Defective Contracts (Summary)

In: Business and Management

Submitted By GlendaG05
Words 1500
Pages 6
Kinds of defective contracts 1. Rescissible Contracts (Chap. 6) 2. Voidable Contracts (Chap. 7) 3. Unenforceable Contracts (Chap. 8) 4. Void or inexistent Contract (Chap. 9)
Article 1380 Contracts validly agreed upon may be rescinded in the cases established by law. (1920)

Rescissible Contracts – are those validly agreed upon because all the essential elements exist and, therefore, legally effective, but in the cases established by law, the remedy of rescission is granted in the interest of equity.
Requisites of rescission. 1. The contract must be validly agreed upon. 2. There must be lesion or pecuniary prejudice to one of the parties or to a third person. 3. The rescission must be based upon a case especially provided by law. 4. There must be no other legal remedy to obtain reparation for the damage. 5. The party asking for rescission must be able to return what he is obliged to restore by reason of the contract. 6. The object of the contract must not legally be in the possession of the third person who did not act in bad faith; 7. The period for filing the action for rescission must not have prescribed.
Article 1381
The following contracts are rescissible: 1. Those, which are entered into by guardians and suffered LESION by more than ¼ of value of the value that is the OBJECT. 2. Those agreed upon in representation of absentees, if the latter suffer the lesion stated in the preceding number; 3. Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them; 4. Those which refer to things under litigation if they have been entered into by the defendant without the 5. knowledge and approval of the litigants or of competent judicial authority; 6. All other contracts specially declared by law to subject to rescission.

Voidable Contracts…...

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