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    Articles 1341-1347

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    Cruxzelle Bajo
    The document discusses different types of fraud that can impact the validity of contracts under Philippine law. It addresses: 1) Expressions of opinion do not constitute fraud unless made by an expert and relied upon. 2) Misrepresentations by third parties do not invalidate consent unless they cause substantial mistake mutually held by both parties. 3) Misrepresentations made in good faith constitute error, not fraud, and result in lesser liability than intentional fraud. 4) There are two types of fraud that can impact contracts - causal fraud which can void a contract or incidental fraud which only requires paying damages. Causal fraud must be serious, not employed by both parties, and not known to the other party.

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    Articles 1341-1347

    Uploaded by

    Cruxzelle Bajo
    101 views3 pages
    The document discusses different types of fraud that can impact the validity of contracts under Philippine law. It addresses: 1) Expressions of opinion do not constitute fraud unless made by an expert and relied upon. 2) Misrepresentations by third parties do not invalidate consent unless they cause substantial mistake mutually held by both parties. 3) Misrepresentations made in good faith constitute error, not fraud, and result in lesser liability than intentional fraud. 4) There are two types of fraud that can impact contracts - causal fraud which can void a contract or incidental fraud which only requires paying damages. Causal fraud must be serious, not employed by both parties, and not known to the other party.

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    Summary of Articles 1341-1347 from book of Hector De Leon

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    The document discusses different types of fraud that can impact the validity of contracts under Philippine law. It addresses: 1) Expressions of opinion do not constitute fraud unless made by an expert and relied upon. 2) Misrepresentations by third parties do not invalidate consent unless they cause substantial mistake mutually held by both parties. 3) Misrepresentations made in good faith constitute error, not fraud, and result in lesser liability than intentional fraud. 4) There are two types of fraud that can impact contracts - causal fraud which can void a contract or incidental fraud which only requires paying damages. Causal fraud must be serious, not employed by both parties, and not known to the other party.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    101 views3 pages

    Articles 1341-1347

    Uploaded by

    Cruxzelle Bajo
    The document discusses different types of fraud that can impact the validity of contracts under Philippine law. It addresses: 1) Expressions of opinion do not constitute fraud unless made by an expert and relied upon. 2) Misrepresentations by third parties do not invalidate consent unless they cause substantial mistake mutually held by both parties. 3) Misrepresentations made in good faith constitute error, not fraud, and result in lesser liability than intentional fraud. 4) There are two types of fraud that can impact contracts - causal fraud which can void a contract or incidental fraud which only requires paying damages. Causal fraud must be serious, not employed by both parties, and not known to the other party.

    Copyright:

    © All Rights Reserved
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    of 3

    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. 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.

     If the misrepresentation has been employed by a third person in connivance with, or at least with
    knowledge of the party benefited by the fraud, it is deemed to have been exercised by such party
    upon the other contracting party. (see Hill vs. Veloso, 31 Phil. 60.)

     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.

    ART. 1343. Misrepresentation made in good faith is not fraudulent but may
    constitute error. (n)

    Effect of misrepresentation made in good faith.

    If the misrepresentation is not intentional but made in good faith (the person making the false statement
    believed it to be true), it is considered a mere mistake or error. Fraud is definitely more serious than
    mistake; hence, the party guilty of fraud is subject to greater liability.
    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)

    Two kinds of fraud in the making of contract.

    (1) the causal fraud, which is a ground for the annulment of a contract, although it may also give
    rise to an action for damages; and

    (2) the incidental fraud, which only renders the party who employs it liable for damages because
    the fraud not the principal inducement that led the other to give his consent. (par. 2.)

    Requisites of causal fraud.

    (1) It should be serious;

    (2) It should not have been employed by both contracting parties, i.e., they should not be in pari
    delicto (see Arts. 1411, 1414.); and

    (3) It should not have been known by the other contracting party.

    The seriousness of the fraud is a question of fact depending on the circumstances. It does not mean its
    influence on the other contracting party, but its importance. When fraud is employed by both parties, neither
    may ask for annulment as the fraud of one neutralizes that of the other. The contract is, therefore,
    considered valid. The rule is in accordance with the principle that "he who comes to court, must come with
    clean hands."

    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)

    Meaning of simulation of a contract.

    Simulation of a contract is the act of deliberately deceiving others, by feigning or pretending by


    agreement, the appearance of a contract which is either non-existent or concealed. (1 Castan
    504.)

    Kinds of simulation.

    (1) Absolute simulation. When the contract does not really exist and the parties do not intend to
    be bound at all.(Art. 1345.) Absolutely simulated or fictitious contracts are inexistent and void.
    (2) Relative simulation. When the contract entered into by the parties is different from their true
    agreement. (Art. 1345.) The parties are bound by their real agreement provided it does not
    prejudice a third person and is not intended for a purpose contrary to law, morals, good customs,
    public order, or public policy. (Art. 1346.)

    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 may be 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.

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