CHAPTER 2
Essential Requisites of Contracts
General Provisions
Article 1318
There is no contract unless the following requisites
concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the
contract;
(3) Cause of the obligation which is established.
Section 1
Consent
Article 1319
Consent is manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to
constitute the contract. The offer must be certain and the
acceptance absolute. A qualified acceptance constitutes a
counter-offer.
Acceptance made by letter or telegram does not bind the
offerer except from the time it came to his knowledge.
The contract, in such a case, is presumed to have been
entered into in the place where the offer was made.
Article 1320
An acceptance may be express or implied.
Article 1321
The person making the offer may fix the time, place, and
manner of acceptance, all of which must be complied
with.
Article 1322
An offer made through an agent is accepted from the
time acceptance is communicated to him.
Article 1323
An offer becomes ineffective upon the death, civil
interdiction, insanity, or insolvency of either party before
acceptance is conveyed.
Article 1324
When the offerer has allowed the offeree a certain period
to accept, the offer may be withdrawn at any time before
acceptance by communicating such withdrawal, except
when the option is founded upon a consideration, as
something paid or promised.
Article 1325
Unless it appears otherwise, business advertisements of
things for sale are not definite offers, but mere
invitations to make an offer.
Article 1326
Advertisements for bidders are simply invitations to
make proposals, and the advertiser is not bound to accept
the highest or lowest bidder, unless the contrary appears.
Article 1327
The following cannot give consent to a contract:
(1)Unemancipated minors;
(2) Insane or demented persons, and deaf-mutes who do
not know how to write.
Article 1328
Contracts entered into during a lucid interval are valid.
Contracts agreed to in a state of drunkenness or during a
hypnotic spell are voidable.
Article 1329
The incapacity declared in article 1327 is subject to the
modifications determined by law, and is understood to be
without prejudice to special disqualifications established
in the laws.
Article 1330
A contract where consent is given through mistake,
violence, intimidation, undue influence, or fraud is
voidable.
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 qualifications 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 its correction.
Article 1332
When one of the parties is unable to read, or if the
contract is in a language not understood by him, and
mistake or fraud is alleged, the person enforcing the
contract must show that the terms thereof have been fully
explained to the former.
Article 1333
There is no mistake if the party alleging it knew the
doubt, contingency or risk affecting the object of the
contract.
Article 1334
Mutual error as to the legal effect of an agreement when
the real purpose of the parties is frustrated, may vitiate
consent.
Article 1335
There is violence when in order to wrest consent, serious or irresistible
force is employed.
There is intimidation when one of the contracting parties is compelled by
a reasonable and well-grounded fear of an imminent and grave evil upon
his person or property, or upon the person or property of his spouse,
descendants or ascendants, to give his consent.
To determine the degree of intimidation, the age, sex and condition of the
person shall be borne in mind.
A threat to enforce one's claim through competent authority, if the claim
is just or legal, does not vitiate consent.
Article 1336
Violence or intimidation shall annul the obligation,
although it may have been employed by a third person
who did not take part in the contract.
Article 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
confidential, family, spiritual and other relations between
the parties, or the fact that the person alleged to have
been unduly influenced was suffering from mental
weakness, or was ignorant or in financial distress.
Article 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.
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.
Article 1340
The usual exaggerations in trade, when the other party
had an opportunity to know the facts, are not in
themselves fraudulent.
Article 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.
Article 1342
Misrepresentation by a third person does not vitiate
consent, unless such misrepresentation has created
substantial mistake and the same is mutual.
Article 1343
Misrepresentation made in good faith is not fraudulent
but may constitute error.
Article 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.
Article 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.
Article 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.
