Obligado ka bang sundin ang mga kontratang pinasok ng iyong mga magulang na nakadikit sa kanilang mga ari-arian, tulad ng kontrata sa pag-upa o pagbenta ng mga nasabing ari-arian, na iyong mamanahin sa oras na sila ay mamatay?

Contracts play a vital role in various aspects of our lives, from buying goods and services to leasing properties. However, when one of the parties involved in a contract passes away, questions arise regarding the enforceability of the agreement. In a significant court case, DKC Holdings Corporation v. Bartolome, the general rule regarding contracts and inheritance was established, shedding light on the rights and obligations of heirs in such situations. This article aims to explain the general rule established in the case, making it easier for the general public to understand.

The Background: The case involved a contract between DKC Holdings Corporation and Encarnacion Bartolome, who owned a parcel of land. DKC Holdings entered into a Contract of Lease with Option to Buy with Encarnacion, granting DKC Holdings the option to lease or lease with the possibility of purchasing the land within a specified period. Encarnacion passed away, and the dispute arose when her heir, Victor Bartolome, refused to honor the terms of the contract.

The General Rule: The general rule established in the DKC Holdings Corporation v. Bartolome case is that heirs are generally bound by contracts entered into by their predecessors-in-interest, except when the rights and obligations under the contract are not transmissible by nature, stipulation, or provision of law. In simpler terms, when someone passes away, their contracts typically remain valid and binding on their heirs.

Exceptions to the General Rule: While the general rule holds true in most cases, there are exceptions where the rights and obligations under a contract are not transmissible. Contracts involving personal acts or qualifications of the parties may be terminated by the death of one of the parties. For example, contracts requiring specialized skills, talents, or personal knowledge unique to the deceased party may not be enforceable against their heirs.

Privity of Interest: In the context of inheritance and contracts, the concept of "privity of interest" is crucial. Privity of interest means that heirs succeed to the rights and obligations of their deceased predecessors. In the DKC Holdings Corporation v. Bartolome case, the court emphasized that Victor Bartolome, as the heir of Encarnacion Bartolome, had a privity of interest with his deceased mother. He inherited her rights and became bound by her contractual obligations.

Property Rights and Nonperformance: When a contract involves property rights, such as a lease or ownership agreement, the death of a party does not excuse nonperformance of the contract. The rights and obligations under the contract pass to the personal representatives of the deceased. Similarly, the other party with a property interest in the contract's subject matter is not relieved of their obligations.

The DKC Holdings Corporation v. Bartolome case provides valuable insights into the general rule that heirs are typically bound by contracts entered into by their predecessors-in-interest. The rights and obligations under a contract are generally transmissible unless there are specific circumstances or legal provisions indicating otherwise. Understanding this general rule can help individuals comprehend their rights and responsibilities in the context of contracts and inheritance.

BY: CARLO JAY J. MANALO
Bachelor of Science in Real Estate Management
Pamantasan ng Lungsod ng Maynila
Contracts | Succession | Legal Aspect of Real Estate

Source: DKC Holdings vs. CA (G.R. No. 118248, FIRST DIVISION, April 5, 2000, YNARES-SANTIAGO, J.) and Article 1311 of Republic Act 386 of 1949 or The Civil Code of the Philippines