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VOIDABLE CONTRACTS Who may ratify?

ART. 1390 1. Guardian


2. Injured party (already capacitated)
Voidable Contract possess all the essential requisites 3. Party whose consent is vitiated *voidable due to
of a valid contract but one of the parties is incapable of mistake
giving consent, or consent is vitiated by 1mistake,
2
violence, 3intimidation, 4undue influence, or 5fraud *Ratification is a unilateral act by w/c a party waives the
defect in his consent; conformity of guilty party is not
KINDS: required.
1. Legal incapacity to give consent *The effect of ratification is retroactive, it cleanses the
2. Violation of consent (Mistake, Violence, contract of all its defects from the moment it was
Intimidation, Undue Influence, Fraud) executed.
*valid and binding unless annulled by a proper action in ART. 1397-1402
court by the injured party
*The action for annulment may be instituted by all who
*it can no longer be annulled once it is ratified are obliged principally or subsidiarily.
Annulment declaration of the inefficacy of a contract Requisites (Annulment):
based on a defect or vice in consent in one of the
contracting parties 1. Plaintiff must have interest in the contract.
2. Victim must assert the same.
ART. 1391
*Strangers have no legal capacity to challenge the
The action for annulment shall be brought within 4 validity of the contract unless they can show detriment
years. The period shall begin: w/c would positively result to them from the contract
w/c they had no participation or intervention.
1. Intimidation, Violence, or Undue Influence
defect of the contract ceases *Guilty party cannot ask for annulment based on the
2. Mistake or Fraud discovery of the defect principle he who comes to court must come with clean
3. Minors or Other Incapacitated Persons hands.
guardianship ceases
*There is duty of mutual restitution upon annulment.
ART. 1392-1396
*If the defect lies in the incapacity of one of the parties,
*Ratification extinguishes the action to annul a voidable the incapacitated person is obliged to make restitution
contract only up to the extent that he was benefited by the thing
or price received by him.
Ratification one voluntarily adopts or approves some
defective or unauthorized act or contract; cleanses the Effect of loss of thing to be returned:
contract of its defects
a. Person obliged to make the restitution
KINDS: 1. w/o fault - no more obli to return
2. w/ fault indemnity for damages (fruits, value +
1. Implied or Tacit
interest)
-requisites:
b. Person who shall institute action for
a.) Knowledge of the reason w/c renders
annulment - extinguished if due to fault or fraud
the contract voidable
b.) Such reason must have ceased *There can be no annulment if the party cannot restore
c.) Injured party executed an act that what he is bound to return.
implies an intention to waive their right
2. Express
-requisites: same as implied or tacit except
it is effected expressly
UNENFORCEABLE CONTRACTS 2. It is applicable only to completely
executory contracts (no performance
ART. 1403-1408 yet) and not to contracts w/c are
1
totally executed (consummated)or
Unenforceable Contracts cannot be enforced or given 2
partly executory (partially performed).
effect in a court of law by reason of certain defects
3. It is not applicable where the contract is
provided by law until and unless they are ratified
admitted expressly, or impliedly by the
according to law
failure to deny specifically its existence.
*Although valid, are unenforceable unless cured or 4. It is applicable only to agreements
ratified. enumerated within.
5. It is not applicable where a writing does
*Cannot be assailed by third persons for it is a personal not express the true agreement of the
defense. parties.
6. It does not declare that contracts
KINDS: infringing it are void but merely
unenforceable.
1. Those entered into in the name of another by
7. The defense of the Statute of Frauds is
one w/o, or acting in excess of, authority
personal to the parties and cannot be
interpose by strangers to the contract.
Unauthorized Contracts those entered into in
the name of another person who has been AGREEMENTS W/IN SCOPE OF STATUTE OF
given no authority or legal representation or FRAUDS:
who has acted beyond his powers
*In the case that these contracts arent
*are governed by ART. 1317 and the principles made in writing, though valid, they are
of agency in Title X of the Civil Code unenforceable if either party refused to
comply w/ their arrangement.
2. Do not comply with the Statute of Frauds
1. Agreement not to be performed w/in 1
Statute of Frauds yr from the making thereof.
In 1677 the English parliament enacted 2. Promise to answer for the debt, default,
a statute to counter the evil practice of or miscarriage of another.
giving false testimony in actions 3. Agreement in consideration of marriage
founded on certain kinds of contracts. other than mutual promise to marry.
Its purpose is not only to prevent fraud 4. Agreement for sale of goods, etc. at
but also to guard against the mistakes of price not less than 500php.
honest men by requiring that certain 5. Agreement for leasing for a longer
agreements specified that are period than 1 yr.
susceptible to fraud must be in writing; 6. Agreement for the sale of real property
otherwise they are unenforceable by or of an interest therein.
action in court. 7. Representation as to the credit of a
The Statute does not require that the third person.
contract be contained in a formal
written document, as long as it is Modes of Ratification:
intelligible and records the intent of the
parties. 1. By failure to object to the presentation of
oral evidence to prove the contract.
APPLICATION: *failure = waiver
2. By acceptance of benefits under the
1. It is not applicable in actions w/c are contract. This is based upon the principle
neither for damages because of a one who has enjoyed the benefits of a
violation of a contract, nor for the transaction should not be allowed to
specific performance thereof. repudiate its burden.
When a contract is enforceable under the
Statute of Frauds, and a public document is
necessary for its registration in the Registry of
Deeds, the parties may avail themselves of the
right under ART. 1357.

RIGHT OF A PARTY WHERE A CONTRACT IS


ENFORCEABLE:

*there must be 1valid agreement and 2the


agreement must not infringe the Statute of
Frauds

1. A party to an oral sale of real property


cannot compel the other to put the contract
in public document for purposes of
registration because it is unenforceable,
unless it has been ratified.
2. The right of one party to have the other
execute a public document is not available
in a donation of realty when it is in a private
instrument because the donation is void.

3. Both parties are incapable of giving

G.R.: Where both parties to a contract are


incapable of giving consent, the contract is
unenforceable.

*If the 1parent or guardian of either party, or


2
one of the parties (capacitated) ratifies the
contract, it becomes voidable.