I entered into an agreement with a friend regarding the sale of his Nike shoe collection. He sold it for a considerable amount of money, but seeing that it was a good deal, we shook hands on it and put it in writing. I signed the piece of paper, and he gave me a photocopy. We did not notarize the paper. A few days later, I found out that he sold his shoe collection to another buyer. When I confronted him about this, he said that I can’t sue him over our contract, because we did not notarize it, therefore it was not a contract. Is it true that a contract has to be notarized for it to be valid and binding?
A contract is defined by Article 1305 of the Civil Code as “a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service.” As long as there is an agreement or a meeting of minds regarding the obligation to give something or to render service, the law considers it as a contract. In order for the contract to be valid, it must be made with the consent of the contracting parties, there must be an object that is the subject of the contract, and a cause of the obligation (Article 1318, Civil Code). As long as the elements of consent, subject and cause are present, contracts are valid in whatever form they take. This means that contracts may either be verbal or written.
However, our law provides that, “[w]hen 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” (Article 1356, Civil Code). Article 1358 enumerates the contracts that have to be set down in a public document. It states:
“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. (128a)”
Notarization converts a private document into a public document (Vda. de Rosales vs. Ramos, A.C. No. 5645, July 2, 2002). Thus, in order for contracts enumerated in Article 1358 to be valid, they may be notarized. However, since the contract with your friend is merely a sale of shoes, which are movable property, then you do not need to have your contract notarized.
We hope that we were able to answer your query. Please be reminded that this advice is based solely on the facts that you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
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