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CHAPTER 8 – UNENFORCEABLE CONTRACT (e) An agreement for the leasing for a longer

period than one year, or for the sale of real
UNENFORCEABLE vs. VOIDABLE vs. RESCISSIBLE property or of an interest therein;
(f) A representation as to the credit of a third
cannot be sued produce legal produce legal
person.
upon or enforced effects until they effects until they
unless ratified as are annulled or are annulled or (3) Those where both parties are incapable of giving
if they have no rescinded rescinded consent to a contract.
effect yet.
may be ratifi ed; UNAUTHORIZED CONTRACTS - those entered into in the
hence, they can name of another person by one who has been given no
have in such a authority or legal representation or who has acted beyond his
case the effect powers
of valid contracts.
In one sense, STATUTE OF FRAUDS
therefore, they a. PURPOSE - to prevent fraud, and not to encourage
may be called the same. Thus, certain agreements are required to
validable be in writing so that they may be enforced.
b. HOW IT PREVENTS FRAUD - Since memory is many
times unreliable, oral agreements may sometimes
KINDS OF UNENFORCEABLE CONTRACTS
result in injustice. To aid human memory, to prevent
1. Unauthorized contracts the commission of injustices due to faulty memory, to
2. Those that fail to comply with the statute of frauds discourage intentional misrepresentations, are the
3. both parties are incapable of giving consent to a principal aims of the Statute of Frauds.
contract
PRINCIPLES OF STATUTE OF FRAUDS

1. The Statute of Frauds applies only to executory
Art. 1403. The following contracts are enforceable, unless contracts (contracts where no performance has yet
they are ratified: been made) and not partially or completely executed
(consummated contracts).
(1) Those entered into in the name of another person 2. cannot apply if the action is neither for damages
by one who has been given no authority or legal because of the violation of an agreement nor for the
representation, or who has acted beyond his specific performance of said agreement.
powers 3. is exclusive, that is, it applies only to the agreements
or contracts enumerated herein.
(2) Those that do not comply with the Statute of 4. Defense may be waived
Frauds as set forth in this number. In the following 5. is a personal defense, that is, a contract infringing it
cases an agreement hereafter made shall be cannot be assailed by third persons.
unenforceable by action, unless the same, or some 6. Contracts infringing the Statute of Frauds are not
note or memorandum thereof, be in writing, and void; they are merely unenforceable.
subscribed by the party charged, or by his agent; 7. is a Rule of Exclusion, i.e., oral evidence might be
evidence, therefore, of the agreement cannot be relevant to the agreements enumerated therein and
received without the writing, or a secondary evidence might therefore be admissible were it not for the fact
of its contents: that the law or the statute excludes said oral
evidence.
(a) An agreement that by its terms is not to be 8. does not determine the credibility or weight of
performed within a year from the making thereof; evidence. It merely concerns itself with the
(b) A special promise to answer for the debt,
admissibility thereof.
default, or miscarriage of another; 9. does not apply if it is claimed that the contract does
(c) An agreement made in consideration of
not express the true agreement of the parties. As long
marriage, other than a mutual promise to marry;
as the true or real agreement is not covered by the
(d) An agreement for the sale of goods, chattels or
Statute of Frauds, it is provable by oral evidence.
things in action, at a price not less than five
hundred pesos, unless the buyer accept and READ PARAS EXAMPLES
receive part of such goods and chattels, or the
evidences, or some of them, of such things in SIX AGREEMENTS IN STATUTE OF FRAUD: Must be in
action, or pay at the time some part of the writing!!
purchase money; but when a sale is made by
auction and entry is made by the auctioneer in his 1. An Agreement that by its terms is not to be performed
sales book, at the time of the sale, of the amount within a year from the making thereof.
and kind of property sold, terms of sale, price, 2. A special promise to answer for the debt, default, or
names of the purchasers and person on whose miscarriage of another.
 Special promise = refers to a subsidiary or
account the sale is made, it is a sufficient
memorandum; collateral promise to pay, like a contract of
guaranty

