When the deal ended up lopsided: annulling it or readjusting it

It is Section Three of Chapter VI of Title I of Book Five of the Civil Code of 2020, Articles 1258 to 1260. They are the two ways of asking a court to annul or rebalance a contract: for taking advantage when signing it, or for an extraordinary event afterwards.

For lesion by disproportionate advantage, only the injured party or their heirs, in an onerous contract. For supervening excessive onerousness, the prejudiced party, if the contract is of deferred execution or successive performance and they are free of fault and relevant delay.

• For the lesion in Article 1258, that one party dolosamente took advantage of the other’s necessity, inexperience, cultural condition, economic dependence or advanced age.Verified against the official source
• That the disproportion be calculated on values at the time the contract was concluded and subsist at the time of the claim.Verified against the official source
• For supervening excessive onerousness, that the contract be of deferred execution or successive performance and the event extraordinary, unforeseeable and outside the parties’ conduct.Verified against the official source
• That the party alleging excessive onerousness be free of fault and relevant delay.Verified against the official source
• Bringing the action for supervening excessive onerousness within six (6) months of the event: it is a caducidad period.Verified against the official source

• Evidence of the values of the performances at the time the contract was concluded, because the disproportion is calculated with them.
• The record of the date the extraordinary and unforeseeable event occurred, because the six months run from it.

1. 1

   Step 1: Taking advantage when signing

   Article 1258 names five situations that may not be taken advantage of: the other party’s necessity, inexperience, cultural condition, economic dependence or advanced age. The taking advantage must be dolosa and must, as a result, produce a disproportionate and unjustified patrimonial advantage.

2. 2

   Step 2: How the disproportion is measured

   Rule (a) fixes two things and a presumption. The calculation must be made on values at the time the contract was concluded, and the disproportion must subsist at the time of the claim. And it adds the number that weighs most: the disproportion raises a presumption of taking advantage if it exceeds half the value of the promised performance.

3. 3

   Step 3: Who may sue, and what they may seek

   Rule (b) closes standing: the action may only be brought by the injured party or their heirs. Rule (c) gives the choice and a twist: the claimant may demand annulment or equitable readjustment of the performances, but the annulment action is transformed into a readjustment action if the defendant offers it. Offering to readjust switches annulment off.

4. 4

   Step 4: How the readjustment is made

   Rule (d) gives the criterion: the equitable readjustment must be made in consideration of the contract type and its cause, to eliminate the imbalance of performances. It is not remaking the contract: it is removing the imbalance.

5. 5

   Step 5: The other route: what happened after signing

   Article 1259 opens it: the party prejudiced by the supervening excessive onerousness of their performance, caused by an extraordinary and unforeseeable event, may allege ineffectiveness or seek revision of the contract. It is not that the deal was unfair when signed: it is that it stopped being sustainable because of something nobody could anticipate.

6. 6

   Step 6: The five conditions

   The contract must be of deferred execution or successive performance. If the contract is aleatory, the excessive onerousness must be outside its own alea. The extraordinary and unforeseeable event must be outside the parties’ conduct. To judge foreseeability, regard must be had to the greater duty to act prudently and with full knowledge of the circumstances. And the party alleging it must be free of fault and relevant delay.

7. 7

   Step 7: What may be sought and what is untouched

   Article 1260 repeats the readjustment mechanism: the prejudiced party may allege ineffectiveness or seek equitable readjustment, but the allegation of ineffectiveness is transformed into a request for readjustment if the other party offers it. Ineffectiveness may be total or partial. And it protects what was done: reciprocal performances already carried out are not affected.

8. 8

   Step 8: Six months, and they are caducidad

   The last sentence of Article 1260 is the one that closes most cases: actions for lesion based on supervening excessive onerousness lapse six months after the extraordinary and unforeseeable event occurs. They are counted from the event, not from when the effect was noticed. And being caducidad, in this Code the parties’ acts do not affect its running.

Both actions are filed before the Court of First Instance. The defendant’s offer to readjust is also made in the case, and it transforms the annulment action or the allegation of ineffectiveness into a request for readjustment. The Code names no agency here.

• Measuring the disproportion with today’s values: the calculation is made on values at the time the contract was concluded.
• Forgetting the disproportion must also subsist at the time of the claim.
• Counting on the presumption without reaching half the value of the promised performance.
• Suing for lesion without being the injured party or their heir.
• Insisting on annulment where the defendant already offered readjustment: the action is transformed.
• Invoking excessive onerousness in a contract of instantaneous execution.
• Alleging it while at fault or in relevant delay.
• Letting the six months from the event pass: it is a caducidad period, not prescription.

These are the government pages this guide is based on.

• Poder Judicial de Puerto Rico

  Poder Judicial

  bvirtualogp.pr.gov