KINDS OF DEFECTIVE CONTRACTS

(1) RESCISSIBLE CONTRACTS - are valid contracts because all the essential requisites of a contract exist but by reason of injury or
damage to one of the parties or to third persons, such as creditors, the contract may be rescinded.
The following are rescissible contracts:
(A) Contracts entered by guardians and representatives whenever the wards and absentees, suffer lesion by more than 1/4 of the value of the
things which are the object.
(B)Contracts undertaken to defraud the creditors.
(C) Things under litigation.
(D) Specially declared by law to be subject to rescission.
(2) VOIDABLE CONTRACTS - are valid contracts until annulled unless there has been a ratification. In a voidable contract, the defect is
caused by vice of consent.
The following are voidable or annullable contracts:
(A) One of the contracting parties is incapable of giving consent.
(B)The consent is vitiated by:
I. Violence – With force
II. Mistake – Should be serious
III. Intimidation - Well-grounded fear
IV. Undue Influence - Takes improper advantage
V. Fraud - Insidious word and machination
(3) UNENFORCEABLE CONTRACTS - are those contracts that cannot be enforced in court or sued upon by reason of defects provided by
law until and unless they are ratified according to law.
The following are unenforceable contracts:
(A) Both parties are incapable of giving consent.
(B)Unauthorized Contract.
(C) Do not comply with the Statute of Fraud.
(4) VOID or INEXISTENT CONTRACTS - They are absolutely null and void. They have no legal effect at all and cannot be ratified.
The following contracts are void from the very beginning:
(A) Object, cause or purpose is contrary to:
I. Law
II. Morals
III. Good customs
IV. Public order
V. Public policy
(B)Contracts are absolutely simulated or fictitious.
(C) Object is outside the commerce of men.
(D) Object or cause did not exist at the time of the transaction.
(E) Contemplate an impossible service.
(F) Intention of the parties relative to the principal object of the contract cannot be ascertained.
(G) Declared void by law.