1403 Unenforceable Contracts

UNENFORCEABLE CONTRACTS  Unenforceable contracts are those that cannot be enforced by court action, upon the timely objection of a party. The following contracts are unenforceable, unless they are ratified (1403): (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; a. No authority conferred b. In excess of authority conferred Unauthorized contracts are additionally governed by Article 1317 and the principles of agency in Title X of Book IV of the Code (Art. 1404, Civil Code) Art. 1317. No one may contract in the name of another without being authorized by the latter, or unless he has by law a right to represent him (2) Those that do not comply with the Statute 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, and 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. These are: (2a) An agreement that by its terms is not to be performed within a year from the making thereof; (2b) A special promise to answer for the debt, default, or miscarriage of another; NOTE: This does not refer to the original or independent promise of the debtor to his own creditor. It refers rather to a collateral promise. (2c) An agreement made in consideration of marriage, other than a mutual promise to marry;

(2d) 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 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 a sufficient memorandum;

(2e) An agreement of the leasing for a longer period than one year, or for the sale of real property or of an interest therein;

(2f) A representation as to the credit of a third person.

Some Basic and Fundamental Principles Concerning the Statue of Frauds (General Rules of Application): 1) The contracts/agreements under the Statute of Frauds require that the same be evidenced by some note, memorandum or writing, subscribed by the party charged or by his agent, otherwise, the said contracts shall be unenforceable. 2)The Statute of Frauds applies only to executory contracts (contracts where no performance has yet been made) and not partially or completely executed (consummated contracts). 3)The Statute of Frauds cannot apply if the action is neither for damages because of the violation of an agreement nor for the specific performance of said agreement. 4)The Statute of Frauds is exclusive, that is, it applies only to the agreements or contracts enumerated herein. 5)The defense of the Statute of Frauds may be waived. 6)The Statute of Frauds is a personal defense, that is, a contract infringing it cannot be assailed by third persons. 7)Contracts infringing the Statutes of Frauds are not void; they are merely unenforceable.

8)The Statute of Frauds is a Rule of Exclusion, i.e., oral evidence might be relevant to the agreements enumerated therein and might therefore be admissible were it not for the fact that the later or the statute excludes said oral evidence. 9)The Statute of Frauds does not determine the credibility or weight of evidence. It merely concerns itself with the admissibility thereof. 10)The Statute of Frauds does not apply if it is claimed that the contract does not express the true agreement of the parties. As long as the true or real agreement is not covered by the Statute of Frauds, it is provable by oral evidence.

(3) Those where both parties are incapable of giving consent to a contract.