foods,etc.
againstthefabri
cators.

Dili
gencer equiredi ntheper formanceofanobl igation.Everyper son
obli
gedt ogivesomet hingi salsoobl i
gedt otakecareofi twiththedili
gence
ofagoodf at
heroft hef amily,unlesst hel aw orst i
pulationofthepar t
ies
requir
esanot herst andar dofcare.Thi smeanst hatpendi ngt hedeli
veryof
thething,theobligorshal ltakecar eofitwitht hedil
igenceandconcer nt hat
apr udentmanwi l
lexer ciseintakingcar eofhi spropertydependi ngupon
thenat ur
eoftheobl i
gationandt heci r
cumst ancesoft i
me,per sonandpl ace.
Ont heot herhand,i ftheobl i
gationisper sonali nt
hatitconsi stsi
ndoi ngor
notdoi ngsomet hing,andt hesamei snotdone,ordonei ncontraventi
on
withthet enoroft heobl igati
on,t hesameshal lbedoneorundone,ast he
casemaybe,att heexpenseoft hegui lt
ypar ty.

Rightstothefrui
tsofthethingtobedel i
vered.Thecr edi
torhasthe
ri
ghttothefrui
tsofthethingfr
om t heti
met heobl igat
iontodeli
verarises.
However,heshal lacquir
enor ealri
ghtoveri tunt i
lthesamehasbeen
deli
ver
ed. Thismeanst hatwhilethethingandt hef rui
tshavenotbeen
deli
ver
ed,theobligeeacquir
esonl yapersonalright.Butoncet het hi
ngi s
deli
ver
ed,theobli
geeacquirestherealr
ightofowner ship.

44
 Rulewhenobl i
gori ncursdelay. Thoseobli
gedtodel i
verortodo
somethi
ng i
ncurin delay f r
om the ti
me the obl
igee j
udici
all
y orext
ra-
j
udici
all
ydemandsfr
om t hem theful
fi
ll
mentofthei
robli
gat
ion.However,the
demandbythecredi
torshal lnotbenecessar
yinordert
hatdelaymayexist:

(
1)Whent
heobl
i
gat
ionort
hel
awexpr
essl
ysodecl
ares;or

(2)Whenf rom thenatureandcircumst

ancesoftheobl
igat
ion
i
tappearst hatt
hedesi gnat
ionofthet i
mewhent hethingistobe
del
i
veredort heservi
cei stoberenderedwast hecont
rol
li
ngmotive
f
ortheestabli
shmentofthecontr
act;or

(3)Whendemandwouldbeusel
ess,aswhent
heobl
i
gorhas
beenr
ender
edi
tbeyondhi
spowert
oper
form.

Inreciprocalobl
igati
ons,neit
herpar
tyi
ncursindel
ayift
heotherdoes
notcompl yori snotr eadytocompl yinapr opermannerwi t
hwhati s
i
ncumbentupon hi m. Fr om the momentone oft he par
ti
es ful
fi
l
lhis
obl
igat
ion,delaybyt heotherbegins.

Li
abili
tyofobl i
gorf orfraud,negl i
gence,del ay,et c.Thosewhoi nthe
perfor
manceoft heirobligat i
onar eguilt
yoff r
aud,negl igenceordel ay,and
those who in any mannercont ravene t he tenort hereofar el iablef or
damages.Del ayexi stswhent heobl i
gorf ai
lstof ulf
il
lhisobl i
gationont he
dateagreeduponandaf terademandbyt heobl i
ge,ei therjudicially(with
courti
nterventi
on)orext ra- j
udicial
l
y( outsideac our t
)orallyorinwr i
ting,has
been made on t he obligor ,wher eas,f raud issi mplyt he volunt aryand
deli
berat
e actoft he obl igort o evade orcheatf orper sonalgai nt he
ful
fi
ll
mentoft heobligati
on.I nconnect i
onwi t
hnegl i
genceorf ault
,itconsi sts
i
nt hefail
uret oobser vef orthepr otecti
onoft hei nterestofanot herper son,
thatdegreeofcar e,pr ecaut i
onandvi gi l
ancewhi chi sdemandedbyt he
cir
cumstances,andbecauseofwhi cht heot herpar tysuf f
ersdamageor
i
njury.

Liabili
tyar isi
ng from fortuit
ousevent . Exceptin casesexpressly
aut
horizedbyl aw,orwheni ti
sot herwi
sedecl aredbysti
pulat
ion,orwhen
t
henat ureoft heobl i
gationrequirestheassumpt i
onofri
sk,nopersonshall
be res
ponsi bl
ef orthos e eventswhi ch coul
d notbe foreseen,orwhi ch
t
houghf oreseen,wer ei nevit
able.Af ort
uit
ouseventi sanunexpectedevent
oractofGodwhi chcannotbef oreseenorresisted,l
i
kefl
oods,eart
hquakes,
t
orrent
s,shipwr eck,l
ightni
ngs,andconf lagrat
ion,tomenti
onaf ew.

Ki
ndsofobl
i
gat
ions.TheCi
vi
lCodecl
assi
fi
esobl
i
gat
ioni
ntoa)pur
e

45
andcondi
ti
onal;b)obli
gati
onwithaperi
od;c)alt
ernat
iveandfacul
tat
ive;d)
j
ointandsol
idary;e)di
visi
bleandi
ndivi
si
ble;andf)obli
gat
ionwithapenal
cl
ause.

Pureobli
gati
on.Apureobli
gati
onisonewhi chisnotsubjecttoany
condi
ti
onorburdenandwhoseful
fi
ll
mentisneit
herdependentuponaf ut
ure
or uncer
tai
n or even a pasteventunknown t ot he part
ies,hence,
i
mmedi at
el e.Exampl
ydemandabl e:Xpr omisestodel
iveraspecifi
cguit
ar
to Y. Thisobli
gati
on i
simmediat
elydemandable because thereisno
speci
fi
cdateorcondi
ti
onmenti
onedfori
tsful
fi
ll
ment.

Conditi
onalobligat
ion. A conditi
onalobli
gati
on i
s one whose
performancei ssubj
ecttoacondi ti
onwhichmayei t
herbesuspensiveor
resolut
oryinef f
ect
. A suspensivecondi
ti
onisonewhi chuponf ul
fi
l
lment
givesrisetotheobli
gat
iondependentuponit.Exampl
e:Xpr omisestogive
Yacari fhepassestheBoar dExam f
orMechani
calEngi
neers.

The Civi
lCode provi
des t
hatin case ofi
mprovements,l
oss or
det
eri
orat
ionofthethi
ngbeforet
heful
fi
l
lmentofthesuspensi
vecondi
ti
on,
t
hefol
lowingr
ulesshal
lgover
n:

(1) Ifthe t
hing islostwi
thoutt
he f
aul
toft
he debt
or,t
he
obl
i
gat
ionshal
lbeextingui
shed;

(2)I fthethi
ngisl
ostthrought
hef aultofthedebtor
,heshall
beobligedt opaydamages;i tisunderstoodthatthet hi
ngislost
whenitperishesorgoesoutofcommer ce,ordisappearsinsucha
waythatit
sexi st
encei
sunknownoritcannotber ecover
ed;

(
3)Whent hethi
ngdeteri
orat
eswit
houtthefaultofthedebtor,
t
hei mpair
mentistobebornebyt hecr
edi
tor
;thecreditormaychose
betweenresci
ssi
onoftheobl
igat
ionandit
sfulf
il
lment,withindemnit
y
ofdamagesineit
hercase;

(4)I
fthe thing i
simpr
oved byi t
snatur
e,orbyti
me,t
he
i
mpr
ovementshal
linuret
othebenef
itoft
hecr
edit
or;and

(
5)Ifi
tisi
mprovedatt
heexpenseoft
hedebt
or,heshal
lhave
noot
herri
ghtt
hanthatgr
ant
edtot
heusufr
uct
uar
y

I
fthe condit
ion isr esol
utor
y, t
he happening oft he condi
ti
on
exti
ngui
shesthe obl
igat
ion and the par
ti
esare obli
ged to make mut
ual
rest
it
uti
onofwhat
evertheyhaver ecei
vedbyreasonthereof
.

46
 Obligat
ionwit
haper i
od.Anobl i
gat
ionwit
haper i
odisonei nwhicha
daycert
ainhasbeenf i
xedf
orit
sfulf
ill
ment.Thisobli
gati
onisdi
fferentf
rom
acondit
ionalobli
gat
ionbecausetheconditioni
mposedt her
einmayormay
nothappen,wher eas,the per
iod f
ixed i
nt hi
sobli
gation i
ssuret o com
al
thoughtheti
meast owhenisuncertai
n,asinthedeathofaperson.

Al
ter
nat
iveobli
gati
on.Analt
ernat
iveobli
gat
ionisonewherevar
ious
prest
ati
onsaredue,butt heper
formanceofone,usual l
ychosenbyt he
obli
gor,i
ssuff
ici .Ex
ent ampl
e:Xbindshi msel
ftodel
ivert
oYacolorTVor
betamax.

Facul
tat
iveobl
i
gat
ion. I
nthi
sobligati
on,onlyonepr
estat
ionisdue
butt
heobli
gorordebt
ormaysubst
it
uteanotheri
nlieuoft
heprest
ati
ondue.

Jointobligat
ion.Aj oi
ntobligat
ionisonewher etheenti
reobligati
onis
t
obef ulfi
ll
edpr oporti
onatel
ybyt hevar i
ousobligor
sordebt or
s,andeach
oneoft heobl igesorcr edit
orsisentitl
edandc andemandapr oporti
onate
partoft hecr editduef rom eachoft hem. Exampl e: X andY si gneda
promissorynot ebindingthemselvestopayZt hesum ofP10,000.00.Zc an
demandf r
om XP5, 000.00,andfrom Yt hesameamountbecauset her ul
ein
aj oi
ntobligati
oni sthatthedebtorcr editi
sdividedint
oasmanypar tsas
t
her earecr edi
torsordebt or
sortoeachhi sown.

Soli
dar yObl i
gati
on.Asol i
daryobligati
onisexact lyt heopposi teofa
j
ointobl i
gationi nthesenset hateachoft hesol i
darydebt orsi sli
ablef orthe
ent i
reobligationasl ongast hesamehasnotbeenper formed,andeachof
thecr edit
orscandemandcompl i
ance.Asol i
daryobligat i
onmayexi stonly
whena)t heobl i
gationsoprovides;b)whent helawsopr ovides;andc)t he
nat ur
e oft he obl i
gati
on requires sol
idariy. Exampl
t e:X and Y bi nd
themsel vesj oint
lyands everal
lytopayZandM t hesum ofP10, 000.00.I n
thi
scase,XorYmaybecompel l
edbyZorM t opayt heent i
reamount ,and
afterpayment ,thepayi ngdebt orcancompelt heot hersol idar
ydebt orto
cont r
ibute hisshar e. Among t he ter
msusual l
yi ndicating solidar
ityar e
“j
ointl
yands everal
ly”,“
insol
idum” ,and“i
ndividual
lyandcol lecti
vely.
”

Divisibl
eobligati
ons. A di
vi
sibl
eobligati
oni sonecapableofbei
ng
perf
ormedpar ti
aly. Ex
l ampl
e: Xobl i
gedhi mselft
odeliver600cubi
cfeet
sandwi t
hinaweek.Thi smaybecompl iedwithint woorthr
eedays.Itis
notthe rule,however ,thatbecause the subjectmatt
eri d di
vi
si
blet
he
obli
gat
ionisdivisi
bleift
heint
entistomakei tdi
visi
ble.

47
 Indi
visibl
eobli
gati
on.Thisi
stheexactopposi
teofdi
vi
si
bleobl
i
gat
ion
asnopart
ialperf
ormanceisper
mit
ted.

Todeter
minewhet hertheobl i
gati
oni sdivi
sibl
eorindi
vi
siblethetest
i
s,didthe par
ti
esintend par t
ialperfor
mance? Thus,t he objectofthe
obl
i
gati
onmaybephysi call
ydivisi
ble,buttheyintendedi
ttobeindivi
sibl
eor
i
fsoprovi
dedbylawtheobj ecti
sdivisi
ble.

Obli
gation wi
th a penalcl
ause. An obl igat
ion whi ch contai
nsan
accessoryunder t
aki
ngtoassumeagr eat
erliabi
l
ityi
ncaseofbr eachi san
obli
gati
onwi t
hapenalc lause.Thepenalcl auseisattachedt othepr i
ncipal
obli
gati
ont oinsurei
tsfulf
il
lment
.Thepenal tymayei therbesubsi di
aryas
whenonl ythepenaltyisdemandabl e,orjointwhenbot ht hepr i
ncipaland
t
hepenal t
ycanbeenf orced. Exampl e:X borrowedf rom Y t hesum of
P20,000.00payableonMay31,1985.Theyagr eedi nwr i
ti
ngt hatifXf ai
ls
t
opayt hesameont hesai ddate,X shallinadditionpayP4, 000.
00as
penalt
y.

Modesofext i
nguishi
ngobl i
gations. Arti
cle1231oft heCivilCode
providesthatobli
gati
onsar e exti
nguished asf ol
lows:1)bypaymentor
performance;2)bylossofthet hi
ngdue;3)bycondonat i
onorremissi
onof
thedebt;4)byconfusi
onormer geroftherightsofcredi
toranddebtor
;5)by
compensat i
on;6)bynovat i
on. El sewherei ntheCodear eotherrelat
ive
modes,amongwhi chare:annul ment,rescissi
on,ful
fi
ll
mentofar esol
utory
conditi
onandprescri
pti
on.

Paymentorper f
ormance.Thismodeconsi stnotonlyofdeliver
yof
moneybutal sotheper f
ormanceofanobli
gationinanyot hermanner .Itis
theessenceoft hismodet hatt
heremustbeapr e-exi
sti
ngobligat
ion(not
opti
on)ot herwi
se,no paymentcoul d be made. Thus,a debti s not
considered t
o have been pai
d unl
essthe thing orservice i
n which t
he
obli
gationconsi
stshavebeencompletel
ydeli
ver edorrendered,asthecase
maybe.

Paymentmayal sobeeff
ectedinvari
ousspeci
alforms,namely:1)
daci
oninpaymentordacionenpago;2)paymentbycessi
on;and3)tender
ofpaymentandconsi
gnat
ion.

1) Daci
( oninpayment
. Daci
onenpagoi st
heconveyanceofthe
owner
shipofathi
ngwhichi
saccept
edbytheobl
i
ge(credit
or)asapayment
ofadebtinl
ieuofmoney,t
her
ebyexti
ngui
shi
ngt
heobligat
ion.Exampl
e:X

48
i
sindebt
edtoYintheamountofP10,
000.
00.I
nst
eadofpayingmoney
,X
del
i
veredacdpl
ayerwor
tht
hesameamountwhi
chisaccept
edbyY.

2) Paymentby cessi
( on. Paymentby cessi on consi st
s oft he
assignmentofal
lthepr
opert
iesofthedebt ortohiscr edi
torsinor derthatthe
samemaybesol dbythecredit
orstosat i
sfytheircredit
s.Unl esst her eisa
sti
pulati
ontothecontr
ary,thecessionshal lext i
nguisht hel i
abi l
i
tyoft he
debtortotheext
entoft
henetpr oceedsint hesale.Exampl e:M i sindebted
toX,YandZi ntheamountofP30, 000.00. IfM i sinsolvent,par t
iall
yor
total
ly,hemayassignorcedehi spr operti
estoX,YandZwhomaysel l
them andapplytheproceedstot hepaymentpr oporti
onall
yt ohi svar i
ous
debts.

Cessionorassi
gnmentmaybeoftwokinds,namely:(
1)thevoluntar
y
cessi
oninwhichtheconsentoft
hecredi
tor
sisneeded,and(2)thelegalor
j
udici
alwheretheapprovaloft
hecourti
srequi
red.Thel at
terisgoverned
bytheInsol
vencyLaw.

(3)Tenderofpaymentorconsi gnat i
on.Thi sspecialform ofpayment
i
sdonet hr
ought heactualoffer
ing( notj ustapr oposal )bythedebt ortothe
credit
oroft het hingors um whi chheconsi der st obedue.I fthistenderis
unjustl
yr ef
used,t hedebtorshallcompl etet hisbymaki ngaconsi gnati
onby
depositi
ng t he t hing orthe amountdue wi tht he courtofcompet ent
j
ur i
sdi
ctioninaccor dancewi t
hthef ormal it
iesr equir
edbyl aw.Consi gnat
ion
shallbemadeal sot oextingui
sht heobl igat ioni nthef oll
owi ngcases:a)
whent hecr edi
tori sabsentorisunknown,ordoesnotappearatt hepl ace
ofpayment ;b)whenhei sincapacitatedt or eceivepaymentatt hetimeitis
due;c)whenwi thoutjustcause,her efusest ogi vear eceipt
;d)whent woor
mor eper sonscl aimt hesamer ightt ocol lect;ande)whent het i
tl
et othe
obli
gationhasbeenl ost.

Lossoft het hi
ng.Thet hi ngduei sconsi deredlostwheni tper ishes,
orgoesoutofcommer ce,ordi sappear si nsuchawayt hati tsexistencei s
unknownorcannotber ecovered. Whent heobl igati
onconsi st
sofdoi ng
somet hing,thereislosswhent hepr estati
onbecomesl egal l
yorphysi cally
i
mpossi ble.Ont heotherhand,anobl i
gationconsi sti
ngi nt hedel i
veryofa
determinatet hi
ngshal lbeext ingui shedifiti sdestroyedwi thoutfaultoft he
debtorandbef orehehasi ncurreddel ay. Exampl e:X obl i
gedhi msel fto
deli
veraspeci f
icAustralianhor set oY.Bef oret heagreeddat eofdel i
ver y,
thehor sedi edwi t
houtX’ sfault
.I nt hi
scaset heobl i
gationi sextinguished
because i tconsists oft he del ivery ofa det erminatet hing. Buti ft he
obli
gationist odeli
veryagener i
ct hing,thel ossordest ructionofanyt hingof
thesameki nddoesnotext i
nguisht heobl i
gat i
on.

49
 Condonati
onorremissi
on.I ti
sanactofl i
ber
alit
ybywhichtheoblige,
whoreceivesnopri
ceorequi valentthereof,renouncestheenforcementof
anobligati
on,whi
chisext i
nguishedi nwhol eori npart. Example:Y i s
i
ndebtedtoXi nt
heamountofP5, 000.00.Ont heduedateoftheobligat
ion,
Y of
feredt opaybutX renounceshi srighttocollectashewoni nthe
sweepstakes.Thi
sisacompl eter emission.Buti ftherenunci
ati
oni sonly
one-
half,Yshoul
dsti
l
lpayP2, 500.00.

Confusi
onormer ger. Thismodet akesplacewhent hequal i
ti
esof
theobligorandt hatoft heobl i
geemeetIoneper son,t
heef fectofwhich
generall
yext i
nguishest he obligati
on. Exampl e:X isindebted toY f or
P10,000.00forwhi chhei ssuedapr omissor
ynote.Later
,Yi ndorsedittoZ
whot henindorsedi tbackt oX.I nthiscase,theobli
gat
ionisextingui
shed
sinceXhadbecomehi sowncr edit
oranddebt or.

Compensation. Compensat i
on takes place when two ormor e
persons,inthei
rownr i
ghts,arecredi
torsanddebt or
stoeachot her
.Thi s
meanst hatbyoper ati
onofl aw,thedebtsofthepar ti
eswhoar ecredi
tors
anddebt or
si ntheirownr ight
sareext i
ngui
shedt otheconcurrentamount
eveniftheydonotknowi .Exampl
t e:Xi sindebtedtoYi ntheamountof
P20,000.00whil
eYi sindebtedtoXi nthesameamount .Ifbothdebtsare
due and demandabl e and no prohibi
ti
on againstany oft hem exists,
compensationshalltakeplacesincebotharecr edi
torsanddebt orsi
ntheir
ownr i
ght.

Di
sti
ncti
onbetweenconfusi
onandcompensat i
on. Thediff
erences
are:(1)I
nconfusi
on,ther
eisonlyonepersonwhobecomesbot hacr edit
or
anddebtorbutincompensat
ion,t
hepersonali
tyofthedebtor
sandcredit
ors
i
spr eser
ved;and(2)Therei
sonlyoneobligat
ioninconfusi
onbutnotinthe
ot
herwher ether
earetwo.

Novati
on. Novationi sthechange,subst i
tut
ion,orr enewalofan
obl
igator
yr el
ati
on,wit
htheintenti
onofext i
ngui
shingormodi f
yingessent i
all
y
t
hef or
mer ,debi
tum prodebito(newdebtf oranolddebt )
.I tmayt akeplace
bychangingtheobjectorprinci
palcondit
ionsoftheobl i
gati
onorsubst i
tut
ion
ofanotherpersonintheplaceoft hedebtororinsubrogationtot her i
ghtsof
t
hecr edit
ororcombi nat
ionofbot hthroughac hangei ntheper sonoft he
part
iesortheobjectorpri
ncipalcondi
ti
on.

Personalnovat
ion may eit
herbe int he f m ofexpr
or omi
si
on or
del
egacion.Expromi
si
ontakesplacewhenat hirdper
sonofhi
sownaccord
and even withoutt
he knowl
edge oft he origi
naldebt
orassumes the

50
obli
gati
on,wi tht heconsentofthecr edit .Exampl
or e:Xi sindebt
edt oYi n
t
heamountofP10, 000.00.ThenZ,at hi
rdperson,goest oYandt ellhi
m
t
hathewi llbet heonet opayt heP10, 000.00.IfYagr ees,anovat i
onby
expromision takes place even i fX does notknow orconsentt oi t
.
Delegaciont akesplacewhent hedebt orasksthecr edit
ort oacceptat hi
rd
persont ot akehi splaceast heobl i
gor . Thecr editormaywi thhol
dhi s
approval. Thusi nt he same exampl e,ifX goest o Y br i
ngi
ng Z and
proposest oYt hatZwhoi swilli
ngwi l
lpayt heP10, 000. 00andYconsent s
t
oi t
,thenovat ionbydelegacionextinguishestheobligation.

QUESTI
ONSANDPROBLEMS

1. Whati
sanobl
i
gat
ionandexpl
ainwi
thi
l
lust
rat
ionsi
tsr
equi
si
tes?

2. Whatar
ethesour
cesofobl
i
gat
ions?

3. Whati
saquasi
-cont
ractandexpl
aineachki
nd?

4. Whati
saquasi
-del
i
ctandhowi
tisdi
ff
erent
iat
edwi
thdel
i
cts?

5. Enumer
ateandexpl
aint
hespeci
alf
ormsofpayment
.

6. Whenmayanobl
i
gorber
eli
evedf
rom hi
sobl
i
gat
ionbyr
easonofl
oss
oft
hingdue?

7. Xpr omi
sestheuseofhisone-doorapar
tmenttoYprovidedthelat
ter
passestheBoardExami nat
ionf orMechani
calEngineers. I
Nt his
case,whatki
ndofobl
igat
ionisestabl
i
shed? Expl
ain.

ANSWERS

51
52
 CHAPTERI
I

CONTRACTS

Defi
nit
ionofacont r
act.Thelawdefinesacontr
actasa“meeti
ngof
t
hemindsbetweentwoper sonswherebyonebindshi
mself
,wi
threspectt
o
t
heot
her,t
ogi vesomet
hingortorendersomeservi
ce.
”

Muchemphasi sismadet hatforacont r

acttoexist
,theremustbea
meet i
ngoft hemi ndsoft hepar t
ieswhoi nt
endt obeboundbyal egal
rel
ati
onship.Fori nstance,ifXof f
erstosellav i
oli
ntoYf orP5, 000.
00and
thelatt
eragr ees,anobl i
gationtogiveisconst i
tut
edwher eXmustgi veY
theviol
inandYt opayt heamountofP5, 000.00toX.I fpersonalservi
cei s
contemplated,aswhen X of f
ersto pai
ntY’ scarf orP10, 000.00 and Y
acceptstheof fer,X shouldpai ntthecarandY t ogivehi mt heagreed
amount .

Contr
actdi ff
erenti
atedfrom agreement.Cont r
actisof t
ent i
mesused
i
nterchangeablywi t
ht heterm agreement.Acont ractf
ormsasubdi vi
sionof
t
he genus“ agreement ”f r
om whi ch fol
l
owst hat
,whi le everycont ractis
basedonagr eement ,notever yagr eementi sacont ract
.I nor derforan
agreementtoqual if
yasacont ract
,thepar t
iesmusthavecl earl
yintendedto
beboundbyal egalt i
e,asdi sti
nguishedfrom otherrelat
ionshipl i
kesocial
andpol i
ti
cal
.Mor eover,acontractwhenbr eachedcanbeenf orcedi ncourt
,
notinthecaseofanagr eement.

53
 Contr
actandobli
gati
ondist
ingui
shed.Contracti
soneofthesour
ces
ofobl
i
gati
ons.Ont heotherhand,obli
gati
onisthelegalt
ieorr
elat
ioni
tsel
f
t
hatexi
stsaf
teracont
racthasbeenenteredint
o.

Stagesofacont ract. Everycont ractpassest hrought hr eedi sti

nct
stages,namel y:(a)prepar ati
onorconcept i
on,( b)per fecti
onorbi rth,and( c)
consummat i
on ort ermi nati
on.Pr epar ati
on orconcept i
on st artsf r
om t he
i
ncept i
onandnegot iati
ont hatmayl eadt othepar tiescomi ngt ot het ermsof
thecont r
act,wher eas,per f
ecti
onorbi rt
hmar kst het imet hepar tiesagr ee
upont heobj ectorsubj ectmat t
erandt hecauseorconsi derationoft he
contract.Thet hir
dst agei ssimplyt hei mpl ement ationoft het er msoft he
contract,andsi mul t
aneousdocument ati
oninf ormalones.Fori nst ance:Ina
contractofsal ei nvolving a r ace hor se ofX t oY f orP100, 000.00,
preparat i
onorconcept i
onwoul dconsi stintheof feringandt hebr ingingbyX
toY,ort alki
ngbyY,t hehor set otestitsrunni ngabi l
ity.Ymay,af terthet est,
bargainf oral owerpr i
ce,sayP70, 000. 00andupt ot histimet heyar emer ely
doing t hingst hatmaybr i
ng them t o a consensus.I fY agr eest o pay
P100, 000. 00af t
erthet est,orifXaccept st hecount er -off
erofP70, 000.00,
thent hesecondst ageofper f
ectionorbi rth oft hecont racti ssat i
sfi
ed.
Final
ly,t hel astst agewoul dconsi stofXdel iveringt her aceofhor setoY
andYpayi ngt heamountagr eeduponaf t
erpr operdocument ati
on.

Cl
assi
fi
cati
onofcontr
acts.From t
het
extoft
heper
ti
nentpr
ovi
si
onsof
t
heCi
vi
lCode,thefol
l
owingclassesmaybededuced:

1. Expressandi mpli
edcont
ract
s.A cont
ractisexpr
esswhent he
i
ntentoft heparti
esisshownbywor dswhichmaybever balorwr i
tt
en,
whereas,acontracti
simpli
edwhentheint
enti
smani f
est
edbyt heconduct
orbehavioroft
heparti
es.

2.Unilateralandbilat
eralcont
ract
s.Inauni l
ater
alcontr
actonlyone
oft
hepar t
ieshasanobl igati
on,asincommodat um orgratui
tousdeposit
whi
l
e,inabi l
ateralcont
ract,bothpart
iesareboundasi nacont ractofsal
e.
Aunil
ater
alcontractissynonymouswi thagratui
touscontr
actasabi l
ater
al
i
swit
hanoner ousone.

3. Consensualandr ealcontract
s.A consensualcontracti
sone
per
fect
edbymer econsentasincontractofsale,whereas,ar
ealcont
ractis
oneperf
ectedorcompl
etedbyt hedeli
veryofthet hi
ngwhichi
stheobjectof
t
hecontract
,asinpl
edge,depositandcommodat um.

4. Execut
edandexecutorycont
ract
s:Anexecut
or ycont
ractisone
whi
chisnotyetimplementedaswherenoneoft hepart
ieshasper f
ormed
t
heprest
ati
onoronlyapartther
eofhasbeenper
formedbyeachpar t
y.

54
 5.Nomi nat
eandi nnomi nat
econt r
acts.Nominatecont
ract
sarethose
which the l
aw gives a speci alname as i n cont
ractofagency,sal e,
part
nershi
p,et c.whilethose wi thoutdesignati
on are cal
l
ed innominat
e
contr
acts.Thel at
tercontractsaret hosewhicht hepart
iesmayagr eeand
nonamei sgivenbyl awtot hei
ragr eement,becausetheyaretoomanyand
cannotbeforecast
edorant ici
pated.

Fr eedom i ncont r
acts.Thef reedom t ocont ractasguar anteedbyt he
Constit
ut i
oni sar t
iculatedinAr ti
cl
e1306oft heCodewhi chpr ovidest hat
“t
hecont ractingpar t
iesmayest abli
shsuchst ipulati
ons,clauses,ter ms,and
condit
ionsast heymaydeem conveni ent,provi dedt hatt
heyar enotcont rary
tolaw,mor als,goodcust oms,publicorder ,andpubl icpoli
cy.”Thi ssi mply
meanst hatf oracont racttobeval i
d,thet ermsandcondi ti
onsther eofmust
notbeagai nstthel aw,cust oms,mor als,publ i
cor derandpubl icpol i
cy.
Exampl e:Xagr eest ogr adear ockylandbel ongingt oYwhoagr eedt opay
P300,000. 00whencompl eted.Ifl
aterondi eseloilort heneededmat eri
als
wil
lincreaseordoubl ei ncosts,Xcannotwi t
hdr awf rom thecontract.

