Estella migrated to Canada with her family in 2001. Before she left the Philippines, she leased her house in Manila to Chito and Jette for a period of one year renewable for the same period. 
 
Having decided to stay in Canada for good, she called up her Chito and informed him that she is no longer planning to renew the lease as she is in the process of selling the house. Chito then told Estella not offer the house to anybody else as they will buy it themselves at the end of the lease.  Estella agreed and said that she will be formalizing everything once she comes back the following year.
 
Shortly before the end of the lease, Estella went back to the Philippines to visit her sick mother and at the same time formalize her agreement with Chito.  To her surprise she was informed by Chito that a week before, another house was being offered for sale in the neighbourhood at a price substantially lower what Estella was asking for.  Because of this, Chito immediately made a down payment on the other property.
 
Estella was furious; Chito’s offer to buy her property a few months before deprived her of the opportunity to find other buyers. 
 
For his failure to make good his promise to buy the property, Estella sued Chito to enforce their verbal agreement.
 
ESTELLA’S CASE WILL MOST PROBABLY BE DISMISSED. 
Most jurisdictions require that contracts specially those involving real properties be reduced into writing to prove their existence and for it to be enforceable.  In fact the Civil Code of the Philippines has specifically provided that some contracts including those involving real properties must be made in writing.

In the case of ASIA PRODUCTION CO., INC., WANG TA PENG and WINSTON WANG, petitioners, vs. HON. ERNANI CRUZ PAńO, as Judge of the Court of First Instance of Rizal (Quezon City, Branch XVIII), LOLITA LEE LE HUA and ALBERTO DY, respondents. (G.R. No. L-51058 January 27, 1992), the Philippine Supreme Court held that:
Article 1403 of the Civil Code declares the following contracts, among others, as unenforceable, unless they are ratified:
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(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents:

 In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents:

(a) An agreement that by its terms is not to be performed within a year from the making thereof;

(b) A special promise to answer for the debt, default, or miscarriage of another;

(c) An agreement made in consideration of marriage, other than a mutual promise to marry;

(d) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them, of such things in action, or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum;

(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein;

(f) A representation to the credit of a third person.
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Again,  since rules on evidence on agreements or contracts are basically the same in most jurisdictions we strongly recommend that all contracts be put in writing.
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(Legal Disclaimer: This article is designed for general information only. The information presented at this site should not be construed to be neither formal legal advice nor the formation of a lawyer/client relationship.)
 
For more info:
Atty Ferdie Aguirre
Email: pilipinolegalservices@yahoo.ca
 

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