Article 1409

April 10, 2019

Article 1409. The following contracts are inexistent and void from the
beginning:

Inexistent contracts refer to agreements which lack one or some or all of the

elements (i.e., consent, object, and cause) or do not comply with the formalities
which are essential for the existence of a contract.

VOID CONTRACTS are contracts where all of the requisites prescribed by law
for contracts are present, but the cause, object or purpose is contrary to law,
morals, good customs, public order or public policy, or they are prohibited by law,
or they are declared by law to be void.

Void and Inexistent Contracts may be distinguished from each other in the
following ways :

a) Void contracts refer to those where all of the requisites of a contract are
present but the cause, object or purpose is contrary to law, morals, good
customs, public order or public policy, or the contract itself is prohibited or
declared by law to be void ; inexistent contracts, on the other hand, refer to
those where one or some or all of those requisites which are essential for
validity are absolutely lacking (Liguez vs. Court of Appeals, 102 Phil. 577).

b) The principle of in pari delicto is applicable in the first, but not in the
second.(in pari delicto – latin for “in equal fault”- connotes that two or more
people are at fault or guilty of a crime.- how does it relate to illegal contaracts?
 The courts will not enforce an invalid contract so that no party can recover
in an action or the court will refuse to provide remedy because both parties are
equally at fault in causing the contracts breach.
c. ) Consequently, the first may produce effects (Articles 1411, 1412), but the
second does not produce any effect whatsoever.

DISTINGUISH VOID AND INEXISTENT CONTRACTS FROM THE OTHER DEFECTIVE

CONTRACTS.
A VOID OR INEXISTENT CONTRACT MAY BE DISTINGUISHED FROM A
RESCISSIBLE CONTRACT IN THE FOLLOWING WAYS :

a. A void or inexistent contract produces, as a rule, no effect even if it is not set aside by a
direct action, whereas a rescissible contract is valid unless it is rescinded (Articles 1380,
1409).

b. The defect of the former consists in absolute lack in fact or in law of one or
some or all of the essential elements of a contract, whereas the defect of the
latter consists in lesion or damage to one of the contracting parties or to third
persons.

c. In the former, the nullity or inexistence of the contract is based on the law,
whereas, in the latter its rescissible character is based on equity. Hence, an
action for declaration of absolute nullity or inexistence is not only a remedy
but a sanction, whereas an action for rescission is a mere remedy. Public
interest, therefore, predominates in the first, whereas private interest
predominates in the second.

d. The action for the declaration of the nullity or inexistence of a contract is

imprescriptible, whereas the action for the rescission of a contract is
prescriptible (Articles 1389, 1410)

e. The nullity or inexistence of a contract cannot as a rule be assailed by third

persons, whereas the rescissible character of a contract may be assailed by
third persons (Articles 1381, 1382, 1409)

WHAT CONTRACTS ARE VOID OR INEXISTENT?

The following contracts are inexistent and void from the beginning:

(1) Those whose cause, object or purpose is contrary to law, morals, good
customs, public order or public policy;
 Contrary to Law
An agreement whereby Anna is to render service as a servant to Ben without
compensation as long as Anna has not paid his debt is reprehensible and
censurable.
 Contrary to Morals
A contract, whereby Anna promised to live as the common-law wife of Ben
without the benefit of marriage in consideration of P50,000.00, is immoral and,
therefore, void.
  Contrary to Good Customs
Anna entered into a contract whereby Anna binds herself to slap his father. This
contract is void because it is against the good custom of showing respect to our
parents.
 Contrary to Public Order
A stipulation in a contract of lease whereby the landlord can use force to eject the
tenant in case of failure of the latter to pay the rent agreed upon is void as being
against public order.
 Contrary to Public Policy
A condition in a contract of sale states: “In case of sale, the buyer shall not sell to
others the land sold but only to the seller, or to his heirs or successors for the same
price of P5,600.00 when the latter shall be able to pay it.’’
The condition is contrary to public policy, because it virtually amounts to a
perpetual restriction on the right of ownership, specifically the owner’s right to
freely dispose of his property. Such a prohibition indefinite and unlimited as to
time, so much so that it shall continue to be applicable even beyond the lifetime of
the original parties to the contract is a nullity.

(2) Those which are absolutely simulated or fictitious;

Anna is indebted to Ben. Upon learning that Ben is going to enforce her credit,
Anna pretended to sell her land to Felimon, his father-in-law. Anna did not receive
a single centavo for the deed of sale she executed and she continued in possession
of the land as the contract was merely simulated or fictitious.
There is no contract of sale in this case as the parties do not intend to be bound at
all. The sale is but a sham.

(3) Those whose cause or object did not exist at the time of the transaction;
Sandra sells to Ben a parcel of land. In the deed of sale, P100,000.00 is stated as
the price of the land. If this statement is false, then there is no contract of sale.

(4) Those whose object is outside the commerce of men;

If the object is outside the commerce of man, such as sidewalks or public plazas or
public bridges, they cannot be the object of contracts of alienation (but may be the
object, for example, of a contract for repair).

(5) Those which contemplate an impossible service;

If a blind man enters into a contract which requires the use of his eyesight, the
contract is void although in this particular case, we have only a relative
impossibility. This is because here, the relative impossibility is not merely
temporary.

(6) Those where the intention of the parties relative to the principal object of
the contract cannot be ascertained;
Anna sold his land to Ben. Anna has many lands. It cannot be determined which
land was intended by the parties to be the subject of the sale.
Therefore, the contract shall be null and void and it is as if the parties have not
entered into any contract at all.

(7) Those expressly prohibited or declared void by law.

These contracts cannot be ratified. Neither can the right to set up the defense
of illegality be waived.
Contracts upon future inheritance except in cases expressly authorized by law

CHARACTERISTICS OF A VOID CONTRACTS

They are as follows:
(1) Generally, it produces no effect whatsoever, being void or inexistent from the
beginning;

(2) It cannot be cured or validated either by time or ratification;

(3) The right to set up the defense of illegality, inexistence, or absolute nullity
cannot be waived;

(4) The action or defense for the declaration of its illegality, inexistence, or
absolute nullity does not prescribe;

(5) The defense of illegality, inexistence, or absolute nullity is not available to third
persons whose interests are not directly affected;

(6) It cannot give rise to a valid contract;

(7) Its invalidity can be questioned by anyone affected by it.

VOID AND VOIDABLE CONTRACTS DISTINGUISHED

Distinctions between Void and Unenforceable Contracts

Unenforceable
Basis Void Contract
Contract

There is a contract
There is no contract
1. Status but which cannot be
at all
enforced.

It is not subject to It is subject to

2. Ratification
ratification. ratification.

It can be assailed by
3. Attack by third third persons whose It cannot be assailed
persons interests are directly by third persons.
affected.

4. Causes Causes of nullity are Causes of

those enumerated in unenforceability are
Article 1409. enumerated in
Article 1403 (par.2)

WHAT IS THE
PRINCIPLE OF IN
PARI DELICTO?

When the defect of a

void contract consists
in the illegality of the
cause or object
of the contract, and
both parties are at
fault or in pari delicto,
the law refuses them
every remedy and
leaves them where
they are. This rule,
which is embodied in
Articles 1411 and
1412, is what is
commonly known as
the principle of in pari
delicto. It is a rule
which is expressed in
the maxims: “Ex dolo
malo non oritur action”
and “In pari delicto
potior est condition
defendentis”. The law
will not aid either party
to an illegal
agreement; it leaves
then where they are.