ARTICLE 1390

AMIL, CHRISTELLE
 ARTICLE 1390
Art. 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.
(n)
 Concept of Voidable Contracts
Voidable Contracts include failure by one or
both parties to disclose a material fact; a
mistake, misrepresentation or fraud; undue
influence or duress; one party's legal incapacity
to enter a contract; one or more terms that are
unconscionable; or a breach of contract.

Voidable contracts are binding unless annulled

by a proper action in court.
 Rescission and Annulment
Rescission and Annulment of contract when
declared, makes the contract inefficacious.
 Grounds for Annulment
Actions for the annulment of contracts prescribe in
four years. If the ground for annulment is vitiation
of consent by intimidation, the four-year period
starts from the time such defect ceases. The
running of this prescriptive period cannot be
interrupted by an extrajudicial demand made by
the party whose consent was vitiated. If the facts
demonstrating the lapse of the prescriptive period
are apparent from the records, the complaint
should be dismissed.
 Incapacity to Consent
The capacity to consent is not a requisite sine
qua non of the contract, but the want is the
ground for annulment.

sine qua non-an essential condition; a thing that is absolutely

necessary.
 How Annulment is obtained
• Directly by an action for that purpose
• Indirectly by way of defense to an action to
enforce the same.
ARTICLE 1391

BALAORO, EVELYN
 ARTICLE 1391
Art. 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 by

minors or other incapacitated persons, from the time the
guardianship ceases. (1301a)
ARTICLE 1392

BAUTISTA, JAY
 ARTICLE 1392
Art. 1392. Ratification extinguishes the action
to annul a voidable contract. (1309a)
 Confirmation

- Is the act by which a person, entitled to bring

an action for annulment, with knowledge of
the cause of annulment and after it has ceased
to exist, validates the contract either expressly
or impliedly.

- Is properly applicable only to annullable

contracts.
 Ratification

- Is the act of approving a contract entered into

by another without the authorization of the
person in whose name it was entered into, or
beyond the scope of the authority of the
former

- Applies to unenforceable contracts, or

contracts where consent is totally absent.
 Acknowledgement

- To remedy a deficiency of proof

- When what has been agreed upon orally is put in

writing, or when a private document is converted into a
public instrument there is acknowledgement

EXAMPLE
An oral loan may be put in writing, or when a private
instrument is made a public instrument
 Fundamental difference of
Confirmation and Ratification
 Requisite of Ratification
1. That the contract is a voidable or annullable
contract, or one in which the consent of one
party is defective, either because of lack of
capacity to contract or because of error, fraud,
violence, intimidation or undue influence.

2. That the ratification is made with knowledge of

the cause for nullity

3. That at the time the ratification is made, the

cause of nullity has already ceased to exist.
ARTICLE 1393

CAPARAS
 ARTICLE 1393
Art. 1393. Ratification may be effected
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. (1311a)
ARTICLE 1394

COLONA, GRETCHEN
 ARTICLE 1394
Art. 1394. Ratification may be effected by the
guardian of the incapacitated person. (n)

Ang ratipikasyon ay maaring maisagawa ng

guardian ng taong nawalan ng kapasidad.
 Discussion
Incapacitated persons includes unemancipated
minors and insane or demented persons, and deaf-
mutes who do not know how to write. If
incapacitated enters into a contract, the contract is
voidable if the other party is capacitated. If both are
incapacitated, the contract becomes void. The
guardians however may ratify the defective contract
in their behalf. If the incapacitated person becomes
capacitated, they themselves may ratify their
defective contracts.
ARTICLE 1395 - 1396

CORPUZ, STEVE LOUIE

 ARTICLE 1395
Art. 1395. Ratification does not require the
conformity of the contracting party who has no
right to bring the action for annulment. (1312)

