Contract of Service legality if the approving person is dead

I just want to ask kasi yung isang officemate ko ay nagkwekwestion sa legality ng contract of service ng mga contractuals namin.

the story of it is this. The Contract of service was done last June 2012 and was signed by our director then. the contract has a effectivity date of July 9, 2012 - December 31, 2012. We followed the procedure prescribed by the Agency for legality issues. July 2, 2012, our boss died. the contracts was already submitted to our legal service for review prior to the date of death. there are minor corrections to be done on the contract but as respect to our late boss, the legal service accepted our plea to have the corrections done with correction fluid and have our Administrative Officer initialed. The Legal service accepted the contracts with corrections initialed and the other offices accepted it and signed on the contract. Our accounting processed the payroll and we have the contract notarized.

My office-mate last November 2012 out of nowhere is questioning the legality of the contract since our director, signing authority is already dead.

Now, im inquiring if the contracts are still valid and legal even if our director died? Do we have a specific law that explains the legality or illegality of it?

Thank You!

Yes there is a basis under Article 1311.

As a general rule, 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.

The said contract is still valid because it took effect not only to the decedent but also to his assigns or heirs.

There is an exception though, "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. ".