CHAPTER 3 FORM OF CONTRACTS

III. Problems

Explain or state briefly the rule or reason for your answer.

1. S (seller) and B (buyer) entered into a contract of sale of a parcel of land. The
sale is embodied in a private document and not in public instrument because it was
not acknowledged before a notary public as required by law. Is the sale valid?

2. In the same example, what rights, is any, are acquired by the contracting parties?

CHAPTER 4 REFORMATION OF INSTRUMENTS

III. Problems

Explain or state briefly the rule or reason for your answer.

1. S sold his horse “X” to B under a written contract of sale. What B bought S was
selling him is horse “Y”. can S ask for the reformation of the contract against the
objection of B who is agreeable to the sale of horse “X”?

2. Suppose in the same example, S was intending to sell his horse “Y”. Give the
three (3) cases when he can ask for the reformation of the contract.

CHAPTER 5 INTERPRETATION OF CONTRACTS

III. Problems

Explain or state briefly the rule or reason for your answer.

1. S sold to B his condominium unit “including all its contents.” In the unit, there is
an antique chair belonging to X which X agreed to sell S. Is the chair to be
included in the sale of the unit?

2. X, architect, designed and supervised the construction of the house of Y. The

parties failed to agree beforehand the professional fee of X. How much is Y bound
to pay X?

3. Suppose in the same problem, the professional fee was agreed upon, but it is not
clear from the written contract prepared by X upon the request of Y whether it
should be the fixed amount of P200,000 or 6% of the cost of construction. How
much is Y liable to pay?
 CHAPTER 3
ANSWERS:

1. The sale is valid because it was in writing even though it was not made to appear
in a public instrument.

2. The contract is valid and binding, although it is still executory, but only as
between the parties and not as against third persons without notice until the sale is
registered in the Registry of Property. B has a right to compel S to put the contract
in a public instrument so that it can be registered to affect third persons, even in the
absence of express agreement between them to the effect.

CHAPTER 4

1. In this problem, since both parties commit mutual mistake, the Article 1361
applies. When a mutual mistake of the parties causes the failure of the instrument
to disclose their real agreement, said instrument may be reformed.

2. The three cases of which he can ask for the reformation of the contract are the
following:
 Article 1362. If one party was mistaken and the other acted fraudulently or
inequitably in such a way that the instrument does not show their true intention,
the former may ask for the reformation of the instrument.

 Article 1363. When one party was mistaken and the other knew or believed
that the instrument did not state their real agreement, but concealed that fact
from the former, the instrument may be reformed.

 Article 1364. When through the ignorance, lack of skill, negligence or bad faith
on the part of the person drafting the instrument or of the clerk or typist, the
instrument does not express the true intention of the parties, the courts may
order that the instrument be reformed.

CHAPTER 5

1. Upon reading chapter 5 the article that will support this decision is Article 1372.
Which explained about the particular matter that may be included and excluded on
the terms of the contract. In this case, if S already paid the antique chair to X, this
chair can be considered to be part of the agreement.And if S is not yet paid, this
chair is still belonging to X so it is not included on the contract that says,
“including all its contents”.

2. For this case, Article 1376 supports this. Which discussed whether the doubtful
or ambiguous in a contract with the contracting parties are entered into. The
situation stated above gave an example of this article, in which the amount must be
determined by the rate customarily paid in the place where the services were
rendered. They must also consider the quality of the work and other factors that
may affect the price of the work of X.

3. For this problem, X is the party who drafted the contract that could have
prevented mistakes or ambiguity in the meaning by careful choice of words and
also the party who causes the obscurity acts with ulterior motives. The terms of the
contracts do not result in the mutual negotiation they had created and most of it
was based upon the one party which is X. The liability of Y is what will he/she
choose from the terms of the contract. Reformation can also be made if Y chooses
to reform the contract.