SECTION 2 – OBJECT OF CONTRACTS
 Giving of sum of money, or an object, or an
ART. 1347: ANY PROPERTY OR SERVICE
CAN BE THE OBJECT OF A CONTRACT
NOT OUTSIDE THE COMMERCE OF MEN
NOT CONTRARY TO LAW, MORALS, GOOD
CUSTOMS, PUBLIC ORDER OR PUBLIC
POLICY
 Ex. Assassination of a particular dignitary
(high rank/office) - void
CASE – Maneclang v. IAC: compromise agreement
about a fishpond which was originally a creek is null
and void
 A creek form part of a river – a public
domain, hence, outside the commerce of
men
FUTURE THINGS THAT CAN BE REASONABLY
ASCERTAINED
 Contract to sale – things that have
potential existence
o Condition: the thing will come to
existence
TRANSMISSIBLE RIGHTS
 Ex. One can sell leasehold rights over a
property provided that there is no
contractual and legal stipulation
prohibiting its transmissibility
 FUTURE INHERITANCE – cannot be
the object; its extent, amount or quantity is
not determinable
CASE – Blas v. Santos: wife agreed to give whatever
her share in the conjugal property to her heirs once
the husband dies
 No future inheritance involved
 Conjugal property share – existing
properties which she will receive by
operation of law upon the death of her
husband
ART. 1348: IMPOSSIBLE THINGS
One cannot be bound to do the impossible.
ART. 1349: OBJECT MUST BE
DETERMINATE TO ITS KIND
 Object must be certain to its kind
 Ex. Deliver a fruit – general; void deliver
mangoes – valid
Quantity not determinate – should be possible to
determine without the need of a new contract
SECTION 3 – CAUSE OF CONTRACTS
ART. 1350: FORMS OF CAUSES – CAUSE OF
ONEROUS, REMUNERATORY, AND PURE
BENEFICIENCE
CAUSE – one of the essential requisites
 May or may not be tangible
FORMS OF CAUSES
 Prestation
 Promise of a thing
 Service by another
expectation profit
CASE – Dihiansan v. CA: corporation sells it
property and gave a preferential right to buy the same
to the persons living near it. Certain individual
approached one of the persons given the preferential
right to sell it to him with
 a commitment to re-sell the property to the
person.
o Stipulated
ONEROUS CONTRACTS – cause: prestation /
promise of a thing / service by the other
CASE – Republic v. Cloribel: compromise
agreement to terminate litigation
 Cause: mutual waiver and abandonment
of the parties of their claims against each
other
ART. 1351: DIFFERENCE OF PARTICULAR
MOTIVES AND CAUSE
cause – essential reason of the contract
 to have
motive – particular reason for a contracting party
which does not affect the other party
 Ex. Valuable relic
cause of the seller - payment of the purchase price
cause of the buyer - the delivery to him
motive of the seller - expectation of profit
motive of the buyer - beauty and rarity of the relic
CASE – PH National Construction Corp v. CA:
purpose for which it entered the contract did not
materialize
 SC: cause – use/enjoyment of a thing
o Motive – does not affect the
validity of the contract
Exception: realization of such motive has been
made a condition upon which the contract is made
to depend
CASE – E. Razon v. PH Ports Authority: cause is
equated to the motive because motive predetermines
the cause
 Cause – Romualdez: to be able to contract
with the government which he was then
prohibited by law
- Razon: to be able to renew his management
contract
 Razon would not have transferred said
shares of stock to Romualdez without an
assurance from the latter that he would be
unduly favored with a renewal of the
management contract.
CASE – Uy v. CA: the quality of the land was an
implied condition for the NHA to enter into the
contracts.
