Stages
in the life of a contract:
1.
Preparation/Generation
2.
Perfection/Birth
3.
Consummation/Death
Characteristics
of Contracts: (ROMA)
1.
Relativity
(Art. 1311)
2.
Obligatoriness
& Consensuality (Art. 1315)
3.
Mutuality
(Art. 1308)
4.
Autonomy
(Art. 1306)
Stipulation
pour Autrui - stipulation in favor of a 3rd
party.
Requisites:
1.
The stipulation must be part, not whole
of the contract;
2.
the contracting parties must have
clearly and deliberately conferred a favor upon a 3rd person;
3.
the 3rd person must have communicate
his acceptance;
4.
neither of the contracting parties
bears the legal representation of the 3rd party.
General
Rule:
Contracts (except real contracts) are perfected
from the moment there is a manifestation of concurrence between the offer and
the acceptance regarding the object and the cause.
Except: Acceptance by letter or telegram which
does not bind the offerror except from the time it came to his knowledge.
Theories applied to perfection of
contracts:
1.
Manifestation
theory - the contract is perfected from the moment the acceptance is declared
or made;
2.
Expedition
theory - the contract is perfected from the moment the offeree transmits the
notification of acceptance to the offerror;
3.
Reception
theory - the contract is perfected from the moment that the notification of
acceptance is in the hands of the offerror;
4.
Cognition
theory - the contract is perfected from the moment the acceptance comes to the
knowledge of the offerror. This is the theory adopted in the Philippines.
Persons
incapacitated to give consent:
1.
Unemancipated
minors;
Except:
·
Contracts for necessaries;
·
Contracts by guardians or legal
representatives;
·
Contracts where the minor is estopped
to urge minority through his own misrepresentation;
·
Contracts of deposit with the Postal
Savings Bank provided that the minor is over 7 years of age.
2.
Insane
or demented persons unless the contract was entered into during a lucid
interval;
3.
Deaf-mutes
who do not know how to write.
The following may not acquire by
purchase, even by public or judicial auction, in person of though the mediation
of another:
1. the
guardian, with respect to the property of his ward;
2. agents,
with respect to the property whose administration or sale may have been
entrusted to them, unless the consent of the principal has been given;
3. executor
or administrator, the property of the estate under administration;
4. public
officers and employees, with respect to the properties of the government, its
political subdivisions, GOCCs, that are entrusted to them;
5. judges,
justices, prosecuting atty.’s, clerks of courts, etc., the property in custogia
legis; and
6. any
other person specially disqualified by law.
Simulation
of a contract
Kinds
of simulation:
1.
Absolute
- no real transaction is intended;
Effect:
simulated contract is inexistent.
2.
Relative
- the real transaction is hidden;
Effect:
the apparent contract is void, but the hidden contract is valid if it is lawful
and has the necessary requisites.
: as to third persons without notice -
the apparent contract is valid on the principle of estoppel.
Effect of:
Absence
of cause
|
the contract confers no right and
produces no legal effect
|
Failure
of cause
|
does not render the contract void
|
Illegality
of cause
|
the contract is null and void
|
Falsity
of cause
|
the contract is void unless the
parties can show that there is another cause which is true and lawful
|
Lesion
|
does not invalidate the contract
unless:
·
there is fraud, mistake or undue
influence
·
when the parties intended a donation
or some other contract.
|
Form
of Contracts
Rules:
1.
Contracts shall be obligatory, in
whatever form they may have been entered into, provided all the essential
requisites for their validity are present.
2.
Contracts must be in a certain form
when the law requires that a contract be in some form to be:
·
valid;
·
enforceable;
·
for the convenience of the parties.
3.
The parties may compel each other to
reduce the verbal agreements to writing except:
·
Solemn contracts such as the following:
a.
Donations of real estate or of movables
if exceeding Ps 5,000;
b.
Transfer of large cattle
c.
Stipulation to pay interest in loans
d.