Contr
arytolaw.Thepartiescannotst i
pul
ateonmat t
ersagainstt
he
l
aw.I ftheobjectandthecauseoft hecontracti
spr ohibi
tedoragainstt
he
l
aw thecontractwil
lbeheldnullandvoid.Typi calexampl esoftheseare
contr
actsinvol
vingthekil
li
ngorki dnappi
ngani ndivi
dualf oramonet ar
y
consi
derati
onorimport
ati
onofprohibi
teddrugsforresale.

Contrarytomoral
sandgoodcust oms.Cont r
actoffendi
ngmor al
sor
goodcustomsar evoi
dandwi thouteff
ectl ikeforinstancewhereMr .X
ent
eredintoanempl oymentcontractwi
thMi ssY wher ebytheformerwill
employMissYascashi eri
nhisfirmifthel att
erwilll
ivewi t
hhim aswi f
e
wit
houtmar r
iage,orwal
kingoutfr
om mar r
iagebyawomant ocomplywi t
h
herobl
igat
ionwi t
hawomanwhosel oveaff
airwiththesupposedbridegroom
di
dnotculminateinmarr
iage.

.Equali
tyofparti
esunderthecont
ract
.Thelawgivesequalst
andi
ng
oftr
eatmentupont hepart
iessuchthattheval
i
dit
yorcompliancewit
hthe
contr
actcannotbel ef
ttot
hesolewillofoneofthem.Example:Xobli
ged
himsel
ftosellhisonlycart
oYifhebuysanothercar.

Thedet er
mi nat
ionortheperfor
manceoft hecontracthowever,is
all
owedbyl aw t
obel eftt
othejudgmentofat hi
rdpersonwhosedecision
shallbindtheparti
eswheni ti
scommuni cat
edtothem,unlessthesamei s
mani f
estl
yinequi
tablei
nwhichcasethecourtshal
ldeci
detheissue.

55
 Part
iesboundundert hecontract,except
ion.Ther ul
eisthatonl ythe
part
iestothecontractandtheirassignsandhei rsareboundt heretounless
t
her ight
sandobl igati
onsar i
si
ngt heref r
om cannotbet r
ansferredtot he
heir
sandassi gnsoftheparti
esbecauseoft hei
rnature,orbyst i
pulat
ionor,
byspeci f
icprovi
sionsofl aw.Ini nstancesallowed byl aw the hei r
sor
assi
gnsar enotli
ablebeyondtheval uesofproperti
esinheri
tedorassigned.

Exampl
esofi
ntr
ansmi
ssi
bler
ight
sandobl
i
gat
ionsar
e:

1.ByLaw:Xent er
edintoapar tner
shipcontr
actwithYandZ,each
contr
ibut
ingP100,000.00t othecommonf und.Upondeat hofei therthe
part
ners,thepart
nershi
pisdeemeddi ssol
vedundert helawandtheirheirs,
orassignscannotst ep int
ot he shoesoft hei
rdeceased fat
her-part
ner
excepttorecei
vehisint
erestattheti
meofl i
quidat
ionofthepar
tnership.

2.Bynat ur
e:Xenteredintoacontractwit
hyf orthelat
tertodrawa
pl
ananddesi gnofX’house.I fY diesbef or
ecompl eti
ngthepl anand
designs,such obli
gati
on wil
lnotpasst o hisson even ifhe isalso an
archit
ectbecauseofthepersonalnat
ureoftheobli
gat
ion.

3.Bysti
pul
ati
on:OnJanuar y5,Xenteredint
oacont r
actofleaseof
hiscart oY tobecomeef fect
iveonMar ch5oft hesameyear .I ft
hey
sti
pul
atethatdeat
hofeit
herpar tybef
oret
hatdateshal
lext
inguishallri
ght
s
andobl i
gat
ionsar
isi
ngtherefrom,thehei
rsofXandYacqui r
esnor i
ght
s
ther
etobecauseofsuchsti
pulat
ion.

Stipulati
onsinfavorofnon- part
iestothecontract.I
facontractshoul d
contai
nst ipulat
ionsgranti
ngaf avortoaper sonnotapar t
ytothecont ract,
the later may demand i tsf ul
fi
ll
mentpr ovi
ded he communi cates hi s
acceptancet ot heobli
gorbef orerevocation.Thissti
pulat
ion,bett
erknown:
aspouraut ri
,mustbec l
earlyanddel iberat
elyint
endedi nordertoconf era
ri
ghttot het hir
dpar t
y.Thus,i fXwhoownsawar ehouse,rentsittoYf or
P500,000. 00amont hwhi chisaagr eedtobepai dtoZ,ani eceofX,t henZ
whoi sast rangertothecont r
act,acquirestheri
ghttothepaymentofr entals
provi
dedt hatheaccept edt hesamewhencommuni catedtohim andbef ore
i
tisrevokedbyX,hi suncle.

Thi
rdpar
ti
esinterfer
inginthecontract
.Further,anythi
rdpersonwho
i
nducesanot
hertoviolatehiscontractshal
lbeliablefordamagest oother
par
ty,ani
nst
ance,wher eastrangercontr
actbecomesl iabl
efordamages.

I
ll
ust
rat
ion:X,a t
heat
re oper
ator
,ent
ersi
nto cont
ractwi
th Y,a

56
celebr
it
ysinger
,wherethelat
terwil
lsi
ngatX’stheat reforaperiodoft
wenty
daysatan agr eed compensati
on.Afterper
formi ng fortwo daysin X’s
theatr
e,Z,anot
hertheatr
eoperat
or,enti
cesYtosi ngi nhistheatr
edoubl
ing
thecompensati
onwhi chthel
att
eraccepted–per f
or minginZ’stheat
refr
om
the3rdt he20thday.Zwhoi
ot sat hi
rdpersoni
sliablef ordamages.

Consensualcontr
acts.Cont
ract
sareperf
ectedbymer econsent,and
f
rom thatmoment ,thepartiesar
eboundnotonlyt otheful
fi
ll
mentofwhat
has been expresslys ti
pulat
ed butalso f
orthe consequences whi ch,
accor
dingtotheirnatur
e,maybei nkeepi
ngwithgoodfai
th,usage,andlaw.

Theaf or
esaidprovisionr eferstoconsensualcont ract
swhi char e
perfect
edbymer econs entort hrought heconcurrenceoft hewi l
loft he
parti
esast otheobjectandcauseoft hecontr
act.Unli
ker ealcont r
actsasi n
pledge and commodat um,no del iveryofthe objectisnecessar yf ori t
s
perfect
ion.Fr
om t hemomentconsenthasbeengi ven,thepar t
iesbecome
l
iableforalltheconsequencest hatar einkeepingwi t
hgoodf ait
h,usage,
andl aw.Thus,avendorofaMer cedezBenzcar ,evenifal readysol dtobe
deli
veredtwoweeksl at
er,wouldbeobl igedtotakegoodcar eofitasi fsti
ll
t
heowneroft hecar,sucht hat,ifthecarf adesori sdent edbyr easonof
omissionofthatdegr eeofcar edur ingtheinteri
m hewoul dbel iabl
ef or
damages.

Cont r
act screati
ngr ealrights.Realrightsar ethoser ight
sr el
ati
ngto
i
mmovabl epr oper t
ies,i
.e.landandbui ldi
ngs,liket herightbelongingt oa
mor t
gageeorl esseeofapi eceofl and.Thel aw pr ovi
dest hatincontract
s
creati
ngr ealrights,thi
rdper sonscomei nt
opossessi onoft heobjectofthe
contractareboundt her
ebysubj ecttothepr ovisionsoft heMor tgageLaw
andLandRegi str
ationLaw.Thus,avendeeofapi eceofl andwhi chisthe
subjectofamor t
gageorl easewi l
lbeboundt or espectther ealri
ghtofthe
mor t
gageeorl esseei ft
hemor tgagedeedorl easecont racti sr
egist
eredin
theRegi st
erofDeeds.

Pr
otect
iontocr edi
tor
s.Cr edi
tor
sar eprot
ectedincasesofcont r
acts
i
ntendedtodef r
audt hem.Thus,af ict
it
iouscontractal
ienat
ingthedebtor
’s
onlypropert
yi nordert oescapepayi nghi scredit
ororcredit
orsmaybe
resci
ndedattheinstanceofthelatt
erforbeingfr
audulent.

Contr
act
sent er
edint henameofanot her.Acontr
actenteredint
oi n
t
he name ofanot herwithouthis author
ity,orwi t
houta l egalri
ghtt o
representhi
m orinexcessoftheaut hor
it
ygi venisunenf
orceablebyaction
unlessthecontr
actisrat
if
iedexpresslyorimpl i
edl
ybyhim beforetheother

57
partyrevokesi .Exampl
t e:X enter
si nt
o a contr
actsel
li
ng a spor
tscar
belongi
ngt oZwi t
houtt
helatt
er’
sconsenttoYforP100,000.
00.Threedays
l
ater,Ygoest oZof fer
ingtopayanddemandi ngthedeli
veryofthecar.Z
canr ef
usebecausehehasnotgi venhisauthor
ityt
oXt osellt
hecar.Buti
f
Z acceptsthepayment ,inwholeori npart,theaccept
anceamount sto
rat
ifi
cat
ion,hence,heshoul
ddeli
verthecar.

Therati
fi
cat
ionorconf i
rmati
onofacont r
actbythepersoninwhose
namethecontr
actwasent eredint
ovali
datestheactorcontractfr
om t
he
momentofi
tscel
ebrat
ion,notmerel
yfr
om rati
fi
cati
onorconf
ir
mation.

QUESTI
ONSANDANSWERS

1.Whati
sacont
ract
?

2.Whatar
etheessent
ialel
ement
sofacont
ract
?

3.Expl
aint
hedi
ff
erencebet
weenacont
ractandanagr
eement
.

4.Whatar
ethel
i
mit
ati
onsont
hef
reedom t
ocont
ract
?

5.Whatismeantbyt
hecl
ause“
cont
racti
sthel
aw bet
weent
he
par
ti
es?”

6.Whoar
eboundbyt
hecont
ract
?

7.Maydeter
minat
ionortheperf
ormanceofacont
ractbel
eftt
othe
sol
ewi
llofoneofthepar
ti
es?Reason.

8.Whati
sast
ipul
atonpouraut
i ri
?

9.X ent er
ed i nt
o a partnershi
p cont
ractwith Y and Z,each
contr
ibut
ingP100, 000.
00t othecommonf und.Si
xmot hslat
er,X
died sur
vived byson O.MayX’ srightunderthe cont
ractas
part
nerbet ransfer
redt
oOonhi sdeat
h?Why?

10.
X,at heat
reoper atorent
ersintoacontr
actwi t
hy,acel ebri
ty
singer,wherethel att
erwi
llsi
ngatX’st
heatreforaper i
odof20
days.Af t
ertwodaysper f
ormance,Z,anothertheatr
eoperat
or,
enticedY tosi ngi nhistheat
redoubl
i
ngY’ scompensat i
on.Y
acceptedrightawayandbegant osi
ngi
nZ’ stheatr
efr he3rd
om t

58
 dayandf
or20days.Di
scusst
hel
i
abi
l
it
yofZi
fany.

ANSWERS

59
 CHAPTERI
II

REQUI
SITESOFCONTRACT

El
ementsofacont ract. Thereisnocont ractunlessthefol
lowi
ng
elementsarepresent
:1)consentofthecontract
ingpart
ies;2)obj
ectcert
ain
whichisthesubjectmatt
eroft hecontract
;and3)causeoft heobligat
i
on
whichisestabl
ished. I
fthecont r
actlacksanyoft hesaidelements,t
he
contr
actisnul
landvoidasifithadnotexist
edatall.

Consent ,meaning of . Consenti st he conformi

tyofwi l
lsoft he
contracti
ngpar t
iesupont heobj ectandcauseaswel lastotheothert
erms
andcondi tionsofthecont ract
.I tismanif
estedthroughthemeet i
ngoft he
offerwhichmustbecer tainandt heacceptancewhichmustbeabsol ute.I f
theac ceptancebyt heoffereeisquali
fi
ed,itbecomesacount eroff
erhence,
thereisnoconsentunl esst heoffer
eracceptsthecounterof
ferunqual
if
iedly.

Thatt heof f
ermustbecer tai
nmeanst hatnopossi bledoubt
couldar i
seonwhatt heobj ectandt hecausei s,int hesamemannert hat
acceptancemusti never yr espectmeetandcoi nci
deexact l
ywi ththeobj ect
andt hecauseof fered. Thus,i ftheofferisuncertainori ndefini
te,orthat
theaccept anceisnotabsol utether eisnomeet i
ngoft hemi nds,hence,no
contr
act . Exampl e: XYZ f i
rm of f
ersABC Const r
uct i
on Cor porati
on the
constructi
onofaf ourst oreybuildingforacostofP5mi ll
i
oni naccor dance
wit
ht hepl anandspeci f
icati
onspr eparedbyt hef ormer ’
sengi neer. An
absoluteacceptancebyt hel att
erwoul dcal lf
oritsconf ormit
yonal lterms
andcondi ti
onsoff
er ed.Ifthel at
terproposesamodi f
icati
onoft heterms,i .e.
,
costoft heconstructi
onorchangeofdesi gnsormat eri
alstobeused,t hat

60
wouldnotconsti
tut
eanabsolut
eaccept
ancebutacount
er-
off
er.Insucha
caseXYZf ir
m mustacceptt
hetermssoughtt
obechanged,other
wiset
he
elementofconsentwi
l
lbeabsent.

Acceptancemadet hr
oughl ett
ers,etc.General
ly,acceptanceshould
bemader i
ghtaf t
ert heofferhasbeenmadeori mmedi atel
yt her
eaft
er.
Acceptancemadet hroughlett
ersort elegramsdoesnotbi ndt heoff
eror
exceptfr
om thet i
mei tcomest ohisknowledge.Insuchacase,t hecont
ract
i
spr esumedtohavebeenent eredint
ot heplacewheretheofferwasmade.

The decl
arati
on by law as t
ot he pl
ace wher ethe contr
actwas
enter
ed intoi s necessaryto deter
mi ne which cour
twi l
lr esol
ve t
he
contr
oversywhichmayar isebet
weenthecont r
acti
ngparti
es.

Ruleonofferandaccept ance. Thegeneralr

uleisthattheperson
maki
ngt heoff
erhastheinherentrighttof
ixt
het i
me,placeandmannerof
ac
ceptance. Oncefixed,theaccept ancemustbemadest r
ict
lyi
nsuch
mannertogivebir
thtotheconsent .Ifthi
sfi
xat
ionisnotfol
lowedconsent
maynotbeachieved.

Li
kewi se,t heof f
erormaygi vet heoff
ereeaper iodwithinwhi cht o
acceptt heof ferandhemaywi thdraw itanytimebycommuni cat
ingsuch
withdrawalbef oret heofferhasbeenaccept edbyt heof f
eree. Howev er,
whent heof f
er eehadpai dorpr omisedt heoffer
oraconsi derati
onf orthe
grantingoft heper i
odwi thinwhicht oaccept,theof ferorcannotrevoket he
option.Fori nst ance,ifXof fer
stosel laconcretemi xertoYgi vingthel at
ter
t
endayswi t
hi nwhi chtoaccept ,Xmayr evoketheof feratanyt i
mebef oreY
accept sit
.Buti fYhadpr omisedorgi vensomet hingt oXi nor derthatthe
l
atterwi l
lgiveanopt i
onorext ensionofaper i
odtoaccept ,thenXcannot
withdrawthesameunt il
theappoi ntedordesignatedt ime.

Whenof ferbecomesi neff

ective.Anof fermaybecomei neffecti
veif
beforei t
saccept ance byt he offeree,the offer
orwil
ldie orsuf fercivi
l
i
nterdicti
onorbecomesi nsaneori nsol
vent.Ifanyofthesecircumst ances
willsupervene af t
erthe acceptance hasbeen made,t he contractswi l
l
continue to have for
ce and ef f
ectbutt he ri
ghtsand obli
gati
onsar i
sing
therefr
om wi l
ldescendt ot hehei rsandassi gnsofthepar t
iesdef ending
uponwhet hertheyaretr
ansmi ssi
blebynat ur
e,byl aworbysti
pulat
ion.

Off
ermade through agent
. An off
ermade t hr
ough an agentis
acceptedfr
om t
hetimeacceptanceiscommunicat
edtohim bytheoffer
ee.
Thisissobecauset heagentinlegalcont
emplat
ionisconsi
deredast he
extensi
onofhispr
incipalandsowhateverhedoesi nconnect
ionwiththe

61
agencywi
l
lbi
ndt
hepr
inci
pal
.

Publishedadver ti
sementnotanof fer. Businessadver t
isement sof
thi
ngswhi char ef orsal einnewspaperadsormedi aar enotdef i
nit
eof f
er s
by mer ei nvit
ati
ons t o make of f
er,and t he same i st r
ue as r egards
adverti
sement s cal l
i
ng f orbidderst o make pr oposals based on gi ven
specif
icati
ons.I nei thercase,theadver t
iserisnotboundeveni faper son
responds compl et el
yt ot he terms published unless indi
cations show
otherwise.Taket hef oll
owingil
lustr
ati
on.Anadver ti
sementappear sint he
Bull
etin Today r eadi ng:“ForSal e:1980 Lancer2- door,good r unning
conditi
onandf ul
lyl oadedP50, 000.00,200G.Tuazon,Sampal oc,Mani la,
See:Vangi eMendoza. ”Xi mmediatel
ylooksf orandmeet sMi ssMendoza
i
nforminghert hathei sbuyingthecarandt enderi
ngt heexactamount .
MissMendozacanr efusebecauseadver t
isement sarenotdefini
teoffers.

Anexcepti
ont otherulehowevercoul
dt akethef orm ofar ewardfor
anactspecif
iedintheadverti
sement.Ifonei
mmedi atel
yactsont hereward
advert
isementwithoutknowingthatadayaf t
ert headwasr evokedi nthe
same paper,t he reward may be clai
med ift he task has been done
confor
mablywi t
htheadverti
sement.Thesecas esarepr evalentinrewards
forthecapt
ur eofunderworl
dcharacter
sorinformationleadingt odetect
ion
oftaxevaders.

Personswhocannotgi veconsent. Consentcanonl ybegi venby

personswhohavet hecapacitytoact.Ifgi
venbyper sonswi t
houtcapacit
y
t
oactorwi t
hdisqual i
fi
cati
ons,thei
rconsentmaynotgivebi r
thtoacontract.
Thus,t he law states thatunemancipated minor
s,i nsane ordement ed
persons,anddeaf -muteswhodonotknowhowt owr i
tecannotgiveconsent
exceptthr
ought heirnaturalorl
egalguardi
ans.

Thel aw,however ,recognizesasi tuati

onwhenaper sonsubj ectto
guardianshipmayhaveaper i
odofl ucidinter
vals(tempor ar
ysani t
y)such
t
hatcont rac t
senteredintodur i
ngt hisper i
odar evalid. Likewise,wher e
“necessaries”arethosei ndispensableforsust enance,dwel l
ing,clothing,
andmedi calatt
endancear esoldanddel i
veredt oami nororotherper son
withoutcapacitytoact
,hemustpayar easonablepricef ori
t.Butcont racts
enteredintointhestat
eofdr unkennessordur i
nghypnot i
cspellarevoidable.

Vicesofconsent.Thelawenumer at
esfi
vecausesbywhi chconsent
may be viti
ated orrendered def
ecti
ve. These ar
e mistake,viol
ence,
i
nti
midati
on,unduei nf
luenceandf r
aud. I
ftheconsentofapar tytothe
cont
ractisgivenorsecur edthroughtheuseofanyoft hesevicesthe
cont
ractbecomesvoidable.

62
 Mist
ake render i
ng contr
actdefect
ive. In orderthatmi stake may
i
nvalidateconsent ,itshouldref
ertothesubstanceofthethingwhi chisthe
objectoft hecont ract
,ort othosecondit
ionwhi chhavepr i
ncipal
lymoved
oneorbot hpar t
iest oenterint
othecontract.However ,mist
akeast othe
i
dent i
tyorqual i
fi
cat i
onofoneoft hepart
ieswi l
lvit
iat
econsentonl ywhen
suchi denti
tyorqual i
fi
cati
onhasbeent heprimarycauseofthecont ract
.But
a simpl e mist
ake ofac countwil
lgive r
ise onl
yt othe correcti
on ofthe
account .

A mist
akeinsubstancetakesplacewhenbot hparti
est houghtthat
t
hesubj ectmattert
heyar edeali
ngintodoesnott urnoutt obewhati t
exactl
yis,suchaswhenonesel lsandtheot herbuysasugarl andbeli
eved
bythem tohaveanareaof20hect aresandyi el
ding2,000piculsperseason
whichactuall
yhadanar eaof18hect aresandpr oducingonlyabout700
pi
culs. Despitethe consummat i
on oft he contract,the same may be
annull
edincourtatt
heini
tiat
iveofthebuyer.

A mi st
akeofi denti
tyorqual if
icat
ion,ont heot herhand,t akesplace
whenonepar t
yentersintothecont ractpri
mar i
lybecauseofsuchi dentit
yor
quali
fic
ationoft heotherpartywhi chi snotact ual l
yt hecase.Toi ll
ustr
ate:
Assumet hatAr tLocsinist hebestconst ructi
onengi neerinthecount ry.
Roxas,want i
ngaf i
vest or
eybuildingt obeconst ruct
edbyAr tLocsin,meet s
anotherengi neerwi t
hthesamename.Bel ievingt hatt helat
teristher eal
Locsin,hecont ractedtheconst ructi
onoft hebui l
dingwi thhim. Af t
erthe
secondst oreyisfi
nished,hediscover edthathei snott hefamousAr tLocsin.
Insuchacase,hemayaskt hecour tforannulmentoft hecontractbecause
ofthemi stakeofidenti
tyandqual if
icati
on.

Circumstancesnotindi
cat
iveofmistake.Thereisnomi st
akei fthe
par
tyal
legingitknewofthedoubt
,conti
ngency,orr
iskaff
ect
ingtheobjectof
t
hecontractasi nthecaseofbuyingacarf r
om aformercarnapconvictor
pur
chasi
ngat hingatanextremel
yl owpr
ice.

Ignoranceoft helaw,li
kewise,doesnotconst
it
utemistakebecause
underourl egalsystem,“ i
gnor
ance oft he l
aw excuses no one fr
om
compliancet herewi
th”exceptwhent helawistoodif
fi
cul
tandcontrover
sial
thatevencal ibr
atedlawyersandmagi st
rat
esofhighcourt
scannotcomet o
unanimityininterpr
etat
ion.

Mi
stakeoffactandmi st
akeofaccountdist
inguished. Mistakeof
ac
countunli
kemist
akeoffactwillnotavoi
dthecontract.Ifami stakeof
ac
countiscommi t
ted t
he r
emedyi snotannulmentoft he cont
ractbut

63
cor
rect
ion oft . Exampl
he account e:Deal
erX sell
sto Y 144 sacksof
cementatP54.20persackandY paidonl
yP7,104.
80duet omi st
akein
addi
ti
on.DealerXmaydemandpaymentoft hedi
ff
erenceaf
tercorr
ecti
on
oft
heer r
orint
heamountofP700.
00.

Legalpr otection tot he weak par t

y. The l aw has i t
s protecti
ve
concer nt ot heno- readno- wri
teordi sadvantagedpar tyt othecont ract.
Article1332oft heCi vilCodest at esthatwhenoneoft hepar ti
esinunabl e
tor ead,ori fthecont ractiswr i
tt
eni nal anguagenotunder stoodbyhi m,and
mi stakei sal leged,t heper sonenf orcingthecont ractmustshow t hatthe
termst hereofhavebeenf ull
yexpl ai
nedt ot heformerbef oreit
sexecut i
on.
Fai l
uret odosowi llr enderthecont r
actvoi e.Exampl
dabl e:X,anI l
onggo,
ent eredi ntoacont ractwor dedi nTagal ogwi thY. Ont heduedat eX
refusedt ocompl ywi thhisobl i
gationcl aimi
ngt hatheerredi nenteri
ngintoit.
Toenf orcet hecont ractincour t
,Yshoul dprovebyconvi ncingevidencethat
thecont ractwasr eadandexpl ainedf ul
l
yt ot hesatisfactionofX bef ore
signingi t
.

Vi
olence and i nti
midation explained. Vi olence isan externalact
charact
eri
zedbyt heempl oymentofser iousandi rr
esist
ibl
ef or
cebyone
partyorat hir
dpar tyf
orhi saccounti nor dertosecur etheconsentoft he
otherpart
yt othecont ract.Empl oymentofvi olencebyapar t
yorbyat hi
rd
personforhisaccountr ender sthecont ractvoidable.Exampl e:X,tosecure
Y’sconsentt osel lhisl and,pr eparesawr it
tendocumentofsal et obe
si
gnedbyY.ThenX,wi ththeai dofar medmenki dnappedandt henbeatY
i
n a secluded pl ace. To avoi df urtherbeat ing and inj
ury,Y signst he
document.Undert hecir
cumst ance,theconsentofYi svit
iat
edbyvi ol
ence,
hencethecont ractisvoidable.

Thereisintimi dationwhenoneoft hecont ract

ingpar t
iesiscompel l
ed
togi vehisconsentonaccountofar easonabl eandwel l-groundedf earofan
i
mmi nentandgr aveper ilemployedbyt heot herpar tyoraper sonf orhis
ac countuponhi sper sonorpr oper tyorupont heper sonorpr oper t
yofhi s
spouse,descendant s,and ascendant s. Unl i
ke in vi ol
ence wher et he
victim’
swi l
lissubst itutedwi t
ht hatoft heper petr
ator,ini nt
imidati
oni tisnot
sobec ausetheint imidat edpartyexer ciseshi swillwhichi snotfreebecause
oft hefearofa f or t
hcomi ngper iluponhi m orhispr opertyorhi sl oveones’
per sonorpr operty,thusr enderinghi sconsentdef ecti
veandunf ree.I nthe
ex amplegi ven,ifi nst eadofempl oyi
ngf orcebybeat i
ngY i nasecl uded
place,Xt hreatensYathi splacet hatifhedoesnotsi gnt hecont ractl ef
tto
him wi t
hintwoort hreedays,hewoul dt hrowsul f
uri
caci donabeaut i
fulface
ofhi sdaught er,andbecauseofwhi chY si gnsthedocument ,t hesame
woul dbevoi dableasY’ sconsenti svitiatedbyi nti
midation.

64
 Degree ofi ntimidation. I n ordert o det ermine t he degree of
i
ntimi
dati
on the cir
cumst ance ofage,sex and condi ti
on oft he person
i
ntimi
datedshallbebor nei nmi nd.Thi smeanst hatiftheconditi
on,sexor
ageofthepar t
yclaimingt ohavebeeni nti
midat edi ssucht hatthereisvery
remotepossi
bil
it
yofhar m uponhi m orhispr oper tyorthatofhi sloveones,
thecontr
actmaynotbeavoi dedashisconsentdoesnotsuf ferf
rom inf
ir
mity.
Inthe same exampl e,ifY i smuch composed physi callyorbi ggerand
str
ongerincondit
ionori sabul kystrongmanwhi l
eXi sanel derlywoman
whoseconditi
onorr esour cespr ecl
udet hepossi bi
li
tyofinfli
cti
nganyhar m
uponY,t hedegreeofi ntimidati
onwoul dbei nsignifi
canttodef eatthefree
wil
lofB.Buti nther everse,therewoul dbei ntimidati
ont hatwoul dvi
ti
ate
theconsent
,hencet hecont ractbecomesvoi dabl e.

Butat hreatt
oenf
orceone’
scl ai
mt hr
oughcompet
entaut
hor
it
ywi
l
l
notvi
ti
ateconsentwhent
heclai
misjustandlegal
.

Unduei nfl
uence. Ther eisunduei nfl
uencewhenaper sont akes
i
mpr operadvant ageofhispowerovert hewi llofanother
,depri
vingthelatt
er
ofar easonabl efreedom ofchoice. Unduei nf
luencemayar isefrom the
f
oll
owi ngci r
cumst ances
:conf i
denti
al,famil
y,spi rit
ual
,andot herrelat
ions
betweent hepar ti
es,orfrom thefactthattheper sonal
legedtohavebeen
undulyinfl
uencedwassuf fer
ingfr
om ment alweaknessorwasi gnorantorin
f
inancialdist
ress.

I
nor dert hatunduei nfluencemayvi ti
ateconsent,itmustbei na
magni tudethatover powersandsubj ugatesthemi ndoftheobligorsuchthat
i
nef fect,hedoesnotexpr essanymor ehisassentorwi l
lbutthatoftheother
par t
ytot hecontract
.Thus,i ftheconsentoft hecontr
actisgivenbecauseof
the undue i nf
luence ofa l awyeroverhi sclienton the lat
ter’
spr opert
y
dispositi
on,orofanel destsont ohisagedorai li
ngfat
heroverhi sbusiness
affai
rs,orofadoct oroverhi scancerpat i
entintheexecutionoft helatt
er’
s
wi l
landt estament,orbyonepar tyagai
nsttheot herpart
ywhoi ssufferi
ng
from ment alweaknessori nf i
nancialst
rain,t
heconsentt othecont r
actmay
standvi t
iat
edbyunduei nf
luence.

Fr
audincontract
s.Thereisfr
audwhent hr
oughinsidi
ouswordsor
machi
nat
ionsofoneofthecontr
act
ingpar
ti
es,t
heot heri
sinducedt
oenter
i
ntoacontr
actwhi
ch,wit
houtt
hem,hewouldnothaveagreedto.

General
ly,f
raudrender
st hecontr
actvoi
dable.Towarrantavoidance
ofthecont
ract
,however ,t
hefr
audallegedandpr ovedmustbeseriousand
havenotbeenempl oyedbybothcontr
acti
ngpart
ies.