  Motive – to use the lands for housing; was
also the cause for its being a party to the sale
ART. 1352: ABSENCE OF CAUSE & DE LEON:
UNLAWFUL CAUSE
ABSENCE OF CAUSE – does not create a contract,
no meeting of the minds
UNLAWFUL – against the law, morals, good
customs, public order or policy
ART. 1353: FALSE CAUSE
General rule: contracts with false cause are void
Exception: a contract stating false consideration, but
has in fact a real consideration – not void
 Simulated contract
ART. 1354: PRESUMPTION OF EXISTENCE
OF CAUSE
Exception: unless the debtor proves the contrary
CASE – Liam v. Olympic Sawmill Co.: an additional
amount was added to cover loss of interest income,
attorney’s fee and incidentals
 Presumed to exist
ART. 1355: LESION OR INADEQUANCY OF
CAUSE
DE LEON:
LESION – any damage caused by the fact that the
price is unjust or inadequate
 These shall not invalidate a contract
CASE – Auyong Hian v. Court of Tax: inadequate
consideration is not a ground for the invalidity of a
contract
 Exception: cases specified by law; involves
fraud, mistake, or undue influence; related
provisions (DE LEON)
CASE – Penaco v. Ruava: a valuable consideration,
however small or nominal, if given or stipulated in
good faith is, in the absence of fraud, sufficient.
 Actual consideration of transfer evidenced
by the alleged act of sale, no matter how
inadequate it be, the transaction could not be
a simulated sale.
DE LEON:
SIMULATED OR FICTITIOUS CONTRACT –
no legal effect because there is no real agreement
between the parties
CONTRACT WITH INADEQUATE
CONSIDERATION – may nevertheless embody a
true agreement between the parties
- Consensual
- When the parties agree on a price as the
actual consideration, the sale is not
simulated despite the inadequacy of the
price
CHAPTER 3: FORMS OF CONTRACTS
ART. 1356: FORMS, OBLIGATORINESS, LAW
REQUIREMENT
FORM OF CONTRACT – manner in which a
contract is executed or manifested
FORMS OF CONTRACT
1. parol or oral; (b) in writing (c) partly oral
and partly in writing
a. Written contract – public or
private instrument
NEED NOT BE CONTAINED IN A SINGLE
WRITING.
 It may be collected from different writings
which do not conflict with each other and
which when connected, show the parties,
subject matter, terms, and consideration,
as in contracts entered into by
correspondence.
MAY BE ENCOMPASSED IN SEVERAL
INSTRUMENTS even though every instrument is not
signed by the parties
 Unsigned instruments are sufficient if are
clearly identified or referred to and made
part of the signed instrument/s
 2 copies of written agreement, one signed
by each party – binding on both to the same
extent as though there had been only 1 copy
and both had signed
General rule: written contract – all terms must be
in writing; contract partly in writing and partly
oral is, in legal effect, an oral contract
STA MARIA:
General rule: form is irrelevant to the binding effect
of a contract, given that it has all the 3 requirements
(Consent, Subject Matter, Causa)
Exceptions: (so that the parties can compel each other
to comply)
1. Law requires that a contract be in some
form to be valid – absolute and
indispensable
a. Reason: to avoid litigation
CASE - Cenido v. Apacionado: purpose of
prescribing a form: validity, enforceability, greater
efficacy
b. DE LEON: Formalities intended
for greater efficacy/ convenience/
to bind third persons – if not done,
would not adversely affect the
validity or enforceability of the
contract between the contracting
parties – can be an exception too
CASE – Deloso v. Sandiganbayan: contract originally
made orally and then later reduced into writing is not
anomalous or felonious
2. Law requires to be proved by some writing
(memorandum) of its terms. Their
existence not being provable by mere oral
 testimony (unless wholly or partly
executed)
a. Statute of Fraud, now Art. 1403(2)
DE LEON:
TWO ASPECTS OF CONTRACT
1. Intent or will – internal;
a. contract exists merely as a
psychological fact - no legal
effect, the law cannot take
cognizance of its existence
2. Expression of such intent or will –
necessary, in order that the will may
produce legal effect
a. The form
CLASSIFICATION OF CONTRACTS ACCDG TO
FORM (INF / F)
INFORMAL/COMMON – may be entered into in
whatever form, provided, all essential requisites are
present
FORMAL/SOLEMN – required by law for its
efficacy to be in a certain form
FORM FOR VALIDITY OF CONTRACT
1. Donation of a real property – must be in public
instrument
