Void Civil Transactions Due to Sham Arrangements
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Where the parties establish a civil transaction in a sham manner to conceal another civil transaction, the sham transaction shall be void, while the concealed transaction shall remain valid, unless such concealed transaction is also void under this Code or other relevant laws.
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Where a civil transaction is established in a sham manner to evade obligations toward a third party, such civil transaction shall be void.
Legal Consequences of Void Civil Transactions
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A void civil transaction shall not give rise to, change, or terminate the civil rights and obligations of the parties from the time the transaction was entered into.
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When a civil transaction is void, the parties shall restore the original state and return to each other what they have received.
Where return in kind is not possible, restitution shall be made in monetary value. -
A bona fide party in the collection of yields or profits shall not be obliged to return such yields or profits.
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The party at fault causing damage must provide compensation.
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The settlement of consequences of void civil transactions relating to personal rights shall be governed by this Code and other relevant laws.
Legal basis:
Articles 124 and 131, Civil Code 2015.
