RESCISSIBLE CONTRACTS

Art 1381

The following are Rescissible:
1. Those which are entered into by guardians whenever the wards whom they represent
suffer lesion by more than one-fourth of the value of the things which are the object
thereof;
2. Those agreed upon in representation 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 to things under litigation if they have been entered into by the
defendant without the knowledge and approval of the litigants or of competent judicial
authority;
5. All other contracts specially declared by law to be subject to rescission.
6. Payments made in state of insolvency (A1382)



VOIDABLE CONTRACTS
A1390

The following contracts are voidable or annullable, even though there may have been no damage
to the contracting parties:

1. Those where one of the parties is incapable of giving consent to a contract; (1327)
2. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or
fraud.

These contracts are binding, unless they are annulled by a proper action in court. They are
susceptible of ratification

* also those entered into in state of drunkenness or during hypnotic spell



UNENFORECEABLE CONTRACTS

The following contracts are unenforceable, unless they are ratified:

1. Those unauthorized contracts entered into in the name of another person by one who has
been no authority or legal representation, or who acted beyond his powers; (1317)
2. Those that do not comply with the Statute of Frauds as set forth in this number. In the
following cases an agreement hereafter made shall be unenforceable by action, unless the
same, or some note or memorandum thereof, in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the agreement cannot be received
without the writing, or a secondary evidence of its contents:
a) An agreement that by its term is not to be performed within a year from the making
thereof;
b) A special promise to answer for the debt, default, or miscarriage of another;
c) An agreement made in consideration of marriage, other than a mutual promise to
marry (pre-nupt.)
d) An agreement for the sale of goods, chattels or things in action, at a price not less that
Five Hundred pesos, unless the buyer accept and receive part of such goods and
chattels, or the evidence, or some of them, of such things in action, or pay at the time
some part o the purchase money; but when a sale is made by auction and entry is
made by the auctioneer in his sales book, at the time of the sale, of the amount and
kind of property sold, terms of sale, price names of the purchases and person on
whose account the sale is made, it is a sufficient memorandum;
e) An agreement for the leasing for a longer period than one year, or for the sale of real
property or an interest therein;
f) A representation as to the credit of a third person.

3. Those where both parties are incapable of giving consent to a contract.


VOID OR INEXISTENT CONTRACTS

The following contracts are inexistent and void from the beginning:

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 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 expressly prohibited or declared void by law.

These contracts cannot be ratified. Neither can the right to set up the defense of illegality be
waived.


Void all essential requisites are present but one or some or all of them may be contrary o law,
morals, good customs, public order, public policy,

Reformation 10 years



CHARACTERISTIC OF CONTRACT
Autonomy/freedom to stipulate A1306
parties may establish such stipulations as they deem convenient
Mutuality of Contracts A1308
Obligatory & has force of law between parties
/Relativity of Contracts A1311
Contracts takes effect only between the parties, their assigns and heirs
Consensuality of Contracts A1315
Contracts are perfected by mere consent


Rescission remedy granted by law to the contracting parties and 3
rd
persons to secure
reparation if valid, by means of restoration of things to their condition prior to celebration of the
contract.

I. FEATURES AND CHARACTERISTICS
1. Defect lies in injury or damage to either or both parties or 3rd persons.
2. Before rescission, they are valid and enforceable
3. Susceptible of convalidation by prescriber only
4. Attached directly not collaterally
5. Attached by injured party or 3
rd
person defrauded

II. FEATURES/CHARACTERISTICS OF VOIDABLE CONTRACTS
1. Binding until annulled by competent court
2. Defect lies in violation of consent or incapacity of 1 of the parties
3. Susceptible of convalidaiton by ratification or prescription
4. Cannot be attached by 3
rd
persons

III. FEATURES OF UNENFORECEABLE CONTRACTS
1. Defect lies in fact that they were either
Entered into without or in excess of authority
Do not comply with Statute of Frauds
Both parties are incapable of giving consent
2. Cannot be enforced by proper court action
3. Convalidated by ratification
4. Cannot be attached by 3
rd
persons

IV. FEATURES/CHARACTERISTICS OF VOID CONTRACTS
1. Defect lies in fact that they lack one or some or all elements of a valid contract
2. They produce no legal effect
3. Can never be convalidated
4. Right to set up defense of absolute mullity or inexistence cannot be renounced
5. Can be attached directly or collaterally even by 3
rd
persons

Gdasgsg essential of impelling reason why a jfahfkja assumes an obligation

Consent manifestation of the meeting of the offer and the acceptance upon the thing and the
case which are to constitute the contract.



BADGES OF FRAUD
1. Cause or consideration of convergence is inadequate
2. Transfer made by debtor after suit was command and pending
3. Sale or credit by insolvent debtor
4. Evidence of large indebtedness/complete insolvency
5. Transfer of all/nearly all of his property
6. Transfer was made between father and son
7. Failure of render to take exclusive possession