Contract

Definition

Rescissible Contracts
Those validly agreed upon
because all the essential
elements exist

Defect

Damage or injury to one of

the parties or to a third
person

Voidable Contracts
Those which possess all the
essential requisites of a
valid contract but one of the
parties are incapable of
giving consent or consent is
vitiated by mistake,
violence, intimidation,
undue influence or fraud
Vitiation of consent or one
of the parties are
incapacitated

Effect

VALID until rescinded

VALID until annulled

1. Entered into by guardian

whenever the absentees
whom they represent suffers
lesion of at least of the
share to which he is entitled.
2. Those undertaken in fraud
of creditors when the latter
cannot in any other manner
collect the claims due to
them.
3. Those which refer to
things under litigation if
they have been entered into
by the defendant without the
knowledge and approval of
the litigants or the
competent court.
4. Those agreed upon in the
representation of absentees
5. All other contracts

1. Those where one of the

parties is incapable of
giving consent to a contract
2. Those where the consent
is vitiated by mistake,
violence, intimidation,
undue influence or fraud

Grounds

Unenforceable Contracts
Those that cannot be
enforced in court or sued
upon by reason of certain
defects provided by law
until and unless they are
ratified according to law

Void Contracts
Those which because of
certain defects generally
produce no effect at all

Without or in excess of
authority, or does not
comply with the statute of
frauds or both parties are
incapacitated
Cannot be enforced by court
action
1. Those entered into the
name of another by one
without authority.
2. Those that do not comply
with the statute of frauds.
3. Those where both parties
are incapable of giving.

Absolute lack either in fa

or in law of one or all
essential requisites of a
contract

Does not produce effects

1. Contracts whose cause

object or purpose is contr
to law.
2. Contracts which are
absolutely simulated or
fictitious.
3. Contracts without caus
or object.
4. Contracts whose objec
outside the commerce of
men.
5. Contracts which
contemplate an impossib
service.
6. Contracts where the
intention of the parties
relative to the object cann
be ascertained.
7. Contracts expressly
prohibited or declared vo

Remedy
Prescription
Ratification
Person who can file action

Requisites

specially declared by law

RESCISSION
4 years
Cannot be Ratified
a. The injured party
b. The heirs of the injured
party
c. Creditors, if the
transaction is fraudulent
1. Contract must be validly
agreed upon.
2. There must be lesion.
3. There must be no other
legal remedy to obtain
reparation for the damage.
4. Object of the contract
must not legally be in the
possession of the third
persons who did not act in
good faith
5. Period for filing the
action must not have
prescribed.
6. Rescission must be based
upon a case.
7. Party asking for
rescission must be able to
return what he is obliged to
restore by reason of the
contract.

ANNULMENT/
RATIFICATION
4 years
May be Ratified
a. The person incapacitated
b. The injured party

1. Knowledge of the reason

why contract is voidable.
2. Injured party must have
executed an act which
necessarily implies an
intention to waive his right.
3. Reason must have ceased.

RATIFICATION
No prescription
May be Ratified
Must be a contracting party

1. Those entered into the

name of another by one
without authority.
2. Those that do not comply
with the statute of frauds.
3. Those where both parties
are incapable of giving.

by law.
Declaration of Absolut
Nullity or Inexistence
No prescription
Cannot be Ratified
3rd person cannot file
contract unless his intere
are directly affected

1. Contracts prohibited b
law
2. Simulated/ fictitious
3. Contracts whose cause
object or purpose is contr
to law