VOIDABLE CONTRACTS (Art.

1390-1402)
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;
(2) Those where the consent is vitiated by
mistake, violence, intimidation, undue influence or
fraud.
These contracts are binding, unless they are
annulled by a proper action in court. They are
susceptible of ratification.
VOIDABLE OR ANNULLABLE CONTRACTS- those
which possess all the essential requisites of a valid
contract but one of the parties is incapable of giving
consent, or those consent is vitiated by mistake,
violence, intimidation, undue influence, or fraud.
BINDING FORCE OF VOIDABLE CONTRACT
They are valid and binding between the
parties unless annulled by a proper action in court.
Once ratified, they become absolutely valid and can
no longer be annulled.
GROUNDS FOR ANNULMENT (DECLARATION OF
NULLITY)
1. incapacity to consent
2. vitiated consent (done by MISTAKE,
VIOLENCE, INTIMIDATION, UNDUE INFLUENCE, or
FRAUD) MVIUF
ANNULMENT-is a remedy provided by law, for
reason of public interest, for the declaration of the
inefficacy of a contract based on a defect or vice in
the consent of one of the contracting parties in
order to restore them to their original position in
which they were before the contract was executed.
Note: *The contract is VOID not merely voidable if
it is a contract of marriage.
*Repentance at having entered into the
transaction is NOT ground for annulment. The
reason given is that it is not the function of the law
to protect or relieve a man from consequences of a
bad bargain.
Example: If a house is built with conjugal funds on
the husbands lot, the house and lot will be both
considered conjugal, with the husband becoming
the creditor of the conjugal partnership to the
extent of the value of the lot. Should the husband
sell the house and lot without his wifes consent, the
sale would be voidable.
Article 1391. The action for annulment shall be
brought within four years.
This period shall begin: In cases of
intimidation, violence or undue influence, from
the time the defect of the consent ceases.
In case of mistake or fraud, from the time
of the discovery of the same.

And when the action refers to contracts

entered into minors or other incapacitated
persons, from the time the guardianship ceases.
APPLICABILITY. This article applies only to the
parties in contract. It does not apply to third person
when the law allows them to question the validity of
a contract.
EFFECT OF PRESCRIPTION. If the action
prescribed, the contract can no longer be set a side.
Example:
a. Sol was intimidated into signing a contract
on March 12, 2012. The intimidation continued until
October 21, 2014. From what time should we
compute the four year period of annulment?
*From Oct. 21, 2014, the time the
intimidation ceased.
b. On June 8, 2005, Angie entered into a
contract with Jo Hanna. On June 13, 2006, Angie
discovered that fraud has been present at the time
she entered into the contract. Such fraud vitiated
her consent. Within what time must Angie bring the
action for annulment?
*Within 4 years from June 13, 2006 Angie
must bring action for annulment; otherwise, his
right to sue for said annulment will have prescribed.
June 13, 2006 should be starting point because it
was on this date that the fraud was discovered.
c. In this case of contract entered into by
minors or incapacitated persons, from what time will
the period within which to bring the annulment
begin?
* From the time the guardianship ceases.
Article 1392. Ratification extinguishes the action
to annul a voidable contract.
CONFIRMATION- to cure a defect in a voidable
contract
RATIFICATION- to cure the defect of lack of
authority in an authorized contract entered into by
another.
ACKNOWLEDGMENT- to remedy a deficiency of
proof (Example: An oral loan may be put in writing
or when a private instrument is made a public
instrument.)
Note: Under the NCC, all the three terms are now
uniformly called RATIFICATION.
EFFECTS OF RATIFICATION.
1. The action to annul is extinguished thus,
the contract becomes a completely valid one.
2. The contract is cleansed of its defect from
the beginning.
Article 1393. Ratification may be affected
expressly or tacitly. It is understood that there is a
tacit ratification if, 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.
KINDS OF RATIFICATION
1. Express- when ratification is manifested in
words or in writing; or
2. Implied or Tacit- as from conduct implying
a WAIVER
REQUISITES
1. There must be knowledge of the reason
which renders the contract voidable;
2. Such reason must have ceased; and
3. The confirmation is made by the injured
contracting party.
Example: Aiza, a minor, sold her land to Dei. Upon
reaching the age of majority, Aiza, with full
knowledge of his rights in the premises, instead of
repudiating the contract, disposed of the greater
part of the proceeds, or collected the unpaid
balance of purchase price from Dei.
*In this case, there is tacit ratification made
by Aiza.
Article 1394. Ratification may be effected by the
guardian of the incapacitated person.
WHO MAY RATIFY
1. the guardian; or
2. the injured party himself provided he is
already capacitated
Article 1395. Ratification does not require the
conformity of the contracting party who has no right
to bring the action for annulment.
CONFORMITY OF A GUILTY PARTY NOT
NEEDED.
The guilty partys consent is not needed;
otherwise, he may find a way of getting out of the
contract by the simple expedient of refusing to
ratify.
Article 1396. Ratification cleanses the contract
from all its defects from the moment it was
constituted.
Ratification cleanses the contract of all its
defects from the moment it was executed. It
extinguishes the right of action to annul. In other
words, the effect of ratification is to make the
contract valid from its inception subject to the prior
rights of third persons.
Example: Dan force Marlou to
Later, the horse gave birth to
the contract after the birth
entitled to the colt?
*Marlou,
because
retroactive effect. It validates
date of its execution.

