Gentleman’s agreement perfected by mere consent

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Persida Acosta

Persida Acosta

Dear PAO,
I would like to ask whether a “gentleman’s agreement” or word of honor is legally binding before the courts of justice?
Anuj

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Dear Anuj,
The general rule is agreements or contracts are perfected by mere consent. They are valid and binding between the parties, and their heirs, except those contracts that are not transmissible by their nature, or by stipulation or by provision of law (Article 1311, Civil Code of the Philippines). The requisites of a contract in order to be valid are the following; (a) consent of the contracting parties; (b) object certain, which is the subject matter of the contract; and (c) cause of the obligation, which is established (Article 1318, Ibid). The contracting parties also 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. (Article 1306, Ibid.) There are contracts which, aside from the elements enumerated, must be in some form or require delivery or inscription in the proper registry to be valid.

The following contracts must appear in a public document: (a) acts or objects, which have for their object the creation, transmission, modification or extinguishment of real rights over immovable, sales of real property or of an interest therein are governed by Articles 140, No. 2 and 1405; (b) cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains; (c) power to administer property, or any other powe, which has for its object an act appearing or which should appear in a public document, or should prejudice a third person; and (d) cession of actions or rights proceeding from an act appearing in a public document. Contracts where the amount involved exceeds five hundred pesos must appear in writing even in a private one (Article 1358, Id).

Contracts that do not comply with the statute of frauds shall be unenforceable by action in court unless the same, or in some note or memorandum be in writing, and subscribed by the party charged, or his agent. Evidence of the agreement cannot be received without the writing, or a secondary evidence of its contents. The following contracts must comply with the statute of frauds (No. 2, Article 1403, Id.):

(a) an agreement that by its terms is not to be performed within one year from the making thereof;

(b) a special promise to answer for the debt, default or miscarriage of another;

(c) an agreement made in consideration of marriage, other than a mutual promise to marry;

(d) an agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accepts and receives part of such goods and chattels, or the pieces of evidence, or some of them, of such things in action, or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum;

(e) agreement for the leasing for a longer period than one year, or for the sale of real or an interest therein; and

(f) a representation as to the credit of a third person.

We hope that we have addressed your legal concerns. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated

Thank you for your continued trust and support.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

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