Defective contracts Flashcards
What are the four kinds of defective contracts?
(1) Rescissible contracts. — They are the least infirm or defective. They are valid because all the essential requisites of a contract exist but by reason of injury or damage to one of the parties or to third persons, such as creditors, the contract may be rescinded. Thus, the defect is external. Until such contracts are rescinded in an appropriate proceeding, they remain valid and binding upon the parties thereto (Chap. 6.);
(2) Voidable contracts. — They are also valid until annulled unless there has been a ratification. In a voidable contract, the defect is caused by vice of consent (Chap. 7.);
(3) Unenforceable contracts. — They cannot be sued upon or enforced unless they are ratified. As regards the degree of defectiveness, voidable contracts are further away from absolute nullity than unenforceable contracts. In other words, an unenforceable contract occupies an intermediate ground between a voidable and a void contract (Chap. 8.); and
(4) Void or inexistent contracts. — They are absolutely null and void. They have no legal effect at all and cannot be ratified. (Chap. 9.)
