CHAPTER 7 - VOIDABLE CONTRACTS (ART. 1390 - 1402) Flashcards
Is one that is defective by reason of the incapacity or vitiated consent of one to the parties
Voidable Contract
It is binding unless annulled by a proper action in court. It is susceptible of ratification
Voidable Contract
What are the following voidable or annullable contracts?
- Those where one of the parties is incapable of giving consent to contract.
- Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.
- Those where consent is given in a state of drunkenness. (Art. 1328)
- Those where consent is given during a hypnotic spell. (Art. 1328.)
What are the following incapable of giving consent to a contract?
a. Unemancipated minors.
b. Insane or demented persons.
c. Deaf-mutes who do not know how to write. (Art. 1327)
A, who is a minor enters into a contract with B. What type of defective contract is this?
Voidable Contract
Both A and B are minors who entered into a contract. What type of defective contract is this?
Unenforceable Contract
A and B entered into a contract because B employed intimidation against A, and forced A to sell a parcel of land to B. And if he will not, B will kill A’s wife. What type of defective contract is this?
Voidable Contract
A and B entered into a contract because B employed intimidation against A, and forced A to sell a parcel of land to B. And if he will not, B will kill A’s wife. Here, the contract is voidable. Why is it not void?
Because there is still a consent, however the consent is vitiated. If there was total absence of consent, then the contract is void.
This is base on lesion or damage
Rescission
This is base on vitiated consent or incapacity to consent
Annulment
Defect is external, the action is subsidiary and to prevent it, ratification is not required
Rescission
Defect is intrinsic, the action is principal and to prevent it, ratification is required
Annulment
Is the action brought to set aside a voidable contract
Annulment
Annulment is a sanction where the law predominates. Rescission is a remedy where equity predominates.
True or False?
True
Annulment is available only to the parties, whether bound principally or subsidiarily. Rescission is available not only to the contracting parties but also to third persons whose interests are affected.
True or False?
True
What is the rules on annulment of voidable contracts?
- When action must be brought (prescriptive period); otherwise the contract can no longer be set aside
The action for annulment must be brought within four (4) years which period shall begin:
a. In cases of intimidation, violence or undue influence, from the time the defect in the consent ceases.
b. In case of mistake or fraud, from the time of discovery of the same.
c. In cases of minority or other incapacity of a party, from the time guardianship ceases.
P was intimidated into signing a contract on Jan 1,2020. The intimidation continued until Dec 1, 2020. From what time should we compute the 4-year period for annulment of contract?
From Dec 1, 2020, when intimidation ceases
Jan 1,2020, P and G entered into a contract. Jan 1, 2021, G discovers the fraud employed by P in seeking her consent for the contract. From what time should we compute the 4-year period for annulment of contract?
4 years from Jan 1,2021, when fraud was discovered
Is the adoption or affirmation of a contract which is defective because of a party’s vitiated consent or incapacity.
Ratification
Under the rules of ratification, what is the effect of ratification?
a. It extinguishes the action to annul a voidable contract.
b. It cleanses the contract from all its defects from the moment it was constituted. In other words, the contract is validated from inception.
Under the rules of ratification, how ratification is made?
a. Express - This takes place when a person states either orally or in writing that he intends to be bound by the contract that he entered into while he was incapacitated or at a time when his consent was vitiated.
b. Implied or tacit - There is tacit ratification if with knowledge of the reason which renders the contract voidable and such reason having ceased, the person who has a right to invoke it executes an act which necessarily implies an action to waive his right. (Art. 1393)
S, 17 years old, sold his computer to B, 25, for P50,000.00 payable in 10 equal monthly installments. When S turned 18 years old, 6 installments were still due. If S continues to collect the remaining installments instead of suing for annulment, what is the effect of the contract?
He is deemed to have ratified the contract.
P, a minor, bought a land. Upon reaching the age of majority, he sold the land to B. What is the effect of the contract?
Here, the action to file for annulment of contract was extinguished
P, a minor, sold his land to G. Upon reaching the age of majority, he collected the unpaid balance. What is the effect of the contract?
Here, the action to file for annulment of contract was extinguished