Unenforceable Contracts

UNENFORCEABLE CONTRACTS
Are those which cannot be enforced by a proper action in court, unless they
are ratified, because, either they are entered into without or in excess of authority
or they do not comply with the statute of frauds or both of the contracting parties
do not possess the required legal capacity.
As regards to the degree of defectiveness, they occupy an intermediate

ground between voidable and void contracts.
- What is, therefore, affected by the defect of the contract or agreement is not
its validity, but its enforceability
- RATIFICATION now used to designate the act of validating any kind of
defective contract (in old law- confirmation)
GENERAL CLASSES OF UNENFORCEABLE CONTRACTS (ART 1403)

1. Those contracts entered into in the name of another person by one without
authority or in excess of his authority
- In this kind of contract, there is absolutely no consent in so far as the
person in whose name the contract is entered into is concerned
- No legal representation
- If duly authorized, he must act within the scope of his powers
- Can be ratified expressly or impliedly by the person in whose behalf it has
executed before it is revoked by the other contracting party
2. Those which do not comply with the Statute of Frauds

- In this contract, there is no writing, note or memorandum by which the
contract maybe proved
- Statute of Frauds was enacted for the purpose of preventing frauds. It
simply provides the method by which the contracts enumerated therein
may be proved
- Statute of Frauds is applicable only to those contracts which are executory
and not those which have been consummated either totally or partially
SIX CLASSES OF CONTRACTS COVERED BY STATUTE OF FRAUDS

A. An agreement that is by terms is not to be performed within a year from
the making thereof
B. A special promise to answer for the debt, default or miscarriage of another
- The promise must be collateral not independent or original
C. An agreement made in consideration of marriage other than a mutual
promise to marry
D. An agreement for the sale of goods, chattels or things in action, at a price
not less than five hundred (P500) pesos
E. An agreement for the leasing of real property for a longer period than one
year, or for the sale of real property of an interest therein
F. A representation as to the credit of a third person
- Contracts infringing the Statute of Frauds may be ratified either 1) by the

failure to object to the presentation of oral evidence to prove the same ; 2) by
the acceptance of benefits under them (ART 1405)
3. Those where both contracting parties are legally incapacitated
- Consent is absolutely vitiated by the legal incapacity of both of the
contracting parties.
- If only one of the parties is incapacitated, the contract is voidable
CHARACTERISTICS OF UNENFORCEABLE CONTRACTS

1. They cannot be enforced by a proper action in court
2. They are susceptible of ratification
3. They cannot be assailed by third persons
DISTINGUISHED FROM RECISSIBLE CONTRACTS

1. An unenforceable contract cannot be enforced by a proper action in court,
while a recissible contract can be enforced, unless it is rescinded
2. The causes for the unenforceable character of the former are different from
the causes for the rescissible character of the latter
3. The former is susceptible of ratification, while the latter is not
4. The former cannot be assailed by third persons, while the latter may be
assailed by third persons who are prejudiced
DISTINGUISHED FROM VOIDABLE CONTRACTS

1. An unenforceable contracts cannot be enforced by a proper action in court,
while a voidable contract can be enforced, unless it is annulled.
2. The causes for the unenforceable character of the former are different from
the causes for the voidable character of the latter.
_____________________________________________________________________________
PROVISIONS
ART. 1403 The following contracts are unenforceable, unless they are ratified:
1. 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;
2. Those that do not comply with the Statue of Frauds as set forth in this
number. In the following cases an agreement hereafter made shall be
unenforceable by action, unless the same, or some note or memorandum
thereof, be in writing, subscribed by the party charged, or by his agent;
evidence, therefore, of the agreement cannot be received without the writing,
or a secondary evidence of its contents:
a. An agreement that by its terms is not to be performed within a year
from the making thereof;
b. A special promise to answer for the debt, default, or miscarriage of
another,
c. An agreement made in consideration of marriage, other than a
mutual promise to marry;
d. An agreement for the sale of goods, chattels or things in action, at a
price not less than five hundred pesos unless the buyer accept and
receive part of such goods and chattels, or the evidences, or some
of them, os such things in action, or pay at the time some part of
the purchase money, but when a sale is made by auction and entry
is made by the auctioneer in his sales book, at the time of the sale,
of the amount and kind of property sold, terms of sale, price, names
of the purchasers and person on whose account the sale is made, it
is sufficient memorandum;
e. An agreement for the leasing for a longer period than one year, or
for the sale of real property or of an interest therein;
f. A representation as to the credit of a third person
3. Those where both parties are incapable of giving consent to contract
ART. 1404 Unauthorized contracts are governed by Article 1317 and the principles
of agency in Title X of this Book.
ART. 1405 Contracts infringing the Statute of Frauds, referred to in No. 2 of Article
1403, are ratified by the failure to object to the presentation of oral evidence to
prove the same, or by the acceptance of benefits under them
ART. 1406 When a contract is enforceable under the Statute of Frauds and a public
document is necessary for its registration in the Registry of Deeds, the parties may
avail themselves of the right under Article 1357.
ART. 1407 In a contract where both parties are incapable of giving consent, express
or implied ratification by the parent, or guardian, as the case maybe, of one of the
contracting parties shall give the same effects as if only one of them were
incapacitated.
If ratification is made by the parents or guardians as the case maybe, of both
contracting parties, the contract shall be validated from the inception.
ART. 1408 Unenforceable contracts cannot be assailed by third persons.

Unenforceable Contracts - Jurado

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As regards to the degree of defectiveness, they occupy an intermediate

GENERAL CLASSES OF UNENFORCEABLE CONTRACTS (ART 1403)

2. Those which do not comply with the Statute of Frauds

SIX CLASSES OF CONTRACTS COVERED BY STATUTE OF FRAUDS

- Contracts infringing the Statute of Frauds may be ratified either 1) by the

CHARACTERISTICS OF UNENFORCEABLE CONTRACTS

DISTINGUISHED FROM RECISSIBLE CONTRACTS

DISTINGUISHED FROM VOIDABLE CONTRACTS

ART. 1408 Unenforceable contracts cannot be assailed by third persons.

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