SECTION 2 Object of Contracts

Article 1347. All things which are not outside the

commerce of men, including future things, may be the
object of a contract. All rights which are not
intransmissible may also be the object of contracts.

No contract may be entered into upon future

inheritance except in cases expressly authorized by
law.

All services which are not contrary to law, morals, good

customs, public order or public policy may likewise be
the object of a contract. (1271a)

Article 1348. Impossible things or services cannot be

the object of contracts. (1272)

Article 1349. The object of every contract must be

determinate as to its kind. The fact that the quantity is
not determinate shall not be an obstacle to the
existence of the contract, provided it is possible to
determine the same, without the need of a new contract
between the parties. (1273)

SECTION 3 Cause of Contracts

Article 1350. In onerous contracts the cause is

understood to be, for each contracting party, the
prestation or promise of a thing or service by the other;
in remuneratory ones, the service or benefit which is
remunerated; and in contracts of pure beneficence, the
mere liberality of the benefactor. (1274)

Article 1351. The particular motives of the parties in

entering into a contract are different from the cause
thereof. (n)

Article 1352. Contracts without cause, or with unlawful

cause, produce no effect whatever. The cause is
unlawful if it is contrary to law, morals, good customs,
public order or public policy. (1275a)

Article 1353. The statement of a false cause in

contracts shall render them void, if it should not be
proved that they were founded upon another cause
which is true and lawful. (1276)

Article 1354. Although the cause is not stated in the

contract, it is presumed that it exists and is lawful,
unless the debtor proves the contrary. (1277)
Article 1355. Except in cases specified by law, lesion
or inadequacy of cause shall not invalidate a contract,
unless there has been fraud, mistake or undue
influence. (n)

CHAPTER 3 Form of Contracts

Article 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. (1278a)

Article 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. (1279a)

Article 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 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)
 CHAPTER 4 Reformation of Instruments (n)

Article 1359. When, there having been a meeting of

the minds of the parties to a contract, their true
intention is not expressed in the instrument purporting
to embody the agreement, by reason of mistake, fraud,
inequitable conduct or accident, one of the parties may
ask for the reformation of the instrument to the end that
such true intention may be expressed.

If mistake, fraud, inequitable conduct, or accident has

prevented a meeting of the minds of the parties, the
proper remedy is not reformation of the instrument but
annulment of the contract.

Article 1360. The principles of the general law on the

reformation of instruments are hereby adopted insofar
as they are not in conflict with the provisions of this
Code.

Article 1361. When a mutual mistake of the parties

causes the failure of the instrument to disclose their
real agreement, said instrument may be reformed.

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.

Article 1365. If two parties agree upon the mortgage or

pledge of real or personal property, but the instrument
states that the property is sold absolutely or with a right
of repurchase, reformation of the instrument is proper.

Article 1366. There shall be no reformation in the

following cases:

(1) Simple donations inter vivos wherein no condition is

imposed;
(2) Wills;
(3) When the real agreement is void.
Article 1367. When one of the parties has brought an
action to enforce the instrument, he cannot
subsequently ask for its reformation.

Article 1368. Reformation may be ordered at the

instance of either party or his successors in interest, if
the mistake was mutual; otherwise, upon petition of the
injured party, or his heirs and assigns.

Article 1369. The procedure for the reformation of

instrument shall be governed by rules of court to be
promulgated by the Supreme Court.

CHAPTER 5 Interpretation of Contracts

Article 1370. If the terms of a contract are clear and

leave no doubt upon the intention of the contracting
parties, the literal meaning of its stipulations shall
control.

If the words appear to be contrary to the evident

intention of the parties, the latter shall prevail over the
former. (1281)

Article 1371. In order to judge the intention of the

contracting parties, their contemporaneous and
subsequent acts shall be principally considered. (1282)

Article 1372. However general the terms of a contract

may be, they shall not be understood to comprehend
things that are distinct and cases that are different from
those upon which the parties intended to agree. (1283)

Article 1373. If some stipulation of any contract should

admit of several meanings, it shall be understood as
bearing that import which is most adequate to render it
effectual. (1284)

Article 1374. The various stipulations of a contract

shall be interpreted together, attributing to the doubtful
ones that sense which may result from all of them taken
jointly. (1285)

Article 1375. Words which may have different

significations shall be understood in that which is most
in keeping with the nature and object of the contract.
(1286)

Article 1376. The usage or custom of the place shall

be borne in mind in the interpretation of the ambiguities
of a contract, and shall fill the omission of stipulations
which are ordinarily established. (1287)
Article 1377. The interpretation of obscure words or
stipulations in a contract shall not favor the party who
caused the obscurity. (1288)

Article 1378. When it is absolutely impossible to settle

doubts by the rules established in the preceding
articles, and the doubts refer to incidental
circumstances of a gratuitous contract, the least
transmission of rights and interests shall prevail. If the
contract is onerous, the doubt shall be settled in favor
of the greatest reciprocity of interests.

If the doubts are cast upon the principal object of the

contract in such a way that it cannot be known what
may have been the intention or will of the parties, the
contract shall be null and void. (1289)

Article 1379. The principles of interpretation stated in

Rule 123 of the Rules of Court shall likewise be
observed in the construction of contracts. (n)

CHAPTER 6 Rescissible Contracts

Article 1380. Contracts validly agreed upon may be

rescinded in the cases established by law. (1290)

Article 1381. The following contracts are rescissible:

(1) Those which are entered into by guardians

whenever the wards whom they represent suffer lesion
by more than one-fourth of the value of the things
which are the object thereof;

(2) Those agreed upon in representation of absentees,

if the latter suffer the lesion stated in the preceding
number;

(3) Those undertaken in fraud of creditors when the

latter cannot in any other manner collect the claims due
them;

(4) Those which refer to things under litigation if they

have been entered into by the defendant without the
knowledge and approval of the litigants or of competent
judicial authority;

(5) All other contracts specially declared by law to be

subject to rescission. (1291a)

Article 1382. Payments made in a state of insolvency

for obligations to whose fulfillment the debtor could not
be compelled at the time they were effected, are also
rescissible. (1292)