sell the latters horse.

a colt. If Marlou ratify
of the colt, who is
ratification
has
a
the contract from the

If the horse had been sold by Dan to

Matthew who acted in good faith, the subsequent
ratification by Marlou of the sale to Dan cannot
prejudice Matthew.
Article 1397. The action for annulment of
contracts may be instituted by all who are thereby
obliged principally and subsidiarily. However,
persons who are capable cannot allege the
incapacity of those with whom they contracted; nor
can those who exerted intimidation, violence, or
undue influence, or employed fraud, or caused
mistake base their action upon these flaws of the
contract.
PERSONS WHO MAY ASK FOR ANNULMENT
The victim (principal or subsidiary party)
may ask for annulment, NOT a guilty person or his
successor. Reason: He who comes to court, must
come with clean hands.
CREDITORS OF THE VICTIM
The creditors of a victim cannot ask for
annulment for they are NOT bound by the contract.
Example: Glea was forced by Gerelle to sign a
contract. Ellaine, a creditor of Glea, wants to annul
the contract. Is Ellaine allowed to do so?
*NO, Ellaine is not allowed to do so. If the
contract prejudices her, and Glea has no other
property, then Ellaine may ask for the rescission of
the contract, not its annulment. Ellaine cannot ask
for annulment because she is not obliged by the
terms of said contract, either principally or
subsidiary.
Article 1398. An obligation having been annulled,
the contracting parties shall restore to each other
the things which have been the subject matter of
the contract, with their fruits, and the price with its
interest, except in cases provided by law.
In obligations to render service, the value
thereof shall be the basis for damages.
The article applies only if the contract had
been consummated. If the contract has not been
performed yet, it is understood, there is no
obligation to restore as nothing had been received
by the parties.
DUTY OF MUTUAL RESTITUTION. If the obligation
has been annulled, the contracting parties shall
restore to one another what they have received by
virtue of the contract. This duty of mutual restitution
covers
1. the thing, with fruits
2. the price, with interest
Municipality of Cavite v. Rojas (30 Phil. 602)
FACTS: A part of the public plaza was leased to Rojas
by the Municipality of Cavite. The object of contract
being outside the commerce of man, the leased was
annulled.
ISSUE: What are the obligations of the parties?

HELD: Defendant must restore and deliver

possession of the land described in the complaint to
the Municipality of Cavite, which in turn must
restore to the said defendant all the sums it may
have received from her in the nature of rentals just
as soon as she restores the land improperly leased.
PERSONAL OBLIGATIONS. Here the value of the
service shall be the basis for damages.
Article 1399. When the defect of the contract
consists in the incapacity of one of the parties, 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.
RESTITUTION BY AN INCAPACITATED PERSON.
*This article is an exception to the general
rule of Mutual Restitution.
*The incapacitated person is obliged to make
restitution only to the extent that he was benefited
by the thing or price received by him.
*If he does not benefited, he is not obliged
to restore what he had received but the other
contracting party is still bound to return what he
had received, whether he was benefited or not.
Example: Sheila and Marina are minors, together
with their mother Thamar, barrowed money during
the Japanese occupation from Villa Abrille. The
money was used for the support of the minors.
While the promissory note signed by the minors
promising to pay P100,000.00 in Philippine currency
2 years after the cessation of the hostilities x x x, is
voidable and annulled by the Court, the minors were
required to return the money they received from
Villa Abrille as they profited by the use thereof.