Sale
of land through an agent (authority must be in writing)
e.
Partnership to which immovables are
contributed
f.
Stipulation limiting carrier’s
liability to less than extra-ordinary diligence
g.
Contracts of antichresis
h.
Sale
of vessels
Note:
in such case, if the contract is
not in writing it is VOID
·
Real contracts that require delivery
for perfection.
·
In contracts under the Statute of
Frauds where the party sued makes a timely objection to the absence of a
written memorandum.
Reformation
of instruments:
Requisites:
1.
Meeting
of the minds to the contract;
2.
The
true intention is not expressed in the instrument by reason of mistake,
accident, relative simulation, fraud, inequitable conduct (MARFI).
3.
Clear
and convincing proof of MARFI.
Cases when there can be no reformation:
1.
Simple,
unconditional donations inter vivos;
2.
Wills;
3.
When
the agreement is void.
Classes of Defective Contracts: (RUVI)
1.
Rescissible
2.
Unenforceable
3.
Voidable
4.
Void
or Inexistent
COMPARATIVE
TABLE OF DEFECTIVE CONTRACTS:
VOID
|
VOIDABLE
|
RESCISSIBLE
|
UNENFORCE-ABLE
|
1.
defect is caused by lack of essential
elements or illegality
2.
not cured by prescription
3.
cannot be ratified
4.
not binding
|
1.
defect is caused by vice of consent
2.
cured by prescription
3.
can be ratified
4.
binding until annulled
|
1.
defect is caused by injury/ damage
either to one of the parties of to a 3rd person
2.
cured by prescription
3.
need not be ratified
4.
binding unless rescinded
|
1.
defect is caused by lack of form,
authority, or capacity of both parties
2.
not cured by prescription
3.
can be ratified
4.
binding unless the defect is raised
against enforcement.
|
RESCISSIBLE
CONTRACTS
Contracts
which may be rescinded:
1.
those
entered into by guardians where the ward suffers lesion of more than ¼ of the
value of the things which are objects thereof;
2.
those
agreed upon in representation of absentees, if the latter suffer lesion by more
than ¼ of the value of the things which are subject thereof;
3.
those
undertaken in fraud of creditors when
the
latter cannot in any manner claim what are due them;
4.
those
which refer to things under litigation if they have been entered into by the
defendant without the knowledge and approval of the litigants and the court;
5.
all
other contracts especially declared by law to be subject to rescission;
6.
payments
made in a state of insolvency on account of obligations not yet enforceable;
Circumstances
denominated as badges of fraud:
1.
consideration
of the conveyance is inadequate or fictitious;
2.
transfer
was made by a debtor after a suit has been begun and while it is pending
against him;
3.
sale
upon credit by an insolvent debtor;
4.
transfer
of all his property by a debtor when he is financially embarrassed or
insolvent;
5.
transfer is made between father and
son, where there are present some or any of the above circumstances;
6.
failure of the vendee to take exclusive
possession of the property;
Distinctions:
RESCISSION
|
RESOLUTION
(Art. 1191)
|
1. Action
by the contracting parties even by a 3rd party;
2. based
on lesion/fraud of creditors;
3. courts
cannot grant periods for compliance
|
1. Action
only by the injured party;
2. based
on non-fulfillment of the obligation;
3. courts
may grant periods
|
VOIDABLE
CONTRACTS
Causes
of extinction of action to annul:
1.
Prescription
·
the action must be commenced within 4
years from:
·
the time the incapacity ends;
·
the time the violence, intimidation or
undue influence ends;
·
the time the mistake or fraud is
discovered.
2.
Ratification
·
Requisites:
a. there
must be knowledge of the reason which renders the contract voidable;
b. such
reason must have ceased;
c. the
injured party must have executed an act which expressly or impliedly conveys an
intention to waive his right.
3. By
loss of the thing which is the object
of the contract through fraud or fault of the person who is entitled to annul
the contract.
