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Defective contracts.
There are four kinds of defective contracts. They are in the order of
They are valid because all the essential requisites of a contract exist
but by reason of injury or damage to one of the parties or to third
persons, such as creditors, the contract may be rescinded. Thus, the
defect is external. Until such contracts are rescinded in an
appropriate proceeding, they remain valid and binding upon the
parties thereto
(Chap. 6.);
(2) Voidable contracts. — They are also valid until annulled unless
there has been a ratification. In a voidable contract, the defect is
caused by vice of consent (Chap. 7.);
RESCISSIBLE CONTRACTS
Meaning of rescission.
(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;
(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;
EXAMPLE:
S sues B for the recovery of a parcel of land. In this case, the land is
a “thing under litigation.” If, during the pendency of the case, B sells
the land to C without the approval of S or of the court, the sale is
rescissible at the instance of S in case he wins in his suit for the
recovery of said land unless C is in legal possession of the land in
good faith. (Art. 1385, par. 2.)
(1) For persons under guardianship, the period shall begin from the
termination of incapacity; and
VOIDABLE CONTRACTS
Meaning of annulment.
UNENFORCEABLE CONTRACTS
(1) Those entered into the name of another person by one who has
been given no authority or legal representation, or who has acted
beyond his powers;
(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, be 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:
(e) An agreement for the leasing for a longer period than one year,
or for the sale of real property or of an interest therein;
(2) Those that do not comply with the Statute of Frauds; and
STATUTE OF FRAUDS
R agreed to lease his house to E for two (2) years. Again, this
agreement must appear in writing to be enforceable unless it is
partially executed.
(1) S orally sold his land or his right or usufruct in said land to B. The
agreement is also unenforceable, unless it has been partially
executed.
VOID CONTRACTS
ART. 1409. 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;
(3) Those whose cause or object did not exist at the time of the
transaction;
(6) Those where the intention of the parties relative to the principal
object of the contract cannot be ascertained;
(6) It cannot give rise to a valid contract. (see Art. 1422.); and