Rules on voidable contracts:

1. A party does not have to sustain damage in order for a contract to be

voidable (1st par. Art. 1390);
2. Voidable contracts are valid until annulled (2 nd par. Art. 1390), and;
3. Voidable contracts may be ratified (2nd par. Art. 1390);

Rules on ratification:
1. Ratification may only be done within a period of 4 years (1 st par. Art. 1391);
2. Period for prescription starts when:
a. For vitiated consent:
i. When the coercion stops (3rd par. Art. 1391), and;
ii. From the time of the discovery of fraud or mistake (4 th par. Art.
1391).
b. For persons incapacitated to give consent from the time the person
becomes capacitated (5th par. Art. 1391).
3. Ratification should be made expressly or tacitly (Art. 1393);
a. There is tacit ratification when:
i. When the person does nothing after the discovery of the defect
(Art. 1393), or;
ii. After the coercive force has ceased, the person does nothing
(Art. 1393).
4. Ratification may be made by a guardian of an incapacitated person (Art.
1394);
5. Ratification does not require conformity of a guilty party (Art. 1395);

Effects of ratification:
1. Ratification extinguishes an action for annulment (Art. 1392);
2. Ratification cleanses a voidable contract of its defects (Art. 1396);
3. Ratification retroacts from the time of the constitution of the contract (Art.
1396);

Rules on Annulment:
1. The general rule is that annulment may be made by a person principally or
subsidiarily obliged in a voidable contract (Art. 1397);
a. Exception to the general rule only the prejudiced party in a voidable
contract may ask for annulment from the courts (Art. 1397)
2. When the thing to be restituted is lost though the fault of either of the parties
the monetary value of the thing lost shall be returned plus interest (Art.
1400).

3. Action for annulment is extinguished if the prejudiced person losses or

destroys the object of the voidable contract or spends the sum in
consideration of the same (1st par. Art. 1401).
4. Exception to the rule on restitution:
a. When the party prejudiced is one who was incapacitated to give
consent (Art. 1399)
i. Exception to the exception he is obliged to make restitution
insofar as it has benefited him (Art. 1399);
b. If the thing, in the possession of the victim, is lost without the fault of
the prejudiced person (Art. 1401);
c. When one of the parties fail or refuse to return an object, the other
party may not compelled to return the object in his possession (Art.
1402).

Effects of annulment:
1. In obligations to give (1st par. Art. 1398):
a. In unilateral obligations/contracts (1st par. Art. 1398):
i. The party given the thing should return the thing plus the fruits
of the thing (if there is any), or;
ii. The party given an amount of money should return the same
plus interest.
b. In bilateral/reciprocal obligations (1st par. Art. 1398):
i. Parties shall restitute one another the thing they received plus
the fruits and/or the sum they received plus interest;
2. In obligations to do the value of the service rendered shall be the one
returned plus damages (if there is any) (2 nd par. Art. 1398);