UNENFORCEABLE
CONTRACTS
Kinds
of unenforceable contracts:
1.
those entered into in the name of
another by one without or acting in excess of authority;
2.
those where both parties are incapable
of giving consent;
3.
those which do not comply with the
Statute of Frauds.
Agreements
within the scope of the Statute of Frauds:
1.
Agreements not to be performed within
one year from the making thereof;
2.
Promise to answer for the debt, default
or miscarriage of another;
3.
Agreement in consideration of marriage
other than a mutual promise to marry;
4.
Agreement for the sale of goods, etc.
at a price not less than Ps500.00
5.
Contracts of lease for a period longer
than one year;
6.
Agreements for the sale of real
property or interest therein;
7.
Representation as to the credit of a 3rd
person.
Modes
of Ratification:
1.
For contracts infringing the Statute of
Frauds:
·
expressly
·
impliedly - by failure to object to the
presentation of oral evidence to prove the contract, or by the acceptance of
benefits under the contract.
2.
If both parties are incapacitated,
ratification by their parents or guardians shall validate the contract
retroactively.
VOID
OR INEXISTENT CONTRACTS
The following contracts are void:
1.
Those
whose cause, object or purpose is contrary to law, morals good customs, public
order or public policy;
2.
Those
whose object is outside the commerce of men;
3.
Those
which contemplate an impossible service;
4.
Those
where the intention of the parties relative to the principal object of the
contract cannot be ascertained;
5.
Those
expressly prohibited or declared void by law;
The following contracts are inexistent:
1.
Those
which are absolutely simulated or fictitious;
2.
Those
whose cause or object did not exist at the time of the transaction.
CONTRACTS
Art 1305
ELEMENTS OF A CONTRACT
- Essential Elements
1.Consent
2.Subject Matter
3.Cause or Consideration
- Natural Elements- presumed to exist, unless the contrary is stipulated
Ex. Warrants against
eviction and against hidden defects
- Accidental Elements – existence of such is dependent on the agreement of the parties.
Classification of Contracts
- According to perfection or formation
- Consensual
- Real-perfected by delivery
- Formal or Solemn
- According to cause of equivalence of the value of prestations:
- Onerous
- Gratuitous or Lucrative
- Remunerative
- According to Importance or dependence of one upon another
- Principal – can stand alone
- Accessory – depends upon the existence of another contract
- Preparatory – here, the parties do not consider the contract as an end by itself, but as a means thru which future transaction or contracts may be made
Ex. Agency,
partnership
- According to the parties obligated
- Unilateral
- Bilateral
- According to their Name or Designation
- Nominate
- Innominate
- According to the risk of fulfillment
- Commutative
- Alienatory
- According to the time of performance or fulfillment
- Executed- one completed at the time the contract is entered into
- Executory – one where the prestations are to be complied with at some future time
- According to subject matter
- Contracts involving things
- Contracts involving rights or credit
- Contracts involving services
- According to obligations imposed and required by law
- Ordinary
- Institutional-like contract of marriage
- According to the evidence required for its proof
- Those requiring merely oral or parol evidence
- Those requiring written proof
- According to the number of persons actually and physically entering into the contracts
- Ordinary – two parties are represented by different persons
- Auto Contracts –where only one person represents two opposite parties, but in different capacities
- According to the number of persons who participated in the drafting of the contract
- Ordinary
- Contract of Adherence
- According to the nature of the contract
- Personal
- Impersonal
STAGES OF A CONTRACT
- Preparation
- Perfection
- Consummation (or death or termination)
Basic Principles or
Characteristics of a Contract
- Freedom to stipulate
- Obligatory force and compliance in good faith
- Perfection by mere consent
- Both parties are mutually bound
- Relativity
Art 1306 – Freedom or autonomy
of contract
Art 1307
Four Kinds of Innominate
Contracts
- Du ut des (I give that you may give)
- Do ut facias (I give that you may do)
- Facio ut des (I do that you may give)
- Facio ut facias (I do that you may do)
Art 1308-1310
MUTUALITY OF CONTRACTS
- The validity or fulfillment of a contract cannot be left to the will of one of the contracting parties.
