Chapter 2: Essential Requisites of Contracts

True or False Part 1

1. For an offer to be certain, a contract must come into existence by the mere acceptance of the

offeree without any further act on the offeror’s part.

2. The offer may fix the time, place, and manner of acceptance, all of which must be complied

with.

3. Acceptance made by letter or telegram does not bind the offerer except from the time it came

to his knowledge.

4. An offer becomes effective upon the death, civil interdiction, insanity, or insolvency of either

party before acceptance is conveyed.

5. Public advertisements are ordinarily construed as mere invitations to make offers or only as

proposal.

6. If the period has a separate consideration, a contract of “option” is deemed perfected, and it

would not be a breach of that contract to withdraw the offer during the agreed period.

7. Business advertisements of things for sale are not definite offers.

8. Contracts entered into during a lucid interval are valid.

9. A contract may not be annulled on the ground of vitiated consent, if the act complained of is

committed by a third party without the connivance or complicity of one of the contracting

parties.

10. As a general rule, it is only a mistake of fact which will vitiate consent thus rendering the

contract voidable.

11. One who alleges any defect or the lack of a valid consent to a contract must establish the same

by full, clear and convincing evidence, not merely by preponderance of evidence.

12. There is no mistake if the party alleging it knew the doubt, contingency or risk affecting the

object of the contract.

13. Contracts without cause or with unlawful cause produce no effect whatsoever.

14. When all the essential requisites are present, a contract is obligatory in whatever form it may

have been entered into.

15. A voidable contract produces no effect either against or in favour of anyone and cannot be
ratified.

16. The essence of cause is the conformity of the parties on the terms of the contract, that is, the

acceptance by one of the offer made by the other.

17. Contracts agreed to in a state of drunkenness or during a hypnotic spell are voidable.

18. There is no question that a contract where the consent is given through mistake, violence,

intimidation, undue influence, or fraud is unenforceable.

19. In order that mistake may invalidate consent, it should refer to the substance of the thing which

is the object of the contract.

20. 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.

True or False Part 2

1. A threat to enforce one’s claim through competent authority, if the claim is just or legal, vitiates

consent.

2. In undue influence, the influence exerted must have so overpowered the mind of a contracting

party as to destroy his free agency.

3. In contracts, a fraud known as causal fraud is basically a deception used by one party after the

contract, in order to secure the consent of the other.

4. Failure to disclose facts, when there is a duty to reveal them, as when the parties are bound by

confidential relations, constitutes fraud.

5. Right of first refusal means identity of terms and conditions to be offered to the lessee and all

other prospective buyers and a contract of sale entered into in violation of a right of first refusal

of another person, while valid, is rescissible.

6. Fraud imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, not

simply bad judgement or negligence.

7. In case one of the parties to a contract is unable to read and fraud is alleged, the person

enforcing the contract need not show that the terms thereof have been fully explained to the

former.

8. Incidental fraud only obliges the person employing it to pay damages.

9. An error so patent and obvious that nobody could have made it, or one which could have been
avoided by ordinary prudence, cannot be invoked by the one who made it in order to annul his

contract.

10. There is intimidation when in order to wrest consent, serious or irresistible force is employed.

11. There is violence when one of the contracting parties is compelled by a reasonable and
wellgrounded fear of an imminent and grave evil upon his person or property.

12. The usual exaggerations in trade, when the other party had an opportunity to know the facts, are

also fraudulent.

13. A mere expression of an opinion does not signify fraud.

14. Misrepresentation made in good faith is not fraudulent but may constitute error.

15. Bad faith must be established by clear and convincing evidence; mere preponderance of

evidence is not adequate.