Short answer. In an onerous contract like a purchase agreement, the Civil Code defines cause as the prestation or promise of a thing or service by the other party — for each contracting party. For the buyer, the cause is the seller's obligation to deliver the goods. For the seller, the cause is the buyer's obligation to pay the price.
What the law says
In onerous contracts the cause is understood to be, for each contracting party, the prestation or promise of a thing or service by the other
Civil Code, Article 1350 — Cause of Contracts. Read the full provision →
The three types of cause under Article 1350
Article 1350 defines cause differently for three types of contracts. For onerous contracts — those where each party gives something in exchange for something else — the cause is what the other party promises or gives. For remuneratory contracts — those that reward a past service — the cause is the service or benefit being compensated. For contracts of pure beneficence — gifts and donations — the cause is the donor's generosity or liberality. A sale is the classic onerous contract: both parties give and receive, and the cause for each is what the other has agreed to do.
Cause in a purchase agreement, specifically
In a simple purchase agreement, the analysis is direct. The seller's cause — the reason the seller enters the contract — is the buyer's obligation to pay the purchase price. That promise of payment is what motivates the seller. The buyer's cause — the reason the buyer enters the contract — is the seller's obligation to deliver the goods or property. Each party's commitment is the other party's cause. This is sometimes called the synallagmatic structure of onerous contracts: the mutual obligations are the reasons for each other's existence.
Why cause must be lawful
Cause is not just any motive or reason — it must be lawful. A contract whose cause is illegal, immoral, or contrary to public policy is void. For a standard sale, the cause is typically lawful: the seller wants money, the buyer wants the goods. But if the sale is structured to accomplish something illegal — moving proceeds of crime, disguising a usurious loan as a sale, or using the transaction to defraud creditors — the underlying cause may be unlawful even if the written contract looks like a normal purchase. Cause operates beneath the surface of the written agreement.
Cause is different from motive
A common source of confusion is the difference between cause and motive. Cause is the immediate legal purpose of the contract — what each party gets in exchange. Motive is the personal, subjective reason a party entered the contract. A buyer who purchases a car because he wants to impress his neighbors has a personal motive (status), but the legal cause remains the seller's obligation to deliver the car. The law generally does not inquire into personal motives. It does, however, care about cause — and if the cause itself is illegal or fraudulent, the contract fails regardless of how innocent the written terms appear.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Perpetua Vda. De Ape vs. The Honorable Court of Appeals, et al, G.R. No. 133638, April 15, 2005 — read the decision on LawPhil →
- SM Land, Inc. vs Bases Conversion and Development Authority and Arnel Paciano D. Casanova, Esp., in his official capacity as President andn CEO of BCSA, G.R. No. 203655, March 18, 2015 — read the decision on LawPhil →
- Hon. Heherson T. Alvarez vs. PICOP Resources, Inc, G.R. No. 162243, December 3, 2009 — read the decision on LawPhil →
- Barceliza P. Capistrano vs. Darryl Limcuando, et al, G.R. No. 152413, February 13, 2009 — read the decision on LawPhil →