65
 Fr audiscl assif
iedi ntot woki nds,namel y:Fr audatorbef orethe
perfecti
onofcont ract(dolocausant e)whi chwhencommi t
tedrendersthe
contractvoidable,andf r
audaf terper f
ectionoft hecont r
act(doloinci
dente)
whichdoesnotcauset hei nvali
dityofthecont ract.Agoodexampl eofthe
formerisacasewher eavendorsel l
sagol dringwhi chher epresentstobe
mount edwi thadi amondwhensuchi smer elyast oneglass. Her ethe
contractmay be annul led by r eason off raud t aking place beforethe
perfecti
onoft hecont ract. Anexampl eoft hesecondi swher eaf t
erthe
executionoft hecont ractofdeposi tofimportedl inent exti
l
es,theownerof
thewar ehouseunt iethebul ksandr eplacesthei nnercont entswithlocal
fabri
csandt hendr essingthem i namannert hatl ooksasi fithasnotbeen
touchedatal l
.Her ethef raudt akespl aceaf t
ert hecont r
act,hence,the
depositormayonl yr ecoverdamagebyr easonoft her eplacement .

I
nst
ancesnotconst
it
uti
ngf
raud:

1.Us ualexagger ati

onint rade.Itisanadmi t
tedfactthatdealersor
mer chantsexagger atet heirwar est oinsurethe i
mmedi ate sale oft hei
r
product s.Fori nstance,isasaucemanuf actur
eradverti
seshi sproductsas
napakasar aporpi nakamasar ap,abuyer ’
soutri
ghtreli
ancet hereofwithout
i
nvest i
gat i
ngoni tst r
uthwi llnotconst i
tutefr
audulentrepresentati
on. I n
otherwor ds,i fthe buyer ,having allthe opport
unit
iestoi nvesti
gat e by
himselft het rut
hoft her epresentati
on,fail
stodoso,hecannotl ateron
compl aint hatthecont ractisvoidabl eifthegoodsbr oughtt ur
noutt obe
opposi t
et hedealer ’
srepresentati
on.

2. Expressi
onofaf avorableopinion. A mer eexpr essi
onofan
opini
onbyapar tydoesnotsigni
fyfraud,unlessthesamei smadebyan
expertandtheot herpart
yreli
edont heformer’sspecialknowledge. An
exampleofthel att
erwouldtakethef or
m ofaseasonedmi ningengineer
whosel l
salotrepresent
edtobel oadedwithmi nes,andt hebuyer,rel
ying
onhisexpert
ise,buysit
,onl
ytodiscovernothi
ngunder neat
ht heground.

3. Mi srepresentat
ionmadei ngoodf ait
h. A mi srepresentati
oni n
goodf aithisnotf raudulentbutmayconst it
uteer r
or. Thismeanst hata
misrepresentati
onbasedonaner r
oneousbeliefandwi thoutintenttot ake
undueadvant ageoft heotherpart
ywillnotavoidthecontract.Toi ll
ustr
ate:
Xr eceivedacaseofScot chWhiskyasagi f
tonhi sbirt
hday.Bel i
evingitto
bei mpor t
edandr unningoutofcash,sol ditt
oagr oceryassur i
ngi ttobe
i
mpor ted. Ifittur
nedoutt obel ocal
,thecont r
actwi l
lnotbeavoi dedf or
beingfraudulent.

Dut
yt odisclosematerialfact
s. Fail
ureofei
therpart
ytodiscl
ose
fact
swhent hereisadut yt
or evealthem aswhenthepart
iesareboundby
confi
denti
alr
elat
ions,const
it
utefraud.

66
 Whent hereisadut ytodiscl
osef actsaswhent heyar eboundby
conf i
denti
alrelat
ionsli
ket hatofalawyerandc l
ientorpr incipalandagent ,
fail
ureoft heknowl edgeablepar t
ytor evealsuchi nfor
mat i
onamount sto
fraud,hencet hecontractisrender
edvoidabl e.Si t
uati
onsl i
ket hismayal so
oc curinempl oymentori nsurancecontractswher et ogett heempl oyeror
i
nsur er’
sassentt hepr ospecti
veemployeeori nsuranceappl icantwhohad
suf f
ered a grave ai
lmentconceal sthi
sf actorsubst i
tute an X- rayofa
heal t
hypersonf orhi
m.

Simulat
edcont r
act
. A contractissimul
atedwhenitisficti
ti
ousor
pret
endedinordertodefraudthecreditorormi
sleadt
hegeneralpublic.I
t
maybeabsol ut
eorr el
ati
veandi neithercasetheappar
entcont
r acti
snot
real
l
ydesir
edorintendedtoproducelegaleff
ect
s.

Anabsolut
esimulat
edcont r
actt
akespl acewhent hepar t
iesdonot
i
ntendtobeboundatal l
,hence,t hecont
ractisvoidorinexi
stentasthereis
noconsentorcauseal thought heobjectiscer t
ain. Thepur poseoft he
contr
actistodefr
audthecr edit
orswhent hedebt orent
eredintoaf i
cti
ti
ous
contr
actali
enati
nghisonlypr opertywort
ht hedebtt oanotherinor derto
placesuchpropert
ybeyondt hereachofhi
scr edit
or.

A r elat
ivel
y si mul at
ed cont ract t akes pl ace when t he par ties
concealedt heirtrueagr eement .I nt hisinst ancet heappar entcont racti s
voidbutnotast ot herealagr eementoft hepar t
ies,ift hesamedoesnot
prej
udiceat hi
rdper sonandi snoti ntendedf oranypur posenotcont raryt o
l
aw,mor als,goodcust om,publ icor der ,andpubl icpol icy. Thi skindof
simulati
ont akespl acewhent hecont r
actent eredi ntoismer elyt omi slead
thepubl i
cont heef fectsoftheirr ealcont ract.Exampl e:SpousesAandB
own t wo Lancercar sf ortheirper sonaland pr ofessionaluse ever yday.
Owi ngtothepr ohibiti
vecost soff uelst heydeci dedt oconver tt heircarsi nto
taxi
sandi nor dert odosoent eredi nt oaf icti
tiouscont ractofsal ewi tha
l
egitimatetaxioper ator,therebymi sleadingt hepubl i
cthatt hel att
erist he
owneroft het wocar sbei ngoper atedast axis.I tiscl earthatt hecont ractof
saleisnott hei
rtrueagr eementbutsomesor tofal easecont ractf ortheuse
offranchi
sef oramont hl
yf ee,locall
yknownaskabi tsyst em.

67
 QUESTI
ONSANDPROBLEMS

1. Howi
sconsentmani
fest
edi
ncont
ract
s?

2. Whatar
ether
equi
si
tesofacont
ract
?

3. Gener
all
y,anof
fermayber evokedatanyt
imebeforeaccept
anceby
t
heoff
eree.Whenistheof
ferorprecl
udedf
rom r
evokingaoff
er?

4. Whenmayanadv
ert
isementconst
it
uteadef
ini
teof
fer
? Why?

5. Whati
sasi
mul
atedcont
ract
? Whatar
eit
stypes?

6. Dif
fer
enti
ate an absol
ute si
mul
ated f
rom a r
elat
ivel
y si
mul
ated
contr
act
.

7. St
atet
hreecasesorcir
cumst
ancest
hatmayi nducea part
ytoent
er
i
ntoacont
ractbutwhi
chthel
awdoesnotconsiderasf
raud.

8. Whatar
ethedi
ff
erentki
ndsoff
rauds? Expl
aineach.

9. ABC Manuf actur

ing Corporat
ion advert
ised i
ts det
ergentsoap as
“washescl othesdoublyclean”. X,r el
yi
ngont herepresent
ati
onof
t
hecor porati
on,boughtsever albarsofs oapsanddiscoversthatthe
advert
isementi snottrue.Canheaskf orannulmentoft hecontr
act
byreasonoff r
audul
entrepresentat
ion? Why?

10. Xi sindebtedtoYi ntheamountofP25,

000.
00.Inordertoescape
paymentofhi sdebtt oYhesoldhisonl
ypassengerj
eepneytohis
brother
-in-
law Z. Stat
ewhethert
hecontr
actisabsol
uteorrel
ati
ve
si
mul at
ion.Why?

68
ANSWERS

69
 OBJECTOFCONTRACTS

Objectcer tain. An objectwhi ch mustbe cer t

ainisthe second
elementofacont ract
. Allthi
ngswhi char ewi thi
nt hecommer ceofman
i
ncluding futuret hi
ngs having pot
entialexistence,r i
ghts whi
ch ar e not
i
ntransmissibleandser vi
ceswhichar enotcont rar
yt olaw,mor als,good
customs,publ icorder,andpublicpoli
cy,andnoti mpossibleofcompl i
ance
maybet heobj ectofac ontr
act
.Nocont ractmay,however ,beent eredint
o
uponf ut
urei nheri
tanceexceptincasesexpr esslyauthori
zedbylaw.

Mor eover
,thingsorser vi
ces,asobjectoft hecontr
actmustnotbe
physicall
yorl egall
yi mpossibleot her
wisethecont r
actisvoidforl
ackof
object.Ast oservice,impossibil
i
tymaybeabsol uteorrel
ati
ve.Thefor
mer
renderst hecontractvoid,wher eas,thelatt
ermayt akeplacewhenthe
prestat
ion cannotcompl etel
y be compl i
ed wi t
h,as in a contr
actof
partnershi
pwher eapar tneragr eedtocont r
ibut
easum whi chhecanil
l
aff
ord.

Kindsofobjectofcontr
act. Obj
ectcer
tai
nist
hesecondessent
ial
el
ementofaval
idcontr
act.Theobjectmaybethi
ngs(
asi
nsale)
,ri
ght
s(as
i
nassi
gnmentofcr
edit
),orser
vices(asi
nagency)
.

Outsidet hecommer ceofman. I thasbeenhel dt hatamunici

pal
councilcannotsel lorl ease publi
c property,such as plazas,st
reets,
commonl ands,rivers,bri
dges,etc.becausetheyar eoutsi
det hecommerce
ofman;andi fithasbeendonesobyl easingpar toft
heplazat hel
easei s
nullandvoi d,foritiscont rar
ytol aw,andt het hi
ngleasedcannotbet he
objectofacont ract.At hingorservicemay,t houghwithi
nthecommer ceof
man,l at
eronbecomepr ohibi
tedbyl awhencegoesout si
det hecommerce

70
ofman.Thus,bef oresl
aught
eringofcarabaosforconsumpt
ionorsalei
s
notbanned,butinmanymuni cipali
ti
es,t
hesamehasbeenpr ohi
bit
edby
l
ocalor
dinanceshencegoesoutsidethecommerceofman.

Thi
ngshavingpotent
ialexistence.Thingshavingpotent
ialexistence
arethosewhi char
esuret ocomebar ri
ngonlyunforeseeneventsalthough
notyetpossessed.Tothisclassif
icati
onmayf al
lsucht hi
ngs,l
i
kemangoes
f
rom exist
ingmangot r
eesf orthecomi ngseason;thegr ai
nsthatmaybe
harvest
edf r
om adefi
nit
ear eaofr iceland;t
hemi l
kt hatacow willyieldin
t
hecomi ngyearoryoungani malsfrom adefi
nit
emot hercow.

Int
ransmissibl
eright
sandser vi
ces.Right
swhi char eint
ransmissi
ble
cannotbet heobjectofacontactbecausetheyareeit
hertooper sonaltothe
parti
esorar enotper mitt
edbyl aw t
obet heobjectofcontact.Suchr i
ghts
l
iker i
ghttovot eandbevot edupon,thoseemanat i
ngf rom mar ri
ageand
personalrelat
ionshipareamongt hosethatmaybement ioned.Forser v
ice
howevert obeaval i
dobject
,itmustbephysicall
yandl egall
ypossibleasit
i
snotcont rarytolaw,goodcostumes,publi
corderandpubl i
cpolicy.

FutureInheri
tance.Acontactinvolvi
ngaf utur
einheri
tancei svoi
das
t
hiswi l
llikel
yenticeani nst
it
utedhei rorlegateet oendupt hel i
feofthe
benefactor.Thetestofwhetherani nheri
tanceisf ut
ureornoti stheti
meof
death.Ifdeathoft hebenefact
orhadcomeaheadoft hecont racti
nvol
ving
t
he whol e orpar tofan i nheri
tance the contractisremoved f rom the
prohi
bit
ion.

Obj ectmustbedet erminate,exceptions.Theobj ectoft hecont ract

mustbedet erminateast oleavenodoubtast owhichisi nt
endedf r
om t he
ki
ndwher eitbel
ongs,ormusthavedef ini
telimit
s.However ,thefactthatthe
quant i
tyisnotdet erminat
ei snotanobst acletotheexist
enceoft hecontract,
providedi ti
spossi bl
et odeterminatewhatt heobjectiswithouttheneedofa
newcont ractbetweent heparti
es.Thusacont r
actwhoseobj ectisdescribed
ast hef i
rstbatchofl anzonesf rom afive-hectarelandinPaet e,Laguna,i n
which t he quant i
tyisnotcapabl e oft he determinat
ion att he ti
me t he
contractisper f
ectedisadet erminateone.

71
 QUESTI
ONSANDPROBLEMS

1.Whatmaybet
heobj
ectofcont
ract
s?

2.Thel
aw pr
ohibi
tsfutur
einheri
tancet
obeanobj ectofacont
ract
.
Wheni
saninheri
tanceconsi
der
edasfutur
einher
it
ance?

3.Whenmayt
heobj
ectofacont
ractbeconsi
der
edasdet
ermi
nat
e/

4.Whenmayat
hinghavepot
ent
ialexi
stenc
e?Expl
ain.

5.Maythi
ngswhi
char
ewi
thi
nthecommer
ceofmanceaset
obeso?
Why?

6.Mayanpossi
bleser
vicebet
heobj
ectofacont
ract
?Why?

7.X owna5- hect

arelotplant
edwith300l anzonestreeswhi
chyiel
d
about900basket
saseason.Twomont hsbeforet
henextseasonhe
ent
eredint
oacontractofsal
ewit
hYr egardi
ngthefruit
swhi
chismay
yi
eldinthenextseason.Istheobjectofthecontr
actdeter
minat
e?
Why?

8.X andY arefatherandson.OnJanuar y15,1984Y ent

ersi
ntoa
cont
ractwit
hZwher ebyhesel
l
sawhi teracehor
sewhichheal
one
wil
linher
iti
naddi t
iontotheotherpr
operti
esofX.OnJanuary20
sameyear,Xdies.Discusst
heeff
ect
softhesal
e.

ANSWERS

72
73
 CAUSEOFCONTRACTS

Cause,meani ngof.Acausewhichmustbei nexi

stenceatt
hetimeof
thecontr
actisthelastelementofavali
dcontract
.Causeorconsider
ati
onis
theimmedi at
e,di r
ectandpr oxi
mater easonwhyapar tyenter
sintothe
contr
actandwi thoutwhichthecontr
actbecomesanul li
ty.Thecausemay
eit
herbeonerous,r emunerat
oryorgr
atuit
ous.

noner
I ouscontr
actsthecauseorconsi der
ationisunder
stoodtobe,
f
oreachcontract
ingpart
y,theprest
ati
onorpr omiseofat hi
ngorserviceby
anot
her.Thus,i
fXsell
shislandtoYf orP100,000.00,theoner
ouscausefor
XistheP100,000.00comingfrom Y,whereas,thatofYi sthelandcoming
f
rom X.

Thec auseorconsi
derati
oninremuner at
orycontractsist
heservice
orbenefi
twhichisremunatedorpai d.A simpleil
lust
rati
onoft hi
sisthe
pr
ofessi
onalfeeofanengi neerwhopur suanttoacont ractwi
thaclient
pr
eparestheplanordesi
gnofthelat
ter’
sresi
denti
alhouse.

In gr at
uitouscontracts,oroneofpur ebenef i
cence,t hecauseor
consider at
ion is purel i
berali
ty oft he par toft he benef actor.Unl
ike in
onerousandr emuner at
orycont ract
swher eeac hpartyr eceivesaval uable
ormat erialconsiderat
ion,i
ngr atuit
ouscont r
actstheobligordoesnotr eceive
any.Thel iber
alityorcausei nthiscasei sthei nnersatisfacti
onoft hegiver
ofhavi ngdoneorgi venaval uablef actororhel ptot her eceivi
ngparty–
somet hingwhi chi sbibli
cal
lybl essed.Donat ingapi eceofl andtoapoor
communi tysot hattheyouthcanusei tfortheirsportandcommonneedsi n
ordert odevi atet hei
rattenti
onf r
om gambl ingorot herf orm ofvicei sa
perf
ectexampl eofonehavi ngagr atuitouscause.

Moti
vesin ent eri
ng i
nto a contr
act.The parti
cul
armot i
vesoft he
part
iesinenteri
ngi ntoacont r
actarediff
erentf
rom thecausether eof
.The
moti
vei sthespeci alorper sonalreasonofapar tywhyheent eredint
o
cont
ract,asdist
inguishedfr
om thecauseoft hecont
ract.Thus,i
nasal eofa

74
newcarforP120,000.00,t
hemoti
veoft hepurchasermaybet ogi
veitt
ohis
wif
e,whereas,thedealer’
smoti
veisper hapstoreinvestt
hemoneystri
ctl
y
f
orbusinessprofi
twhichisal
sopersonaltohim.Inotherwords,mot
ivehas
ref
erencetot
heper sonandcauserefer
st othecontr
act.

Moti
veisfur
therdif
fer
enti
atedfr
om thecausei nthatt
heformermay
beunknownt ot
hepar t
ies,andthatil
legal
it
yismotivedoesnoti nval
i
dat
e
t
hecontr
act,whi
l
eill
egal
ityofcauserendersthecont
ractanull
i
ty.

Cont
ract
swithoutcauseorwit
hill
egalcause.Contr
actswit
houta
causeorwi t
hanil
legalcausepr
oducenoeffectwhat
soever
.Thecauseis
unlawfuli
fiti
scontrar
yinlaw,moral
s,goodcostumes,publi
corder
,and
publi
cpoli
cy.

Anex ampleofacont r
actwit
houtacausei swhent hedeedofsal e
statest hatthesell
errecei
vedthepriceofthethingwhent het ruthofthe
mat teristhatnonehasbeenr ecei
vedast hesaleismerel
yapl oyt oplace
theobj ectofthecontr
actbeyondther eachofthesell
er’
scr edi
tors.Inthi
s
case,eveni ft
hereisadeedofsale,thecontr
actisvoi
dast helastelement
i
nl acking.

I
fthecontracthasanunl awf ulcause,i
tasi fnocont r
acthasbeen
enteredint
obecauset hel aw prohibi
tsorconsi der
sthecauseasi ll
egal.
Thereareabundantexampl esofthis,l
ikeacontractt
odistr
ibut
econtr
aband;
t
odeali nprohi
biteddrugswher ebot hthemanuf act
ureranddeal erar e
unli
censed;cont
ractsrest
raini
ngt heflow oftr
adeaswhenapar tyhoar ds
ri
ce orsugart o creat
e arti
fi
ci
alshor tage;ora contracttor ef
rai
nf rom
prosecut
ingacri
mef oramonet arycause.

St atementofaf alsecausei ncont ract.Thest atementofaf alse

causei ncont ractsshallrendert hem void,i fits houldnotbepr ovedt hatis
foundeduponanot hercausewhi chi st
rueandl awful.Thismeanst hatitis
i
ncumbentupont hepar tyenforcingthecont racttopr ovethatt hereexists
anothercausel awfuli
ftheot herpartycl
aimst hecauset obef alse.Exampl e:
Xsi gnsacont ractofsalestati
ngt hathesol danddel iveredaBet amaxt oY
forP10, 000.00whi chisl att
erpaidincash.Thet r
uthoft hemat terhowever
i
st hatYdi dnotpayanyamountt oXast hel atter’
spur posei st oplacethe
Betamaxbeyondandr eachofanappl iancef i
rmt owhi chhehadnotpai d
thecompl eteinstal
lmentpayment s.Here,t hecausest at
edi sf alsehenc e,
thecont ractisvoid.Butsuppose,i nanact iont or ecovertheBet amaxwhi ch
wasal readypai dbyXt ot hecompany,Ypr ovedt hatXhasanexi sti
ngdebt
tohi m wor ththesameamount .Insuchacase,t hecont ractcont inuest o
enjoythepr esumpt i
onofval i
dit
ysi ncet her ealandt ruecausehasbeen
proven.

Pr
esumpt
ionofconsi
der
ati
on.Al
thought
hecausei
snotst
atedi
nthe

75
cont ract
,t hesamei spr esumedt oexi standi slawful,unlesst hedebt or
pr ovest hecont rary.Thi smeanst hatever ycontractispr esumedt obe
basedonacauseorconsi der ati
onwhichi sl
awfulandexi st
ing,sucht hatt
he
par tyagai nstwhom t hecont ractisenforcedisrequiredt opr ovelackofor
i
llegalconsi derati
on,ot her wiset hecontractconti
nuest or etainitsvali
dity.
Exampl e:Anegot i
ablei nstrumentr eading“Payt oJ.Gonzal esondemand
thesum ofp1, 000.00”orst atementont hepageofadi aryoft hecr edi
tor
stating“I.O.U.P1, 000.00”,si gnedatthebot tom ofthewr i
ti
ngbyt hedebtor ,
i
spr esumedt ohavebeeni ssuedormadewi t
haconsi derati
on.Toabsol ve
themakerf rom li
abi l
i
ty,heshoul dprovet hatthedocumentorwr i
ti
nghasno
trueandl awf ulconsideration.

Lesionorinadequacyofcause. Excepti
ncasesspeci
fi
edbylaw,
l
esi
onori nadequacyofcauseshallnoti
nvali
dat
eacontr
act,unl
esst
here
hasbeenfraudorundueinfl
uence.

Lesionissimpl yt hedamagesuf feredbyapar t

ybecauset hepr icei s
unjustori nfl
uenced.I tdoesnotavoi dori nval
i
datet hecont r
actunl esst he
pri
ce i s so gr osslyi nadequate as t o amountt o practicallyaf raud,
oppr essi
onorunduei nfluence.Exampl e:X,aVi sayanresi
dent ,i
stheowner
ofa500squar emet ersr esidenti
allotinTagayt ayCity.Withoutknowi ngt hat
thecostpersquar emet erisP500. 00,hesol di
ttoYatP300. 00persquar e
met er.Undert heci r
cumst ances,thel esionofP200. 00persquar emet erhe
suff
er ed wi l
lnoti nvalidatet he contract.Buti fY ora t hir
d per son had
deli
ber atel
yusedf raudorunduei nfluence,orYhadcommi ttedasubst antial
mistake,l esion suffered maybe a basi sofan act i
on toi nval
i
datet he
contract.

76
 QUESTI
ONSANDPROBLEMS

1.Whati
smeantbycauseorconsi
der
ati
on?

2.Di
ff
erent
iat
emot
ivesi
ncont
ractf
rom caus
esi
ncont
ract
s/

3.Whati
sthepr
esumpt
ionont
heexi
stenceofacause?

4.Howi
sagr
atui
touscausedi
sti
ngui
shedf
rom anoner
ouscause?

5.Mayl
esi
onori
nadequacycausei
nval
i
dat
eacont
ract
?Why?

6.Wheni
sthecaus
eoft
hecont
ractconsi
der
edunl
awf
ul?

7.X,aVi sayanr esi

dent
,istheownerofa200squar emet erl
otin
TagaytayCi ty.Duetofal
seinf
ormati
onfr
om Y,he(X)enter
edint
oa
cont
ractwi t
hYsel l
ingt
helandatP200.00persquar
emeterwhenthe
marketval ue ofthe same is P500.
00 persquare met
er.Isthe
cont
ractvalid?Why?

8.X si
gnsacont ractthathesol danddeli
veredaBet amaxt oY for
P10,
000.00whicht helat
terpaidi
ncash.Xdi dt hi
sactual
l
ytoplace
t
heBet amaxbeyondt her eachofhi
scredit
orZ,andasamat t
erof
f
acthedidnotreceivetheamountofP10,000.00.Canthecont
ractbe
enf
orced?Reason.

77
 CHAPTERI
V

FORM OFCONTRACTS

Form notessent i
altobebi nding.Contract
sshallbeobl i
gatoryin
whateverf orm they have been ent
er ed i
nto,provi
ded allt
he essenti
al
requi
sit
esf orthei
rval
idit
yarepresent.However,whent helawrequi
resthat
ac ontr
actbei nsomef or
mi norderthatitmaybeval idorenfor
ceable,or
t
hatt hecont r
actbepr ovedinacer t
ainway,t hatrequir
ementisabsolute
andindispensable.

Whenfor
mi sar equi
rement.Acontr
actinwhat
everform –verbalor
wri
tt
en,isvali
di fallt
heessentialel
ementsarepresent
,i.e.
,consentof
contr
acti
ngpart
ies,obj
ectcert
ainwhichisthesubj
ectofthecontract
,and
causeorconsi
derati
on.Theexcepti
onstot
hisrul
eare:

1.Whenl awrequir
esformforvali
dit
y.Ifthelawrequi
resa
cont
ractoragreementt obei nwr i
ti
ngort obei napubi cinst
rument,a
cont
ractwhichisnotinsuchf or
mi snotvalid,hence,cannotbeenfor
ced.
Anexampl eofthefor
merisanunder t
akingtoanswerf ort
hedebtordefaul
t
ofanother
,andinthelatt
er,adonati
onofar ealpropert
ywhichmustbeina
publ
icinst
rumentandalsoacceptedi
nt hesamemanner .

2.Whenl awr equi

resafor
mf orenfor
ceabil
i
ty.Whenthelawrequir
es
acontractoragreementt obei nwr i
ti
ngornot edinanymannert obe
enf
orceabl
e,i.
e.,thosecontai
nedint heSt at
uteofFrauds,suchshallbe
compli
edwithot
her wisenoact
ioncanbeal l
owedtoenfor
cethecont
ract.

3.Whenlawrequir
esaf or
mf orconveni
ence.Ifthecontracti
sval
id
andenf or
ceabl
ebutnoti napubl i
ci nst
rument,apar tyint
erestedini
ts
regi
str
ati
onmaycompelt heotherpartytorewrit
ei ti
nt heproperfor
m or
completei
tthr
oughpl
acingtheneedednotari
alacknowl
edgement .

78
 Remedyi fvalidcont r act,notinpubl icinst
rument .Ift
hel awr equires
thecont r
actoragr eementt obei npubl i
cdocumentori naspeci alform,the
contract i
ngpar ti
esmaycompeleachot hertoobser vet hatf orm oncet he
contracthasbeenper fected.Ther emedyi sav ai
lablesimul t
aneousl ywi th
theact ionupont hecont r
act .Exampl e:Xsol dtoYapar celofl andbutt he
contracti swr i
tt
enonl yi nanor di
narypad.Undert helaw,sal esoforr eal
ri
ghtsi nvolvi
ng realpr opertymustbe i n a publi
ci nstr
ument .Since the
contracti snoti napubl i
ci nstrumentYmaycompelt oXt or ewri
tei tina
publici nstrumentso t hati tcan be r egister
ed int he Regi stryofDeeds
therebybecomi ngbi ndingt ot hewhol ewor ld.
Apubl icinst
rumentmaybedef inedasonewher et heactorcont ract
andot hert er
msandst ipulationst hereofisacknowl edgedandswor nt oby
thepar ti
esast heirfreeandvol untaryactordeedbef oreagover nment
offi
cialaut hori
zedtoadmi nisteroat horanot arypublicbearinghi sseal .An
actorcont r
actembodi edi napubl i
ci nstr
umenti sgener all
ybi ndingt othe
gener alpubl i
c.

Actswhichmustappearinapubl
i
cinst
rument
.Thef
oll
owi
ngact
s
mustappeari
napubli
cinst
rument
:

1.Acts and contr

acts whi
ch have fortheirobjectthe creat
ion,
t
ransmi ssi
on,modi
fi
cati
onorext i
ngui
shmentofr ealri
ght
soveri mmovable
propert
y;salesofrealpr oper
tyoran i nt
eres
tt her
ein are gover
ned by
art
icl
es1402,No.2and1405.

2.Thecessati
on,repudi
ati
onorrenunci
ati
onofher
edi
tar
yri
ght
sorof
t
heseofconj
ugalpar
tner
shipofgai
ns.

3.Thepowertoadmini
sterproper
tyoranyot
herpowerwhi
chhasfor
i
tsobj
ectanactappear
ingorwhi chshoul
dappeari
napublici
nst
rumentor
shoul
dprej
udi
cethi
rdperson.

4.The cessat
ion ofacti
ons orr
ight
s pr
oceedi
ng f
rom an act
appear
ingi
napubli
cdocument.

Al
lothercont
ract
swheretheinvol
vedexceedsfi
vehundredpesos
mustappearinwri
ti
ng,evenaprivat
eone.Butsaleofgoods,chat
tel
sor
t
hingsar
egovernedbyArti
cl
es1403,No.2and1404.

Realri
ghtsoverimmovabl e proper
ti
es.Immovable pr
operti
esare
t
hosewhichbynature,l
ocat
ionorintenti
onofthepart
iesaredesti
nedtobe
i
mmovable,i
.e.
,landormachi ner
iesorequipmentsinst
all
edonsur f
aceor
under
neat
htheground.Thus,anyactorcontractt
hatwoul
dcreate,t
ransmi
t,

79
modi
fy orter
mi nat
ear i
ghtovert hese,such as t
hose acqui
red by a
mort
gagee,possessor
,lessee,orusufr
uct
uaryar
eamongt hosewhi chare
i
ncl
udedinthi
snumber .

