MODULELAWONOBLI

GATI
ONSANDCONTRACTS

CHAPTER7-VOI
DABLECONTRACTS

Att
heendont
hel
ect
ure,t
hes
tud
ents
houl
dbeab
let
o:

1.Def
ineandgi
veexamp
leofv
oid
abl
econt
rac
ts

2.Di
scus
swhati
srat
ifi
cat
ion

3.Di
sti
ngui
shb
etweenexp
res
sandi
mpl
iedr
ati
fic
ati
on

X.VOI
DABLECONTRACTS

I
sonewher
eint
hec
ons
entofoneoft
hep
art
iesi
sdef
ect
iveb
ecaus
eofi
ncap
aci
ty,
mi
stake, v
iol
enc
e, i
nti
mid
ati
on,f
r d
aud (ol
ocaus
ant
e) and und
ue i
nfl
uenc
e.As
p
rev
ious
lyd
isc
uss
ed,c
ons
entt
obev
ali
dmus
tbei
ntel
li
gent
ly,f
reel
yandv
olunt
ary
gi
ven.Whent
hec
ons
entofoneoft
hep
art
iest
oac
ont
rac
tisv
iti
atedb
yayoft
he
af
ores
aidv
icesofc
ons
ent
,thec
ont
rac
tisv
oid
abl
e.Thef
oll
owi
ng c
ont
rac
tsar
e
v
oid
abl
eorannul
lab
le,ev
ent
hought
her
emayhav
ebeennod
amaget
othec
ont
rac
ting
p
art
ies
:

(
1)Thos
ewher
eoneoft
hep
art
iesi
sinc
apab
leofgi
vingc
ons
entt
oac
ont
rac
t;

(
2)Thos
ewher
ethec
ons
enti
svi
tiat
edb
ymi
stake,v
iol
enc
e,i
nti
mid
ati
on,und
ue
i
nfl
uenc
eorf
raud
.

Thes
econt
rac
tsar
ebi
ndi
ng,unl
esst
heyar
eannul
ledb
yap
rop
erac
tioni
ncour
t.
Theyar
esus
cep
tib
leofr
ati
fic
ati
on.
 MODULELAWONOBLI
GATI
ONSANDCONTRACTS

I
ll
ust
rat
ionofv
oid
abl
econt
rac
ts:

Rat
ifi
cat
ionext
ingui
shest
heac
tiont
oannulav
oid
abl
econt
rac
t.

1.Conf
irmat
ion–t
ocur
ead
efec
tinav
oid
abl
econt
rac
t.
2.Rat
ifi
cat
ion–t
ocur
ethed
efec
tofl
ackofaut
hor
ityi
nanaut
hor
izedc
ont
rac
t
(
ent
eredi
ntob
yanot
her
).
3.Ac
knowl
edgment
–tor
emed
yad
efi
cienc
yofp
roof(
thus
,anor
all
oanmayb
eputi
n
wr
iti
ng,orwhenap
riv
atei
nst
rumenti
smad
eap
ubl
ici
nst
rument
).

Requi
sit
esofRat
ifi
cat
iont
obeef
fec
tiv
e:
1.Ther
emus
tbeav
oid
abl
eorannul
abl
econt
rac
t.
2.Rat
ifi
cat
ioni
smad
ewi
tht
heknowl
edgeoft
hec
aus
eofnul
li
ty.
3.Att
het
imeofr
ati
fic
ati
on,t
hec
aus
eofnul
li
tyhasal
read
yceas
ed.
4.Ther
ati
fyi
ngp
art
yist
hei
njur
edp
art
y,ort
hep
rej
udi
cedp
art
y.
5.Ther
ati
fic
ati
oni
sac
comp
lis
hedexp
res
slyori
mpl
ied
lyb
yawai
verofac
tiont
oannul
.
 MODULELAWONOBLI
GATI
ONSANDCONTRACTS

Ther
ightt
orat
ifyi
str
ans
fer
rab
let
othehei
rsoft
hepar
tywhohast
her
ightt
orat
ify.

Rat
ifi
cat
ionmayb
eef
fec
tedexpr
ess
lyort
aci
tly.I
tisund
ers
toodt
hatt
her
eisa
t
aci
trat
ifi
cat
ioni
f,wi
thknowl
edgeoft
her
eas
onwhi
chr
end
erst
hec
ont
rac
t
v
oid
abl
eands
uchr
eas
onhav
ingc
eas
ed,t
heper
sonwhohasar
ightt
oinv
okei
tshoul
d
exec
uteanac
twhi
chnec
ess
ari
lyi
mpl
iesani
ntent
iont
owai
vehi
sri
ght
.

