UNENFORCEABLE

CONTRACT
Group 3
UNENFORCEABLE CONTRACT
ART. 1403. The following contracts are unenforceable unless
they are ratified:
(1) Those entered into 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 Statute of Frauds as set
forth in this number. In the following cases, an agreement
here after made shall be unenforceable by action, unless the
same, or some note or memorandum thereof, be in writing,
and subscribed by the party charged, or by his agent;
evidence, thereof 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, of 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 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 persons 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 a contract.
MEANING OF UNENFORCEABLE CONTRACTS.
▪ Unenforceable contracts are those that cannot be
enforced in court or sued upon by reason of certain
defects provided by law until and unless they are
ratified according to law.
BINDING FORCE OF UNENFORCEABLE
CONTRACTS.
▪ While rescissible and voidable contracts are valid
and enforceable unless they are rescinded or
annulled, unenforceable contracts, although valid,
are unenforceable in court unless they are cured or
ratified. Once ratified, these contracts may then be
enforceable.
MEANING OF UNAUTHORIZED CONTRACTS.
▪ Unauthorized contracts are 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.
 STATUTE OF FRAUDS.
▪ (1) History. – In 1677, the English Parliament enacted a
statute to counter the evil practice of giving false testimony
in actions founded on certain kinds of contracts. It
attempted to deal with the prevalence of successful perjury
by making specified contracts unenforceable unless
evidenced in a prescribed manner-in general, by a written
memorandum signed by the party against whom liability
under the contract was sought to be enforced.
▪ Since then, the statute has been called Statute of Frauds. It
has been adopted, in more or less modified form, in the
Philippines.
▪ (2) Purpose. – The Statute of Frauds has been enacted not
only to prevent fraud but also to guard against the mistakes
of honest men by requiring that certain agreements
specified (Art. 1403, that are susceptible to fraud must be in
writing; otherwise, they are unenforceable by action in
court. Unless they be in writing, there may be no palpable
evidence of the intention of the contracting parties and
court must perforce rely upon no other evidence than the
mere recollection or memory of witnesses, which is many
times faulty and unreliable.
▪ (3) Application. – Some fundamental principles relative to
the Statute of Frauds are given hereunder.
▪ (a) The Statute of Frauds is not applicable in actions which are
neither for damages because of a violation of a contract, nor for the
specific performance thereof. Thus, the purchaser of a parcel of
land may prove the oral contract of sale in a a subsequent action
for ejectment against a third person who is in possession of the
property.
▪ (b) It is applicable only to executory contracts (where no
performance has as yet been made by both parties) and not to
contracts which are totally (consummated) or partially performed.
The reason is that partial performance, like the writing, furnishes
reliable evidence of the intention of the parties or the existence of
the contract.
▪ A contrary rule would result in injustice or unfairness to the
party who has performed his obligation (see Art. 1405) for
it would enable the other to keep the benefits already
derived by him from the transaction, and at the same time
evade the obligations assumed or contracted by him
thereby. Furthermore, these contracts cannot be
categorized as unenforceable where the parties
themselves have enforced them with partial execution or
by accepting benefits thereunder.
▪ (c) It is not-applicable where the contract is admitted
expressly, or impliedly by the failure to deny specifically its
existence, no further evidence thereof being required in
such case.
▪ (d) it is applicable only to the agreements enumerated
therein. Thus, an agreement creating an easement of
right of way is not covered by the Statute therein.
▪ (e) It is not applicable where a writing does not
express the true agreement of the parties. This is so
because the Statute cannot be used as a shield for
fraud or as a means for the perpetration of it.
▪ (f) It does not declare that contracts infringing it are
void but merely unenforceable. (Art. 1403, No. 2,
opening clause.)
▪ (g) The defense of the Statute of Frauds may be
waived. (Art. 1405.)
▪ (h) The defense of the Statute of Frauds is personal to
the parties and cannot be interposed by strangers to
the contract. (Art. 1408.)
AGREEMENTS WITHIN THE SCOPE OF THE
STATUE OF FRAUDS.
1. An agreement that by its terms is not to be performed
within a year from the making thereof;
2. A special promise to answer for the debt, default, or
miscarriage of another;
3.An agreement made in consideration of marriage, other
than a mutual promise to marry;
4. An agreement for the sale of goods, chattels, or things in
action, at a price not less than 500 pesos.
5. An agreement for the leasing for a longer period than
one year, or for the sale of real property or of an interest
therein;
6.Agreement for the sale of real property or of an interest
herein-
7.A representation as to the credit of a third person.
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, ARTICLE 1403,
ARE RETIFIED BY THE FAILURE TO OBJECT TO THE
REPRESENTATION OF ORAL EVIDENCE TP PROVE
THE SAME, OR BY THE ACCEPTANCE OF BENEFITS
UNDER THEM.
 MODES OF RATIFICATION UNDER THE
STATUTE.
▪ The ratification of contracts infringing the Statute of Frauds
may be effected in two ways:
▪ Sec. 4. Secondary evidence when original is lost or
destroyed. – When the original writing has been lost or
destroyed, or cannot be produced in court, upon proof of its
execution and loss or destruction, or unavailability, its
contents may be proved by a copy, or by a recital of its
contents in some authentic document or by the recollection
of witnesses. (Rule 130, Rules of Court.)
▪ (1) by failure to object to the presentation of oral
evidence to prove the contract. The failure to so
objects amounts to a waiver and makes the contract
as binding as if it has been reduced to writing. The
requirement of a written form is for evidential
purpose only; and
▪ (2) by acceptance of benefits under the contract. In
this case, the contract is no longer executory and,
therefore, the Statute does not apply. This rule is
based upon the familiar principle that one who has
enjoyed the benefits of a transaction should not be
allowed to repudiate its burdens.
▪ 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. (n )
RIGHT OF A PARTY WHERE CONTRACT
ENFORCEABLE.
▪ For the application of this provision, there must be a valid
agreement and the agreement must not infringe the Statute
of Frauds.
▪ (1) Accordingly, a party to an oral sale of real property
cannot compel the other to put the contract in a public
document for purposes of registration because it is
unenforceable (Art. 1403[2, e].) unless, of course, it has
been ratified. (Art. 1405.)
▪ (2) Similarly, the right of one party to have the other
execute a public document is not available in a donation of
realty when it is in a private instrument because the
donation is void. (Art. 1356.)
▪ 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 may be, of one of the
contracting parties shall give the contract the same effect
as of only one of them were incapacitated. In ratification is
made by the parents or guardians, as the case maybe, both
contracting parties, the contract shall be validated from the
inception.
WHEN UNFORGEABLE CONTRACT BECOMES
A VOIDABLE CONTRACT
▪ Where both parties to a contract are incapable of
giving consent, the contract is unenforceable. (Art.
1403(31) However, if the parent or guardian, as the
case may be, of either party, or if one of the parties
after attaining or regaining capacity, ratifies the
contract, it becomes voidable.
Members:
Rina Gagarin
Angela Mae Bungalbal
Rosedale Romero
Noime Calambacan
Grashelle Bade
Alden Octaviano
Claire Anne Deco
Ashley Millamina