The principle of relativity of contracts, under civil law in the Philippines, states that contracts bind only the parties who entered into them and have no effect upon third parties. This is rooted in Article 1311 of the Civil Code of the Philippines, which provides that "Contracts take effect only between the parties, their assigns, and heirs," except in certain cases provided by law.

However, there are exceptions to this rule on privity of contracts, where a third party may be bound or may acquire rights under a contract. Here’s a comprehensive examination of these exceptions:

1. Stipulation Pour Autrui (Stipulation for the Benefit of a Third Party)

A contract may contain a stipulation for the benefit of a third party, known as a stipulation pour autrui. This exception allows a third party who is not a party to the contract to benefit from it, but only if certain conditions are met:
- The stipulation must be clearly intended to favor the third party.
- The third party must have accepted the benefit stipulated for them.
- The stipulation must not be incidental, meaning it must be directly intended by the contracting parties for the third party’s benefit.
For example, in a life insurance policy, the insured may name a third party as the beneficiary, who may then claim benefits from the insurer upon the insured's death.

2. Contracts Intended to Affect Third Parties by Operation of Law

There are instances where laws allow certain contractual obligations to affect third parties. For example:
- Labor contracts may affect subcontractors when there is a principal-employer relationship that extends liability to a principal company.
- In cases involving joint tortfeasors, a person who did not directly enter a contract may be held jointly liable if their actions are directly tied to a contractual relationship.

3. Tortious Interference

A third party who unjustifiably interferes with an existing contract may be held liable under tort law. This is based on the principle that while third parties generally have no direct obligations or rights under a contract, they must not interfere with the contractual relationship of others.
The elements required to establish tortious interference include:
- A valid and existing contract.
- The third party’s knowledge of this contract.
- Intentional interference by the third party, resulting in damage to one or both contracting parties.

4. Transmissible Contracts (Contracts Transferring Rights or Obligations to Successors)

Certain contractual rights and obligations are transmissible by their nature, law, or stipulation, thereby binding successors-in-interest (e.g., heirs and assigns). This is, however, limited by specific provisions in the contract or by law:
- For example, lease agreements may bind a new property owner, who is considered a successor-in-interest, to honor the existing lease.

5. Involuntary Assignment of Rights

By law, some rights can be involuntarily assigned to a third party. This usually occurs through legal processes such as attachment, execution, or similar court-ordered mechanisms that transfer a contractual right or obligation to a third party.
- For instance, a creditor may pursue a garnishment order, allowing them to receive payments from a debtor’s contract with a third party.

6. Contracts for the Protection of Creditors (Acción Pauliana)

Acción Pauliana allows creditors to impugn fraudulent transactions entered by their debtor with third parties that harm their rights.
This action enables creditors to nullify transactions intended to prejudice their rights, even though they were not parties to the transaction.

7. Contracts Affecting Property or Rights that “Run with the Land”

Certain contractual obligations may attach to property and bind subsequent owners (who are not original parties to the contract) if the contract is registered or otherwise publicly known. Examples include easements or covenants that “run with the land,” which are enforceable against anyone acquiring the property.
This principle is often applied in real estate transactions, where covenants bind not only the original contracting parties but also future property owners.

8. Agency

The law on agency provides that acts performed by the agent within the scope of their authority bind the principal, even though the principal did not directly perform the act. In this context, the principal is bound by the contract entered into by the agent with a third party.
Under Article 1317 of the Civil Code, however, an agent who acts outside the scope of their authority does not bind the principal unless the principal ratifies the unauthorized act.

9. Trust Relationships

In trust arrangements, where a trustee holds property for the benefit of a beneficiary, the beneficiary may acquire rights in the contract or transactions entered into by the trustee in relation to the trust.
Trust relationships may also allow a beneficiary to assert claims against third parties in connection with trust property, even though they were not direct parties to the transaction.

10. Third Party’s Involvement in Performance of a Contractual Obligation

In certain cases, a third party may perform obligations under a contract if such performance is allowed by the contracting parties. Under the Civil Code, if a third party voluntarily performs the obligation of another, this may be acknowledged if it benefits the creditor.
This is particularly relevant in situations where third-party performance prevents unjust enrichment or fulfills a legally recognized interest of the creditor.

11. Negotiorum Gestio (Intervention Without Authority)

In situations where a third party intervenes in the affairs of another without authorization, the law allows them to be indemnified or to be reimbursed if they act for the benefit of the other party and without undue risk.
This doctrine provides relief to a third party who, acting as a gestor, incurs obligations or expenses to prevent loss or damage to the contracting party's interests.

12. Class Suits or Group Claims (Class Actions)

Certain rights and obligations may be asserted in a class suit where one or more parties represent a group with similar interests. While not common in Philippine jurisdiction, class suits are recognized in specific instances where a large number of people have the same legal interest affected by a particular contract.
For example, environmental damage claims may allow communities to bring a class suit against a corporation or entity based on a contractual obligation (such as a mining or forestry agreement) where the effects are widespread.

Summary

The exceptions to the principle of relativity of contracts are deeply rooted in both statutory and case law in the Philippines. While the general rule holds that only the parties to a contract are bound by its terms, these exceptions create situations where third parties may acquire enforceable rights or obligations, either through direct benefit, legal intervention, or specific legal doctrines. The interpretation and application of these exceptions require careful consideration of contractual language, legal precedent, and statutory provisions to ensure the protection of rights and interests under Philippine law.