OBLICON M8

Question 1

It is a remedy to conform to the real intention of the parties due to mistake, fraud, inequitable
conduct, accident (NCC, Art. 1359).

Answer 1

Reformation of Instruments

Question 2

is a remedy in equity by means of which a written instrument is made or construed so as to express or confirm the real intention of the parties when some error or mistake is committed. (Pineda, 2009)

Answer 2

Reformation

Question 3

Requisites in reformation of instruments

Answer 3

1. Meeting of the minds on the contract;
2. True intention is not express in the contract;
3. By reason;
   a. Mistake
   b. Accident
   c. Relative simulation
   d. Fraud
   e. Inequitable conduct
4. Strong, clear, and convincing proof of mistake, accident, relative simulation, fraud, or/and inequitable conduct

Question 4

There is meeting of the minds between the parties as to the object, cause of the contract

Answer 4

Reformation

Question 5

There is no meeting of the minds. Consent is vitiated

Answer 5

Annulment

Question 6

The instrument failed to express the true intention of the parties due to mistake, fraud, inequitable conduct or accident.

Answer 6

Reformation

Question 7

The meeting of the minds was prevented by reason of mistake, fraud, inequitable conduct or accident perpetrated by one party against the other

Answer 7

Annulment

Question 8

The purpose of (____) is to establish the true agreement of the parties and not to create a new one

Answer 8

Reformation

Question 9

The purpose of (____) is to render inefficacious the contract in question.

Answer 9

Annulment

Question 10

When there is no meeting of the minds, the proper remedy is

Answer 10

annulment

Question 11

It relates back to, and takes effect from the time of its original execution, especially as between the parties (Tolentino, 2002).

Answer 11

Operation and effect of reformation

Question 12

may be availed of judicially or extrajudicially.

Answer 12

Reformation of instruments

Question 13

When the (___) of the parties causes the failure of the instrument to disclose their agreement

Answer 13

Mutual Mistake

Question 14

Requisites of Mutual Mistake

Answer 14

1. The mistake should be of fact;
2. The same should be proved by clear and convincing evidence;
3. The mistake must be common to both parties to the instrument

Question 15

In such a way that the instrument does not show
their true intention, the party mistaken or defrauded may ask for the reformation of the instrument (NCC, Art. 1362);

Answer 15

Mistake on one party and fraud on the other.

Question 16

When one party was mistaken and the other knew or believed that the instrument did not state their real agreement, but concealed that fact from the former (NCC, Art. 1363);

Answer 16

Mistake on one party and concealment on the other.

Question 17

When through the ignorance, lack of skill, negligence or bad faith on the part of the person drafting the instrument or of the clerk or typist, the instrument does not express the true intention of the parties (NCC, Art. 1364);

Answer 17

Ignorance, lack of skill, negligence or bad faith.

Question 18

If the parties agree upon the mortgage or pledge of real or personal property,
but the instrument states that the property is sold absolutely or with a right of repurchase (NCC, Art. 1365).

Answer 18

Right of repurchase.

Question 19

Reformation of instruments; when not allowed

Answer 19

1. Simple, unconditional donations inter vivos
2. Wills
3. When the agreement is void
4. When an action to enforce the instrument is filed (estoppel)
5. If mistake, fraud, inequitable conduct, or accident has prevented the meeting of the minds of the parties
6. When the contract is enforceable because of failure to comply with the statute of frauds

Question 20

Prescriptive period in reformation of instruments

Answer 20

10 years from the date of the execution of the instrument

Question 21

The prescriptive period within which to bring an action to set aside or reform a simulated or fictitious written deed of pacto de retro sale starts only when the alleged vendees made known their intention by overt acts not to abide by the true agreement, and not from the date of execution of contract (Conde v. Cuenca, G.R. No. L643, 1956).

Question 22

Persons who can ask for the reformation of the instrument

Answer 22

It may be ordered at the instance of:

1. Either party or his successors in interest (if the mistake is mutual);
2. Upon the petition of the third person;
3. His heirs and assigns.

