BASIS RESCISSIBLE VOIDABLE UNENFORCEABLE VOID CONTRACT

CONTRACT CONTRACT CONTRACT (1409-1422)

(1380-1389) (1390-1402) (1403-1408)
1. Origin of the Defect 1. Economic damage or 1. Incapacity of one of 1. Entered into in behalf Absence of any of the
lesion to one of the the contracting parties of another person essential requisites of a
parties or to a third to give consent. without authority or in contract (consent, object,
person 2. Vitiated consent due excess thereof cause) (Art. 1409)
2. A special declaration to presence of “vices 2. Non-compliance with
by law that the of consent” (Art. the Statute of Frauds
contract is subject to 1390) 3. Incapacity of both
rescission (Art. 1381) contracting parties to
give consent (Arts.
1403, 1407)
2. Damage or prejudice There must be Damage or prejudice to Damage or prejudice is Damage or prejudice is
damage/lesion or the other party is not not necessary. not necessary.
prejudice to one of the necessary.
contracting parties or
third person.
3. Legal Effect Considered valid and Considered valid, binding Inoperative until ratified; Generally, do not produce
legally enforceable until and enforceable until not enforceable in court legal effects; there are
judicially rescinded (Art. judicially annulled (Art. without proper few exceptions (void
1380) 1390, last par.) ratification (Art. 1405) marriages under Art. 36,
FC and Art. 53, FC) (See
Art. 165, FC)
4. Remedy/Action Just a personal defense
when the plaintiff:
Rescission or rescissory Annulment of contract • Pursues a specific Declaration of nullity of
action performance case; or the contract
• Complaint for
damages based on
breach of contract
5. Nature of Action Must be a direct action. Direction action is needed Indirect attack is allowed May be attacked directly
Collateral attack is not either the complaint or as in the form of a defense. or indirectly.
allowed. a counter-claim.
6. Persons who can file Must be a contracting Must be a contracting Must be a contracting Third persons cannot
the action party. party principally or party. assail the contract, unless
Exception: Creditors who subsidiarily obliged under Third persons cannot his interests are directly
are defrauded. the contract (Art. 1397) assail it. (Art. 1438) affected.
Exception: Third person
who is prejudiced.
7. Susceptibility to Susceptible to Susceptible to ratification Susceptible to ratification Not susceptible to
Ratification convalidation but not (Art. 1392) (Art. 1495) ratification (Art. 1409, last
ratification proper. par.)
8. Susceptibility to Action for rescission Action for annulment Action for recovery, or Action for declaration of
Prescription prescribes after 4 years. prescribes after 4 years. action for specific nullity or the putting of
(Art. 1389) (Art. 1391) performance or for the defense of nullity of
damages for breach of the contract does not
Commencement of Commencement of contract also prescribe. prescribe. (Art. 1410)
prescription period: prescription period: There being no specific
• Persons under • Intimidation, period, it could be 10
guardianship -> violence or undue years if the basis of the
termination of the influence -> time action is a written
incapacity when the defect of contract, or 6 years if
• Absentees -> consent ceases unwritten. (Arts. 1144 &
domicile of the • Mistake or fraud -> 1145)
absentee is known discovery of mistake
or fraud
• Minors or other
incapacitated
persons ->
guardianship ceases