Cessati
on,r epudiat
ionorr enunciati
on.Her edit
aryrightsr elat
et othe
ri
ghtsofcompul soryhei r
st oi nheritfr
om t heirparentsupont hel att
er ’
s
demise,orvi se ver sa,orthe r ightoft he designated hei rini nheritas
provi
dedint helawofsuccessi on,wher easconj ugalri
ghtsr efertot heright
ofmar r
iedspouset ot heone- halfoft heconj ugalpartnershipofgai nsi n
case ofdissolut
ion ofdeat h ofa spouse.Ex ample.Don Mar iano di es
survi
ved byf ourchi ldr
en.X,t he el destand a successf ulengi neerand
alr
eady stable,r enounced his shar ei nt he estate ofhi sf ather.Thi s
renunci
ati
onmustbei napublicinstrument.

Powerofadminist
rat
ion.Thispowermustal
sobei npubl
ici
nstr
ument
t
obebi ndi
ngt othewhol eworld.Thesamei struewit
hanyot herpower
whi
chhasf orit
sobjectactsappearingorwhichshoul
dappearinapublic
i
nst
rument.A powert oadmi ni
sterabusinessorahaci endagiventoa
per
sonwhil
et heownerisawaypr operl
yfal
l
sunderthi
sgroup.

Cessationofact
ionsorright
s.Acti
onsi
ntendedtobeext
ingui
shedor
ri
ghtstobet ermi
natedliket
her eleaseofamor t
gageaft
erpaymentofa
l
oanmor tgagedebtorcancellati
onofanencumbr anceonani mmovable
proper
tysquarel
yfal
lsundert
hisnumber .

Contractspart
lywri
tt
enandpar t
lyoral
,effectof.Ifacont racti
spar
tl
y
i
nwr i
ti
ngandpar t
lyinoral
,t heoralonesar egener all
yexcl udedf r
om t
he
writ
ten document .Such being the case,disputesnotr esolvable byt
he
writ
tendocumenti sdeemednotwr i
tt
enatallunlesst hemat tersclai
medto
havebeenor al
lyagreedandf orm partofthewr i
tt
eni nstr
umentcanbe
provenbyot herevidencesancti
onedbyt helaw

80
 QUESTI
ONSANDPROBLEMS

1. Doest
helawr equi
reafor
m ofor
dert
hatacont
ractmaybe
val
i
dorenfor
ceable?Expl
ain.

2. Whataretheactsandcont
rac
tswhi
chmustappeari
na
publ
i
cinst
rument
?

3. Whataresomeoft
her
ealr
ight
sthataf
fectani
mmovabl
e
pr
oper
ty?

4. When may a partytot he cont

ractwhich i
s noti
nt he
r
equi
redform demandf ortheobservanceoftherequi
red
f
ormfrom t
heotherpar
ty?

5. X mortgagedapi eceofl
andtoY whichwaswr it
tenina
pri
vatei nst
rument
.When Y soughtr egi
str
ati
on ofthe
i
nstrument,theRegist
ryofDeedsref
usedtor egi
stert
he
same because itisnotint
he pr
operform.Whati st
he
remedyofY?Reason.

6. XandYar ehusbandandwi fewhoseconjugalpart

ner shi
p
ofgainsst andst oanetwor thofP500,000.
00.Inor derto
show hisaf fect
ion to hi
swi f
e,Y,he executed a pri
vate
wri
ti
ngcl earlyrepudiat
ingandr enounci
nghi
ssharet othe
part
nership.Isther epudi
ati
onint hefor
mrequir
edbyl aw?
Why?

ANSWER

81
82
 CHAPTERV

REFORMATI
ONOFTHEI
NSTRUMENT

Meaning ofr efor mation.Ref or

mat i
on ist hatremedyi n equityby
meansofwhi chawr itteni nstr
umenti smadeorconst r
uedsoast oexpress
orreformt other eali
nt entionoft heparti
eswhensomeer rorormi st
akehas
beencommi tted.I nt her eformat i
onoft hei nst r
ument,thecour tsdonot
att
emptt omakeanot hercont ractforthepar t
ies.Theymer el
yinquireinto
t
hei ntenti
onoft hepar t
iesandhavi ngfoundi tont heevidencepr esent
edor
uponi nqui
ry,reformt hewr it
teninst
rument( nott hecont
ract)inorderthatthe
reali
ntenti
onmaybeexpr essed.

Whenr eformat i
onoft hei
nst r
umenti snecessar y.When,t herehaving
beenameet ingoft hemi ndsoft hepar t
iestoacont ract,thei
rtrueintenti
on
i
snotexpr essedi nthei nstr
umentpur porti
ngtoembodyt hei
ragr eement,by
reasonofmi stake,f raud,inequi
tableconductoracci dent,oneoft heparti
es
mayaskf ort her eformati
onoft heinstrumentt otheendt hatsucht rue
i
ntention may be expr essed.Ifmi stake,f r
aud,inequi tabl
e conduct ,or
accidenthaspr eventedt hemeet ingofthemi ndsoft hepar t
ies,theproper
remedyi snotr eformationbutannul mentoft hecontr
act .

Requi
sitesofr ef
ormati
on.Inorderthattheacti
onf orreformati
onwil
l
prosperthefoll
owingr equi
si
tesmustconcur :(1)meetingoft hemi nds;(
2)
writ
tencontr
act;(3)wr i
tt
encontr
actsf
ailstoexpressthetrueintenti
onofthe
parti
es;and( 4)acl earandconvinci
ngpr oofofther ealint
ent i
on;and(5)
f
ailurei
sduet omut ualmist
ake,fr
aud,inequi
tableconduct,oraccident.

Di
sti
ncti
onbet weenr ef
ormationandannul ment.Reformat
ionofthe
i
nstr
umentpr esupposesameet ingoft hemi ndsbetweent hecontr
acti
ng
part
iesbutthei
rt rueint
enti
onisnotexpr essedintheinst
rument,whil
ethe
remedyofannul mentisproperwhent hereisnomeet i
ngoft hemi nds.
Example:X ent eredintoacont ractofsaleofapi eceofl andtoY f or
P100,000.
00wi t
ht heunder
standingthatthesalewouldincl
udeallexi
sti
ng

83
i
mpr ovement
st her
ein.Thr ough the mist
ake ofX’ st ypi
stthe phrase
“
incl
udingexi
sti
ngimpr ovementsther
ein”wasomi t
tedi nt
heDeedofSal e.
I
nt hiscase,Y mayaskf orr ef
ormati
onoft heinstrumentbyr easonof
mist
akeandfail
ureoftheinstr
umenttoexpressthetrueint
ent
ion.

Whenrefor
mat i
onmaybesought .Inthef
oll
owi
ngcasesr
eformat
i
on
oftheinst
rumentinorderbecauseoft
hef ai
l
ureoft
hesametodiscl
oset
he
i
ntenti
onortherealagreementoft
hepart
ies:

1.Mut
ualmi st
akeofthepar t
ies.Whenmut ualmist
akeoft hepar
ti
es
causesthefai
lureoftheinstr
umentt odi scl
osetherealagreement,oneof
them mayaskf orref
ormaton.Exampl
i e:Xent er
edintoacontractofsal
eof
acartoY.Bymut ualmist
ake,thepartiesdrewacont r
actofmor t
gage.Xor
Ymayf i
l
eanact i
onforref
ormation.

2.Onepar tywasmi stakenandt heot heract edfraudulent l

y.Ifone
part
ywasmi stakenandt heot heractedfraudulentl
yori nequitablyinsucha
wayt hatthei nstr
umentdoesnotshow t heirtrueintenti
on,t hef ormermay
askforreformat on.Exampl
i e:X,aCebuanoent eredintoacont r
actwher eby
hesel l
shishouset oY,thecont ractbei
ngwr it
teni nTagalogofwhi chhei s
notconver sant.Bef ore signing,Y expl ai
ned t hatthe f urnishings and
accessori
est hereofarenotincludedinthesale.Itturnsouthowevert hatthe
contr
acti ncl
udes al lfur
nishings and accessories such as f ur ni
ture,air
condit
ioner,etc.Xcommi tt
edami stakeandcanaskf orreformat i
on.

3.Onepar t
ywasmi stakenandt heotherknowi ngl
yconceal edthe
mistake.Whenonepar tywasmi st
akenandt heotherkneworbel ievedthat
theinstrumentdidnotstat
et herealagreement,butconceal edt hatfactf
rom
thef or
mer ,theinst
rumentmayber ef
ormed.Exampl e:Int hepr oceedi
ng
exampl e,supposethatxthoughtt hathewasmer elyleasi
ngt hehouse,but
Yknewt hatt
hecontractpreparedbyXwi thhissignaturewasanabsol ut
e
saleoft hehouseandkeptsi l
entaboutit.Xmayaskf orref
or mation.

4.I gnorance,et c.ofpar tydraft

ing instr
ument .When t hrough t he
i
gnor ance,lackofski l
l,negligenceorbadf ai
thont hepar toftheper son
draft
ing the instr
umentori fhiscl er
kort ypist,the i
nstr
umentdoesnot
expresst he true intenti
on oft he parti
es,t he courtsmayor dert hatt he
i
nstrumentber eformed.Exampl e:MEC onAugust30,1920wr oteal ett
er
biddi
ngt oconst ructabui l
dingofCHi nwhi cht hepesosi gnwasusedbyi t
.
Later,ont hebasi softheletter,acontractwasmadebet weenMECandCH
adopt i
ngt hepesosi gnasabasi soft hecont r
actbywhi chMEC wast o
constructcertainbui l
dingsatsomuchperbui l
ding,et
c.OnNovember5,
1920MECsubmi tt
edabi l
lofpaymenti ndol l
arsandsoCHr ef
usedt opay.
Thecour tallowedr ef
ormati
onoft heinstrumentont hebasisofthemi stake
commi tt
edbyt hecl erkwhenhemi scopiedi nt heorigi
naldraftthesi gn
doll
arst o pesosand f orthe furtherfactt hati nthe ordinar
ycour se of

84
busi
nessatt
het
imeCHshoul
dhaveknownt
hemi
stake.

5.Mortgageorpledgewr it
tenotherwise.Iftwopar t
iesagreeuponthe
mor t
gageorpl edgeofr ealorper sonalproperty,butt heinst
rumentstat
es
t
hatt hepropert
yissoldabsol ut
elyorwithar ightofrepurchase,ref
ormati
on
oftheinst
rumentisproper .Exampl e:Xwant edt oloanmoneyf r
om Ysohe
of
feredtohi m bywayofmor t
gagehi slandassecur i
ty.Bothagreeont hi
s
poi
ntbutthecont r
actaswr it
tenisabsolutel
ysal e.

Whenref
ormati
onisnotall
owed.Ther
eshallbenoref
ormat
ioninthe
f
oll
owi
ngcases:(1)simpl
edonat i
onsint
ervivos,wher
einnocondit
ionis
i
mposed;(
2)wil
l
s;(3)whentherealagr
eementisvoi
d.

Reason f ort he law.Donat i

on is essent
iall
y an actofl i
berali
ty
whereas,i ncaseofawi llwhi
chi snotacont r
act,theint
enti
onshouldbe
l
ookedi ntofrom thewor dsit
sel
faloneandmaynotbechangedaf t
ertheli
ps
oft
het estatorhasbeenseal edbydeat h.Ast othevoidagreement,when
t
heagr eementi si nexi
stentwhatusecouldrefor
mationdowhent hecontract
i
sreall
yi ncurabl
e?

Ef fectofact i
ont oenfor
cei nstr
ument .Whenoneoft heparti
eshas
broughtanact iontoenf or
cetheinstrument,hecannotsubsequent lyaskfor
ref
ormat ion.Exampl e:Xsol dhishouset oY.Todef raudY,Xpr epareda
contractofmor t
gagei nst
eadofsal easagr eed.Bothsignedt hecontract
,
thelatterbelievingthattheinst
rumentwasasal e.Ytherefor
ehasar i
ghtto
bri
nganact i
ont oforclosethemor tgage.Byr easonofthisacti
ontoenforce
hecannotas kforreformati
on.

Par t
ywho can br i
ng act i
on forref ormati
on.Ref ormation maybe
or deredatt hei nstanceofei therpar t
yorhi ssuccessorsi ninter
est,ifthe
mi stakewasmut ual;otherwise,uponpet it
ionoft heinj
uredpar tyorhishei r
s
and assi gns.Exampl e:The wr it
ten i
nstrumentbet ween X and Y i sa
mor t
gageal thought heyi ntendedasal eduet omutualmistake.Inthi
scase,
XorYcanf i
leanact i
onf orr eformati
onoft heinst
rument.Ifanyorbot hof
them di e,thesuccessor sini nterestmay.Supposehowever ,thatXt hrough
fraudpr epar edthemor tgagei nstr
umentindi sr
egardofther ealcontractof
sal e.Inthiscaseonl yYorhi shei rsincaseofhi sdeathmayf i
letheaction.

85
 QUESTI
ONSANDPROBLEMS

1.Whenmayani
nst
rumentber
efor
med?

2.Di
ff
erent
iat
ether
emedyofr
efor
mat
ionf
rom annul
ment
.

3.Gi
vet
woexampl
eswhennor
efor
mat
ioni
sal
l
owed.

4.Whatar
ethecaseswhenr
efor
mat
ioni
sal
l
owed?

5.Whomayf
il
eanact
ionf
orr
efor
mat
ion?

6.Whatistheef
fecti
faref
ormat
ioni
nst
rumenti
senf
orcedbyapar
ty
ent
it
ledt
other
emedy/

7.X,aCebuano,ent eredint
oacont ractselli
nghi shouset oY,t he
contractbei
ngwrit
teninPil
ipi
no.Befor
esi gningXexplainedthatthe
furni
shingsandaccessori
esthereofarenoti ncl
uded.I
tt ur
nedout
howevert hatt
hecont r
actdrawnbyY i ncludesallthef ur
nishi
ngs
therein.I
sanact
ionforref
ormati
onadvisable?Why?

8.Al
thoughtheyi
ntendedasale,t
hewr i
tt
eni
nstrumentbet
weenXand
Yappearstobeamor tgageduetothei
rmutualmist
ake.I
fanact
ion
f
orresci
ssi
onist
obef i
led,whoamongthem canfi
l
e?Why?

ANSWERS

86
87
 CHAPTERVI

I
NTERPRETATI
ONOFCONTRACTS

Rul eint hei nterpr etation. I fthet erm oft hecontracti sclearand
l
eave no doubtupon t he i ntention oft he cont racti
ng parties,the li
teral
meani ngofi t
sst ipul
ationsshal lcontrol.I fthewor dsappeart obecont rary
t
ot heevi dentintenti
onoft hepar t
ies,thel att
ershal lprevai
lovert heformer .
Thus,i ft
hedi sposi t
ivepar toft hecont r
actr eads:“ Forandi nconsi derati
on
oftheamountofP100, 000. 00,Iher ebyt ransferandconveybywayof
absolutesalemysai dpi eceofl and,”thi
sshoul dbeinterpr
etedt obeasal e
becauset hetermsar ecl earandf reef r
om doubt .Butsupposet hephr ase
“bywayofabsol utesal e”doesnotappearal thoughthecont ractrecit
esthat
t
he amountofP100, 000. 00 has been r eceived whi ch shalleven bear
i
nterest,thent hecont ractshal lbei nt
er pretedasamor tgagesi ncet he
evi
denti ntent
ioni stosecur et heamountl oaned.

Howtojudgei
ntent
ionofthepar
ti
es.I nordert
ojudgetheint
ent
ion
oft
hecontr
act
ingpar
ti
es,t
heircont
emporaneousandsubsequentact
sshal
l
beconsi
der
ed.

Contempor aneousandsubsequentact s. Act soft hepar ti

esbef ore
andaf t
ert heexecut i
onoft hecont ractar el eadsnecessar ytopr ovet he
i
ntenti
onoft hepar ti
es.I naddi t
iont othis,thei rcondi ti
onsbef oreandaf t
er
thecontractareequal l
yr el
evantt odi scovert hati ntenti
on.Fori nstance:X
andYent erint
oacont ractent i
tl
ed“ KasunduansaLupa”( Cont ractInvolving
aPieceofLand)onFebr uary8,1983.I treci t
est hatbecauseofadebtof
P100,000.00ofXt oY,Xt r
ansfersandcedest hel ottoY.I sthisasal eora
mortgage? I tappearshowevert hatbef oreFebr uar y8,1983,Yi sal essee
ofanapar tmentwhi chisalreadyt oosmal lforhi sfami l
y,payi ngahi ghr ent al
,
hadaf eudatonet imewi ththel essor,andt hataf t
ert hecont ractXdel iver s
thetit
leoft helandt oY,andXi mmedi at
el ypai di tsunpai dt axes,andY
constr
uctedaconcr etebungal ow.Undert heci rcumst ances,t herecanbe
nodoubtt hattheintent
ionoft hepar ti
esisthatofasal e.

88
 Generalter msofcont ract,howconst r
ued.Thegener alt
ermsoft he
contractshallnotbeconst r
uedascompr ehendi ngthingst hataredisti
nct
andcasest hatar edi ff
erentf rom thoseuponwhi chthepar tiesint
endedt o
agree. Fori nstance:X sol dhi shouseandi nt hewr i
tt
encont ractisa
gener alphase“ i
ncl udi
ngal lfurnit
ur et herein”.I fsomef urni
tureinthehouse
havebeendeposi tedbyaf ri
endofXf ortempor aryaccommodat i
on,evenif
allincludesever ythi
ng thatbel ongst o hisf riend i
sexcl uded. Anot her
exampl eisagener alsti
pulationi nt hewr i
ttenPowerofAt t
or neygranti
nga
sugarhaci endaover seer“withf ullpower stodoanyoral lact snecessaryto
managet hehaci enda” .Evenwi tht hatgener alpower ,thesameshal lnot
i
ncludet heselli
ngofanunpr oduct i
vepor t
ionoft hehacienda.

St
ipul
ationsadmitti
ngsever almeani ngs.Ifsomest i
pulat
ionsofany
contr
actshould admi tofsever almeani ngs,i tshould be under stood as
beari
ngthatimportwhichi smostadequat et orenderitsef f
ectual
.Exampl e:
X,asuccessfulengineer,sell
shiscartoYwhi chwasnotpr operl
ydescribed
i
nt hedeedofsal e.Att hetimeoft hesal e,Xownst wocar soft hesame
brandandmodel ,oneusedi ntheexer ciseofhi spr ofessionandanot her
whichisreservedforthef amil
yuse.I nt hiscase,t hemeani ngthatshould
begivenisthesal eofthef amil
y-usecarsi ncetheengi neer’scarisneeded
forhi
sprofessi
onandwoul dbei nkeepingwi ththeintenti
onofX.

Sti
pulat
ionstobei nt
er pr
etedtogether.Thevar i
oussti
pulat
ionsofthe
contractshallbe inter
preted together,att
ributi
ng the doubt
fulonest hat
sensewhi chmayr esultf
rom allofthem takenj oi
ntl
y.Thismeanst hati
fany
clauseofthecontractadmitsofadi ffer
entmeani ng,itmustbeinterpret
edin
relat
iontootherclausesoft hecontract,gi
vingt oitt
hemeani ngwhi chmay
appearfrom aconsiderati
onofal lofthem t
oget her
.

Int
erpret
ati
onofwor dshavingvar
iousmeani
ngs.Wordswhi
chmay
havediff
erentsigni
fi
cat
ionsshallbeunderst
oodinthatwhi
chismosti
n
keepi
ngwiththenatureandobjectoft
hecontr
act
.

Ef f
ectsofusageorcust omsoft hepl ace.Theusageorcust omsof
theplaceshal lbeborneinmi ndintheint
erpretati
onoftheambi gui
tiesofthe
contract,andshallfi
lltheomi ssi
onofst i
pulationswhichar enotor di
naril
y
establshed.Exampl
i e:Ifseverali
ndivi
dualsar ehi r
edtot hreshpal ayina
l
ocality and the compensation is notfixed,t he customs oft he place
regardingthef i
xat
ionofcompensat ionshareatt went
y-f
iveort hir
typercent
ofthehar vestwil
lbeusedt osupplytheomi ssi
oni nthecontract.

89
 I
nterpr
etat
ionagai nstpartycausingobscur i
ty. Thei nt
erpr
etati
onof
obscurewor dsorst ipul
ationinacont ractshallnotf avorthepar t
ywho
causedtheobscur i
ty.Exampl e:Xbor rowedP5, 000.00from Ypayableaft
er
oneyearf rom themaki ngoft hecont r
actwi t
hi nter
est. Y preparedthe
contr
actandnof i
xedr ateofinterestwasst at
edi nthecontract.Insucha
case,allthatY coulddemandf rom X ist helegalrateofi nter
estatsix
percentevenifYor i
ginall
yintendedtochar gemor ebecausei ti
shewho
causedtheobscur i
ty.

Rule on impossibil
ityt o sett
le doubts. When i ti s absolutel
y
i
mpossibl
et oset
tl
edoubt sbyt herulesest abl
i
shedinthepr ecedi ngart
icl
es,
andthedoubt sr
eferr
edtoi nci
dentalcircumstancesofagr atuitouscontract
,
t
heleasttransmi
ssionofrightsandi nterestsshal
lprevai
l.Ift hecontractis
oner
ous,thedoubtshallbesettledinfavorofthegreatestr
eci procit
y.

I
fthedoubtsarecastuponthepri
nci
palobj
ectofthecont
racti
nsuch
awaythati
tcannotbeknownwhatmayhavebeent heint
enti
onorwil
lof
t
hepar
ti
es,t
hecontractshal
lbenul
landvoi
d.

Expl
anat
ionandi
l
lust
rat
ion:

Thedoubtmayexi stei
theront hepri
ncipalobjectoront heinci dental
ci
rcumstancesofthecont r
act.I fthereisadoubti nthepr i
ncipalobj ectin
suchawayt hati
tcannotbedet erminedwhatmayhavebeent hei ntenti
on
orthewi l
loft heparti
es,thecont r
actshallbeabsol utel
ynul landvoi d,
whereasifthedoubtreferstoincidentalmatt
er softhecontr actther ulewi l
l
depend on whethert he contracti s gr
atui
tous and t hereforet he l east
tr
ansmissi
on governs;oroner ous,hence t he gr eatestreciprocity shall
prevai
l
.

Doubtoni
nci
dent
alci
rcumst
ancesofagr
atui
touscont
ract
.

Example:X enter
edi nt
oacont r
actdonat
ingacarwhi chwasnot
descr
ibedinthedeed.Heownst wocars–aMer cedesBenzandaLancer.
Inthi
scase,TheLancercarshal lbedeemeddonatedsincei
thasaless
er
val
ueori nvol
vesalessertr
ansmissi
onofi
nter
est
.

Doubt
soni
nci
dent
alci
rcumst
ancesofanoner
ouscont
ract
.

Example:Xwhoi sfi
nanci
all
ydi
str
essedenteredintoacontractwi
th
Ylett
inghishouset oYf oranamountofP100, 000.
00f orfi
veyearswhich
waspai dto X upon occupancyofthe house byY. The cont r
actwas
r
egist
er ed i
nt he Regist
ry ofDeeds. Because oft he ref
usalofY t o

90
surrenderthe house af t
erf i
ve years,X f i
l
ed an action tor ecovert he
possessionoft hehouse.Ycl ai
mst hatthehousehasbeensol dt ohimf or
thatamountal thoughthemar ketvalueoft hesamei sP250, 000.00.Int his
case,si nce t
he doubtr ef
erst oincidentalcir
cumstancesofan oner ous
contract
,thetransacti
onshallbedeemedacont ractofl
easeoranequi tabl e
mor t
gagebecausei ti
nvol
vesthegreatestreci
proci
tyofinter
ests.

Princi
plesofi
nter
pret
ati
on.Theprinci
plesofi
nter
pretat
ionst
atedin
Rul
e123oft heRul
esofCourtshal
ll
ikewi
sebeobservedintheconst
ruct
ion
oft
hecontr
act.

91
 QUESTI
ONSANDPROBLEMS

1. Whati
sthebasi
crul
eint
hei
nter
pret
ati
onofcont
ract
s?

2. I
fthei nt
ent
ionofthepart
iesi
nacont
racti
snotcl
ear
,how i
sthe
i
ntent
ionusual
lyj
udged?

3. Whatsigni
fi
cancedoesusageandcust
om ofapl
acepl
ayi
nthe
i
nter
pret
ati
onofacont
ract
? Expl
ain.

4. Howar
egener
alt
ermsoft
hecont
ractconst
rued?

5. I
facontractcont
ainsobscur
ewordscreat
ingpubl
i
cdoubt
s,agai
nst
whom maythedoubtberesol
ved? Why?

6. Ift
hereisnowayofr esol
vi
ngthedoubtr
egar
dingt
heobj
ectoft
he
cont
ract
,whathappenstot
hecont
ract
?

7. The disposi
ti
ve por
ti
on of t he contract reads: “For and in
consi
derat
ion oft
he sum ofP100, 000.
00,Iher eby transf
erand
conveybywayofabsolutesal
emysai dpieceofl andtoB.SGD.X” .
Willt
her
ebeaneedf orthecourtt
ointer
pretthecontractothert
hana
sal
e? Why?

8. X,whoi sfinanci al
l
ydi st
ressed,enter
edintoacont ractlet
ti
nghi s
housetoYf orfiveyearsi nconsider
ati
onofthesum ofP120, 000.
00
pai
dincash.Becauseofr efusalofYtosurr
endert hepossessi
onof
t
hehouseaf terfiveyears,Xf i
l
edanact i
ontorecoverthepossessi
on
ofthehouse. Y cl ai
mst hatt hehousehadbeensol dtohi mf or
P120,
000.00. Theappr ai
sedval ueofthehousei sP250,000.00.
Howmayt hei nstrumentbeconst r
ued?

ANSWERS

92
93
 CHAPTERVI
I

DEFECTI
VECONTRACTS

Defecti
vecont r
actsarethosewhi chfai
l
edtomeetorpar t
ial
lymeet
t
hel egaltestofval i
dit
ybecauset heylacksomeessentialelement,ort he
part
iestheretolackthecapacit
ytocont r
act
,orther
eisavi ceintheconsent
ofoneoft hepar t
iesorlesi
onincer tai
ncase. Thedef ecti
vecontractsin
order of t hei
r ef f
ecti
veness ar e as foll
ows: rescissi
ble, voidable,
unenforceableandvoidorinexi
stent.

RESCI
SSI
BLECONTRACT

Conceptandr equi
sitesofrescission.Res cissionisar emedygr anted
byl awt othecont racti
ngpar ti
esort hei rsuccessor si ninterestandevent o
thi
rdper sons,i nor dert osecur erepar ationofdamagescausedt hem bya
contract,eveni fthecont racti
sval i
d,bymeansoft her estorationoft hingsto
theirconditi
onpr i
ortot hecelebrationoft hingstot hei rconditionpr i
ort othe
celebrati
onoft hecont ract.Inor derthatr escissionmaybeavai ledofbya
party,theel ement st hatmustconcurar e:( 1)acaseespeci all
ypr ovidedby
l
aw;( 2)mut ualr estit
uti
on ofwhatt he par t
ieshave r ecei ved undert he
contract;(3)obj ectoft hecont r
actmustnotbei nt hepossessi onofat hi
rd
personwhoacqui redingoodf ait
handf orvalue;( 4)noot herlegalr emedy
exceptbyr escissi
on;and( 5)acti
onhasnotpr escr i
bed.

Cont
ract
st hatmay be r
esci
nded. The f
oll
owi
ng cont
ract
s ar
e
ex
pressl
yprovi
dedbylawt
oberesci
ssi
ble:

1. Those whi ch ar
e entered i
nto by guardi
ans whenevert
he
wardswhom theyrepr
esentsuff
erlesi
onbymor et hanone-f
ourt
hofthe
val
ueofthi
ngswhichar
etheobjectt
hereof
;

2. Thoseagr
eedi
nrepr
esent
ati
onofabsent
eesi
fthel
att
ersuf
fer

94
t
hel
esi
onst
atedi
nthepr
ecedi
ngnumber
;

3. Thoseunder t
akeni
nf r
audofcr
edi
tor
swhent
hel
att
ercannot
i
nanyot
hermannercol
l
ectt
hecl
aimsdue;

4. Thosewhi chref
ertothi
ngsunderl
it
igat
ionifent
eredi
ntoby
def
endantwit
houtt
heknowl
edgeandappr
ovaloft
heliti
gant
sorcompetent
j
udi
cialaut
hor
it
y;

5. Payment smadeunderacont ractwherethedebtori

sinthe
st
ate ofinsol
vencyforobli
gati
onsto whose ful
fi
l
lmenthe coul
d notbe
compell
edatthetimetheywereeff
ect
ed;and

6. Allot
hercont
ract
sspeci
all
ydecl
aredbyl
aw t
obesubj
ectt
o
r
esci
ssion.

Meani ngoflesion.Lesi
onisthedamageori nj
urytot hepartyaski
ng
forr
escissionbyreasonoft hefactt
hatthepriceisunjustorinadequate.To
consti
tut
el esiont
hedamagemustbesubst anti
albecausemer einadequacy
ofpr i
ce,unlessshocki ngtotheconsciencei snotasuf f
ici
entgroundfor
sett
ingasideasal e,ifther
eisnoshowingthatintheeventofr esaleabett
er
pri
cecanbesecur ed.

I
ll
ust
rat
ionsanddi
scussi
ons:

Cont
ract
si nrepresentat
ionofwar ds. X,theguar di
anofmi norY,
soldtoZ api eceofl andbel ongingtoY i ntheamountofP100, 000.
00
alt
houghthemar ketpri
ceatt hetimeofsalei nP150,000.
00.Byr easonof
the sal
e Y suf
fered l
esion ofmor ethan one-
four
th ofitsval
ue. Upon
reachi
ngtheageofmaj orit
yYcanbr i
nganact i
onforresci
ssi
on.