2. Donation of personal property (exceeds 5,000) –
donation and acceptance must be in writing
3. Sale of land through agent – authority of the
agent must be in writing
4. Contract of antichresis – amount of the principal
and of the interest must be specified in writing
5. Stipulation to pay interest – otherwise, no interest
is due
6. Contract of partnership – if immovables are
contributed, it must be in a public instrument
7. Transfer or sale of large cattle – must be
registered (public instrument) and a certificate of
transfer secured
8. Negotiable instruments
ART. 1357: RIGHT TO COMPEL EACH
OTHER TO OBSERVE THE FORM
REQUIRED BY LAW
 Contract is already perfected
Contracts covered by Art. 1358 – binding and
enforceable by action or suit despite the absence of
writing
If the requirement of law is directory only and has
no bearing on the validity or enforceability of the
contract – valid and enforceable; parties can enforce
the contract and demand that it be reduce in the form
required by law
 not an essential requisite of a contract’s
existence
 a coercive power granted to the
contracting parties by which they can
reciprocally compel the observance of
these formal requisites. The contract can be
enforced even if it may not be in writing.
(But before the contract can be reduced in
proper form or enforced, it may be necessary
to prove its existence)
CASE – Zaide v. CA: though defective in form, the
sale was valid; and the parties could compel each
other to do what was needful to make the document
of sale registrable
ART. 1358: THE FOLLOWING MUST APPEAR
IN A PUBLIC DOCUMENT:
1. Acts and contracts which have for their
object the creating, transmission,
modification, or extinguishment of real
rights over immovable property; sales of
real property or of an interest therein are
governed by Article 1403, No. 2 and 1405
2. The cession, repudiation, or renunciation
of hereditary rights or of those of the
conjugal partnership of gains
3. The power to administer property, or any
other power which has for its object an act
appearing or which should appear in a
public document, or should prejudice a
third person
4. The cession of actions or rights proceeding
from an act appearing in a public
document.
All other contracts where the amount involved
exceeds five hundred pesos must appear in
writing, even a private one. But sales of goods,
chattels or things in action are governed by
Articles 1403, No. 2 and 1405. (1280a)
 Failure to put in a public or private
document – not void or invalid,
o effective between parties
 Purpose: greater efficacy, of convenience
or of binding 3rd persons
DE LEON:
Formal requirement – for the benefit of 3rd
parties (inform and bind)
 PUBLIC DOCUMENT/ INSTRUMENT –
acknowledged before a notary public or
any official authorized to administer the
oath, by the person who executed the same
- Entitled to full faith and credit on their
face in the absence of any clear and
convincing evidence that their execution was
tainted by defects or irregularities that would
warrant a declaration of nullity
o Party - declares that the instrument
is free act and deed
o Officer - attests
 PRIVATE – acquires the character of a
public doc when it becomes part of an
official record and is certified by a public
officer duly authorized by law
- Notarization converts said document into a
public one and render it admissible in
evidence in court without further proof of its
authenticity and due execution
CHAPTER 4: REFORMATION OF
CONTRACTS
ART. 1359: TRUE INTENTION IS NOT
REVEALED IN THE INSTRUMENT
DE LEON:
REFORMATION – remedy by means of which a
written instrument is amended or rectified to
express or conform to the real agreement or
intention of the parties when by reason of mistake,
fraud, inequitable conduct or accident, the instrument
fails to express such agreement or intention
STA MARIA:
 Applies only to written contracts
contained in an instrument or series of
instrument
 Connotes a valid contract
2 FUNDAMENTAL MATTERS FOR
REFORMATION TO BE AVAILED
1. Instrument embodying the contract does not
reveal the true intention of the parties
2. Existence of a real and actual contract
entered by the parties
Failure to prove these may lead to the creation of an
entirely new contract not within the contemplation
of the parties
RATIONALE OF THE DOCTRINE
Equity; It would be unjust and inequitable to allow
the enforcement of a written instrument which does
not reflect or disclose the real meeting of the
minds of the parties.
