Obligations and Contracts

Chapter 1: Contracts General Provisions

Art. 1305.
A contract is a meeting of minds between two persons whereby one binds himself, with respect to
the other, to give something or to render some service. (1254a)

What is a Contract?
A contract happens when:
1. Two people (or more) agree to do something for each other.
○ One person offers something (like help, service, or money),
○ The other person accepts that offer.
2. This is called a "meeting of minds" — meaning both sides clearly agree and understand what
they’re going to do.

● You can’t make a contract with yourself, because a contract needs at least two parties.
● BUT: One person can still make a contract if they represent two different interests.
➤ Example: If you're the owner of a store and also the manager of another business, you
could sign a contract as both, since they are legally separate roles.

Contract vs. Obligation

Contract
● A contract is an agreement between people.
● It’s one way to create an obligation.
● Example: You agree to clean your neighbor’s yard, and they agree to pay you ₱200. That
agreement is the contract.
Obligation
● An obligation is the legal duty to do something (like pay, deliver, or perform).
● It comes after the contract is made — it’s the result or the “tie” that connects people legally.

Contract is like a promise you both agree on.

Obligation is what you’re actually required to do because of that promise.

All contracts create obligations.

But not all obligations come from contracts.
➤ Example: The government makes you pay taxes — that’s an obligation from the law, not a
contract.

Contract vs. Agreement

Agreement
● An agreement is when two or more people decide on something together.
● It can be about anything — serious or casual.
● Example: You and your friend agree to meet at the mall or go to a dance party.
➤ That’s an agreement — but not a contract.
Contract
● A contract is a special kind of agreement that the law will enforce.
● If someone breaks it, you can go to court to ask for help.
● But for it to be a contract, it must:
1. Be lawful (not illegal),
2. Have all the valid parts (see Art. 1318),
3. And involve something serious, like money, service, or property.

Easy Trick to Remember:

All contracts are agreements,
but not all agreements are contracts.

Example:
● Agreement only: “Let’s go to the party later!”
→ If your friend backs out, you can’t sue them.
● Contract: “I’ll design your poster, and you’ll pay me ₱500.”
→ If they don’t pay, you can take legal action.

Classification of Contracts

1. According to name or designation

a. Nominate- These are contracts that the law recognizes and names.
b. Inominate- These don’t have a specific name under the law

2. According to perfection
a. Consensual- These are perfected by consent — just by agreeing.
b. Real- These are perfected not just by consent, but also by delivery of the
thing.

3. According to cause
a. Onerous- This is when both sides give something and both get something in return.
b. Remuneratory or Remunerative- One party gives as a reward for a service that was already
done — not as payment for a future service.
c. Gratuitous- Only one party gives, and the other doesn't give anything in return.

4. According to form
a. Informal, common or simple- These don’t need any special form to be valid.
 b. Formal or solemn- These require a specific form (like being in writing, notarized, or
registered) to be valid.

5. According to obligatory force

a. Valid- This is the perfect kind of contract — it follows all the legal rules (see Art. 1306 &
1318).
b. Rescissible- A valid contract at first, but can be cancelled (rescinded) if it causes damage
or harm to someone (like creditors or one of the parties).
c. Voidable- It’s valid for now, but can be canceled because there was a problem during
consent (like one person was tricked, forced, or underage).
d. Unenforceable- It’s not valid in court unless certain things are fixed (like getting it in
writing).
e. Void or inexistent- It’s like the contract never existed at all.

6. According to person obliged

a. Unilateral- Only one party has an obligation — the other does not have to do anything in
return.
b. Bilateral- Both parties have obligations — it’s a give-and-take situation.

7. According to risks
a. Commutative- Both parties know exactly what they’re getting, and the benefit or risk is
equally balanced
b. Aleatory- The contract depends on an uncertain event or contingency — meaning you
don’t know what will happen.

