Defective Contracts defective contracts are those contracts which under civil law have a certain

irregularity or absence in one or more of its elements or has damaged an innocent third party
KINDS:
1. Rescissible
2. Voidable
3. Unenforceable
4. Void
RESCISSIBLE CONTRACTS
Refer to Art 1381, NCC
A rescissible contract is one were all the elements exist and therefore a valid contract
however its very execution has created injury or economic damage to another.
o Example: A is the guardian of B, who is a minor. A administers all of the
properties of B. One of Bs properties is a piece of land worth 500K. A connived
with C, where A sold the property to C for 200K will the agreement that they will
sell it to D for 500K and divide the 300K profit between themselves.
Because B (minor) has suffered damage in the amount of 300K which is of the
total amount of the property the said transaction between A and C is rescissible (B
the minor can ask that the valid contract between A and C be annulled or
invalidated or rescinded.
VOIDABLE CONTRACTS
Refer to Art 1390, NCC
A voidable contract can be annulled although there is no damage to a contracting party.
There is a defect/irregularity in the consent given.
o Voidable Contracts
Those whose parties are incapable of giving consent. ie. Minors, insane
Those whose consent is vitiated by mistake, violence, intimidation, undue
influence or fraud.
These contracts may be validated within four years
o Intimidation, violence, undue influence four years from the time defect in the
consent ceases
o Mistake or fraud four years from the time of discovery
o Minority or guardianship four years from the time the minor reaches majority
age or four years from the time the guardianship ceases.
UNENFORCEABLE CONTRACTS
Refer to Art 1403, NCC
These are contracts which can be enforced (opposing party cannot be compelled to
perform) or sued in a court of law by reason of certain defects provided by law until and
unless they are ratified.
KINDS:

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o Unauthorized contracts entered into by an agent who has no authority or was not
authorized or acted beyond the authority given
o Those that did not comply with the statute of frauds
Contracts under the statute of frauds must be WRITTEN and SIGNED. If
they are not written or signed the said contracts cannot be enforced in a
court of law
Performance of the terms are not to be performed within a year.
o Contract of Service for 2 years or 5 years
Special promise to answer for the debt, default or miscarriage of
another
o Being a co-maker, bondsman
Sale of goods or other personal property above 500 pesos
Lease of a property for more than 4 years
Sale of real property (land/land+building) or an interest in the said
real property.
o Those were BOTH parties are incapable of giving consent
VOID CONTRACTS
Non-existent contract, void from the beginning.
Cannot be ratified or validated because they do not exists
The defect in one of the elements has rendered said element absent.
o Cause, object or purpose is contrary to law, morals, good customs (lack of
OBJECT)
o Simulated or fictitious/ fake contracts (lack of CONSENT-consent given is to a
fake contract)
o Object did not exists at the time of the transaction (lack of OBJECT)
o Object outside the commerce of men (lack of OBJECT, ie. We cannot sell
roads, rivers, seas)
o Contemplates an impossible service (lack of OBJECT)
o Contracts declared void by law
NOTES:
Rescissible, Voidable and Unenforceable contracts may be ratified or validated, by curing
the effect or irregularity.

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