Chapter 2, Sec.

1: Consent

Study Guide

I. Definitions

1. Consent –the conformity or concurrence of wills (offer & acceptance)

2. Acceptance- the manifestation by the offeree of his assent to the terms of the offer.

3. Natural Elements- those that are presumed to exist in certain contracts unless the contrary is
expressly stipulated by the parties, like warranty

against eviction, or warranty against hidden defects in sale

4. Option Contract- one giving a person for a consideration a certain period within which to accept the
offer of the offerer

5. Mistake of Law- that which arises from an ignorance of some provision of law, or from an erroneous
conclusion as to the legal effect of an agreement, on the part of one of the parties.

II. Discussions

1. When is a contract voidable or annulable?

According to Art.1330, a contract is voidable when consent is given through mistake, violence,
intimidation, undue influence or fraud.

2. Is it always required that he who alleges fraud or mistake in entering into a contract, must prove his
allegation? Explain.

No. According to Art.1332, when one of the parties is unable to read or if the contract is in a
language not understood by him, it is the party enforcing the contract who is duty-bound to show that
there has been no fraud or mistake and the terms of the contract have been fully explained to the
former.

3. Give the requisites in order that intimidation may vitiate or annul consent of a party to a contract.

According to Art.1335, the requisites are that (1) it must produce a reasonable and well-
grounded fear of an evil, (2) the evil must be imminent and grave, (3) the evil must be upon his person
or property, or that of his spouse, descendants, or ascendants, and (4) it is the reason why he enters
into the contract.

4. May fraud be committed by a party to a contract though there is no misrepresentation on his part?
Explain.

- Yes. According to Art.1339, concealment is equivalent to misrepresentation when there is a neglect or

failure to communicate that which a party to a contract knows and ought to communicate.
5. Will the acceptance of a business advertisement of a thing for sale produce the perfection of a
contract? Explain.

- No. According to Art.1325, business advertisements of things for sale are not definite offers,
acceptance of which will perfect a contract, but are merely invitations to the reader to make an offer.

III. Problems

1. In a contract containing an option period, when is the offeree not allowed to withdraw his offer even
before acceptance by offeree? When is the offeree allowed to withdraw his offer even after
acceptance?

- According to Art.1324, the offeree may not withdraw his offer even before acceptance if the option is
founded upon a consideration, as something paid or promised. According to Art.1479, the offeree is
allowed to withdraw the offer even after the acceptance if it is a unilateral promise to buy or sell a
determinate thing not supported by any consideration distinct from the price for which the thing was
intended to be sold by or to the promisee.

2. S sold his house to B, thinking that B was Mr. C. Can S legally withdraw from the contract on the
ground of mistake? Why?

S can legally withdraw from the contract on the ground of mistake because under Article 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 quality 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 the correction.

3. S agreed to deliver to B 500 cavans of rice at P1,000.00 per cavan. S delivered only 490 cavans
deliberately misrepresenting that delivery consisted of 500 cavans. Can B ask the court to annul the
contract on the ground of fraud? Why?

B can ask the court to annul the contract on the ground of fraud because this situation is a
representation of Causal Fraud (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) or
fraud employed to secure the consent of the other party, which is a ground for the annulment of a
contract although it may give rise to an action for damages.

4. S sold to B a commercial lot for P 1 million. S assured B that it is certain that in two years time the
land would increase in market value by 50%, B relied on the representation of S and bought the lot. It
turned out that the market value even decreased to P 800,000.00. Is S liable to B for the
misrepresentation?
Under Article 1340, The usual exaggerations in trade, when the other party had an opportunity to know
the facts, are not in themselves fraudulent. (n) The article refers to the usual exaggerations in trade
which are not fraudulent by themselves when the party has the opportunity to investigate and know the
true facts.

5. Suppose in the same problem, What S sold to B, a hardware owner, was 500 bags of cement. S had
every reason to believe that the price of the cement will go down but did not told B of such fact. Has B
the right to have the contract annulled?

The sale is valid and B does not have the right to have the contract annulled because S was not
bound to make disclosure of his reasons for his belief. Under Article 1339, Failure to disclose facts, when
there is a duty to reveal them, as when the parties are bound by confidential relations, constitutes
fraud.