Caranto, Rose Anne Mae A.

Obligations and Contracts

Enumerate the rescissible contracts.

1. What is rescission?
Rescission is a subsidiary remedy granted by law to the contracting parties and sometimes even
to third persons in order to secure reparation of damages caused them by a valid contract, by means of
restoration of things to their condition prior to the celebration of said contract.

2. What are rescissible contracts and what are its requisites.

Rescissible contracts are those contracts that are validly agreed upon because all the essential
elements exist but, by reason of lesion or economic prejudice may be rescinded in cases established by
law, the remedy of rescission is granted in the interest of equity. As stated on Art. 1381 of the Civil Code,
the following are the rescissible contracts:
● Those which are entered into by guardians whenever the wards whom they represent suffer
lesion by more than one-fourth of the value of the things which are the object thereof;
● Those agreed upon in representation of absentees, if the latter suffer the lesion stated in the
preceding number;
● Those undertaken in fraud of creditors when the latter cannot in any other manner collect the
claims due to them;
● Those which refer to things under litigation if they have been entered into by the defendant
without knowledge and approval of the litigants or of competent judicial authority; and
● All other contracts specially declared by law to be subject to rescission.
The following are the requisites in order that the remedy of rescission may be availed of:
● The contract must be validly agreed upon;
● There must be lesion or pecuniary prejudice or damage to one of the parties or to a third
person;
● The rescission must be based upon a case especially provided by law;
● There must be no other legal remedy to obtain reparation for the damage;
● The party asking for rescission must be able to return what he is obliged to restore by reason of
the contract;
● The object of the contract must not legally be in the possession of third persons who did not act
in bad faith; and
● The period for filing the action of rescission must not have prescribed.

3. State the liability of one who acquires the thing in bad faith where rescission can no longer be
availed of.
The liability of the one who acquires the thing in bad faith shall be indemnified for the damages
suffered by them on account of the alienation, whenever, due to any cause, it should be impossible for
him to return to them the acquired thing (Art. 1388).

4. What is the period within which rescission should be resorted to?

As a general rule, the action to rescind contracts must be commenced within four (4) years from
the date the contract was entered into (Art. 1389). The exceptions are:
 ● For persons under guardianship, the period shall begin from the termination of incapacity; and
● For absentees, from the time the domicile is known

5. What are voidable contracts?

Voidable or annullable contracts are those contracts which possess all the essential requisites of
a valid contract but one of the parties is incapable of giving consent, or consent is vitiated by mistake,
violence, intimidation, undue influence, or fraud (Art. 1390).

6. What are some basic characteristics of voidable contracts?

Some of the basic characteristics of voidable contracts are:
● Their defects consist in the vitiation of consent of one of the contracting parties;
● They are binding until they are annulled by competent court; and
● They are susceptible to convalidation by ratification or by prescription.

7. What are the requisites required for the ratification of voidable contracts?
The requisites required for the ratification of voidable contracts are as follows:
● There must be a voidable contract;
● There must be knowledge of the reason which renders the contract voidable;
● Cause must not exist or continue to exist anymore at time of ratification except in case of
ratification effected by the guardian to contracts entered into by an incapacitated;
● Ratification is made expressly or by an act of implying a waiver of action to annul; and
● Person ratifying must be the injured party.

8. What is the effect of ratification of voidable contracts?

The effect of the ratification of a voidable contract extinguishes the action to annul the contract
(Art. 1392).

9. What is the obligation of each party in case of annulment of contracts?

As a general rule, the obligation of each party in case of annulment of contracts is to restore to
each other the things which have been the subject matter of the contract, with their fruits, and the price
with its interest, except in cases provided by law (Art. 1393).

10. Suppose the thing was lost through the fault of the person who must return it, what is his
obligation?
Applying the principle of Art. 1400, his obligation is the indemnification for damages consisting
of the value of the thing at the time of the loss with interest from the same date and the fruits received
from the time the thing was given to him to the time of its loss.