Adhesion

April 12, 2010

Rizal Commercial Banking Corp. vs. CA

 G.R. No. 133107, 25 March 1999.

 

            A contract of adhesion is just as binding as ordinary contracts. It is true that on occasion, such contracts had been struck down as void when the weaker party is imposed upon in dealing with the dominant bargaining party and is reduced to the alternative of taking it or leaving it, completely deprived of the opportunity to bargain on equal footing. Nevertheless, contracts of adhesion are not invalid per se; they are not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent. While ambiguities in a contract of adhesion are to be construed against the party that prepared the same, this rule applies only if the stipulations in such contract are obscure or ambiguous. If the terms thereof are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. ¹¹ In the latter case, there would be no need for construction.

 

 

 

 

Angeles vs. Calasanz 

G.R. No. L-42283, 18 March 1985.

 

            The contract of adhesion, must be construed against the party causing it. The terms of a contract must be interpreted against the party who drafted the same, especially where such interpretation will help effect justice to persons who would be deprived of their rights thru the application of a contract clever in its phraseology, condemnable in its lopsidedness and injurious in its effect which, in essence, and in its entirety is most unfair to the other party.

 

 

 

 

Philippine Airlines vs. CA

G.R. No. 119706, 14 March 1996.

 

            The peculiar nature of contracts of adhesion behooves the Supreme Court to closely scrutinize the factual milieu to which the provisions are intended to apply. Thus, just as consistently and unhesitatingly, but without categorically invalidating such contracts, the Court has construed obscurities and ambiguities in the restrictive provisions of contracts of adhesion strictly albeit not unreasonably against the drafter thereof when justified in light of the operative facts and surrounding circumstances.

 

 

 

 

South Pachem Development, Inc. vs. CA

G.R. No. 126260, 16 December 2004.

 

            A contract of adhesion is defined as one where one of the parties imposes a ready-made form of contract which the other party may accept or reject, but which the latter cannot modify. One party prepares the stipulation in the contract, while the other party merely affixes his signature or his “adhesion” thereto, giving no room for negotiation and depriving the latter of the opportunity to bargain on equal footing. These types of contracts have nonetheless been declared as binding as ordinary contracts, the reason being that the party who adheres to the contract is free to reject it entirely. Thus, such agreement is not per se inefficacious. Corollarily, should there be any ambiguity in a contract of adhesion, such ambiguity is to be construed against the party who prepared it. If, however, the stipulations are not obscure, but are clear and leave no doubt on the intention of the parties, the literal meaning of its stipulations must be held controlling. To reiterate, contracts of adhesion are not prohibited even as the courts remain careful in scrutinizing the factual circumstances and the situation of the parties concerned in the case to determine the respective claims of contending parties on their efficacy and enforceability.

 

 

 

Orient Air Services & Hotel Representatives vs. CA

G.R. No. 76931, 29 May 1991.

 

            Any ambiguity in a “contract of adhesion” is to be taken “contra proferentem“, i.e., construed against the party who caused the ambiguity and could have avoided it by the exercise of a little more care. Thus, Article 1377 of the Civil Code provides that the interpretation of obscure words or stipulations in a contract shall not favor the party who caused the
obscurity. To put it differently, when several interpretations of a provision are otherwise equally proper, that interpretation or construction is to be adopted which is most favorable to the party in whose favor the provision was made.

 

 

 

Avon Cosmetics, Inc. vs. Luna

G.R. No. 153674, 20 December 2006.

 

            It is true that the Supreme Court has, on occasion, struck down contracts of adhesion as void when the weaker party is imposed upon in dealing with the dominant bargaining party and is reduced to the alternative of taking it or leaving it, completely deprived of the opportunity to bargain on equal footing. Nevertheless, contracts of adhesion are not invalid per se and they are not entirely prohibited.

 

Philippine Commercial International Bank vs. CA

G.R. No. 97785, March 29, 1996.

 

            On previous occasions, it has been declared that a contract of adhesion may be struck down as void and unenforceable, for being subversive to public policy, only when the weaker party is imposed upon in dealing with the dominant bargaining party and is reduced to the alternative of taking it or leaving it, completely deprived of the opportunity to bargain on equal footing.  And when it has been shown that the complainant is knowledgeable enough to have understood the terms and conditions of the contract, or one whose stature is such that he is expected to be more prudent and cautious with respect to his transactions, such party cannot later on be heard to complain for being ignorant or having been forced into merely consenting to the contract.

 

 

 

 

Arquero vs. Flojo

G.R. No. L-68111, 20 December 1988.

 

            The Supreme Court held that contracts of adhesion, where the provisions have been drafted only by one party and the only participation of the other party is the signing of his signature or his adhesion thereto, are contrary to public policy as they are injurious to the public or public good.