SEATWORK

Your text here

COMPARATIVE TABLE OF DEFECTIVE CONTRACTS
NATURE OF RESCISSIBLE VOIDABLE UNENFORCEABL VOID
DEFECT E
STATUS OF Valid and Enforceable, Valid and binding until Valid but enforceable by Absolutely null and
CONTRACT unless rescinded annulled by proper action unless ratified void
court action

REMEDY Rescission Annulment or Ratification Declaration of absolute

Ratification nullity or inexistence

PRESCRIPTIVE 4 years. 4 years. No prescription No prescription

METHOD Guardianship: 4 yrs Duress – from cessation
from termination of MF – from discovery
incapacity. MIG – from cessation
Absentee: 4 yrs from of incap
the time domicile is
known
REAL PARTY IN One of the parties or a Contracting party Contracting party or Contracting party or
INTEREST third person aggrieved party third person

GROUNDS Art. 1381 – Lesion, in Incapable of giving Lack of prescribed form Object, cause, purpose
fraud of creditors, in consent Lack of authority contrary to LMGcPoPp
state of insolvency, Vitiated consent (Art. (Art. 1403) Absolutely simulated or
declared by law 1390) fictitious
Cause or object did not
exist at the time of
transaction
Object outside
commerce of man
 NATURE OF RESCISSIBLE VOIDABLE UNENFORCEABL VOID
DEFECT E
Impossible service
Intention of the parties
cannot be ascertained
Expressly prohibited or
declared void by law
(Art. 1409)

RESCISSIBLE VOIDABLE UNENFORCEABLE VOID

Valid - Valid until annulled by court Cannot be enforced unless Void, produce no effect at all
With remedy of rescission by - Defect on vice of consent: ratified by court - Cannot be ratified; cannot
reason of economic injury or One of the party incapable of - Kinds of unenforceable give rise to a valid contract
damage to one of the parties or giving consent (legal incapacity); contracts: - Right to set up the defense of
third parties, e.g. creditors consent vitiated by MISTAKE, 1) Those entered into in the illegality cannot be waived
VIOLENCE, INTIMIDATION, name of another by one - The action or defense for the
Rescission: remedy granted by UNDUE INFLUENCE or FRAUD without, or acting in excess, declaration of its inexistence
law to the contracting parties, (violation of consent) of authority; (unauthorized does not prescribe
and sometimes to third persons contracts) - The defense of illegality is
in order to secure reparation of Ratification (one voluntarily 2) Those who do not comply not available to third persons
damages by means of returning adopts the defect of the contract) with the Statute of Frauds; whose interests are
of the things 3) Those where both parties are not directly affected.
Once ratified, absolutely valid, incapable of giving;
Requisites of rescission can no longer be annulled. Following contracts are void or
(1) Validly agreed upon May be effected expressly or Statute of Frauds inexistent from the beginning:
(2) There must be lesion or tacitly (accept benefits) - 1677, the English Parliament (1) Those whose cause, object,
pecuniary prejudice a) Knowledge of the reason - To counter the evil practice or purpose is contrary to l,
(3) Based upon a case provided which renders the contract of giving false testimony/ m, gc, po, pp;
by law voidable; guard against honest mistakes (2) Those which are absolutely
(4) No other legal remedy to b) Reason must have ceased; of man simulated or fictitious;
obtain reparation for c) Injured party must have - Recollection of memory -> (3) Those whose cause or object
damages executed an act which faulty, unreliable. did not exist at the time of
necessarily implies an transaction;
intention to waive his right
 RESCISSIBLE VOIDABLE UNENFORCEABLE VOID
(5) Party asking for rescission Who may ratify: guardian; or the - Does not require that the (4) Those whose object is
must be able to return what injured party himself, provided he contract be contained in a outside the commerce of
he is obliged to restore is already capacitated. formal written document as men;
(6) Object of the contract is not - In case contract is voidable long as it is comprehensible, (5) Those which contemplate an
legally be in possession of on the ground of mistake, etc. and it records the intention impossible service;
the third person (acted in Ratification can be made by the of the parties (6) Those where the intention of
good faith) party whose consent is vitiated. - Only applicable to executory the parties relative to the
(7) Period for filing action for contracts (no performance principal object of the
rescission must not have Ratification does not require the has been made) contract cannot be
prescribed (4 years) conformity of the contracting - Not applicable where a ascertained;
party who has no right to bring an writing does not express the (7) Those expressly prohibited
Cases of rescissible contracts action for annulment. true agreement of the parties.
provided by law:
(1) Contract entered into by Annulment
guardian in behalf of wards - Remedy for the declaration of
where the ward suffer lesion inefficacy of the contract based
of more than ¼ of the value on a defect or vice in consent of
of the object one of the contracting parties
(2) Contracts entered into in
representation of absentee Action for annulment must be
where the absentee suffers brought within 4 years,
lesion of more than ¼ of the - Period begins from the time
value of the object intimidation, violence, undue
(3) Contracts undertaken in influence ceases
fraud of creditors - From the time the mistake was
(a) Where the fraud charge is discovered
not the one used to obtain a - From the time, incapacitated
party’s consent to a contract, it person becomes capacitated
can only be a fraud of creditors
that give rise to a rescission of Party entitled to bring an action
the offending contract to annul:
(4) Contracts which refer to - Plaintiff (must have interest
things under litigation in the contract)
- Victim, and not the party
responsible for the defect