8. According to Liability
a. Unilateral- Only one party has an obligation to perform or deliver something.
b. Bilateral- Both parties have mutual obligations — they each owe something to the other.

9. According to Status
a. Executory- The contract has not yet been fully performed by both parties.
b. Executed- The contract has been completely performed by both parties.

10. According to dependence to another contract

a. Preparatory- This is a preliminary contract entered into to set up or create the conditions
for another contract to happen.
b. Accessory- This contract depends on another contract for its existence and validity.
c. Principal- This is the main contract that stands on its own.

11. According to dependence of part of contract to other parts.

 a. Indivisible- All parts of the contract depend on each other.
b. Divisible- Parts of the contract can be performed separately.

Art. 1306.
The contracting parties may establish such stipulations, clauses, terms and conditions as they may
deem convenient, provided they are not contrary to law, morals, good customs, public order, or
public policy. (1255a)

Valid Contracts
– meet all the legal requisites for the type of agreement involved and the limitations on
contractual stipulation and are, therefore legally binding and enforceable

Freedom to contract guaranteed.

– The freedom to contract means individuals have the right to freely enter into agreements or
contracts with others. This right is protected by Article III, Section 10 of the Philippine
Constitution. Which means that once a contract is legally formed, the government cannot
interfere.
– However, this freedom is not absolute:
1. Only valid contracts are protected
2. "It cannot be invoked as against the right of the state to exercise its police power.
(infra.) - The individual's right to contract cannot stop the government from enforcing
laws meant to protect the public.
Example:
– A factory owner and workers sign a contract where workers agree to work 16 hours a day with
no rest days, just to earn more money.
– However, Since the freedom to contract is constitutionally and legally protected, courts are
expected to be cautious and only declare contracts void when there is a clear and valid legal
reason.

Limitation on contractual stipulations

1. Law
– Fundamental requirement that the contract entered into must be in accordance with,
and not repugnant to, and applicable statute. Its terms are embodied in every contract.
The law thus sets limits
2. Police Power
– This means the government can step in to protect morals, public safety, good customs,
and public interest. Even if the contract doesn't break any law, it can still be limited if it
goes against public welfare
– When there is no law in existence or when the law is silent, the will of the parties
prevails unless there contract contravenes the limitation of morals, good customs,
public order, or public policy
– All contractual obligations are subject to- as an implies reservation therein- to the
possible exercise of the police power of the state
Contracts must not be contrary to
1. Law
– Because law is superior to a contract
2. Morals
– Good and right conduct evolved in a community
3. Good customs
– Talks about good habits and practices
4. Public order
– Public safety
5. Public Policy
– Much broader than public order, refer not only to public safety but also to
consideration which are moved by the common good

Art. 1307.
Innominate contracts shall be regulated by the stipulations of the parties, by the provisions of Titles
I and II of this Book, by the rules governing the most analogous nominate contracts, and by the
customs of the place. (n)

Classification of contracts according to its name or designation

1. Nominate Contract
– Has specific name or designation in law
2. Innominate contract
– Has no specific name or designation in law

Kinds of Innominate Contract

1. Do ut des – "I give that you may give"
Example: I give you my old laptop, and in return, you give me your tablet.
→ A mutual exchange of things.

2. Do ut facias – "I give that you may do"

Example: I pay you ₱1,000 so you can paint my house.
→ I give money, and you perform a service.

3. Facio ut des – "I do that you may give"

Example: I tutor your child for a month, and at the end, you pay me a fee.
→ I perform an act, and you give something in return

4. Facio ut facias – "I do that you may do"

Example: I promote your business on social media, and in return, you design my website.
→ An exchange of services.
However, it's important to note that "Do ut des" is no longer considered innominate. It now has a
legal name: barter or exchange, as stated in Article 1638.

Rules Governing Innominate Contracts.

Innominate contracts shall be governed by:
1. The agreement of the parties;
2. The provisions of the Civil Code on obligations and contracts;
3. The rules governing the most analogous nominate contracts;
4. The customs of the place.

