formation and perfection of a contract lesson 4 reduced

core principles (freedom of form)

• article 1261: a contract only exists when consent object and cause concur= these are the essential elements for validity

  • consent object and cause= essential and consitutitve

  • form= not required for validity only for expression of proof

• article 1278: contracts shall be binding whatever form they have been made provided the eseential conditions for their validity exists

  •  the form is not a susbtantive element; what matters is that consent boject and cause exist

  • this expresses the principle of freedom of form

validity vs effectiveness/efficacy

• contract validity= legally exists and binds the parties (consent object cause)

• contract effectiveness= can produce full legal effects- when it can be enforced or excercised as the law intends

• sometimes even if a contract is valid the law requires additional formality for it to be effective against third parties or to produce certain legal effects

• consent gives validity; form gives effectiveness

perfection of the contract

• articles 1258: contracts are perfected by mere consent

  • the contract becomes binding at the moment consent is exchanged regardless of form

  • the contract does not need a specific solemnity (state) or document to exist

  • this embodies a spiritualist sytem: the will/consent is what creates the contract not its external form

the role of form in contracts

• although form is generally irrelvent to valdity, some degree of formality is always necessary to manifest consent externally

  • a purely internal agreement (mental consent only) does not constitute a contract

  • thus some external manifestation must exist such as oral written or otherwise-but no specific form is required

legal regulation of form: article 1279

• if the law requires a public document (notorial deed) or a special form for a contract to be effective the parties can force eachtoher to complete that form AFTER the contract is already valid

• declarative (not consituttive) effect of form:

  • the contrct already exists and is valid once consent occurs

  • the required form (eg a notarised deed) only has a declarative meaning it serves as evidence or helps make the contract enforceable but it doesnt create the contract itself

  • either party may compel the other to complete the formalities (going to the notary) and this can be enfroced under article 708 of the civil procedure law

• supreme court interpretation

  • the rule gives a right to request (faculty) not an obligation- the parties can choose to demand formalisation

  • the absence of a public deed doesnt invalidate the contract btween the parties or third parties as long as the contracts existence can be proven

  • the duty to formalise isnt a personal duty like performing an act of will, it can be enforced judicially ( judicially ordered if needed)

example:

• two pople agree to sell/buy a house, they agree on the price and conditions- consent object and cause are all present 

• the contract is valid even if it hasnt yet. been fromalised via a public deed

• however to trasnfer ownership (make it effective) the parties must sign a public deed before a notary and register it in the property register

validty= the contract is valid once there is consent 

effectiveness= the nortial deed makes it effective- it allows the contract to have its full legal consequences like trasnferring ownership or being enforceable against third parties

article 1280- contracts that must be in writing or deed

lists several cases where contracts shall be in public deed but usually for effectiveness or proof not validty (declarative v consitutive)

article 1280-declarative

declarative=

• creation,trasnfer,modification or extinction of real rights over property- public deed required but contract valid between parties even without it

• leases/rent of property for 6+years- valid between the parties without public deed.

  • but the public deed is required to make it effective against third parties and serves as proof of the contract and its terms.

  • Historically, it was also needed for registration purposes

• cession of rights from an act in a public deed- valid without a public deed but either party may require the same formalisation as the original act granting the rights

  • a person trasnfers rights that were originally granted in pd

  • not required but can be compelled to ensure consitency proof and effectiveness against third parties

• any contract with a value exceeding 1500 pesetas- not required for validity but required in writing (even if private doc) for proof 

  • helps prove the contrcts existence and terms 

article 1280-consitituitve

consitituive:

• marriage settlements- public deed required for validity per article 1327 cc , without it null and void

• renunciation or cession of inheritance or conjugal/marrital rights- public deed required for validity as per article 1008, without it act has no legal effect

  • a person gives up rights to an inheritance or marital property

• powers of attorney relates to marriage or judicial acts- public deed required for validity

  • ensures legal certainty and authenticity

  • most powers do not require a specific form for validity, only these

Form ad solemnitatem / ad validitatem:

better modern disnction=constituive= creates contract itself

• the form is required for validity; without it the contract does not exist

• the contract is null if ommited

• applies to a few contracts only:

  • marriage settlements (art 1327)

  • emphyteusis/long term real estate leases (article 1628)

    • some scholars argue whether donation of immovables/property and mortgages should be included but these are generally not considered true contracts in the strict snese (they are donations)

form ad probationem

better modern dsitnction=declarative/ probative= expresses or proves and existing contract

• serves mainly to prove the contract

• not required for validity 

• declarative efficacy= public document has multiple legal affects

declarative efficiacy: practical importance of form

while form is not essential for existnce the public deed has key advantages

• proof (art 1218-1227 cc)

  • serves as strong evidence of the contract and its terms, enforceable against all parties including third parties

• enforcement

  • can act as an executive title in judciial proceedings to collect boligations (art 517 lec)

• registration (publicity)

  • enables the contract to be entered into the property or commercial registers which is often necessary for third party protection (art 3lh 5 rrm)

• transfer of ownership

  • faciliates the delivery and trasnfer of real rights such as property (art 1462.2cc)

• priority and efnorcability advantage (arts 1924.3, 1230, 1865 cc)

  • rights arising from a public deed may have priority over later claims or third party rights

  • formalised contracts can serve as evidence of obligations and may allow creditors to enforce them more effectively

  • certain real rights such as mortgages when formalised in pd are more readily enforceable and can be registered to secure priority against third parties

summary

• In Spanish law, form is not generally required for the validity of a contract.

• Contracts are perfected by consent (no formalities necessary).

• Form serves mainly declarative, probative, or enforceability purposes.

• Only exceptional cases (e.g. marriage settlements) require form ad validitatem.

• The public deed confers practical and legal advantages, even though not constitutive.