Rescissible contracts – Contracts Law

1. Concept

Contracts validly agreed upon may be rescinded in the cases established by law. (Article 1380, Civil Code)

The term “rescission” is found in:

1) Article 1191 of the Civil Code, the general provision on rescission of reciprocal obligations;

2) Article 1659, which authorizes rescission as an alternative remedy, insofar as the rights and obligations of the lessor and the lessee in contracts of lease are concerned; and

3) Article 1380 with regard to the rescission of contracts. (Pryce Corporation v. PAGCOR, G.R. No. 157480, 06 May 2005)

a. Rescissible contracts

The following contracts are rescissible:

1) 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;

2) Those agreed upon in representation of absentees, if the latter suffer the lesion stated in the preceding number;

3) Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them;

4) Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the li...