RECISSIBLE CONTRACTS VOIDABLE CONTRACTS
WHAT Contracts validly agreed upon may be Can be annulled even without causing damage
rescinded
Cause damage to another party
PERIOD TO BRING Within 4 years
ACTION
In case of incapacitated – 4yrs start from
the termination of incapacity
In case of absence – 4yrs start until the
domicile is known
WHAT CAN BE 1. Those entered into by guardians
whenever the ward suffer lesion for
more than ¼ of the value of the things
subject of the contract
EXC if approved by the court
2. Those entered in representation of an
absentee, where absentee suffer lesion
more than ¼ of the value of the things
subject of the contract
EXC if approved by the court
3. Taken in fraud of creditors
4. Those which refer to things under
litigation entered into by the defendant
without knowledge and consent of the
litigants or competent court
5. Payments made in a state of insolvency
for obligations whose fulfillment the
debtor cannot be compelled at the time
of the payment
6. All other contracts that are rescissible
under the law
CAN BE RATIFIED? CANNOT
UNENFORCEABLE CONTRACTS VOID CONTRACTS
Cannot be enforced. May be ratified Inexistent or void from the beginning
to another party.
Binding unless annulled by proper court.
Can be ratified.
Within 4 years period begins: Imprescriptible
From the VIU ceases
From discovery of FM
From the time guardianship ceases
1. Those where one of the parties are 1. Entered into without authority or Those
incapable of giving consent to a contract beyond the authority 1. Whose cause, object or purpose
2. Those where consent is vitiated by 2. BOTH parties incapable of giving is contrary to law, moral, good
 Fraud consent customs, public order or public
 Violence 3. Those that do not comply with the policy
 Intimidation STATUTE of FRAUD 2. Absolutely simulated or fictitious
 Mistake Those that require to be in writing 3. Cause or object do not exist at
 Undue influence to be enforceable the time of the transaction
FIMVU The following: 4. Object is outside the commerce
a. Agreement that should not be of man
performed within 1 yr from the 5. Contemplate impossible service
making thereof 6. Intention of the parties relative to
b. Special promise to answer for debt, the object cannot be ascertained
default or miscarriage of another 7. Expressly voided by law as void
c. Agreement made in consideration of
marriage
d. Agreement for sale of goods at a
price NOT LESS THAN 500 with EXC
e. Lease agreement for a period of
more than 1 yr
f. Sale of real property
g. Representation as to the credit of a
3P
Can be ratified (Express or implied) Ratify by: CANNOT be ratified
1. Receiving benefits under the
contract
2. Failure to object the presentation of
oral evidence
 3. Parents or guardian of the minor or
incapacitated
NATURE OF CONTRACT  Cannot be instituted EXC if the party Cannot be assailed BY 3P
suffering damage has no other legal
means to obtain reparation
 Subsidiary
 Only to the extent necessary to cover the
damage caused
 Provided that the party can return the
thing required to return
 If the thing is legally in possession of 3P,
pay for damages
 ACTION FOR REFORMATION ACTION FOR RECISSION OF CONTRACT ACTION FOR ANNULMENT
WHEN TAKEN When the contract does not express the When person suffers damage from the contract Consent was vitiated by
true intent of the parties by reason of Mistake
Mistake Fraud
Fraud Inequitable conduct
Inequitable conduct Accident (FAMI)
Accident (FAMI)
Rescissible contracts Voidable contracts
EXCEPTION 1. simple donation inter vivos where
no condition is imposed
2. Wills
3. When the real agreement is void

WHO MAY BRING IF MUTUAL MISTAKE Injured party By All who are obliged Principally or Only parties
ACTION 1. Either party or his successor in subsidiarily
interest

NOT MUTUAL MISTAKE

1. Injured party or his successor in
interest
HOW Declaratory relief
EFFECTS If party demanding recission can return 1. Obligation to return the things
1. Obligation to return the things which which are objects of the contract
are objects of the contract 2. Return the fruits and the price with
2. Return the fruits and the price with interest
interest 3. For obligations to render service,
the value thereof is the basis for
damage
4. If the defect is incapacity, the INCAP
is not obliged to make restitution
EXC in so far as he was benefitted
5. If the thing is LOST (through his
fault), he should return the fruits,
vale of the thing at time of the loss
and interest from the same date
If the act or object constitute an offense,
1. No action against each other if in pari
delicto
2. Both shall be prosecuted
3. Disposal or effects or price will be
subject to law
4. If one party is NOT guilty, may recover
what he has given
If the act or object does NOT constitute
an offense
1. Both is at fault, neither can
recover
2. Party not at fault can recover, ask
performance