Article 1311

Contracts take effect only in between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law.  The heir is not liable beyond the value of the property he received from the decedent.

If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation.  A mere incidental benefit or interest of a person is not sufficient . The contracting parties must have clearly deliberately conferred a favor upon a third person.

Ang kontrata ay magkakaroon lamang ng bisa sa pagitan ng partido, ang kanilang itinalaga, at ang taga-pagmana, maliban na lang kung ang karapatan at obligasyon ay magmumula sa kontrata, ito ay hindi maaaring mailipat dahil sa katangian, o ng mga istipulasyon o ang probisyon ng batas. Ang tagapagpamana ay mananagot lamang ng nauukol sa halaga ng ari-arian na kanyang tinanggap galing sa namatay.

Kung ang kontrata aymayroong ilang istipulasyon na pumapabor sa ibang tao, sya ay maaring maghabol sa kondisyon na kanyang ipinagbibigy-alam ang pagtanggap sa may obligasyon bago ang pagbawi. Ang kaugnay na benepisyo o ang interes ng isang tao ay hindi sapat. Ang dalawang partidong sumasang-ayon sa kontrata ay dapat mayroon na malinaw at sadyang pakikipag-ugnayan na pumapanig sa ibang tao.

Heirs and assigns are liable for a contract entered into by the decedent because generally the rights and obligations are transmissible to them.

What a person can receive by way of inheritance, and therefore as an heir, cannot be less than his legitime; neither can he be obliged to pay more on an inherited obligation than the estate that he inherited.

General rule:

Third person has no rights and obligations under a contract to which he is a stranger.

Instances where a third person may be affected by a contract:

1. In contracts containing a stipulation in favor of a third person (stipulation pour trui)
2. In contracts creating real rights
3. In contracts entered into to defaud creditors
4. In contracts which have been violated at the inducement of a third person

General Rule:

Creditors are not affected by the contracts of their debtors.

Rules:

1. Contracts made in fraud of creditors may be rescinded (Art.1381)
2. Contracts by which a debtor gratuitously disposes of his property, or alienations made even for a valuable consideration when a judgment has been rendered or an attachment has been levied are considered fraudulent
3. Transfers or assignments made by an insolvent are deemed fraudulent and should be set aside.

Example:

Don Camello owes 50,000.00 to Don Facundo. If Don Camello dies, his daughter Carmenchu has the obligation to pay Don Facundo but not beyond the value of the property that she inherited from Don Camello.

Papito ordered a cake for his daughter Papita from Mrs. Baker. Papita as the daughter of Papito may demand the cake from Mrs. Baker.