ESSENTIAL REQUISITES: C-O-C (consent, object, cause)

CONSENT

1. CONCURRENCE OF OFFER AND ACCEPTANCE

-OFFER must be CERTAIN or DEFINITE (Art. 1319)
-ACCEPTANCE must be ABSOLUTE and UNQUALIFIED (Art. 1319);
-Express (Art.1320)
-Implied (Art. 1320)
-Qualified/Counter-Offer (Art. 1319)

-OFFERER fixes TIME, PLACE, MANNER OF ACCEPTANCE (Art. 1321)

-Offer terminates when:
1.) offeree rejects it
2.) incapacity of offeror or offeree (Art. 1323)
-Death, Civil Interdiction, Insanity, Insolvency
3.) counter-offer (Art. 1319)
4.) LAPSE of time to accept; revocation of option period, except if
founded upon consideration, payment or promise. (Art. 1324)
5.) REVOCATION before learning of ACCEPTANCE (Art. 1324)

-Offer thru an AGENT (Art. 1322)

-ADVERTISEMENT (Not a definite offer, unless contrary is provided)

-Business Advertisement, mere invitation to make an offer (Art. 1325)
-Advertisements for bidders, invitation to make proposal (Art. 1326)

2. LEGAL CAPACITY OF PARTIES

-INCAPACITY to enter into contracts which RESTRAINS the EXERCISE of a
RIGHT and RENDERS them VOIDABLE
-Consent given by a MINOR (under 18 years old), INSANE, DEAF-MUTE who
cannot write: VOID (Art. 1327)
-Contracts entered in a DRUNKENNESS or HYPNOTIC SPELL: VOIDABLE (Art.
1328)
-Contracts entered during a LUCID INTERVAL: VALID (Art. 1328)
-Prohibition by law, other restraint in entering contract (Art. 1329)

3. MUST BE INTELLIGENCE, FREE, SPONTANEOUS, REAL

-VICES OF CONSENT (Art. 1330)
1. Mistake/Error (Art. 1331)
2. Violence/Intimidation (Art. 1335)
3. Undue Influence (Art. 1337)
4. Fraud (Art. 1338)
4.1. Misrepresentation (Art. 1342, 1343)
5. Simulation (Art. 1345, 1346)
MISTAKE/ERROR
-Mistake of Fact (Art. 1331): In order that mistake may
invalidate consent, it should refer to the substance of the
thing which is the object of the contract, or those conditions
which have principally moved one or both parties to enter the
contract.
-Mistake of Law: General rule, valid. Exception, mutual error
as to the legal effect of an agreement when the real purpose
is frustrated, may VITIATE CONSENT (Art.1334).

- When one of the parties is UNABLE to READ, the person

ENFORCING the contract must show that the terms have
been fully EXPLAINED to the FORMER (Art. 1332).

-There is NO MISTAKE if the party ALLEGING it knew the

DOUBT, CONTINGENCY or RISK affecting the object of the
contract (Art. 1333).

VIOLENCE/INTIMIDATION (Art. 1335)

-Violence = Physical Compulsion
-Intimidation = Moral Compulsion
-Threat must constitute actionable wrong. Fear must
be determining factor of the consent.

UNDUE INFLUENCE
- When a person:
1. Takes improper ADVANTAGE;
2. Of his power over the WILL of ANOTHER;
3. DEPRIVE the latter of a REASONABLE freedom of
CHOICE
- Circumstances to consider:
1. CONFIDENTIAL, SPIRITUAL, FAMILY
RELATIONS between the parties e.g., teacher and
student;
2. The person unduly influenced was suffering from
INFIRMITY or from an UNFAVORABLE
BARGAINING POSITION that leaves NO
REASONABLE ALTERNATIVE.
-Due influence = Solicitation, importunity, argument, and
persuasion are not undue influence and a contract is not to
be set aside merely because one party used these means to
obtain the consent of the other. Influence obtained by
persuasion or argument or by appeals to the affection is not
prohibited either in law or morals and is not obnoxious even
in courts of equity. (Martinez v. HSBC)
FRAUD (Art. 1338)
DOLO CAUSANTE (CAUSAL FRAUD)
- The party would NOT have CONSENTED if there
had been no fraud (Art. 1338). It renders the contract
VOIDABLE.
DOLO INCIDENTE (INCIDENTAL FRAUD)
- The party would have AGREED, but under
DIFFERENT TERMS (Art. 1344 par. 2). It gives rise to
an action for DAMAGES ONLY.

CONCEALMENT may constitute fraud where the parties are

in CONFIDENTIAL RELATION where there is a DUTY to
DISCLOSE FACTS. (Art. 1339)

USUAL EXAGGERATIONS in TRADE (Dealer’s Talk) are

not FRAUDULENT as long as the party had an
OPPORTUNITY to KNOW the facts (Art. 1340).

EXPRESSION of OPINION does not constitute fraud unless

made by an EXPERT, and the other party has relied on the
expert’s special knowledge (Art. 1341).

Misrepresentations
-Misrepresentation by THIRD PERSONS does not vitiate
consent, unless it created substantial mistake and same is
mutual (Art. 1342).
-If made in GOOD faith, it is not fraudulent but may
CONSTITUTE ERROR (Art. 1343).

Misrepresentation of age (liability)

Active misrepresentation (Mercado case): contract valid
Passive misrepresentation (Braganza case): void

SIMULATON (Art. 1345, 1346)

Absolute = No real transaction is intended; FICTITIOUS
diminishing of assets or increasing liabilities.
VOID.
Relative = Parties conceal their true agreement.
VALID (as to their true agreement); so long as it does
not prejudice third person, not intended for any
purposes contrary to law, morals, good customs,
public order, and public policy,