Form of Contracts
As a general rule, contracts are consensual. Hence, they are generally perfected by mere consent. Once perfected, contracts become obligatory regardless of whatever form they may have been entered into, so long as all the essential requisites for their validity are present.
Formal contracts – The condition requiring that a contract be in some form to be valid and enforceable is absolute and indispensable: (f) if there is a law requiring such, or (b) if a contract is only allowed to be proved in a certain way. Otherwise, a party cannot exercise his rights arising from the contract which does not comply with such a condition.
For instance, these contracts are required to appear in a public instrument:
(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 governed by the Statute of Frauds;
(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; and
(4) The cession of actions or rights proceeding from an act appearing in a public document.
On the other hand, a contract where the amount involve exceeds five hundred pesos is required to be in writing, even if it be in a private one.
A contracting party may require the other to observe or comply with the form required by law after the perfection of the contract. This right to specific performance may be exercised simultaneously with an action arising out of or in connection with the contract.