Characteristics of a Contract 2. Defect lies in the vitiation of consent or 1.
Cause or consideration of conveyance is
Autonomy/Freedom to Stipulate (A1306) incapacity of one of the parties inadequate (fictitious) o Parties may establish such 3. Susceptible of convalidation by 2. Transfer made by debtor after suit has stipulationsas they may deem ratification and prescription commenced or pending convenient 4. Cannot be attacked by third persons 3. Sale on credit by insolvent debtor Mutuality of Contracts (A1308) 4. Evidence of large o Contracts must bind contracting indebtedness/complete insolvency parties 5. Transfer of all/nearly all of the properties Obligatory and has a force between 6. Transfer was made between father and son them Features of Unenforceable Contracts 7. Failure of vendee to take the exclusive Privity and relativity of Contract (A1211) 1. Defect lies in fact that they were either: possession of property o Contracts take effect only a. Entered into without or in excess between the parties, their assigns of authority Rescissible Contracts Based on equity (O- and heirs b. Do not comply with statute of F-L-A-G-I) Consensuality of Contract frauds The following are rescissible contracts (A1381) o Contracts are mere perfected by c. Both parties are incapable of 1. Those which are entered into by mere consent giving consent guardians whenever the wards whom Rescission A remedy granted by law to the 2. Cannot be enforced by proper court they represent suffer lesion by more contracting parties and 3rd persons to secure action than of the value of the things which reparation of damages caused them by a 3. Convalidated by ratification are the object thereof contract, even if valid, by means of restoration 4. Cannot be attacked by third persons 2. Those agreed upon in representation of of things to their condition prior to the absentees if the latter suffer the lesion celebration of the contract Features/characteristics of Void Contracts stated in the preceding number 1. Defect lies in fact that they lack one or 3. Those undertaken in fraud of creditors Features and characteristics of rescissible some or all elements of a valid contract when the latter cannot in any other contracts 2. They produce no legal effect manner collect the claims due them 1. Defect lies in injury or damage to either 3. Can never be convalidated (Accion pauliana 1177 Badges of or both parties of 3rd persons 4. Right to set up defense of absolute Fraud) 2. Before rescission, they are valid and nullity cannot be renounced 4. Those which refer to things under enforceable 5. Can be attacked directly or collaterally litigation if they have been entered into 3. Susceptible of convalidation by even by third persons by the defendant without the knowledge prescription only Essential Requisites (A1318) and approval of the litigants of or 4. Attacked directly not collaterally Cause essential and impelling means why a competent judicial authority 5. Attacked by injured party or 3rd persons party assumes an obligation 5. All other contracts specially declared by defrauded Object law to be subject to rescission Consent manifestation of the meeting of the 6. Payments made in state of insolvency Features or characteristics of voidable offer and acceptance upon the thing and the (A1382) contracts cause which are to constitute the contract 1. Binding until annulled by competent Voidable Contracts (A1390) court Badges of Fraud (in rescissible) The following contracts are voidable or annullable, even though there may have been no damage to the contracting parties (Damage a. An agreement that by its terms is ratified by one party voidable; when is immaterial) not to be performed within a year ratified by both cured) 1. Those were one of the parties is from the making thereof; incapable of giving consent to a contract b. A special promise to answer for VOID OR INEXISTENT CONTRACTS (A1409) (I- (1327) the debt, default, or miscarriage C-P-O-I-S-E) 2. Those where the consent is vitiated by of another The following contracts are inexistent and void mistake (substantial mistake affects c. An agreement made in from the very beginning: essence), violence, intimidation undue consideration of marriage other 1. Those whose cause, object or purpose is influence or fraud (F-I-V-M-U) than a mutual promise to marry contrary to law, morals, good customs, 3. Also those entered into in state of (Pre-nuptial agreement) public order or public policy (VOID); drunkenness or during hypnotic spell d. An agreement for the sale of 2. Those which are absolutely simulated or Those contracts are binding, unless they are goods, chattels, or things in fictitious (inexistent) 1345; annulled by a proper action in court. They are action, at a price not less than 3. Those whose cause or object did not susceptible of ratification. 500 pesos, unless the buyer exist at the time of the transaction accepts and receive part of such (inexistent); goods and chattels, or the 4. Those whose object is outside the evidence, or some of them, of commerce of men res nullius (VOID); such things in action, or pay at 5. Those which contemplate an impossible Unenforceable Contracts (A1403)-valid but the time some part of the service (VOID); defect lies on that fact that it cant be enforced purchase money; but when a sale 6. Those where the intention of the parties or sued upon is made by auction and entry is relative to the principal object of the The following contracts are unenforceable, made by the auctioneer in his contract cannot be ascertained (VOID); unless they are ratified: sales book at the time of the sale, 7. Those expressly prohibited or declared 1. Those entered into the name of another of the amount and kind of void by law (VOID) person by one who has been no property sold, terms of sale, price These contracts cannot be ratified. Neither can authority or legal representation, or who names of the purchases and the right to set up defense of illegality be acted beyond his power Unauthorized person on whose account the waived. contracts (1317) sales is made, it is a sufficient 2. Those who do not comply with the memorandum; Inexistent on, some, or all of essential Statute of Frauds as set forth in this e. An agreement for the leasing for a requisites of a contract are absent number. In the following cases an longer period than one year, or for Void- All essential requisites are present but agreement hereafter made shall be the sale of real property or an one or some or all of them may be contrary to unenforceable by action, unless the interest therein law, morals, good customs, public order, public same, or some note or memorandum f. A representation as to the credit policy. thereof, in writing, and subscribed by the of a third person party charged, or by his agent, evidence Note: ratified by failure to object; Reformation: 10 years therefore, of the agreement cannot be acceptance of benefits received without the writing or a 3. Those were both parties are incapable secondary evidence of its contents: of giving consent to a contract (when