Contract
sinr epr
esent
ati
onofabsentees.Anabsent eeisaperson
whosewher eaboutsisunknownandcannotbel ocatedi
nhislastoff
ici
al
r
esidenceoraddress.Usingtheaboveexample,i
fYi sanabsent
ee,hecan
f
il
eanact i
onforresci
ssi
onwhenheappear s.

Thoseunder takeninfr
audofcr edi
tors,etc.Toenablet hecredit
ors
toexercisether emedyofr escissi
on,itmustbepr ovenbyt hepr ej
udiced
credi
torthathecannotcol l
ecttheclaimsduei nanyothermanner .Thus,if
Xt oevadepayi nghi sdebttoY amount ingt oP50,000.00entersintoa
contr
actselli
nghi sonlyFordFierraforthesameamountt oZ,Ycanf il
ean
acti
onforrescissi
onast hecontractwasmadet odefr
audt hecredi
tor.

95
 Thoseref
err
ingtot hingsinl i
ti
gat i
on.At hi
ngisconsider
edtobein
l
iti
gati
onwhent her espondenthasal readyrec ei
vedservi
ceofsummons
f
rom t hecour
ttaki
ngcogni zanceoft hecase. Thus,ifX suesY f ort
he
recoveryofacarandpendi ngt r
ialthesamei ssol
dbyYt oZwi t
houtt
he
approvalofXorthecourt,thesaleisr escissi
ble.

Paymentunderacontr
actaf terinsol
vency.Insol
vencyhereneednot
beaj udi
ciall
ydecl
aredone,butmaybeunderasi t
uati
onwheret hedebt
or
i
spubl i
clyknownt ohavedef aul
tedi nt hepay mentofobli
gati
onsduet o
vari
ouscr edi
tor
s. Thus,ifadebt or,beinginsol
vent,paysanobl i
gati
on
whichisnotyetdue,acredit
oratt het i
meofpaymentmayaskt hecourtto
resci
ndpayment .

Cont
ract
sdeclar
edbyl awsubjectt
or esci
ssion.Thesecompr i
sesall
ot
hercont r
actsscat
tered i
nt he Ci
vilCode,l i
ke judi
cialorextr
a-j
udici
al
par
tit
ionwhereoneofthehei r
srecei
vedashar elessthanone-f
ourt
hofhi s
l
egit
imate shar
e,an unpaid sell
eroft hings,and br each ofreci
procal
obl
igati
onsunderArt
icl
e1191,amongot her
s.

Contr
actsi nbehalfofwar dsorabsent eesappr ovedbycour tnot
resci
ssibl
e. Cont r
actsetint hesenumber s( above)ent er
edinbehalfofa
minorbyaguar di
anadl it
em orbyal egalrepresentati
veincaseofan
absentee and appr oved byt he court
s,ar e notrescissi
ble. Thisisso
becausei nt
erventi
onoft hecour tissuff
ici
entt oprotecttheint
erestofthe
minorsaswel lasthosewhoar econsideredasabsent ees.

Resci
ssion wi t
houtjudici
ali nt
ervention. Cour t
s have held vali
d
however st ipul
ation in a cont ract provi
ding automaticr evocat
ion or
cancel l
ati
onoft hecont r
actforviol
ati
onofanyt ermsandcondi ti
onsthereof
withoutinter
vent i
onoft hecour t
s. Asi mpleexampl eoft hesecontr
actsi s
thecondi ti
onalsal eoni nst
allmentspr ovi
dingaut omati
cr esci
ssi
onoft he
contractifbuyerdef aul
tsintwoormor emont hl
yinst
all
ment s.Inthi
scase,
rescissi
onoft hecont r
actbecomesaut omat i
cwi t
houtacti
onbyt hecourt.

Acti
onf orresci
ssi
onnotapr i
ncipalremedy.Theact i
onf orresci
ssion
i
ssubs idi
ary;itcannotbeinsti
tut
edexceptwhent hepar
tysuf f
er i
ngdamage
hasnoot herl egalmeansofseeki ngredr essorreparat
ionsfort hedamage
caused.I f
,ther ef
ore,i
tisfoundt hatthedebt orhasotherpr oper t
iesaside
fr
om thatwhi chi stheobjectofther escissi
blecontr
act,rescissionwillnot
prosperforther easonthatthedefraudedcr edit
orcancollectinsomeot her

96
waybypur
sui
ngt
hedebt
or’
sot
herpr
oper
ti
es.

Extentofr escission.Rescissionshal lbeonlyt otheext entnecessary

tocov erdamagescaused. Thi smeanst hatpar t
ialrescissionisal l
owed
si
ncet hepur poseofr emi ssi
onisonl ytor epairorcoverupt hedamages
caused and t or espectand pr eserve asmuc h aspossi blet he contr
act
enteredi ntobyt hepar t
ies.Toi ll
ustr
ate:X,t heguar di
anofmi norY,sol dto
Zapi eceofl andbel ongi ngt oYintheamountofP100, 000.00al t
hought he
mar ketvaluewasP150, 000.00.Uponr eachingtheageofmaj or
it
y,Yf i
led
anact i
onf orr escissionduet olesion. Z howeveri swi ll
ingt opayt he
damageofP50, 000.00.I nt hi
scase,r escissi
onshal lonlybet orepairthe
damageofP50, 000. 00t oY.

Ef
fectsofr esci
ssion.Rescissi
oncreatestheobli
gati
ontor et
urnt
he
t
hingswhichwer et heobjectsofthecontract
,toget
herwithfr
uit
s,andthe
pri
cewit
hi nterest;consequentl
y,itcannotbecar r
iedoutwhenhewho
demandsrescissi
oncannotr etur
nwhateverhemaybeobl igedt
or est
ore.

Nei thershal
lr escissi
ontakeplacewhenthi
ngswhichar
etheobject
oft
hecontractarelegallyinthepossessi
onofathi
rdper
sonwhodidnotact
i
nbadf ai
th.Inthiscaset heindemni
tyfordamagemaybedemandedfrom
t
hepersoncausingt heloss.

Requisit
esf oranact i
onf orresci
ssi
ont opr osper.I norderthatan
acti
onf orr
es ci
ssionmaypr ospertheplaint
if
fmustbeabl etoretur
nwhathe
hasr ecei
vedbyvi r
tueofarescissi
blecontracttogetherwit
hthef r
uit
sorthe
pri
ceandi nterest,andthatt
heobj ectofthecont r
actisnotinthehandsofa
t
hird person who has acqui red the same i n good fai
th and forvalue.
Furthermore,theremustbenoot herlegalr emedyandt hattheactionbe
broughtwithi
npr escri
pti
veperi
od.

Mutualr esti
tuti
on oft hings r eceived. The obl i
gati
on ofmut ual
resti
tutionincludesnotonl yther eturnoft het hingtogetherwi t
hthef rui
tsbut
alsot hepriceandi tsinterest.Fori nstance:X,guar di
anofmi norY,sol dto
Zapi eceofl andbel ongingtoYi nt heamountofP100, 000.00althought he
mar ketpr i
cewasP150, 000.00.Uponr eachingt heageofmaj ori
ty,Yf il
ed
anact i
onforr escissionduet ol esion.Zi showeverwi ll
ingt oret
urnt heland
butY cannotpr oducet hepr oceedsoft hesal e. Resci ssi
oncannott ake
placebecausehewhodemandsr escissionshal lret
ur nwhathemaybe
obli
gedt or est ore.Buti fYcanr estoret hepr icetogetherwiththei nterest
receivedbet weent heper iodcommenci ngf rom thedateoft hesalebyXand
t
hef i
lingoft heact ion,andZ i swi ll
ingt or eturnthel andandt hef r
uits

97
r
ecei
veddur
ingt
heper
iod,r
esci
ssi
onwi
l
lbei
nor
der
.

Subjectmatt
erinpossessi
onofpur chaseringoodf ai
th.Apur chas er
i
ngoodf ai
thisonewhobuyst hethingforvalueandwi thoutnoti
ceofdef ect
ofacquisit
ionoft
hevendor.Thusi f
,inthepr ecedingexample,ZsoldittoO
whopaysanamountofP150, 000.
00,andwi t
houtknowingofthef l
awofZ’ s
t
it
le,regist
ersint
heRegi st
ryofDeeds,rescissi
oncannotl i
kewisetakeplace
becauseOi sapurchaseri
ngoodfaithandf orvalue.

Al
ienati
onspr esumedi nfraudofcreditor
s.Allcontr
act
sbyvi
rtueof
whichthedebt orali
enatespropertybygratui
tousti
tl
earepresumedt
ohave
beenent eredi nt
oi nfraudofcr edit
ors,whent hedonordi dnotr
eserve
suf
fici
entpropertytopayalldebtscontr
actedbeforedonat
ion.

Ali
enationsbyoner oustitl
earepresumedf
raudulentwhenmadebya
personagai nstwhom somej udgmenthasbeenrenderedinanyi nst
anceor
somewr i
tofat t
achmenthasbeeni ssued.Thedeci
sionorattachmentneed
notrefertothepr opert
yalienated,andneednothavebeenobt ai
nedbythe
partyseekingther esci
ssi
on.

Inaddi
ti
ontothesepresumpti
ons,thedesigntodef
raudcredi
tor
s
maybepr
ovedinanyot
hermannerrecogni
zedbythelawonevi
dence.

I
ll
ust
rat
ionsandexpl
anat
ion:

Ali
enati
onbygr atuit
oustitl
e.Cont r
actsi
nvol
vinggratuit
ousalienati
on
takeplacewhent hedebt ordi dnotr eservesuf
fi
ci
entpr opertytopayal l
debtscontract
edbef or
et hedonat on.Exampl
i e:Xdonatedt ohislandt oY.
Beforehemadet hedonat ion,hehadsever alout
standingdebt sdi dnot
reserve enough proper
tiest o payhisdebt s. The donation i
st heref
ore
presumedt obei nf r
audoft hecredi
torsifnoproofisshownt opr ovethe
contr
ary.

Al
ienationbyoner oustit
le.Foranoner ousal
ienati
ontobepresumed
fraudulent,itmustbemadebyaper sonagai nstwhom aj udgmenthasbeen
rendered,oragai nstwhom awr i
tofat tachmenthasbeeni ssuedbyt he
cour t
,andi ti
simmat eri
alwhetherornotdeci sionorwr i
tofatt
achmentwas
obt ai
ned byt he partyseeking the rescission,orr efer
st othe propert
y
alienatedasl ongast healienat
iontookpl ace.Thus,af i
tt
ingexampleofthe
formeri swher eaft
erjudgmenthasbeeni ssuedagainsthim byacour t,X
sol dhispr opert
ytoY,wher eas,thatofthel att
erisacasewher eaft
erX’s
houseat1000Er mit
a,Mani l
a,wasat tachedbyt hecour t
,Xsolditorsome

98
ot
hert
angi
blepr
oper
tyt
oY.

Ci
rcumstance i
ndicati
ve off raud. In consi
der
ing whetherornot
cert
aintr
ansacti
onswer efraudulent,cour
tshavel ai
ddowncertainrul
esby
whichthef r
audulentcharact
erofat r
ansacti
onmaybedet er
mi ned. The
fol
l
owingar esomeoft heci rcumstancesattendi
ngsaleswhichhavebeen
denominatedbythecourtsasbadgesoff r
aud:

1. The f
actt
hatconsi
der
ati
on ofa conveyance i
sfi
cti
ti
ousor
i
nadequat
e;

2. A t ransf
ermadebyadebt
oraf
tersui
thasbeenbegunand
whi
l
eiti
spendi
ngagainsthi
m;

3. Asal
eoncr
edi
tbyani
nsol
ventdebt
or;

4. Thet r
ansf
erofal lornearl
yallofhispropert
ybyadebt
or
es
peci
all
ywhenhei
sinsol
ventorgreat
lyembar
rassedf
inanci
all
y;

5. Evi
denceofl
argei
ndebt
ednessorcompl
etei
nsol
vency;

6. Thef actthatthetr
ansf
erismadebet
weenf
atherandsoni
n
r
elat
iont
othepr
ecedi
ngcircumst
ances;and

7. Thef
ail
ureoft
hevendeet
otakeexcl
usi
vepossessi
onofal
l
t
hepr
oper
ty.

Li
abil
ityofacquir
erinbadf ait
h.Whoev eracquir
edinbadf ai
ththe
thi
ngsalienatedinfraudofcredit
orsshallindemni
fythelat
terf
ordamages
suff
eredbyt hem onaccountofthealienat
ionwhenever,duetoanycause,i
t
shouldbei mpossibleforhimt or et
ur nthem. Iftherearetwoormor e
ali
enati
on,thefi
rstacqui
rershal
lbel i
ablefi
rst
,andsoonsuccessivel
y.

Conceptofbadf aith. Badf ait

hi mpli
esadel i
berat
edi sregardofa
knowndut yinor dertogetper sonaloreconomi cadvant agei nmani fest
disr
egar dofther ightofothers.Whenempl oyed,i
tisconsideredaf raudof
thecreditorandt hei nj
uredpar t
ycanavai loftheremedyofr escissi
onand
recoveri
ngt hepr opertyfrom thet ransfereeinbadf ai
th.Ifforanyr eason,
i
ncluding fortuit
ous event,t he pr operty cannotbe recovered,t he party
enti
tl
edt or ecovermaysuet het ransfereeinbadf ait
hf orindemni t
yf or
damages,and i fthere are mor et han one ali
enati
on,the fir
stacqui rer
becomes l iable,and t hen t he second par t
y,and so on successi vely.
Exampl e:X,t odef r
audhi screditors,soldhisonlycartoYwhoknewofX’ s

99
purpose,hence,inbadfai
th.Yalienateditt
oZwhol atersoldi
ttoO.Both
ZandOar einbadf ai
th.Ift
hecarislostaft
err
esci
ssion,Yi sl
i
ablef
ir
st.I
f
hecannotpay,O wi l
lbeli
ablebecauset hel
awsaysthatifther
earetwoor
more alienat
ions,the fi
rstacquirer shal
lbe li
ablef i
rst,and so on
successi
vely.

Prescri
pti
on peri
od f
oracti
on forrescissi
on. The action to cl
aim
resci
ssion mustbe commenced wi t
hinfoury ears. Forper sons under
guardianshipandforabsent
ees,t
heper i
odoffouryearsshallnotbeginuntil
t
he t erminati
on ofthe for
mer’
si ncapaci
ty orunt i
lthe domi ci
l
e oft he
absenteei sknown.

100
 QUESTI
ONSANDPROBLEMS

1. Def
iner
esci
ssi
on.

2. Whatar
ether
equi
si
tesf
oranact
ionf
orr
esci
ssi
ont
opr
osper
?

3. Di
ff
erent
iat
ether
emedyofr
esci
ssi
onf
rom annul
ment
.

4. Maya par
tychoose t
he r
emedyofr
esci
ssi
on i
fther
e ar
e ot
her
r
emedi
esavai
l
abletohi
m?

5. Whatar
ethecont
ract
ssubj
ectt
oresci
ssi
on?

6. Whati
smeantbyl
esi
on?

7. Xisi
ndebtedtoYintheamountofP50, 000.00.WhenXl earnedt
hat
Yisfi
li
nganacti
onagainsthimincour t
,hei mmedi
atel
yenteredi
nto
acontr
actsel
l
inghi
sonl ypassengerjeepneytoz,hi
sbrotherinl
aw.
Cantheremedyofr
escissi
onbeavai l
edofbyY? Why?

8. Todef r
audhisc redi
tors,X sol
dhisonlycart oY whoknew t he
pur
poseofX.Lat eron,Yal i
enat
editt
oZandt henZali
enat
edittoO
whoar eli
kewi
seawar eoftheschemeofX.Whi lei
nO’spossessi
on,
t
hecarwascar nappedandcannotber ecover
edanymor e.Discuss
t
heliabil
i
tyoft
hepar t
ies.

ANSWERS

101
102
 VOI
DABLECONTRACTS

Meaningofvoi dablecontract
s. Voi dabl
econt r
actsaret hoset hat
possessallt
her equisi
tesofavali
dcont ract,namely:consent
,objectcer t
ain
andconsiderati
on,buthaveadef ectorvi cebecauset heconsenti svi
tiated
bymi st
ake,viol
ence,inti
midati
on,unduei nf
luenceandf r
aud,orthatoneof
thecontr
acti
ngpar t
iesisincapabl
eofgi vingconsent.Avoi dabl
econt ractis
vali
dunti
liti
svoidedi ncourt
.Itsvali
dit
ybecomesabsol uteonceitisratif
ied
ornotannull
edwi t
hinfouryears.

Voidabl
econt
ract
sundert
heCivi
lCode.Thef
oll
owi
ngcontr
actsare
annull
able,event
houghther
emayhavebeennodamagetothecont
ract
ing
part
ies:

(1) Thosewher
eoneoft
hepar
ti
esi
sincapabl
eofgi
vi
ngconsent
t
ocont
ract
;and

(2) Those wher ethe consenti

s vi
ti
ated by mi
stake,vi
olence,
i
nti
midati
on,unduei
nfl
uenceorf
raud.

Thesecont
ract
sarebindi
ngunlesstheyareannul
l
edbyapr
oper
ac
tioni
ncourt
.Theyaresuscept
ibl
etor
ati
fi
cat
ion.

Dist
inct
ionsbetweenr esci
ssi
onandannul
ment
. Amongothers,t
he
f
oll
owi
ngarethebasicdif
fer
encesbetweenr
esci
ssi
onandannul
ment:

1. The basi s ofresci

ssi
on i
slesi
on (
damage)whi
l
ethatof
annul
menti
svi
ti
atedconsent
;

2. Resci ssi
on i
s a subsi
diar
yremedy whi
l
e annul
menti
sa
pr
inci
palr
emedy;

3. I nrescissi
ononlyt hepri
vat
einter
estofparti
esareaf
fect
ed
whi
l
einannul
mentpubli
cint
erestist
heoneessenti
all
yaf
fect
ed;

4. Def ect in r
esci
ssi
on i
s ext
ernal (
visual damage) whi
l
e
annul
menti
sint
ernal
;and

103
 5. Damaget ot
heplai
nti
ff(
per
sonbr
ingi
ngt
heact
ion)i
sessent
ial
i
nresci
ssi
onbutnoti
nannul
ment.

Prescript
ionofact i
ontoannulcontract.Theact i
onf orannulmentof
thecontractshallbebr oughtwithi
nfour(
4)yearscountedf rom:( a)t
hetime
thedefectoft heconsentceasesi ncasesofinti
midat
ion,violence,orundue
i
nfluence;( b)thet imeofdi scoveryofthemi st
akeorf r
aud;and( c)the
cessati
onofguar dianshi
pincasesofcont ract
senter
edi ntobymi norsand
i
ncapacitatedper sons.

Effect
sofrati
fi
cati
onofavoi
dablecont
ract
.Rat i
fi
cat
ionext
inguished
theactiont oannulavoidabl
econt
ract
.Whenr ati
fi
cat
iontakesplace,the
contr
acti scleansedfrom al
lit
sdefectsfr
om thedatet hecontractwas
enter
edi nto.

Meaningofr
ati
fi
cat
ion.Ratif
icati
oni
stheaff
ir
mancebyaper sonofa
pr
ioractmadebyhim orbyot herpersonsf
orhisaccountbutdi
dnotbind
hi
mi nthebegi
nni
ng,andbyr easonofwhichgiv
esanef f
ecttot
hepr i
oract
asifor
igi
nal
l
yint
endedorconsentedt obyhi
m.

Ratif
icat
ion,howef f
ected.Rat if
icati
onmaybeef fectedexpresslyor
tacit
ly.Itisunder stoodt hatthereistacitratif
icati
onif,wi
thknowledgeoft he
reason whi ch r enderst he contractvoi dable and such r easons having
ceased,t heper sonwhohasar i
ghttoinvokei tshoul
dexecut eanactwhi ch
necessar il
yi mpliesan i nt
ention to waive hi sr i
ghts. Exampl esoft acit
ratif
icati
onar e:(a)Ami norboughtapi eceofl andbutsoldt hesameaf t
er
reachi ngtwentyoneyear sofaget oat hirdper son;(b)Ami norsoldhisland
anduponr eachingmaj orit
yagecol lect
edt heunpai dbalanceoft heselli
ng
price;and( c)Vol unt
aryper f
ormancebyt hei njur
edpartyofhi sobligati
on
afterthecauseofnul li
tybecomeknownt ohi m.

Rati
fi
cat
ionofguardi
ans. Theguardianofani ncapacit
at edper son
mayrati
fyavoi
dablecont
ractent
eredint
obyt hel
atter
.Ther ati
ficati
onmay
bemadebyt hefat
heror,inhisabsence,t
hemot herbecauset heyar ethe
l
egalguardi
ansoftheminorchil
dren. Int
heirabsenceordi squalif
icati
on,
t
hecourtmayappointaguardi
anforthechi
l
d’spropert
ywhenhi si nt
er estso
demand.

Personwhomayaskf orannul
ment
. Theact
ionforannul
mentof
cont
ract
smaybei nst
it
utedbyallwhoarether
ebyobl
igedpri
nci
pal
l
yor

104
subsi
diar
il
y. However ,persons who ar ecapabl
e cannotal l
ege the
i
ncapacit
yoft hose whom t heycontract
ed;norcan those who exer
ted
i
nti
midati
on,vi
olenceorunduei nf
luence,orempl
oyedfraud,orcausedthe
mist
ake,basetheiract
ionupontheseflawsoft
hecont
ract.

Requisit
esf oractiont oprosper.Twoi ndispensabl erequirementsar e
neededfort heact i
onf orannul mentt oprosper,namel y:(a)t hattheplainti
ff
hasani nterestint hecont racteitherpri
nci
pallyorsubsi diari
ly;and( b)that
thevict
im andnott hepar tyr esponsibl
efort hedef ectist heper sonwho
mustasser tthesamebecauseequi t
ycanonl ybedemandedi fthepar t
y
seeki
ngi thascl eanhands.Exampl e:X,bymeansofi ntimidati
on,secur ed
thesignatureofY i naDeedofSal ewher ebyt hel at
tersol dayachtf or
P500,000.00t oXonJanuar y5,1984t obepai donJanuar y30oft hesame
year.Bef or
et hedat eoft hepayment ,Xlearnedthatt hepr i
cei sratherhigh
and so he f i
led an act ion forannul ment. I nt hi
scase,t he acti
on for
annulmentwi l
lnotpr ospersi ncehecausedt hedef ect( i
nti
mi dati
on)oft he
contr
act.Thati showequi t
ywor ks–got othecour twit
hcleanhands.

Obligati
onoft hepar ti
esaf terdecr eeofannul ment. Anobl igati
on
havi ngbeenannul l
ed,thecont r
actingpar t
iesshal lrestoretoeachot herthe
thingswhi chhavebeent hesubj ectmat teroft hecont r
acttogetherwiththe
fruits,andt hepr i
cewithinterest,excepti ncasespr ovidedbyl aw.However ,
i
nobl i
gat i
onstor enderser vice,theval uet hereofshal lbet hebasisoft he
damage. Exampl e:X,an uncl e who wi elds undue i nf
luence overY,
succeededi nhavingYsi gnacont ractsell
ingt ohim at hree-doorapartment
onhi sbi rt
hdaySept ember11,1984f orP60, 000.00payi ngone- hal
fandt he
bal ancet obepai donSept ember30oft hesameyear . Eachdoorear ns
P2, 000. 00amont h.Becauseoft hepr edomi nantinfluenceofX,Ygott he
ner vet of il
eanact i
onf orannul mentonl yi nDecember .I fthecour twill
decr eet heannul mentoft hecont ractonSept ember10,1985,X wi llbe
obl i
ged t or etur
nt oY t he apar t
mentpl us the r entals amounting to
P24, 000.00r ecei
vedbyX,andYt oreturnXt hesum ofP60, 000.
00wi t
h
i
nt er est
.

Non-r
esti
tuti
onbyi ncapaci t
atedpar t
y,exception.Whent hedefectof
thecont r
actconsist
si nthei ncapaci
tyofoneoft heparti
es,thei ncapacit
ated
person isnotobl i
ged to make anyr esti
tuti
on exceptinsof arashe has
benefitedbyt het hingorpr icereceivedbyhi m. Exampl e:X,ami nor
,
enteredintoacont ractofsal eofhiscarwi thYf orP30,000. 00.P20, 000.00
ofthiswaspl acedi nt i
medeposi ttomat ur eonhi sreaching21year sand
therestwer elosttogambl ing.Af t
erreachi ngtheageofmaj ori
tyhefil
edan
acti
ont oannulthecont ractandt hecour tvoidedit.Therefore,Xmustr eturn
simultaneouswi t
ht her eturnoft hecarbyY t ohi mt heP20, 000.
00onl y

105
becausehewasbenef
it
edorwasenr
ichedt
othatext
ent
.

Resti
tut
ionthroughpaymentofval
uewi t
hint er
est.Whent heper
son
obl
igedbythedecreeofannulmenttoret
urnthethingcannotdosobecause
i
thasbeenl ostthr
oughhisfaul
t,heshallr
etur
nt hef r
uit
srecei
vedandthe
val
ueofthethingattheti
meofloss,wi
thint
erestf
rom thesamedat e.

I
fwhati stober etur
nedi slostthr
ought hef aultoft
hepar tyobl igedt o
retur n,theobligati
onisnotext i
nguished.Instead,t hevalueoft het hingl ost
shal lbepai dinthef or m ofi ndemni t
ywi t
hinterestpl usthefruitsr eceived
from t het i
met hethingwasr eceivedunti
lit
sloss.Toi l
l
ustr
ate:Xf orcedYt o
sel ltohi mt helatter’
shousewhi chXt ookpossessi onimmedi ately. Af ter
cessat i
onoft hevi ol
ence,Y f il
edanact ionf orannul mentandt hecour t
gr antedi tbutXcoul dnotr eturnthehousebecausei twasbur nedt hrough
ther ecklessnessofX. Undert hecircumstanc es,X shouldr eturn( a)the
rent alsofthehousef rom it
sdel i
veryupt othet i
mei twasrazed;( b)val ueof
thehouse;and( c)Thei nterestofsi xpercentoft hevalueofhouseatt he
ti
mei twasbur ned.

Effectoflossofobj ectthroughf raudorf aultofvi ct

im.Theact i
onf or
annulmentofcont ractsshallbeext ingui shedwhent het hingwhichi sthe
objectthereofislostthroughfraudoft heper sonwhohasar i
ghttoinsti
tute
t
hepr oceedings. I fther i
ghtofact ioni sbasedupont heincapacityof
anyoneoft hecont r
actingpar ti
es,thel ossoft het hingshal lnotbean
obstacletothesuccessoft heact i
onunl essthesai dlosst ookplacethrough
t
hef aultofthepl ai
ntif
f.Exampl e:Xsol dt oYwhoi sami noramot orboat
f
orP300, 000.00.I fthemot orboatist her eaft
erlostthrought hefaul
torfraud
ofY,hi sr i
ghtt of i
le an action f
orannul menti sl ost.Buti fthe same
disappearsduet oast rongtyphoonorot herfortui
touseventhi sr i
ghttof il
e
anact i
onf orannulmentwi l
lnotbeext inguishedeveni ftheboatcannotbe
retur
ned.I nt hi
scase,Ywoul dmer elybeent i
tl
edt other eturnofthepr ice
withinter
est.

Obl
i
gati
ontor et
urni
sr eci
procal
.Aslongasoneofthecont
ract
ing
part
iesdonotrest
orewhatinvir
tueofadecr
eeofannul
menthei
sboundt o
ret
urn,the ot
herpar t
y cannotbe compell
ed t
o compl
y wit
h whati s
i
ncumbentuponhim.

106
 QUESTI
ONSANDPROBLEMS

1. Whati
savoi
dabl
econt
ract
?

2. Di
sti
ngui
shavoi
dabl
econt
ractf
rom ar
esci
ssi
blecont
ract
.

3. Howar
evoi
dabl
econt
ract
scl
assi
fi
ed?

4. Whatar
etheef
fect
sifavoi
dabl
econt
racti
srat
if
ied?

5. Howmayr
ati
fi
cat
ionofavoi
dabl
econt
ractbeef
fect
ed?

6. Whomayi
nit
iat
eanact
ionf
orannul
ment
?

7. X,thr
oughi nt
imidati
on,securedthesignatur
eofYi naDeedosSal e
whereby the l at
ter sol
d hi s yacht on January 15, 1984 for
P500,000.
00toXt obepai donJanuar y30ofthesameyear .Before
t
hedat eofpaymentXl ear
nedt hatthepri
ceisrat
herhigh,andsohe
f
il
edanact i
onf orannulment.Cant heacti
onprosper? Why?

8. X,anuncl eofywhowi eldsunduei nf

luenceuponhim,succeededin
havingYsi gnedacont ractsell
i
ngt oXonhi sbirt
hday–Sept ember
11,1984–a3- doorapar tmentforP300,000.
00. Eachdoorear ns
P2,000.00amont h.Becauseoft hecont i
nui
nginf
luenceofX,Ygot
t
hener vetof i
l
eanactionf orannulmenttwomonthslater
.Ift
hecourt
wil
ldecr eetheannulmentonSept ember10,1985,whatwi llbethe
obl
igati
onofXandY?

ANSWERS

107
108
 UNENFORCEABLECONTRACTS

Meani ngofunenforceablecontracts. A contractisunenforceabl

e
wheni tcannotbesueduponorenf orcedi ncourtunlessiti
srati
fi
ed.They
haveal lt
heel ementsofavalidcontr
actbutcannotbeenf or
cedbecauseof
non-compliancewi t
htherequi
rementsofl aw,i.e.
,wr i
ti
ngorevidencedbya
note ormemor andum. As r egar
ds t he defect
iveness,itoccupies an
i
ntermediategr oundbet
weenavoi dablecontractandavoi dcontr
act.