Ang pagpapatibay ay hindi kaylangang humingi

ng pagsangayon ng nagkasundong partido na
walang karapatan na magdala ng aksyon sa pag
sasawalang bisa
 DISCUSSION
Conformity of the Party who has no right to
bring an action for annulment is not needed. –
The innocent party has the prerogative to annul
or not to annul a voidable contract.
“He who comes to the court, must come with
clean hands”
Further, there is also no need for the innocent
party to require the guilty party’s conformity
before he ratifies the defective contract.
 ARTICLE 1396
Ratification cleanses the contract from all is
defects from the moment it was constituted.
(1313)

Ang pagtitibay ay nagpapalinis sa mga kontrata

sa lahat ng mga depekto nito sa oras na
maitatag ito.
 What is the effect of ratification?
After the contract has validly ratified, no action
to annul the same can be maintained beased
upon defects relation to its original validity.
From what time shall the cleansing of
the voidable contract retroacts?
The cleansing of the voidable contract retroacts
to the time of its constitution. Further, this
retroactivity does not prejudice the rights of a
third persons acquired before the ratification.

Example: A minor sells a piece of land to X;

after attaining majority he sells the same to Y,
but later on, he confirms the precious sale
made to X, this confirmation cannot prejudice
Y.
 ARTICLE 1377

DELA CRUZ, IAN ELDRICK

 ARTICLE 1397
Art. 1397. The action for the annulment of
contracts may be instituted by all who are
thereby obliged principally or 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.
(1302a)
 PARTY ENTITLED TO BRING AN
ACTION TO ANNUL
Two different requisites are required to confer the n
ecessary capacity to bring an action for annulment
of a contract, to wit:

(1) The plaintiff must have an interest in the

contract; and

(2) The victim and not the guilty party or the party r
esponsible for the defect is the person who must
assert the same.
 DISCUSSION
In an action for the annulment of contracts, the real
parties in interest are those who are parties to the
contract, or are bound either principally or
subsidiarily, or are prejudiced in their rights with
respect to one of the contracting parties and can
show the detriment which would positively result to
them from the contract even though they did not
intervene in it, or who claim aright to take part in a
public bidding but have been illegally excluded from
it.
 DISCUSSION
The guilty party, including his successors-in-
interest, cannot ask for annulment. This rule is
sustained by the principle that he who comes to
court must do so with clean hands. Thus, a
person who employed fraud cannot base his
action for annulment of a contract upon such
flaw of the contract.
ARTICLE 1398

DIZON, CHERRY
 ARTICLE 1398
Art. 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. (1303a)
 Mutual Restitution upon annulment

If the contract is annulled, the parties, as a

general rule, must restore to each other the
subject matter of the contract with its fruits and
the price thereof with legal interest. Unless
there are fundamental reasons recognized by
the law which will prevent such restitution.
 Who may invoke Restitution

Only the between the parties who are privity

with the contract. A stranger to the actual
contractual relation cannot invoke the benefit of
this provision.
 Contracts not covered

If one of the contracting parties received some

benefit, and he has not given anything for it to the
other, it is only equitable that he should return the
amount by which he unjustly enriched.

If the parties had reciprocal prestations, which can

compensate each other, the excess in value can be
paid to the party to whom it pertains.
 EXAMPLE
If a piece of land is leased for one year, with the
land delivered and rent paid in advance for full
period, and then the contract is annulled after four
months, the mutual restitution cannot be total.

The lessee has to return the land, but the lessor

should not be obliged to return the full amount of
rent received by him but only the corresponding to
the unexpired eight months.
 Restitution of fruits and interests

Article 1398 can be applied without qualification, only

when the cause of nullity does not involved an illicit act,
such as error and incapacity unknown to the other party.
But when the cause of nullity is illicit, such as fraud,
violence, intimidation, or undue influence, the other
party who employed those means must be considered as
a possessor in bad faith, and must be obliged to restore
not only the fruits received but also those which might
have been received; on the other hand, the innocent
party must be deemed a possessor in good faith and
should not be required to return fruits or pay interest.
 Liability for damages

