This document summarizes Philippine contract law regarding voidable contracts. It defines a voidable contract as one where consent is vitiated by incapacity, mistake, violence or fraud. While valid until annulled, a party can petition to have the contract annulled. The statute of limitations for annulment actions is generally four years. Exceptions are provided, such as when incapacity is raised as a defense rather than the basis for a positive annulment action. The document outlines the rules around ratification, restitution following annulment, and who can bring an annulment action.
This document summarizes Philippine contract law regarding voidable contracts. It defines a voidable contract as one where consent is vitiated by incapacity, mistake, violence or fraud. While valid until annulled, a party can petition to have the contract annulled. The statute of limitations for annulment actions is generally four years. Exceptions are provided, such as when incapacity is raised as a defense rather than the basis for a positive annulment action. The document outlines the rules around ratification, restitution following annulment, and who can bring an annulment action.
This document summarizes Philippine contract law regarding voidable contracts. It defines a voidable contract as one where consent is vitiated by incapacity, mistake, violence or fraud. While valid until annulled, a party can petition to have the contract annulled. The statute of limitations for annulment actions is generally four years. Exceptions are provided, such as when incapacity is raised as a defense rather than the basis for a positive annulment action. The document outlines the rules around ratification, restitution following annulment, and who can bring an annulment action.
IV, TITLE II: CONTRACTS SC: If incapacitated is merely to be availed of
CHAPTER 7: VOIDABLE CONTRACTS as a defense in enforcement of contract = VOIDABLE CONTRACT prescription does not apply; it is Those in which all of the essential elements for UNENFORCEABLE. validity are present, but the element of consent Both positive action and defense may be is vitiated by either lack of legal capacity of one availed of the contracting parties, or by mistake, Prescription is a way of ratifying or curing a violence, intimidation, undue influence or fraud defect It is valid until annulled by a competent court Promissory note by mother instituting her two sons as solidary debtors. The sons were Distinguished from Rescissible Contracts only 18 and 19 years old [21 years old was VOIDABLE RESCISSIBLE the age of majority back then] only after Petition for annulment Action for rescission more than 4 years from the time one of the Primary action; avail supplemental brothers is 21 when the creditor tried to immediately enforce the obligation against him; the son Defect is intrinsic Defect is external put up a defense not to annul because there Voidable even if there is Should have damage or was no petition to annul = voidable. C did no damage or prejudice prejudice not file any action UNTIL HE WAS 26. C tried Based on the law Based on equity to enforce it against him. Brother invoked Not just a remedy but a Mere remedy defense of incapacity, SC upheld the defense sanction and excused him from the payment. Involves public interest Involves private interest SC: 4 year period applies only in cases of positive action for annulment- not defense. CAUSES: This is an addition to one of the causes of 1. When one of the contracting parties is UNENFORCEABILITY OF CONTRACTS. incapacitated in rel to Art. 1327 [ if both are Estoppel was first applied in this case. Req: incapacitated, unenforceable] 1. Positive misrepresentation ; 2. Physical 2. Consent vitiated by vices of consent attributes must show that he is a minor
Note: Vitiated consent is different from total Is it subject to ratification? YES. Article 1392. Ratification extinguishes the action to annul a voidable absence of consent. Total absence would lead to a contract. (1309a) void contract Article 1393. Ratification may be effected expressly or tacitly. It is understood that there is a tacit ratification if, with knowledge of the reason which renders the contract voidable and such reason having Prescription [Art. 1391] ceased, the person who has a right to invoke it should execute an act General rule 4 years which necessarily implies an intention to waive his right. (1311a) Article 1394. Ratification may be effected by the guardian of the When to reckon: incapacitated person. (n) Article 1395. Ratification does not require o Incapacitated- upon acquiring age of the conformity of the contracting party who has no right to bring the majority action for annulment. (1312) o Fraud- upon discovery Article 1396. Ratification cleanses the contract from all its defects o Violence, intimidation, undue from the moment it was constituted. (1313) influence, when the forces cease Ratification, confirmation, acknowledgment Ratification or confirmation is the act or means Capacity by virtues of which efficacy is given to a contract Case: Braganza v. De Villa Abrille [GR NO. L-12471 , which suffers from a vice or of curable nullity. April 13,1959] Requisites: Prescription period of 4 years 1. Contract should be tainted with a vice which Application for action for annulment is susceptible of being cured JTVS | Obligations & Contracts | 1M | Dean Ulan Sarmiento 1 2. Confirmation should be effected by the Exceptions: person who is entitled to do so under the Article 1399. When the defect of the law contract consists in the incapacity of one of 3. It should be effected with the knowledge of the parties, the incapacitated person is not the vice or defect of the contract obliged to make any restitution except 4. Cause of nullity or defect should have insofar as he has been benefited by the already disappeard thing or price received by him. (1304) Those which may be used for Binding Efficacy: valid until annulled support Article 1400. Whenever the person obliged Assailabilty by the decree of annulment to return the General rule : may be assailed only by a thing can not do so because it has been lost party; not by a third person through his fault, he shall return the fruits Exception: a person prejudiced in his rights received and the value of the thing at the Case: Teves v. Peoples Homesite & Housing time of the loss, with interest from the same Corp et al. GR No. L 21498, June 27, 1968 date. (1307a) o SC: person who is not a party to a Should not be due to the fault of contract may exercise action for person who must return annulment if prejudiced in his right With interest with respect to one of the Who must return? May be the contracting parties and can show petitioner or defendant detriment which could positively Need to return value and interest result to him from the contract in Loss without fault : obliged to pay which he had no intervention value but no interest o Eg: heir without actionable wrong to descendant Article 1401. The action for annulment of o 88 y/o donating to a 22 y/o contracts shall be extinguished when the paramour thing which is the object thereof is lost o Age is not incapacity; only minority. through the fraud or fault of the person who No maximum age to capacity. But has a right to institute the proceedings. subject to being appointed of a If the right of action is based upon the judicial guardian. incapacity of any one of the contracting parties, the loss of the thing shall not be an Who may assail? obstacle to the success of the action, unless Incapacitated person said loss took place through the fraud or Person whose consent was vitiated fault of the plaintiff. (1314a) If loss due to fault of person who has Effects of Annulment right to file for annulment, action is Restore to each other things of the contract, extinguished. Same rule even if the fruits plaintiff is incapacitated person Article 1398. An obligation having been annulled, the contracting parties shall restore to each other the things
which have been the subject matter of the contract, with Loss due to a fortuitous event: their fruits, and the price with its interest, except in cases If object cannot be return because of provided by law. In obligations to render service, the value thereof shall be a fortuitous event, contract may still the basis for damages. (1303a) be annulled. Plaintiff shall pay the o similar to a contract rescinded value of the thing at the time of the o return to status quo loss no interest.