(1) A contract which, at the initiation of its
party, may be declared void by the court shall be deemed to be a
voidable contract.
(2) The person aggrieved from any of the following
contracts may get the contract voided by the court:
(a) A contract concluded by coercion,
Explanation: If a person detains or threatens to detain
any property of another person or threatens to put that
other person's body, life or prestige in peril or commits
or threatens to commit any other act forbidden by law,
with the intention of causing that other person to enter
into a contract against his or her will, the person is said
to commit coercion.
(b) A contract concluded by undue influence,
Explanation:
(1) Undue influence means an influence exercised
by a person over another person who is under his
or her influence or who may be employed
according to his or her will with the intention of
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taking any unfair advantage for his or her
interest or concern.
(2) Without prejudice to the generality of clause (1),
the following person is deemed to be under
influence or who may be employed according to
his or will:
(a) A person who is under his or her
guardianship, curatorship or custody,
(b) A person who is incapable of representing
his or her interest for the time being or
forever by reason of age, illness or
physical or mental distress,
(c) A person who may be subjected to
financial or positional influence of that
other person.
(c) A contract concluded by fraud,
Explanation: A party to a contract or his or her agent
is said to commit fraud when he or she, with intent to
deceive another party thereto or his or her agent, makes
the suggestion, as to a fact, of that which is not true
which he or she does not believe it to be true or does
any act that is likely to make the other party or his or
her agent believe it, or knowingly conceals a fact
which is in his or her knowledge or does any such act
as the law declares to be fraudulent.
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(d) A contract caused by misrepresentation.
Explanation: Misrepresentation means any of the
following acts:
(1) Presenting a false description of any matter or
fact on without reasonable basis,
(2) Misleading any party to his or her detriment,
(3) Causing a mistake as to any matter of the
contract,
(4) Making assurance to have concluded a contract
in one subject and but causing to enter into it in
another subject.
(3) In the case of a voidable contract under this Section,
the following matters shall be governed as follows:
(a) The party caused to enter into a contract may, instead
of having the contract voided, demand that his or her
position be restored into the position that would have
been had the contract not been concluded.
(b) If a contract is made with the person who is under his
or her influence and whose will can be dominated by
him or her, the party who claims that he or she has not
exercised such undue influence shall have the onus to
prove that the contract has not been caused by undue
influence.
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(4) A voidable contract shall, before it is voided, be
enforceable as if it were a lawful contract.
(5) If a voidable contract under this Section is voided by
the court, it shall not affect the act done under such contract before
the voidance.
(6) If any contract is voided pursuant to this Section, the
legal right or interest of a bona fide third party shall not be
prejudiced merely by the reason of such voidance.