LOPEZ, ELLA MARIE P.

FIN191
SEATWORK

Four Kinds of Defective Contracts:

 Rescissible Contracts
 Voidable or Annullable Contracts
 Unenforceable Contracts
 Void or Inexistent Contracts

DIFFERENCE
Rescissible Contracts Voidable or Annullable Contracts Unenforceable Contracts Void or Inexistent Contracts

Those validly entered into by the
contracting parties, but because
of them resulting to economic
damage or lesion to one of the
parties or a third person, OR for
having been entered into in fraud
of creditors, OR without
knowledge and approval of
judicial authority having custodia
legis over the property involved,
OR for being specially declared by
law as rescissible may, for
equitable reasons, be rescinded
or set aside by the court (Articles
1380 and 1381).
Those where the consent of one
party is defective either because
of incapacity to give consent to a
contract, or where the consent is
vitiated by mistake, violence,
intimidation, undue influence or
fraud (Article 1390). In other
words, the consent is vitiated by
any of the vices of consent.
Those which cannot be enforced those which produce no legal
in Court because of the existence effect for they do not exist in the
of any of the following reasons: eyes of the law (Article 1409).
(1) they were entered into in
behalf of another without
authority or in excess of
authority, (2) there is non-
compliance with the Statute of
Frauds, and (3) both contracting
parties are incapacitated. They
may be ratified in accordance
with the law (Articles 1403, 1406
and 1407).

EXAMPLE
Ella sues Marie for the recovery
of a parcel of land. In this case,
the land is a “thing under
litigation.” If, during the
pendency of the case, Marie sells
the land to a third party without
the approval of Ella or of the
court, the sale is rescissible at the
instance of Ella in case she wins
in her suit for the recovery of said
land unless the third party is in
legal possession of the land in
good faith.
Rescission or rescissory action
Ella, an insane person, entered C and B are neighbors, they orally Ella entered into a contract
into a contract with a carpenter agreed that C would sell and B whereby Ella binds herself to slap
to repair the roof of her house, would buy C’s car for 150,000, 3 Elmer, his father. This contract is
this contract can be annulled as it years from the date of void because it is against the
has been entered into by a agreement. At the end of 3 years good custom of showing respect
person who is incapacitated. C refused to hand over the said to our parents.
However, Ella is Senyora Marie’s car although B was willing to pay.
ward, Senyora Marie can make In this case the agreement is not
an express or tacit ratification of enforceable under the statute of
the repair, especially if it will frauds, it should be made in
redound to the benefit of her writing and apparently only 1
incapacitated ward year is the limit, if the agreement
let’s say within 5 months, the
agreement even if oral would
have been enforceable.
AS TO REMEDY
Annulment of Contract A personal defense when the Declaration of Nullity of the
plaintiff pursues a specific Contract
performance case or complaint
for damages based on breach of
contract.