Ki
ndsofr
ati
fic
ati
on

1.Expr
essr
ati
fic
ati
on–whent
her
ati
fic
ati
oni
smani
fes
tedi
nwor
dsORi
nwr
iti
ng
2.I
mpl
iedr
ati
fic
ati
on–mayt
aked
iff
.for
ms:b
ysi
lenc
eorac
qui
esc
enc
e,b
yac
ts
s
howi
ngad
opt
ionorr
emov
aloft
hec
ont
rac
t,b
yac
cep
tanc
eandr
etent
ionoft
he
b
enef
itsf
lowi
ngt
her
efr
om
Requi
sit
esofi
mpl
iedr
ati
fic
ati
on
●Knowl
edgeoft
her
eas
onwhi
chr
end
erst
hec
ont
rac
tvoi
dab
le
●Suc
hreas
onmus
thav
eceas
ed
●Thei
njur
edp
art
ymus
thav
eexec
utedanac
twhi
chnec
ess
ari
lyi
mpl
iesani
ntent
iont
o
wai
vehi
sri
ght

Rat
ifi
cat
ionmayb
eef
fec
tedb
ytheguar
dianoft
hei
ncapac
itat
edper
son.

Par
tywhomayr
ati
fy.
(
1)Ac
ont
rac
tent
eredi
ntob
yani
ncap
aci
tat
edp
ers
onmayb
erat
ifiedb
y:
(
a)t
heguar
dian;or
(
b)t
hei
njur
edp
art
yhi
msel
f,p
rov
ided
,hei
sal
read
ycap
aci
tat
ed.Asl
egal
r
epr
esent
ati
vesoft
hei
rwar
ds,guar
dianshav
ethep
owert
ocont
rac
tont
hei
rbehal
f.
Henc
e,t
heymayal
sor
ati
fyc
ont
rac
tsent
eredi
ntob
ythei
rwar
ds.
(
2)I
ncas
ethec
ont
rac
tisv
oid
abl
eont
hegr
oundofmi
stake,et
c.,r
ati
ficat
ionc
anb
e
mad
ebyt
hep
art
ywhos
econs
enti
svi
tiat
ed.

Rat
ifi
cat
iond
oesnotr
equi
ret
hec
onf
ormi
tyoft
hec
ont
rac
tingpar
tywhohasno
r
ightt
obr
ingt
heac
tionf
orannul
ment
.

Rat
ifi
cat
ioni
sauni
lat
eralac
tbywhi
chap
art
ywai
vest
hed
efec
tinhi
scons
ent
.The
 MODULELAWONOBLI
GATI
ONSANDCONTRACTS

c
ons
entoft
hegui
lt
ypar
tyi
snotr
equi
red
;ot
her
wis
e,hec
anc
onv
eni
ent
lyd
isr
egar
d
hi
scont
rac
tbyt
hes
imp
leexp
edi
entofr
efus
ingt
ogi
vehi
sconf
ormi
ty.
Thei
nnoc
entp
art
yhast
hep
rer
ogat
ivet
oannulornott
oannulav
oid
abl
econt
rac
t.
“
Hewhoc
omest
othec
our
t,mus
tcomewi
thc
leanhand
s”
Fur
ther
,ther
eisal
sononeedf
ort
hei
nnoc
entp
art
ytor
equi
ret
hegui
lt
ypar
ty’
s
c
onf
ormi
tyb
efor
eher
ati
fiest
hed
efec
tiv
econt
rac
t.

I
LLUSTRATI
ON

Enr
icoi
stheowneroft
hef
amoushar
dwar
einLaguna.Her
ent
edt
hewar
ehous
eof
Dannat
obec
omeoneofhi
sbod
ega.Ces
arb
uyt
hemat
eri
alst
hatheneed
edf
ort
he
c
ons
truc
tionofhi
sownhous
etoEnr
ico,s
inc
etheot
hermat
eri
alsi
sont
hewar
ehous
e
ofDannaandEnr
icoal
read
yrent
edi
tther
efor
ethec
ons
entofDannai
snotneed
edf
or
t
hed
eli
ver
yoft
hemat
eri
alst
hatCes
arneed
ed.

Rat
ifi
cat
ionc
leans
est
hec
ont
rac
tfr
omal
lit
sdef
ect
sfr
omt
hemomenti
twas
c
ons
tit
uted
.
Theac
tofr
ati
fic
ati
onc
urest
hed
efec
tsoft
hec
ont
rac
tands
oiti
sasi
fthes
ame
c
ont
rac
thadnoi
nfi
rmi
tyf
romt
hev
eryb
egi
nni
ng.Thec
leans
ingofv
oid
abl
econt
rac
t
r
etr
oac
tst
othet
imeofi
tsc
ons
tit
uti
on.
Anac
tionf
orannul
mentofc
ont
rac
tbas
edoni
tsor
igi
nalc
urab
led
efec
tsc
annol
onger
p
ros
peraf
teri
tsd
uer
ati
fic
ati
onorc
onf
irmat
ion.

