4 Vices of Consent

Article 1327-1329
Capacity To Give Consent
Importance of Capacity
Legal capacity is essential element for the existence of a contract because it is
an indispensable condition for the existence of consent.
Legal Consent presupposes capacity
Incapacity does not result to an inexistent or void contract but on a voidable
one because consent is there only it is defective.
Person Not Legally Capacitated to Contract (Article 1327)
Enumerate in Article 1327:
Minor
Insane or demented person
Deaf-mutes who do not know how to write
Those who are under guardianship such as "incompetents" are not
capacitated.
Civil Interdiction
Lepers
Prodigals
Insane Persons
Sane but due to age, disease or weak mind, that are unable to know the
consequences and significance of his acts
Deaf and dumb who do not know how to write
NOTE: Some are still able to enter into a contract but if one of the
enumerated circumstances are under a guardianship, their capacity to
enter into a contract are restricted or limited. Grounds for annulment
could be based on
Article 1327 - simply because of their incapacity
Article 1328 - because some of them could give consent but is
vitiated
Rules of Court - because they are under guardianship
Special Disqualifications (Article 1329)
 Disqualification and incapacity is different. The former is the prohibition to
enter into a contract upon the surrounding circumstances and its effect is a
void contract. While the latter is merely a restriction on the right to contract,
and is purely personal and its effect is merely for annulment.
Examples
Those persons living as husband and wife without any valid marriage
could not donate to one another
Husbands and wife are unable to sell or donate to one another except
when their marriage settlements are separated.
Property of the ward could not be bought by the guardian.
Property of the decedent could not be bought by the executor.
Property of the principal could not be bought by the agent unless he was
authorized to do so.
Property of the government could not be bought by the public official or
employee especially those things that are under his supervision.
Property of litigation could not be bought by any judges, clerks or any
person in the administration of justice, together with lawyers.
Minors
Article 1328 refers to "unemancipated minors" but in the current laws of the
Philippines, all minors are unemancipated. Unemancipated minors do not
have any capacity to act, therefore they could not enter into any contract until
the age of majority.
The effect of a minor that enters into a contract is that the consent is merely
defective, therefore the contract is only voidable and could be ratified or be
void by the minor upon reaching the majority age.
Although the guardians of the minors could represent them in a contract, the
parents even without court order are allowed to represent a minor into a
contract, although if the thing or annual income more than P50,000 the
parents must furnish a bond.
Mercado vs Espiritu
A minor who misrepresented their age when entering into a contract
would make the contract valid. Although it is necessary that there is
active misrepresentation, passive misrepresentation as such when the
age of the parties are not disclose because there is no obligation to
disclose them, would not bind the minor.
Insane or Demented  (Article 1328)
 Insanity in a person is defined as the mental sickness of a person that would
remove the sanity of a person therefore his mental faculties are disturbed in
such a way that they do not know the significance of his actions and are
unable to manage his own property therefore susceptible to fraud or deceit.
Every person is deemed sane, therefore the burden of proof lies to the person
asserting insanity. It must be proven that the insanity was in such a way to
disturb the mental faculties where the person is unable to know the
significance or importance of his actions or is unable to manage their own
property. It must also be proven that insanity happens during the perfection
of the contract. An insane person who is under guardianship are presumed to
be suffering from the sickness they are asserting, however this is merely a
presumption and could be rebutted.
Insanity varies in form, some insane persons have regular episodes of sanity,
some have events where the person is insane and some events sane. These
events where sanity is regained is called "lucid intervals". During lucid
intervals it is deemed that the person goes back to his sanity, and therefore is
able to give capacity again provided that he is no capacitated on other
grounds. It is the burden to prove for those who are asserting that the
contract entered into by an insane person is in their lucid interval that such
contracts were perfected during the perfection of a contract.
A state of drunkeness or under a hypnotic spell are placed in the same
category as that of insane or demented persons. Therefore contracts entered
by them are voidable.  
Illiteracy, Old Age and Civil Interdiction
Illiteracy
General Rule:
Illiteracy by itself is not an incapacity to enter into a contract.
However there is an obligation to the other contracting party to
prove that he had explained the terms and contracts to the illiterate
in a clear manner.
Exception:
The only problem is that when the person is illiterate and is also deaf-
mute.
 Article 1327 states that a deaf-mute who do not know how to write are
incapacitated in entering into a contract. It is but obvious that a person
that who do not know how to write do not know how to read and vice
versa.
Old Age or other physical infirmities
General Rule:
Old age or other physical infirmities does not incapacitate a person.
Exception:
If such age, disease or weak mind interfere with the person to know
the significance or importance of the transaction entered by him or
could not manage his own property therefore susceptible to fraud
would be incapacitated.
If the person is under a guardianship.
Civil Interdiction
Those who are suffering the penalty of civil interdiction are those who are
criminally sentenced by reclusion temporal or a higher penalty. A person
suffering from civil interdiction are unable to exercise his parental
authority or guardianship, to dispose of his property, manage his
property and marital authority.

