Lawyer specialized in contract annulment

Cases of ineffectiveness can be varied and extensive.

In general, we refer to the following cases:

• By law, as per legal imperative.
• By the parties’ will, it is determined that a contract produces no effect or ceases to produce it from a specific moment, breaking the contractual bond.

The Possible Invalidity of the Contract

This implies that the contract is considered non-existent or ceases to exist and have binding force as such a contract in certain cases provided for by our legal system.

Cases of contract invalidity include the lack of constitutive requirements or illegality of content.

Within this invalidity, we can distinguish between nullity and voidability of the contract.

These are different cases, but sometimes the rules do not clearly distinguish between them, occasionally using the term “nullity” when referring to cases of voidability.

Both are regulated in Articles 1,301 and following of the Civil Code. Sometimes, this can lead to confusion. However, case law has clarified these concepts.

The Contract Can be Considered Partially Invalid

This occurs when only a part of the content, some clause, or contractual detail is considered invalid. For example, because it is affected by the defect of consent (as in the case of swaps) or because it is contrary to mandatory rules.

It is crucial, of course, that it is not an essential content of the civil or commercial contract. Otherwise, the entire contract would be affected. In other words, we would speak of total invalidity of a commercial or civil contract.

Not all cases are the same, and therefore it is essential to understand the invalidity of the contract in each specific case.

It may lead to various consequences of the lack of validity of the commercial or civil contract:

• An affected clause may be considered as not set forth.
• The affected clause may be replaced by another with content in accordance with the violated rule.
• Furthermore, the contract may be supplemented by the judge who declares that partial invalidity.

Furthermore, doctrine distinguishes between ineffectiveness and invalidity.

The Commercial or Civil Contract is Ineffective

When it does not produce effects.

The Commercial or Civil Contract is Invalid

When it lacks value as a contract, due to its intrinsic defects.

As expert lawyers in commercial and civil law, we believe that the concept of ineffectiveness suffices, divided into its two main consequences: nullity and voidability.

The Civil Code regulates absolute nullity and voidability.

All this will depend on the greater or lesser degree of defect or absence of consent, object, and cause of the civil or commercial contract.

Nullity due to non-compliance with mandatory norms in the Civil Code

In this regard, it is worth noting what Article 6.3 of the Civil Code states:

“Acts contrary to imperative or prohibitive norms are null and void, except where a different effect is established for the case of contravention.”

Differences between Nullity and Voidability of Civil and Commercial Contracts

Absolute nullity can be opposed by any interested party. It can also be declared ex officio (i.e., by the judge himself).

It operates automatically. As a general rule, it does not have a time limit and can be invoked at any time.

Voidability can only be invoked by the person indicated by the law for this purpose. Moreover, within a strictly defined period.

Voidability of Civil and Commercial Contracts

Within the general concept of ineffectiveness, voidability allows one of the parties to the contract to request its nullity, based on legally provided defects.

Among the most relevant provisions, we refer to Article 1,301 of the Civil Code.

They must always be valid, and all essential elements of the civil or commercial contract must exist.

Voidability is regulated in Article 1,261 of the Civil Code:

Contracts in which all their essential elements concur may be voidable when there is a defect that affects one of the parties: lack of capacity, defect of consent…

The legal regime of voidability is set forth in Articles 1,300 to 1,314 of the Civil Code.

The voidable contract is valid and effective until a judgment is issued declaring its nullity as a result of the exercise of the voidability action.

If the court considers the contract voidable, it will be considered null retroactively.

The effects of the civil or commercial contract declared voidable will be undone, returning the situation to what it was before. In other words, as if that contract had never been entered into.

As a consequence of voidability, the parties to the contract must mutually restore the things that were the subject of the contract, with their fruits, and the price with interest.

Articles 1,303 and following of the Civil Code stipulate this.

What is the deadline to request the voidability of a contract?

The exercise of the voidability action is subject to a limitation period of four years. This is stated in Article 1,301 of the Civil Code.