II. KINDS OF CONTRACTS A.

Consensual Contracts which are perfected by mere consent of the parties regarding the subject matter and the cause of the contract B. Real Contracts which are perfected not merely by consent but by delivery, actual or constructive, of the object of the obligation. (ex: contract of pledge, commodatum, mutuum) C. Formal or Solemn Contracts for which a special form is necessary for its perfection Formal/Solemn Contract 1.) Donations of real property 2.) Donations of personal property 3.) Partnerships where real property is contributed 4.) Contract of Antichresis Special Form required by law Must be in a public instrument (Art. 749) Must be in a written contract if the donation exceeds P500 (Art.748) Must be in public instrument; otherwise the contract of partnership is void (Art. 1771 & 1773) The amount of the principal and of the interest shall be specified in writing; otherwise, the contract of antichresis shall be void (Art. 2134) 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. (Art.1874.) a.) Must be in writing, signed by the shipper or owner; b.) supported by a valuable consideration, and c.) reasonable, just and not contrary to public policy Must be recorded in the Chattel Mortgage Register (Art. 2140) Requires transfer of the certificate of registration (Sec.523,Rev.Adm.Code)

5.) Agency to sell real property or any interest therein 6.) Stipulation to pay interest on loans, interest for the use of money 7.) Stipulation limiting common carriers duty of extraordinary diligence to ordinary diligence

8.) Chattel mortgage 9.) Transfer of large cattle III. FORMALITY

Art. 1356. Contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present. However, when the law requires that a contract be in some form in order that it may be valid or enforceable, or that a contract be proved in a certain way, that requirement is absolute and indispensable. In such cases, the right of the parties stated in the following article cannot be exercised. A. GENERAL RULE: Contracts shall be obligatory, in whatever form they may have been entered into, provided all essential requisites for their validity are present. (Spiritual system of the Spanish Code) B. EXCEPTION: When the law requires that a contract be in some form in order that it may be VALID or ENFORCEABLE

(Anglo-American principle in Statutes of Fraud) (1) Formal contracts (2) Real contracts When Form is important: a.) For Validity (ex: Formal/Solemn contracts) b.) For Enforceability (ex: agreements enumerated under the Statute of Frauds, Art.1403) c.) For Convenience (ex: for contracts enumerated in Art. 1358) Art. 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. Note: This article applies only when form is needed for convenience, not for validity or enforceability. Thus, before the contracting parties may be compelled to execute the needed form, it is essential that the contract be: (1) perfected or valid (Art. 1357) (2) enforceable under the Statute of Frauds (Art. 1356) Art. 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 a governed by Articles 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. Note: The necessity for the public document in the contracts enumerated under this article is only for convenience, not for validity or enforceability.