Art.

1380
A. Recissible contracts in general. - is a contract which is valid because it contains all of
the essential requisites prescribed by law, but which is defective because of injury or
damage to either of the contracting parties or to third persons, as a consequences of
which it may be rescinded by means of proper action for rescission
B. Idem; characteristic. – Rescissible contracts, therefore possess the following
characteristic:
a. Their defect consist in injury or damage either to one of the contracting parties
or to third persons.
b. Before rescission, they are valid and, therefore, legally effective
c. They can be attacked directly only, and not collaterally.
d. They can be attacked only either by a contracting party or by a third person who
is injured or defrauded.
e. They are susceptible of convalidation only by prescription and not by ratification.
C. Idem; concept of recission. – Rescission is a remedy granted by law to the contracting
parties, and even to third persons, to secure the reparation of damages caused to them
by a contract, even if the same should be valid by means of the restoration of things to
their condition.
D. Idem; id. Distinguished from resolution. – Rescssion of rescissible contracts must
not be confused with the rescission or resolution of reciprocal obligations under
Art.1191 of the code. Although there are similarities both with respect to validity and
effects, they are distinguished from each other in the following ways:
a. As to party who may institute action;
i. In Rescission the action may be instituted not only by a party to the
contract but even by a third person.
ii. In Resolution the action may be instituted only by a party to the contract.
b. As to causes:
i. In Rescission there are several causes or grounds such as lesion, fraud
and others expressly specified by law.
ii. In Resolution the only ground is failure of one of the parties to comply
with what is incumbent upon him.
c. As to power of the courts:
i. In rescission there is no power of the courts to grant an extension of
time for the performance of the obligation so long as there is a ground
for rescission.
ii. In Resolution the law expressly declares that courts shall have a
discretionary power to grant an extension for performance provided that
there is a just cause.
d. As to contract which may be rescinded or resolved:
i. In Rescission any contract, whether unilateral or reciprocal, may be
rescinded
ii. In Resolution only reciprocal contracts may be resolved.

E. Idem; id - Distinguished from rescission by mutual consent.

 a. First, with respect to the causes of rescission,
b. Second, with respect to the las applicable,
c. Third, with respect to the effects.
Art. 1381
Art. 1382
A. Contracts in behalf of ward. – Rescissible contracts are those which are entered into by
guardians whenever the wards whom they represent suffer lesion or damage by more than
one-fourth-fourth of the value of the things which are the object thereof.
B. Contracts in behalf of absentees.
a. Whether the contract is entered into by a guardian in bhalf of his wards or by a legal
representative in behalf of an absentee, before it can be rescinded on the ground of
lesion, it is indispensable that the following requisites must concur:
i. The contract must have been entered into by a guardian in behalf of his ward
or by a legal representative in behalf of an absentee;
ii. The ward or absentee must have suffered lesion of more than one fourth of
the value of the property which is the object of the contract;
iii. The contract must have been entered into without judicial approval;
iv. There must be no other legal means for obtaining reparation for the lesion
v. The person bringing the action must not be able to return whatever he may
be obliged to restore; and third person who did not act in bad faith.
vi. The object of the contract must not be legally in the possession of a
C. Contracts in fraud of creditors.
a. Before a contract can be rescinded on the ground that it has been entered into in
fraud of creditors, it is indispensable that the following requisites must concur:
i. There must be a credit existing prior to the celebration of the contract;
ii. There must be a fraud, or atleast, the intent to commit fraud to the prejudice
of the creditor seeking the rescission;
iii. The creditor cannot in any other legal manner collect his credit; and
iv. The object of the contract must not be legally in the possession of a third
person who did not act in bad faith.
Note; if the object of the contract is legally in the possession of a third
person who did not act in bad faith, the remedy available to the creditor is to
proceed against the person causing the loss for damages.

The action to rescind contracts in fraud of creditors is known as accion pauliana.

For this action to prosper, the following requisites must be present:
1. The plaintiff asking for rescission has a credit prior to alienation
2. The debtor has made a subsequent contract conveying a patrimonial benefit to a
third person;
3. The creditor has no other legal remedy to satisfy his claim;
4. The act being impugned is fraudulent;
 5. The third person who receive the property conveyed, if is by onerous title, has
been an accomplice in the fraud.
General Rule-Rescission requires the existence of creditors at the time of the alleged
fraudulent alienation, and this must be proved as one of the bases of the judicial
pronouncement setting aside the contract.
D. Contracts referring to things under litigation. – are 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 of competent judicial authorithy.
E. Contracts by insolvent – Art 1382, payments made in a state of insolvency for obligations
to whose fulfillment the debtor could not be compelled at the time they were effected, are
also rescissible.
a. Insolvency – financial situation of the debtor by virtue which it is impossible for him
to fulfill his obligations.
b. In order that the payment can be rescinded, it is indispensable
i. That it must have been made in a state of insolvency, and
ii. That the obligation must have been one which the debtor could not be
compelled to pay at the time such payment was effected.
F. Other rescissible contracts – contracts contemplated in arts. 1098, 1189, 1526, 1534, 1539,
1542, 1556, 1567, and 1659 of the code
Art 1383
A. Subsidary Character of action. – it cannot be instituted except when the party suffering
damage has no other legal means to obtain reparation for the same. Hence, before a party
can avail himself of this remedy, it is essential that he has exhausted all of the other legal
means to obtain reparation.
B. Parties who may Institute Action.
a. The person who is prejudiced, such as the part suffering the lesion in rescissorry
actions on the ground of lesion, the creditor who is defrauded in rescissory actions
on the ground of fraud, and the other persons authorized to exercise the same in
other rescissory actions;
b. Their representatives;
c. Their heirs;
d. Their creditors by virtue of the subrogatory action defined in Art. 1177 of the Code.

Art. 1384
A. Extent of Rescission.
a. Primary purpose of rescission of rescission is reparation for the damage or injury
which is suffered either by a party to the contract or by a third person.
b. In order that this purpose may be realized the rescission does not necessarily have to
be total in character; it may also be partial.
c. Art. 1384, Rescission shall be only to the extent necessary to cover the damages. This
percept, which was not found in the old code, is in accordance with the doctrine
enunciated by the supreme tribunal of Spain December 10, 1994.
d. To effect that a contract in fraud of creditors may be partially rescinded to an extent
which is sufficient to satisfy the damage caused to the creditor.