a. the fruits or rentals of the house

received from the time the house was given to him
to the time of its loss;
b. the value of the house at the time
of the loss;
c. interest at 6% per annum on the
value of the house from the time the house was
destroyed.
Article 1401. The action for annulment of
contracts shall be extinguished when the thing
which is the object thereof is lost through the fraud
or fault of the person who has a right to institute the
proceedings.
If the right of action is based upon the
incapacity of any one of the contracting parties, the
loss of the thing shall not be an obstacle to the
success of the action, unless said loss took place
through the fraud or fault of the plaintiff.
EXTINGUISHMENT OF ACTION FOR ANNULMENT
1. If the person, who has a right to institute
an action for annulment, will not be able to restore
the thing which he may be obliged to return in case
the contract is annulled because such thing is lost
through his fraud or fault, his right to have the
contract annulled is extinguished. If the loss is not
due to his fault or fraud, Art. 1402 applies.
The action for annulment shall be
extinguished only if the loss is through the fault or
fraud of the plaintiff.
2. Under the 2nd paragraph, the right of
action is based upon the incapacity of any one of
the contracting parties. Whether the right of action
is based upon incapacity or not, the rule is the
same.

Article 1400. Whenever the person obliged by the

decree of annulment to return the thing can not do
so because it has been lost through his fault, he
shall return the fruits received and the value of the
thing at the time of the loss, with interest from the
same date.

Example: Geraldine was forced to sign a contract

with Mary Lou. In said contract, Geraldine was given
a house. But Geraldine destroyed the house. May
Geraldine still bring the action for annulment?
*No more. Her act of destroying the house
extinguished his right to bring the action for
annulment.

EFFECT WHEN THING WAS LOST THROUGH THE

FAULT OF DEFENDANT-OBLIGOR
If the thing was lost through the fault of the
obligor. He is obliged to:
a. return the fruits received;
b. return the value of the thing at the
time loss; and
c. to pay 6% interest per annum on
the value of the thing

Lee Min, a minor, was sold a house by JC.

The house was destroyed by fortuitous event. May
Lee Min still annul the contract so as to recover from
JC the price (and interest) he (Lee Min) had given?
*Yes. As a rule, if the right of action is based
upon the incapacity of anyone of the contracting
parties, the loss of the thing shall not be an obstacle
to success of the action. Here, the minor was not
guilty of fraud or fault. (Art. 1401, p.2)

Example: Theresa forced Cyre to sell to her the

house (of Cyre). Cyre brought an action to annul the
contract. The contract was annulled on the ground
of fraud. Theresa was asked by the court to return to
Cyre whatever she (Theresa) has received. But the
house had been destroyed through the fault of
Theresa. What should Theresa now give?
*Theresa should give all of the following:

Article 1402. As long as one of the contracting

parties does not restore what in virtue of the decree
of annulment he is bound to return, the other
cannot be compelled to comply with what is
incumbent upon him.
Example: Angie Louh forced Gerelle to takes her car
in exchange for Gerelles ring. Gerelle asked for
annulment, and the court gave the decree of

annulment ordering each to return what had been

received. Gerelle refused to give Angie Louh the car.
May Angie be compelled to give back the ring? *NO
^FORTUITOUS EVENT^
Coco forced Cersie to sell to her his ring. Cercie
sued for annulment, but Coco had already lost the
ring thru fortuitous event. What is Cercies remedy?
*Coco can be compelled to pay its value or
damages, for it is as if Coco was a possessor in bad
faith who bears the loss even in case of a fortuitous
event.

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GOD BLESS

Prepared by: PRECIOUS-ANN N. NIDUA

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