Summary
Highlights
Ratification can be effected by the guardian of an incapacitated person or by the incapacitated person themselves upon regaining capacity. Ratification does not require the conformity of the contracting party who has no right to bring the action for annulment, meaning the guilty party cannot ratify or prevent the innocent party from ratifying.
Ratification has a retroactive effect, making the contract valid from its inception, as if it had no defects. This is subject to the prior rights of third parties.
The action for annulment can only be instituted by the injured party or the party whose consent is vitiated. The guilty party or their successors in interest generally cannot bring the action for annulment.
Upon annulment, the contracting parties are generally excused from performing their obligations. If the contract has been executed, the parties must restore to each other the things which have been the subject matter of the contract, with their fruits, and the price with its interest. For personal obligations, the value is the basis for damages.
If the defect is the incapacity of one party, the incapacitated person is not obliged to make restitution except insofar as they have been benefited by the thing or price received. The burden of proof for showing benefit lies with the capacitated person.
If the thing to be restored is lost through the fault of the person obliged to return it, they must return the value of the thing at the time of loss, with interest from the same date. This value substitutes the thing itself.
The action for annulment is extinguished if the person who has the right to institute it loses the thing which is the subject matter of the contract through their fault or fraud. This rule applies even if the right of action is based on incapacity, unless the loss occurred without the incapacitated person's fault.
In a decree of annulment, if one contracting party does not restore what they are bound to return, the other cannot be compelled to comply with their reciprocal obligation. The return by one party is a condition for the other party's fulfillment of their restitution obligation.
Voidable contracts are legally valid until they are annulled. They can be annulled if one party is incapable of giving consent, or if the consent of one party is vitiated (e.g., due to mistake, fraud, intimidation, violence, or undue influence). Annulment requires a proper court action, but the contract is susceptible to ratification.
An action for annulment must be filed within four years. The start of this four-year period depends on the specific defect: for intimidation, violence, or undue influence, it starts when the defect ceases; for mistake or fraud, it starts when the defect is discovered; and for incapacitated persons, it starts when the guardianship ceases or the incapacity ends (e.g., upon reaching the age of majority).
Ratification extinguishes the action to annul a voidable contract. Ratification, which can be express or implied, cleanses the contract of its defects from the moment it was constituted. Implied ratification occurs when, with knowledge of the defect and after the reason for it has ceased, the injured party performs an act that implies an intention to uphold the contract.