ARTICLE 1400 2.

To give to Maria the value of the apartment 

ARTICLE 1401 house at the time of the loss plus interest on the
ARTICLE 1402 value of the house.
Effect of failure to make restitution; where loss is
due to the fault of the defendant Where loss is due to fault of plaintiff – if ever na
- when the person obliged by the order of the court the person who has a right to institute an action of
or the judgement of the court or decree of the annulment will not be able to restore the thing
court to annul the contract, commanding it to which he may be obliged to return in case the
return the thing he benefited from but he can no contract is annulled because such thing is lost
longer return it back to the other party because it through his fraud or fault, his right to have the
was lost through his fault, he shall return the fruits contract annulled is extinguished.
that he received and the value of the thing at the – kapag yung taong makakapag annul ng contract
time of the lost failed to return or restore the thing na obliged
-Kapag ang isang tao ay obligadong magbalik ng siyang ibalik due to his fault or faud, yung right niya
isang bagay dahil ipinawalang bisa na ang pag-aari which is the right to annul the contract will be
nya dito ngunit dahil sa kanyang kapabayaan ito ay extinguished.
nawala na, dapat niyang ibalik ang mga bunga nito Note: that there are other actions wherein the
at mga interest ng kaparehong halaga mula ng contract can be extinguished.
mawala ito kasama ang mga interest ng
kaparehong petsa. Example: - sa years or period has already lapsed or
Example:  Juan forced and threaten Maria para passed. Yung period to take an action is tapos na.
makabili siya sa apartment house ni Maria. Later, Alam niyang mayroon siyang right to annul the
nagdecide si Maria na mag take ng action to annul contract given by the court pero hindi niya ginamit.
the contract which action was granted  by the (Article 1389 – Prescriptive period – the action for
court. Juan was ordered  by the court to return to the rescission of a contract must be commenced
Maria the apartment house ang kaso Juan cannot within four (4) years)
do so because the apartment  house had been - he ratify the contract (Ratification), he
destroyed by fire through  his fault . In this case, cured the defect of it, knowing that the contract is
therefore, Juan has the following obligation: suffering from defect, he still ratified it.
Note: if it was already loss due to the plaintiff’s
1. To give Maria the fruits or rentals of the fault, he can no longer ask for it to be annulled. The
apartment  house, if any, from the time the house case will be dismissed by the court.
was delivered to him;
Where loss is due to fortuitous event - these are contracts that cannot be enforced in
- If the person OBLIGED BY THE DECREE OF court. Hindi ka pwedeng file sa husgado based on
ANNULMENT to return the thing cannot do so this contract.
because it has been lost through a fortuitous event, - is a valid contract that cannot be fully enforced
the contract CAN STILL BE ANNULLED. due to some technical defect.
a. the DEFENDANT can be held liable only for the - a written or oral agreement will not be enforced
value of the thing at the time of the loss, but by courts.
without interest. Example: an employer forces an employee to sign a
b. If it is the PLAINTIFF who cannot return the thing contract that prevents him or her from taking sick
because it has been lost through a fortuitous event, leave, it would be considered unenforceable.
the contract may still be annulled, but with this THREE CLASSES OF CONTRACTS
difference- he must pay to the defendant the value 1. Those contracts entered into in the name of
of the thing at the time of the loss, but without another person by one without any authority or in
interest thereon. excess of his authority.
Note: if one of the party cannot return the thing, - ginagamit mo yung name nung ibang tao to enter
then he cannot compel the other party as well to a contract without his or her authority. Or you are
return the thing. exceeding your authority based on the instruction
The person who was forced to enter into a contract of that party/name of that person that you are
using violence can take another action for using.
damages. 2. Those which do not comply with the Statute
Frauds.
CHAPTER 8: UNENFORCEABLE CONTRACTS 3. Those where both contracting parties are legally
incapacitated.
ARTICLE 1403 Characteristics of unenforceable contracts:
Unenforceable contracts a. They cannot be enforced by a proper action in
- contracts which cannot be enforced by a proper court;
action in court, unless they are ratified, because b. They are susceptible of ratification;
either they are entered into without or in excess of c. They cannot be assailed by third person. (they
authority or they do not comply with the statute of cannot be questioned by the third person.
frauds or both of the contracting parties do not
possess the required legal capacity. Distinguished from rescissible contracts:
(rescissible contracts are those contracts in which
they were entered legally by the contracting parties
but has resulted in economic damage to one of the authorized, he must act within the scope of his
parties or an outside party. The court can therefore powers.
rescind, or set aside, the contract for equitable B. A contract entered into in the name of another
reasons. by one who has no authority or legal

