Engineering Contracts, Specifications and Ethics

By: Josefa Carmelli A.
Abejar
BSNA, 5-B
Chapter VII
Engineering Contracts, Specifications and Ethics

By: Josefa Carmelli A. Abejar
Defective Contracts
BSNA, 5-B
those which failed to meet or

partially meet the legal test of
validity
 Rescissible Contracts
 Voidable Contracts
 Unenforceable Contracts
 Void or Inexistent
Engineering Contracts, Specifications and Ethics
Contracts
Rescission BSNA, 5-B
a remedy granted by law to the contracting parties or their

successors in interest and even to third persons, in order to
secure reparation of damages caused them by a contract,
even if the contract is valid, by means of the restoration of
things to their condition prior to the celebration of the
Lesion
contract
the damage or injury to the party asking for rescission by
reason of the fact. that the price is unjust or inadequate
Ratification
the affirmance by a person of a prior act made by him or by
other persons for his account but did not bind him in the
beginning, and by reason of which gives an effect to the prior
Engineering Contracts, Specifications and Ethics Defective Contracts
 RESCISSIBLE CONTRACTS BSNA, 5-B
ELEMENTS
 a case specially provided by law
 mutual restitution of what the parties
have received under the contract
 object of the contract must not be in
the possession of a third person who
acquired it in good faith and for value
 no other legal remedy except by
rescission
 action
Engineering
has not prescribed
Contracts, Specifications and Ethics Defective Contracts
 RESCISSIBLE
 Contracts CONTRACTS
in representation of wards BSNA, 5-B
those which are entered into by guardians whenever the wards whom they represent
suffer lesion by more than one fourth of the value of things which are the object thereof
 Contracts in representation of absentees
those agreed in representation of absentees if the latter suffer the lesion stated in the
preceding number
 Those undertaken in fraud of creditors, etc.
those undertaken in fraud of creditors when the latter cannot in any other manner
collect the claims due them
 Those referring to things in litigation
those which refer to things under litigation if entered into by defendant without the
knowledge and approval of the litigants or competent judicial authority
 Payment under a contract after insolvency
payments made under a contract where the debtor is in the state of insolvency for
obligations to whose fulfillment he could not be compelled at the time they were
effected (Article 1382)
 Contracts
Engineering declared
Contracts, Specifications andby law subject to rescission
Ethics Defective Contracts
 Contracts
RESCISSIBLE CONTRACTS
in behalf of wards or absentees
BSNA, 5-B
approved by court not rescissible

→ Contracts in behalf of a minor by a guardian ad litem
or by a legal representative in case of an absentee
and approved by the courts, are not rescissible.
Rescission without judicial intervention

→ Courts have held valid however stipulation in a
contract providing automatic revocation or
cancellation of the contract for violation of any terms
and conditions thereof without intervention of the
courts.
Action
for rescission not a principal remedy BSNA, 5-B
→ cannot be instituted except when the party suffering

damage has no other legal means of seeking redress
or reparations for the damage caused
Extent of rescission
→ shall be only to the extent necessary to cover
damages caused
Effects of rescission
→ creates the obligation to return the things which
were the object of the contract, together with fruits,
and the price with interest
→ cannot
Engineering be
Contracts, carried
Specifications out when he who Defective
and Ethics demands Contracts
 RESCISSIBLE CONTRACTS
Requisites for Ratification Prosperity
BSNA, 5-B
 the plaintiff must be able to return what he has

received by virtue of a rescissible contract
together with the fruits or the price and
interest, and that the object of the contract is
not in the hands of a third person who has
acquired the same in good faith and for value
 there must be no other legal remedy and that
the action be brought within the prescriptive
period
Mutual restitution of things received
Subject
matter in possession of purchaser in BSNA, 5-B
good faith
→ one who buys the thing for value, and without notice
of defect of acquisition of the vendor
Extent of rescission
→ shall be only to the extent necessary to cover
damages caused
Effects of rescission
→ creates the obligation to return the things which
were the object of the contract, together with fruits,
and the price with interest
→ cannot be carried out when he who demands
 RESCISSIBLE CONTRACTS BSNA, 5-B
Alienations presumed in fraud of creditors

 Alienation by gratuitous title
→ place when the debtor did not reserve sufficient
property to pay all his debts contracted before the
donation
 Alienation by onerous title

→ are/ presumed fraudulent when made by a person
against whom some judgment has been rendered in
any instance or some writ of attachment has been
issued
 RESCISSIBLE
Circumstance CONTRACTS
indicative of fraud BSNA, 5-B
1. The fact that consideration of a conveyance is

fictitious or inadequate;
2. A transfer made by a debtor after suit has been
begun and while it is pending against him;
3. A sale on credit by an insolvent debtor;
4. The transfer of all or nearly all of his property by a
debtor especially when he is insolvent or greatly
embarrassed financially;
5. Evidence of large indebtedness or complete
insolvency;
6. The fact that the transfer is made between father and
son in
Engineering relation
Contracts, to the
Specifications preceding circumstances;
and Ethics and
Defective Contracts
 RESCISSIBLE CONTRACTS
Liability of acquirer in bad faith BSNA, 5-B
→ things alienated in fraud of creditors, shall indemnify