Unenforceabl
econt r
actsundert heCivi
lCode.TheCodecl assif
ies
unenforceablecontr
actsint
othreecategori
es,namely:(
1)thoseenteredinto
i
nt henameofanot herwi t
houtthelatt
er’
sauthori
tyorlegalrepr
esentat
ion,
orbeyondt heagent ’
spower ;(2)thosewhi chf ai
l
edt ocompl ywiththe
Statut
eofFr auds;and( 3)thosewher ebothpart
iesareincapableofgivi
ng
consent.

Ar t
icl
e1403.Thef
oll
owi
ngcont
ract
sar
eunenf
orceabl
e,unl
esst
hey
ar
erat
if
ied:

(1) Thoseent eredint

ointhenameofanotherper
sonbyonewho
hasbeen gi
ven no authori
tyorlegalrepr
esent
ati
on,orwho hasact
ed
beyondhi
spower
s;

(
2) Thoset hatdonotcompl ywiththeSt at
uteofFraudsasset
for
thint hi
snumber .Int hefol
lowingcasesanagr eementhereaft
ermade
shallbe unenf orceable by acti
on unless t
he same,orsome not e or
memor andum ther eof
,bei nwri
ti
ng,andsubscribedbythepar
tycharged,or
hisagent;evidence,therefor
e,oftheagreementcannotbereceivedwit
hout
thewri
ting,orasecondar yevidenceofit
scontents:

(
a) Anagr eementthatbyi
tst
ermsi
snott
obeper
for
med
wi
thi
nayearf
rom t
hemakingther
eof
;

(b) A specialpr
omi
set
oanswerf
ort
hedebt
,def
aul
tor
mi
scar
ri
ageofanot
her;

(
c) Anagreementmadei
ncons
ider
ati
onofmar
ri
age,ot
her
t
hanamut
ualpr
omi
set
omarry;

(
d) Anagr eementfort
hesaleofgoods,chat
telsorthi
ngsin
act
ion,atapr
icenotlesst
hanfivehundr
edpesos,unl essthebuyer

109
 accepts and receives partofsuch goods and chat t
els,orthe
evidences,orsomeoft hem,ofsucht hi
ngsinaction,orpaysatthe
ti
mes omepartofthepur chasemoney;butwhent hesaleismadeby
aucti
onandent ryismadebyt heauctioneerinhi
ssalesbook,atthe
ti
meoft hesale,oftheamountandki ndofpr oper
tysold,t
er msoft
he
sale,pri
ce,namesoft hepur chaser
sandper sononwhoseaccount
thesaleismade,itissuffi
cientmemor andum;

(
e) Anagr eementfort
heleasi
ngforalongerperi
odthan
oney
ear,orf
ort
hesaleofr
ealpr
oper
tyorofani
nter
estt
herei
n;

(
f) Ar
epr
esent
ati
onast
othecr
edi
tofat
hir
dper
son.

(3) Thosewher
ebot
hpar
ti
esar
eincapabl
eofgi
vi
ngconsentt
oa
cont
ract
.

I
ll
ust
rat
ionsandexpl
anat
ions:

(1) Unauthori
zedcontract
s. WithoutX’ sauthorit
y,hi
sbrotherY
soldhiscari
nhisnamet oZ.Thecont ractbeingunaut hori
zedcannotbind
X unlessherati
fi
esthesameexpr essl
yori mpliedl
y,asbyaccept i
ngt he
proceedsoft
hesale.Intheeventhowevert hatXwi llr
atif
ythecont
ract,he
wil
lboundbyitandthepri
nci
plesofagencyshal lbeapplied.

2) Cont
( ract
sinviolati
onoftheStatutesofFraud.Thepur poseof
theSt at
utesofFraudi stopreventthecommi ssi
onoff r
audsbyr equiri
ngthe
contracttobei nwr i
ti
ngandsubscr i
bedbyt hepar t
ychargedbecauset he
l
aw consi dersthehumanbr ainunrel
iabl
et or et
ainwhathasbeenor all
y
agreeduponbyt hepar ti
es. Thus,ifanyoft hesaidcontractsisnoti n
writ
ing,itisgenerall
yunenforceablebyactionincourt.Inotherwor ds,the
writ
ingitsel
fistheonl yoneaccept abl
easevi dencetoenforcethecont r
act
i
ncour t
,unlessthepar t
yagai nstwhom iti
senf or
cedfail
edtoobj ecttothe
presentati
onoforalevidenceoft heagreement.

a) Agr
( eementnott obeper f
ormedwithinoneyear. On
June 16,1983,X ent er
ed into a ver
balcontr
actwi t
hY forthe
constr
ucti
onofhi shouset ost ar
tonJune30,1984. I fY f
ail
sor
ref
usedt oconst
ructorcommenceont heconstruct
ionbyJune30,
1984,X cannotenf orce the agreementbetween them si
nce t
he
contr
actisnoti
nwr i
ti
ng.

b) Pr
( omiset oanswerforadebt,defaul
t,et
c. XowesY
P5,
000.00.WhenYaskedt hatXputsupasecur it
yonthedebt ,Z
ver
bal
lycommit
tedtoY:“Don’tbot
her
,ifXdoesnotpay,Iwi
llpaythe
amount
.”Thispromisemustbei nwri
ti
nginordertobeenforceabl
e

110
 i
ncour
t.

c) Agr
( eementinconsiderat
ionofmarri
age,etc.Xmadea
verbalpr
omisetogivehisnephewYahouseandl oti
fYmar riedhis
secret
aryMissZ.Twomont hslater
,YandZwasmar r
ied.Xr efused
toabidewit
hhispromisetogiveYt hehouseandl ot
.CanYsuexf or
breachofcont
ract? No,becausethecontracti
snotinwrit
ing.

d) Agr
( eementf orsaleofgoods,chat tels,etc. Today,X
agreedverbal
lytosellhiscart oYt obedel iveredandpai damont h
l
ater.Ifonthedesignatedti
meXwi llrefuset oabi dewi ththecontract
,
Ycannotenf or
cet hecont r
actforlackofwr it
ing. Anot herexampl e
wouldbeacont ractwheresuppl i
erXanddeal erYver ball
yagreedt o
sellandbuymer chandisewor t
hP5, 000. 00tobeexecut edonal ater
date. Thi
sagaini sunenforceablef orlackofwr it
ing. Butifant he
ti
meoft heagreement ,Xdeliverspar toft hemer chandise,orYpai d
parti
alpayment,thecontractwi l
lber emovedf rom t heoper at
ionof
theStatut
eofFraudsforbeingpar ti
allyex ecuted.

(e) Agr eementofleaseformor ethanoneyear,etc.Lease

ofrealpr oper
tyformor ethanoneyearandsal eofrealpropert
yor
i
nteresttherei
n,ir
respecti
veofthepri
ce,areagreementreferr
edt oi
n
thi
snumber . Example: TodayXl easedhi s2-
doorapartmentt oY
verbal
lyfortwoyear s.IfXejectsYaftersi
xmont hst
helattercannot
rel
yont hecont r
actbecauseiti
snotinwr i
ti
ng.

(f) Repr esentat

ion ast o cr editofa t
hird person. X,a
l
awyer,inbehalfofhi scli
entY,negot i
atedforal oanwi t
habank.
Whent hebankaskedaboutt hecr editofY,Xverballyassuredt
hatY
i
ssolventandwi l
lsecuret heloanwi t
hseveralparcelsoflandwhich
i
si nX’spossession. Thisr epresentationofX cannotbeenf orced
agai
nsthim becauseiti
snoti nwr i
ting.

3) Cont
( ractswher
ebothparti
esar
eincapaci
tat
edtogiveconsent.
X,ami nor,ent
eredintoacontr
actofsal
eofbicy
clewithY,aninsane,tobe
perf
ormedaweekl ater.I
fXrefusest
ocomplywithhisobl
igat
ion,noacti
on
f
orspecifi
cperformancebytheguardianofYcanbef i
ledasthecontracti
s
unenfor
ceable.

St
atut
eofFr audsappli
cableonlytoexecut orycontr
act
s.TheSt atut
e
ofFraudsisappli
cableonlytoexecutorycontractsbecausethecommi ssi
on
offr
audisv eryprobabl
eduet ol ackofwrit
ing.Accor dingtothecourt,t
he
Stat
utehasbeenenact edt opreventfr
auds.Thus,i facontr
actist
otall
yor
part
ial
lyperfor
med,t he excl
usion ofparol( oral)evidence t
o pr
ove the

111
contr
actwould pr
omotef r
auds and bad f ai
th as i
twoul d enablet he
defendantt
okeepthebenefi
tsal
readyderivedbyhi mf r
om thetransacti
on
i
nl i
ti
gati
on,andatt
hesamet imeevadet heobl i
gat
ions,responsi
bil
it
iesor
l
iabil
i
ti
esassumedorcont
ract
edbyhimt hereby.

Ratif
icati
onofcont ractsviolativeofStatute. Cont r
actsvi olati
ngt he
Stat
uteofFr audsar edeemedr atif
iedandt her
efor eenf orceabl e,forfai
lure
t
oobj ecttot hepr esent
ati
onofor alevidencetopr ovet hesamei ncour tor
byaccept anceofbenef it
sundert hecont r
act.Thus,i fthepl ainti
ffpresents
atthebegi nningoft hetri
alor alevidencet oprovet hever balcont ractand
t
hisi s notobj ected by the defendant ,the cont racti s deemed r ati
fi
ed.
Acceptanceoft hebenefit
sundert hecontracttakespl acewhenpar toft he
obli
gati
ont hereinhasbeenr eceivedbyanypar ty.I tmayal sot akeplace
whenpossessi onorbuildi
ngofi mpr ovementsoft het hingt akespl aceaf t
er
t
hecont ractaswhent het enderofpaymentpl ussur veyingoft hel ot
sof
buyer’
sexpense.

Compelli
ngtheexecut i
onofpublici
nstrument. Whenacont ractis
enforceable undert he Stat
ute ofFrauds because iti
si n wr
it
ing and
therefore val
i
d and enf or
ceable,al
though notint he r
equir
ed f
orm f or
purposesofr egi
str
ationintheRegistr
yofDeeds,t heaffect
edpar t
ymay
compelt heotherpartytohavethecontr
actreducedinther
equir
edform.

Example:Xsell
st oYapi eceofl
andwr i
tt
eni
nawr it
ingpad.
Underthestatut
ethecontractisval i
dandenfor
ceabl
ebetweenthem
butthewr i
ti
ngcannotber egist
eredtobindt hi
rdpar
ti
es. Y can
compelXt orewri
teorreducei tinapubli
cinstr
umentst
hatitcanbe
regi
steredi
ntheRegist
ryofDeeds.

Cont ractwher ebot hparti

esar eincapaci
tated. Inacont ractwhere
both par t
ies ar ei ncapacit
ated ofgi vi
ng consent ,express ori mpli
ed,
rat
ifi
cati
onbyt hepar entorguar di
an,ast hecasemaybe,ofoneoft he
contract
ingpar tiesshallgivethecontractthesameef f
ectasifoneoft hem
i
si ncapacitated.I frati
fi
cati
onismadebyt heparentsorguardians,ast he
casemaybe,ofbot hcontract
ingpart
ies,thecontractshal
lbevalidatedfr
om
theincepti
on.

Stranger
s cannotassai
lunenf
orceabl
e cont
ract
s. Unenf
orceabl
e
cont
ract
scannotbeassail
edbythi
rdper
sons.

112
 QUESTI
ONSANDPROBLEMS

1. Whati
sanunenf
orceabl
econt
ract
?

2. Di
sti
ngui
shanunenf
orceabl
econt
ractf
rom avoi
dabl
econt
ract
.

3. Cananunenf
orceabl
econt
ractber
ati
fi
ed? How?

4. Howar
eunenf
orc
eabl
econt
ract
scl
assi
fi
edundert
heCi
vi
lCode?

5. Towhatki
ndofcont
racti
stheSt
atut
eofFr
audsappl
i
cabl
e? Expl
ain.

6. Whomayr at
if
ycont
ract
sent
eredi
ntobyper
soni
ncapabl
eofgi
vi
nga
val
i
dconsent
?

7. Xmor t
gagedapi eceoflandtoYbutt hei
nstr
umenti
sinapr i
vat
e
wri
ti
ng.When Y soughtt oregi
stert
he mort
gage,t
he Regi
str
yof
Deedsrefusedregi
str
ati
onbecauseiti
snotinapublici
nstr
ument.
WhatistheremedyofY? Explai
n.

8. Manufactur
erXanddeal erYenteredintoaver balcontr
actofsaleof
commer ci
algoodsworthP20,
000.00t obedeli
ver edaweekl at
erina
C.O.
D.basi s.WhenXt r
iedt
odeli
vert hegoods,Yr efusedtoaccept
andtohonort hecont
ract
.Candeal erYgot othecour tt
oenforcethe
cont
ract
? Why?

ANSWERS

113
114
 VOI
DORI
NEXI
STENTCONTRACT

Meaning ofvoi d orinexistentcontr

act. A voi d oran inexi
stent
contr
actisonewhi chisabsolut
el ywi t
houtl
egalforceandef f
ect.Unli
kea
voi
dableoranunenf orceablecont ract
,voi
dori nexist
entcontr
actisnot
suscepti
blet
or at
if
icati
on.Mor eover ,theact
ionordefensefordeclar
ati
onof
i
tsinexist
encedoesnotpr escr
ibedespi tethelongl apseoftimeandnot
avail
abl
et ostr
anger st
ot hecontract.

Ar
ti
cl
e1409.Thef
oll
owi
ngcont
ract
sar
einexi
stentandvoi
dfr
om t
he
begi
nni
ng:

(1) Those whose cause,obj

ectorpurpose i
scont
rar
ytol
aw,
mor
als,goodcust
oms,publ
i
corderorpubl
i
cpol
icy;

(
2) Thosewhi
char
eabsol
utel
ysi
mul
atedorf
ict
it
ious;

(3) Thosewhosecauseorobj
ectdi
dnotexi
statt
het
imeoft
he
t
ransact
ion;

(
4) Thosewhoseobj
ecti
sout
sidet
hecommer
ceofmen;

(
5) Thosewhi
chcont
empl
ateani
mpossi
bleser
vice;

(6) Thosewher etheint

enti
onofthepar
ti
esr
elat
ivet
othepr
inci
pal
obj
ectoft
hecont
ractcannotbeascer
tai
ned;and

(
7) Thoseexpr
essl
ypr
ohi
bit
edordecl
aredvoi
dbyl
aw.

Thesecont
ract
scannotber
ati
fi
ed.Nei
thercant
her
ightt
osetupt
he
def
enseofil
l
egali
tybewai
ved.

Voi
dabl
eandvoi
dcont
ract
sdi
sti
ngui
shed.

(a) Voi
dabl
e contr
act
sbei ng val
i
d unti
lannull
ed pr
oduce legal
ef
fect
s,whi
l
enol
egalef
fecti
sproducedwhatsoeverbyvoi
dcontr
acts;

(b) The defecti

n voi
dable cont
ract
s ar
ises f
rom incapaci
ty or
vi
ti
atedconsent
,whi
l
einvoi
dcontr
actsthebasi
sispubli
cpoli
cy;

(c) Voi
dabl
econtract
scanber
ati
fi
ed,wher
easnor
ati
fi
cat
ioncan
t
akepl
acei
nvoi
dcont
ract
s;

115
 (
d) A voi dabl
e contractbecomesabsolut
elyr
egul
arand cur
ed
aft
erthelapseoftheprescri
pti
veperiodtofi
leanact
iont
oannul
,whi
l
evoid
contr
actscannotbecuredthroughprescr
ipt
ion;

(e) Def ensesarisi

ngfr
om voi
dabl
econtr
actsareavai
l
ableonlyt
o
t
hepar
ties,wher
easthoseinvoi
dcontr
act
sareavai
labl
etoever
ybody.

Unenf
orceabl
eandvoi
dcont
ract
sdi
sti
ngui
shed.

(a) I nunenf
orceabl
econtractacont
ractexi
ststhoughcannotbe
enf
orced,whi
l
enocontractatal
lexi
stsinavoi
dcontr
act;

(b) Unenf
orceabl
e cont
ractcan be r
ati
fi
ed whi
l
e voi
d cont
ract
cannot
;and

(
c) Unenf or
ceabl
econt
ract
scannotbeassail
edbythi
rdper
sons
whi
l
evoi
dcont
ract
scanbeassai
l
edbyanypersonaf
fected.

Consequencesofi l
legalandpuni shablecontract
s.Whent henul li
ty
oft hecont r
actproceedsfrom thei l
l
egalit
yoft hecauseandt heobjectofthe
cont ract
,andt heactconst i
tut
esacr iminaloff
ense,bothparti
esbeingi npari
delicto(bothar eguilt
y),theyshallhavenoact i
onagainsteachot her,and
bot h shallbe prosecuted. Mor eover,t he provi
si
onsoft he PenalCode
relati
vet ot hedisposalofef f
ectsoft hei nst
rumentsoft hecrimeshal lbe
appl i
cabletot het hi
ngsort hepriceoft hecont r
act.Whenonl yoneoft he
par ti
esisgui l
ty,thesamer ul
eshal lbeappl ied,buttheinnocentonemay
claim whathehasgi venandshal lnotbeboundt ocomplywi t
hhispr omise.

Expl anationandi l
l
ust rat
ion.Whent hecauseofobj ectoft hecont ract
const i
tutesacr i
mi nalof f
enseandbot hpar ti
esaregui l
ty,noact ionshal lbe
maint ained agai nsteach ot herand t heyshal lbe pr osecut ed criminal l
y.
Mor eover ,thecauseandobj ectandot hert hi
ngsusedshal lbef orf
eit
edas
i
nstrument soft hecr i
me.Fori nstance:X,YandZent ersintoacont ractof
partner shipt o oper atejuet eng in Mar i
ki
na,whi ch i
sa pr ohi bited game.
Theyagr eedt hatt hecapi t
alshal lbeP90, 000.00.Pur suantt ot hecont ract,
andowi ngt olackofcash,Xcont r
ibut
edapanelcarwor t
hP50, 000.00and
P20, 000. 00incash,t hebal ancet obepaidi noneyearcont ributedahouse
and l otwor th P150, 000.00 pl us P100,000. 00 in cash,t he bal ance of
P50, 000. 00t obepai dalsowi thi
noneyearandZcont ributedi nf ul
lcashof
P300, 000. 00.Af tersix( 6)mont hsoperation,theywer edi scover edbyt he
author i
tiesandt heiroperationsst opped.

116
 Applyi
ngthesai dar t
icl
et hefollowingconsequencesshal lf
ollow:( 1)
theyshal lhavenoact i
onagai nsteachot hert orecoverthebal anceoft heir
contribut
ionssincet heyar ei npar idel i
cto;( 2)theyshal lbepr osecuted
cri
mi nall
yforil
legalgambl i
ngundert hePenalCode;and( 3)theobj ectand
thecauseoft heirpar tnershipscont ract–cashcapi t
al,t hepanelcarand
othermovabl e–pur chasedandneededi nt heoper ati
on,aswel last he
houseandl otandpr ofi
ts,ifany,shal lbeconf i
scatedasef f
ectsoft hecr i
me.
SupposeY whol i
vesi nCebuwasnotawar eoft her ealpur poseoft he
partnershipbecauseXandZr epresentedt hatthepart
ner shipwi llengagei n
gener alandmer chandi si
ngbusi ness,whatwi llbehisright? Hi sr i
ghtsshal l
be as f oll
ows:( 1)ha can r ecoverhi s house and l otas wel las t he
contribut
ionofP100, 000. 00;(2)hecannotbecompel l
edt opayt hebal ance
ofhiscont ri
buti
onamount i
ngt oP50, 000.00;and( 3)hecanbeexemptf rom
cri
mi nalresponsi
bil
it
y.

Rul
eswhen t he contractthr
ough f or
bidden doesnotconst i
tut
ea
cri
mi naloff
ense.Iftheacti nwhichtheunl awfulorforbiddencauseconsi sts
doesnotconst it
uteacr i
mi naloff
ense,thefoll
owi ngrulesshal lbeobser ved:
(1)Whent hef aul
tisont hepar tofbot hcontracti
ngpar ti
es,neithermay
recoverwhathehasgi venbyvi r
tueofthecont r
act,ordemandper f
or mance
oftheot her’
sundertaki
ng;( 2)Whenonl yoneoft hecont racti
ngpar ti
esisat
faul
t,hecannotr ecoverwhathehasgi venbyr easonoft hecont ract,orask
forthef ul
fi
l
lmentofwhathasbeenpr omisedhi m.Theot herwhoi snotat
faul
tmaydemandt her eturnofwhathehasgi venwi t
houtanyobl i
gat i
onto
compl ywithhispromise.

Theaforesai
dr ul
eref
erstoi l
l
egalcontr
act
sinwhichtheobjector
causedoesnotconst i
tut
eacr i
minaloff
ensebutmerel
yprohi
bit
ed.Thisis
sobecausenomat t
erhowi l
l
egalorunl awf
ulanactmaybe,thesamewi l
l
notconstit
ute a cri
minalof
fense ifthe l
aw does notdecl
areitas a
punishabl
ecri
me.

Exampl
esandef
fect
sofi
l
legalcont
ract
s:

(1) Paymentofusuri
ousint
erest
.Int
erestpai
dinexcessoft
he
i
nter
estall
owedbytheusurylawsmayber ecoveredbythedebt
orwit
h
i
nter
estfr
om t
hedat
eofpayment.

2) Paymenti
( nexcessofregul
atedpri
ces.Whent hepr i
ceofan
art
icl
eorcommodit
yisdetermi
nedbyst atut
eorbyaut hor
it
yofl aw,any
personpayi
nganamounti
nexcessofthemaximum pr
icemayr ecoversuch
excess.

(3) Non- paymentofl

egalr
atef
orovert
imewor k. Whenthelaw
f
ixesoraut
hor
izesthefi
xi
ngoft
hemaximum numberofhoursofl
aboranda

117
contr
acti
senteredint
owher ebyalabor
erunder
takestoworklongerthan
the maxi
mum t hus f
ixed,he may demand addit
ionalcompensat
ion f
or
servi
cesr
enderedbeyondt hetimel
i
mit.

(4) Paymentofsub- mi
nimum wages. When t he l
aw sets or
aut
hori
zestheset
ti
ngofthemini
mum wageforlabor
ers,andacontractis
agr
eeduponbywhi chalabor
eraccept
salowerwage,heshallbeentit
led
t
orecovert
hedefi
ci
ency
.

I
nst
anceswhenapar
tyt
othei
l
legalcont
ractmayr
ecover
:

(
1) When money i s paid orpropert
y del
ivered f
oran ill
egal
purpose,t
hecontractmayber epudi
atedbyoneoft hepar ti
esbefor
et he
purposehasbeenaccompli
shed,orbefor
eanydamagehasbeencausedt o
athirdper
son.Insuchcasethecourt
smay,ifthepubl
icinter
estwi
llt
husbe
served,al
low t
hepar t
yrepudi
ati
ngthecont r
acttorecoverthemoneyor
propert
y.

(
2) Whenoneoft hepar ti
estoani l
l
egalcontracti
sincapabl
eof
givi
ngconsent
,thecourtmay,iftheint
erestofjust
icesodemands,al l
ow
recover
yofmoneyorproper
tydeli
veredbytheincapaci
tat
edperson.

Separ abi
li
tyofvali
dt ermsindi vi
si
bl econtr
acts.I ncaseofadi vi
si
ble
contr
act,i
ft heill
egaltermscanbesepar atedfrom thel egalones,thelatt
er
maybeenf orced.Thesi tuati
oncontempl atedherewi l
lri
sei ft
helegalter
ms
i
nt hecont ractcanbesepar at
edf rom thei ll
egalones. Fori nstance,in
usuri
oustransactions,theprinci
palt
er mist opayt heamountoft heloanand
theaccessor ysti
pulati
oni stopayt hest ipul
atedi nter
est.I fthesti
pulat
ion
ontheinterestisexcessiveorviolat
iveoft heusuryl awt hi
sst i
pul
ati
onwoul d
beill
egalbutt hepri
ncipalwillal
waysr emai nvali
dandenf orceabl
e.

Contr
actresulti
ngf r
om previ
ousil
legalcontracti
svoid. A contract
whichisthedirectresultofaprevi
ousil
l
egalcontractisvoi
dandi nexist
ent.
Example:X promi sedt ogiveY acarasar ewardaf t
erhekill
edC,t he
mortalenemyofX.Af t
ertheki
lli
ng,t
hecontractwaschangedt oal easeof
ahous eforten(10)year s.Thesecondcontractbeingadirectr
esultofthe
i
ll
egalcontr
actisthereforenul
landvoid.

QUESTI
ONSANDPROBLEMS

118
1. Whati
savoi
dcont
ract
?

2. Di
sti
ngui
shavoi
dcont
ractf
rom t
heot
herdef
ect
ivecont
ract
s.

3. Canavoi
dcont
ractber
ati
fi
ed? Why?

4. Mayi
nter
estinexcessofi
nter
estal
l
owedbyl
aw ber
ecover
edand
howmuch? Expl
ain.

5. Whatarethelegalconsequencesofani l
l
egalcont
ractwhoseobj
ect
andcauseconst
it
uteacr i
minalof
fense?

6. Gi
veanexampleofani ll
egalcont
ractwhereoneoft
hepar
ti
esi
s
al
l
owedt
orecoverwhathasbeenpaidordeli
ver
ed.

7. Becauseofthet er
ri
bleempl
oymentshort
age,Xsi gnedacont
ractof
employmentwi t
hABC Cor porati
onwher
eheagr eedt
oreceivea
dail
ywageofl esthanthemi ni
mum wageprescr
ibedbylaw.Ist he
contr
actl
egalandwhatareitseff
ects?

8. Thepri
ceofcementi sfi
xedbyt hePriceSt
abil
izat
ionCounci
lat
P45.
00perbag. Later,X pur
chasedfr
om DealerY 100bagsat
P60.
00perbag.Di
scusstheeff
ect
softhecont
ract
.

ANSWERS

119
CHAPTERVI
II

120
 PREPARI
NGTHECONTRACT,SPECI
FICATI
ONS,ETC.

Basicconsi der
ati
on.I nthepr ecedingchapt ersthenat ureandef f
ects
ofacont ractandt herightsandobl i
gati
onst hati tcarries,aswel last he
for
msandhow i nter
preted,hasbeendi scussedatl engt ht oprovidet he
prospect i
veengi neeranover viewoft hef undament algui delinesindeedi ng
andconveyanci ng.Ofcour se,dr af
ti
ngcont ractsist hebusi nessofal awyer
butsuchshoul dnotbet akenasanexcusef oranengi neert oprepareor
helpi ndr aft
ingincont ractbecausei nanyi nstancest heengi neerhast o
writ
eordr aftthecont r
acthi mselfinor dertoavoi domi ssionsonwhati nhis
opinion shoul d be embodi ed i nthe cont racts;and t he same i st rue to
specificat
ionswhi charet radit
ionall
yandl egal l
yt akenaspar tofthecont r
act
byr eference.

Pointstoreckoni ncont ractwr i

ti
ng.Bef oredr aft
ingthecontract
,the
engineershouldamongot hers,beawar eofthef oll
owing:a)theneedoft he
cl
ient;b)thetermsandcondi t
ionsdesi redincludingt hesubjectmatterand
considerat
ionsofthecont ract;andc)l egali
tyoft hecont emplat
edcont r
act.
Thef ir
stwouldcoverwhatt hecl ientwantswhi chmaybet hepersonalt o
him asint heconstruct
ionofhi shouseorhi sbusi nessori ndust
ri
alneeds.
The second mayconsi stupon whatpossi blet ermsand condi ti
onst he
part
iesmayagr eefortheirneedandconveni enceandt hethir
dmaycent er
onwhet herthetermsandcondi tionsconf or
m wi t
ht helegalrequi
rements.

I
fallthe above fact or
sar ef avor
ablysatisf
ied,the wr i
ti
ng ofthe
contractmaybeunder taken.Fort hi
spur pose,itwoul dbebestf orthe
engineert opatt
ernandt estthesamewi ththeaccept edl egalformatas
foundi nbooksinl egalfor m whichmaybej ustontheshel vesofal i
brar
y
nearby.I ft
hecont ractoragr eementi sonewhi chi srequiredtobei na
publi
ci nstr
ument,whi chf orpr act
icalpurposesshoul dbeobser ved,and
regi
steredtobebi ndi
ngt ot hewhol eworld,thenpreparet hedocumenti n
suchf ormtofaci
l
itateregistrat
ionintheRegistr
yofDeeds.

Part
sofacont r
act
.Li keabusi nessl ett
er,awr it
tencont racthas
dif
fer
entpartswhich–mayber efer
redt oasessent i
alandopt ional.The
l
attercompr i
sesthose which ar
e dispensable,like t
he salutati
on t othe
publi
c,usuall
ycoachedas“ KNOW ALLMENBYTHESEPRESENTS. ”And
theti
tl
easCONTRACTOFSALEOR KASUNDUAN SABI LIHIN.I nsome
casesthatpartofthecont
ractint
endedf orinst
rumentalwit
nesses,r eading:
SIGNED I N THE PRESENCE OF:maybedi spensedwi t
hal so.Butt he
mandat or
ypar t
sarethosewhi chwit
houtt hem theagr eementorcont r
act,
maynotbeknownorunder st
ood,andconsequent l
y,maycausei nf
irmit
yto

121
t
hecont
ract
,i.
e.,bodyoft
hecont
ractandsi
gnat
ureoft
hepar
ti
es.

