BM2304
VOIDABLE CONTRACTS
There are four (4) defective contracts under the Civil Code to wit:
1. Rescissible Contract
2. Voidable Contract
3. Unenforceable Contract
4. Void Contract
Each has different effects and grounds, making the contract defective.
DEFINITION OF VOIDABLE CONTRACTS
A voidable contract is a contract that is valid until annulled. It is a valid contract. Therefore, it has a binding
effect between the parties until the court annuls the same.
Article 1390. The following contracts are voidable or annullable, even though there may have been no damage
to the contracting parties:
1) Those where one of the parties is incapable of giving consent to a contract;
People who cannot give consent or are incapable of giving consent are the following:
a. Minors
b. Insane except those entered into during a lucid interval, which is valid
c. Demented persons
d. Deaf mutes who do not know how to write
e. Those who are in a state of drunkenness
f. Those under the hypnotic spell (hypnotized)
If any of them enter into a contract with persons capable of giving consent, the contract is voidable.
2) Those whose consent is vitiated by mistake, violence, intimidation, undue influence or fraud.
These contracts are binding unless a proper action in court annuls them. They are susceptible to ratification.
EFFECTS OF VOIDABLE CONTRACT
Annulment of the contract in court.
Once the contract is annulled, the contract ceases to exist. An annulment is a remedy granted by law for the
declaration of the inefficacy of a contract based on a defect in the consent of one of the contracting parties to
restore their original position in which they were before the contract was executed. Under annulment, the
parties are restored to their status before the contract is entered into.
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BM2304
Period for filing action of annulment of contracts
The remedy of annulment may be availed within four (4) years only. However, the 4-year period shall begin
from different reckoning points. Suppose the contract becomes voidable because of a defect in consent due
to intimidation, violence, or undue influence. In that case, the 4-year period shall begin from the time the
defect of the consent ceases. If the defect in consent is due to a mistake or fraud, it shall start from the time
of discovery. Moreover, if the contract to be annulled is entered into by minors or other incapacitated persons,
the 4-year period shall begin from the time the guardianship ceases.
People who can file an action for annulment of the contract
Only the injured party can file an action for annulment of the contract. In other words, only the victim, not the
party responsible for the defect, has the right to file the action.
In the same minor, even if they were affected, those who are not party to the contract cannot have the
contract annulled.
Contract being ratified.
Once the contract is ratified, the contract becomes valid and can no longer be annulled.
RATIFICATION
Ratification means that one voluntarily adopts or approves some defective or unauthorized act or contract,
which, without his subsequent consent, would not be binding on him. It effectively cleanses the contract from
all its defects since it was constituted. The contract becomes valid upon ratification, and action to annul the
contract is extinguished.
KINDS OF RATIFICATION
The two (2) ways that ratification may be made:
a. Express/Tacit – With knowledge of the reason which renders the contract voidable and such
reason having ceased, the person who has a right to invoke it should execute an act which
necessarily implies an intention to waive his right
b. Implied – It may be in different forms, such as silence or acquiescence, acts showing adoption or
approval of the contract, or acceptance and retention of benefits flowing from the contract.
Requisites that must be present for implied ratification to exist:
1. There must be knowledge of the reason which renders the contract voidable;
2. Such reason must have ceased; and
3. The injured party must have executed an act that implied an intention to waive his right.
EFFECTS OF RATIFICATION
Ratification cleanses the contract from all its defects from the moment it was constituted. Therefore, when
ratified, it would be as if the contract is valid from the start.
References
De Leon, H. S. & De Leon Jr., H. M. (2014). The law on obligations and contracts. Philippines: Rex Book Store.
Paras, E. (2016). Civil Code of the Philippines annotated prescription (Volume IV) obligations and contracts.Rex Book Store.
Cagurangan, T. (2022). Essentials in Law on Obligations and Contracts
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