res inter alios acta aliis neque nocet prodest,"

A fundamental rule in contracts is the principle of relativity embodied in Article 1311 of the Civil Code which provides:

Art. 1311. Contracts take effect only 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 and deliberately conferred a favor upon a third person.

In consonance with the axiom "res inter alios acta aliis neque nocet prodest," a contract can only obligate the parties who had entered into it, or their successors who assumed their personalities or juridical positions, and that, concomitantly, a contract can neither favor nor prejudice third persons, 1 although, in some ways, such persons may be affected in varying degrees. Thus, in contracts creating real rights, third persons who come into possession of the object of the contract may be bound thereby under the provisions of mortgage laws and land registration laws.2 Creditors are protected in cases of contracts intended to defraud them.3 Accion directa is allowed by law in certain cases.4 Any third person who induces another to violate his contract can be made liable for damages to the other contracting party.5 Exceptionally, contracts may confer benefits to a third person or what are otherwise also known as "stipulation pour autrui." 6 But that should be just about all.