Art. 1308.
The contract must bind both contracting parties; its validity or compliance cannot be left to the will
of one of them. (1256a)

Contract binds both contracting parties.

– A contract is an agreement which gives rise to obligations. It must bind both parties in order
that it can be enforced against either. Without this equality between the parties, it cannot be
said that the contract has the force of law between them. (Art. 1159.)
– It is a fundamental rule that no party can renounce or violate the law of the contract without
the consent of the other. Hence, "its validity or compliance cannot be left to the will of one of
them." (Art. 1308; see Art. 1182.)

Art. 1311.
Contracts take effect only between the parties, their assigns and heirs, except in case where the
rights and obligations arising from the contract are not transmissible by their nature, or by
stipulation or by provision of law. The heir is not liable beyond the value of the property he received
from the decedent.
If a contract should contain some stipulation in favor of a third person, he may demand its
fulfillment provided he communicated his acceptance to the obligor before its revocation. A mere
incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly
and deliberately conferred a favor upon a third person. (1257a)

Art. 1314.
Any third person who induces another to violate his contract shall be liable for damages to the other
contracting party. (n)

Art. 1315.
Contracts are perfected by mere consent, and from that moment the parties are bound not only to
the fulfillment of what has been expressly stipulated but also to all the consequences which,
according to their nature, may be in keeping with good faith, usage and law. (1258)

Art. 1316.
Real contracts, such as deposit, pledge and Commodatum, are not perfected until the delivery of
the object of the obligation. (n)

CHAPTER II: ESSENTIAL REQUISITES OF CONTRACTS GENERAL PROVISIONS

Art. 1318.
There is no contract unless the following requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established. (1261)

Classes of Elements of a Contract

1. Essential Element
– no contract can validly exist regardless of the intentions of the parties
– also known as requisites
– common
– those present in all contracts
– consent
– object
– cause
– special
– those of common to all contracts or those which must be present only in, or peculiar
to, certain specified contracts, and such peculiarity may be:
– as regards to form, as for example, public instrument in donation of immovable
property, delivery in real contract, registration in real estate mortgage, chattel
mortgage, etc.
– as regards the subject matter, as for example, real property in antichresis,
personal property in pledge
– as regards the consideration or cause, as for example, price in sale and in lease,
liberality in commodatum
– valid contract is one that manifest all the essential elements of a contract

2. Natural Elements
– presumed to exist in certain contracts unless the contrary is expressly stipulated by the
parties, like warranty against eviction, or warranty against hidden defects in sale

3. Accidental Elements
– particular stipulations, clauses, terms, or condition established by the parties in their
contract, like conditions, period, interest, penalty, etc., and, therefore, they exist only when
 they are expressly provided by the parties.

Section 1: Consent

Art. 1319.
Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract. The offer must be certain and the acceptance absolute. A
qualified acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not bind the offerer except from the time it came to his
knowledge. The contract, in such a case, is presumed to have been entered into in the place where
the offer was made. (1262a)

Consent
– conformity or concurrence of wills (offer and acceptance) and with respect to contracts, it is
the agreement of the will of one contracting party with that of another or others, upon the
object and terms of the contract
– the meeting of minds or mutual assent between the parties on the subject matter and the
cause which are to constitute the contract even if neither has been delivered and
notwithstanding that the parties have not affixed other signatures in written form. Mutual
assent agreement takes place when there is an offer and acceptance of the offer.

Offer
– proposal made by one party to another, indicating a willingness to enter into a contract.
– more than a. Expression of desire or hope
– a promise to act or to refrain from acting on condition that the terms thereof are accepted by
the person to them it is made
– Offer must be certain and seriously intended

Acceptance
– manifestation by the offeree of his assent to all the terms of the offer
– no meeting of mind of there was no acceptance
– Acceptance of offer must be clear and absolute

Art. 1320.
An acceptance may be express or implied. (n)

Express vs. Implied Acceptance.

