Rescissible Voidable Unenforceable Void/Inexistent

1. Defect Damage to a party or to a third Vitiation of consent Without or in excess of authority; Absolute lack of essential
person Does not comply with the Statute requisites
of Frauds; or
Both parties are incapacitated

2. Effect Valid until rescinded Valid until annulled Cannot be enforced in court action No effect

3. Nature of Rescission – a mere remedy Annulment – not only a Absolute nullity or

Remedy remedy but a sanction inexistence not only a remedy
but a sanction

4. Basis of remedy Equity - public interests Law – private interests Law – private interests
predominates predominates predominates

5. Grounds: 1. Those entered by guardians 1. Where one of the parties 1. Those entered into in the name 1. Those whose cause, object
whenever their wards suffer is incapable of giving of another person (agency) by or purpose is contrary to
lesion by more than ¼ of consent to the contract; one who has been given no laws, morals, good
the value of the thing; 2. Those where consent is authority or legal customs, public order or
2. Those agreed upon in vitiated by mistake, representation, or who acted public policy;
representation of absentees, violence, intimidation, beyond his powers; 2. Those which are
if the latter suffers lesion; undue influence or 2. Those that do not comply with absolutely simulated or
3. Those undertaken in fraud fraud. the Statute of Frauds – must be fictitious; (inexistent)
of creditors; made in writing and subscribed 3. Those whose cause or
4. Those which refers to These contracts are binding, by the party in charge or his object did not exist at the
things under litigation; unless annulled by action in agent: time of transaction;
5. All other contracts declared court. They are susceptible - An agreement by its terms (inexistent)
by law as subject to of ratification. not to be performed within a 4. Those whose object is
rescission. year from the making outside the commerce of
thereof; men;
- A special promise to answer 5. Those which contemplate
for the debts of another, an impossible service;
default of miscarriage; 6. Those where the intention
- An agreement made in of the parties relative to
consideration of marriage; the principal object of the
- An agreement for the sale of contract cannot be
goods; ascertained;
- An agreement for the leasing 7. Those expressly prohibited
 for a longer period than one or declared void by law.
year, or for the sale or
property or real interest
therein;
- A representation as to credit
of a third person.
3. Those where both parties are
incapable of giving consent to
the contract.

6. Necessity of Necessary Not necessary Not necessary Not necessary

damage

7. Ratification Cannot be ratified Can be ratified Can be ratified Cannot be ratified

8. Prescription The action to reclaim Action for annulment shall The action or defense for
rescission must be be brought within four the declaration of the
commenced within four years. years. inexistence of a contract
For persons under does not prescribe
guardianship/absentees,
period of 4 years shall not
begin until the termination of
the former’s incapacity, or
until the domicile of the latter
is known.

9. Assailabity of 3rd Available by a person or 3rd Assailable by party only Assailable by party only Available by a person or
persons party who suffered damages 3rd party who is directly
affected

Lease of Things Commodatum Mutuum Deposit

1. Kind Consensual Real Real Real

2. Object Anything, movable or Non fungible (non- Fungible (Consumable Anything, movable or
immovable, fungible or non- consumable thing) things) immovable, fungible or non-
 fungible fungible

3. Cause Onerous Gratuitous Gratuitous or onerous Gratuitous or onerous

4. Purchase Use Use Consumption Safekeeping

5. Ownership Lessor (no transfer of Bailor (no transfer of Debtor (there is transfer of Depositor (no transfer of
ownership) ownership) ownership) ownership)

6. What must be returned Same thing Same thing Same amount, same kind or Same thing
quality

Express agency Implied agency Agency of estoppel Negotiorium gestio

1. Nature of Judicial relation Contract Contract Contract by estoppel Quasi-contract

2. Constitution Principal expressly, with Principal implied form his Person who represents Manger voluntarily assuming
express or implied acceptance acts, silence or inaction, with himself as agent or is management of business or
by agent express or implied acceptance represented by another as property of another in good
by the agent such faith
3. Presence of authority or Authority present Authority present Authority present if estoppel No authority
principal or owner is caused by principal; there
is none if estoppel is cause by
an agent

4. Condition of business or Must be neglected or

property abandoned

5. Liability of principal or Liable Liable Liable if estoppel is caused Liable so long as act is in the
owner as to acts of the by the principal, there is none interest of the owner or refers
agent if estoppel is caused by the to things pertaining to him,
agent but once aware of the
management, relation
becomes implied agency

Lease of Services Contract with Agency

(Employment) Independent Contractor

1. Kind Principal Principal Preparatory

2. Applicability of principle of Not applicable Not applicable Applicable

representation

3. Powers of employees, contractor Ministerial powers Absolute discretionary powers Discretionary powers, but under
or agent control of principal
4. Control and supervision by Employees under control and Contractor not under control of Agent under control of principal
employer or principal supervision of employers employer

5. Liability of employer or principal Employer liable Employer not liable Principal liable provided agent acts
for acts of employee, contractor or within the scope of authority
agent

6. Termination Depends on the contract Depends on the contract Principal may revoke the contract of
agency by will. Thus an Agency is
extinguished by the following:
- Revocation
- Withdrawal of the agent
- Death, civil interdiction, insanity
or insolvency of the principal or
the agent
- Dissolution of the firm or
corporation which entrusted or
accepted the agency
- Accomplishment of the object or
the purpose of the agency
- Expiration of the period for which
the agency was constituted

Pledge Real Estate Mortgage Antichrisis Chattel Mortgage

1. Kind Real Consensual Majority: Consensual Consensual

Minority: Real

2. Object Movables Immovable Fruits of immovable Movables

3. Form Public instruments, in Registration, in order to bind 3rd Writing, for validity Registration, for validity with the
order to bind 3rd persons persons Chattel Mortgage Register

4. Possession Creditor, or to 3rd persons Debtor or mortgagor Creditor or debtor Debtor or mortgagor
by agreement
5. Fruits Applied to interest, then to Not applied Applied to interest, then to Not applied
principal principal

6. Taxes Debtor or pledger Debtor or mortgagor Creditor Debtor or mortgagor

7. Sale or foreclosure Extrajudicial Extrajudicial or judicial Judicial Extrajudicial or judicial

8. Deficiency judgment No deficiency judgment Deficiency judgment Deficiency judgment Deficiency judgment

Culpa Aquiliana Culpa Contractual

No pre-existing contractual relationship There is pre-existing contractual relationship

Negligence of the defendant is substantive and independent Negligence of defendant is merely an incident in the performance of the
obligation

Source of liability is defendant’s acts or omission itself Source of liability is the violation of the contract

Negligence of the defendant must be proved Proof of contract and its breach is prima facie evidence to warrant recovery

Based upon the principle that the negligence of the employee is prima facie Liability of employer is based upon the principle that the negligence of the
presumed to be the negligence of the employer employee is conclusively presumed to be the negligence of the employer

Supervision of employees is an available defense Supervision of the employee is not available defense