Dear PAO,
My wife loaned money from her friend but their loan agreement was not dated. Is the agreement
valid?
Dave
Dear Dave,
A contract is defined as a meeting of minds between two persons whereby one binds himself, to give something or to render some service (Article 1305, Civil Code of the Philippines). As a rule, form does not matter for the validity of consensual contracts such as contracts of loan. It is 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 (Article 1315, id.). For consensual contracts to be valid, it is enough that the following essential requisites are complied with: 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 (Article 1318, id.).
There are instances, however, when the law requires certain contracts to appear in certain forms.
Although the last paragraph of Article 1358 of the Civil Code of the Philippines requires contracts where the amount involved exceeds five hundred pesos (Php500.00) to appear in writing, even if a private one, the failure of the parties to comply with this requirement will not adversely affect the validity of neither the contract nor the contractual rights of the parties. This is because the said requirement is not for the determination of the validity of the contract but for convenience and for the benefit of third parties only (Fule vs. Court of Appeals, G.R. No. 112212, March 02, 1998).
Hence, even oral contracts of loan involving more than five hundred pesos will be valid even if the parties did not reduce their agreement into writing. With more reason that the validity of the written loan agreement which was entered into between your wife and her friend will not be affected by the fact that it was not dated. Despite the absence of this detail, the loan agreement will still be considered valid as long as your wife and her creditor have agreed or have given their consent on the subject matter of the loan and its cause or consideration.
We hope that we were able to answer your queries. 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.
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