Page 57 - Obligations & Contracts Module 1-2

*KINDS OF DEFECTIVE CONTRACTS:

1. RESCISSIBLE CONTRACTS- defective because it creates economic damage

Requisites:

a. Contract must be rescissible

(1) Under art 1381:

i. Contracts entered into by persons exercising fiduciary capacity

(a) Entered into by guardian whenever ward suffers damage by more than 1/4 of

value of object

(b) Agreed upon in representation of absentees, if absentee suffers lesion by

more than ¼ of value of property

(c) Contracts where rescission is based on fraud committed on creditor

(accion pauliana)

(d) Objects of litigation; contract entered into by defendant w/o knowledge or

approval of litigants or judicial authority

(e) Payment by an insolvent – on debts w/c are not yet due; prejudices claim of

others

(f) Provided for by law - art 1526, 1534, 1538, 1539, 1542, 1556, 1560, 1567

1659

(2) Under art 1382 - Payments made in a state of insolvency

b. Plaintiff has no other means to obtain reparation

b. Plaintiff must be able to return whatever he may be obliged to return due to rescission

c. The things must not have been passed to 3rd parties who did not act in bad faith

d. It must be made within the prescribed period