Published 20 July 2025, The Daily Tribune
In our increasingly casual and digital society, it’s not uncommon for transactions—especially among friends, business associates, or family members—to begin and end with a handshake or a gentleman’s agreement. These informal arrangements, often based on verbal commitments, are fueled by trust. But in the world of law, trust without paper is a recipe for trouble.
This is especially true in real estate dealings, where large sums and valuable assets are involved. A recent ruling by the Supreme Court in Chavez v. Spouses Gopez underscores a cardinal rule in contract law: when it comes to real estate, words must be not just said, but written, clear, and complete.
In Chavez, the Supreme Court was confronted with a dispute over the supposed sale of real property. The buyers claimed that they had already paid ₱1.5 million as earnest money, and pointed to an Acknowledgement Receipt to prove that a contract of sale had been perfected. Unfortunately for them, the receipt failed to contain one crucial element—a clear indication that the sellers had agreed to transfer ownership of the property.
While the receipt used the term “earnest money,” the Court made it crystal clear that this alone does not suffice to prove a sale. For a valid contract of sale to exist, there must be a meeting of the minds on all essential elements—object, price, and consent, including the unequivocal intent to transfer ownership. Without this explicit agreement, written down for all to see, there is no enforceable contract.
The Court’s ruling was unequivocal: the Acknowledgement Receipt was not enough. It neither contained the hallmarks of a perfected contract nor showed that the parties had reached a definite agreement to buy and sell. As such, the so-called gentleman’s agreement crumbled—unsurprisingly so, as handshakes seldom hold up against hard legal scrutiny.
What this case reaffirms is the longstanding principle that in real estate, the written word reigns supreme. A simple note, text message, or receipt—however well-meaning—cannot substitute for a properly executed contract of sale. And courts will not fill in the blanks or infer intent where the written document is silent or vague.
This doctrine is not rooted in legal technicality, but in sound public policy. Contracts involving immovable property are not trifling matters. They must be approached with formality, precision, and foresight. It is not only about what the parties say or believe—it is about what they have committed to, in clear and unequivocal terms, on paper.
The Chavez decision is a cautionary tale. It reminds us that real estate agreements should never be left to chance or informal promises. Whether one is the buyer or the seller, reducing terms to writing—complete, detailed, and properly signed—is not optional. It is essential. Failure to do so can mean the difference between securing your rights and walking away empty-handed.
In legal practice, we often see the consequences of documents hastily drafted, receipts mistaken for contracts, or promises never properly recorded. Emotions run high when property is involved, but courts look dispassionately at the evidence. And in the absence of a definitive, written agreement, justice will not conjure a contract out of hope or assumption.
The law may seem unforgiving, but it is fair. It offers predictability and protection to those who take the time to formalize their transactions. So if you’re entering into a real estate deal, remember this: get it in writing, get it right, and if in doubt, get a lawyer.
For more of Dean Nilo Divina’s legal tidbits, please visit www.divinalaw.com. For comments and questions, please send an email to cad@divinalaw.com.