- The validity or fulfillment may be left to the will of a third person.
- The validity or fulfillment may be left to chance.
Art 1311
This
principle stresses the Principle of Relativity.
Contracts are generally effective only between the
parties, their assigns and their heirs.
Exceptions:
- Where the obligation arising from the contract are not transmissible by their nature, by stipulation, or by provision of law.
- Where there is stipulation pour atrui (a stipulation in favor of a third party)
- Where a third person induces another to violate his contract
- Where, in some cases, third persons may be adversely affected by a contract where they did not participate.
- Where the law authorizes the creditor to sue on a contract entered into by his debtor.
Art 1312
A
real right binds the property over which it is exercised.
Exception to the general rule that a contract binds
only the parties.
Art 1313
Right of defrauded creditor.
Art 1314
Requisites
before a third person in this article can be held for damages
- Existence of a valid contract
- Knowledge on the part of the third person of the existence of the contract
- Interference by the third person without legal justification or excuse
Art 1315-1316
Perfection of contracts
Art 1317
Requisites for a Person to
Contract in the Name of Another
a.
He
must be duly authorized (expressly or impliedly)
- Or he must have by law a right to represent him
- Or the contract must be subsequently ratified
Art 1318
Requisites of Contracts
- Consent (Art 1319-46)
- Object (Art 1347-1349)
- Cause (Art 1350-55)
Art 1319
Definition of Consent
-Art 1319,first paragraph
Requisite of Consent
- There must be two or more parties
- The parties must be capable or incapacitated
- There must be no vitiation of consent
- There must be no conflict between what was expressly declared and what was really intended
- The intent must be declared properly
Requisites for the meeting of
minds
- An offer that must be certain
- And an acceptance must be unqualified and absolute
- Concurrence of offer and acceptance (Art 1319-26)
- Legal capacity of contracting parties (Art 1327-29)
- Characteristics of Consent (Art 1330-46)
Art 1320
Forms of Acceptance
Art 1322
Acceptance of an Offer made thru
an agent
Art 1323
Other instances when the offer
becomes ineffective
a.
When
the offeree expressly or impliedly rejects the offer
b.
When
the offer is accepted with qualification or condition
c.
When
before acceptance is communicated, the subject matter becomes illegal or
impossible
d.
When
the period of time given to the offeree within which he must signify his
acceptance has already lapsed
e.
When
the offer is rejected in due tome
Art 1324
Option Contract
Option- it is a contract
granting a person the privilege to buy or not to buy certain objects at anytime
within the agreed period at a fixed price
Perfection of Option
When there is a meeting of minds on the option
Art 1325-1326
If
the advertisement contains all the specific particular needed in a contract, it
is a definite offer.
If important details are left out, the advertisement
is not a definite offer, but a mere invitation to make an offer.
Art 1327 in relation to Art
1329
Who
cannot give consent.
Art 1328
Voidable
contracts by reason of incapacity
Art 1330
This
article enumerates causes or vices of consent.
Art 1331 in relation to Art
1333
Mistake
It is a false belief about something.
Requisites for mistake to
vitiate consent
- Object of the contract
- The condition which principally proved or induced one of the parties
- Identify or qualifications, but only if such was the principal cause of the contract.
- The error must be excusable
- The error must be a mistake of fact
Kinds of Mistake
- Mistake as to the object
- Mistake as the identity of the thing
- Mistake as to the substance of the thing
- Mistake as to the conditions of the thing
- Mistake as to the quantity of the thing
- Mistake as to person
- Mistake must be either with regards to the identify or with regard to the qualification of one of the contracting parties
- Such identity or qualification must have been the principal consideration for the celebration of the contract
Art 1332
Burden
of proof in case of mistake
Art 1333
Effect
of knowledge of risk
Art 1334
Mistake of Law
Is that which arises from an ignorance of some
provision of law, or from an erroneous interpretation of its meaning, or from
an erroneous conclusion as to the legal effect of the agreement, on the part of
one of the parties.