DE LEON:
What is reformed is the instrument, not the contract
itself. It follows that whether the contract has become
disadvantageous or not under Article 1267 is
irrelevant to reformation and, therefore, cannot be an
element in the determination of the period for
prescription of the action to reform under Article
1144(1) of the Civil Code.
FUNCTION OF REFORMATION
 not make a new contract
 to establish and perpetuate the true
existing contract between the parties which,
under the technical rules of law, could not be
enforced but for such reformation
REQUISITES OF REFORMATION
1. There is a meeting of the minds of the
parties to the contract
2. The written instrument does not express
the true agreement or intention of the
parties
3. The failure to express the true intention is
due to mistake, fraud, inequitable
conduct, or accident
4. The facts upon which relief by way of
reformation of the instrument is sought are
put in issue by the pleadings
5. There is clear and convincing evidence
(which is more than mere preponderance of
evidence) of the mistake, fraud, inequitable
conduct, or accident.
Both parties must have executed a writing that
does not reflect their actual agreement.
Reformation is thus not available where no writing
exists, or a writing exists, but the parties do not
intend it to express their final agreement, or no
attempt is made to show any vice of consent therein
PAROL / ORAL EVIDENCE RULE
- Forbids any addition to or contradiction
of the terms of a written instrument by
testimony purporting to show that, at or
before the signing thereof, other or different
terms were orally agreed upon by the parties
General rule: Whatever is not found in the text of
the agreement should thus be construed as excluded,
waived, or abandoned
Exceptions: (to modify, explain or add to the terms of
the written agreement; should be put in issue in his
pleading)
1. An intrinsic ambiguity, mistake, or
imperfection in the written agreement
a. Mistake should be by both of the
parties
2. The failure of the written agreement to
express the true intent and agreement of the
parties thereto
a. Contract is so ambiguous or
obscure in terms that the
contractual intention of the parties
cannot be understood from a mere
reading of the instrument
3. The validity of the written agreement
4. The existence of other terms agreed to by
the parties or their successors in interest
after the execution of the written agreement.
STA. MARIA:
ACTION FOR REFORMATION – can be filed
within 10 years from the time the cause of the action
accrues
Cause of action accrues:
 Upon the knowledge of the ground for
reformation
 From the date of the execution of the
instrument embodying the contract if the
cause or causes for reformation were
already known at the time of the
execution of the said contract
CAUSE OF REFORMATION (MFI)
 Mistake, fraud, inequitable conduct, or
accident of the parties
o Inequitable conduct, - doing acts,
or omitting to do acts, which the
court finds to be unconscionable.
1. Taking advantage by one party of the other
party’s illiteracy
2. abusing confidence
3. concealing what of right should have been
disclosed
4. drafting or having drafted an instrument contrary
to the previous understanding of the parties and
making the other party to believe the instrument
other than it actually is
5. in taking advantage of a mistake of the other
party, known or suspected at the time of the
execution of the instrument.
 Onus probandi (burden of proof) is upon the
party who insists that the contract should
be reformed
 o Presumption: an instrument sets
out the true agreement of the
parties
 If these factors prevent a meeting of the
minds, annulment is the remedy
RULES OF COURT ON REFORMATION
 Instituted as a special civil action for
declaratory relief
 Since the purpose of an action for
declaratory relief is to secure an
authoritative statement of the rights and
obligations of the parties for their
guidance in the enforcement thereof, or
compliance therewith
o NOT settle issues arising from an
alleged breach thereof, it may be
entertained only before the breach
or violation of the law or contract
to which it refers.
