III.

Form of Contracts

C. Kinds of Formalities required by law:

1. Those required for the validity of contracts, such as those referred to in Arts:
a. Donation
748. The donation of a movable may be made orally or in writing.

An oral donation requires the simultaneous delivery of the thing or of the document
representing the right donated.

If the value of the personal property donated exceeds P500, 000, the donation and the
acceptance shall be made in writing. Otherwise, the donation shall be void.

749. In order that the donation of an immovable may be valid, it must be made in a public
document, specifying therein the property donated and the value of the charges which the done
must satisfy.

The acceptance may be made in the same deed of donation or in a separate public document,
but it shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both instruments.

b. Agency – by contract of agency a person binds himself to render some service or to do

something in representation or on behalf of another, with the consent or authority of the latter
(1868)
1874. When a sale of a piece of land or any interest therein is through an agent, the authority of
the latter shall be in writing; otherwise, the sale shall be void.

c. Antichresis – creditor aquires the right to receive an immovable of his debtor, with the
obligation to apply them to the payment of the interest, if owing, and thereafter to the principal
of his credit. (2132)
2134. The amount of the principal and of the interest shall be specified in writing; otherwise, the
contract of antichresis shall be void.

d. Partnership
1771. A partnership may be constituted in any form, except where immovable property or real
rights are contributed thereto, in which case a public instrument shall be necessary.

1773. A contract of partnership is void, whenever immovable property is contributed thereto, if

an inventory of said property is not made, signed by the parties, and attached to the public
instrument.

2. Those required, not for validity, but to make the contract effective as against third persons,
such as those covered by Arts. 1357 and 1358.
 1357. If the law requires a document or other special form, as in the acts and contracts
enumerated in the following article, the contracting parties may compel each other to observe
that form, once the contract has been perfected. This right may be exercised simultaneously
with the action upon the contract.

1358. The following must appear in a public document:

(1) Acts and contracts which have for their object the creation, transmission, modification or
extinguishment of real rights over immovable property; sales of real property or of an interest
therein are governed by Articles 1403, No.2 and 1405;

(2) The cession, repudiation or renunciation of hereditary rights or those of 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 P500, 000 must appear in writing, even
a private one. But goods, chattels or things in action are governed by Articles 1403, No. 2 and
1405.

3. Those required for the purpose of proving the existence if the contract, such as those under the
Statute of Frauds in Art. 1403. (Unenforceable Contracts)
1403. The following contracts are unenforceable, unless they are ratified:
(1) Those entered into the name of another person by one who has been given no authority or
legal representation, or who has acted beyond his powers;

(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the
following cases an agreement hereafter made shall be unenforceable by action, unless the
same, or some note or memorandum thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence therefore, of the agreement cannot be received without the
writing, or a secondary evidence of its contents:
(a) An agreement that by its terms is not to be performed within a year from the making
thereof;
(b) A special promise to answer for the debt, default, or miscarriage of another;
(c) An agreement made in consideration of marriage, other than a mutual promise to
marry;
(d) An agreement for the sale of goods, chattels, or things in action, at a price not less
than P500,000, unless the buyer accept and receive part of such goods and chattels, or
the evidences, or some of them, of such things in action, or pay at the time some part of
the purchase money; but when a sale is made by auction and entry is made by the
 auctioneer in his sales book, at the time of the sale, of the amount and kind of property
sold, terms of sale, price, names of the purchasers and persons on whose account the
sale is made, it is a sufficient memorandum;
(e) An agreement for the leasing for a longer period than one year, or for the sale of real
property or of an interest therein;
(f) A representation as to the credit of a third person.
(3) Those where both parties are incapable of giving consent to a contract.

a. No Form:

Tan v. Lim
San Lorenzo Dev’t Corp. v. CA

b. Exception:
Arts. 748, 749, 1581, 1874, 2134, 1956, 1773, 1403(2)

Sales
1581. The form of sale of large cattle shall be governed by special laws.

Loan
1956. No interest shall be due unless it has been expressly stipulated in writing.