Ifonewi
l
lexami
newel
lwr
it
tencont
ract
,hewi
l
lreadi
l
ydi
scovert
he
f
oll
owi
ng:

1.Tit
leofContract.Theti
tleofcontractisusual
l
yatthetopoft
he
documentand gener al
lyder i
ved fr
om the agreementordi
ctat
ed byt
he
part
iestothecont
ractoftheirr
epresent
ati
ves.

2.Sal
utat
ion.Thi
spar ti
smerel
yplacedf
ort
hepurposeofst
yle:and
usual
lytoi
mpresst hepart
iesandthepubli
cwhomaygl anceorr
eadt he
cont
ract
.Oft
enthisiswordedinbol
dlett
ersatt
het
op,r
eading:KNOW ALL
MENBYTHESEPRESENTS:

3.TheBODY.Thebodyi sthatpartwhichidenti
fi
esthecontracti
ng
part
ies,whethernatur
alorjuri
dicalpersons,aswellastheiri
ntent
iontobe
boundont heobject
sandcauseaswel last otheot
hertermsandcondi t
ions,
andusuallypresent
edinthefol
lowingor der
;

a)Intr
oduct
ionoft hepar ti
esandt heagr eement
.Thispartwhichis
usuall
ywor ded“ThisAgreementorCont ractof_______enter
edintobyand
betweenJoseR.SanchezandTi r
soManal o,etc
.“descr
ibest
heparti
esand
st
ateswhatt heagreementi sallabout
.Indiff
icul
tandcompli
cat
edmul t
ipar
ty
tr
ansactionsoragr eement,however ,andt oprovi
deabet t
erandeasi er
understandi
ngofthei denti
tyandi nt
enti
onpar ti
esandwhatthecontracti
s.
“WHEREASES”ar eprovi
dedt oserveasapr eamblet
othecontr
act.

b)Terms and Condi

ti
ons.This speci
es in det
ailthe t
erms and
condi
ti
onsasi
ntendedbyt
heparti
es,usual
lycover
ingthefol
l
owing:

b.
1.Thesubjectmatt
erwhi
chmaybedet ermi
nat
ethi
ngs,r
ight
s,or
ser
vicesandthecauseorconsi
der
ati
onoft
hecontr
act
.

b.2.Themechani csofwhat ,where,whenandhow,andwhyi nsome

cases,andot herdetai
lsregar di
ngtheobjecttobedel i
veredtheservi
cest
o
be render ed,i.
e.constructi
on ofhouse ori nst
all
ati
on ofa machi ne.I
n
connect i
onwi t
hengineeringcontract
s,themor etechnicalonesareusual
ly
embodi edi nthespecif
icati
onsaswel lasotherdocument slikepl
ansand
designs,whi ch ar
ei ncor porat
ed int he cont
ractby r efer
ence,hence,
becomi ngpartandparceloft hecontr
act.

c) Di
sposi
ti
ve Cl
ause.This par
tusual l
yreadi
ng “I
N WI TNESS
WHEREOF,wehaveher eunt
osetoursignat
ureset
c.”i
stheaff
ir
mationof
t
hepar
ti
estobeboundbythecont
ract
.

d)Dat
eandpl
aceofexecut
ion.Thedat
eandpl
aceofexecut
ioni
s

122
t
her eferencetowhenandwher ethecontr
acthasbeenper fect
ed.These
ar
enecessar yforpur
posesofpr
escri
pti
onofacti
onsupont hecontractand
t
odet erminejuri
sdi
cti
onandvenueofthecourt
sintheeventoflegaldisput
e
onthecont ract
.

4.Si
gnat ur
esoftheparti
es.Thesignaturesoft heparti
esort heir
l
egalrepresentati
vesareproofsofthei
rconsentandgi vebindingeffect
ther
etoaswi t
houtthesametheinst
rumentwouldjustbeanor di
narywri
ti
ng.
The signat
ures ofthe i
nst
rumentalwit
nesses oft he par
ti
es someti
mes
appeartherei
n,butunlessrequi
redbylaw,i.e.
,wi l
lsandt est
aments,the
samemaybedi spensedwit
h.

Notari
alacknowledgment .Theacknowl edgmentisnotapar tofthe
contr
actandmaybeomi tt
edi nthedocumentespeci al
lyifthepar tiesar e
personall
yandi nti
matel
yknownt oandtrusteachother.Itiscallednot ari
al
acknowledgmentbecauset heparti
esacknowledgedtheiridenti
tyaspar t
ies
tothecont r
act,andtheactast heirf
reeactanddeedbef oreanot ar
ypubl i
c
whosi gnsandaf fi
xeshissealont hecontr
actaft
eradministeri
nganoat hor
aff
ir
mat i
on,thus,converti
ngi ti
ntoapubl i
cinst
rument.Heal sost atesthe
document ,it
snumber ,thebooknumber ,pagenumberandser i
esofwhat
year,tof aci
li
tat
ei t
sidenti
ficat
ionwhenr egist
eredorf i
ledi nthenot ari
al
regi
str
y.

Mat t
er susual lyembodi edinengi neer i
ngcont r
acts.Basi ci sther ul e
thatthecont ract i
ngpar tiesmayst i
pul ateont ermsandcondi t
ionst hatt hey
maydeem f itandconveni entaslongast heyar enotcont r
ar ytol aw,mor als,
customs,publ i
cpol icyand publ icor der . Gui ded byt his,t he engi neer
prepar ing the cont r
act mustal ways t ake note,among ot her s,oft he
fol
lowi ngwhi char egener al
l
ycont ainedi nmanyengi neer i
ngcont racts:( 1)
wor kmanshi paccor dingt oagr eedpl ansandspeci fi
cati
ons;( 2)mat erials
whichmustbet heagr eedquant i
tyandqual it
yort heaver agei fnonei s
specifiedoravai lableint hemar ket;( 3)r esponsibi
li
tyoncompl i
ancewi th
l
egalr equir
ement s,i.e.
,l i
censes,per mitsandpost i
ngofl egalabst r
act si n
thepr emises;( 4)cont rolandsuper vi
sionoft hewor kbyt heengi neert o
fai
rlyi nsuret heaccompl ishmentoft hepr oj
ect;(5)bondst hatmustbeput
upt osecur et heper formanceoft hecont ractandot herliabil
iti
est owhi cht he
cli
ent-ownermaybeex posed;( 6)cont ractmodi fi
cati
onorr escissionf or
will
fulbr each oft he t erms and condi tions oft he cont ract;( 7)r isk or
addi t
ionalcostorpenal tybyr easonofdef ecti
vewor kmanshi p;and( 8)mode
andcondi t
ionf orpayment .

Ot
herEngi
neer
ingdocuments.Ther eareavar
iet
yofdocument
sthat
us
ual
l
ycompl
ementanengineer
ingtransacti
on.Typi
calexampl
esoft
hese,

123
i
naddi ti
ont othecontr
act,are:(
a)specifi
cati
onsproper;(b)adver
ti
sement s
orinvitati
on to bi
dders;(c)proposals;and (d)plans and designs and
perf
ormance bond. Butf r
om t he many availabl
e document s used in
engi
neer ingtr
ansacti
ons,iti
ssafet oinf
erthatthetrustuponthemakerof
t
hese document sist o see toitthatthe purpose,need and i ntentis
understoodclearl
ybyt hosewhoar eexpectedtouseorr espondint heli
ght
oft
hei ntenti
onandneed,whet heriti
sfai
rorreasonable.

ADDI
TIONALPROBLEMS

124
1. SsoldhishorsetoBf orP15,
000.
00.Nodat eorconsiderat
ionwas
st
ipul
atedfort
hedel
iveryoft
hehorse.Whi
l
est i
lli
nthepossessi
onof
S,thehorsegavebi
rt
ht oacol
t.Whohasarighttothecol
t?

2. S off
eredtosel
ltoB aring,cl
aimingthatthestoneont heri
ngi
s
di
amond.Sknowst hati
tisnotdiamondbutor di
nar
yglass.MayB
askedfort
heannul
mentofthecontr
act?Ifyes,onwhatground?

3. Sagr eedtodelivertoB500cavansofriceatP6oo.00percavan.S
deli
vered onl
y 490 cavans deli
ber
atel
y misr
epresent
ing t
hatthe
deli
veryconsi
stedof500cavans.CanBaskt hecour ttoannult
he
contr
actonthegr oundoff
raud? Whyorwhynot?

4. Ssol dtoBacommer ci
allandforP1,000,
000.00.Sassur edBthatit
i
scer tai
nt hatintwoyear stime,thelandwoul dincreaseinmar ket
val
ueby50% orP1, 500, 000.00.Itt
urnedourt hatthemar ketval
ue
ofthelandevendecr easedt oaboutP800,000.00.IsSl iabl
etoBf or
misrepresentat
ion? Explain.

5. SandBent er
edintoacontractofsal
eofaparcelofl
and.Thesal e
i
sembodiedonl yi
napr i
vat
edocumentandnoti napubli
cinst
rument
becauseitwasnotacknowledgedbeforeanot
arypubli
casr equi
red
bylaw.Isthesaleval
i
d? Whyorwhynot ?

6. S,ami nor,sol
dhi sl
andtob.Uponreachi
ngt
heageofmaj or
it
y,S,
withf ul
lknowledgeofhi sri
ght
sint hepr
emi
ses,disposedoft he
greaterpartoftheproceedsandcol
l
ectedt
heunpai
dbal anceofthe
purchasepr icefrom B. CanS sti
l
las kf
ort
heannul mentoft he
contr
act ? Expl
ain.

7. S orall
yagreedt osellhi
spianoforP7,000.
00t oB whomadea
part
ialpaymentofP1,000.
00.Later
,Sdeniedtherewassuchasale.
CanBenf or
cethesaleconsi
der
ingthatt
hecontr
actwasoralandt
he
pri
cewasmor ethanP500.
00? Whyorwhynot ?

8. W agreedtostayinthehouseofM ast helatt

er’
sli
ve-inpar
tnerfor
one year I consi
derat
ion of the l
att
er’
s promise to pay her
P100,
000.00 af
tersaid per
iod. W compli
ed with herpartofthe
agr
eementbutM r enegedonhi spromi
se.I sW entit
ledtorecov
er
f
rom M? Expl
ain.

125
 PARTI
II

ENGI
NEERI
NGETHI
CS

CHAPTERI

126
 ENGI
NEERI
NGETHI
CS

I
ntr
oduct i
on. From thepre-hi
stor
icti
mes ,arti
fact
shaver evealedof
t
heearl
yengi neeri
ngi ngenuit
y.Thishadpr ogressedi nthemoder nt i
mes
t
hatwenowl earnfrom accountedeventsofmanyamazi ngdiscover
ies,i.e.
,
l
andi
ngont hemoon,andmanyot herengineer
ingfeat sl
ikesatel
l
it
eor bit
ing
t
hesurf
aceoft heearth,allbr
oughtaboutbytheactivi
tycall
edengineering.

Itisobvi ousthatt heengi neer ’sexper t

iseandt echni calskil
l,which
probabl ymakesupengi neer ing,cont ri
butesmuc ht ot hesur vi
valandgr owth
ofmanki nd.Hei ssaidtobeacont riverofamazi ngt hingst hroughut i
li
zati
on
ofmat eri
alsandf orcesofnat urediscover edbys cient i
stsandt heappl i
cati
on
ofhi sknowl edgeofmat hemat i
calandnat uralsci ences. AsoneDeanof
Engi neeringsai d:“t
heengi neersyst emat i
zesandconsol idatesthegai nsof
scient i
fi
cr esearchandf ashi onst hatknowl edgei ntosyst em anddesi gnsal l
forthesoci alandeconomi cbenef i
tofman. ”Thus,whent heengi neerplans
andconst ructsmoder nr oad,damsandpor tfacili
ti
es,whenhest udiesthe
sour cesandusesofel ect r
icalener gy,whenheset supi ndustr
ialsystems,
devel opanddesi gnsnewmachi nes,andwhenheanal ysessewer ageand
wat erdispos althesedays,et c.,het her ebybecomesal i
vingpr oofofman’ s
capaci tytocont ri
ve,andindoi ngsobr i
ngsaboutt hegr eatesteconomi cand
socialadvancement .I ti snotf arfetched t hatengi neer ing,ifimpr operl
y
expl oit
ed,maycauset hedest ructionofmanki nd,asi nt hepr esentr acein
spaceconquestandnucl earweaponsbyel itenat ions,andi nthepr ocess
dest royi
ngeachot her.

Forallt
heaf or
esai
dconsider
ati
ons,theroleofanengi neerinthe
societ
ybecomesappar ent
lyunparal
l
eled–ar ol
eunmat chedbycommon
man t hereby subject
ing hi
mselfto certai
n professi
onalresponsi
bil
it
y
establ
ishedundertheCanonsofPr of
essi
onalEthi
cs.

Ethicsexplained.I nabr oadsense,et hicsisthedi

sci
pli
nerel
ati
ngt
o
whati sgoodorbad,r ightorwr ong,orwi t
hmor aldutyandobli
gat
ion.I
n
part
icular,itmeansagr oupormor alpr
incipl
esorsetofval uesrel
ati
ngt
o
the conductofan i ndivi
dualand hi s profession. Thus,gangst
erand
syndicatesf orapar ti
cularpurpose,whet herlawf ulandunl
awful
,dohave
thei
rownpr ofessi
onalet hi
cs.

Itmaybesai dthatethicsdoesnothavei t
ssanct i
onfrom legisl
ati
on
orlawspr omul
gatedbyt hest at
ewhichappliesgenerallytoallinhabit
ants,
i
rrespecti
ve of t
hei r st
atus or calli
ng. Rat her
, pr of
essional ethics
encompassesagr oupofpeopl ewhoar eproperl
yt r
ainedandequi ppedt o
engagei nthepr
act i
ceofadi sci
pli
neforwhi
cht heyhavevowedt ocult
ivate
i
tsgr owthtothemaxi mum whi lehemakesus eofi tforhisownbenef it
.

127
Et
hics, t
herefor
e, deri
ves it
s force thr
ough the submi
ssi
on of the
pr
ofessi
onaltothedisci
pli
neoftheprof
essi
onalgr
oupasestabl
i
shedunder
t
heCanons.

Guidingpr inciples.I ntheabsenceofapr escribednorm ofbehavior

toanengi neer ,heshoul dbegui dedbythehi ghestprincipl
eofhonor,justi
ce
andcour tesy.Theengi neershoul datallti
mesabi dewi thsuchstandar d,
notbypassi veobser vance,butasasetofdynami cpr i
nci
plesguidinghi s
conductandwayofl i
fe,seeingtoi tt
hatatallti
mest hesear ealsoobserved
byt hosewhol i
kehi msel fhasbeenadmi tt
edt oitsfol d.Mor eover
,ast he
keystonef orpr of
essionalconducti nint
egrit
y,theengi neershalldi
scharge
hisdutieswi thut mostf idel
it
yt othepublic,hisclientorempl oyerandwi t
h
fai
rnessandi mpar t
iali
tytoall.

Ent r
y oft he engi neert ot he pr of
ession. Af terunder going t he
prescribed academi ct rai ni
ng and pr acti
calexper i
ence i n col lege,an
aspirantt opr acti
ceengi neer ingi srequiredtopasst heappr opriat
et echni cal
exami nationgi venbyt hegover nment .I fhepassest hesame,hei scal l
ed
upont ot akeapr ofessionaloat ht of ul
lydef endt hepr ofessionandf oral l
thi
ngsi tst andsf orbef or et he Boar d ofExami ner sorot heraut hor ized
gover nmentof fi
ci
al s.Ther eafter,acer t
ifi
cateofr egistr
ationi sissued,save
whenhehasbeenconvi ct edofacr i
minaloffensei nvolvingmor altur pit
ude
orhasbeenf oundgui ltyofi mmor alordi shonorableconduct .I fthesehave
beenf ulf
il
led,het her ebybecomesboundt oobser vecer tai
nmeasur esof
conductordi scipli
necal leduponbyt hesociety.Inpar t
icular,thedut iesand
responsi bil
it
ieswoul di ncludet hoseper tai
ningt ot hegener alpubl ic,t he
profession and t he soci etyofengi neersaswel last ot he Pr ofessi onal
Regul ati
onsCommi ssion–t hest ateent i
tythatr egulatest headmi ssi ont o
the pr acti
ce – t he cl ientorempl oyer,and t o hiscol league and f ellow
engineer s.

Relati
onshiptothegener alpubli
c.Atallti
mesandwhenf easiblet
he
generalpubli
cisent i
tl
edtoshar etheknowledgeandbenef i
tsofengi neeri
ng
fr
om thesoci et
y.Al ongthisdirect
ion,ef
for
tsshouldbemadet hatonl yfai
r,
accurate,andtrueengi neeringmat t
ersarefedtot hepubli
cf ortheireasy
compr ehensi
onandappr eciati
onofsuchmat t
ers.Specif
ical
ly,thefollowi
ng
actsareamongt hoseenjoinedandmustbeobser vedbyhim:

(1) Avoidmisi
nformati
on.Anengi neershoul dassistt
hepubli
ct o
arr
iveatafai
randcorr
ectunder st
andingoft
ec hnicalengi
neeri
ngmat t
er s.
Thismaybedonebyus ingasmuchaspr act
icablesimplelanguagewhi ch
mayber eadi
l
yunder
stoodbypeopl eofaveragei ntel
li
gence.Ifnecessar y
hemayr esor
ttousi
ngi l
lust
rat
ions,desi
gnsordi agramst omakehi msel f

128
easilyunder st
ood. Ifstatementsaffect
ingengi neeri
ngwor kar eissuedin
thepr essorel sewhere,andi nhisconvict
ionthesear eunt r
uthful
,unfai
ror
ex aggeratedleadi
ngt ooraremadef ort
hepur poseofi nduci
ngt hepubli
cto
par t
ici
patei n unworthy enter
pri
se,he shoul d nothesi t
atet or i
se and
ex poundt othebestofhi sabil
it
ywhati strue,fairandaccur at
et osavethe
publ i
cf rom t he inevi
table consequences thatmay ar i
se f r
om such
statement s.

(2) Avoi dance ofr enderi

ng opi nions i n publ ic on unver if
ied
engi neeringmat t
ers.Anengi neershouldr ef
r ai
nfrom r ender ingopi nionsi n
publ i
cont echnicalengineeri
ngmat tersifnotposi t
ivelycer tainofitsver acity
since t his may cr eate compl i
cati
ons or add conf usi on t o al ready
cont roversialtransacti
ons. He wi l
lexpr ess an opi ni
on onl y when i ti s
foundedonadequat eknowl edgeandconvi ct i
onwhi l
ehei sser vi
ngasa
witness bef ore a court,commi ssi
on orot herdul y const i
tuted tribunal s.
Likewi se,hei senjoinedtoissueex- partestatement s,crit
icism orar gument s
onmat t
er sconnect edwi t
hpubl icpolicywhi char ei nspiredorpai df orby
privateinter est
sast hesear ebias,unlesshei ndi
catesi nwhosebehal fhei s
maki ngt hest atement.

(3) Guar dagainstpubli

cheal thandsaf et y.Verymanypeopl ear e
witnesst othef actt hatinpubl i
candpr i
vate,aswel lasini ndust
rialand
commer ci
alentit
ies,thereisapr eval enceofacci dentscosti
ngt heli
vesand
l
imbsnotonl yofi t
swor kersbutal sost ranger swhomayormaynothave
connections ther et
o due t o del eterious oper ations and the pr evail
i
ng
conditi
onst herein. Anengi neeri sr eput edt obet heguar dianofpubl ic
healthandsaf etywher evert heseoper ati
onsar e. Inthepr acti
ceofhi s
professi
onori nt heper f
ormanceofhi suni quetask,hei sexpect edt
obean
advocateofpr event i
veandcur at
ivemeasur esthatwi l
lsafeguardtheheal th
andsaf etyofthepubl icandthecl i
ent -empl oyerheser vesandi tsworkers.

Rel ati
onshiptot he pr of
ession and engi neering society. I n his
prof essionalli
fe,anengi neeriscalleduponbyhi spr ofessi
ont ocooper ate
by ext ending the eff
ec ti
veness oft he engi neer
ing pr ofessi
on through
i
nt erchangi nginfor
mationandexper i
enceswi thotherengi neersandeven
student sofengi neer
ing,and bycont ri
buting tothe wor kofengi neeri
ng
soci eti
es,sc hoolsandsci ent
if
icandengi neeringpress.Buteveni fiti
sso,
hei senj oi
nedt oadvert
isehiswor kofmer itinasel f
-l
audat orymanner ,and
mandat edt oavoidallconductorpr acticeslikelytodiscreditorworki nj
uries
tot hehonoranddi gnit
yoft heprofession.

Theafor
esaidmandateservesasapar ameteronhow theengineer
should saf
eguardt he pr
ofessi
on and the engineeri
ng soci
ety agai
nst
assault
stoitsinher
enthonoranddi gni
ty. Bri
efandgener alastheyare,
cert
ainspeci
fi
crestr
aint
sarededuci
bletheref
rom whichacursoryr
eadingof

129
t
hecanonswoul
dnotr
eadi
l
yyi
eld.Thef
oll
owi
ngdet
ail
sfori
nst
ancewoul
d
ampl
i
fythevow:

1) Loyal
( ty. Inthei nt
erestoftheprof
essi
onandt heengi
neeri
ng
soci
etyandhimselfasapr of
essional
,loyalt
ytot
heprof
essi
oni samustand
shoul
dpr evai
latallti
mesi nt heheartandmi ndofanengineer.Thi
sdut y
cal
lsforunself
ishprotect
ionoft heprofessi
onbyhim bot
hasani ndi
vidual
andasamemberoft heprofessi
on.

A measur eofef fectivepr otecti

ontot heprofessi
on,asi nt helaw
professi
on,i stoconsi dert hepr acticeasneverat r
adeorbusi ness.Under
thi
spr ecept,monet aryconsi derati
oni snotthepr i
mor di
alcauseofever y
professi
onalser vicer ender edsincet headmissi
ontot hebroadcr i
teri
onof
whati sj ust
,honor able,anddecent . Thismeanst hatunli
kei nt radeor
businesswher et het r
aderorbusi nessmani snotli
mitedinhisgainsorpr ofi
t,
i
nt hepract i
ceofapr ofessiont hef eeorconsider
ati
ont hatt
heengi neermay
coll
ectfrom hisclientislimitedt ohi scapaci
tytopay.I nfi
ne,thepar amount
considerati
onf ort hepr ivil
eget oser vetheengineer i
ngprofessioni sthe
honoranddi gni
tyi tgi
vesandnevert heeconomicgain.

2) I
( dentif
icati
onwi thlegit
imat eenterpri
se. Theengi neershould
atalltimes associ ate ordealonl y wi t
hl egi
timate enter
pri
ses. I l
l
egal
ent
erpri
sesmayt aket hef orm ofunl awfulcorporati
ons,partnershi
psand
ot
her or ganizati
ons or under taki
ng whose pur pose or objecti
ves are
general
lyinjurioust osoci etyast heyar eagainstthel aw,customs,good
moral
s,publ icor derandpubl i
cpol icy. Undernoci rcumstancemayt he
engi
neeral l
owhi msel forhisexper t
iseorknowl edgeoranypr oper t
yunder
hi
schar gebeusedf oril
legalorimmor alact
ivi
ti
es.

Ifan engi neer fi

nds hi mselfdirectl
y or indir
ectl
yi dentif
ied or
connectedwi thani ll
egalenterprise,t
helogicalthi
ngtodoi st oadvi seand
helphiscl ientorempl oyertocur eit
sor ganizat
ion,ifthesamel egalit
y
permissi
ble,ot herwise,heshoul dpromptlyandwi t
houtdel aysever ehis
connectionst herewith.Fail
ure on hispar tmayr enderhi m liable under
exi
sti
ngci vilandcr i
minalstatutesasidef r
om t heappropriatedi sci
pli
nary
measur et hatmay be br oughtagai nsthim mot u pr
oprio by orupon
complaintbyan of fended indivi
dualbeforet he Prof
essionalRegul at
ions
Commi ssion.

(3) Cont i
nuousawar enessofengi neeri
nglaws.Uni versalpr
inci
ple
i
n allci vi
l
ized soci et
yi sthati gnorance ofthe l
aw excusesno one i n
compliance therewi t
h.Such bei ng the rul
eitiswi th mor ereasonst hat
prof
essionalsincludingtheengineershoul dcomplynotonlywi ththegeneral
l
awsbutwi ththel awst hatarerelevanttothem andespeciallypromulgat
ed
fortheirchosendi sci
pli
ne.Af t
eral lnothi
ngismor esat i
sfyi
ngt hanbeing
abletoknowhi sbi bleandl i
veint heli
ghtofwhatispropagates.

130
 (4) Avoi ddi
scussingengi
neer i
ngmat t
ersinpublic.I
nbeingbound
t
o ext end the eff
ect
ivenessofthe engi neer
ing pr
ofession byextendi
ng
i
nformat i
on and experience wi
th otherengineers,et c.
,an engineeris
enjoi
ned f rom conducting orpart
icipat
ing i
nt echnicaldiscussi
ons on
engineeringissuesi
npubl i
c.

Thei nfl
uencet hataf al
seorer roneousengi neeringmat terint he
formulati
onofadeci sionordeedt ot echnicalmenandt hosegener all
y
i
nterested i nt he same i st r
emendous and i rresi
stibl
e. I twoul d be
unfort
unat eandt ool atetocur et hebl underori tsef f
ectaf t
ert hei mpact
resul
ti
ng f r
om such er rorhas been caused. Butwor stst il
lt han the
experi
encer esulti
ngf rom suchbl underi sthevirtualdisgraceanddi scr
edit
ofthepr ofessi
oni nt ermsofcr edibili
tyt othepubl icwhichhar nessatal l
ti
mest ot heusef ul
nessoft heengi neer ingpr of
ession. Ifanengi neerhas
somegoodpoi nt
st ocont ri
buteont echnicalengineer i
nghenaydosoby
presentingt hemat t
erorpar ti
cipatingi nt hedi scussionsoft hesamei n
acceptedf ormsf ortechnicaldiscussi onsi nt heengi neer
ingsoci eti
esand
engineer i
ngpr ess.

Relationshi pt oclientandempl oyer.Ther elat ionshi pofanengi neer

withhi scl ientorempl oyerisst ri
ctlycont r
actualandanchor edessent i
all
yon
mut ualt r
ustandconf i
dence.I ft hatr elati
onshipisest ablishedonahi gher
professi onall evelt hel i
nkagecr eatedi st hatofengi neer -clientr elati
onship
wher et hepr ofessi onali ssai dt ohavebeen“ retai
ned”f orhi sexper ti
seand
techni calknowl edge. On t he ot her hand,i ft he engi neer i s hired
uncondi ti
onal l
yt o car ry outori mpl ementwhol ly orpar tiallyt he hirer’s
economi cact ivit
yorbusi ness,he,l ikeanor di
nar ywor keri s“ employed”
such t hatt he r elations hi
p est ablished bet ween t hem i s mer ely one of
empl oyerandempl oyee.I tiswor tht onot et hatint hef or merr elati
on,the
consi der ati
on pai dt ot he engi neeri si nt he nat ure ofpr of essionalfee,
usual lyf orat empor aryoronanon- cont i
nuingdur ation,wher eas,t hatpaid
i
nt hel at t
err elationshi pi sdenomi nat edaswageorsal ar ypai dusual l
yt o
per i
odi ci ntervalsasmandat ed byappl i
cable stat utes. Fi nally,tenurial
privil
ege and r ight sl ike those emanat ing from exi sti
ng l egi sl
at i
ons,i.e.,
mini mum wage,ei ght-hourwor k perl egalwor king day and addi ti
onal
compensat ionf orover timewor k,et c.ar epr ovi
dedf orempl oyee’ spr ot
ecti
on

Whetheronst ri
ctl
yprofessionalorempl oyeel evel
,ther elat
ionshi
p
maybehar nessedtosucceedf oral ongerdurationthroughobser vanceof
cer
tai
n normsofbehavi orfort he food oft he parties. Asr egardsthe
engi
neer and withoutbeing r estr
icti
ve,the f oll
owi ng norms may be
menti
onedasamongt heobl
igati
onsemanat i
ngf rom t
her elat
ionship:

(
1) Pr
otect
iont
ocl
i
entorempl
oyer
.Theengi
neershoul
dconsi
der

131
thepr otect
ionofhi scli
entorempl oyerashi spr
ofessi
onalobligat
ion.Acts
thatreespeci all
yi nimi
caltothei nt
erestofthecli
entorempl oyershouldbe
studiouslyc onsidered and avoided. He shoul d be awaret hatin many
as pectshei sanagentort r
usteewhoshoul dsafeguardtheinterestofhi
s
princi
palbecausei nsuc hcapacityheget sconfi
denti
alinf
ormationandacts
ondel icat
emat tersaf f
ecti
nghisbenef act
or.

I
nthecour seoft herel
ati
onship,hebecomespr i
vytothei nformation
concerni
ngthebusi nessaffai
rsortechnicalpr ocessesoroper ati
onsaswel l
astradesecrets,i
.e.,f
ormularelat
ingtot hepr oducti
onofgoodsbei ngdeal t
withbyhisclientorempl oyer
.Si ncet hesear einstri
ctconfi
dencei tishi s
pri
medut ytokeept heirconfi
denti
ali
tydur ingandaf terther elationship,
otherwi
se,hemaybeaccount ablenotonl yf ordamagest ohi scl ientor
employerbutf ordisci
pli
naryacti
onst hatmaybebr oughtagai nsthi m bya
concernedmemberoft heengineeri
ngpr ofessionort hesoci
etyi t
self.

