0% found this document useful (0 votes)
3 views

Chapter 3

This document outlines the various forms of contracts, emphasizing that contracts are binding regardless of their form as long as essential requisites for validity are met. It details the exceptions where specific forms are required by law, the reformation of instruments to reflect true intentions, and the interpretation of contracts based on the parties' intent. Additionally, it categorizes defective contracts and rescissible contracts, providing criteria and examples for each type.

Uploaded by

vmarjorie292
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
3 views

Chapter 3

This document outlines the various forms of contracts, emphasizing that contracts are binding regardless of their form as long as essential requisites for validity are met. It details the exceptions where specific forms are required by law, the reformation of instruments to reflect true intentions, and the interpretation of contracts based on the parties' intent. Additionally, it categorizes defective contracts and rescissible contracts, providing criteria and examples for each type.

Uploaded by

vmarjorie292
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 11

CHAPTER III: FORMS OF CONTRACT

A. GENERAL RULE: Contracts shall be obligatory, in whatever form they may have been entered into, provided all
essential requisites for their validity are present. (ART 1356)
The form of contract refers to the manner in which a contract is executed or manifested.
a. The contract may be oral, or in writing, or partly oral and partly in writing billion if in writing, it may be in a
public or a private instrument
b. it may be expressed when the parties expressly set forth their intentions, or implied when their intentions
may be inferred from their actions or conducts.
B. EXCEPTION: when the law requires that a contract be in some form in order that it may be valid or enforceable.
ART 1357 – however, when the law requires that a contract in some form in order that it may be valid or
enforceable, or that a contract be proved in a certain way, that requirement is absolute and indispensable. In
such cases, the right of the parties stated in the following article cannot be exercised.
CLASSIFICATION OF CONTRACTS ACCORDING TO FORM :
1. Informal or common or simple contract or that which may be entered into in whatever form provided all the
essential requisites for their validity or present. ( 1356), such as the contract of sale. An informal contract
may be oral or written and in fact may even be implied from the conduct of the parties and,
2. formal or solemn contract or that which is required by law for its efficacy to be in certain special form

GENERAL RULE :

Contracts are binding and therefore enforceable reciprocally by the contracting parties, whatever may be the
form in which the contract has been entered into, provided all the three essential requisites (consent, object, and cause)
for their validity are present. So, a contract may be oral or written. A written contract may consist of a letter,
memorandum, note or other instrument, without following any particular form or language, it being sufficient that the
parties clearly expressed their intentions.

C. KINDS OF FORMALITIES REQUIRED BY LAW


1. AD ESENTIA, ADSOLEMNITATEM – THOSE REQUIRED FOR THE VALIDITY OF CONTRACTS, such as those
referred to in
ART 748 – DONATION OF MOVABLE
ART 749 – DONATION OF IMMOVABLE
ART1874 – SALE OF PIECE OF LAND THROUGH AGENT
ART 2134 – CONTRACT OF ANTICHRESIS; AMOUNT OF PRINCIPAL AND OF THE INTEREST
ART1771 – PARTNERSHIP; IMMOVABLE PROPERTY OR REAL RIGHTS ARE CONTRIBUTED
ART 1773 – PARTNERSHIP; INVENTORY OF IMMOVABLE PROPERTY CONTRIBUTED
ART1956 – INTEREST FOR USING SOMEONE ELSE’S MONEY
ART 2140 – CHATTEL MORTGAGE

2. Those required, not for the validity, but to make the contract effective as against third person, such as those
covered by article 1357 (if law requires a special form, parties may compel each other to observe that form
upon perfection of the contract) and article 1358 (documents which must appear in a public document; it
also constitutes constructive delivery)
ART 1358
a. acts and contracts that have for their object the creation, transmission, modification or
extinguishment of real rights over immovable property; sales of real property or of an interest there
in is governed by articles 1403, no.2 and 1405;
b. The cession, repudiation or renunciation of hereditary rights all of those off the conjugal partnership
of gains;
c. the power to administer property, or any other power which has for its object an act appearing or
which should appear in a public document, or should prejudice a third person;
d. the cession of actions or rights preceding from an act appearing in a public document
All other contracts were the amount involved exceeds 500 pesos must appear in writing, even a private one
period but sales of goods, chattels or things in action are governed by articles 1403 no. 2 and 1405.

