Rescissible Contracts

Which of the following is a characteristic of rescissible contracts under the Civil Code?

• inherently void from the beginning

• valid but may be rescinded due to certain causes

• cannot be annulled or rescinded once entered into

• only valid if approved by a court

Which of the following best describes the effect of the rescission of a contract under the Civil Code?

• The contract is considered never to have existed

• The rights of the parties remain unchanged

• The parties are burdened with additional liability

• The contract remains valid but is subject to cancellation

The right to rescind a contract can be exercised by any interested person, not necessarily a party to the contract

• True
• False

Rescission is the remedy used to annul or nullify contracts that are inherently void from the outset

• True
• False

According to Articles 1383 and 1384, what must be done before rescinding a contract?

• The rescinding party must notify the other party formally

• The rescinding party must first seek judicial authority

• No prior action is required; rescission is automatic

• The contract must be fulfilled entirely

The law allows rescission of a contract when one party has entered into it through mistake, provided the mistake is significant

• True
• False

Under Article 1389, how long is the period within which the injured party can rescind a contract due to fraud or mistake?

• 1 year from the time the party learns of the fraud or mistake

• 4 years from the date of the contract

• No specific period; rescission can be filed anytime

• 10 years from the date of the contract

Rescission has only a prospective effect and does not affect rights already finalized or executed

• True
• False

Who has the right to rescind a contract under Article 1381?

• Only the party in real interest.

• Any interested person or the injured party

• The government

• Only the courts

The article provides that the rescission of a contract does not prejudice third parties who acquired rights in good faith

• True
• False