kind of property sold. 1404. This representation by C parent. unless the buyer accept and receive part of such goods and chattels. C being a lawyer. of both contracting parties. When C was asked regarding A’s credit C said: “You can safely lend money to A because A is the owner of a parcel of land and I have the title deeds in my possession. 3. entered into a contract. An agreement made in consideration of marriage These statutes are applicable only to executory contracts.” Art. 6. acceptance of benefits under them (thus. hence the need for the writing. or some of Art. EXCEPTION: an oral mutual promise to marry is breach of said agreement or for specific performance thereof. the parties may (note of personal property) avail themselves of the right under Article 1357. The statute was the creditor. 4. prove the same. of one of the is not enforceable against him because it is not in contracting parties shall give the contract the same effect writing. not embraced by the Statute of Frauds. Contract was still executory. Art. 1405. and not in any other matter. for the party to have the other execute the public period does not exceed one year. 2. Unauthorized contracts are governed by them. at a price not less than five hundred pesos. applicable. and in what kind of actions may they be invoked? Example: A and B. of INFRINGING STATUTE OF FRAUDS 1. it is a sufficient memorandum  EXAMPLE: A sold B his pen for P400. and enforceable. the amount and kind of property sold 2. Marriage settlements These statutes may be invoked in actions for damages for b. with C as judicial action. document needed for convenience in registration. chattels or things ** An oral promise to put in writing an agreement that is in action. This is referred to in No. or guardian. or for the sale of real property or of an waiver or to a failure to object. An agreement for the sale of goods. are ratified by the unenforceable unless B gets the pen or pays fully failure to object to the presentation of oral evidence to or partially for the price. of such things in action. the contract has no effect. When a contract is enforceable under the  INCLUDES TWO KINDS OF AGREEMENT Statute of Frauds. to partially or totally executed or performed contracts. An agreement for the leasing for a longer period than witnesses testifying orally on the contract amounts to a one year.00 orally. If ratification is made by the parents or guardians. EXAMPLE OF WAIVER: Cross-examination of the 5. or the evidences. 2 of Article 1403. interest therein. gave C as his reference. valid . terms of sale. or by the acceptance of benefits under  RULE IN CASE OF AUCTION SALE: When a them. the price (this is deemed a waiver) 4. Donations propter nuptias c. covered by the Statute is itself unenforceable. lease is still enforceable. unreliable. Contracts infringing the Statute of Frauds. A representation as to the credit of a third as if only one of them were incapacitated. lease of real property for more than one year its registration in the Registry of Deeds. the terms of the sale 1.  Example: A borrowed money from B. Art. Lease is for six  It must be stressed here that the right of one months. the statute whose account the sale is made — the entry does not apply to executed or partially executed or is considered a SUFFICIENT memorandum performed contracts) (even if the same is not signed by the party sought to be charged). at the time of the sale. and entry is made by the auctioneer in his sales book at the time of the TWO WAYS OF RATIFICATION OF CONTRACTS sale. A was C’s giving consent. statutes. The law considers the memory of man guarantor. Incidentally. 1407. the contract descriptive? To what kind of contract are these statutes shall be validated from the inception. sale of real property (regardless of price)  EXAMPLE: A is B’s tenant. or provisions which require certain give consent. not other than a mutual promise to marry. In a contract where both parties are incapable of This was made orally. is given only when the contract is both valid and  EXAMPLE: A was borrowing money from B. A representation as to the credit of a third person. the names of the purchasers and persons on 2. person must be in writing to be enforceable. names of Unless ratified. sale is made by auction. writing to be enforceable. price. and C. it becomes voidable. or pay at the time some Article1317 and the principles of agency in Title X of this part of the purchase money. If oral. express or implied ratification by the client. ANSWER: The term “Statute of Frauds” is descriptive of those The contract is unenforceable because both parties cannot laws. a. failure to object to the presentation of oral evidence 3. as the IN GENERAL: Of what statutes is the term “Statute of Frauds” case may be. but when a sale is made Book. must be in designed to prevent fraud and the commission of perjury. 1406. and a public document is necessary for 1. as the case may be. the guarantor. by auction and entry is made by the auctioneer in his sales book. of the amount and  Ratification cures an unauthorized contract. both 15 years old. Now if the guardian or parent of A ratifies agreementsto be in writing before they can be enforced in a expressly or impliedly the contract. the purchasers and person on whose account the sale is made. The contract of guaranty between B.

unless annulled by the guardian or parent of B. Indeed. Unenforceable contracts cannot be assailed by defense by strangers to the transaction. 1408. the Statute of Frauds cannot be set up as a Art. third persons. However. contract because of its unenforceability. if the  Just as strangers cannot attack the validity of guardian or parent of B also ratifies. . so also they cannot attack a right from the time it was first entered into. the contract is validated voidable contracts.