 Thus, an action for reformation instituted
after the lessor allegedly breached the
contract with the lessee giving the lessee a
right of first refusal to buy the leased
premises, and which right of a first refusal
was the subject of the action for
reformation, cannot prosper.
ART. 1360: GENERAL LAW ON
REFORMATION AND THE CIVIL CODE
In case of conflict, NCC shall prevail. The general
law on reformation will have only suppletory effect
ART. 1361: MUTUAL MISTAKE AS CAUSE OF
REFORMATION
To justify reformation under this article, the
following requisites must concur:
1. The mistake must be of fact (Art. 1331:
parties would not have entered the contract if the
mistake is known to them), for if it is one of
law, the remedy is annulment (Art. 1334:
ignorance of provisions, erroneous
interpretation, erroneous conclusion as to the
legal effect)
2. Such mistake must be proved by clear and
convincing evidence
3. The mistake must be mutual, that is,
common to both parties to the instrument
4. The mistake must cause the failure of the
instrument to express their true intention.
CASE – Atilano v. Atilano: There was a mutual
mistake on the designation of the particular lands
owned by 2 brothers. However, the correct properties
were already in the possession of the persons to
whom they should rightfully belong, there was no
more need for reformation.
 Parties already implemented the true
intention of the contract
ART. 1362: UNILATERAL MISTAKE AND
UNILATERAL FRAUD/INEQUITABLE
CONDUCT
DE LEON:
General rule: a unilateral mistake in the making of an
agreement, of which the other party is entirely
ignorant and to which he in no way contributes,
will not affect the agreement, or afford ground for
its reformation (similar to Art. 1331)
STA. MARIA: Reformation can be sought if one
committed a unilateral mistake; it must be shown
that the other party has acted fraudulently or
inequitably resulting in the drafting of a document
which does not correspond to the actual contract
agreed upon by the parties
DE LEON: Right to ask for reformation is granted
only to the party who was mistaken in good faith.
Here, the mistake is not mutual.
IGNORANT / MISTAKEN AS TO THE LEGAL
CONSEQUENCES OF THE FACTS OF THE CASE
General rule: mistake or ignorance of the law is not
a ground for reformation because parties must, as a
rule, submit to the legal ramifications of their written
contracts clearly pursuant to their true intent and
meaning.
Exception: on account of misplaced confidence, and
because of some artifice or deception fraudulently
practiced upon him by the other party, a material
part of the contract was omitted from the writing,
or he was otherwise misled, equity will decree a
reformation
ART. 1363: CONCEALMENT OF MISTAKE BY
OTHER PARTY
DE LEON: The remedy of reformation may be
availed of only by the party who acted in good
faith. The concealment of the mistake by the other
party constitutes fraud.
STA. MARIA: Knowledge of one party of the
other’s mistake regarding the expression of the
agreement – mutual mistake
 Reformation can be sought by the former
ART. 1364: FAULT OF THE CLERK OR
TYPIST
Ignorance, lack of skill, negligence or bad faith by
the person drafting or typing the document
 Mistake is deemed mutual
 Either of the parties may ask for reformation
CASE – Huibonhoa v. CA: admission of one party’s
counsel oversighting the drafting did not suppress the
intention of the parties, hence, no reformation was
granted.
ART. 1365: MORTGAGE OR PLEDGE STATED
AS SALE
 Reformation is proper
CASE – Palileo v. Cosio: parties intended that the
house subject of the agreement was to be a collateral
for a particular loan, but the agreement apparently
states that the house was the subject of a conditional
sale of residential building
 Reformation was granted
ART. 1366: NO REFORMATION
 1. Simple donations inter vivos wherein no
condition is imposed
2. Wills
3. When the real agreement is void.
WILLS AND DONATIONS – gratuitous; do not
involve meeting of the minds
PRIOR AGREEMENT IS VOID – no legal effect;
reformation cannot be made
ART. 1367: ESTOPPEL IN REFORMATION
 One who ask for enforcement cannot
subsequently ask for reformation
 When a party brings an action to enforce the
contract, he admits its validity and that it
expresses the true intention of the parties.