There are cases where losses occasioned by the contract

cannot be erased or compensated by its annulment.

e.g.
The injured party, before discovering the fraud, has
already incurred in expenses which become useless by
the annulment; or where there has been intimidation, the
property transferred has suffered damages in the hands
of the defendant before annulment of the contract. In
such cases, the injured party should be entitled to
recover also indemnity for damages.
ARTICLE 1399

ESCALANTE, JOPHEN
 ARTICLE 1399
Art. 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.
(1304)
ARTICLE 1400 - 1402

FAMILARA, PETER
 ARTICLE 1400
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 return the fruits received and the
value of the thing at the time of the loss, with
interest from the same date. (1307a)
 ARTICLE 1400
Kung kelan na ang tao ay obligado ng batas
para sa pagpapawalang bisa na ibalik ang
bagay na hindi pwede sa kadahilanang ito ay
nawala sa pamamagitan ng kanyang
kapabayaan, dapat lamang na ibalik nya at
bunga na kanyang tinanggap at ang halaga ng
bagay na kung saan ay nawala rin, para sa
kapakanan ng naturang kaperehong petsa.
 EXAMPLE
Example:
X by force and threat, was able to purchase the apartment
house of Y. Later, Y brought an action to annul the contract
which action was granted by the court. X was ordered by the
court return to Y the apartment house but X cannot do so
because the apartment house had been destroyed by fire
through his fault . In this case, therefore,

X has the following obligation:

1. To give Y the fruits or rentals of the apartment house, if
any, from the time the house was delivered to him;

2. To give to Y the value of the apartment house at the time

of the loss plus interest on the value of the house.
 ARTICLE 1401
Art. 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. (1314a)
 ARTICLE 1401
Ang aksyon para sa pagwawalang bisa ng kontrata ay
matatapos kapag ang bagay na pinag-uugatan ng
kontrata ay nawala dahil sa pandaraya o sa pagkakamali
ng taong may karapatang isulong ang paglilitis.

Kung ang karapatan sa pag-aksyon ay naaayon sa

kakulangan ng isa sa mga partido, ang pagkawala
ng bagay ay hindi hadlang sa tagumpay ng aksyon,
maliban na lamang kung ang pagkawala nito ay dahil sa
pandaraya o sa pagkakamali ng nagsasakdal.
 DISCUSSION
Loss of the thing while in the possession of the
party who can annul the contract

A- Due to his fault or fraud

The right to annul is extinguished if the
thing is lost through the fraud or fault of the
party who has the right of annulment.
 DISCUSSION
B- Due to fortuitous event
The contract can still be annulled. But the
other party cannot be compelled to make
restitution unless the innocent party restores
what in virtue of the decree of annulment he is
bound to return.
 EXAMPLE
C was forced by B to enter into a contract of
barter whereby B exchange his fountain pen
with C’s ring. If the fountain pen is lost due to
the fault of C. C’s right of the annulment is
extinguished.
 ARTICLE 1402
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
be compelled to comply with what is incumbent
upon him. (1308)

Hangga’t isa sa mga partido ay hindi pa binabalik

ang kaniyang responsibilidad na ibalik, ang kabilang
partido ay hindi pwedeng piliting gawin ang
nakatoka niyang gawain.
 MUTUAL RESTITUTION
if an obligation is annulled , the parties
shall restore to each other the things which have
been the object the contract, with their fruits,
and the price with its interest. Hence, if one of
the parties does not restore what he is required
to restore, the other cannot be compelled to
make restitution.
 EXAMPLE
C was forced by B to enter into a contract to
barter whereby B exchanged his iphone with C’s
Tablet. If the contract is annulled B is required to
return the tablet to C and C is required to return
the iphone to B. if the iphone is lost due to a
fortuitous event, the C’s right to annulment shall
subsist but B is not required to return the tablet
to C unless the value of the iphone at the time
of its loss is returned by C to B.