Requisites:
- There must be mutual error
- The error must refer to the legal effect of the agreement
- The real purpose of the parties is frustrated
Art 1335-1336
Violation
refer to physical coercion
Intimidation refers to moral coercion
Requisites for violence to
vitiate consent
- Employment of serious or irresistible force
- It must have been the reason why the contract was entered into
Requisites for intimidation to
vitiate consent
- Reasonable and well-grounded fear
- Of an imminent and grave evil
- Upon his person, property, or upon the person of property of his spouse, descendents or ascendants
- It must have been the reason why the contract was entered into
- The threat must be an unjust act, an actionable wrong
Art 1337
Requisites
for undue influence to vitiate consent
- Improper advantage
- Power over the will of another
- Deprivation of the latter’s will of a reasonable freedom of choice
Art 1338-1341
Kinds of Fraud
- Fraud in the celebration of the contract
1.
Dolo
Causante or causal fraud (Art 1338)
2.
Dolo
Incidente of incidental fraud
- Fraud in the performance of the obligations stipulated in the contract
Requisites of Dolo Causante
- The fraud must be material and serious
- The fraud must have been employed by one of the contracting parties, because if both committed fraud, the contract would remain valid
- There must be a deliberate intent to deceive to induce
- The other party must have relied on the untrue statement, and must himself not be guilty of negligence in ascertaining the truth
Art 1342-1344
Speaks
about misrepresentation
Art 1345-1346
Simulation
Simulation of a Contract
defined
It is the process of
intentionally deceiving others by producing the appearance of a contract that
really does not exist (absolute simulation)
Or which is
different from the true agreement relative simulation.
Kinds
a.
Absolute;
Effect; the contract is void
b.
Relative;
Effect; the parties are bound to the real or true agreement except-
a.
If
the contract should prejudice third persons
b.
Or
if the purpose is contrary to law, morals, public order, policy or good customs
Requisites
a.
An
outward declaration of will difference from the will of the parties
b.
The
false appearance must have been intended by mutual agreement
c.
The
purpose is to deceive third persons
Art 1347-1349
Objects (Subject Matter) of a
contract
-
A
thing or a service
Requisites
- The thing or service must be within the commerce of man
- Must be transmissible
- Must not be contrary to law, morals, good customs, public order, or public policy
- Must not be impossible
- Must be determinate as to its kind or determinate without the need of a new contract or agreement
CAUSE OF CONTRACTS
Art 1350
“Cause” defined
-It is the essential and impelling reason why a party
assumes an obligation
Art 1351
Motive
– is the purely personal or private reason which a party has in entering into a
contract
Motive vs. Cause
Motive
- May vary although he enters into the same kind of contract
- May be unknown to the other
- The presence of motive
Cause
- Always the same
- Always known
- Cannot cure the absence of cause
Art 1352-1355
Requisites for cause
- It must be present
- It must be true
- It must be lawful
CHAPTER 3
FORM OF CONTRACTS
Art 1356
Meaning of form of contracts
-Refers to the manner in which a contract is executed
or manifested
Rules regarding from of
contracts (Art 1356)
Art 1357-1358
Principles
regarding formalities for the efficacy of a contract
- Art 1357 and Art 1358 do not require the execution of a contract either in a public or private instrument in order to validate enforce it but only to ensure its efficacy, so after its existence has been admitted, the party bound may be compelled to execute the necessary document
- Even where the contract has not been reduced to the required form, it is still valid and binding as far as the parties are concerned
- From the moment one of the contracting parties invokes the provisions of Art 1357 and 1358by means of a proper action, the effect is to place the existence of the contract in issue, which must be resolved by the ordinary rules of evidence
- Art 1357 does not require that the action to compel the execution of the necessary document must precede the action upon the contract
- However, although the provisions of Art 1357 in connection with those of Art 1358, do not operate against the validity of the contract nor the validity of the acts voluntarily performed by the parties for the fulfillment thereof, yet from the moments when any of the contracting parties invokes said provisions, it is evident that under them the execution of the required document must precede the determination of the other obligations derived from the contract
CHAPTER 4
REFORMATION OF
INSTRUMENT
Reformation – is
that remedy by means of which a written instrument is amended or rectified so
as to express or conform to the real agreement or intention of the parties when
by reason of mistake, fraud, or inequitable contract, or accident the
instrument fails to express such agreement or intention.
