CONTRACTS

1) As an action based on the binding force of a written contract, therefore, rescission

(resolution) under Article 1191 prescribes in 10 years. Ten years is the period of
prescription of actions based on a written contract under Article 1144.
2) Voidable contracts are those contracts that deemed valid until annulled. The defects in
these contracts are due to vices of consent or lack of legal capacity of one of the
contracting parties.
3) X is estopped from seeking the annulment of the contract anymore because he is the one
who committed the fraud. The law will only entertain those who comes to court with clean
hands.
4) An unenforceable contract or transaction is one that is valid, but which the court will not
enforce. Unenforceable is usually used in contradistinction to void (or void ab initio) and
voidable. If the parties perform the agreement, it will be valid, but the court will not
compel them if they do not. These are :
a) Those entered into in the name of another person by one, who has been given no
authority or legal representation or who has acted beyond his powers;
b) Those that do not comply with the Statute of Frauds

5)

c) Those where both parties are incapable of giving consent to a contract.

a) Yes. By law 1 a contract of sale is perfected at the moment there is a meeting of minds
upon the thing which is the object of the contract and upon the price. It is a consensual
contract which is perfected by mere consent. Once perfected, the contract is generally
binding in whatever form it may have been entered into provided the three (3)
essential requisites for its validity prescribed the law. These requisites are consent,
object and consideration..
b) B may invoke the Statute of Frauds which substantially states that contracts which for
its object is sale of real property must be in writing. Yes, the case will prosper because
their transaction is within the ambit of the Statute of Frauds.
c) Under the law, if B already accepted a downpayment, the Statute of Frauds provision
will no longer apply and the parties could compel each other to perform their respective
obligations, even if the agreement was merely oral.

6.) The compromise agreement between the parties is not valid because properties owned by
the State are beyond the commerce of man.
7.) The contract entered into by A, B, and C with the NLRC is invalid for the reason that the
cause or consideration is contrary to public policy.
8.) As action is valid because under the law, the contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem convenient, provided they
are not contrary to law, morals, good customs, public order, or public policy. However, the
courts may declare the contract invalid if it finds the interest rate stipulated in the contract
as unconscionable or excessive.
9.) Requisites of a stipulation pour autrui: (1) there is a stipulation in favor of a third person;
(2) the stipulation is a part, not the whole, of the contract; (3) the contracting parties
clearly and deliberately conferred a favor to the third person the favor is not an incidental
benefit; (4) the favor is unconditional and uncompensated; (5) the third person

communicated his or her acceptance of the favor before its revocation; and (6) the
contracting parties do not represent, or are not authorized by, the third party.
10.) The contract between A and B is not binding for the reason that the object of the
contract, which is to replace a public officer without going through the legal process of
election, is patently illegal.
11.) There was no meeting of the minds between A and B. As a general rule, there is meeting
of the minds when there is consent as manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to constitute the contract. However, the
instant case falls squarely within the purview of the exception which states that
acceptance made by letter or telegram does not bind the offeror except from the time it
came to his knowledge.
12.) There is no meeting of the minds because one of the essential requisites of a valid
contract is lacking to wit: a valid object. In the instant case, they could not agree on the
size of the land.
13.) The action of the heirs of A will not prosper because it is a fundamental rule in contracts
that although the cause or consideration is not expressly stated, yet it is presumed that it
exists and the same is lawful. Whoever alleges want of consideration, or that it does not
exist or that it is unlawful shall have the burden of proof to establish it.
14.) Y can file an action in court asking for the annulment of the contract of sale of his
property to X with the argument that his consent was procured through fraud on the part
of X when X misrepresented that the contract of sale of the parcel of land of Y to X was
only for security on the loan taken out by Y. Under the law, there is fraud when, through
insidious words or machinations of one of the contracting parties, the other is induced to
enter into a contract which, without them, he would not have agreed to.
15.) X cannot ask for the reformation of the contract anymore, Under the law, when one of
the parties has brought an action to enforce the instrument, he cannot subsequently ask
for its reformation.
16.)

Art. 1381. The following contracts are rescissible:

a) Those which are entered into by guardians whenever the wards whom they represent
suffer lesion by more than one-fourth of the value of the things which are the object
thereof;
b) Those agreed upon in representation of absentees, if the latter suffer the lesion stated
in the preceding number;
c) Those undertaken in fraud of creditors when the latter cannot in any other manner
collect the claims due them;
d) Those which refer to things under litigation if they have been entered into by the
defendant without the knowledge and approval of the litigants or of competent judicial
authority;
e) All other contracts specially declared by law to be subject to rescission. (1291a)
Art. 1382. Payments made in a state of insolvency for obligations to whose fulfillment the
debtor could not be compelled at the time they were effected, are also rescissible.
17.) Failure to eject the tenants cannot be a ground to rescind the contract. The law
substantially provides that no rescission shall take place when the things which are the
objects of the contract are legally in the hands of third persons who did not act in bad
faith. In the instant case, the remedy is to ask for indemnity for damages from the person
who caused the loss.
18.) Under the law,accion pauliana is an action to rescind contracts in fraud of creditors, and
the requisites are:

a) Defendant must be indebted to plaintiff

b) The fraudulent act performed by the debtor subsequent to the contract gives advantage
to another
c) The creditor is prejudiced by such act.
d) The creditor must have pursued all properties of the debtor subject to execution
e) The creditor has no other legal remedy.
19.) Z cannot institute an action for rescission of the contract of donation of X to Y anymore
because the liability of X to Z was incurred one year after the donation. Even under the
Insolvency Law, any conveyance or transfer of property may be questioned only when only
one month has elapsed between the alienation of the property of the debtor and the filing
of insolvency.
20.) The defense of B is proper. The law provides that the action upon a written contract
should be brought within ten years from the time the right of action accrues. The suit was
filed 25 years after the contract was entered into by A and B. Therefore, the action was
filed out of time.