CBET-01-301A SODELA CRISTINA M9

 
 Form of Contracts
It refers to the manner of a contract in which it is executed or manifested 
 
 Contract
The contract may be done orally or written, or partly oral and partly writing. It is said that
it may be express or implied. Express when the intentions of the parties are expressly set
forth and implied when the intentions may be seen from their actions.
 
 Informal and Formal Contract 
Under Article 1356, it defines the two classifications of contracts according to form.
First, Informal Contract, which may be entered into in whatever form provided that it has
all the essential requisites. A formal Contract is where it is required by law.
 
 General Rule in Form of Contracts
As stated in Article 1356 of the Civil Code, contracts are deemed obligatory and it should
meet the essential requisites that will prove their validity.
 
Except, 
1. The law requires a contract to be in some form to be valid
2. The law requires a contract to be in some form to be enforceable
3. The law requires a contract to be in some form for the convenience of the parties

 Cases when the law requires a contract to be in a certain form for the validity of a
contract:
 
1. Donation of a real property
2. Donation of personal property, which the value exceeds 5,000.00
3. Sale of land through an agent
4. Stipulation to pay interest
5. Contract of Partnership

In these cases, a written contract is required.

 In the cases covered by Statute of Fraud

 
It is required by the law to be in writing. If the contract is not in writing it is still
considered but it cannot be proved and it cannot be enforced unless it is ratified.

 Public document
Under Article 1358, the contracts are valid and enforceable even if it is not in a public
document. It is required only for the convenience of parties to make the contract binding
against the third person.
 
 Contracts must appear in a Public Instrument, WHEN:
 
1. Creation of real rights over immovable property
2. Cession or Renunciation of hereditary rights or those of conjugal properties
3. Power to administer a property
4. Cession of actions or rights

 Reformation
Reformation is the remedy through which a written instrument is amended or corrected to
express the real agreement or intention of the parties when because of mistake, fraud,
inequitable conduct, or accident, the instrument fails to express such agreement or
intention.

 Requisites of Reformation 
1. There must have been a meeting of the minds upon the contract;
2. The instrument or document evidencing the contract does not express the true
agreement between the parties;
3. The failure of the instrument to agree must be due to mistake, fraud, inequitable
conduct, or accident.

 Interpretation
Under Article 1370, it is defined as the determination of the meaning of the terms or
words used by the parties in their written contract. 
 
 Interpretation of stipulation with several meanings
Under Article 1373, it is said that when the agreement is susceptible to several meanings
one of which would render it effectual it should be given that interpretation.
 
 Interpretation of various stipulations of a contract
Under Article 1374, a contract must be interpreted as a whole and the intention of the
parties is to be gathered from the entire instrument, phrases, or clauses.
 
 Interpretation of words with different significations
Under Article 1375, if a word is susceptible to two or more meanings, it is to be
understood in a sense that it keeps the nature and object of the contract with the rule that
the intentions of the parties must prevail.
 
 The rules in case doubt impossible to settle
 
1. Gratuitous Contract – the interpretation should be made that would result in the least
transmission of rights and interests
2. Onerous Contract – the doubts should be settled in favor of the greatest reciprocity of
interests
3. Principal Object of the Contract – leaving the intention of the parties unknown, the
contract shall be null and void