VOIDABLE CONTRACTS IN BOLIVIA: CAUSES, TIME LIMITS, AND PRACTICAL EXAMPLES

In Bolivia, a contract is considered voidable when it contains defects that affect its validity without rendering it null from the outset. Voidability allows the affected party to request annulment within a specific time frame or, alternatively, confirm the contract to keep it enforceable. This article explains the causes of voidability, the applicable time limits, and provides practical examples for a better understanding of the concept.

WHEN IS A CONTRACT VOIDABLE?

A contract is voidable when a defect in its formation compromises the consent or legal capacity of one of the parties. Unlike absolute nullity, which can be claimed by any party with a legitimate interest, voidability can only be invoked by the affected party.

MAIN CAUSES OF VOIDABLE CONTRACTS IN BOLIVIA

CONTRACTS WITHOUT VALID CONSENT

A contract may be annulled if one party did not provide valid consent at the time of signing.

Example: A person signs what they believe to be a loan agreement, but it turns out to be a contract selling their property.

VOIDABILITY DUE TO LEGAL INCAPACITY

If a legally incapacitated person signs a contract, it is voidable. However, the legally capable party cannot use the other’s incapacity to their own advantage.

Example: A minor sells their motorcycle without parental consent. The buyer cannot demand enforcement, as the minor lacked legal capacity.

ANNULMENT DUE TO UNRECOGNIZED MENTAL INCAPACITY

If a person, though not formally declared incapacitated, was mentally unfit to understand the contract at the time, and the other party acted in bad faith, the contract may be annulled.

Example: An elderly person with cognitive decline is manipulated into signing a contract to sell their house at a negligible price.

ANNULMENT DUE TO FRAUD, DURESS, OR FUNDAMENTAL ERROR

A contract may be voided if signed under pressure, deception, or a serious error regarding the nature of the agreement or the quality of the item involved.

Example: A buyer purchases a “gold watch” that turns out to be a fake. If the seller acted fraudulently, the contract is voidable due to fraud.

VOIDABILITY DUE TO ERROR IN IDENTITY OR ESSENTIAL QUALITIES

If identity or essential characteristics of a person were decisive in entering into the contract, and a fundamental error exists, the contract is voidable.

Example: A person hires someone claiming to be a licensed plastic surgeon, later discovering the individual lacks proper credentials.

OTHER LEGAL GROUNDS FOR CONTRACT ANNULMENT

Bolivian law also recognizes other grounds for voidability, such as violation of public order regulations or harm to legally protected individuals.

Example: A guardian signs a contract on behalf of a minor without court approval, despite such approval being legally required.

WHO CAN REQUEST CONTRACT ANNULMENT?

Unlike absolute nullity, which may be pursued by any party with a legitimate interest, voidability may only be invoked by the affected party.

Example: A person who signed a contract under deception is the only one entitled to request its annulment—not a third party without direct interest.

TIME LIMIT TO ANNUL A CONTRACT IN BOLIVIA

The right to annul a contract generally expires five years after the signing. However, in specific cases, the countdown begins from a different moment:

• Incapacity: The time limit starts when the person reaches legal age or is no longer under legal guardianship.
• Consent defects (fraud, duress, or error): The period begins once the duress ends or the fraud/error is discovered.

Example: If a person is coerced into signing a contract and the coercion lasts two years, the five-year period begins once the coercion stops.

LEGAL DEFENSE AGAINST VOIDABLE CONTRACT CLAIMS

If someone seeks to enforce a voidable contract, the other party may raise the exception of voidability at any time.

Example: A company sues to enforce a sales contract signed by a minor. The minor’s family may raise the incapacity defense to avoid enforcement.

IS IT POSSIBLE TO VALIDATE A VOIDABLE CONTRACT?

Yes. The party entitled to annul the contract may confirm it, thereby validating it.

• Confirmation by the affected party: If the entitled individual chooses to validate the contract, it remains effective.
• Confirmation by a legal representative: A representative may confirm a contract signed by an incapacitated person, if legally authorized.
• Effect of confirmation: Validation has retroactive effect from the date the contract was originally signed.

Example: A minor sells a motorcycle without permission. Upon turning 18, the individual confirms the sale, retroactively validating the contract.

THIRD-PARTY RIGHTS IN VOIDABLE CONTRACTS

If a voidable contract has created rights for third parties acting in good faith and for value, those rights remain protected unless a formal claim of annulment was previously recorded.

Example: Someone buys a car from a person who obtained it through a voidable contract. If the buyer acted in good faith and unaware of the defect, they retain legal ownership unless the annulment claim had been formally registered.

CONCLUSION