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Justin V.

Torres 1G DEFECTIVE CONTRACTS


RESCISSIB LE Those which are valid but are defective because of injury or damage to either of the contracting parties or to third persons, as a consequenc e of which it may be rescinded by means of a proper action for rescission. UNENFORCEAB LE Those which Those which possess all cannot be the enforced by essential proper action in elements court unless for validity they are ratified but the because either: consent is (1) they are vitiated entered into either by without or in lack of legal excess of capacity of authority; (2) one of the they do not contracting comply with the parties, or statute of by mistake, frauds; (3) Both violence, contracting intimidation parties do not , undue possess the influence, required legal or fraud capacity. even though there may have been no damage to the contracting parties. Art. 1390Art. 1403- 1408 1402 Defect is caused by vice of consent. Defect is caused by lack of form, authority, or capacity of both parties not VOIDABLE VOID Those which lack absolutely either in fact or in law one or some of the elements essential for its validity.

DEFINITION

ARTICLES IN THE CIVIL CODE DEFECT/S

Art. 13801389 Defect is caused by injury/ damage either to

Art. 14091422 Defect is caused by lack of essential elements or

EFFECT/S

PRESCRIPTI ON OF ACTION OR DEFENSE

one of the parties or to a third person. Valid and enforceable until rescinded by a competent court. Action for rescission may prescribe.

cured by prescription. Valid and enforceable until annulled by a competent court. Action for annulment or defense or annulability may prescribe. Cannot be enforced by a proper action in court.

illegality.

Do not, as a general rule produce any legal effect.

EFFECT OF PRESCRIPTI ON RATIFICATIO N ASSAILABILI TY

Cured by prescription Need not be ratified Assailed by a contracting party and a third person who is prejudiced or damaged by the contract. Assailed directly only. Rescission

Cured by prescription Can be ratified Assailed only by a contracting party.

Corresponding action for recovery, if there was total or partial performance or the unenforceable contract under No.1 or 3 of Art. 1403 may prescribe. Not cured by prescription Can be ratified Assailed only by a contacting party.

Action for the declaration or nullity or inexistence or defense of nullity or inexistence does not prescribe.

Not cured by prescription Cannot be ratified Assailed by a contracting party and a third person whose interest is directly affected. Assailed directly or collaterally. Declaration of Absolute Nullity or

HOW CONTRACTS MAY BE ASSAILED REMEDY

Assailed directly or collaterally. Annulment, Ratification

Assailed directly or collaterally. Ratification

Inexistence EXAMPLES (1) Those which are entered into by guardians whenever the wards whom they represent suffer lesion by more than of the value of the things which are the object thereof; (2)Those agreed upon in representati on of absentees, if the latter suffer the lesion stated in the preceding number; (3)Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them; (4) Those which refer (1) Those where one of the parties is incapable of giving consent to a contract; (2) Those where the consent is vitiated by mistake, violence, intimidation undue influence or fraud. (Art 1390) (1) Those entered into the name of another person by one who has been given no authority of legal representation or who has acted beyond his powers; (2) Those that so not comply with the Statute of Frauds. The following cases an agreement hereafter made shall be unenforceable by action, unless the same or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent: a) An agreement that by its terms is not to be performed w/in a year from the making thereof; b) A special promise to answer for the debt, default or miscarriage of another; c) An agreement (1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy; (2) Those which are absolutely simulated or fictitious; (3) Those whose cause or object did not exist at the time of the transaction; (4) Those whose object is outside the commerce of men; (5) Those which contemplate an impossible service; (6) Those where the intention of the parties relative to the principal object of the contract cannot be ascertained; (7) Those

to things under litigation if they have been entered into by the defendant w/o the knowledge and approval of the litigants or of competent judicial authority; (5) All other contracts especially declared by law to be subject to rescission. (Art 1381)

made in consideration of marriage, other than a mutual promise to marry; d) An agreement for the sale of goods, chattels or things in action at a price less than P500, unless the buyer accept and receive part if such goods and chattels, or the evidences or some of them, but when a sale is made by auction and entry is made by the auctioneer in his sales book, it is a sufficient memorandum; e) An agreement for the leasing for a longer period than 1 year or for the sale of real property or of an interest therein; f) A representation as to the credit of third person. (3) Those where both parties are incapable of giving consent to a contract. (Art 1403)

expressly prohibited or declared void by law; (Art 1409)