Unenforceable Contracts Flashcards
what contracts are unenforceable ?
ART. 1403. The following contracts are unenforceable, un- less they are ratified:
(1) Those entered into the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers;
(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agree- ment hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writ- ing, or a secondary evidence of its contents:
(a) An agreement that by its terms is not to be per- formed 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;
(d) An agreement for the sale of goods, chattels, or things in action, at a price not less than Five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, 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 purchasers and person on whose account the sale 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 of an inter- est therein;
(f) A representation as to the credit of a third person.
(3) Those where both parties are incapable of giving con- sent to a contract
Meaning of unenforceable contracts.
Unenforceable contracts are those that cannot be enforced in court or sued upon by reason of defects provided by law until and unless they are ratified according to law.
Kinds of unenforceable contracts.
Under Article 1403, the following contracts are unenforceable:
(1) Those entered into in the name of another by one without or acting in excess of authority;
(2) Those that do not comply with the Statute of Frauds; and
(3) Those where both parties are incapable of giving consent.
Meaning of unauthorized contracts.
Unauthorized contracts are those entered into in the name of another person by one who has been given no authority or legal representation or who has acted beyond his powers.
What is the statute of frauds?
The term “statute of frauds’’ is descriptive of statutes which re- quire certain classes of contracts to be in writing. This statute does not deprive the parties of the right to contract with respect to the matters therein involved, but merely regulates the formalities of the contract necessary to render it enforceable.
What is the purpose of the statute of frauds?
The Statute of Frauds has been enacted not only to prevent fraud and perjury in the enforcement of obligations depending for their evidence on the unassisted memory of witness but also to guard against the mistakes of honest men by requiring that certain agreements specified (Art. 1403, No. 2[a-f].) must be in writing signed by the party to be charged; otherwise, they are unenforceable by action in court.
when may statute of frauds apply?
1) The application of the Statute of Frauds presupposes the existence of a perfected contract
2) limited only to those specified in article 1403(2)
3. It is applicable only to executory contracts (where no per- formance has as yet been made by both parties) and not to con- tracts which are totally (consummated) or partially performed.
4. It is not applicable where the contract is admitted, by the failure to deny specifically its existence
5. It is not applicable where a writing does not express the true agreement of the parties.
6. The defense of the Statute of Frauds is subject to waiver.
7. The defense of the Statute of Frauds is personal to the parties and cannot be interposed by strangers to the contract. (Art. 1408.)
Modes of satisfaction of the Statute.
(1) the giving of a note or memorandum;
(2) acceptance and receipt of part of the goods (or things in action) sold; and
(3) payment at the time some part of the purchase price.
What are the modes of ratification under the statute of frauds?
ART. 1405. Contracts infringing the Statute of Frauds, re- ferred to in No. 2 of Article 1403, are ratified by the failure to object to the presentation of oral evidence to prove the same, or by the acceptance of benefits under them.
When does an unenforceable contract become a voidable contract?
ART. 1407. In a contract where both parties are incapable of giving consent, express or implied ratification by the parent, or guardian, as the case may be, of one of the contracting parties shall give the contract the same effect as if only one of them were incapacitated.
When does an unenforceable contract become a valid contract?
If ratification is made by the parents or guardians, as the case may be, of both contracting parties, the contract shall be validated from the inception.
what are agreements under the statute of frauds?
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;
d. An agreement for the sale of goods,
chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, 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 purchasers and person on whose account the sale is made, it is a sufficient memorandum;
e. An agreement of the leasing for a longer period than one year, or for the sale of real property or of an interest therein;
f. A representation as to the credit of a third person
