‘RESCISSIBLE CONTRACTS VOIDABLE CONTRACTS ‘UNENFORCEABLE CONTRACTS VOID/ NON-EXISTENT ‘CONTRACTS DEFINITION ‘Acontract that is valid because it contains allthe essential requisites prescribed by law, but Which is defective because of the injury or damage to either of the contracting parties or to 3" persons, asa consequence of which itmay be rescinded by ‘means of a proper action for rescission. ‘Accontract that has all of the essential elements for validity are present, although the element of consent is vitiated either by: (2) lack of legal capacity of cone of the contracting parties, or (2), mistake, violence, Intimidation, undue influence or fraud (vices of consent”) ‘A contractthat cannot be enforced by a proper action in court, unless they ate ratified. Voide refer to those where all ofthe requisites of a contract are present, but the cause, object or Purpose is: (2) contrary to law, morals, good customs, public order or publi policy, or (2) contractitsetfis, prohibited or declared void by law. Inexistent- refer to those where one or some or all of those requisites which are essential for the validity of a contract are absolutely lacking. ‘RSTO KINDS Tclude: (1) Those which are entered into by ‘guardians whenever the wards whom they represent suffer lesion by more than % of the value of the things which are the object thereof; (2) Those agreed upon in include: (2) Those where one of the parties is incapable of giving consent toa contract; (2), Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud. Tnelude: (1) Those entered into in the of another person by one who has: (a) Been given no authority, or (b) Been given no legal representation, or (@) Acted beyond his powers, NOTE: (1) are called the Tnclude: (1) Those whose cause, ‘object or purpose is contrary to law, morals, good customs, public order ‘or public policy (voi); (2) Those which are absolutely simulated or fictitiousrepresentation of absentees, if the latter suffer the lesion stated in (2); (@)_ Those undertaken in fraud of creditors when the later cannot in any manner collect the claims due them (the action to rescind a contract that defraud creditors is called accion pouliona}; (4) Those which refer to es under litigation if they have been entered into by the defendant without the knowledge and “unauthorized contracts” (2), Those that do not comply with the Statute of Frauds; (3) Those where both parties are incapable (of giving consent to a contract. {inexistent); (2) Those whose cause or object didnot exist at the time of the transaction {inexistent) (4) Those whose object is outside the commerce of men (void); (6) Those which contemplate an impossible service (votay (6) Those where the intention ofthe parties relative tothe principal object ofthe contract cannot be ascertained (void); (7) Those expressly approval of the Prohibited or litigants or of declared void by law competent judicial (void), authority; (6) Allother contract specially declared by law to be subject of ‘ASTO DEFECT | Damage/injury to either: | (2) Vitlation of consent, or | Contractis entered into: | One or some or all of the (1) One of the (2) Legal incapacity of one | (1) In excess or without _| essential requisites arecontracting parties, (2), 3% persons. of the contracting parties. ‘any authority, (2) Without compliance with the Statute of Frauds, or (3) With both parties not legally capacitated Tacking either in factor in law. ‘ASTO ORIGINOF | Economie damage or (Incapacity of one of — | (a) Entered into in behalf | Absence of any of the erect | lesion the contracting parties | of another person, | essential requisites of a to ve consent, or without authority or | contract. (2) vitiated consent due to | in excess thereof, or the presence ofthe | (2) Non-compliance with Vices of consent. the Statute of Frauds, (3) Incapacity of both contracting parties to give consent. "ASTO DAMAGE/_| Necessary. Nat necessary. Not necessary. Not necessary INJURY/PREJUDICE "ASTO EFFECT | Considered valid and Considered valid and Can be considered asa | Asageneralrule, enforceable until enforceable until annulled | “validable transaction” _| produces no legal effects. rescinded by a competent | by a competent court. that i, ithas no effect court. now, butit may be effective upon ratification. However, it cannot be ‘enforced by a proper action in court. REMEDY OR | Resclssion. ‘Annulment: ‘A personal defense only _ | Declaration of nullity of ‘CAUSE OF ACTION ‘when the plaintiff pursues | the contract. 2 specifi action oF performance or complaint for damages based onbreach af contract. STO The action to daim The action for annulment — | The corresponding action | Does not prescribe. PRESCRIPTIBILITY | rescission must be shall be brought within 4 | for recovery, ifthere was OF ACTION OR | commenced within 4 vears. total or partial DEFENSE | years. (2) incases of performance of the (1) For persons under Intimidation, violence | unenforceable contract ‘guardianship: 4-year fr undue influence: the | under Article 1403, nos. 1 period shall not begin 4-year period shall | and 3, may prescribe. until the termination of | begin from the time the former's the defect of the Incapacity, or until the consent ceases. domicile of the latter is | (2) In case of mistake or shown, fraud: the 4-year (2) For absentees: 4-year period shall start from period shall not begin the time of the until the absentee’s, discovery of the same. domicile is known. (3) When the action refers to contracts entered Into by minors or other incapacitated persons: the year period shall start from the time the guardianship ceases. ‘STO Cannot be ratified Can be ratified. Can be ratified Cannot be ratified SUSCEPTIBILITY TO RATIFICATION “ASTO By prescription only (G) Ratification, or By ratification only, NONE. Itean neither be SUSCEPTIBILITY TO (2) Prescription. ratified nor can it CONVALIDATION preseribe. ‘ASTO WHO MAY | (i) Acontracting party, | Only by a contracting party. | Only by a contracting (2) A contracting party, ASSAILTHE or party or contract ___| (2) The contracting (2) 43 person whosepartys representative, or 2) Heirs of the contracting parties, (4) Creditors by virtue of theie suppletory action defined in art. 1177 of the CC, of (6) 43" person who is prejudiced by the contract. interest i directly affected, STO HOW CONTRACTS MAY BE ASSAILED. Direct action only, Direct and collateral ation, Direct and collateral action. Direct and collateral action.