Contracts of adhesion NOT invalid per se; Doctrine of EQUAL footing

The RTC upheld the validity of the promissory notes despite respondents assertion that those documents were contracts of adhesion.

A contract of adhesion is a contract whereby almost all of its provisions are drafted by one party. The participation of the other party is limited to affixing his signature or his adhesion to the contract. For this reason, contracts of adhesion are strictly construed against the party who drafted it.

It is erroneous, however, to conclude that contracts of adhesion are invalid per se. They are, on the contrary, as binding as ordinary contracts. A party is in reality free to accept or reject it. A contract of adhesion becomes void only when the dominant party takes advantage of the weakness of the other party, completely depriving the latter of the opportunity to bargain on equal footing.

That was not the case here. As the trial court noted, if the terms and conditions offered by Equitable had been truly prejudicial to respondents, they would have walked out and negotiated with another bank at the first available instance. But they did not. Instead, they continuously availed of Equitable's credit facilities for five long years. While the RTC categorically found that respondents had outstanding dollar- and peso-denominated loans with Equitable, it, however, failed to ascertain the total amount due (principal, interest and penalties, if any) as of July 9, 2001. The trial court did not explain how it arrived at the amounts of US$228,200 and P1,000,000. In Metro Manila Transit Corporation v. D.M. Consunji, we reiterated that this Court is not a trier of facts and it shall pass upon them only for compelling reasons which unfortunately are not present in this case. Hence, we ordered the partial remand of the case for the sole purpose of determining the amount of actual damages. (G.R. No. 171545; December 19, 2007)