RESCISSIBLE VOIDABLE UNENFORCEABLE VOID AND INEXISTENT

A rescissble contract is a Voidable contracts are Unenforceable contracts Void and inexistent
contract which is valid those in which all of the are those which cannot contracts are those which
because it contains all of essential elements for be enforced by a proper lack absolutely either in
the essential requisites validity are present, but action in court, unless fact or in law one or some
prescribed by law, but the element of consent is they are ratified, because or all of those elements
which is defective vitiated either by lack of either they are entered which are essential for its
because of injury or legal capacity of one of into without or in excess validity.
damage to either of the the contracting parties, or of authority or they do
contracting parties or to by mistake, violence, not comply with the In particular, void
third persons. intimidation, undue Statue of Frauds or both contracts are the contract
Definition influence or fraud. of the contracting parties where all of the requisites
do not possesses the prescribed by law for
required legal capacity. contracts are present but
the cause, object or
purpose is contrary to law,
morals, good customs,
public order or public
policy, or they are
prohibited by law, or they
are declared by law to be
void.
1) Their defect consists in 1) Their defect consists in 1) Their defect consists 1) Their defect consist in the
injury or damage either the vitiation of consent or either in the fact that fact that they lack
to one of the contracting in the legal incapacity of they were entered into in absolutely either in fact
parties or to third one of the contracting excess or without any or in law one or some of
persons. parties. authority, or they do not the elements of a valid
2) Before rescission, they 2) They are binding until comply with the Statue of contract.
are valid and therefore they are annulled by a Frauds, or both 2) As a general rule, they
legally effective. competent court contracting parties are produce no legal effects.
3) They are susceptible of 3) They are susceptible of legally incapacitated. 3) They are not susceptible
Features or
convalidation only by convalidation either by 2) They cannot be enforced of convalidation either by
Characteristics
prescription, and not by ratification or by a proper action in ratification or by
ratification. prescription. court. prescription.
4) They can be attacked 4) They cannot be attacked 3) They are susceptible of 4) The right to set up the
directly only and not or assailed by third convalidation by defense of absolute
collaterally. persons ratification. nullity or inexistence
5) They can be attacked 4) They cannot be attacked cannot be renounced.
either by a contracting or assailed by third 5) They can be attacked or
party who suffers injury persons. assailed either by a
or by a third person who contracting party or by a
 is defrauded
1) Those which are entered
into by guardians
whenever the wards who
they represent suffer
lesion by more than ¼ of
the value of the things
which are the object
thereof.
2) Those agreed upon in
representation of
absentees, if the latter
suffer the lesion stated in
the preceding number
3) Those undertaken in
fraud of creditors when
the latter cannot in any
other manner collect the
claims due them
4) Those which refer to
Examples
things under litigation if
they have been entered
into by the defendant
without the knowledge
and approval of the
litigants or of competent
judicial authority
5) All other contracts
specially declared by law
to be subject to recission.
6) Payments made in a state
of insolvency for
obligations to whose
fulfillment the debtor
could not be compelled at
the time they were
effected are also
rescissible.
1) Those where one of the 1) Those entered into in the
parties is incapable of name of another person
giving his consent to a by one who has been
contract. given no authority or
2) Those where the consent legal representation, or
is vitiated by mistake, who has acted beyond his
violence, intimidation, powers.
undue influence or fraud. 2) Those that do not comply
with the Statute if Frauds
as set forth.
3) Those where both parties
are incapable of giving
consent to a contract.
third person whose
interest is directly
affected.
1) Those whose cause,
object or purpose is
contrary to law, morals,
good customs, public
order or public policy
2) Those which are
absolutely simulated or
fictitious
3) Those whose cause or
object did not exist at the
time of the transaction
4) Those whose object is
outside the commerce of
men
5) Those which contemplate
an impossible service
6) Those where the intention
of the parties relative to
the principal object of the
contract cannot be
ascertained
7) Those expressly
prohibited or declared
void.
 The action must be
commenced within 4 years
from the time the
termination of the incapacity
Prescription
of the ward, or from the time
the domicile of the absentees
I known, or from the time
the discovery of fraud.
1) Obligation of mutual
restitution – the
contracting parties shall
restore to each other
things which have been
the subject matter of the
contract with their fruits
and the price with its
interest.
2) Abrogation of contract
3) Obligation of 3rd person
to restore
Effect
The action for annulment Does not prescribe
must be commenced within a
period of 4 years.
1. If contract not yet Cannot be enforced by a GR: They produce no legal
consummated – parties proper action in court. effect whatsoever in
shall be released from the accordance with the principle
obligations arising “quod nullum est nullum
therefrom producil effectum”.
2. If contract has already
been consummated – XN: In case of pari delicto
ruled provided in Arts. since it will refuse legal
1398-1402 shall govern: remedy to either party to an
a. GR: Mutual illegal agreement and leave
Restitution them to where they were.
XN: The party
incapacitated is not
obliged to make any
restitution except
insofar as he has been
benefited by the thing
or the price received
by him
b. Whenever the person
obliged by the decree
of annulment to
return the thing
cannot do so because
it has been lost
through his fault, he
shall return the fruits
received and the
value of the thing at
the time of the loss,
with interest from the
same date.