If one party is incapacitated courts may allow

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Unformatted text preview: any of the parties before purpose is accomplished or damage is caused to 3rd parties c. Court believes that public interest will be served by allowing recovery (discretionary upon the court ) – based on remorse; illegality is accomplished when parties entered into contract; before it takes effect – party w/c is remorseful prevents it WHERE LAWS ARE ISSUED TO PROTECT CERTAIN SECTORS: CONSUMER PROTECTION, LABOR, USURY LAW a. Consumer protection – if price of commodity is determined by statute, any person paying an amount in excess of the maximum price allowed may recover such excess b. Labor – if law sets the minimum wage for laborers, any laborer who agreed to receive less may still be entitled to recover the deficiency; if law set max working hours and laborer who undertakes to work longer may demand additional compensation c. Interest paid in excess of the interest allowed by the usury law may be recovered by debtor with interest from date of payment EFFECTS OF ILLEGAL CONTRACTS a. If one party is incapacitated, courts may allow recovery of money, property delivered by incapacitated person in the interest of justice; pari delicto cannot apply because an Page 128 of 297 Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 incapacitated person does not know what he is entering into; unable to understand the consequences of his own action b. If agreement is not illegal per se but merely prohibited and prohibition is designated for the protection of the plaintiff – may recover what he has paid or delivered by virtue of public policy MUTUAL RESTITUTION IN VOID CONTRACTS • GENERAL RULE: parties should return to each other what they have given by virtue of the void contract in case • Where nullity arose from defect in essential elements a. return object of contract and fruits b. return price plus interest • EXCEPTION: No recovery can be had in cases where nullity of contract arose from illegality of contract where parties are in pari delicto; except: a. incapacitated – not obl...
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