Contracts Annotations for Ch 6-9

Question 1

What are the 4 kinds of defective contracts?

Answer 1

1. Rescissible Contacts - All the requisites exist making it valid, but reasons like economic injury or damage to one of the parties, the contract may be rescinded
2. Voidable Contracts - Also valid, until it is annulled, unless it gets ratified. In a voidable contract, the defect is caused by vices of consent
3. Unenforceable Contract - Cannot be sued or enforced unless it is ratified. This is the middle ground between voidable and void
4. Void contracts - Absolutely null and void, has no effect, cannot be ratified, treated as if it doesn’t exist

Question 2

What are the requisites of rescission?

Answer 2

1. The contract must be validly agreed upon
2. There must be lesion or pecuniary prejudice to one of the parties or to a 3rd person
3. The recission must be based off a case especially provided by the law
4. There must be no other legal remedy to obtain reparation for damages
5. The party asking for rescission must be able to return what he is obliged to restore by reason of the contract
6. The object of the contract must not legally be in the possessions of 3rd persons who did not act in bad faith
7. The period for filing the action for rescission must not have prescribed

Lesion means: one party suffers a loss due to another party’s failure to perform a contract.

Question 3

The time period for annulment of a voidable contract is?

Answer 3

4 years
Beginning from the time the defect of consent ceases (intimidation, undue influence, etc)
From the time of discovery of fraud
For minors, from the time guardianship ceases

Question 4

This is a situation where one voluntarily adopts or approves some defective or unauthorized act or contract which, without his subsequent approval or consent, would not be binding on him. It indicates an intention on the part of the person to be bound to the provisions of the contract

Answer 4

Ratification

Question 5

What are the 2 kinds of ratification?

Answer 5

1. Expressed (when it is manifested in words or writing)
2. Implied/Tacit (then it is manifested by action like silence or acquiescence)