Requisites for
reformation
- There is a meeting of minds of the parties to the contract
- The written instrument does not express the true agreement or intention of the parties
- The failure to express the true intentions is due to mistake, fraud, inequitable conduct or accident
- The facts upon which relief by way of reformation of the instrument is sought are put in issue by the pleadings
- There is clear and convincing evidence of the mistake, fraud, inequitable conduct, or accident
Reformation vs. Annulment
In reformation, there has been a meeting of the minds
of the parties, hence, a contract exists while in annulment, there has been
none, the consent of one of the parties being vitiated by mistake, etc.
Art 1360-69
Art 1360
Rule
in case of conflict
Art 1366
Instances
when reformation is not allowed
CHAPTER 5
INTERPRETATION OF A CONTRACT
Art 1370
Definition of interpretation of
contract
-Is the determination of the meaning of the terms or
words used by the parties in their contract
Art 1371-79 (provisions)
Kinds of defective contracts
- Rescissible (Art 1380-89)
- Voidable (Art 1390-1402)
- Unenforceable (Art 1403-1408)
- Void or Inexistent (Art 1409-1422)
Art 1381 in relation to Art
1382
Meaning of rescissible
contracts
-Those validly agreed upon because all the essential
elements exists but in some cases established by law, the remedy of rescission
is granted in the interest of equity
Requisites of rescission
- The contracts must be validly agreed upon
- There must be lesion or pecuniary prejudice to one of the parties or to a third person
- The rescission must be based upon a case especially provided by law
- There must be no other legal remedy to obtain reparation of the damages
- The party asking for rescission must be able to return what he is obliged to restore by reason of the contract
- The object of the contract must not legally
- The object of the contract must not legally be in the possession of third persons who did not act in bad faith
- The period for filing the action of rescission must have not prescribed
Meaning of Rescission
-Remedy granted by law to the contracting parties and
sometimes even to third persons in order to secure reparation of damages caused
by them by a valid contract, by means of the restoration of things to their
condition in which they were prior to the celebration of the said contract.
Art 1385
Effects
of rescission
Art 1324
Prescription
VOIDABLE
CONTRACTS
Definition
-Are those which possess all the essential requisites
of a valid contract but one of the parties is incapable of giving consent, or
consent is vitiated by mistake, violence, intimidation, undue influence, or
fraud
Characteristics
- Their defect consist in the vitiation of consent of one of the contracting parties
- They are binding until they are annulled by competent court
- They are susceptible of convalidation by ratification or by prescription
Voidable vs. Rescissible
Contracts
Voidable
- Defect is intrinsic
- Contract is voidable even if there is no damage or prejudice
- Annulability of the contract is based on law
- Susceptible of ratification
- The causes of annulment
The causes of
rescission
Rescissible
- Defect is extrinsic
- Contract is not rescissible id there is no damage or prejudice
- Rescissibility of the contract is based on equity
- Not susceptible of ratification
- Are different form
Art 1390
Voidable
contracts
Art 1391
Prescription
Art 1392-96
Concept of Ratification
-By virtue of which efficacy is given to a contract
which suffers from a vice of curable nullity
Requisites for ratification
- The contract should be tainted with a vice which is susceptible of being cured
- The confirmation should be effected by the person who is entitled to do so under the law
- It should be effected with knowledge of the vice or defect of the contract
- The cause of the nullity or defect should have already disappeared
Art 1397 in relation to Art
1391
-Who and when may an action for
annulment of contract be instituted
Art 1398-99
Effects of annulment
Art 1400-02
- Effect pf failure to make
restitution
-Where loss is due to fault of
plaintiff
-Where loss is due to fault of
defendant
-Where loss is due to
fortuitous event
CHAPTER
8
UNENFORCEABLE CONTRACTS
Meaning of unenforceable
contracts
-Those that san not be enforced in court or sued upon
by reason of defects provided by law until and unless they are ratified
according to law.
