Law on Contracts
OUTLINE OF LECTURE IN LAW ON CONTRACTS
(Defective Contracts)
1. Defective contracts a. Rescissible contract – valid until rescinded; b. Voidable contract – valid until annulled; c. Unenforceable contract – cannot be sued upon or enforced unless ratified; d. Void contract – no effect at all, cannot be ratified or validated
2. Rescission
Rescission is the remedy granted by law to the contracting parties and sometimes even to third persons in order to recover indemnity for damages caused them by a contract, even if such contract be valid, by means of restoration of things to their condition prior to the celebration of contract.
3. Requisites for the rescission of contract
1. The party seeking rescission can return what he received by virtue of the contract. 2. The object of the contract is not in the legal possession of a third person who acted in good faith. 3. There must be no other legal remedy. 4. The action must be brought within the proper prescriptive period.
4. Prescriptive period for rescission
Action for rescission must be commenced within 4 years from the date it was entered into. (Guardianship – from the time guardianship ceases; Absentees – from the time the domicile is known)
5. Rescissible contracts
a. Those made by guardians when their wards suffer lesion by more than ¼ of the value of the things which are the object thereof; b. Those agreed upon in behalf of absentees if the latter suffer the lesion stated above; c. Those made in fraud of creditors provided the following requisites are present: i. There must be credit prior to the contract to be rescinded; ii. Fraud on the part of the debtor; iii. Creditor cannot recover his credit in any other manner. d. Those which refer to things under litigation made by defendants without the knowledge and approval of the litigants or of competent judicial authority. e. All other contracts especially declared
(Defective Contracts)
1. Defective contracts a. Rescissible contract – valid until rescinded; b. Voidable contract – valid until annulled; c. Unenforceable contract – cannot be sued upon or enforced unless ratified; d. Void contract – no effect at all, cannot be ratified or validated
2. Rescission
Rescission is the remedy granted by law to the contracting parties and sometimes even to third persons in order to recover indemnity for damages caused them by a contract, even if such contract be valid, by means of restoration of things to their condition prior to the celebration of contract.
3. Requisites for the rescission of contract
1. The party seeking rescission can return what he received by virtue of the contract. 2. The object of the contract is not in the legal possession of a third person who acted in good faith. 3. There must be no other legal remedy. 4. The action must be brought within the proper prescriptive period.
4. Prescriptive period for rescission
Action for rescission must be commenced within 4 years from the date it was entered into. (Guardianship – from the time guardianship ceases; Absentees – from the time the domicile is known)
5. Rescissible contracts
a. Those made by guardians when their wards suffer lesion by more than ¼ of the value of the things which are the object thereof; b. Those agreed upon in behalf of absentees if the latter suffer the lesion stated above; c. Those made in fraud of creditors provided the following requisites are present: i. There must be credit prior to the contract to be rescinded; ii. Fraud on the part of the debtor; iii. Creditor cannot recover his credit in any other manner. d. Those which refer to things under litigation made by defendants without the knowledge and approval of the litigants or of competent judicial authority. e. All other contracts especially declared