Article 1330
Vices of Consent
Consent presupposes that the consent has freedom, intelligent and spontaneous.
Any actions that would hinder such freedom, intelligent and spontaneous decision
would render the consent vitiated. As such in a contract there is a presumption
that consent is given freely, the burden to prove that there was a vitiation is the
person who is claiming such vitiation. Vitiation of consent could be through
mistake or error, intimidation, violence, undue influence or fraud.
Vices of consent must also be distinguished from incapacity. Since the former is
usually a defect in the contract itself while incapacity is defective in the consent, in
particular to the person giving consent.

Article 1331-1334
Mistake
Covers Both Mistake and Ignorance
 Mistake - wrong conception of a thing or when something is believed but it
turns out is not existing
Ignorance - absence of knowledge of a thing
Mistake referred to in Article 1331 covers mistake and ignorance.
Character of Mistake Which Annuls Consent (Article 1331)
Mistake to the object of a contract such as error corpore, error sustansia, error
quantite or to the identification or qualification of the person if such
qualification have become a factor on why the parties entered into a contract.
Mistake must be excusable.
Mistake must be of fact.
Mistake as to Object of Contract
Mistake as to the identity of the object, such as when in a facultative
obligation when there is a substitution of a thing.
Mistake as to substantial qualities or material that the object is made
out of. Such as when a gold or silver item is bought but it was not
gold or silver. It is clear that they would not have bought the item if
they had known it was not made out of gold or silver, since the
material of gold in the object became a principal cause why they
entered into a contract.
Mistake that are foreign to its matter but are essential in entering
into a contract. Such as when a painting by Goya is bought but the
painting is not of Goya. The buyers believed that such painting is
from Goya which is actually what principally caused the buyer to buy
the painting, had the person known that the painting was not from
him, he would not have entered into a contract.
Mistake that is not because of account but because of the
dimensions of the thing.
Mistake as to Conditions
Mistake as through the conditions would vitiate consent if there was
a mistake when the conditions are what principally that caused the
contracting parties to enter into a contract.
Mistake as to Identity or Qualifications of Parties
General Rule: Identity or qualifications of a party does not vitiate
consent
 Exception: This is only when the identity and qualifications of a party
have become the principal cause of entering into a contract. If it is
then mistake in this circumstance are vitiated.
Mistake as to Non-Essential Elements (3)
The identification or qualifications of a party is non-essential in
mistake however if it was the principal cause of the contract, then
there would be vitiation.
The simple account or mathematical error would only render
correction.
Mistake as to motive, only if the motive have become the principal
cause, therefore the motive becomes the cause of the contract.
Mistake Must Be Excusable (Article 1333)
Mistake must refer to REAL ERROR.
Not one that could have reasonably avoided, especially if the person
knows of the doubt or contingency.
Mistake Must Be Of Fact (Article 1334)
General Rule: Mistake of law does not vitiate consent. This is because Article 3
refers that ignorance of the law does not excuse anybody in compliance
therewith.
Exception: Mistake of fact refers to the application of laws, therefore the
mistake must refer to the application of laws.
Another notable exception is when mistake of law is (1) mutual, (2) refers
to the legal effects of the contract and (3) frustrates the intention of the
parties.
Effect If A Party Is Illiterate (Article 1332)
General Rule: A person is presumed to be in ordinary care for his concerns
and that private transactions have been regular
Exception: Article 1332
Under Article 1332 it is provided that a contract entered with an illiterate
person or a contract written in an unknown language, the burden to
prove the validity of the contract, is the one who is enforcing the contract.
It must first be evidently established that the person is unable to read and
write or that a contract is written in another language before the it would
be shifted to the other side.
This provision also presupposes that there was a vitiation of consent.
Article 1335-1336
Violence or Intimidation
Distinguished

Violence Intimidation

Physical Force Moral Force

External Internal

The person who is

being threatened are
The person who is still able to act
being threatened are however the grave and
unable to act in his will serious danger of
at the moment intimidation would
remove the will of the
one intimidated.

