Difference Between Ratification of Contract and Reformation of Contract
Reformation of Contract is the remedy whereby a written instrument to the contract is amended
to conform to the parties’ true intentions. Meanwhile, Ratification of Contract is the remedy to cure the
defect of lack of authority in an authorized contract or cleanse the agreement from all its faults from the
moment it was constituted; hence the action to annul a voidable contract is extinguished (Art. 1390).
Moreover, the former is used as the court’s power to modify an agreement to reflect both parties’ intent
where an error was committed. In contrast, the latter may be used expressly (when the ratification is
manifested in writing) or impliedly (when it is displayed in silence, showing approval, or by acceptance).
Furthermore, in terms of requisites, both are distinct. In the Reformation of Contract, the
following are considered: (a) there must be meeting of the minds, (b) the true intention is not expressed
in the written instrument, (c) the failure of intention is due to mistake, fraud, inequitable conduct or
accident, and (d) there must be clear and convincing proof. On the other hand, the requisites of
Ratification are as follows: (a) there must be a voidable or annullable contract, (b) it is made with the
knowledge of the cause of nullity, (c) the cause of nullity has already ceased, (d) the ratifying party is the
injured party, and (e) ratification is accomplished expressly or impliedly by a waiver of action to annul.
For example, in the case of the Reformation of Contract, A sold his house to B for Php 4 million.
However, B negotiated with A to change the selling price to Php 3.5 million. Eventually, A approved B’s
offer, and subsequently, they executed a deed of sale. However, it was written in the deal that the
property price is Php 4 million. From here, the remedy is reformation because there is a meeting of minds
between the parties that the fee shall change to Php 3.5 million, and since the written instrument does
not reflect their true and honest intention.
Alternatively, in the case of Ratification, it can be applied in an instance where X, a minor, sold his
car to Y. Upon reaching the age of 18, instead of annulling the contract since he was incapacitated during
the time he sold his car, he only collected the unpaid balance. Therefore, X has waived his right to file an
action for annulment, which means he ratified their contract.