Documente Academic
Documente Profesional
Documente Cultură
Professor E. A. Labitag
DEFECTIVE
CONTRACTS
RESCISSIBLE
(Arts 1381 1389)
Economic prejudice
or damage to:
- owner
- 3rd person
- litigant
Can generally be
ASSAILED and
CURED by: Injured
Party
EFFECTS:
Mutual restitution
AS TO NATURE OF
DEFECT
Contracts of
guardians (acts of
administration) when
wards they represent
suffer lesion of more
than 25% of the value
of thing
Contracts in
representation of
absentees when
latter suffers lesion of
more than 25% of
value of thing
EFFECT ON
CONTRACT
VALID
until
rescinded
VALID
until
rescinded
VALID
until
rescinded
Pauliana)
VALID
until
rescinded
VALID
until
rescinded
ASSAILABLE?
HOW?
YES but only through
DIRECT action for
rescission
No rescission if:
a. plaintiff has other
legal means to obtain
reparation
(subsidiary)
b. plaintiff cannot
return what must be
restored
c. object in the hands
of 3rd persons in good
faith
d. Contract approved
by court (Art 1386)
WHO CAN
ASSAIL?
WHEN TO
ASSAIL?
CURABLE?
HOW?
WHO CAN
CURE?
WHEN TO
CURE?
By ward
Or by guardian
ad litem of ward
during incapacity
of ward in action
against original
guardian
By absentee
By plaintiffcreditor
By heirs of
creditor
BY creditors of
creditors injured
(accion
subrogatoria) By
other third
parties
prejudiced by the
contract
By party litigant
Within 4 years
from gaining
(minor) or
regaining
(insane) capacity
YES
By ratification
(Confirmation by
the ward)
Within 4 years
from knowledge
of domicile of
absentee
YES
By prescription
Within 4 years
from knowledge
of fraudulent
contract
YES
By prescription
Within 4 years
from knowledge
of fraudulent
contract
YES
By prescription
By ward
Within 4 years
from (re)gaining
capacity
By absentee
Within 4 years
from knowledge
of domicile or
knowledge of
fraudulent
contract
By creditor
Within 4 years
from knowledge
of fraudulent
contract
By party litigant
Within 4 years
from knowledge
of fraudulent
contract
DEFECTIVE
CONTRACTS
VOIDABLE
(Arts 1390 1402)
Vitiated consent
EFFECT:
Cleanses defect of
contract
Does not prejudice
right of 3P prior to
ratification
Mutual restitution
AS TO NATURE OF
DEFECT
EFFECT ON
CONTRACT
ASSAILABLE?
HOW?
Want of capacity
- age
- insanity
VALID
until annulled
by court
action
WHO CAN
ASSAIL?
All who are
obliged
principally or
subsidiarily (i.e.
guarantors and
sureties)
Incapacitated
party; not the
party with
capacity
Victim; not the
party who cause
the defect
WHEN TO
ASSAIL?
Within 4 years
from cessation of
(re)gaining
capacity
Within 4 years
from:
- cessation of
intimidation,
violence, undue
influence
(consensual
defect)
- discovery of
mistake or fraud
CURABLE?
HOW?
YES
By ratification
By prescription
YES
1 By ratification
- Express
- Implied
(silence or
acquiescence, acts
showing approval or
adoption of
contract,
acceptance and
retention of
benefits)
WHO CAN
CURE?
By parties
themselves
By guardian in
behalf of an
incapacitated
party during
existence of
incapacity
2 By prescription
UNENFORCEABL
E
(Arts 1403 1408)
Contract entered
into name of
another without
authority or in excess
of authority
VALID
but cannot be
ENFORCED
by a proper
action in court
Contracts covered by
Statute of Frauds
and not complying
with requirement of a
written memo
VALID
but cannot be
ENFORCED
by a proper
action in court
By owner of
property
By other party
By his privies
(heirs,
representatives
and assigns)
By ratification
Person in whose
name the
contract was
entered into
By
acknowledgemen
t By performance
of oral contract
By party against
whom the
contract is being
enforced
By failure to
object seasonably
to presentation of
oral evidence
By acceptance of
benefits under
the contract
WHEN TO
CURE?
Within 4 years
from cessation of
(re)gaining
capacity
Within 4 years
from:
- cessation of
intimidation,
violence, undue
influence
(consensual
defect)
- discovery of
mistake or fraud
DEFECTIVE
CONTRACTS
AS TO NATURE OF
DEFECT
VOID or
INEXISTENT
(Arts 1409 1422)
a.
b.
c.
d.
e.
VALID
but cannot be
ENFORCED
by a proper
action in court
EFFECT ON
CONTRACT
ASSAILABLE?
HOW?
By other party
By his privies
(heirs,
representatives
and assigns)
By guardian
WHO CAN
ASSAIL?
WHEN TO
ASSAIL?
By parents or
guardians of both
parties
By confirmation
Both parties after
(re)gaining
capacity to act
CURABLE?
HOW?
WHO CAN
CURE?
WHEN TO
CURE?
By innocent party
Cause, object or
purpose of contract
contrary to law, good
customs, morals,
public order or public
policy (Art 1401, Par
1)
DOES NOT
CREATE
RIGHTS AND
CANNOT
IMPOSE
OBLIGATION
YES.
By an action for
declaration for
nullity
By defense of
nullity
One or some of
essential requisites
of valid contract
lacking in fact or in
law
Absolutely simulated
Those whose cause or
object did not exist
Object outside the
commerce of man
Contemplate an
impossible service
Where intention of
parties re: principal
object of contract
cannot be ascertained
(Art 1402 Pars 2 to 6)
DOES NOT
CREATE
RIGHTS AND
CANNOT
IMPOSE
OBLIGATION
YES.
By an action for
declaration for
nullity
By defense of
nullity
Contracts expressly
prohibited by law
(Art 1409 Par 7)
DOES NOT
CREATE
RIGHTS AND
CANNOT
IMPOSE
OBLIGATION
YES.
By an action for
declaration for
nullity
By defense of
nullity
By 3rd persons
whose interest
are directly
affected
(If in pari delicto,
neither has an
action against
each other)
Imprescriptible
Cannot be cured
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--
By any of the
contracting
parties
By 3rd persons
whose interests
are directly
affected
Imprescriptible
Cannot be cured
--
--
By party whose
protection the
prohibition of the
law is designed
By 3rd party
whose interests
are directly
affected
Imprescriptible
Cannot be cured
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--