Similarities:
Violence and intimidation is different from only those who have been
compelled to enter into a contract or was coerced. Due to the fact that both
violence or intimidation replaces the person who is being threatened or the
will of such person into the will of the other. Even though he does not want to
enter into a contract he is unable to act for himself because of violence or
intimidation.
Violence or intimidation employed by a third person would vitiate consent
provided that the requisites are present and that the degree must be so that
the will of the actor is totally removed and replaced by the will of the
perpetrator.
Requisites of Violence
The violence must be grave or serious
The violence must be the cause or consideration of the contract
Requisites of Intimidation
Intimidation must be the cause or consideration of the contract
 Intimidation must be unlawful or unjust
Intimidation would give the option however the contract is the lesser evil
Intimidation is imminent, when the one intimidated knows that the
intimidation can be employed.
In determining intimidation these factors must be considered:
Age
Sex
Condition of the person
However a threat to enforce one's claim through competent authority if the
claim is just or legal, does not vitiate consent.

Article 1337
Undue Influence
Undue Influence is the use of improper advantage of power or position to a
person that could be influenced in entering into a contract.
It must in some measure destroy the free agency of the person and interfere with
the exercise of that independent discretion which is necessary for determining the
advantages or disadvantages of a proposed contract.
In order that undue influence would vitiate consent it is essential that (1) there is a
person that could be influenced (2) that influence is unlawful or unjust and (3) that
the person acted because of this influence.
Factors in undue influence such as:
Confidential
Spiritual
Family
or any other relation
or the fact that the person is suffering from a weak mind, financial distress or
was ignorant
The law does not presume that undue influence was employed if there is no
fiduciary relation between one another. Fiduciary relation refers to a relation
where the other party are able to take improper advantage of another.
Solicitation, importunity, argument, persuasion, or by appeal to affections is not
prohibited.

Article 1338-1344
Fraud
Concept (Article 1338)
Fraud refers to deception through insidious machinations, misrepresentation,
concealment or manipulation that would lead an ordinarily prudent person to
error.
Insidious machinations - refers to schemes and plot to lead an ordinarily
prudent person to error.
Kinds of Fraud

Causal Fraud (Dolo Incidental Fraud (Dolo

Causante) Incidente)

One that is employed Only incidental in the

Employment in the perfection of a performance of an
contract obligation

Degree Serious Not Serious

Effect Annulment Damages

Requisites of Fraud That Vitiates Consent

Employed By One Against Another (Article 1342)
The fraud must be employed by one against the other contracting party.
A fraud that is employed by a third person in order to be vitiated must
prove that the act was in connivance with the other contracting parties.
A fraud that is employed by a third person would be vitiated if both
parties commits a mutual mistake and such fraud resulted in substantial
mistake
Fraud Must Be Dolo Causante (Article 1344 paragraph 2)
In order that fraud would vitiate consent, it is essential that the fraud
employed refers to causal fraud, or fraud that was employed in the
perfection of a contract. Otherwise the fraud is only incidental fraud if it is
employed after perfection and only in the performance of an obligation.
Fraud Must Be Serious (Article 1344 paragraph 1)
Fraud is serious if:
It led to a prudent and reasonable person into error.
 Other Rules On Fraud
Rule on Silence and Concealment (Article 1339)
Silence or concealment would vitiate consent if there is a special duty to
disclose facts. If there is no special duty to disclosure of facts or unless
according to good faith and the usage of commerce the communication
should be made.
Usual Exaggerations In Trade (Article 1340)
The usual exaggerations in trade or "dealers talk" could not vitiate
consent. It is ordinary that a prudent person in their inquiry would know
certain facts that is material in entering into a contract.
Expression Of Opinion (Article 1341)
A mere expression of opinion does not vitiate consent.
The only way that opinion could vitiate consent is if the opinion is made
by an expert and such opinion was relied on by the party in entering into
a contract.
Quantum of Evidence To Prove Fraud
Quantum of Evidence necessary to prove fraud either causal or incidental is
one more than preponderance but lesser than a reasonable doubt. It is a
"clear and convincing" evidence that is necessary in proving that there was
fraud employed.

Article 1345-1346
Simulation of Contracts
Simulation - is a declaration of a fictitious will, deliberately made by agreement of
the parties, in order to produce, for the purposes of deception, the appearances of
a juridical act which does not exist or is different with that which was really
executed.
Simulation may be absolute or relative
Absolute Simulation - it is when the parties intend to not be bound at all
Relative Simulation - the true agreement is concealed.
An effect of an absolute simulation is that the contract is void, since the parties do
not intend to be bound by the contract at all, there is no consideration or cause
between them.
An effect of a relative simulation would rely on:
Whether or not the true agreement is contrary to law, morals, good customs,
public order or public policy
Whether or not the agreement affected third persons.
Because there is an ostensible act and the hidden act. The real agreement
could be enforced by the court in determining both of the situation.