Concept and Coverage | Consensuality of Contracts | Basic Principles of Contracts | Contracts | OBLIGATIONS AND CONTRACTS

CIVIL LAW > V. OBLIGATIONS AND CONTRACTS > B. Contracts > 2. Basic Principles of Contracts > d. Consensuality of Contracts > i. Concept and Coverage

1. Concept of Consensuality of Contracts

The principle of consensuality in contracts is a fundamental tenet of contract law, particularly under Philippine Civil Law, as outlined in the Civil Code. At its core, consensuality denotes that a contract is perfected by mere consent between the parties, without the necessity of any formality, written instrument, or additional requirement, unless otherwise specified by law.

This doctrine is enshrined in Article 1315 of the Philippine Civil Code, which states:

“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.”

Thus, the principle of consensuality means that, once the essential elements of consent, object, and cause are present, the contract is considered perfected and enforceable. This principle underscores the freedom of individuals to form agreements as long as their essential requisites are met, embodying the notion that consent alone is sufficient for a contract to take effect.

2. Coverage of the Consensuality Principle

Consensuality applies to all consensual contracts, which are the majority in civil and commercial transactions. In the Philippine context, contracts generally fall into one of the following categories based on their perfection requirements:

1. Consensual Contracts: Perfected by mere consent and do not require any particular form for their validity.
2. Real Contracts: Require delivery of the object to perfect the contract (e.g., loan or commodatum).
3. Formal or Solemn Contracts: Demand compliance with specific formalities prescribed by law for validity (e.g., donation of immovable property, marriage).

In consensual contracts, the moment the parties agree on the object and cause of the obligation, the contract becomes binding. It is unnecessary for these contracts to be in writing, though written agreements can be advantageous for evidentiary purposes. Additionally, consensual contracts are enforceable even in the absence of formalities, provided they do not fall under exceptions or types requiring a particular form.

3. Essential Elements for Contract Perfection in Consensual Contracts

For a consensual contract to be perfected, three essential elements must be present:

• Consent: The mutual assent or agreement of the parties to the terms and conditions of the contract.
• Object: The subject matter of the contract, which must be within the commerce of man, lawful, and determinate or determinable.
• Cause or Consideration: The reason or objective that motivates each party to enter into the contract.

Upon meeting these requisites, the contract obligates the parties to its terms and effects.

4. Exceptions to the Consensuality Principle

While consensuality governs most contracts, certain exceptions exist. Article 1356 of the Civil Code provides that:

"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 for its validity or enforceability, or for the convenience of the parties, such requirement is absolute and indispensable."

Thus, when a contract falls under specific categories or transactions that require a particular form, such as written form or notarization, failure to comply with such formalities renders the contract void or unenforceable. Some key exceptions include:

• Real Contracts: Contracts like commodatum, deposit, or pledge require delivery to be perfected.
• Contracts Requiring Public Instrument: Certain transactions, such as donations of immovable property and transfers of real property, must be in a public document for validity.
• Contracts under the Statute of Frauds: Some agreements, such as those not to be performed within a year or those involving sale of land, must be in writing to be enforceable under the Statute of Frauds.

5. Implications of the Consensuality Principle

The consensuality principle is grounded in the recognition of individual autonomy and contractual freedom, as parties are presumed to be in the best position to determine their rights and obligations. However, it also implies that once a consensual contract is perfected, the contracting parties are bound to the contract's terms and liable for breach of the stipulated obligations.

The principle of consensuality in Philippine Civil Law ensures that contracts, generally speaking, are simple and accessible for creation, reinforcing efficiency in business transactions and personal dealings. However, while consensual contracts are binding by mere consent, parties should carefully consider potential evidentiary issues and protections afforded by formalized contracts, especially in significant or complex transactions.

In summary, the principle of consensuality in contracts is a foundational doctrine in Philippine contract law, affirming that mere consent, along with an object and cause, is sufficient to bind parties under most contractual agreements, barring certain exceptions where law prescribes additional formalities. This principle not only simplifies contractual obligations but also respects individual autonomy, thereby making consensual contracts a vital component of Philippine civil and commercial jurisprudence.