ART. 1330.
A contract where consent is given 2) the conditions which principally moved or induced
through mistake, violence, intimidation, undue
influence, or fraud is voidable. (1265a)
Causes of Vitiated Consent
Aside from “incapacity to give consent,” the following
are causes of vitiated consent: (They are also referred
to as “vices of consent.”)
(a) mistake (or error)
(b) fraud (or deceit)
(c) violence
(d) intimidation
(e) undue influence
**NO valid consent if there is intelligent, free and
voluntary and conscious or spontaneous.
[NOTE: Mistake and fraud affect the INTELLECT (which
is the faculty in the mind of man, the proper object of
which is the TRUTH. They thus affect COGNITION.)
Cognition must be intelligent.]
[NOTE: Violence, intimidation, and undue influence
affect the WILL (which is the faculty in the mind of
man, the proper object of which is the GOOD. They
thus affect VOLITION.) Volition must be free.]
[NOTE: Mistake and fraud result in defects of the
intellect; the others result in defects of the will.]
Nature of a Voidable Contract
A voidable contract is binding and valid, unless
annulled by a proper action in court. It is, however,
susceptible of ratification before annulment.
**There must be clear and convincing evidence of the
presence of vitiated consent. Mere preponderance of
evidence on this matter is not sufficient.
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 to those
conditions which have principally moved one or both
parties to enter into the contract.
Mistake as to the identity or qualifications of
one of the parties will vitiate consent only when such
identity or qualifications have been the principal
cause of the contract.
A simple mistake of account shall give rise to
its correction.
‘Mistake’ or ‘Error’ Defined
It is a false belief about something.
(2) Requisites for Mistake to Vitiate Consent
(a) The error must be substantial regarding:
1) the object of the contract
one of the parties (error in quality or in quantity —
error in qualitate or in quantitate).
3) identity or qualifications (error in personae), but
only if such was the principal cause of the contract.
(b) The error must be excusable (not caused by
negligence).
(c) The error must be a mistake of fact, and not of law.
Nature of mistake.
(1) Mistake may be of fact or of law. In general (see
Art. 1334.), the mistake to which Article 1331 refers is
mistake of fact. It may arise from ignorance or lack of
knowledge.
(2) The mistake contemplated by law is substantial
mistake of fact, that is, the party would not have
given his consent had he known of the mistake.
Hence, not every mistake will vitiate consent and
make a contract voidable.
it was held in the case of spouses vs fiera
and Antonina santos vs. baik savings and mortgage
bank that one who alleges any defect lack of a valid
consent must establish the same by full, clear and
convincing evidence not merely by preponderance of
evidence.
**the rule is that he who alleges mistake, affecting a
construction substantiate his allegation . since it is
presumed that a person takes ordinary care of his
concerns and that private constructions have been
fair and regular.
ART. 1332. When one of the parties is unable to
read, or if the contract is in a language not
understood by him, and mistake or fraud is alleged,
the person enforcing the contract must show that
the terms thereof have been fully explained to the
former. (n)
ART. 1333. There is no mistake if the party alleging it
knew the doubt, contingency or risk affecting the
object of the contract. (n)
Effect of knowledge of risk.
If a party knew beforehand the doubt, contingency,
or risk; affecting the object of the contract, it is to be
assumed that he was willing to take chances and
cannot, therefore, claim mistake.
ART. 1334. Mutual error as to the legal effect of an
agreement when the real purpose of the parties is
frustrated, may vitiate consent.
Requisites for Mutual Error to Vitiate Consent
(a) There must be mutual error
(b) b) The error must refer to the legal effect of
the agreement.
 (c) (c) The real purpose of the parties is
frustrated.
ART. 1335. There is violence when in order to wrest
consent, serious or irresistible force is employed.
There is intimidation when one of the contracting
parties is compelled by a reasonable and well-
grounded fear of an imminent and grave evil upon
his person or property, or upon the person or
property of his spouse, descendants or ascendants,
to give his consent.
To determine the degree of the intimidation, the
age, sex and condition of the person shall be borne
in mind.
A threat to enforce one’s claim through competent
authority, if the claim is just or legal, does not vitiate
consent. (1267a)
Violence and Intimidation
Violence refers to physical coercion; intimidation, to
moral coercion.
Example: If a person signs a contract only because a
gun is pointed at him, this is intimidation because he
is afraid he would be killed. But if he signs because his
left hand is being twisted painfully, this is violence or
force
Reverential Fear
If a contract is signed merely because of “fear of
displeasing persons to whom obedience and respect
are due,” the contract is still valid, for by itself
reverential fear is not wrong.
