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 confi dential, family, spiritual and other relations between the parties, or the
fact that the person alleged to have been unduly infl uenced was suffering from mental weakness, or
was ignorant or in fi nancial distress

Meaning of undue influence.

The rule as to what constitutes undue influence has been variously stated but the substance of the
different statements is that, to be sufficient, the influence must be of a kind that so overpowers and
subjugates the mind of a party as to destroy his free agency and make him express the will of another,
rather than his own. (Coso vs. Fernandez-Deza, 42 Phil. 596 [1921].)
Elements of undue influence.

For undue influence to be established to justify the cancellation of an instrument, three elements
must be present:
(1) a person who can be infl uenced;
(2) the fact that improper infl uence was exerted; and
(3) submission to the overwhelming effect of such unlawful conduct.
The following are examples of circumstances which shall be considered to determine whether undue
infl uence has been exercised:
(1) confidential, family, spiritual and other relations between the parties,
(2) mental weakness,
(3) ignorance, or
(4) financial distress of the person alleged to have been unduly influenced.

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)

Meaning of causal fraud.

Causal fraud or dolo causante is the fraud employed by one party prior to or simultaneous with the
creation of the contract to secure the consent of the other. It is the fraud used by a party to induce the
other to enter into a contract without which the latter would not have agreed to, taking into account the
circumstances of the case

ART. 1339. Failure to disclose facts, when there is a duty to reveal them, as when the parties are
bound by confi dential relations, constitutes fraud. (n)Fraud by concealment.
A neglect or failure to communicate that which a party to a contract knows and ought to
communicate constitutes concealment. In this case, concealment is equivalent to misrepresentation.
 ART. 1340. The usual exaggerations in trade, when the other party had an opportunity to know the
facts, are not in themselves fraudulent

EXAMPLES:
Expressions or advertisements like:

“The cigarette that will give you utmost smoking pleasure”

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)
Expression of opinion.
To constitute fraud, the misrepresentation must refer to facts, not opinions. Ordinarily, a mere
expression of an opinion does not signify fraud. In order that it may amount to fraud, the following
requisites must be present:
(1) It must be made by an expert;
(2) The other contracting party has relied on the expert’s opinion; and
(3) The opinion turned out to be false or erroneous.

ART. 1342. Misrepresentation by a third person does not vitiate consent, unless such
misrepresentation has created substantial mistake and the same is mutual. (n)
Fraud by a third person.
A third person has no connection with a contract. Consequently, a misrepresentation by him does not
vitiate consent. A party should not be made to suffer for the imprudence of another in believing the
fraud of a third person. The presumption is that both contracting parties are acting in good faith.