The bringing of the action is thus
inconsistent with reformation.
ART. 1368: PERSONS WHO CAN ASK FOR
REFORMATION
 If the mistake is mutual:
o Either of the parties or their
successors-in-interest
 If by fraud or vitiated consent:
o Injured party or his heirs and
assigns
DE LEON: The effect of reformation is retroactive
from the time of the execution of the original
instrument.
ART. 1369: RULES OF COURT GOVERN
PROCEDURE
RULE 63 OF THE 1997 NEW RULES OF CIVIL
PROCEDURE:
Sec. 1(1). Any person interested under a deed, will,
contract or other written instrument, or whose rights
are affected by a statute, executive order or
regulation, ordinance, or any other governmental
regulation may, before breach or violation thereof
bring an action in the appropriate Regional Trial
Court to determine any question of construction or
validity arising, and for a declaration of his rights or
duties, thereunder.
Sec. 6. If before the final termination of the case, a
breach or violation of an instrument or a statute,
executive order or regulation, ordinance, or any other
governmental regulation should take place, the action
may thereupon be converted into an ordinary action,
and the parties shall be allowed to file such pleadings
as may be necessary or proper.
DE LEON:
General rule: all persons interested in the subject
matter of litigation, whether it is a legal or an
equitable interest should be made parties in suits to
reform written instruments, so that the court may
settle all of their rights at once and thus, prevent the
necessity of a multiplicity of suits.
Thus, in an action to reform a deed of sale, all parties
claiming an interest in the property, or any part
thereof purportedly conveyed by the instrument
sought to be reformed and whose interests will be
affected by the reformation of the instrument are
necessary parties to the action.
CHAPTER 5: INTERPRETATION OF
CONTRACTS
ART. 1370: CLEAR TERMS AND UPON THE
INTENTION OF THE PARTIES;
PREVAILANCE OF TRUE INTENTION OVER
CONTRARY WORDS
INTERPRETATION – the act of making
intelligible what was before not understood,
ambiguous, or not obvious.
- Method by which the meaning of language
is ascertained
DIFFERENCE BETWEEN INTERPRETATION
AND REFORMATION
INTERPRETATION – determination of the
meaning attached to the words written or spoken
which make the contract
REFORMATION – remedy in equity by means of
which a written instrument is made or construed to
express or conform to the real intention of the
parties
PURPOSE OF INTERPRETATION
 To be able to know the intent of the
parties so that the contract can be properly
implemented
o Agreement of the parties which
must be enforced
LITERAL MEANING CONTROLS WHEN
LANGUAGE IS CLEAR
CLEAR AND UNEQUIVOCAL TERMS -
contracts should be fulfilled according to the literal
sense of their stipulations
 No interpretation should be given which
would alter or change the plain meaning of
the words thereof
EVIDENT INTENTION OF PARTIES PREVAILS
OVER TERMS OF CONTRACT
INTENTION OF THE PARTIES – prevails when
contradicts with the words and clauses of a written
contract
 Cardinal rule: intention always prevails
CASE – Finman GAC v. CA: rules in statutory
construction can likewise be applied as a guide in
interpreting ambiguous provisions in a contract.
 Where the insurance policy procured by the
insured did not include murder or assault as
incidents exempting the insurance company
from liability in case of the death of the
insured.
