Our supply contract does not fix an exact quantity — is the contract void for that reason?

The two requirements for a valid object

Article 1349 of the Civil Code sets out what is required of the object of a contract: The object of every contract must be determinate as to its kind. The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties. There are two distinct requirements. The kind of object must be determinate — the parties must agree on what they are contracting about. But the quantity does not need to be fixed at the time of contracting, as long as the quantity can be determined later without a new agreement.

What makes a quantity determinable

A quantity is determinable if the contract itself provides a mechanism or standard for arriving at the exact amount without the parties needing to sit down and agree again. Examples of determinable quantity include: all the rice harvested from a specific field, the number of units needed to fulfill a specified project, the quantity consistent with the buyer's actual consumption over a period, or the number produced by a defined formula. If a third party or an objective standard determines the quantity, that is also sufficient. The critical test is whether the quantity can be arrived at without a fresh agreement between the parties.

When indefinite quantity does void the contract

If the quantity cannot be determined at all from the contract's terms — and no mechanism exists for determining it without the parties agreeing again — the contract may be too indefinite to be enforced. A contract that simply says the seller will supply goods and the buyer will buy them, with no indication of how much, and with no formula or standard for computing the amount, may fail the determinability test. The question is always whether there is an objective basis for computing the quantity built into the existing contract. If there is, the contract stands. If the parties would have to make a new deal to fix the quantity, the object is not determinable and the contract cannot be enforced for that reason.

What this means for your supply contract

If your supply contract specifies the kind of goods — the particular product to be supplied — and contains some mechanism for determining the quantity (such as tying it to orders, consumption, capacity, or a formula), the absence of a fixed quantity does not void the contract under Article 1349. But if the contract is entirely silent on how the quantity would be computed and the parties would need to agree on it later, that gap may be serious enough to make the contract unenforceable. Reviewing the full contract language, including any provisions that reference purchase orders, capacity, forecasts, or other quantity-setting mechanisms, is important to assess whether the determinability requirement is met.

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.

• Aurora Fe B. Camacho vs. Court of Appeals, et al, G.R. No. 127520, February 9, 2007 — read the decision on LawPhil →
• Cristina R. Seming vs. Emelita P. Alamag, et al, G.R. No. 202284, March 17, 2021 — read the decision on LawPhil →
• Benito Marasigan, Jr. vs. Provincial Agrarian Reform Officer, Land Bank of the Philippines, G.R. No. 222882, December 2, 2020 — read the decision on LawPhil →
• Domingo Realty, Inc., et al. vs. Court of Appeals, et al, G.R. No. 126236, January 26, 2007 — read the decision on LawPhil →

Related provisions

• Civil Code, Article 1349 — Object Must Be Determinate