– An express acceptance in the form of a promise to pay a certain amount or to do something,
may be oral or written. An implied acceptance is one that is inferred from act or conduct. As a
rule, mere silence cannot be construed as acceptance.

Art. 1323.
An offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either
party before acceptance is conveyed. (n)

Art. 1324.
When the offerer has allowed the offeree a certain period to accept, the offer may be withdrawn at
any time before acceptance by communicating such withdrawal, except when the option is founded
upon a consideration, as something paid or promised. (n)

Option Contract
– one giving a person for a consideration a certain period within which to accept the offer of
the offerer. It is separate and distinct from the contract which will be perfected upon the
acceptance of the offer
– option may also refer to the privilege itself give. To the offeree to accept an offer within a
certain period

Withdrawal of offer where period stipulated for acceptance

– where the offeree gives to the offeree a certain period within which to accept the offer, the
general rule is that the offeree gives may be withdrawn as a Matthew of right at any time
before the acceptance. The exception is when the option is founded upon a consideration, as
something paid or promised

Art. 1325.
Unless it appears otherwise, business advertisements of things for sale are not definite offers, but
mere invitations to make an offer. (n)

GR: Business advertisements of things for sale are not definite offers. Acceptance of which will
perfect
a contract but are merely invitations to the reader to make an offer.

XPN: If the advertisement is complete in all the particulars necessary in a contract, it may amount to
a
definite offer which, if accepted, will produce a perfected contract.

Art. 1327.
The following cannot give consent to a contract:
(1) Unemancipated minors;
(2) Insane or demented persons, and deaf-mutes who do not know how to write. (1263a)

Person who cannot give consent

1. Unemancipated Minor
 – Below 18 years old
– Still subject to parental authority

2. Insane or demented person

– insanity may exist at the time of contracting

3. Deaf-mutes
– deaf and dumb
– if the deaf-mute knows how to write the contract is valid for then he is capable of giving
intelligent consent

Art. 1328.
Contracts entered into during a lucid interval are valid. Contracts agreed to in a state of
drunkenness or during a hypnotic spell are voidable. (n)

Lucid Interval
– temporary period of sanity
– valid
– it must be shown, however, that there is a full return of the mind to sanity as to enable him to
understand the contract he is entering to

Drunkenness and hypnotic spell

– impaired the capacity of a person to give intelligent consent
– Voidable

Art. 1330.
A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud
is voidable. (1265a)

Vices of Consent
1. Error or Mistake
2. Violence or Force
3. Intimidation or threat or duress
4. Undue Influence
5. Fraud or Deceit

1. Error or mistake

● Art. 1331.
In order that mistake may invalidate consent, it should refer to the substance of the thing which is
the object of the contract, or to those conditions which have principally moved one or both parties
to enter into the contract.
Mistake as to the identity or qualifications of one of the parties will vitiate consent only when such
identity or qualifications have been the principal cause of the contract.
A simple mistake of account shall give rise to its correction. (1266a)

● Art. 1332.
When one of the parties is unable to read, or if the contract is in a language not understood by him,
and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof
have been fully explained to the former. (n)

● Art. 1333.
There is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object
of the contract. (n)

● Art. 1334.
Mutual error as to the legal effect of an agreement when the real purpose of the parties is
frustrated, may vitiate consent. (n)

2. Violence or force – Article 1335 (1st par.)

3. Intimidation or threat or duress – Article 1335 ( 2nd to last par.)

Art. 1335.
There is violence when in order to wrest consent, serious or irresistible force is employed.
There is intimidation when one of the contracting parties is compelled by a reasonable and well-
grounded fear of an imminent and grave evil upon his person or property, or upon the person or
property of his spouse, descendants or ascendants, to give his consent.
To determine the degree of intimidation, the age, sex and condition of the person shall be borne in
mind.
A threat to enforce one's claim through competent authority, if the claim is just or legal, does not
vitiate consent. (1267a)