 Expresso unius exclusion alterius – the
mention of one thing implies the exclusion
of another
ART. 1371: EVIDENCE OF THE INTENTION
CONTEMPORANEOUS & SUBSEQUENT
ACTS OF THE PARTIES – shall be considered in
determining the meaning and intention of the
stipulated clauses
 ANTECEDENT circumstance under which
the contract was made may also be
considered
ART. 1372: SPECIAL INTENT PREVAILS
OVER A GENERAL INTENT
General & special provisions found in the contract –
special provisions control
Reason: when the parties express themselves in
reference to a particular matter, the attention is
directed to that, and it must be assumed that it
expresses their intent; whereas a reference to some
general matter, within which the particular matter
may be included, does not necessarily indicate that
the parties had that particular matte in mind.
Ex. Sunwoo sold his house “including all the
furniture therein”. The term “all” should not be
understood to include Sunwoo’s refrigerator which is
distinct from “furniture”
STATCON DOCTRINES
 Noscitur a sociis – general and unlimited
terms are restrained and limited by particular
terms that follow
 Ejusdem generis – general words that
follow specific words in a list must be
construed as referring only to the types of
things identified by the specific words
ART. 1373: INTERPRETATION OF
STIPULATION WITH SEVERAL MEANINGS
Agreement that is susceptible of several meanings –
one which render it effectual should be given
ART. 1374: INTERPRETATION OF VARIOUS
STIPULATIONS AS A WHOLE
A contract must be interpreted as a whole and the
intention of the parties to be gathered from the
entire instrument and not from particular words,
phrases, or clauses. All provisions should, if possible,
be so interpreted as to harmonize with each other.
ART. 1375: INTERPRETATION OF THE
WORDS USED SHALL BE KEPT WITH THE
NATURE AND OBJECT OF THE CONTRACT
 Certain doubts still exist – should be settled
with the supplementary rules of this article
GRATUITOUS CONTRACT – incidental
circumstances, such interpretation should be made
which would result in the least transmission of rights
and interests
Ex. Rowoon gave his car to Kamden. It is not clear
whether the contract is a donation or a commodatum.
 Should be presumed as a mere commodatum
because it would transmit lesser rights than a
donation since Rowoon retains his
ownership of the car.
ONEROUS CONTRACT – the doubts should be
settled in favor of the greatest reciprocity of
interests
Ex. Dino borrowed from Cheol P20,000 at 12%
interest. It cannot be determined from the terms of the
contract whether the loan is payable in 6 months or in
1 year.
 Must be assumed that the period agreed
upon is 1 year which results in greater
reciprocity of interests since Dino can use
the money for 1 year, and C, on the other
hand, can earn interest due for 1 year instead
of only 6 months.
- Contract of sale – essentially onerous;
whether the parties intended a suspensive
condition or suspensive period for the
payment of the agreed price, the doubt shall
be resolved in favor of the latter, that is, the
buyer’s obligation is deemed to be actually
subsisting, with only its maturity postponed
or deferred.
PRINCIPAL OBJECT OF THE CONTRACT –
doubt cannot be resolved leaving the intention of the
parties unknown, the contract shall be null and void
ART. 1379: RULES OF COURT IN THE
CONSTRUCTION OF CONTRACTS

If a word is susceptible of 2 or more meanings – it RULE 130, SECTION 8 TO 17 OF THE RULES OF

shall be understood in the sense which is most in COURT
keeping with the nature and object of the contract
ART. 1376: USAGE & CUSTOM OF PLACE
Usage or custom of the place where the contract was
entered into may be received to explain what is
doubtful or ambiguous in a contract

 Necessary to prove the existence of usage or

custom
ART. 1377: INTERPRETATION OF OBSCURE
WORDS AGAINST THE ONE WHO CAUSED
IT

 Generally applied to contracts of adhesion

o Drafted by banks, adhered by
clients by mere affixation of
signature
Reason: the party who drafts the contract more easily
than the other, could have prevented mistakes or
ambiguity in meaning by careful choice of words

 Generally, the party who causes the

obscurity acts with ulterior motives
ART. 1378: RULES IN CASE DOUBTS
ABSOLUTELY IMPOSSIBLE TO SETTLE