Kinds:
- Those entered into in the name of another by one without or acting in excess of authority
- Those that do not comply with the statute of fraud
- Those where both parties are incapacitated of giving consent
Unauthorized contracts
-Those entered into in the name of another person by
one who has been given no authority or legal representation on who has acted
beyond his powers.
Characteristics of
Unenforceable Contracts
- They can not be enforced by a proper action in court
- They are susceptible of ratification
- They can not be assailed by third persons
Unenforceable vs. Rescissible
- An unenforceable contract cannot be enforced by a proper action in court, while a rescissible contract can be enforced, unless it is rescinded
- The causes for the unenforceable character of the former are different from the causes fro the rescissible character of the latter
- The former is susceptible of ratification, while the latter is not
- The former cannot be assailed by third persons, while the latter may be assailed by third persons who are prejudiced
Unenforceable vs. Voidable
- An unenforceable contract cannot be enforced by a proper action in court, while a voidable contract can be enforced, unless it is annulled
- The causes for the unenforceable character of the former are different from the causes for the voidable character of the latter
STATUTE
OF FRAUDS
Purpose
-Not only to prevent fraud but also to guard against
the mistakes of honest men by requiring that certain agreement specified must
be in writing.
Application
- Not applicable in actions which are neither for damages because of a violation of a contract, nor for the specific performance thereof
- Applicable only to executory contracts and not to contracts which are totally or partially performed
- Not applicable where the contract is admittedly expressly, or impliedly by the failure to deny specifically its existence, no further evidence thereof being required in such case.
- Applicable only to the agreements enumerated therein
- Not applicable where a writing does not express the true agreement of the parties
- It does not declare the contracts infringing it are void but merely unenforceable
- The defense of the statute of frauds may be waived
- The defense of the statute of frauds is personal to the parties and cannot be enforced by strangers to the contract
Effect of Non-Compliance
-The contract or agreement is unenforceable by action
Ratification of Unenforceable
Contracts
Either by: a. the failure of
object to the presentation of oral existence to prove the same
- The acceptance of benefits under them
Art 1404-1408 (provisions)
CHAPTER 9
VOID OR INEXISTENT CONTRACTS
Void Contracts
-Those, which of certain defects generally produce no
effect at all
Inexistent Contracts
-Refer to agreements which lack one or some or all
the elements or do not comply with the formalities which are essential for the
existence of a contract
Characteristics of a Void or
Inexistent Contracts
- Generally, it produces no effect
- It cannot be ratified
- The right to set up the defense of legality cannot be waived
- The action or defense for the declaration of its inexistence does not prescribe
- The defense of illegality is not available to third persons whose interests are not directly affected
- It cannot give rise to a valid contract
Art 1410
-Imprescriptibility
of void or inexistent contract
Art 1411-1412
Where both parties are in pari
delicto
- The parties shall have no action against each other
- Both shall be prosecuted
- The things or the price of the contract, as the effects of the crime shall be confiscated in favor of the government
Where only one party is guilty
-The rule in paragraph 1 of Art 1411 applies only to
the guilty party or the more guilty party
Exceptions to the principle of
pari delicto
Art 1413-1419
No comments:
Post a Comment