COMPARISON OF DEFECTIVE CONTRACTS

Kinds of Defective
Contract
Nature of Contract Basis of Defect Name of Action Persons to Fie Effect if Successfu Prescri!tive Period Ratifia"iit#
Rescissi"e Contracts
Grounds:
1. Contracts
entered into in
behalf of wards.
2. Contracts agreed
upon in
representation of
absentees.
3. Contracts
undertaken in
fraud of creditors.
4. Contracts which
refers to things
under litigation.
5. Other instances:
Partition !udicial
or e"tra!udicial.
1.
Contracts that are #alidl$
agreed upon because all
the essential ele%ents
e"ist.
&cono%ic da%age or
pre!udice to one of the
parties or to a third person.
'ction for (&)C*))*O+ 1. *n!ured part$ or
defrauded creditor
2. ,is heirs assigns
or successors in
interest
3. Creditors of the
abo#e entitled to
subrogation.
Contract is #alid and
enforceable until rescinded
b$ a co%petent court.
1.
2. 4 $ears (escissible Contracts do
not need to be ratified.
Voida"e Contracts
Grounds:
1. -egal incapacit$
to gi#e consent
where one of the
parties is
incapable of
gi#ing consent to
the contract.
2. .iolation of
consent where
the #itiation is
done b$ %istake
#iolence
inti%idation
undue influence
or fraud.
1.
Contracts which possess
all the essential re/uisites
of a #alid contract but one
of the parties is incapable
of gi#ing consent or
consent is #itiated b$
%istake #iolence
inti%idation undue
influence or fraud.
1. One of the
parties is
incapable of
gi#ing consent.
2. Consent is
#itiated b$
%istake
#iolence
inti%idation
undue influence
or fraud.
'ction for '++0-1&+2 Contracting parties onl$. Contract is #alid and
enforceable until the$3re
annulled b$ a co%petent
court.
4 $ears 1. .oidable Contracts can
be ratified.
(atification e"tinguishes
the action to annul a
#oidable contract. 4'rt.
13526
$nenforcea"e Contracts
7inds:
1. 2hose entered
into in the na%e
of another b$ one
without or acting
in e"cess of
authorit$.
2. 2hose that do not
co%pl$ with the
)tatute of
8rauds.
3. 2hose where
both parties are
Contracts that cannot be
enforced in court or sued
upon b$ reason of certain
defects pro#ided b$ law
until and unless the$ are
ratified according tolaw.
-ack of for% authorit$ or
capacit$ of both parties not
cured b$ prescription.
'ction for (atification
2he corresponding action
for reco#er$ *f there was
total or partial perfor%ance
of the unenforceable
contract under no. 1 or no.
3 of 'rt. 1493 %a$
prescribe.
Contracting parties onl$. Once ratified these
contracts %a$ then be
enforceable.
+o Prescription. 0nenforceable Contracts
%ust be ratified to
beco%e enforceable.
atty.idamv escolano . bl1.
incapable of
gi#ing
1.
Void Contracts
Grounds:
1. Contracts whose
cause ob!ect or
purpose is
contrar$ to law
etc.
2. Contracts which
are absolutel$
si%ulated or
fictitious.
3. Contracts without
cause or ob!ect.
4. Contracts whose
ob!ect is outside
the co%%erce of
%en.
5. Contracts which
conte%plate an
i%possible
ser#ice.
:. Contracts where
the intention of
the parties
relati#e to the
ob!ect cannot be
ascertained.
;. Contracts
e"pressl$
prohibited or
declared #oid b$
law.
1.
Contracts generall$
produce no effect at all
because of certain defects.
Caused b$ lack of essential
ele%ents or illegalit$.
1.
'ction or <efense for the
declaration of its
ine"istence does not
prescribe.
1. 2he contracting
parties
2. ' 3rd person
whose interest is
directl$ affected
+o legal effect. +o Prescription. .oid Contracts cannot be
ratified.
atty.idamv escolano . bl1.