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Aug 18, 2003
Entering into Valid Contracts
- Albert Vincent Y. Yu Chang Email this article
Question: I am a businessman in the Philippines. My business partner drafts our contracts himself, and says that contract drafting is all a matter of putting our agreements in writing. How do I make sure that our contracts meet legal requirements?

Answer: Some people may view this advice, coming from a lawyer, with skepticism: nothing can substitute for the advice of a qualified attorney.

Contract drafting may seem very simple. Sample legal forms can easily be obtained from books and websites. Many, in fact, are able to do away with self-revised sample forms, without fully understanding the legal ramifications of self-made revisions. It is not always fully realized that while a contract drafted by a layman may very well be valid, it is not for the layman to say whether or not it is. Moreover, assuming that the contract is valid, it takes a trained professional to draft a contract that would reflect the true intent of the parties. Thus, unless the contract has been drafted or reviewed by a qualified attorney, contracting parties may just realize, in the face of a controversy, that the contract intended to protect them does not serve its purpose.

Nevertheless, here is a brief discussion of basic contract law principles, intended to give some pointers, but more importantly, to underscore the complexities of contract drafting and the value of getting legal advice from a lawyer.


Contracts are loosely thought of as written documents embodying the terms of agreements, and signed by the contracting parties. By definition, however, a contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service.

Governing Laws

An understanding of all pertinent laws is necessary to ensure that your contract complies with legal requirements.

The Law on Obligations and Contracts under the Civil Code of the Philippines is not the only law that governs. There are many pieces of legislation that apply to specific types of transactions. There are, for instance, laws on credit transactions, lease, insurance, common carriers, negotiable instruments, to name a few. Parties do not have to stipulate for particular laws to govern. Laws are deemed written into contracts.

Parenthetically, in our e-commerce generation, foreign laws may, under certain circumstances, apply to transactions entered even while one of the parties may be physically located in the Philippines.

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