3. Ad probationem - those required for the purpose of proving the existence of the contract, such as those
under the statute of frauds in article 1403

IV. REFORMATION OF INSTRUMENTS


ART 1359 – when, there having been a meeting of the minds of the parties to a contract, their true intention is
not expressed in the instrument purporting who embodied the agreement, by reason of mistake, fraud,
inequitable conduct or accident, one of the parties may ask for the Reformation of the instrument to the end
that such true intention may be expressed.
If mistake, fraud, inequitable conduct, or accident has been prevented a meeting of minds of the parties, the
proper remedy is not reformation of the instrument but annulment of the contract.

Reason for reformation of instruments


1. equity dictates the Reformation of instrument in order that the true intention of the contracting parties may
be expressed. I'm just an inequitable to allow the enforcement of a written instrument which does not
reflect or disclose the real meeting of the minds of the parties
2. court do not attempt to make a new contract for the parties, but only to make the instrument express their
real agreement.
3. Statute of frauds is no impediment to the Reformation of an instrument

Distinguished from an annulment

REFORMATION ANNULMENT
action presupposes A valid existing contract no meeting of the minds or the consent of either
between the parties and only the document or one was vitiated by mistake or fraud
instrument which was drawn upon and signed by
them does not correctly express the terms of
agreement
gives life to the contract upon certain corrections involves a complete nullification of contracts

Requisites for reformation of instruments


1. meeting of the minds upon the contract
2. the true intention of the parties is not expressed in the instrument
3. the failure of the instrument to express the true agreement is due to mistake, fraud, inequitable conduct
or accident

Causes for reformation

1. Mutual - instrument includes something which should not be there or omit what should be there
a. Mutual
b. mistake of fact
c. clear and convincing
d. causes failure of instrument to express true intention
2. unilateral
a. one party was mistaken
b. other either after fraudulently or inequitably or knew but concealed
c. party in good faith may ask for reformation
3. mistake by third persons- due to ignorance, lack of skill, negligence, bad faith of drafter, clerk or typist
4. others is specified by law- to avoid frustration of true intent

examples of cases where reformation is allowed

1. article 1361 when a mutual mistake of the parties causes failure of the instrument to disclose their real
agreement, said instrument may be required
2. article 1363 when one party was mistaken and the other knew or believed that the instrument did not state
their real agreement, but concealed the fact from the former, the instrument may be reformed
3. article 1364 when through the ignorance, lack of skill, negligence or bad faith on the part of the person drafting
the instrument or of the clerk or typist, the instrument does not express the true intention of the parties, the
courts may order that the instrument be reformed

Cases where no reformation is allowed

1. oral contracts- there's nothing to reform at all


2. article 1366 -there shall be no reformation in the following cases:
a. simple donations inter vivos were in no condition is imposed
b. wills;
c. when the agreement is voided

Implied ratification

article 1367 when one of the parties has brought an action to enforce the instrument, he cannot subsequently ask for its
reformation.

 There has been election between 2 inconsistent remedies, one in affirmance, the other in disaffirmance

who may ask for reformation

- mutual mistake - either party or successor in interest


- mistake by one- injured party, heirs, or assigns
1. article 1368 reformation may be ordered at the instance of either party or his successors in interest, if the
mistake was mutual; otherwise, upon petition of the injured party, or his heirs and assigns
2. article 1362 if one party was mistaken and the other acted fraudulently or inequitably in such a way that the
instrument does not show their true intention, the former may asked for the Reformation of the instrument.

Procedure of reformation

article 1369 the procedure for the Reformation of instrument shall be governed by ROC to be promulgated by the
Supreme Court.
CHAPTRER V: INTERPRETATION OF CONTRACTS

(compare with rules on statutory construction)

Primacy of intention

 VERBA INTENTIONE NON E CONTRADEBENT INSERVARE - words ought to be subservient to the intent, not the
intent to the word
 look for the contractual intent

article 1370 if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the
literal meaning of its a stipulations shall control.

Article 1372 however general the terms of a contract may be, they shall not be understood to comprehend things that
are distinct and cases that are different from those upon which the parties intended to agree.

 Generalia verba generaliter intellegencia - general things are too understood in a general sense

How to determine intention

article 1371 in order to judge the intention of the contracting parties, their contemporary news and subsequent acts
shall be principally considered.

