Short answer. No. Article 1422 voids a contract that is the direct result of an earlier illegal one regardless of whether the party who entered the later contract knew about the illegality behind it. Good faith may support a separate claim for damages against whoever concealed the truth, but it cannot cure the void, inexistent character of the contract itself.

What the law says

A contract which is the direct result of a previous illegal contract, is also void and inexistent.

Civil Code, Article 1422 — A Contract That Is the Fruit of an Earlier Illegal Contract. Read the full provision →

The objective test Article 1422 applies

Article 1422 does not ask what either party to the second contract knew or intended. It asks a simpler, factual question: is this agreement the direct result of a contract the law already condemns as illegal? If the answer is yes, the second contract shares the same fate as the first — void and inexistent from the start — no matter how innocently the parties to it may have acted.

Why this differs from voidable contracts

Contracts that are merely voidable, under Article 1390, turn on the state of a party's consent — whether it was vitiated by fraud, mistake, or intimidation. Void contracts under this Title work differently: their defect is objective and structural, tied to what the agreement actually is or does, not to what either party believed. A party's honest ignorance of the underlying illegality does not change what the contract objectively is.

What remedy an innocent party actually has

Someone who entered the second contract without knowing it was tainted is not left with no recourse at all. He may have a claim in damages against the person who concealed the illegal origin of the deal, since that concealment can itself amount to fraud or bad faith actionable independently of the contract's validity. What he cannot do is ask a court to treat the void contract as though it were binding just because he acted in good faith. This rule binds both parties to the second contract and any third party who later deals with property or rights that passed under it, since a void contract transfers nothing that a court will recognize. Whoever benefited from the void arrangement may also be required to return what was received, under the ordinary rules on restitution for void contracts, even if that person also acted honestly.

A practical caution

Anyone entering a contract that depends on, or grows out of, an earlier agreement should look into that earlier agreement's legality before relying on the new one. Discovering only after the fact that the first contract was illegal, and that the second is therefore void as well, can leave a party with nothing enforceable to show for a transaction he believed was entirely proper. This exposure does not depend on the size of the transaction or on how many steps separate the second contract from the illegal first one; as long as the later agreement is the direct result of the earlier illegality, the taint carries through. Requesting the underlying documents and, where possible, independent confirmation of the first transaction's legality before signing is the only reliable way to avoid inheriting a defect that good faith cannot cure.

Related provisions

Note. Statute text quoted on this page is reproduced from the official enactment and is linked to the full provision. The explanation around it is general legal information from Vivas & Nobles Law Office, not legal advice. Whether it applies to your situation depends on facts only a lawyer reviewing them can assess.