Art. 1336.
Violence or intimidation shall annul the obligation, although it may have been
employed by a third person who did not take part in the contract. (1268)

4. Undue Influence

Art. 1337.
There is undue influence when a person takes improper advantage of his power over the will of
another, depriving the latter of a reasonable freedom of choice. The following circumstances shall
be considered: the confidential, family, spiritual and other relations between the parties, or the fact
that the person alleged to have been unduly influenced was suffering from mental weakness, or was
ignorant or in financial distress. (n)

5. Fraud or Deceit

Art. 1338.
There is fraud when, through insidious words or machinations of one of the contracting parties, the
other is induced to enter into a contract which, without them, he would not have agreed to. (1269)
NOTE FROM TABLE:

Causal Fraud
– which is a ground for the annulment of a contract, although it may also give rise to an action
for damages
– Requisites
– It should be serious
– It should not have been employed by both contracting parties, i.e., they should no be in
pari delicto
– It should not have been known by the other contracting party

Incidental fraud
– only renders the party who employs it liable for damages because the fraud was not the
principal inducement that led the other to give his consent

Art. 1345.
Simulation of a contract may be absolute or relative. The former takes place when the parties do
not intend to be bound at all; the latter, when the parties conceal their true agreement. (n)

Art. 1346.
An absolutely simulated or fictitious contract is void. A relative simulation, when it does not
prejudice a third person and is not intended for any purpose contrary to law, morals, good customs,
public order or public policy binds the parties to their real agreement. (n)

Simulation of Contract
– act of deliberately deceiving others, by feigning or pretending by agreement, the appearance
of a contract which is either non existence or concealed

Kind of simulation
1. Absolute Simulation
– when the contract does not really exist and the parties do not intend to be bound at all
– Inexsitent and Void

2 Relative Simulation
– when the contract entered into by the parties is different from their true agreement
– the parties are bound by their real agreement provided it does not prejudice a third
person and is not intended for a purpose contrary to law, morals, good customs, public
order, or public policy

SECTION 2 – OBJECT OF CONTRACTS

Art. 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)

Object of a contract
– subject matter
– Object of every contract is the in,ig action created
– Thing, service, or right which is the object of the obligation is also the object of the contract

Requisites of thing as object of contract

1. The thing must be within the commerce of men, that, is it can legally be the subject of
commercial transaction
2. It must not be impossible, legally, or physically
3. It must be in existence or capable of coming into existence
4. It must be determinate or determinable without the need of a new contract between the
parties

Requisites of services as object of contract

1. The service must be within the commerce of men
 2. It must not be impossible, physically, or legally
3. It must be determinate or capable of being determinate

Rights as object of contract

GR: All rights may be the object of contract. The exception are when they are intransmissible by
their nature, or by stipulation, or by provision of law

Future Inheritance
– property or right, not in existence or capable of determination at the time of the contract, that
a person may inherit in the future, such person having only an expectancy of a purely
hereditary right
– Inheritance ceases to be future upon the death of the decedent or deceased

Art. 1348.
Impossible things or services cannot be the object of contracts. (1272)

Kinds of impossibility

1. Physical
– When the thing or service in the very nature of things cannot exist (e.g. monkey that
talks) or be performed. With particular reference e to service, the impossibility may be:
– Absolute
– when the act cannot be done in any case so that nobody can perform it
(e.g. to flu like a bird) It nullifies the contract
– Relative
– when it arises from the special circumstances of the case (e.g. to make
payment to a dead person, to drive a car on a flooded highway) or the
special condition or qualifications of the obligor (to paint a portrait by a
blind person). It does not nullify the contract if temporary

2. Legal
– when the thing or service is contrary to law, morals, good custom, public order, or
public policy. An act is contrary to law, either because it is forbidden by penal law or a
role of law makes it impossible to be done, to make a valid will, where the testator is
under 18 years of age