 Also take note of the usage and custom of the place

How to interpret a contract

1. when it contains stipulations that admit of several meanings


- Article 1373 if some stipulation of any contract should admit to several meanings, it should be understood as
bearing that import which is most adequate to render its effectual.
2. When it contains various stipulations, some of which are doubtful
- article 1374 the various stipulations of a contract shall be interpreted together, attributing to the doubtful ones
that sense which may result from all of them taken jointly.
3. When it contains words that have different significations
- article 1375 words which may have different significations shall be understood in that which is most in keeping
with the nature and the object of the contract
4. when it contains ambiguities and ambition of stipulation
- article 1376 the usage or a custom of the place shall be borne in mind in the interpretation of the ambiguities of
a contract, and shall fill the mission of stipulations which are ordinarily established.
5. With respect to the party who caused the obscurity
- article 1377 the interpretation of obscure words or stipulations in a contract shall not favor the party who
caused the obscurity.
o Contracts of adhesion-result against the party who prepared the contract and in favour of the one who
merely adhered to it
6. when it is absolutely impossible to settle doubts of the rules above
- article 1378 par.1 when it is absolutely impossible to settle doubts by the rules established in the preceding
articles, and the doubts refer to incidental circumstances of a gratuitous contract, the least transmission of rights
and interests shall prevail. If the contract is onerous, the doubt shall be settled in favor of the greatest reciprocity
of interest
o in gratuitous contracts, incidental circumstances - least transmission of rights and interests
o In onerous contracts - greatest reciprocity of interest
7. when the doubts are cast upon the principal objects so that the intention cannot be known
- article 1378par2. If the doubts are cast upon the principal object of the contract in such a way that it cannot be
known what may have been the intention or will of the parties, the contract shall be null and void.
Applicability of rule 12, rules of court (now secs. 10-19, rule 130)

Article 1379 the principles of interpretation stated in room 123 of the rules of court shall likewise be observed in
the construction of contracts.

 law in evidence; interpretation of documents

In between a valid and effective contracts is relatively ineffective-ineffectively only with respect to certain parties,
but are effective as to other persons.

 Against voidable contract: ineffectiveness is produced ipso jure


 void or inexistent contract: can be made completely effective by the consent of the persons as to whom it is
effective or by the cessation of the impediment which prevents its complete ineffectiveness
1. assignment of the lease by the lessee without the consent of the lessor is ineffective only as regards the
lessor,
2. transfer of a debt by the debtor to another without the consent of the creditor is ineffective as to the
creditor
3. the payment of the debtor to his creditor after the credit has been garnished for attached by a third person is
ineffective to the latter

DEFECTIVE CONTRACTS

1. RESCISSIBLE - contract that has caused a particular damage to one of the parties or to a third person and which
for equitable reasons may be set aside even if valid.
2. VOIDABLE OR ANULLABLE (contracto nulo)- contract in which consent of one of the parties is defective, either
because of WANT of capacity or because it is vitiated, but which contract is valid until judiciary set aside
3. ENFORCEABLE-contract that for some reason cannot be enforced, unless ratified in the manner provided by law
4. VOID AND NON- EXISTENT (contrato inexistente)- contract which is an absolute nullity and produces no effect, as
if it had never been executed or entered into.

CHAPTER VI: RESCISSIBLE CONTRACTS

KINDS OF RESCISSIBLE CONTRACTS

Article 1381 the following are resistible contracts:

1. entered into by guardians whenever the wards suffer lesion by more than 1/4 of value of the things object
 Guardian: authorized only to manage ward’s property, no power to dispose without prior approval of court. Only
includes those which are ordinary course of management of the state of the ward, because if sale, mortgages
and other encumbrances and not approved by court, it becomes enforceable.
2. Agreed upon in representation of absentee, suffer lesion by more than 1/4 of the value of things object
 same principle in relation to contracts by guardians
3. in fraud of creditors who cannot collect claims due them
 requisites of accion pauliana
1. plaintiff asking for rescission (subsidiary action) has a credit prior to the alienation
2. debtor has made subsequent contract giving advantage to a third person
3. creditor has no other remedy but to receive the debtors contract to the third person (last resort)
4. act being impugned in fraudulent
5. third person who received the property is an accomplice in the fraud
 credit must be existing at the time of the fraudulent alienation, although not yet due. But at the time of accion
pauliana, the credit must already be due because it presupposes a judgment and unsatisfied execution which
cannot exist when the debt is not yet demandable at the time the rescissory action is brought .
 General rule: credit is prior to the alienation
 Exception: credit is after alienation but entitled to accion pauliana because of some prior right
a. claims for acknowledged by the debtor after alienation, But origin of which antedated the alienation
b. those who become subrogated, after the alienation, in the rights of a creditor whose credits were prior to
the alienation
 even secured creditors are entitled to AP
 conveyance was intentionally fraudulent which may be established by the presumption in article 1387
 TEST OF FRAUD: weather the conveyance was a bonafide transaction or a trick and contrivance to defeat
creditors or whether it conserves to the debtor especial right; founded on good consideration or is made with
bonafide intent. Does it prejudice the right of the creditors?
 Good consideration: creditor is not prejudiced, becomes the property was merely replaced or substituted
 Badges fraud applicable
4. Things under litigation, without knowledge and approval of litigant or of competent judicial authority
 to secure the possible effectivity of a claim
 transparency of property in good faith who acquires property for valuable consideration, without knowledge of
the litigation or claim of the plaintiff, cannot be deprived of property.
5. Specially declared by law to be subject of recession