the latter for damages suffered by them on account of
the alienation, whenever, due to any cause, it should
be impossible for him to return them
Concept of bad faith
→ implies a deliberate disregard of a known duty in order
to get personal or economic advantage in manifest
disregard of the rights of others
Prescription period for action for rescission
→ claiming rescission must be commenced within four
years
→ For persons
Engineering under guardianship
Contracts, Specifications and Ethics and for absentees, the
Defective Contracts
 VOIDABLE CONTRACTS BSNA, 5-B
→ those that possess all the requisites of a

valid contract (consent, object certain and
consideration) but have a defect or vice
because the consent is vitiated by
mistake, violence, intimidation, undue
influence and fraud, or that one of the
contracting parties is incapable of giving
consent
→ valid until voided in court
Voidable
VOIDABLE CONTRACTS
contracts under the Code BSNA, 5-B
 Those where one of the parties is incapable of giving

consent to contract
 Those where the consent is vitiated by mistake, violence,
intimidation, undue influence or fraud
*These contracts are binding, unless they are annulled by a proper action
RESCISSION in court. They are
ANNULMENT
susceptible to ratification.
Lesion ← BASIS → Vitiated
(Damage) ← REMEDY → Consent
Subsidiary ← AFFECTED INTEREST → Principal
Private Public
← DEFECT →
External
Internal
(Visible ← DAMAGE
Engineering Contracts, Specifications TO PLAINTIFF →
and Ethics Defective Contracts
 VOIDABLE CONTRACTS
Prescription of action to annul contract
BSNA, 5-B
The action for annulment of the contract shall be brought within

four years counted from:
(a)the time the defect of consent ceases in cases of intimidation,
violence or undue influence;
(b)the time of discovery of the mistake or fraud; and
(c) the cessation of guardianship in cases of contracts entered into
by minors and incapacitated persons.
Effects of ratification of a voidable contract

Ratification extinguished the action to annul a voidable contract.
When ratification takes place, the contract is cleansed from all
its defects from the date the contract was entered into.

 VOIDABLE
Ratification,CONTRACTS
how effected BSNA, 5-B
EXPRESS RATIFICATION
Consists in supplying the lack of authority by writing or orally.
Must evidence the intention to be bound by the ratified
obligation.
TACIT RATIFICATION
Results when a person, with knowledge of an obligation
incurred on his behalf by another, accepts the benefit of that
Ratification of guardians
obligation.
The guardian of the incapacitated person may ratify a
voidable contract entered into by the latter. The
ratification may be made by the father or in his absence,
the mother because they are the legal guardians of the
Who may ask for annulment?
The action for annulment of contracts may be instituted
by all who are thereby obliged principally or subsidiarily.
Requisites for Annulment Prosperity

 the plaintiff have an interest in the contract either
principally or subsidiarily
 the victim and not the party responsible for the defect
.is the person who must assert the same because
equity can only be demanded if the party seeking it has
clean hands
Obligation of the parties after decree of BSNA, 5-B
annulment
→ the contracting parties shall restore to each other
the things which have been the subject matter of the
contract together with the fruits, and the price with
interest, except in cases provided by law
Exception of non-restitution by incapacitated

party
→ the incapacitated person is not obliged to make any
restitution except insofar as he has benefited by the
thing
Engineering or price
Contracts, received
Specifications by him
and Ethics Defective Contracts
Restitution through payment of value with BSNA, 5-B
interest
→ the person shall return the fruits received and the
value of the thing at the time of loss, with interest
from the same date
Exception of non-restitution by incapacitated

party
→ the incapacitated person is not obliged to make any
restitution except insofar as he has benefited by the
thing or price received by him
→ the obligation is not extinguished if what is to be
Effect of loss of object through fraud or fault of

victim
→ the action for annulment of contracts shall be
extinguished
Obligation to return is reciprocal

→ as long as one of the contracting parties do not
restore ·what in virtue of a decree of annulment he is
bound to return, the other party cannot be
compelled to comply with what is incumbent upon
him
 UNENFORCEABLE CONTRACTS BSNA, 5-B
to be continued…

Engineering Contracts, Specifications and Ethics

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Engineering Contracts, Specifications and Ethics

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By: Josefa Carmelli A.

Engineering Contracts, Specifications and Ethics

those which failed to meet or

a remedy granted by law to the contracting parties or their

approved by court not rescissible

Rescission without judicial intervention

→ cannot be instituted except when the party suffering

 the plaintiff must be able to return what he has

Alienations presumed in fraud of creditors

 Alienation by onerous title

1. The fact that consideration of a conveyance is

→ things alienated in fraud of creditors, shall indemnify

→ those that possess all the requisites of a

 Those where one of the parties is incapable of giving

The action for annulment of the contract shall be brought within

Effects of ratification of a voidable contract

Engineering Contracts, Specifications and Ethics Defective Contracts

Requisites for Annulment Prosperity

Exception of non-restitution by incapacitated

Exception of non-restitution by incapacitated

Effect of loss of object through fraud or fault of

Obligation to return is reciprocal

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