**the threat must be of an unjust act, an actionable
wrong. (Therefore, a threat to enforce one’s claim
thru competent authority, if the claim is just or legal,
does not vitiate consent.) (Art. 1335, last paragraph).
A threat to prosecute is not considered as
intimidation. (
ART. 1336. Violence or intimidation shall annul the
obligation, although it may have been employed by a
third person who did not take part in the contract.
(1268)
ART. 1337. There is undue influence when a person
takes improper advantage of his power over the will
of another, depriving the latter of a reasonable
freedom of choice. The following circumstances shall
be considered: the confidential, family, spiritual and
other relations between the parties, or the fact that
the person alleged to have been unduly influenced
was suffering from mental weakness, or was
ignorant or in financial distress. (n)
Requisites for Undue Influence to Vitiate Consent
(a) improper advantage
(b) power over the will of another (reflected for
example in a superior bargaining power).
(c) deprivation of the latter’s will of a reasonable
freedom of choice
**(The influence exerted must be of a kind that
overpowers the mind as to destroy the party’s free
agency.)
Undue Influence Caused by Third Person
Undue influence exercised by a third party vitiates
consent, just like in the case of violence and
intimidation.
ART. 1338. There is fraud when, through insidious
words or machinations of one of the contracting
parties, the other is induced to enter into a contract
which, without them, he would not have agreed to.
(1269)
How causal fraud committed.
Causal fraud may be committed through insidious
words or machinations (Art. 1338.) or by
concealment. –DONE IN FRAUDULENT PURPOSE
**
ART. 1339. Failure to disclose facts, when there is a
duty to reveal them, as when the parties are bound
by confidential relations, constitutes fraud. (n)
Failure to Disclose Facts
(a) Failure to disclose facts (CONCEALMENT)
constitutes FRAUD, when there is a duty to reveal
them.
(b) There is a duty to reveal in the following cases, for
example: when the parties are bound by confidential
relations (Art. 1339) as in the case of partners.
ART. 1340. The usual exaggerations in trade, when
the other party had an opportunity to know the
facts, are not in themselves fraudulent. (n)
Usual Exaggerations in Trade
(a) This Article stresses the rule of “caveat
emptor” (let the buyer beware).
**The maxim “caveat emptor” simply means that a
buyer must be on his guard. It is his duty to check the
title of the seller, otherwise the buyer gets the object
at his own risk.
**Ordinarily, what does not appear on the face of the
written contract should be regarded as “trader’s talk”
or “dealer’s talk.”
ART. 1341. A mere expression of an opinion does not
signify fraud, unless made by an expert and the
other party has relied on the former’s special
knowledge. (n)
ART. 1342. Misrepresentation by a third person does
not vitiate consent, unless such misrepresentation
has created substantial mistake and the same is
mutual. (n)
It should be remembered that force or intimidation
employed by a third person on one of the parties
makes a contract voidable. (Art. 1336.) The reason is
because the consent is vitiated just the same.
However, if the misrepresentation by the third person
has created substantial mistake and the same is
mutual.
ART. 1343. Misrepresentation made in good faith is
not fraudulent but may constitute error. (n)
ART. 1344. In order that fraud may make a contract
voidable, it should be serious and should not have
been employed by both contracting parties.
Incidental fraud only obliges the person employing it
to pay damages. (1270)
Requisites for Fraud to Vitiate Consent
Two requisites for fraud as a ground for annulment
are given in this Article:
(a) the fraud must be serious;
(b) the parties must not be in pari delicto (mutual
guilt), otherwise, neither party may ask for
annulment. The contract would, therefore, be
considered valid
(3) It should not have been known by the other
contracting party.
ART. 1345. Simulation of a contract may be absolute
or relative. The former takes place when the parties
do not intend to be bound at all; the latter, when the
parties conceal their true agreement. (n)
ART. 1346. An absolutely simulated or fictitious
contract is void. A relative simulation, when it does
not prejudice a third person and is not intended for
any purpose contrary to law, morals, good customs,
public order or public policy binds the parties to their
real agreement. (n)
Kinds of Simulated Contracts
(a) Absolutely simulated (simulados) fictitious
contracts:
1) Here, the parties do not intend to be bound.
2) Effect: The contract is VOID.
(b) Relatively simulated (disimulados) disguised
contracts:
1) Here, the parties conceal their true agreement.
2) Effect: The parties are bound to the real or true
agreement except —
a) if the contract should prejudice a third person;
b) or if the purpose is contrary to law, morals, good
customs, public order, or public policy
SECTION 2. — Object of Contracts
ART. 1347. All things which are not outside the
commerce of men, including future things, may be
the object of a contract.