SECTION 3 – CAUSE OF CONTRACTS

Art. 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)
Cause
– causa
– essential reason or purpose which the contracting parties have in view at the time of entering
into the contract. It is something bargained for or given by a party in exchange for a legally
enforceable promise of another
– Civil code term for considerable n in common law

Classification of Contracts according to Cause

1. Onerous
– for each contracting party is the prestation or promise of a thing or service by the
other
– the parties re reciprocally obligated to each other

2. Remuneratory or Remunerative
– the service or benefit which is remunerated.
– to reward the service that had been previously rendered by the party renumerated

3. Gratuitous
– liberality of the benefactor or giver

Art. 1351.
The particular motives of the parties in entering into a contract are different from the cause thereof.
(n)

Motive
– purely personal or private reason which a party has in entering into contract

Cause vs Motive

Cause Motive
Immediate or Direct Reason Remote or indirect reason
always known to the other Unknown
contracting party
essential element of a contract Not a essential element of a
contract
the illegality of the cause affects Illegality of one’s motive does not
the validity if a contract render the contract void
Art. 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)

Art. 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).

Effect of Absence of Cause

Absence or want of cause means that there is a total lack of any valid consideration for the contract
1. A contract which is absolutely simulated or fictitious is inexistent and void
2. Where there is, in fact, no consideration (e.g. price) the statement of one in the contract
(sale) will not suffice to bring it under the rule of Article 1353 as stating a false consideration
3. Promises to make gift, or to render some gratuitous service in the future (e.g. to help a friend
pass final examinations, to lend a car over the weekend) are not enforceable as contracts
because they contain no consideration
4. Similarly, promises made in gratitude for good deeds of others cannot be enforced for they
constitute only moral, not legal, consideration

Effect of Falsity of Cause

– By falsity of cause is meant that the contract states a valid consideration but such statement
is not true
– A false cause may be erroneous or simulated. The first always renders a contract void. If the
cause is false, the contract is rendered void because the same actually does not exist. The
second does not always produce this effect, because it may happen that the hidden but true
cause is sufficient to support the contract. If the parties can show that there is another cause
and that said cause is true and lawful, then the parties shall be bound by their true agreement

CHAPTER III: FORM OF CONTRACTS

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. (1278a)

Classification of Contract according to Form

1. Informal or Common or Simple Contract
– may be entered into whatever form provided all the essential requisites for their validity
are present
– This refers only to consensual contracts, such as the contract of sale.
 – May be oral or written and, in fact, may even be implied from the conduct of the parties
2. Formal or Solemn Contract
– Required by law for its efficacy to be in a certain specified form

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. (1280a)

CHAPTER IV: REFORMATION OF INSTRUMENTS

Art. 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.

Reformation
– remedy allowed by law by means of which a written instrument is amended or rectified so as
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
– It is to be distinguished from interpretation

Reason for reformation

– Equity orders the reformation of an instrument in order that the intention of the contracting
parties may be expressed
– The courts do not attempt to make another contract for the parties. The rationale of the
doctrine is that it would be unjust and inequitable to low the enforcement of a written
instrument which does not reflect or disclose the real meeting of the minds of the parties.
 The rigor of the legalistic rule that the written instrument should be the final and inflexible
criterion and measure of the rights and obligation of the contracting parties is thus tempered,
to forestall the effect of mistake, fraud, inequitable conduct of accident

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 pleading
5. There is clear and convincing evidence (which is more than mere preponderance of evidence)
of the mistake, fraud, inequitable conduct, or accident

Reformation is thus not available as a remedy where no writ b exists, or even where a writing exists,
there is no showing of any defect of consent therein. Note that in reformation of contracts, what is
reformed is not the contract itself, but the written instrument embodying the contract

SUMMARY OF DEFECTIVE CONTRACTS