DEFECTIVE CONTRACTS RESCISSIBLE (Art 1380) Valid but subject to rescission Reason: economic damage to one party or to 3rd

person RESCISSIBLE CONTRACTS: 1. Contracts entered into by guardians in behalf of wards: lesion > value 2. Contract agreed into by representatives in favor of absentees: lesion > value 3. Contracts undertaken in fraud of creditors 4. Contracts referring to things under litigation 4. Payments made in state of insolvency VOIDABLE (Art 1390) Valid but subject to annulment Reason: defect in consent BUT subject to ratification VOIDABLE CONTRACTS: 1. Incapacity to give consent Minors Insane/demented persons Deaf-mutes Drunkenness Hypnotic spell 2. Vitiated consent Mistake Violence Intimidation Undue influence Fraud UNENFORCEABLE (Art 1403) Valid but unenforceable unless ratified VOID/INEXISTENT (Art 1409) Not valid, no effect at all Cannot be ratified

UNENFORCEABLE CONTRACTS: 1. Person with no authority/in excess of authority 2. Statute of Frauds -Agreement not to be performed in one year -Promise to answer for debt, default, miscarriage of another -Agreement in consideration of marriage -Agreement for sale of goods, price: not less than P500.00 -Lease longer than one year -Sale of real property -Representation of credit of 3rd person 3. Both parties incapable of giving consent

VOID CONTRACTS: 1. Cause/object/purpose: contrary to law, morals, good customs, public order, public policy 2. Absolutely simulated or fictitious 3. Cause/object did not exist at time of transaction 4. Object outside the commerce of man 5. Impossible service 6. Intention of parties cannot be ascertained 7. Expressly prohibited/declared void by law

Prescriptive period: 4 years - No other legal remedy to obtain reparation for damage

Prescriptive period: 4 years - Ratification cleanses contract of defect: retroactive

No prescription

-Party asking for rescission should be able to return what he is obliged to restore -Object of contract not legally in possession of 3rd person

- Duty of mutual restitution upon annulment - Loss of thing through fault of defendant - Plaintiff fault for loss