Unenforceable Rescissible representation, or who has acted beyond his

powers, in unenforceable.
Cannot be enforced by Can be enforced in
C. However, such contract may be ratified,
proper action in court court unless it is
expressly or impliedly, by the person in whose
rescinded.
behalf it has been executed, before it is revoked by
Susceptible of Not subject to
the other contracting party.
ratification. ratification.
Cannot be assailed by May be assailed by
- Ratification also can be applied in unenforceable
the third persons. third persons who are
contracts. Voidable contracts
prejudiced.
- it can only be ratified by the owner.
Distinguished from voidable contracts:

Unenforceable Voidable
Ex: A has a land. B was selling it to C without the
Cannot be enforced by Can be enforced
authority of A. B and C already agreed and had a
a proper action in unless it is annulled.
contract. Ang kaso B cannot deliver the title to C
court.
kase wala naman siyang authority galling kay A.
Can C go to court and enforce the contract? No
ARTICLE 1403
kase wala or hindi naman aware si A at wala siyang
Contracts without or in excess of authority
binigay na authority kay B. If ever naman na may
- a contract that was entered into another person
authority si B kay A, ang kaso itong si B exceeded
wherein he is representing another person kaso
his authority, still it is unenforceable.
wala siyang authority or even though he has a
authority, he exceeded his authority. This case isn’t
CONTRACTS INFRINGING STATUTE OF FRAUDS;
enforceable. He cannot file a case in court based on
PURPOSE OF STATUTE
this kind of contract.
- the purpose or essence of statue of frauds is to
– the following principles are applicable:
prevent frauds.
A. No one may contract in the name of another
FORM REQUIRED BY THE STATUTE
without being authorized by the latter or unless he
- the formalities needed or required in Statute of
has a right to represent him. If he his duly
Fraud must be complied with.
- written and signed by the party or his utang ni Juan pag di makapagbayad itong isa. In
representative. order for this to be enforceable, Pedro should or
EFFECT OF NONCOMPLIANCE WITH STATUTE must write an agreement together with his
- the contract is unenforceable in court. The defect signature or it also must be signed by the
of the contract or agreement is not affected by its guarantor.
validity but its enforceability.
CONTRACTS COVERED BY THE STATUTE c. An agreement made in consideration of
- There are six classes of contracts which are marriage, other than a mutual promise to marry –
covered by the Statute of Frauds. They are: Marriage settlements and donations by reasons of
marriage are covered by Statute of Fraud.
a. An agreement that by its terms is not to be - Pre-nuptial agreement or donations between the
performed within a year from the making thereof – couple.
this refers to agreements which by their terms are Example: Juan agrees to build a house worth of 5M
not to be performed on either side within a year pesos for Maria if the latter will marry Juan. This
from the execution. must appear in a written form.
- an agreement wherein the contract is not to be Yung mga pre-nuptial agreements before
performed within a year from the making. the wedding must be in written form and must be
signed.
Example: A and B are planning to have a wedding.
And year 2021 they reserved an event place. d. An agreement for the sale of goods, chattels or
However, their wedding is still in 2024. In this things in action, at a price not less than five
example, the event place must be via written hundred pesos.
agreement. Since hindi one year in the making - not less than 500 pesos must be written
yung kasal, they must have a written agreement.
e. An agreement for the leasing of real property for
b. A special promise to answer for the debt, default a longer period than one year, or for the sale of
or miscarriage of another – a promise in order to real property or an interest therein – In the case of
fall under the statute must be collateral, e.g. “ I will Syquia v. Court of Appeals, the Supreme Court
pay if he does not pay”. ruled that an alleged oral assurance that the lessee
- Juan owes Maria P50,000 tapos si Pedro is the should be given priority or a renewal of the lease
guarantor. Si Pedro here has a special promise to cannot be enforceable, in the absence of some
answer for the debt of Juan in case na si Juan fails note or memorandum.
to pay Maria. Bale si Pedro ang magbabayad ng
- sale for the real property longer than one year
period of time.

