OBLICON DISCUSSION (1.5.

21)

ART. 1332

An example of this article is an “employment contract” usually in the English

There are times when an employee does not understand well the English language
If the quitclaim was written in the English language, a menial worker may easily say that he did not
understand what he signed
The burden of proof is on the OTHER PARTY to explain it well to the employee

It should be on the language of the person who you will ask to sign such document

ART. 1334
EFFECT OF MISTAKE OF LAW

Mistake of law is not a ground for the annulment of a contract

Vitiation of consent – contract may be voidable or annulled

Vices of consent
Mistake, fraud, violence, intimidation and undue influence
Defective consent

ART. 1335
Violence – the use of serious or irresistible force in order to get the other party’s consent
Ex:
May nakatutok na shot gun sa ulo; may kutsilyong nakatutok

Intimidation – a vice of consent; one of the parties is compelled to give consent to a contract due to
reasonable and well-grounded fear of an imminent and grave evil upon his person, property or upon the
person or property of his spouse, descendants, or ascendants; it should be imminent evil that is directed
upon the person

Ascendants – parents, grandparents, great-grandparents

Descendants – children, grandchildren, great-grandchildren
Spouse – requires the parties to be married

Brother/sister, cousins – siblings; not direct line

Aunt/uncle – not ascendants
Nephews and nieces – not descendants

The language of this article is restrictive

What if the intimidation is directed against a sibling or mother in law then you are intimidated to sign a
contract? Is it voidable?

If there is intimidation – you can have the contract annulled

ART. 1337-

Undue influence – improper taking advantage over one’s willpower; deprived of reasonable choice
Financial distress- could be a little problematic
Ex:
Jen is a parent and her child is sick. She is in a financial distress. She needs cash to pay for the expenses
of her child. She has a jewelry worth a million pesos. Jen had to sell the jewelry for a much lower price.
Taking advantage of this situation will make the contract voidable

ART. 1338 –

Fraud – a party is induced to enter a contract by reason of insidious words

 Insidious words – mabulaklak na pananalita

Fraud – in the perfection of the contract = voidable contract (e.g. vitiated consent)
Fraud – in the performance of the contract/obligation =

You were shown a ring and it’s a diamond ring. Through the use of insidious words, you were misled into
believing that the ring is indeed genuine and worth 500k, but it turned out, it was fake; you agreed to
buy the ring anyway (this is fraud at the PERFECTION of the contract)

Let’s say you are an expert and you can tell if the ring is fake or genuine, you couldn’t be misled; so you
agreed to buy it; on Friday I will deliver the ring to you; but then when it was delivered to you, iba na
yung product (this is fraud in the PERFORMANCE of the obligation) the contract here is not voidable but
a case of fraud in the performance of obligation; ask for the rescission of a contract

Buyer may ask for the specific performance like deliver the original ring
Buyer may ask for the rescission of the obligation with damages in either case

Art. 1191 connect with Art 1338

Determine at what point the fraud was committed

Fraud is either criminal or just civil

ART. 1339

There is fraud if there’s only a DUTY TO REVEAL FACTS; otherwise, there is NO FRAUD

PURPOSE OF REPRESENTATION AND WARRANTIES

- Disclosure of certain facts

3 kinds of lawyers
Lawyer 1 – do huge transactions (project finance)
Lawyer 2 – regular lawyer who is just taking the LRT
Lawyer 3 – a lawyer who practices law under the LRT; those in notary public

There are different kinds of lawyers; what you become depends on the effort you give
When you do high-value transactions, the contracts you will draft will be so vast
Like loan agreement at 50 pages

High value transactions – complicated; with so many pages

ART. 1340 –

Exaggeration in trade

ART. 1341 –

Mere expression of an opinion does not signify fraud

When you misrepresent – it will tantamount to fraud; but when made by a 3 rd person; that is not
suppose to vitiate consent

ART. 1343 –

Misrepresentation made in GOOD FAITH

ART. 1344 –

Must be serious and not committed by BOTH parties

If committed by both parties, it puts them in pari delicto (when both parties are at fault)

One who goes to court must come with clean hands

Fraud should not be committed by both parties; remedy of annulment is only available to the innocent
party

ART. 1345 –

Simulation of contracts may be absolute or relative

TRAIN LAW – a Tax law; amended the NIRC

Relatively simulated contract –

Simulated deed of sale – to transfer a property to another; in order to pay tax less

ART. 1346 –

If the intention is for the purpose which is contrary to law – it should be considered void

Under the TRAIN law – you don’t need to simulate; all 6%; no need for legal maneuvering

SECTION 2 – OBJECT OF CONTRACTS

ART. 1347, ART. 1348, AND ART. 1349

WHAT CANNOT BE OBJECT OF A CONTRACT?

- Things outside the commerce of men
- Object

WHAT ARE FUTURE THINGS?

- ART. 1461 connect with Art. 1347
- ART. 1409 (3) – THE OBJECT DID NOT EXIST AT THE TIME OF THE TRANSACTION; since there is
one missing element, the contract is inexistent then

Can you buy the mangoes that will be produced by a particular mango plantation for the next summer?

Qualities of an object of a contract

- Licit, real, susceptible of appropriation, determinable

ART. 1350 –

WHY IS THAT PARTY ENTERING INTO THAT CONTRACT?

- IF YOU’LL ANSWER THE “WHY”, THAT IS THE CONSIDERATION
- SELLER’S CONSIDERATION: 500K OR MONEY
- BUYER’S CONSIDERATION: THE CAR

HOW DO YOU DETERMINE THE OBJECT AND CONSIDERATION?

E.G. CAR AND 500K

OBJECT = CAR
CONSIDERATION = THE 500K

IF A IS SELLING A CAR FOR 500K TO B

SELLER’S OBJECT – THE THING SELLING/CAR

BUYER’S OBJECT – THE MONEY/500K

SELLER’S CONSIDERATION – MONEY

BUYER’S CONSIDERATION – CAR

THE CONCEPT OF OBJECT AND CONSIDERATION MAY SHIFT FROM WHICH PERSPECTIVE YOU’RE
LOOKING FROM; PERSPECTIVE NI SELLER OR BUYER

View of Tolentino –
The object is always the car and money is not the object
The consideration may HOWEVER SHIFT
It still answers the question “why”
The object is ALWAYS the CAR

The better view is of Manresa and Castan

Instead of money, make it another car

Foreign exchange transactions = you exchange one currency to another

The better view is of Manresa and Castan

ART. 1353 –

Gr. 144735 – October 18, 2001

I f the purchase price was not paid, it doesn’t mean na wala inexistent agad yung contract; pwedeng
rescission din muna

ART. 1355 –

Inadequacy or lesion

1-peso car = the price is grossly inadequate