Ma. Khershey Denize R.

Alberto
BSA - BKA

Types of Defective
Contracts Rescissible Voidable Unenforceable Void

Status of the Valid but Valid until annulled Valid but Absolutely or
Contract unenforceable unless unless there is unenforceable unless completely null and
it is ratified. ratification. it is ratified. void.
Contracts that are Contracts that is valid Contracts that cannot Contracts that has all
Definition valid and agreed upon but one of the be enforced by proper the requisites of the
with the presence of parties is incapable action upon by reason contract but the
all essential requisites of giving consent or of defects provided by cause, object or
and is effective vitiated by mistake, law unless ratified. purpose is contrary
although subject to violence, to law, morals, good
rescission when there intimidation, undue customs, public order
is damage or influence or fraud. or public policy or is
prejudice. prohibited by law.
Remedy Rescission Annulment of Ratification Declaration of Nullity
Contract of the Contract
Prescription As a general rule, the As a rule the action There is no There is no
action must be for annulment shall prescription for prescription for a
commenced within 4 be brought within 4 unenforceable declaration of nullity
years from the date years. This period contracts. or inexistence.
the contract was shall begin incase
entered into.  The time the
 For persons incapacity
under ends
guardianship  The time the
shall begin violence,
from intimidation
termination of or undue
incapacity influence
 For absentee ends
from the time  The time the
he domicile is mistake or
known fraud is
discovered.

Real Party One of the parties or a The contracting The contracting and Contracting parties
third person. parties. the aggrieved parties. and a third person.
Action for Third Even a 3rd person who When a person is not A person who is a The third person has
Person is prejudiced by the a party to the stranger to the the right to question
contract may demand contract, there has contract cannot annul the contract’s
the rescission of the no right or legal or question a illegality or avail of
contract. capacity to validate a contract’s defense when his
contract. unenforceability. interest or intentions
affect the contract.
Grounds  Those entered  Those where  Those entered  Those
into by a one of the into the name wherein the
guardian parties is of other cause, object
whenever the incapable of person or purpose is
 wards suffers giving without contrary to
damage from consent. authority or law, morals,
more than ¼  Those where legal good
of the value of the consent representation customs,
the thing or was vitiated not cured with public order
the object. with mistake, prescription. or public
 Those that are violation,  Those who policy.
agreed upon fraud or don’t comply  Those
in undue with the stimulated or
representation influence. statute of fictitious (not
of absentees, frauds. real).
if absentee  Those wherein  Those whose
suffers lesion both parties cause or
by more than are incapable object
¼ of value of of giving doesn’t exist
the thing or consent to a during the
the object. contract time of the
 Those that transaction.
undertake in  Those object
fraud of the that are
creditors or outside
accion commerce or
pauliana. cannot be
 Those things owned by
that are under men.
litigation if  Those
entered into services that
by defendant are
without the impossible to
knowledge do.
and approval  Those
of litigants or intention
judicial that cannot
authority. be
 All other determined
contracts that  Declared
are declared void by law.
by law to be
subject to
rescission.
Example Freddie is the Jude threatens Eric at Mario and Luigi Marlou promised to
appointed guardian of dire consequences if promised to sell his give Xander 20,000
John who is a minor Eric didn’t enter to a house to Luigi for 2 pesos if Xander kills
that owns an inherited contract with Jude to million pesos and Luigi Ford. The contract is
lot worth 50,000,000 sell Eric’s portion of promised to pay void because you
pesos. Freddie sold land. With this, Eric Mario. With this cannot contract to do
the property of John has the choice to sell agreement, it should something illegal.
to Russell for the land to Jude or to first be written in
30,000,000. seek the Court to order to be
enforceable unless has
With this example, declare the contract a delivery of a partial
Freddie sold the lot for as void. or full payment that
not more than one can set aside the
fourth of the market statute of frauds and
value. John can ask for can be enforced even
rescission of the sale if it is verbally agreed.
in this case.