Contracts that are only voidable can still produce legal effects (i.e., they remain valid) if the affected contracting party does not challenge them.166 A contract is voidable if it was concluded by a party with limited legal capacity, if there were errors in the parties’ consent during its conclusion, or if voidability is prescribed by the OZ, another code, or another law.167 Only the contracting party for whose benefit voidability is established can invoke it (through a lawsuit).168
The right to invoke voidability expires:
- 1 year from the day the entitled party became aware of the reason for voidability (subjective period),
- 3 years in any case from the date of contract conclusion (objective period).169
By court decision, the contract is annulled, rendering it invalid from the moment of its conclusion.170 If any performance was made based on the annulled contract, it must be returned; if return is not possible or if the nature of the performance prevents restitution, an appropriate monetary compensation must be provided. Monetary compensation is determined based on prices at the time of restitution or the issuance of the court decision.171
The party responsible for the cause of voidability is liable for damages to the other party if the latter was unaware and was not obligated to be aware of the reason for voidability.172
