Article 1403 of the Civil Code: Unenforceable contracts and the Statute of Frauds
Status: In force
What does Article 1403 say?
The following contracts are unenforceable, unless they are ratified:
(1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers;
(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum, thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents:
(a) An agreement that by its terms is not to be performed within a year from the making thereof;
(b) A special promise to answer for the debt, default, or miscarriage of another;
(c) An agreement made in consideration of marriage, other than a mutual promise to marry;
(d) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them, of such things in action, or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum;
(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein;
(f) A representation as to the credit of a third person.
(3) Those where both parties are incapable of giving consent to a contract.
What does it mean in plain language?
Article 1403 of the Civil Code lists contracts that are "unenforceable": they exist, but a court will not enforce them unless they are ratified. There are three kinds: contracts made for another person without authority, agreements that break the Statute of Frauds, and contracts where both parties cannot give consent. The Statute of Frauds covers six agreements, such as a lease longer than one year or a sale of land, that need a signed writing to be enforced by action, unless they are ratified.
Most contracts bind in any form (Article 1356). Article 1403 is one of the main exceptions. It does not make these agreements void. It means a court will not enforce them unless they are ratified or, for the Statute of Frauds, unless there is a signed note or memorandum.
How does it work in real life?
Jessa and the two-year room lease
Jessa agrees by word of mouth to rent a room from Ruben for two years, starting next month. Nothing is signed. Before she moves in, Ruben rents the room to someone else. A lease longer than one year is on the list (item (e)). Jessa cannot enforce the deal in court without a signed note or memorandum, unless it is ratified, for example if Ruben fails to object to oral evidence of the deal in court (Article 1405).
Boyet's promise for his brother
Boyet tells a sari-sari store owner: "Give my brother goods on credit. If he does not pay, I will." This is a special promise to answer for the debt of another (item (b)). Unless Boyet signed a note or memorandum, or the promise was ratified, the store owner cannot enforce it against Boyet by action.
Lorna's verbal sale of a phone
Lorna agrees to sell her used phone to Ben for ₱6,000. Ben pays ₱1,000 at the time and promises to pay the rest later. Item (d) does not apply when the buyer pays at the time some part of the purchase money, so the lack of a writing alone does not stop the sale from being enforced under that item.
These are made-up examples to show how the rule works. They are not advice for any real case.
What does this mean in practice?
- If an agreement is on the list, a short note signed by the other party, with the main terms, removes the issue.
- Courts have ruled on agreements that were already partly or fully performed. Those rulings are not covered on this page. If your agreement was already partly carried out, ask a lawyer.
- A case on an oral contract has six years (Article 1145); on a written one, ten years (Article 1144).
- For verbal deals in general, see is a verbal agreement binding?
- For free or low-cost legal help, see where to find legal help.
What does Article 1403 say?
The article opens with the general rule:
The following contracts are unenforceable, unless they are ratified:
Then it lists three kinds of contracts:
- Unauthorized contracts. Contracts made in the name of another person by someone who has no authority or legal representation, or who acted beyond his powers. Article 1404 says these are governed by Article 1317 and the rules on agency. Article 1317 says such a contract is unenforceable unless the person in whose name it was made ratifies it, expressly or impliedly, before the other party revokes it.
- Agreements that break the Statute of Frauds (Article 1403(2)), explained below.
- Contracts where both parties are incapable of giving consent. Article 1407 says ratification by the parent or guardian of one party gives the contract the same effect as if only one party were incapacitated. Ratification by the parents or guardians of both validates it from the start.
Which agreements need a signed writing?
Article 1403(2) says that for six kinds of agreements, the agreement is "unenforceable by action" unless it, or "some note or memorandum, thereof, be in writing, and subscribed by the party charged, or by his agent". Without that writing, evidence of the agreement "cannot be received", except secondary evidence of the writing's contents.
| Item | Agreement | Example |
|---|---|---|
| (a) | By its terms, not to be performed within a year from the making | A deal to deliver rice every month for three years |
| (b) | A special promise to answer for the debt, default or miscarriage of another | "If my brother does not pay you, I will." |
| (c) | Made in consideration of marriage, other than a mutual promise to marry | A promise to give a lot if the couple marries |
| (d) | Sale of goods, chattels or things in action at a price not less than ₱500 | A verbal sale of a used motorcycle, unless the buyer received part of it or paid part of the price at the time |
| (e) | A lease longer than one year, or a sale of real property or an interest in it | A two-year verbal lease of a room; a verbal sale of a lot |
| (f) | A representation as to the credit of a third person | "My cousin is good for the money, lend to him." |
The ₱500 figure in item (d) is the amount written in the Civil Code of 1949 (Republic Act No. 386). For a sale by auction, item (d) also says the auctioneer's entry in his sales book, made at the time of the sale with the details the article lists, is a sufficient memorandum.
The rule on leases and sales of land reads:
(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein;
How can these contracts be ratified?
For the Statute of Frauds, Article 1405 gives two ways:
Contracts infringing the Statute of Frauds, referred to in No. 2 of article 1403, are ratified by the failure to object to the presentation of oral evidence to prove the same, or by the acceptance of benefits under them.
So an agreement under item (2) becomes enforceable if:
- the other side lets witnesses testify about the verbal deal in court without objecting, or
- a party accepts benefits under the agreement.
Article 1406 adds that once a contract is enforceable under the Statute of Frauds and a public document is needed to register it with the Registry of Deeds, the parties may use the right in Article 1357 to compel each other to sign that document.
How is "unenforceable" different from "void"?
An unenforceable contract is not void. Article 1403 says it is unenforceable "unless they are ratified", so it can become fully enforceable. Article 1408 also says: "Unenforceable contracts cannot be assailed by third persons."
Frequently asked questions
What is the Statute of Frauds in the Philippines?
It is Article 1403(2) of the Civil Code. It lists six kinds of agreements that cannot be enforced by a court action unless the agreement, or a note or memorandum of it, is in writing and signed by the party being sued or by his agent, unless the agreement was ratified.
Is an unenforceable contract void?
No. Article 1403 says these contracts are unenforceable unless ratified, which means they can become enforceable. Article 1408 adds that third persons cannot attack an unenforceable contract.
How is a contract under the Statute of Frauds ratified?
Article 1405 gives two ways: the other party fails to object when oral evidence of the agreement is presented, or a party accepts benefits under the agreement.
Does the Statute of Frauds cover a verbal loan?
A plain loan of money is not one of the six agreements by name. But item (a) covers any agreement that by its terms is not to be performed within a year. How courts treat a long-term loan already handed over depends on case law this page does not cover.
Is a verbal sale of land valid?
A sale of real property or of an interest in it is on the Statute of Frauds list (Article 1403(2)(e)). Without a signed note or memorandum, it cannot be enforced by action unless it was ratified (Article 1405). Unenforceable is not the same as void: a ratified agreement can be enforced.
Where does the 500-peso amount in Article 1403 come from?
Article 1403(2)(d) speaks of a price not less than five hundred pesos. That is the amount written in the Civil Code of 1949 (Republic Act No. 386).
General information, not legal advice. For your case, ask a lawyer, the Public Attorney's Office (PAO) or the agency.
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