Thedut ytoprotectthecli
entorempl oyeri snotal i
censeforan
engineertotrampleupont hemandateoftheexist
ingl awsandt helegi
ti
mate
powersofdul yconst
it
utedauthori
ti
es.Iftheengineerf indshimselfdir
ectl
y
orindir
ectlyl
inkedwithani l
l
egalent
erpr
ise,theprotecti
ont hatmaybegi ven
i
st oper suadei tori
tsmanagementt ocur eit
sor ganizationifthesamei s
l
egallyper missi
ble,el
sehewoul dpromptlyandwi thoutdelaysever ehis
rel
ati
on.

(2) Qual i
tyanddedi catedservice.Ser viceofapr of
essionali sone
thatcanber enderedonl ybyat rai
nedandknowl edgeabl eindividualwho
hasbeenl i
censedbyt heaut hor i
ti
esaft
erhavi ngpr ovenhi swor t
hal ongt he
disci
plinethathehaschosen. Wi t
hr espectt ot heengi neer,theser vice
shallbet hebestt hathecoul dgi veinrelationt ohi spr ofessionalst anding,
trai
ningandexper ti
se.Theobl i
gati
oni sviol at
edi ftheengi neer ,i.e.plant
engineer ,wil
lacceptt hepar ttimej obswi thoutt heconsentofhi scl i
entor
empl oyer. Unlesshisengagementi sst r
ictl
yonar et
ainerbasi s,heshal l
divul
ge hi spar tti
me empl oymentwi t
h hi sempl oyerand onl yupon hi s
consentorper missi
on may he be al lowed t o cont inue his par tt i
me
engagement .Thi sissobecausehi spartt i
meorot herempl oymentt akes
awayhi sattenti
onanddedi cationf r
om hisempl oyer ’
sbusi nessconcer nto
theext entthattheeffecti
venessanddedi cationont hejobf orwhi chhewas
empl oyedi simpairedt othepr ejudiceoft heempl oyerandt hosei ndirectl
y
benef i
ti
ngfrom suchser vices.

Providi
ngpr of
essionalandt echnicaladvi
cet oaclientoremployeris
oneoft hemanyi mportantobl
igat
ionsofanengi neer.Thisshouldbegi ven
onlyafterhavingascer tainedandwei ghedthefactsofthecasebecausean
erroneousandi naccurateprof
essionaladvisemaycutt hebl oodandst r
eam
t
hatpr ovidelif
eandmoment um tot hebusinessorunder taki
ng. Fort hi
s
reasonal one,theengi neerwhoi sr esponsibl
eforthetechnicaladequacyof

132
t
heengi
neer
ingwor
kswoul
dbef
ull
yaccur
ateandpr
eci
sei
nhi
sdeci
si
ons.

Therearet i
meshoweverwhenanengi neerfindshimselfuncer t
ainof
thephaseandt echni calaspectofaquer yevenaf terextensi
ver esearchand
study.Shoul dsuchsi tuat
ioncome,heshoul dbehonestenought ot ellhis
cli
entorempl oyerofhi sinadequacyandi nsteadreferthesamet oanexper t
forappr opri
atedeci sion. Onceanopi ni
onhasbeenr endered,itmustbe
relayedbyt heengi neert ohiscli
entorempl oyerwhoi sexpectedtoabi dein
i
tscont ext.Ifthecl i
entorempl oyerdoesnotagr eewi ththeexper topinion,
theengi neershouldpr esentandexplainthepos si
bleconsequencesofsuch
adeci sioninal anguager eadi
l
yunder st
andabl ebyhi m eventotheext entof
i
llustr
atingbydiagr amsorsket ches.

3) Reasonabl
( epr of
essionalfees.Ther eisofcoursenouniform
rat
efort hefeest hatmaybecol l
ectedbyapr ofessi
onal
. Despi
teoft hi
s
absence,theengineer,li
keotherpr of
essional
s,isnotpermit
tedtodemand
orcol
lectexhorbi
tantchargeswhichover compensatehisadvi
ceorservi
ce.

Inf i
xi
ngt heprofessionalchar ge,thepr ofessi
onali sboundtot ake
i
ntoconsiderati
oncert
ainmor alandl egalfactor
s.Fori nstance,thecl
ient’
s
abi
li
tytopaycannotj usti
fyhisdemandi ngofachar geexceedi ngthevalue
ofhisservi
ces.However ,ifacl i
entisi ndi
gentthepr ofessionali
sexpected
t
odemandal owrat
eornoneper hapswhent heclientstandstobedeprived
ofcert
ainri
ghtswhicharef undament all
ygrantedt ohim bylaw.

Amongt heusualfact orsthatmaybeconsi deredi naddit

iont othe
abi
li
tytoayofacl i
entare:( a)novelt
yoft hewor kt obeunder t
akenwhi ch
necessit
atesmuchoft het
ime,ef for
t,ski
llandex per
ienceoftheengineer;(b)
whethertheacceptanceoft heunder t
akingwilldepri
vehim ofotherearning
opport
uniti
esandneededpr ofessi
onaladvancement ;(c)customarycharges
f
orsimilarjobsi
nthelocali
ty;(d)characteroftheunder t
aking–whet heriti
s
merelycasual,regul
arorper manent ;and( e)contingencyorcer t
aintyof
bei
ngcompensat ed.

4) On commi
( ssion,rebates,per cent
age,etc. The engineer
shouldrefr
ainfr
om accepti
ngcompensat ion,monetaryorot
herwi
se,di
rect
ly
or indi
rectl
yf r
om mor et han one interest
ed person fr
om the same
prof
essionalser
vice,unl
essallpart
iesareawar eofandconsentt
oit
.

Theforegoingi nhi
biti
onisbasedont hepr i
ncipleofjustandf ai
r
tr
eatmentwhi ch mustpr evailbetween t he parti
es notonl y dur i
ng t he
progr
essoft he relati
onship buteven af tert he severance oft he same.
Alt
hought i
psandot hermat eri
alconsiderationsfr
om t hosedealingswi thhis
cl
ientoremployer,i.
e.cont r
actor
s,suppl i
ers,vendors,et c.maynotatt i
mes
confl
i
ctwi t
ht he principl
e,i tis butf airand j ustt hathe be i nformed
i
mmedi atel
y so thathe may be gui ded accor dinglyt o hisi nterest
.

133
Fur
ther
more,muchl i
berali
tyoft
hiswouldcr
eat
esomesortofadualloyal
ty
astheengineermay,havi ngbeenusedt orecei
vi
ngkickbacksorextra
i
ncomefrom deal
ers,expectt
hatfavori
nsomei
fnoti
neverytr
ansact
ion.

(5) Di sclosur
eoffinanci
alint
erest.Aconf l
i
ctoffinanci
alinter
est
betweent heengineerandhiscli
entorempl oyertakesplacewhenheorhi s
ki
nsort hei
rfi
rmsi sengageddi r
ectl
yori ndirect
lyinthesameorr el
ated
businessorproductsorser
vicestowhichhisclientoremployerisengaged.

Theconf l
ictcontempl atedi sessent i
all
yf i
nanciali
nchar act
ersuch
thatift
heconf l
ictisonot herconsi derat
ion,i.
e.r eli
gious,poli
ti
cal,social,etc.
the princi
ple woul d have a doubt fulappl i
cation. A conf li
ctoff i
nanci al
i
nterestbetweent heengineerandhi sclientorempl oyerwouldsur el
yi mpai r
orstraintherelationshi
p.Thus,f orahar moniousandl ast
ingrelati
onshi p,it
i
si ncumbentuponhi mt odi sclosei nthebegi nninghi sfi
nancialinterest,if
any,i nabusi nesswhi chmaycompet ewi t
horaf f
ectthebusi nessofhi s
cli
entorempl oyer .I facquiescedbyt hel at
ter,suchi nter
estshoul dnotbe
all
owedt oaff
ecthi sdec i
sionr egar dingengi neer i
ngwor kforwhi chhewas
retai
nedorempl oyedorf orwhi chhemaybecal ledupont operform.

Also,he shallnotbe f i
nanci
all
yinter
est
ed in bi
ds as,orofa
contr
actoroncompet i
ti
vewor k. Iffi
nanci
all
yint
erest
edinanymachi ne,
appli
ances,processesoranythingwhichmaybeusedi nconnect
ionwi
thhis
prof
essionalundert
akingorduty,thi
smustbet i
mel
ycommuni cat
edtogui
de
hiscl
ientoremployer.

Relationshipwi thengi neers. Theengineeri sint hecour seofhi s

prof
essi onalcar eerwor ks wi t
h many people ofvar i
ous empl oymentor
vocation.Thesemaybehi sbr ot
hersintheprof
essi onwhoar eretai
nedor
empl oyed byhi scl i
entorempl oyerand non-technicalpeople who may
eit
herbesi mpl epr oducti
onl i
newor kersormanagerofi ndustr
ialfi
rmsor
represent at
ivesoff inancialagencies.Consideri
ngt hesepeopl ewi t
hwhom
hewor kswit h,theabi l
it
ytogetal ongandestabli
shhar moni ousprofessi
onal
orwor king r el
ations witht hem becomes i ndi
spensabl e and shoul d be
developedatal lcost s.

Whetherasanempl oyeeorasanemployer
,thefol
lowi
ngconduct
shouldbeobservedbyanengineeri
fhehast
obesuccessf
ulandtr
uetohis
concernoveracoll
eague:

1) Pr
( otect
ion offel
low engineers. A respectabl
e prof
essional
reput
ati
oni sal ongrangeobj ect
ivewhichever yprof
essionalcher
ishest o
acquir
eoveraconsi der
ableper i
odoftri
alsandfrust
rat
ionstothechall
enges
oftheprofession.Hisreputati
onandchar ismaiswhatattr
actpeopletoavail
ofhisservices,andonceat tai
ned,itpart
akesthenatureofapr oper
tywhi ch

134
t
hel awpr ot
ectsinthesamemannerast hegoodwi l
lofabusiness.Thus,
every engineershould st
rive to prot
ectal lr
eputabl
e engineersfrom
misr
epresentati
onandf r
om beingmi sunderst
oodinhisprof
essionalwork.
Anyactoromi ssi
on t
hatmaycause i njurydi
rect
lyorindir
ectl
yt othe
prof
essionalreput
ati
onorpracti
ceofacol l
eagueaswellashisprospect
sof
advancementi sdeemedwit
hi nt
heambi tofthi
smandate.

Prot
ecti
on may al so be inthe f orm off r
iendl y persuasion ofa
coll
eaguet oref
rainfr
om unet hi
cal
,il
legalorunpr of
essi onalpracti
cei fheis
soengagedoraboutt oi ndulgeinsuchi finhisopi niont hesamei sofsuch
natureandchar act
er.Whenacol l
eaguehaspr oblemsi nthepr acti
ce,the
engineeri scall
edupont ohel phimr esolveiti
nt hebestofhi slight.Ifthe
problem invol
vesacti njurioustohisbount i
esliket hegener alpubl i
cort he
professionandhi sadvicei signor
edhei sexpect edt or eportthesamet othe
appr opri
ateEngineeri
ngCommi tt
eefornecessar yact ion.

(2) Fai rnessandt oler

ance.Forapr ofessionalbrot
her hoodt obe
desi
rableorl asti
ng,itmusthaveasol i
df oundationofequal it
ybot hon
pri
vi
legesandoppor t
unit
iesf oradvancement .Thi smaybeat tainedi fevery
engineerhasa wi l
li
ng desi reto help a brotheri n need ofgui dance or
assi
stance.Whenanengi neeri snewi nt hepr of
essionheneedsahel pi
ng
handorani nspir
ati
ont ostartwithortogethi smoment um int
hepr act
ice.A
gestureofconcer nt oaneedybr othercouldbeamor alboost
ert oest abl
ish
i
nhi m af eeli
ngofbei nghome.Typi calofthisishavi ngthelessonofhi s
experi
ence,orl endingper sonall
yorcont ri
butingr epor t
sandot herpaper
st
udiest oengineeringforumsandt echnicalpress.

I
fanengi neerbegi nsorwindsupasanempl oyee,theengi neer-
employershould,not wit
hstandi
ngthatedge,bel iber
all
yt ol
eranti
nal lways
t
hatmaycont r
ibuteorenhancehi sadvancementr emember i
ngalwayst hat
heisapr of
essionalbr otherwhoalsowant sapl acei nthesociety. For
i
nstance,all
owi ng hi m att i
mes to part
icipateint echnicalengi
neer ing
di
scussionsonof f
icialt
imei nseminars,studiesorwor kshopsori not her
engineeri
ngforumsmaypr ovi
dehi
mt hechanceofadvancementwhi chal so
benefi
tstheprofession.

I
nmat t
ersofr emuner ati
on,theengi neershouldupholdt hepri
nciple
ofj ustandappr opri
atecompensat ionf orthoseempl oyedinengi neeri
ng
wor kinaccordancewi thacceptedstandar d.Amongt hefact
orsthatmaybe
relevantinf
ixi
ngt hecompensationar ethequal i
fi
cati
onsoftheengineer,his
recordedexper ienceint hefi
eldoft echnicalengineer
ingaswel lasnon-
technicalendeavor swhi chhasmat eri
albear i
ngt otheventure,prevail
i
ng
compensat i
onf orempl oyedengineersinsi mil
arorrelat
edventures,andthe
qual i
tyofhi
swor k.

(
3) Mer
it
snotdue.Recogni
ti
oni
nthef
iel
dofengi
neer
ingi
saf
eat

135
thatcoststheengineer
’stime,eff
ort
,money,etc. Itisunethicalf oran
engineertocl
aim cr
edi
twhichisnotduehim.Neitheri
tisproperforhi mto
acquiesceashisanyengineeri
ngaccompli
shmenterr
oneouslyattr
ibutedto
him.I fhefeelshehadtakenpartinit,heshoul
dmakecl earhisposi ti
on
thatthe same isnotwhollyhisaccompli
shment. Aft
erallhumi li
tyand
candidnessevenonnon- t
echni
calsubj
ectsisal
waysavi r
tuetowhi chthe
Fil
ipi
noisnoted.

(4) Revi ewofcolleague’

swor k.Theengi neershoul dnotmakeor
i
ssuepubl iclyundesi
rabl
ecomment soropi ni
onr egardingt hewor kofa
coll
eagueexceptt osavet hepubli
candt heprof
essionfrom har m orinjury.
Ifsuchnecessi tyexi
sts,iti sadvi
sablet hathebei nformedt hr
oughan
i
nformalar r
angementbefor eanopenr eviewofhiswor kismade,ot herwise
thereview orcommentonanengi neeri
ngwor kofacol leagueshoul dbe
str
ict
lyonapr of
essi
onallevel,di
sal
lowingatallti
mesper sonali
tytoslantin
thediscussion.

Moreof tent hannot,professionaljealousytakesplacebetweent wo

prof
essi onalsai mingforrecognitionorst ruggli
ngtosur vi
veinthefiel
dof
thei
rexper tise.Successorsur vi
valshallnotbeatt heexpenseofanotherin
thepr ofessionbutuponhi smer i
t.Toavoi doratleastmi ni
mizet
heef f
ects
of such possi bi
li
ty there ar e factors whi ch may deser ve serious
consider at
ion. Such f actorslike professionalreputati
on,whethert he
engineeri snew oranol dtimerint hepr acti
ce,genderatt i
mesandot her
analogousmat tersarecertainl
yamustf orconsider
ation.

(5) Cont roversieswi t

hcol l
eague.I nthestr
uggl
et oatt
ainawor thy
professi
onalreputationanengi neermayi nnocentl
ystepont hetoeorr un
acrosst hepathofanot hertryi
ngal sotocar veanamef orhiscar eer.As
muchaspossi blecar eshouldbeobser vedtoavoidar unningconf l
i
ctwi t
h
anotherengineer i
ngconsi der i
ngt hatthepr acti
ceasr epeatedagai nand
againisapr i
vil
egeandnotat radeorbusi nesswher eunf
aircompetiti
onand
monopol yisoftenwi t
nessed. Thepr acticeshouldbepur suedonahi gh
l
evelsucht hatallhisactivi
ti
esshoul dbeabl etopassthetestofobjecti
vi
ty.

Int he eventcont r
over siesar i
se orcannotbe avoi ded the same
shouldbesubmi t
tedtot hePhi l
i
ppineSoci etyofEngi neeringwhichmay
createaboar dofar bi
tr
ationcomposedoft hreemember schosenbyeach
party,withthethi
rdbeingsel ect
edbyt hetwomember spurposelytoresolve
theconf li
ct. Af
tersuchsubmi ssionthepar t
iesshouldbeext racarefulin
everythingthatmayaggr avateorl endf lamet othecontroversyuntilthe
samei sful
lyresolvedbyt heboar dfortheirguidance.Onl yuponf ai
l
ur eof
theboar dtoset t
lethec ontroversyar eparti
esper mit
tedtor esortt
oacour t
suit
.

(
6) Sol
i
cit
ati
onofunder
taki
ngorcl
i
ent
s.Sol
i
cit
ati
ont
akespl
ace

136
whenanengi neerr esor
tstoundesi r
ablepr acti
ceslikeunder biddingfora
parti
cularwork,orr educesthenor malchargesorf eesafterbecomi ngawar e
ofthechar gespr off
eredbyt heotherinordert oassurehi msel fofthejobor
capturet he clientofanot her
. I n mostc ases,sol i
citation is done
clandesti
nely although the mor e unscrupulous ones do i tpubl i
clyi n
completedi sr
egar dofgoodt asteandtradit
ion.Abhor redasi ti sinthefield,
thiskindofpr acticedegradest heprofessionandconver t
si tt osver i
table
stateofcut t
hroatcompet i
ti
onwhi cheveni ncommer cialcirclesi sdeclared
unlawfulandpenal i
zedwhenmadedel iberatel
yunderexi st
ingl aws.

Af
orm ofsol
icit
ati
onmayt akeplacewhenanengi neerwithoutthe
consentoft he employerofanot herengi neer,off
erst he lat
tersalar
ied
posit
ionorhigherremuner ati
onandr ebatesorcommi ssion,orcausehi s
dismi
ssalinordert
ol ateronabsorbhimi nhisfold.Anotherf or
m wouldbe
thedr awi
ngtohimselfacl i
entofanotherengineerbygivinghi mincenti
ves
notusuall
yoffer
edbyt helatt
erorotherengineer
s.

7) Si
( gningpl ansandspeci f
ications,et
c.Thepr eparati
onofpl ans
andspecificati
ons,et c.foranengi neeringwor korprojectisadel icatetask
whichshoul dbedonesol elybyar egisteredengineeroronewhohasbeen
previ
ouslyaut hori
zedbyl aw.Theengi neershouldnotf oranyconsi derat
ion
al
low hissi gnatureoraut horit
ytobeusedosuchdocument si fthesame
hasnotbeenpr eparedbyhi m orunderhi scontrolanddi r
ecti
on.Thus,hi s
si
gningofpl ans,speci fi
cationsanddesi gnsordr awingspr eparedbyan
unregi
steredengi neeroranunder graduat eoraf l
unkeri nt hel i
censure
examinati
oni sgr osslyunet hical
,unl
esst hesamehasbeenpr eparedbyan
apprent
iceorsubor dinatewhohassomeengi neeri
ngbackgr oundunderhi s
di
recti
on.

CHAPTERI
I

137
 LI
ABI
LITYOFTECHNI
CALMEN

Gener alconsi derati

on.Af t
eradmi ssi ont ot hepr acti
ce,t heengi neer
maycar ryhi swor kinadi rectionandmannert hatinhi sl i
ghti snotcont r
ary
toexi st i
ngl aw,mor als,goodcust oms,publ icor derandpubl i
cpol i
cy,aswel l
asexi stinget hi
csoft hepr ofession;butasaguar dianofpubl icsafety,he
shoul dpr obabl yant i
cipatepr obabler i
skst ol ivesandl imbst hatmayoccur
from hi swor k.Fori nstance,whenanar chi tecti sengagedt odr awapl anor
desi gnofabui l
ding,orwhenanengi neeri nstallsaboi l
eroramachi nei na
factoryorpl ant ,ther esultshoul dbei nsuchacondi t
iont hatt hesame
satisfiesexi stinglegalandt echnicalrequi rement ssot hatthel ivesandl i
mbs
notonl yoft hosewhowoul dmakeuseorwor kont hesamebutal lthose
thatmaybeexposedt oi tdirectlyorindirect lyar enotendanger ed.Hemust
bef ur therawar et hatmuchr eli
anceonhi st echni calcompet encei sgivenby
acl ientorempl oyersot hati nt hefinalanal ysi shei snotonl yanagentof
ec onomybutal soani nsurerofsaf etyandheal thoft hegener alpublic.I n
otherwor ds,peopl e engage hi m forhi sdomest i
cand i ndust ri
alneeds
becausehi st echnicalexper t
isecr eatesi nt hei rmi ndabel ieft hattheyc an
buyt heirheal thandsaf etyf rom him.Fort hi sreason,t hel awmakessur e
thatl i
keanor dinaryl i
feandpr opertyinsur er ,heshoul dpr otectagai nstt he
l
ossoft hel i
vesandl imbsandpr oper t
iesofal lthosewhoavai l
edofand
benef itf rom hi sser vi
ce,t husi mposi ngonhi m acer t
ainl i
abi l
i
tyf ort he
consequencesofhi sengi neer ingwor ksdur ingandaf tertheconcl usionof
hist ask.

Civi
lli
abi
li
tyfordamages. Bar ri
ngcer tainl iabil
iti
escr eat
edunder
cont r
actwithacli
entorempl oyerandotherjur
idicalr elat
ions,t
heCi vi
lCode
oft he Phili
ppi
nespr escr
ibesin no uncertai
n meani ng the li
abil
it
yofan
architectorengi
neeraswel lasthecont
ractorwhof ailsorneglectstoli
veup
tot hatmeasur eofresponsibil
i
ty. TheCodepr ovidesi nAr t
icle1723the
fol
lowi ng:

“Art
.1723.Theengi neerorar chi
tectwhodr awsupt heplans
andspeci f
icati
onsforabui l
dingi sliablefordamagesi fwithi
nfif
teen
yearsfrom thecompl eti
onoft hest ructurethesameshoul dcollapse
byr easonofdef ectont hosepl ansandspeci f
icati
onsorduet othe
defectsofthegr ound.Thecont ractori sli
kewiser esponsi
bleforthe
damagesi ftheedi f
icefall
swi thi
nt hesameper i
odonaccountof
defectsintheconst r
ucti
onort heuseofmat erial
sofi nf
eri
orqualit
y
fur
nishedbyhi m,orduet oanyvi olationoft het er
msoft hecontract.
Ift
heengi neerorar chit
ectsuper visedt heconst r
ucti
on,heshal lbe
sol
idaril
yli
ablewi t
hthecontractor.

“
Accept
anceoft
hebui
l
dings,af
tercompl
eti
ondoesnoti
mpl
y

138
 wai
verofany ofthe causes ofact
ion by r
eason ofany def
ect
ment
ionedi
nthepr
ecedingpar
agraph.

“
Theact
ionmustbebr
oughtwi
thi
ntenyear
sfol
l
owi
ngt
he
col
l
apseoft
hebui
ldi
ng.
”

The person l
iable undert he aforesaid art
icl
e are engineers or
archi
tect
swhodr ewthepl ansandspeci fi
cat
ionsofthef al
l
enst r
uctureand
the contr
act
ori fthe fal
loft he bui
l
ding is by reason ofdefecti nthe
constr
ucti
onort hesueofi nf
eriormat
erial
sf ur
nishedbyhim orviolati
onof
thetermsofthecontr
act .

Requi rement sf oract i

ont opr osper.Fort hem tobehel danswer able
fordamages,however ,therearecer tainelementswhi chmustbeshownt o
thesatisfacti
onoft hecour t
.Foranact i
onagainsttheengineerorar chitect
toprosper ,itmustbepr ovent hat:(a)t hecoll
aps eofthebuildingtookpl ace
withi
nf i
fteenyear sf rom itscompl etion;(b)thepl ansandspeci f
icati
onsof
thestructurewer edrawnbyhi m;and( c)thec auseoft hef alli
sdef ectsI
plans and speci fi
cations ordef ects oft he ground. I fthe engi neeror
archi
tectsuper visedt heconst r
uction,heshal lbel iablesolidari
lywi t
ht he
contr
act orifthecol lapseorf al
loft heedi fi
ceisforreasonsat tri
butedtot he
l
atter
. Thus,i ft hecausei sduet ot hedefectsofconst r
uct i
onoruseof
i
nferi
ormat erials,et c.t he archi
tectort he engineerwho super vised the
constr
uct i
onshal lbel i
ablet opayf ortheent i
reamountofdamagest o
whomeveri tmaybeawar ded.

Asagainstthecontractor
,theremustbeacl earshowi
ngthatthefal
l
oftheedif
icetookplacewithinfi
ft
eenyearsfrom t
hecompleti
onandthatthe
causeofthef alli
sduet ot hedefectsintheconstr
ucti
onoruseofi nf
eri
or
quali
tyofmateri
alsfurni
shedbyhi m orvi
olat
ionoft
hetermsofthecontr
act.

Warrant
y and pr escr
ipt
ion. The law furt
herprovi
des thatthe
accept
anceofthebuil
dingaf t
ercompleti
ondoesnotimpl
yawaiverofanyof
t
hecausesofactionbyr easonoft hedef
ect
smentioned.

Thismeanst hattheengi neerorar chi

tectort hecont ractor
,ast he
casemaybe,shal lwarrantt hesaf etyandstrengthoft hebuilding,andthat
alt
hough t he j ur
idicalr elati
onship oft he engi neerorar chitectort he
contractoristerminat edr easonoft heacceptanceoft hebuilding.Thelaw
st
il
lpr eservesi nf
avoroft heownert heri
ghttosuet heformerf ordamages
ari
singf rom thedef ect
st hatmayl ateronbedi scover
edasl ongast he
fi
f
teenyear shasnotexpi red.Fur t
her mor
e,anyl egalactionarisingfr
om the
vi
olationorbr eachofwar rantyi sordainedtobef il
edi ncourtwi t
hinaperiod
oftenyear sfrom thedat eoft hef al
lorfrom thedi scoveryoft hedefector

139
el
seanyact
ionar
isi
ngt
her
efr
om i
sbar
redf
orever
.

Damagesdef ined.Damagesi ssi mplyt

hesum ofmoneywhi chthe
l
aw awar ds ori mposes as pecuni ary compensation,r ecompense,or
sati
sfact
ionforanyi nj
urydoneorawr ongsustai
nedasaconsequence
eit
herofabr eachofcont ract
ualobli
gationortortuousact .I nrel
ati
ont o
engineeri
ngliabi
li
ty,itistheamountofmoneyf orwhi chtheengineeror
archi
tectorcont r
actormaybeor der
edt opayt otheowneroft hef al
l
en
buil
dingortowhomevermaysuf f
erbyr easonofthecollapse.

Penalliabi
li
ty. The dif
fer
entlaws relevanttot he pract
ice of
engineeri
nghaveenumer at
edinsepar
atesect
ionst hespeci
fi
cprofessi
onal
act
ivit
iesthatali
censedengi
neermayundert
ak e.Thesear eexcl
usiveand
aut
onomous al though atti
mes complement
ar y wit
h acti
vi
ti
es ofot her
cl
assifi
cat
ions.

Al thought hel awconsi dersasill

egalpr acti
ceanyi nterferencebyan
engineeri nacti
viti
esnotwi thi
nhisfi
eldofexper t
ise,itper mi t
snever t
heless
t
wocl assesofengi neer st oestabl
i
shapr of
ess i
onalpar tner shiporf ir
mf or
t
hepr act i
ceoft hei rpr ofession.A civi
lengi neercanf orm apr ofessi
onal
part
ner shi pwithanar chi tectandviceversa,butt hisdoesnotl egali
zenor
j
usti
fyt hear chi
tecti nt hreadingormeddl i
ngonwor kwhi chi sspeci fi
call
y
i
ntendedf oracivilengi neer .Asaconsequence,andf ort enur ialpurposes,
t
heengi neershoul dbecaut iousanddi screeti nt heper formanceofhi s
prof
essi onalvow because meddl i
ng int he per imeterofhi s partner’
s
experti
seori ntot heact iviti
esofanotherengi neeri sdecl aredasacr i
meof
misdemeanorwhi chcar riesapenal t
yuponconv i
ctionwi thaf i
neofnotl ess
t
han one hundr ed pesos nor mor e than one t housand pesos, or
i
mpr i
sonmentf ora per i
od notexceedi ng thr ee mont hs,orbot h,int he
di
scretionoft hecour t.

BI
BLI
OGRAPHY

140
CanonsofPr
ofessi
onalEt
hicsf
orEngi
neer
s

DeLeon,Hect
orS.
,TheLawonObl i
gat
ionsandCont
ract
s.QuezonCi
ty:
RexBookSt
ore,I
nc.
,2003.

Jur
ado,Desi
der
ioP.
,Ci
vi
lLawRevi
ewer
.QuezonCi
ty:RexBookst
ore,
I
nc.
,1999.

Jur
ado,Desi
deri
oP.
,Comment sandJur
ispr
udenceonObl
i
gat
ionsand
Cont
ract
s.QuezonCi
ty:RexBookStore,2002.

Mendoza,Qui
nti
nC.,Engi
neer
ingCont
ract
s,Speci
fi
cat
ionsandEt
hics.
QuezonCit
y:RexBookStor
e,2000.

NewCi
vi
lCodeoft
hePhi
l
ippi
nes.

Republ
icActNo.8495,“
Anactregulati
ngt
hePr
act
iceofMechani
cal
Engi
neeri
nginthePhi
l
ippines”.

Rul
esandRegul
ati
onsI
mpl
ement
ingRepubl
i
cActNo.8495.

141