f. A representation as to the credit of a third

person. CHAPTER 9: VOID AND INEXISTENT CONTRACTS.
- just like the letter B, you are the guarantee.
ARTICLE 1409
a, d, e, f – void contracts VOID AND INEXISTENT CONTRACTS IN GENERAL
b, c – inexistent contracts - defined as lacking in essential elements for its
validity. There is one or some absence in the
EFFECT OF PERFORMANCE OF CONTRACT elements of essential requisites for validity.
- if the contract was already performed and it did - strictly speaking, void and inexistent contracts
not comply with the statute of fraud, there is are different from each other. (According to the
already a ratification. The defect in the contract is author of the book na ginagamit ni Sir)
cured already. 1. CONTRACTS WHICH ARE VOID refer to those
- you comply on what has been incumbent upon where all of the requisites of a contract are
you. present, but the cause, object or purpose is
- you have deemed to ratify the contract or you contrary to law, morals, good customs, public order
enjoyed the benefits from the contract. or public policy, contract itself is prohibited or
Example: tumatanggap ka ng renta sa para sa declared void by law.
bahay or apartment mo, since you are enjoying or - that’s why the contract is prohibited or declared
have a benefit from it you cannot questioned the as void but all the requisites for the validity of the
agreement na kase you already agreed by receiving contract are present.
the rent. - the object and the purpose of the object is
Contracts where both parties are incapacitated – prohibited by law.
the contract shall be unenforceable. - The principle of in pari delicto applies in void
ARTICLE 1404 contracts, while not so on inexistent contracts.
ARTICLE 1405 - In Pari Delicto – the law will leave you on where
ARTICLE 1406 you are.
ARTICLE 1407 - Void contract may thus produce legal effects, but
ARTICLE 1408 not inexistent contracts.
2. CONTRACTS WHICH ARE INEXISTENT refer to
those where one or some or all of those requisites
which are essential for the validity of a contract are
absolutely lacking, such as those which are
absolutely simulated contract or fictitious, or those DISTINGUISHED FROM VOIDABLE CONTRACTS
cause or object did not exist at the time of Void/ inexistent Voidable
transaction. contract
- the elements of the contract are lacking.
As a rule produces no Binding, unless
- example: absolutely simulated contracts or
effect even if it not annulled.
fictitious contracts.
set aside by a direct
action.
DISTINGUISHED FROM RESCISSIBLE CONTRACTS
Not susceptible of Susceptible
Void/ inexistent Rescissible Contracts ratification. ratification.
Contracts The action to declare The action for the
The defect is absolute The defect consists in nullity or inexistence annulment of a
lack in fact, or in law of lesion or damage to one of a contract is contract is
one or some of the of the contracting imprescriptible. prescriptible.
essential elements of parties or third person.. The defense of The defense of
the contract. inexistence or annullability is not
The nullity is based on The rescissible absolute nullity is available to third
law. character is based on available to third persons.
equity. persons whose
The action to declare The action for the interests are directly
nullity is rescission of a contract affected.
imprescriptible. is prescriptible.
The nullity or The rescissible
inexistence of a character of a contract
contract cannot as a may be assailed by third
rule be assailed by third persons.
persons.
 a. As a general rule, they produce no legal effects
whatsoever.
DISTINGUISHED FROM UNENFORCEABLE b. They are not susceptible of ratification.
CONTRACTS - they cannot be cured by the parties by reason

Void/ inexistent Unenforceable contracts of ratification.