All rights which are not intransmissible may also be
the object of contracts.
No contract may be entered into upon future
inheritance except in cases expressly authorized by
law. All services which are not contrary to law,
morals, good customs, public order or public policy
may likewise be the object of a contract. (1271a)
Object (Subject Matter) of a Contract
The object of a contract is really to create or to end
obligations which, in turn, may involve things or
services. Hence, elliptically, it may be said that the
object of a contract is a thing or a service.
Requisites of things as object of contract.
In order that things may be the object of a contract,
the following requisites must be present:
(1) The thing must be within the commerce of
men, that is, it can legally be the subject of
commercial transaction (Art. 1347.);
(2) (2) It must not be impossible, legally or
physically (Art. 1348.);
(3) (3) It must be in existence or capable of
coming into existence (see Arts. 1461, 1493,
1494.); and
(4) (4) It must be determinate or determinable
without the need of a new contract between
the parties. (Arts. 1349, 1460, par. 2.)—VOID
IF NOT DETERMINABLE.
ART. 1348. Impossible things or services cannot be
the object of contracts. (1272)
ART. 1349. The object of every contract must be
determinate as to its kind. The fact that the quantity
is not determinate shall not be an obstacle to the
existence of the contract, provided it is possible to
determine the same, without the need of a new
contract between the parties. (1273)
SECTION 3. — Cause of Contracts

ART. 1350. In onerous contracts the cause is
understood to be, for each contracting party, the
prestation or promise of a thing or service by the
other; in remuneratory ones, the service or benefit
which is remunerated; and in contracts of pure
beneficence, the mere liberality of the benefactor.
(1274)
(1) Cause’ Defined
It is the essential and impelling reason why a party
assumes an obligation. (8 Manresa 677). Strictly
speaking, there is no cause of a contract, but there is a
cause for an obligation
Classification of Contracts as to Cause
(a) Onerous — here the cause is, for each
contracting party, the prestation or promise
of a thing or service by the other.
Example: contract of sale
(b) Remuneratory — the past service or benefit
which by itself is a recoverable debt.
[NOTE: In a remuneratory donation, the past service
or debt is not by itself a recoverable debt. (See Art.
726, Civil Code).]
(c) Gratuitous (or contracts of pure beneficence)
— here, the cause is the mere liability of the
benefactor.
Example: pure donation, commodatum, guaranty or
suretyship unless there is a stipulation to the contrary
(Art. 2048.), mortgage given by a third person to
secure an obligation of a debtor (see Art. 2085, last
par.) unless a consideration is paid for such mortgage.
ART. 1351. The particular motives of the parties in
entering into a contract are different from the cause
thereof. (n)
Cause distinguished from motive.
As contradistinguished from consideration or cause,
motive has been defi ned as the condition of mind
which incites to action, but includes also the inference
as to the existence of such condition from an external
fact of a nature to produce such a condition. (Olegario
vs. Court of Appeals, 238 SCRA 96 [1994].)
The differences are as follows:
(1) Cause is the immediate or direct reason, while
motive is the remote or indirect reason;
(2) Cause is always known to the other contracting
party, while motive may be unknown;
(3) Cause is an essential element of a contract, while
motive is not; and
(4) The illegality of the cause affects the validity of a
contract, while the illegality of one’s motive does not
render the contract void.
ART. 1352. Contracts without cause, or with unlawful
cause, produce no effect whatever. The cause is
unlawful if it is contrary to law, morals, good
customs, public order or public policy. (1275a)
Requisites for Cause
(a) It must be present (at the time the contract was
entered into);
(b) It must be true (not false);
(c) It must be lawful (not contrary to law, morals,
good customs, public order, or public policy).
Existing Cause
(a) If there is no cause whatsoever, the contract is
VOID. Thus, a fictitious sale is VOID.
RATIONALE:
The parties were given a chance to show that a cause
really exists and that said cause is true sand lawful.
it is not necessary that a cause be expressly stated
ART. 1353. The statement of a false cause in
contracts shall render them void, if it should not be
proved that they were founded upon another cause
which is true and lawful. (1276)
ART. 1354. Although the cause is not stated in the
contract, it is presumed that it exists and is lawful,
unless the debtor proves the contrary. (1277)
Cause presumed to exist and lawful.
It is not necessary that the cause be expressly stated
in the contract. The presumption is that the cause
exists and is lawful unless the debtor proves the
contrary.
This presumption is in accord with the natural
order of things. Ordinarily, a person will not part with
his property unless there is a consideration. It is only
prima facie and must yield to contrary evidence.