Essay Flashcards

Gina, a landowner of a 12-hectare rice farm, is pressed by creditors and agrees to sell the farm to her neighbor Trese for PHP 1,100,000, even though its fair market value is about PHP 6,000,000. The deed is signed and notarized; Trese pays and takes possession. A few days after the transfer, Gina discovers the sale and seeks rescission on the ground of lesion (injury) to her due to the significantly undervalued price. (a) Identify the doctrine that allows rescission in these circumstances and who has standing to sue for rescission. (b) Distinguish rescission for lesion from a voidable contract arising from lack of free consent. (c) If, before a court rules, Trese sells the farm in good faith to a third party for PHP 1,400,000, what is the impact on Gina’s right to rescind and on the third party’s rights?