Cause of contracts

Article 1350 of Civil Code provides: 

ART. 1350. In onerous contracts the cause is understood to be, for each contracting party, the prestation or promise of a thing or service by the other; in remuneratory ones, the service or benefit which is remunerated; and in contracts of pure beneficence, the mere liberality of the benefactor. (1274) 

Cause (causa) is the essential or more proximate purpose or reason which the contracting parties have in view at the time of entering into the contract,[1] or, as expressed in another case, it is the “why of the contract, the essential reason which moves the contracting parties to enter into the contract.’’[2] It is the Civil Code term for consideration in Anglo-American or common law.[3]

For cause to exist, the following requisites must concur:

a) exists at the time the contract is entered into;[4]

b) lawful;[5] and

c) true or real.[6]

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[1] 8 Manresa 697; Republic vs. Cloribel, 36 SCRA 534 (1970). 

[2] Gonzales vs. Trinidad, 67 Phil. 682 [1939]; Villamor vs. Court of Appeals, 202 SCRA 607 [1991]; Domingo vs. Court of Appeals, 367 SCRA 368 (2001).

[3] De Leon. (2014). Obligations and Contracts.

[4] Paragraph 3, Article 1409, Civil Code.

[5] Article 1352, Civil Code.

[6] Article 1353, Civil Code.