Question 23

Characteristics of rescissible contract

Answer 23

1. It has all the elements of a valid contract;
2. It has a defect consisting of an injury (generally in the form of economic damage or lesion, fraud, and alienation of the property) to one of the contracting parties or to a third person;
3. It is valid and effective until rescinded;
4. It can only be attacked directly
5. It is susceptible of convalidation only by prescription

Question 24

are those where consent is vitiated either by the incapacity of one of the contracting parties or by mistake, violence, intimidation, undue influence or fraud. These contracts are binding, unless they are annulled by a proper action in court. It is susceptible of ratification (NCC, Art. 1390).

Answer 24

Voidable contracts

Question 25

may be had even if there be no damage to the contracting parties.

Answer 25

Annulment

Question 26

Characteristics of a voidable contract

Answer 26

1. Effective until set aside 2. Can be (the word should be "ratified") 3. Can be assailed only by the party whose consent was defective or his heirs or assigns.

Question 27

Third persons may assail if they are prejudiced.

Question 28

Characteristics of unenforceable contract

Answer 28

1. It cannot be enforced by proper action in court; 2. It may be ratified; 3. It cannot be assailed by third person; 4. May only be ratified as a way of defense; not by direct action; 5. The defect of an unenforceable contract is of a permanent nature and it will exist as long as the contract is not duly ratified. The mere lapse of time cannot give efficacy to the contract.

Question 29

An unenforceable contract is valid although it produces no legal effect

Question 30

Kinds of unenforceable contracts

Answer 30

The following are unenforceable unless they are ratified: 1. Those who entered into the name of another person who has been given no legal representation or acted beyond his powers, "Unauthorized contracts"; 2. Those that do not comply with the statute of frauds; 3. Those where both parties are incapable in giving consent to contract.

Question 31

The term "Statute of Frauds" [Article 1403, (2)] is descriptive of statutes which require certain classes of contracts to be in writing. It requires certain contracts enumerated therein to be evidenced by some note or memorandum subscribed by the party charged or by his agent in order to be enforceable. The Statute does not deprive the parties of the right to contract with respect to the matters therein involved, but merely regulates the formalities of the contract necessary to render it enforceable. Evidence of the agreement cannot be received without the writing or a secondary evidence of its contents (Swedish Match, AB v. CA, G.R. No. 128120, October 20, 2004).

Answer 31

Statute of Frauds

Question 32

The Statute of Frauds applies only to executory contracts, not to those that are partially or completely fulfilled. Where a contract of sale is alleged to be consummated, it matters not that neither the receipt for the consideration nor the sale itself was in writing. Oral evidence of the alleged consummated sale is not forbidden by the Statute of Frauds and may not be excluded in court (Victoriano v. CA, G.R. No. 87550, February 11, 1991).

Answer 32

Statute of frauds

Question 33

It is to prevent fraud and perjury in the enforcement of obligations depending for their evidence on the unassisted memory of witnesses, by requiring certain enumerated contracts and transactions to be evidenced by a writing signed by the party to be charged (Swedish Match, AB v. CA, G.R. No. 128120, October 20, 2004).

Answer 33

Statute of frauds

Question 34

The statute of Frauds simply provides the method by which the contracts enumerated therein may be proved. It does not declare the said contracts are invalid because they are not reduced to writing. A contract exists and is valid even though it is not clothed with the necessary form (De Leon, 2010).

Answer 34

statute of Frauds

Question 35

In general, void and inexistent contracts may be defined as those which lack absolutely either in fact and or in law one or some or all of those elements which are essential for its validity. Void contracts are those which have no force and effect from the beginning and which cannot be ratified or validated by lapse of time (Pineda, 2000).

Answer 35

VOID AND INEXISTENT CONTRACTS

Question 36

is applicable in cases of void contracts but not in inexistent contracts. Consequently, void contracts may produce effects (NCC, Arts. 1411-1412), but inexistent contracts do not produce any effect whatsoever (Jurado, 2009).

Answer 36

The principle of in pari delicto

Question 37

Characteristics of void/inexistent contracts

Answer 37

1. It produces no legal force and effect; 2. It cannot be cured or validated by prescription or ratification; 3. The right to setup defense of illegality cannot be waived; 4. The defense of illegality of contract is not available to third persons whose interests are not directly affected; 5. Cannot give rise to a valid contract; 6. Can be assailed either directly or collaterally; 7. Parties to a void agreement cannot expect the aid of law (in pa ri delicto)

Question 38

In case of a divisible contract, if the illegal terms can be separated from the legal ones, the latter may be enforced. (Art. 1420)