Characteristics of a rescissible contracts


1. Their defect consist in injury or damage either to one of the contracting parties or to the third persons
LESION: injury which one of the parties suffers by virtue of Contra that is disadvantageous to him; must
be known or could have been known at the birth of contract and not due to subsequent thereto or
unknown to the parties.
Article 1098 partition, judicial and extrajudicial may be rescinded on account of lesion
article 1539 sale of real estate of inferior thing
article 1542 sale of real estate made for a lump sum
2. they are valid before rescission
3. they can be attacked directly only, not collaterally
4. they can be attacked only either by a contracting party, or by other person who is injured or defrauded
5. they can be convalidated only by prescription and not by ratification

RESCISSION

Article 1380 the contracts are validly agreed upon maybe rescinded in the cases established by law.

Definition: remedy granted by law to the contracting parties and even to the third persons, to secure the reparation of
damages cost to them by a contract, even if this should be valid, by means of the restoration of things to their condition
at the moment prior to the celebration of the said contract.

 Relief for the protection of one of the contracting parties and 3rd persons from all injuries and damages the
contract may cause or protect some incompatible and preferent right created by the contract
 Implies a contract which, even if initially valid, produces A lesion or pecuniary damage to someone
 grounds for rescission can only be for legal cause.
 Voidable contracts may also be rescinded

recession article 1380 distinguished from resolution article 1191

RESOLUTION RESCISSION
Similarities presuppose contracts validly entered into and existing
 recession vs. annulment: the latter there is a defect which vitiate
/invalidates the contract
 mutual restitution when declared proper
who may demand only by a party to the contract party to the contract suffering lesion
third parties prejudiced by the
contract
Grounds non performance or implied basic various reasons of equity provided by
condition in reciprocal obligation the grounds, mainly economic injury
or lesions
scope of judicial control court determines sufficiency of sufficiency of reason does not affect
reason to justify extension of time to right to ask for resolution(cannot be
perform obligation(weather slight or refused if all the requisites are
casual breach) satisfied)
kind of obligation applicable to only the reciprocal unilateral, reciprocal
even when contract is fully fulfilled
character Principal remedy secondary or subsidiary

Mutual dissent- not the same with the recision, because mutual dissent is tantamount to a simple creation of new
contract for the dissolution of the previous one. In order for rescission to take place, the requisites must first be satisfied:

REQUISITES OF RESCISSION:

1. the contract is rescissible


article 1381 kinds of rescissible contracts
Article 1382 payments made in a state of insolvency for obligations to use fulfillment the debtor could not be
compelled at the time( has not yet matured) they were effected, are also rescissible
2. the party asking for rescission has no other legal means to obtain reparation
Article 1383 the action for rescission is subsidiary, It cannot be instituted except when the party suffering
damage has no other legal means to obtain reparation for the same.
3. He is able to return whatever he may be obliged to restore if rescission is granted
Article 1385 rescission creates the obligation to return the things which were the object of the contract, together
with their fruits, and the price with its interest
4. the object of the contract is not passed legally to the possession of a third person acting in good faith
1385…. Consequently, it can be carried out only when he who demands rescission can return whatever he may
be obliged to restore
article 1385 par3. Neither shall rescission take please when the things which are the object of the contract are
legally in the possession of third persons who did not act in bad faith.
5. The action for rescission is brought within the prescriptive period for four years
article 1389 the action claim rescission must be commenced within four years
for persons under guardianship and for absentees, the period of four years shall not begin until the termination
of the former’s incapacity or until the domicile of the latter is known.
o Period Commences on the termination of the ward’s in capacity or absentee’s the domicile is known
 with respect to the third persons who acquired the thing in good faith
o transferee of property in good faith who acquires property for valuable consideration, without
knowledge of the litigation or claim of the plaintiff, cannot be deprived of property.
o Article 1385par2 - neither shall rescission thanks please when the things which are the object of the
contract are legally in the possession of third persons who did not act in bad faith
o article 1385 Par. 3 -in this case, indemnity for damages may be demanded from the person causing the
loss.
o Right of transferee to retain alienation:
 nature of transfer
o onerous
 good faith-no rescission
 bad faith-rescissible because of his complicity in the front; not entitled
for reimbursement because in pari delicto; it's not possible to return,
indemnify the plaintiff;
o gratuitous
 good faith-does not protect him because he gave nothing; rescissible ,
although not required to restore the fruits
 bad faith- rescissible because of his complicity in the fraud; if not
possible to return; indemnify the plaintiff
 who made bring actions for rescission
1. creditor injured
2. heirs of creditor injured
3. creditors of creditor injured (by virtue of accion subrogatoria)
 extent of rescission
article 1384 rescission show

