Ch. 11 - Voidable Contracts

Question 1

(Art. 1390) The following contracts are voidable and annullable, even though there may have been no damage to the contracting parties

Answer 1

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

Question 2

(Art. 1390) Voidable or annullable contracts are binding, unless

Answer 2

they are annulled by a proper action in court. They are susceptible of ratification

Question 3

What are voidable or annullable contracts?

Answer 3

are existent, valid, and binding, although they can be annulled because of want of capacity or vitiated consent of one of the parties, but before annulment, they are effective and obligatory between parties. Hence, it is valid until it is set aside and its validity may be assailed only in an action for that purpose. They can be confirmed or ratified.

Question 4

Extinguish void and voidable contracts

Answer 4

A void contract is one which has no force and effect from the very beginning. Hence, it is as if it has never been entered into and cannot be validated either by passage of time or by ratification. A voidable or annullable contract is one where one of the parties is incapable of giving consent or where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.

Question 5

The action for annulment of voidable contracts must be brought within

Answer 5

4 years from the time of intimidation, violence, or undue influence ceases, or 4 years from the time of the discovery of the mistake or fraud

Question 6

What is ratification?

Answer 6

is defined as the act or means by virtue of which efficacy is given to a contract which suffers from a vice of curable nullity

Question 7

What are the requisites of ratification or confirmation?

Answer 7

1. The contract should be tainted with a vice which is susceptible of being cured
2. The confirmation should be effected by the person who is entitled to do so under the law
3. It should be effected with the knowledge of the reason which renders the contract voidable
4. The reason which renders the contract voidable should have already disappeared

Question 8

What is the basis for annulment

Answer 8

The vitiated consent or incapacity to consent

Question 9

What is the basis for rescission

Answer 9

The lesion (damage)

Question 10

What is the defect in rescission

Answer 10

External or Extrinsic

Question 11

What is the defect on annulment

Answer 11

Intrinsic (in the meeting of the minds)

Question 12

What is the action for rescission

Answer 12

Subsidiary

Question 13

What is the action for annulment

Answer 13

Principal

Question 14

The plaintiff for rescission may be

Answer 14

a party or a third person

Question 15

The plaintiff for annulment may be

Answer 15

must be a party to the contract (whether bound principally or subsidiarily)

Question 16

To prevent rescission, ratification is

Answer 16

not required

Question 17

To prevent annulment, ratification is

Answer 17

required

Question 18

(Art. 1391) The action for annulment shall be brought within four years. This period shall begin:

Answer 18

• 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 by minors or other incapacitated persons, from the time guardianship ceases

Question 19

(Art. 1392) Ratification extinguishes

Answer 19

the action to annul a voidable contract

Question 20

What are the effects of ratification?

Answer 20

1. The action to annul a voidable contract is extinguished; hence, the contract becomes valid
2. The contract is cleansed of its defect from the beginning

Question 21

(Art. 1393) Ratification may be effected

Answer 21

expressly or tacitly

Question 22

(Art. 1393) It is understood that there is a tacit ratification if,

Answer 22

with knowledge of the reason which renders the contract voidable and such reason having ceased, the person who has the right to invoke it should execute an act which necessarily implies an intention to waive his right

Question 23

(Art. 1394) Ratification may be effected by

Answer 23

the guardian of the incapacitated person

Question 24

(Art. 1395) Ratification does not require the

Answer 24

conformity of the contracting party who has no right to bring the action for annulment

Question 25

(Art. 1396) Ratification cleanses the contract from

Answer 25

all its defects from the moment it was constituted

Question 26

(Art. 1396) Ratification has _____________ effect

Answer 26

Retroactive

Question 27

(Art. 1397) The action for the annulment of contracts may be instituted by all who are thereby obliged principally or subsidiarily. However,

Answer 27

persons who are capable cannot allege the incapacity of those 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 contact

Question 28

(Art. 1397) The general rule is, the action for the annulment of contracts may be instituted by all who are thereby obliged principally or subsidiarily. What are the requisites?

Answer 28

1. The plaintiff must have an interest in the contract; and
2. The action must be brought by the victim and not the party responsible for the defect

Question 29

What is the exception to the rule in Art. 1397

Answer 29

The court held that person who is not obliged principally or subsidiarily in a contract may exercise an action for nullity of a contract if he is prejudiced in his rights with respect to one of the contracting parties, and can show the detriment which could positively result to him from the contract in which he had no intervention.

Question 30

(Art. 1398) An obligation having been annulled, the contracting parties shall

Answer 30

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

Question 31

(Art. 1398) An obligation having been annulled, and its an obligation to render service, the contracting parties shall

Answer 31

restore to each other the things which have been the subject matter of the contract, in this case of rendering service, the value thereof shall be the basis for damages

Question 32

(Art. 1399) When the defect of the contract consists in the capacity of one of the parties, the incapacitated person is

Answer 32

not obliged to make any restitution except insofar as he has been benefited by the thing or price received by him

Question 33

(Art. 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

Answer 33

return the fruits received and the value of the thing at the time of the loss, with interest from the same date

Question 34

(Art. 1401) The action for annulment of the contracts shall be extinguished when

Answer 34

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

Question 35

(Art. 1401) If the right of action is based upon the incapacity of any one of the contracting parties, the loss of the thing shall

Answer 35

not be an obstacle to the success of the action, unless said loss took place through the fraud or fault of the plaintiff

Question 36

(Art. 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

Answer 36

be compelled to comply with what is incumbent upon him