Exc
ept
ion:
Ther
uleofr
etr
oac
tiv
itys
hal
lnotpr
ejud
icet
her
ight
sofi
nnoc
entt
hir
dper
sonsf
or
t
hatwi
llr
esul
tini
njus
tic
ewhi
chi
snott
hei
ntent
ionoft
hel
aw.

Anob
ligat
ionhav
ingb
eenannul
led
,thec
ont
rac
tingpar
tiess
hal
lres
tor
etoeac
h
 MODULELAWONOBLI
GATI
ONSANDCONTRACTS

ot
hert
het
hingswhi
chhav
ebeent
hes
ubj
ectmat
teroft
hec
ont
rac
t,wi
tht
hei
r
f
rui
ts,andt
hepr
icewi
thi
tsi
nter
est
,exc
epti
ncas
espr
ovi
dedb
ylaw.
I
nob
ligat
ionst
orend
ers
erv
ice,t
hev
aluet
her
eofs
hal
lbet
heb
asi
sford
amages
.

Mut
ualRes
tit
uti
onuponannul
ment
I
fthec
ont
rac
tisannul
led
,thep
art
ies
,asagener
alr
ule,mus
tres
tor
etoeac
h
ot
hert
hes
ubj
ectmat
teroft
hec
ont
rac
twi
thi
tsf
rui
tsandt
hep
ric
ether
eofwi
th
l
egali
nter
est
.Unl
esst
her
ear
efund
ament
alr
eas
onsr
ecogni
zedb
ythel
awwhi
chwi
ll
p
rev
ents
uchr
est
itut
ion.

Cont
rac
tsnotc
over
ed
I
foneoft
hec
ont
rac
tingp
art
iesr
ecei
veds
omeb
enef
it,andhehasnotgi
ven
any
thi
ngf
ori
ttot
heot
her
,iti
sonl
yequi
tab
let
hathes
houl
dret
urnt
heamountb
y
whi
chheunj
ust
lyenr
iched
.

Whenev
ert
heper
sonob
ligedb
ythed
ecr
eeofannul
mentt
oret
urnt
het
hingc
annot
d
osob
ecaus
eithasb
eenl
ostt
hroughhi
sfaul
t,hes
hal
lret
urnt
hef
rui
tsr
ecei
ved
andt
hev
alueoft
het
hingatt
het
imeoft
hel
oss
,wi
thi
nter
estf
romt
hes
amed
ate.

Ef
fec
tofl
ossoft
hingt
ober
etur
ned
1.I
fthet
hingt
ober
etur
nedi
slos
twi
thoutt
hef
aul
toft
hep
ers
onob
ligedt
omake
r
est
itut
ion,
●t
her
eisNOmor
eob
ligat
iont
oret
urns
ucht
hing.
●BUTi
nsuc
hcas
e,t
heot
herCANNOTb
ecomp
ell
edt
ores
tor
ewhati
nvi
rtueoft
he
d
ecr
eeofannul
menthei
sboundt
oret
urn.
2.
Ifi
tisl
ostt
hroughhi
sfaul
t,hi
sob
ligat
ioni
sNOText
ingui
shedBUTi
sconv
ert
edi
nto
ani
ndemni
tyf
ord
amagesc
ons
ist
ingof
●t
hev
alueoft
het
hingatt
het
imeoft
hel
osswi
thi
nter
estf
romt
hes
amed
ate
●andt
hef
rui
tsr
ecei
vedf
romt
het
imet
het
hingwasgi
vent
ohi
mtot
het
imeofi
tsl
oss
.

Theac
tionf
orannul
mentofc
ont
rac
tss
hal
lbeext
ingui
shedwhent
het
hingwhi
chi
s
t
heob
jec
tther
eofi
slos
tthr
ought
hef
raudorf
aul
toft
heper
sonwhohasar
ightt
o
i
nst
itut
ethepr
oceed
ings
.