shall be only to the extent necessary to cover the damages coused.

 As to the excess, alienation is maintained even if transferee is in bad faith


 benefits only the plaintiff creditor not everyone
 but if transfer is willing to pay, no rescission

Presumptions of fraud

article 1387 all contracts by virtue of which the debtor alienates property by gratuitous title are presumed to have been
entered into a fraud of creditors, when the donor did not reserve sufficient property to pay all debts contracted before
the donation.

Alienation by ONEROUS title are also presumed that fraudulent when made by persons against whom some judgment
has been issued. The decision or attachment need not refer to the property alienated, end need not have been obtained
by the party seeking the rescission.

In addition to this presumptions, the design to defraud creditors may be proved in any other manner recognized by the
law of evidence.

 Rebuttal by evidence that conveyance was made:


o in good faith
o for a sufficient cause
 effect of fraud: does not necessarily make the alienation rescissible. It is only one of the requisites for accion
pauliana. Can be overruled by a transferring in good faith and for valuable consideration.

Badges of fraud(indicia of fraud) -rules by which fraudulent character of transaction may be determined
1. fictitious or insufficient consideration
2. Conveyance is after suit is filed and while it is pending
3. Sale on credit by insolvent debtor
4. evidence of insolvency or large indebtedness
5. transfer of All or nearly all of debtors property
6. Transfer is between father and son when some of above is present
7. Failure of vendee to take exclusive possession of the property

Liability for acquiring in bad faith the things alienated in fraud of creditors
ART1388 - whoever acquires in bad faith the things alienated and fraud of creditors, shall indemnify the latter for the
damages suffered by them on account of their alienation, whenever, due to any cause, it should be impossible for him to
return them.

If there are two or more alienations, the first acquirer shall be liable first, and so on successively.

CHAPTER VII: VOIDABLE OR ANNULLABLE CONTRACTS

KINDS OF VOIDABLE OR ANNULLABLE CONTRACTS

ART 1390 although no damage to contracting parties:

1. Want of capacity
2. Vitiated consent

Characteristics of voidable/ annullable contracts

1. Their defect consist in the vitiation of consent of one of the contracting parties
2. They are binding until they are unnuled by a competent court
3. They are susceptible of convalidation by ratification or by prescription

ANNULMENT

Annulment distinguished from rescission

NULLITY(VOIDABLE) RESCISSION(RESCISSIBLE)
declares inefficiency which contract already carries in merely produces inefficiency, which did not exist
itself(intrinsic defect) essentially in the contract(external defect i.e. Pecuniary
damages or prejudice to one of the contracting parties or
third persons)
requires app of ratification to be cured Needs now ratification to be effective
based on vice of the contract which invalidates it compatible with the perfect validity of the contract
annulment is a sanction based on law rescission is a remedy based on equity
demanded only by the parties to the contract demanded even by the third parties affected by it
public interest predominates private interest predominates

grounds for annulment -article 1390

1. incapacity to consent - not a requisite sine qua non of the contract; want is only a ground for annulment
2. vices of consent: violence, intimidation, undue influence, mistake or fraud

who may and may not institute an action for annulment - article 1397

A. MAY : ALL who are obliged principally or subsidiarily


article 1395: action does not require conformity of the other party who has no right to bring action for
annulment.
Requisites :
a. interest in the contract- there must be legal capacity by being bound to the contract either principally or
subsidiarily
b. victim and not the partly responsible for the defect- he who comes to the court must come with clean
hands(so not applicable to the successor in interest of one who has contracted with a minor)
B. MAY NOT
1. capable parties not allege the in capacity of those with whom they contracted
2. what is weather that intimidation, violence, undue influence, mistake or fraud sentence
3. third person who is a stranger to the contract. UNLESS he can prove that the contract prejudiced his rights
with respect to one of the contracting parties, he may ask for annulment e.g. Guarantors and sureties

prescription of action for annulment-after prescription, contract can no longer be set aside

article 1391 - within four years

period shall begin:

1. intimidation, violence,or undue influence: from the time consensual defects ceases
2. mistake or fraud: from the time of discovery of the same
3. incapacity: from the time guardianship ceases
 extinctive prescription applies not only to action for annulment but also to the defense of nullity
 applies to the parties of the contract but not to the third persons

effects of ANNULMENT -cleanses the Contract from all its defect from the moment it was constituted(retroactive effect),
but does not prejudice rights after the persons acquire before the ratification article 1396

a. mutual restitution article 1398 -restore to each other things which have been the subject matter of the
contract, together with fruits and the price with the interest
EXCEPT in cases provided by law(principle of unjust enrichment): compensation, services rendered in
contracts of service
ELIMINATES AWARD FOR DAMAGES but when there is loss or suffered damages, injured party maybe
entitled to recover indemnity for damages
b. article 1402 as long as one does not restore what he is bound to return, the other cannot be compelled
to return why
i. loss through plaintiff’s (party entitled to bring action) fault or fraud: action is extinguished, even
if at the time of the loss the plaintiff is still a minor or insane(article 1401)
ii. LOSS THROUGH FORTUITOUS EVENT, BUT PLAINTIFF IS WILLING TO PAY : play article 1400,
defendant should return but not including the interest because loss not due to his fault
iii. LOSS OF FRUITS AND ACCESSIONS - apply article 1400, pay value if cannot return(plaintiff and
defendant)
1. when one of the parties is incapacitated
article 1399 -not obliged to make any restitution except insofar as he has been benefited by the price or thing
received
 benefit not necessarily a material AND permanent increase in fortune
 proof of benefit incumbent upon the defendant, in the absence of such proof, the presumption is there is no
benefit or profit to the incapacitated person
 if it's still in the patrimony at the time incapacity ceases, deemed to have been benefited. If he asks for
annulment, He must return it to the other party. If he squanders, it is ratification
2. when the thing lost is through the fault of the party obliged to return the same
article 1400 return the fruits received and the value of the thing at the time of loss, with interest from same date
LOSS THROUGH FORTUITOUS EVENT: be the value of the thing lost but not fruits and interest

extinguishment of action
A. article 1392 by ratification
confirmation or ratification: CURES a defect of NULLITY
acknowledgement: remedies deficiency of proof
B. article 1401 when The thing is lost through the fault of the person who has the right to
file the action
 LOST NOTT THROUGH THE FAULT, E.G. FORTUITOUS EVENT: not extinguished because extinguishment limited
only to the loss by fault of plaintiff. Unjust enrichment if the loss is returned for the defendant to bear. Hence,
the defendant cannot be obliged to make restitution to the plaintiff because of article 1402(cannot compel to
return if the other party does not return)
 cannot extinguish action for annulment by any event not imputable to the fault or fraud of the plaintiff

RATIFICATION

Requisites of ratification

a. contract is voidable or annulable(consent of one party is defective)


b. ratification is made with the knowledge of the cause for nullity
c. at the time of the ratification, the cause of nullity has already ceased to exist

forms of ratification

a. article 1 393 express or tacit; execute an app which necessarily implies an intention to waive his rights
EXPRESS: any oral or written manifestation of the person entitled to ask for annulment that he agrees to be
bound by the contract or that he will not seek its annulment.
IMPLIED
 silence or acquiescence
 ACTS showing approval or adoption of the contract
 acceptance and retention of benefits slowing therefrom
b. article 1394 by the parties themselves or by the guardian in behalf of an incapacitated party
- during the existence of incapacity
- right to ratify is transmitted to the heirs of the party entitled to such right

Effects of ratification

a. article 1392 action to annul is extinguished


b. article 1396 the contract is cleansed retroactively from all its defects from the time it was constituted
EXCEPTION: right after persons prior to ratification

You might also like