Voidable contracts – Contracts Law

1. Concept

Voidable contracts are binding, unless they are annulled by a proper action in court.(Paragraph 2, Article 1390, Ibid.)

a. Voidable contracts

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. (Article 1390, Ibid.)

These contracts are binding, unless they are annulled by a proper action in court. They are susceptible of ratification.(Paragraph 2, Article 1390, Ibid.)

2. 4-year prescription

The action for annulment shall be brought within four years.(Article 1391, Ibid.)

a. Intimidation, violence, undue influence

In cases of intimidation, violence or undue influence, the counting of prescription shall be from the time the defect of the consent ceases. (Paragraph 3, Article 1391, Ibid.)

b. Mistake, fraud

In case of mistake or fraud, the counting of prescription shall be from the time of the discovery of the same. (Paragraph 4, Article 1391, Ibid.)

c. Minors or incapacitated persons

When the action refers to contracts entered into by minors or other incapacitated persons, the counting of prescription shall be from the time the guardianship ceases. (Paragraph 5, Article 1391, Ibid.)

3. Ratification

a. Extinguishes action to annual a voidable contract

Ratification extingu...