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Contracts - Chapter 2 (Section 1) AGCAOILI

This document provides definitions and discussions related to contract law. It defines key terms like consent, acceptance, natural elements, and mistake of law. It also discusses when a contract is voidable or annulable, when fraud or mistake must be proven, and the requisites for intimidation to invalidate consent. Several examples of contract scenarios are provided and rules are stated briefly.

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Leinard Agcaoili
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196 views3 pages

Contracts - Chapter 2 (Section 1) AGCAOILI

This document provides definitions and discussions related to contract law. It defines key terms like consent, acceptance, natural elements, and mistake of law. It also discusses when a contract is voidable or annulable, when fraud or mistake must be proven, and the requisites for intimidation to invalidate consent. Several examples of contract scenarios are provided and rules are stated briefly.

Uploaded by

Leinard Agcaoili
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Chapter 2 (Section 1)

STUDY GUIDE

I. Definitions
1. Consent
- Consent is manifested by the meeting of the offer and the acceptance upon the
thing and the cause which are to constitute the contract.
2. Acceptance
- Acceptance is one person's compliance with the terms of an offer made by
another. Acceptance occurs in the law of insurance when an insurer agrees to
receive a person's application for insurance and to issue a policy protecting the
person against certain risks, such as fire or theft. When a person who is
offered a gift by someone keeps the gift, this indicates his or her acceptance of
it.
3. Natural Elements
- Those which are part of the contract even if the parties do not provide
(stipulate) them, and is presumed by law to exists, such as a warranty of
hidden defects or eviction in contract of sale.
4. Option Contract
- An option contract is a contract where one-person (the offeror/promissor)
grants to another person (the offeree/promisee) the right or privilege to buy (or
to sell) a determinate thing at a fixed price if he or she chooses to do so within
an agreed period.
5. Mistake of Law
- Mistake of law is 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 and annullable?
- The following contracts are voidable or annullable, even though there may
have been no damage to the contracting parties: 1) Those where one of the
parties is incapable of giving consent to a contract 2) Those where the consent
is vitiated by 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. When entering a contract, one must always be ready to prove what they
are alleging. Without proof the court cannot give a judgement. Evidence is
paramount in any criminal or civil case.
3. Give the requisites in order that intimidation may vitiate or annul consent for a
party to a contract.
- In order that intimidation may vitiate consent and render the contract invalid,
the following requisites must concur: 1) That the intimidation must be the
determining cause of the contract, or must have caused the consent to be given
2) That the threatened act be unjust or unlawful 3) That the threat be real and
serious, there being an evident disproportion between the evil and the
resistance which all men can offer, leading to the choice of the contract as the
lesser evil 4) That it produces a reasonable and well-grounded fear from the
fact that the person from whom it comes has the necessary means or ability to
inflict the threatened injury.
4. May fraud be commuted by a party to a contract though there is no
misrepresentation on his part? Explain.
- Yes. According 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.
5. Will the acceptance of a business advertisement of a thing for sale produce the
perfection of a contract? Explain.
- Unless it appears otherwise, business advertisements of things for sale are not
definite offers, but mere invitations to make an offer. However, if the
advertisement is complete in all the particulars necessary in a contract, it may
amount to a definite offer which, if accepted, will produce a perfected
contract.
III. Problems
Explain or state briefly the rule or reason for your answer.
1. In a contract containing an option period, when is the offerer not allowed to
withdraw his offer even before acceptance by the offeree? When is the offerer
allowed to withdraw his offer even after acceptance?
- If it is in the contract that the offerer cannot withdraw his offer even before or
after the acceptance of offeree because there is a contract that both must
follow.
2. S sold his house to B believing that B was C. Can S legally withdraw from the
contract on the ground of mistake?
- Yes, because there is a contract that will protect S by doing mistake because
he should sell his house to B not to C so if there is a mistake S should do the
right thing and withdraw immediately to avoid breaking the law.
3. S agreed to deliver to B 500 canvas of rice at P600 per cavan. S delivered only
490 cavans deliberately misrepresenting that the delivery consisted of 500 cavans.
Can B ask the court to annul the contract on the ground of fraud?
- Yes, he can because S did not do his obligation in contract and B can annul
the contract or else S will be responsible of damages to B.
4. S sold to B a commercial land for P1,000,000. S assured B that it is certain that in
two years time, the land would increase in market value by 50% or P1,500,000. It
turned out that the market value of the land even decreased to about P800,000. Is
S liable to B for misrepresentation?
- Yes, because if B prove that it is decreased by P800,000 S should be liable to
B and make a new contract to B or else B will annul the contract because of
misrepresentation or mistake.
5. Suppose in the same problem, what S sold to B, hardware owner, are 500 bags of
cement. S had every reason to believe that the price of cement would go down.
After two weeks, it did go down. Has B the right to have the sale annulled?
- Yes, because even it is intentional or not both parties can annulled, but there is
no duty to make the disclosure, the parties are bound by their contract.

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