CHAPTER 7 - VOIDABLE CONTRACTS

• Voidable Contract


  When one of the parties is incapable of giving consent to a contract
• Voidable Contract


  Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud
• Annulment


  remedy provided by law for reason of public interest for the declaration of the inefficacy of a contrast based on a defect or vice in the consent of one of the contracting parties
• The action for annulment shall be brought within four years


  For intimidation, violence, or undue influence - from the time the defect of the consent ceases
• The action for annulment shall be brought within four years


  For mistake or fraud - from the time of discovery of the same
• The action for annulment shall be brought within four years


  For incapacitated people - from the time of the guardianship ceases
• Ratification


  extinguishes the action to annul a voidable contract
• Ratification


  one voluntarily adopts or approves some defective or unauthorized act or contract which, without his subsequent approval or consent, would not be binding on him.
• Ratification


  cleanses the contract from all its defects from the moment it was constituted
• A voidable contract that undergo ratification

  Contract is valid
• Who may ratify for an incapacitated person

  1. The guardian; or
  2. The injured party himself provided he is already capacitated
• Who may ratify when voidable contracts are on the ground for the vices of consent?


  The party whose consent is vitiated
• Ratification


  A unilateral act by which a party waives the defect in the consent
• S sold a parcel of land to B. The consent of S was vitiated by fraud. Subsequently, S sold the same lot to C. Can C bring an action to annul the sale?

  Yes
• Can the guilty party without right bring action?

  No
• If an obligation has been annulled

  Contracting parties must restore to each other the things that have been the subject matter or the contract, with their fruits, and the price with its interest, except in cases provided by law
• The defect of the contract is the incapacity of a party

  The incapacitated person is not obliged to make any restitution 


  Except insofar as he has been benefited by the thing or price received by him
• Plaintiff - nagdemanda

  Defendant - dinemanda
• Thing to be returned is lost without the fault of the defendant

  There is no more obligation to return such a thing

  Cannot be compelled to restore
• Thing lost because of the fault of the defendant

  Obligation not extinguished

  Converted into an indeminity for damages
• Thing lost due to plaintiff's fault

  Annulment is extinguished
• (Annulment) If the party cannot restore what he is bound to return because of fortuitous event

  There is no annulment
• (Annulment) If the party cannot restore what he is bound to return not because of fortuitous event

  There is no annulment