Newlyweds Sam and Sienna had contracted with Sangria Hotel for their wedding reception. The couple was so unhappy with the service, claiming, among other things, that there was an unreasonable delay in the service of dinner and that certain items promised were unavailable. The hotel claims that, while there was a delay in the service of the meals, the same was occasioned by the sudden increase of guests to 450 from the guaranteed expected number of 350, as stated in the Banquet and Meeting Services Contract. In the action for damages for breach of contract instituted by the couple, they claimed that the Banquet and Meeting Services Contract was a contract of adhesion since they only provided the number of guests and chose the menu. On the other hand, the hotel’s defense was that the proximate cause of the complainant’s injury was the unexpected increase in their guests, and this was what set the chain of events that resulted in the alleged inconveniences.
(a) Does the doctrine of proximate cause apply in this case? (2.5%)
(b) Was the Banquet and Meeting Services Contract a contract of adhesion? If yes, is the contract void? (2.5%)
Suggested answer only. Not an official answer and not legal advice.
(a) No, proximate cause does not apply. (b) Yes, it is a contract of adhesion, but it is not void. Under Spouses Guanio v. Makati Shangri-La Hotel, proximate cause applies only to quasi-delicts, not to breach of contract
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Quick check
Why is the doctrine of proximate cause inapplicable in an action for breach of contract?
Proximate cause applies strictly to quasi-delicts, as contractual liability arises directly from the breach of a pre-existing agreement.
What is the legal status of a contract of adhesion under Philippine civil law?
Contracts of adhesion are valid and binding as ordinary contracts unless their terms are unconscionable or illegal.
Under Article 1170 of the Civil Code, who among the following is liable for damages?
Under Article 1170, parties guilty of fraud, negligence, delay, or contravention of the tenor of their obligation are liable for damages.
In Spouses Guanio v. Makati Shangri-La Hotel, why was the banquet services contract declared valid despite being a contract of adhesion?
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What must a plaintiff prove to recover damages in an action based on culpa contractual?
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Learn more about these topics
1. Proximate Cause Inapplicability
Under the landmark ruling in Spouses Guanio v. Makati Shangri-La Hotel, the doctrine of proximate cause applies strictly to actions based on quasi-delicts or torts. In actions for breach of contract (culpa contractual), a pre-existing contractual relation exists between the parties. The obligation to perform in good faith arises directly from the contract itself under Article 1159 of the Civil Code. Consequently, proof of proximate cause is not required to establish liability for contractual breach; rather, liability attaches upon proof of the existence of the contract and its non-performance, subject to valid defenses such as fortuitous event.
2. Contract of Adhesion
A contract of adhesion is an agreement wherein one party prepares the stipulations in a printed form, while the other party merely signs or 'adheres' to it on a take-it-or-leave-it basis. Contracts of adhesion are not invalid per se. They are as binding and enforceable as ordinary contracts because the party who adheres to the agreement remains completely free to reject it entirely. Such contracts become invalid or void only when the adhering party is forced or coerced into signing, or when the terms are grossly unfair, unconscionable, or contrary to law, morals, or public policy.
3. Contractual Breach Liability
Under Article 1170 of the Civil Code, those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. In a contract for banquet services, the hotel is bound to execute its contractual promises with ordinary diligence. While an unexpected influx of guests may mitigate or explain operational delays, it does not completely absolve the obligor of contractual liability if the hotel failed to exercise reasonable care and diligence in managing the reception and servicing the attendees.