contracts c. The right to set-up the defense of inexistence

or absolute nullity cannot be waiver or
There is in reality no There is actually a
renounced.
contracts at all. contract which cannot be
- pag pumunta ka at nagfile sa husgado ang
enforced by a court
kalaban at sinabi ng kalaban na may valid
action, unless it is
contract daw kayo, sasabihin mo walang
ratified.
contract because the contract is void and
Not susceptible of Susceptible of
inconsistent. (DEFENSE) and it cannot be
ratification. ratification.
waived or hindi mo pwedeng mawala yung
Can be assailed by The latter cannot be
Karapatan mo na iyon.
third persons whose assailed by third persons.
d. The action or defense for declaration of their
interest are directly
inexistence or absolute nullity is
affected.
imprescriptible.
- inexistent is imprescriptible. (Prescriptive
ARTICLE 1409 –
period, wala dito)
Contracts which are void or inexistent - The seven
e. The inexistence or absolute nullity of a contract
classes of void or inexistent contracts enumerated
cannot be invoked by a person whose interests
in Article 1409 have already been discussed in
are not directly affected.
previous chapters. It must be observed that Nos.
Effects – As far as inexistent contracts are
1,4,5,6 and 7 refer to contracts which are void,
concerned, THE SAID CONTRACTS CAN
while Nos. 2 and 3 refer to contracts which are
PRODUCE NO LEGAL EFFECT. However, in case
inexistent.
of void contracts where the nullity proceeds
from the illegality of the cause or object, A
Characteristics – In Tongoy v. Court of Appeals,
CERTAIN QUALIFICATION MUST BE MADE.
the Supreme Court opined that the following are
Under ARTICLE 1411 AND 1412, of the New
the most fundamental characteristics of void or
Civil Code nullity of contracts due to illegal
inexistent contracts:
cause or object, when executed will produce
the effect of barring action by a guilty to
 recover what he has already given under the contract and defense for action for declaration of
contract. inexistence or absolute nullity.
As a rule, void contracts have no legal effects - if there is no period of prescription in questioning
but if the nullity of the void contract is based on or in invoking the void contract.
illegality of cause or object certain qualification - if yung contract is void, a party can always bring a
must be made or we must qualify court action to declare it void or inexistent; and a
Example: Juan nagbebenta ng shabu kay Pedro. party against whom a void contract is sought to be
We all know that shabu is illegal and it shall not enforced, can always raise the defense of nullity,
be the object to enter a contract. Si Pedro despite the passage of time.
naman nagbayad kay Juan. Hindi alam ni Pedro - a void contract has no effect at all, therefore,
na si Juan ay isa pa lang undercover NBI agent. unnecessary to bring an action to declare it void.
Subsequently, Juan was aprehented by Pedro.
Si Juan hindi na niya mababawi yung shabu na ARTICLE 1411
ibinenta niya kay Pedro pero si Pedro ARTICLE 1412
mababawi niya pa yung money na ibinayad niya PRINCIPLE OF IN PARI DELICTO –
kay Juan. - when a contract consists of illegality and both
parties are at fault, the law refuses any remedy and
In Chavez v. PCGG, the Supreme Court declared leave them where they are. The law will not aid
that agreements containing terms and either party to an illegal agreement, it leaves them
conditions that are clearly contrary to the where they are. Dapat both party may fault.
Constitution and the laws are not subject to Example: SI Juan maraming utang at para
compromise. Thus, the contracts are null and maiwasan niya mga utang niya nag execute siya ng
void, even if there was partial performance. A simulated contract of sale to his brother. He
void contract cannot be ratified. transferred his properties to his brother. Ngayon,
- kahit may performance na if it is null and void, hinahabol siya ng mga napag-utangan niya kaso
it cannot be ratified. wala silang makuha kay Juan. After that, Juan now
- considering that the object of the contract is decided or was trying to get his property back kaso
considered illegal. ayaw ng kapatid niya. Juan decided na ifile yon sa
husgado but the court says na bahala na sila.
ARTICLE 1410 –
IMPRESCRIPTIBLY OF ACTION OR DEFENSE – This EFFECT IF ONLY ONE PARTY IS AT FAULT
principle is applicable on both action for
declaration of inexistence or absolute nullity of the
– If the contract has been executed, the guilty party - nung nagbayad ang minor para sa binibili niyang
is barred from recovering what he has given to the kotse, the payment by the minor can still be
other party by reason of the contract. recovered. He has no legal capacity
- sa drug illustration, si Juan hindi na niya
mababawi yung shabu na ibinenta niya kay Pedro d. Agreement or contract which is not illegal per se
pero si Pedro mababawi niya pa yung money na but is merely prohibited by law, and the prohibition
ibinayad niya kay Juan. is designed for the protection of the plaintiff.
- the contract is an illegal per se. For example is
yung contract ng mag asawa. If subsequently, it is
Exceptions – The principle of pari delicto is not void because it does not follow the requisites of
absolute, the following are the exceptions: the law, the other spouse can still recover the
a. Payment of usurious interest. property he obtained. PARI DELICTO will not be
- before pag magbabayad ka ng interest more than applied because donation per se is not illegal.
the rate imposed by the bangko sentral pwede mo
pa marecover. e. Payment of any amount in excess of the
- principal stays, kailangan mong bayaran. maximum price of any article or commodity fixed
by law.
b. Payment of money or delivery of property for an - pag meron tayong limitations of prices just like in
illegal purpose, where the party who paid or during the pandemic, may mga kunware na kung
delivered repudiates the legal contract before the magkano na naibebenta yung baboy.
purpose has been accomplished, or before any
damage has been cause to third person. f. Contract whereby a laborer undertakes to work
- Si X binayaran niya si Y para patayin niya si Z. longer than the maximum number of hours fixed
Subesequently nagbago yung decision ni X. by law.
General Rule: it can no longer be recovered (PARI - yung trabahador na sumobra sa 8 hour time of
DELICTO) work can recover or will be paid for the overtime.
Pero dito, it can still be recovered by X since the
performance has not yet been accomplish. g. Contract whereby a laborer accepts a wage
lower than the minimum wage fixed by law.
c. Payment of money or delivery of property by an
incapacitated person. The principal amount can still be recovered by the
debtor even though the interest rate is usurious
but the principal of the loan shall still be paid.
ARTICLE 1413
Recovery by Debtor of usurious interest – only the
interest beyond the ceiling of the usury law is
allowed to be recovered by the debtor. The
principal amount loaned are recoverable by the
creditor.
ARTICLE 1414 –
ARTICLE 1415 –
ARTICLE 1416 –
ARTICLE 1417 –
ARTICLE 1418 –
ARTICLE 1419 –
ARTICLE 1420 -