"Obligations and Contracts" (often abbreviated "Oblicon") is Book IV of the Philippine Civil Code (Republic Act 386). It governs every promise between private parties — from a verbal sale of a sari-sari store snack to a 200-page financing agreement. Article 1157 enumerates five sources of obligations; Article 1318 enumerates the three essential requisites of a contract; Articles 1305-1430 spell out the consequences when any requisite is missing or defective.
Five sources of obligations (Art. 1157)
- Law — obligations imposed directly by statute (e.g., parental support under the Family Code).
- Contracts — the parties' own agreement.
- Quasi-contracts — lawful, voluntary, unilateral acts giving rise to obligation by operation of law (Arts. 2142-2175). Two main forms: negotiorum gestio (officious management) and solutio indebiti (payment of what is not due).
- Acts or omissions punished by law (delict) — civil liability arising from a crime (Art. 100, Revised Penal Code).
- Quasi-delicts — fault or negligence causing damage where no contractual relation exists (Art. 2176). A dedicated Quasi-Delict overview is forthcoming.
Does a contract have to be in writing? (Art. 1356)
As a general rule, no. Under Article 1356 of the Civil Code, contracts are fully obligatory regardless of the form in which they were entered into. As long as there is an agreement between the parties — with the essential requisites below present — the contract is legally binding, whether it is verbal, written, or implied from conduct.
The rule has one important exception: when the law requires a particular form for the contract to be valid, that requirement is absolute and indispensable. A contract that fails the required form here is void, not merely unenforceable. (This differs from the Statute of Frauds under Article 1403, where writing is required only for certain agreements to be enforceable — not for them to be valid.)
Sample instances where a written form is required for validity:
- Donation of real property (immovable) — must be made in a public instrument specifying the property donated (Art. 749).
- Donation of personal property (movable) worth more than ₱5,000 — the donation and its acceptance must be in writing; otherwise the donation is void (Art. 748).
- Contribution of immovable property to a partnership — must appear in a public instrument, with an inventory of the property signed by the parties (Arts. 1771 & 1773).
- Authority of an agent to sell land — the authority to sell a piece of land, or any interest in it, must be in writing; otherwise the sale is void (Art. 1874).
- Stipulation to charge interest on a loan — no interest is due unless it is expressly stipulated in writing (Art. 1956).
- Antichresis (Art. 2134) — the amount of the principal and of the interest must be specified in writing.
Three essential requisites of a contract (Art. 1318)
A contract does not exist without all three:
- Consent — meeting of minds. Vitiated by mistake, violence, intimidation, undue influence, or fraud (Arts. 1330-1346).
- Object certain — the thing or service that is the subject. Must be determinate or determinable, within the commerce of man, and possible.
- Cause of the obligation — the "why." For onerous contracts, the cause is the prestation each party promises. For gratuitous contracts, the cause is the donor's liberality.
Missing one of the three: the contract is void from inception. Defect in one (e.g., consent vitiated): voidable, subject to annulment.
The four defective contracts
Read the codal text on Intellegal. Each of these provisions is published in full on our Civil Code reader — browse Book IV: Obligations and Contracts (Arts. 1156–2270) or the complete Civil Code of the Philippines (RA 386).
Relevant cases
Worked example: void vs voidable
A signs a deed of sale of his Quezon City land to B for ₱1,000,000. Three scenarios:
- Scenario 1: A is sane, an adult, and consents freely. Object certain, cause established. Contract is valid. B becomes owner.
- Scenario 2: A is sane, adult, but consented because B held his daughter under duress. Consent vitiated by intimidation. Contract is voidable (Art. 1390). A can sue to annul within 4 years.
- Scenario 3: A is a 15-year-old minor. Capacity to give consent absent. Contract is voidable if A's guardian seeks annulment (Art. 1390). Note that gross incapacity (e.g., A is unconscious) instead makes the contract void for absent consent (Art. 1318).
- Scenario 4: A and B agree on the sale but the "land" doesn't exist (fictitious lot). Object not certain. Contract is void from inception (Art. 1318 + 1409).
Related reading
- Contract Review — these requisites, applied clause by clause to a contract you upload
- Case Contrast — compare two contract-dispute rulings side by side
- Quasi-Delict (Art. 2176) — the 5th source of obligations (forthcoming)
- Demurrer to Evidence — procedural tool in contract disputes (forthcoming)
FAQ
What's the difference between void and voidable?
Void contracts never existed in law. Voidable contracts exist until annulled. Action to declare a void contract void does not prescribe. Action to annul a voidable contract prescribes in 4 years from the discovery of the defect.
Is consent in writing required?
Generally no — Article 1315 says contracts are perfected by mere consent (Article 1305 is the provision that merely defines a contract). But the Statute of Frauds (Art. 1403[2]) requires certain contracts (sale of real property, lease over a year, etc.) to be in writing to be enforceable.
Does a contract have to be in writing to be valid?
As a general rule, no. Under Article 1356, a contract is obligatory in whatever form it was entered into, provided the essential requisites are present. The exception is when the law requires a specific form for validity — for example, a donation of real property (Art. 749) or a donation of movable property worth more than ₱5,000 (Art. 748) must be in writing, or the contract is void. This is stricter than the Statute of Frauds above, which affects only enforceability, not validity.
What is "cause" vs "consideration"?
"Cause" is the Philippine civil-law concept (from Spanish causa). It is broader than common-law "consideration." In an onerous contract, cause = the prestation each side gives. In a gratuitous contract (donation), cause = the donor's liberality.