Ext
ingui
shmentofac
tionf
orannul
ment
.
 MODULELAWONOBLI
GATI
ONSANDCONTRACTS

(
1)I
fthep
ers
on,whohasar
ightt
oins
tit
uteanac
tionf
orannul
ment(
Art
.1397.
),wi
ll
notb
eab
let
ores
tor
ethet
hingwhi
chhemayb
eob
ligedt
oret
urni
ncas
ethec
ont
rac
t
i
sannul
ledb
ecaus
esuc
hthi
ngi
slos
tthr
oughhi
sfr
audorf
aul
t,hi
sri
ghtt
ohav
ethe
c
ont
rac
tannul
ledi
sext
ingui
shed
.Ift
hel
ossi
snotd
uet
ohi
sfaul
torf
raud
.Theac
tion
f
orannul
ments
hal
lbeext
ingui
shedonl
yift
hel
ossi
sthr
ought
hef
aul
torf
raudoft
he
p
lai
nti
ff.
(
2)Und
ert
hes
econdp
aragr
aph,t
her
ightofac
tioni
sbas
edup
ont
hei
ncap
aci
tyofany
oneoft
hec
ont
rac
tingp
art
ies
.Whet
hert
her
ightofac
tioni
sbas
edup
oni
ncap
aci
tyor
not
,ther
ulei
sthes
ame.I
tisnol
ongernec
ess
aryt
hatt
hef
raudorf
aul
tont
hep
art
oft
hep
lai
nti
ff(
thei
ncap
aci
tat
edp
ers
on)r
esul
ti
ngi
nthel
ossmus
thav
eoc
cur
red
“
aft
erhav
ingac
qui
redc
apac
ity
”asund
ert
heol
dCod
e.Thi
squal
ific
ati
onhasb
een
d
elet
edi
nthep
res
entar
tic
le.Thed
elet
ionhasmad
ethes
econdp
aragr
aphr
edund
ant
.

Asl
ongasoneoft
hec
ont
rac
tingp
art
iesd
oesnotr
est
orewhati
nvi
rtueoft
he
d
ecr
eeofannul
menthei
sboundt
oret
urn,t
heot
herc
annotb
ecompel
ledt
ocomp
ly
wi
thwhati
sinc
umb
entuponhi
m.

Whenac
ont
rac
tisannul
led
,ar
eci
proc
alob
li
gat
ionofr
est
itut
ioni
scr
eat
ed.The
r
etur
nbyonep
art
yofwhathei
sob
ligedt
ores
tor
ebyt
hed
ecr
eeofannul
mentmayb
e
r
egar
dedasac
ond
iti
ont
othef
ulf
il
lmentb
ytheot
herofwhati
sinc
umb
entup
onhi
m.I
n
ef
fec
t,t
her
ewi
llb
enoannul
menti
fthep
art
ycannotr
est
orewhathei
sboundt
o
r
etur
n.Thi
sist
rueev
eni
fthel
ossi
sduet
oaf
ort
uit
ousev
ent
.
Howev
er,i
fthep
art
ywhol
ostt
het
hingt
hroughaf
ort
uit
ousev
entof
fer
stop
ayi
ts
v
aluewi
tht
hef
rui
tsr
ecei
vedi
fany(
ther
eisnol
iab
ili
tyt
opayi
nter
ests
inc
ethel
oss
i
swi
thouthi
sfaul
t),t
heot
herc
anb
erequi
redt
omaker
est
itut
ion.

I
LLUSTRATI
ON

Jayent
eredi
ntoac
ont
rac
twi
thZol
awher
ebyheob
ligedhi
msel
ftoc
reat
ea
wood
ens
tat
uei
nthei
mageofZol
a’smot
her
.Howev
er,i
ttur
nedoutt
hatZol
aisonl
y
12y
ear
sol
dandass
uch,hei
sinc
apac
itat
edt
oent
eri
ntoac
ont
rac
t.Thec
ont
rac
twas
 MODULELAWONOBLI
GATI
ONSANDCONTRACTS

annul
led
.Zol
awast
henob
ligat
edt
oret
urnt
hes
tat
uewhi
leJayhast
heob
ligat
ionof
r
etur
ningt
hemoneyp
ayedb
yZol
afort
hes
tat
ue.Si
nceJayd
idnotr
etur
nthemoney
,
Zol
acannotb
ecomp
ell
edt
oret
urnt
hes
tat
ue.

Pl
eas
ewat
cht
hisv
ideof
ory
out
ohav
eani
nfor
mat
ionab
outt
hisc
hap
ter7-
ht
tps
://
yout
u.b
e/Mt
QV8O8Kk-M

Formor
einf
ormat
ionab
outv
oid
abl
econt
rac
tski
ndl
ywat
cht
hisv
ideo.
ht
tps
://
yout
u.b
e/6xPur
3Ly
PhA

REFERRENCE:
TheLawonOb
ligat
ionsandCont
rac
tsb
yHec
torS.DeLeon,Hec
torM.DeLeonJr
.