To correct this misunderstanding, one must understand the elements of a valid contract and know which contracts should be written. The Philippine legal system is a mixture of Roman civil law and Anglo-American common law. Civil law is active in areas such as family relations, property, estate law, contract and criminal law, while the statutes and principles of common law are recognizable in the areas of constitutional law, procedures, corporate law, taxation, insurance, industrial relations, banking and money. The purpose of the contract must be legal. In our example, the nephew`s reason is to borrow money from his aunt to replace a flat tire on his car. As such, the contract between them is legal. However, if the nephew wanted to lend money to illegally modify his car (z.B. installing lights to mimic a police car), the purpose becomes illegal and the contract is invalid. One of the complications that the court takes in the event of an oral agreement is that it must be able to extract key conditions from the implementation agreement, which can be difficult if both parties do not agree on these conditions. The two sides are unseeded that there has been an agreement. There are situations where an oral contract is unenforceable if it falls under the status of fraud, which requires a written agreement for situations, including: just like the aunt in our imaginary scenario, you are probably better off documenting a written agreement.

Something as simple as a promised note, detailing the nephew`s promise to repay his aunt, could have avoided any quarrel over their agreement. Finally, it is less difficult to ask family members for a written loan than to bring them to justice. To be enforceable, the following contracts must appear in a public document, i.e. in a document executed or recognized before a notary: 1) deeds and contracts for the creation, transfer, modification or removal of rights to real estate; 2) the surrender, denial or renunciation of hereditary rights or those of the marital partnership of benefits; 3) the power to manage the property or other power that, to its effect, contains an act or which should appear in a public document or that should affect a third party; and, 4.) the transfer of deeds or rights arising from an act in a public document. Duterte revealed that such an agreement had been reached to clarify an earlier controversial statement that China could not be deterred from fishing in the Philippine EEZ.