Characteristics of a Contract 2. Defect lies in the vitiation of consent or 1.

Cause or consideration of conveyance is

Autonomy/Freedom to Stipulate (A1306) incapacity of one of the parties inadequate (fictitious)
o Parties may establish such 3. Susceptible of convalidation by 2. Transfer made by debtor after suit has
stipulationsas they may deem ratification and prescription commenced or pending
convenient 4. Cannot be attacked by third persons 3. Sale on credit by insolvent debtor
Mutuality of Contracts (A1308) 4. Evidence of large
o Contracts must bind contracting indebtedness/complete insolvency
parties 5. Transfer of all/nearly all of the properties
Obligatory and has a force between 6. Transfer was made between father and
son
them
Features of Unenforceable Contracts 7. Failure of vendee to take the exclusive
Privity and relativity of Contract (A1211)
1. Defect lies in fact that they were either: possession of property
o Contracts take effect only a. Entered into without or in excess
between the parties, their assigns of authority Rescissible Contracts Based on equity (O-
and heirs b. Do not comply with statute of F-L-A-G-I)
Consensuality of Contract frauds The following are rescissible contracts (A1381)
o Contracts are mere perfected by c. Both parties are incapable of 1. Those which are entered into by
mere consent giving consent guardians whenever the wards whom
Rescission A remedy granted by law to the 2. Cannot be enforced by proper court they represent suffer lesion by more
contracting parties and 3rd persons to secure action than of the value of the things which
reparation of damages caused them by a 3. Convalidated by ratification are the object thereof
contract, even if valid, by means of restoration 4. Cannot be attacked by third persons 2. Those agreed upon in representation of
of things to their condition prior to the absentees if the latter suffer the lesion
celebration of the contract Features/characteristics of Void Contracts stated in the preceding number
1. Defect lies in fact that they lack one or 3. Those undertaken in fraud of creditors
Features and characteristics of rescissible some or all elements of a valid contract when the latter cannot in any other
contracts 2. They produce no legal effect manner collect the claims due them
1. Defect lies in injury or damage to either 3. Can never be convalidated (Accion pauliana 1177 Badges of
or both parties of 3rd persons 4. Right to set up defense of absolute Fraud)
2. Before rescission, they are valid and nullity cannot be renounced 4. Those which refer to things under
enforceable 5. Can be attacked directly or collaterally litigation if they have been entered into
3. Susceptible of convalidation by even by third persons by the defendant without the knowledge
prescription only Essential Requisites (A1318) and approval of the litigants of or
4. Attacked directly not collaterally Cause essential and impelling means why a competent judicial authority
5. Attacked by injured party or 3rd persons party assumes an obligation 5. All other contracts specially declared by
defrauded Object law to be subject to rescission
Consent manifestation of the meeting of the 6. Payments made in state of insolvency
Features or characteristics of voidable offer and acceptance upon the thing and the (A1382)
contracts cause which are to constitute the contract
1. Binding until annulled by competent Voidable Contracts (A1390)
court Badges of Fraud (in rescissible) The following contracts are voidable or
annullable, even though there may have been
no damage to the contracting parties (Damage
is immaterial)
1. Those were one of the parties is
incapable of giving consent to a contract
(1327)
2. Those where the consent is vitiated by
mistake (substantial mistake affects
essence), violence, intimidation undue
influence or fraud (F-I-V-M-U)
3. Also those entered into in state of
drunkenness or during hypnotic spell
Those contracts are binding, unless they are
annulled by a proper action in court. They are
susceptible of ratification.
Unenforceable Contracts (A1403)-valid but
defect lies on that fact that it cant be enforced
or sued upon
The following contracts are unenforceable,
unless they are ratified:
1. Those entered into the name of another
person by one who has been no
authority or legal representation, or who
acted beyond his power Unauthorized
contracts (1317)
2. Those who do not comply with the
Statute of Frauds as set forth in this
number. In the following cases an
agreement hereafter made shall be
unenforceable by action, unless the
same, or some note or memorandum
thereof, in writing, and subscribed by the
party charged, or by his agent, evidence
therefore, of the agreement cannot be
received without the writing or a
secondary evidence of its contents:
a. An agreement that by its terms is
not to be performed within a year
from the making thereof;
b. A special promise to answer for
the debt, default, or miscarriage
of another
c. An agreement made in
consideration of marriage other
than a mutual promise to marry
(Pre-nuptial agreement)
d. An agreement for the sale of
goods, chattels, or things in
action, at a price not less than
500 pesos, unless the buyer
accepts and receive part of such
goods and chattels, or the
evidence, or some of them, of
such things in action, or pay at
the time some part of the
purchase money; but when a sale
is made by auction and entry is
made by the auctioneer in his
sales book at the time of the sale,
of the amount and kind of
property sold, terms of sale, price
names of the purchases and
person on whose account the
sales is made, it is a sufficient
memorandum;
e. An agreement for the leasing for a
longer period than one year, or for
the sale of real property or an
interest therein
f. A representation as to the credit
of a third person
Note: ratified by failure to object;
acceptance of benefits
3. Those were both parties are incapable
of giving consent to a contract (when
ratified by one party voidable; when
ratified by both cured)
VOID OR INEXISTENT CONTRACTS (A1409) (I-
C-P-O-I-S-E)
The following contracts are inexistent and void
from the very beginning:
1. Those whose cause, object or purpose is
contrary to law, morals, good customs,
public order or public policy (VOID);
2. Those which are absolutely simulated or
fictitious (inexistent) 1345;
3. Those whose cause or object did not
exist at the time of the transaction
(inexistent);
4. Those whose object is outside the
commerce of men res nullius (VOID);
5. Those which contemplate an impossible
service (VOID);
6. Those where the intention of the parties
relative to the principal object of the
contract cannot be ascertained (VOID);
7. Those expressly prohibited or declared
void by law (VOID)
These contracts cannot be ratified. Neither can
the right to set up defense of illegality be
waived.
Inexistent on, some, or all of essential
requisites of a contract are absent
Void- All essential requisites are present but
one or some or all of them may be contrary to
law, morals, good customs, public order, public
policy.
Reformation: 10 years