 ARTICLE 1318

The classes of elements of a contract are Essential Elements, Natural Elements, and Accidental
Elements. Essential Elements are those without which no contract can validly exist regardless of
the intentions of the parties. It may be subdivided into common, those present in all contracts,
and special, those not common to all contracts. Next, the Natural Elements are those that are
presumed to exist in certain contract unless the contrary is expressly stipulated by the parties.
Lastly, Accidental Elements or the particular stipulations, clauses, terms, or conditions
established by the parties in their contract.

 ARTICLE 1319

In this article it defines Consent, Offer, and the Acceptance. Consent is defined as the conformity
or concurrence of wills and with the respect to contracts, it is the agreement of the will of one
(1) contracting party with that of another or others, upon the object and terms of the contract.
Offer is a proposal made by one party (offerer) to another (offeree) that indicates the willingness
to enter into a contract. The offer must be certain or definite and an offer made in jest or anger
is not a valid offer. Lastly, the Acceptance, it is the manifestation by the offeree of his assent to
all the terms of the offer. It is said the without the acceptance, there is no meeting of minds and
therefore there is no contract between the parties. It is because the acceptance of an offer must
be clear, absolute, unconditional, or unqualified to produce consent or meeting of minds to
enter into a contract.

 ARTICLE 1320

An express acceptance in the form of a promise to pay a certain amount or to do something,

may be oral or written.

 ARTICLE 1321

The person making the offer has the right to prescribe the time, the place, and the manner of
acceptance, all of which must be complied with. The offer must be communicated and received
by the offeree, it may be by letter, telephone or e-mail.

Example. L, as offerer, may tell M, the offeree that he must accept the offer personally on
December 8, at 5:30 P.M. in the house of L, all of which must be complied by M to create a
contract.

 ARTICLE 1322

The acceptance of the offer to the offerer must be absolute, it may be either express or implied
subject to the terms of the offerer. While in the acceptance of the offer to the agent, if the offer
is made through and communicated through him Article 1322 applies. But, if the offer is made
 by the principal and communicated through the agent, there would be no meeting of minds,
unless if the agent is duly authorized to receive the acceptance.

 ARTICLE 1323

An offer may be revoked or withdrawn at any time before it is accepted. After acceptance, the
contract is already perfected. But under the Article 1323, it states that even if the offer is not
withdrawn, in case of death, civil interdiction, insanity, or insolvency of either party before the
conveyance of the acceptance of the offer it is already ineffective and will not produce a
meeting of minds.

 ARTICLE 1324

An option may refer to the privilege itself given to the offeree to accept an offer within a certain
period. The Option Contract is one giving a person for a consideration a certain period within
which to accept the offer of the offerer. Option Period, it is the period given within which the
offeree must accept the offer. Last, the Option Money, is the money paid or promised to be paid
in consideration for the option.

The general rule here is that the offer may be withdrawn as a matter of right at any time before
acceptance. Except, when the option is founded upon consideration, as something paid or
promised.

 ARTICLE 1325

This article states that the advertisements of things for sale are not definite offers acceptance of
which will perfect a contract it is because advertisements are only a mere invitations to make an
offer. Except, if the advertisement is complete in all particulars necessary in a contract.

 ARTICE 1326

The advertiser is not bound to accept the highest bidder or the lowest bidder, except, the
contrary appears.

 ARTICLE 1327

This article provides who have no capacity to give consent. The contract is voidable if one of the
parties is incapable of giving a consent. A voidable contract is valid and binding until it is
annulled by a proper action in court. Persons who cannot give consent are the following:(1)
Unemancipated minors, persons who have not yet reached the legal age (18 years) (2)
Insane/Demented persons, here the insanity must exist at the time of contracting, and (3) Deaf-
mutes, they are the persons who are deaf and dumb, but there are exceptions, if the deaf-mute
knows how to write the contract is valid, and the deaf-mute knows how to read the contract is
also valid.
 ARTICLE 1328

The lucid interval is the temporary period of sanity. An insane person or demented person who
entered into a contract during a lucid interval is considered valid. However, the contract entered
by the person in the state of drunkness or during hypnotic spell is voidable.

 ARTICLE 1329

The contracts entered into by persons who have no capacity to give consent are voidable.
Except, that there incapacity may be modified by law, they can also give consent.

 ARTICLE 1330

The contracting parties must possess the necessary legal capacity to give consent to a contact.
The contract must be based on the genuine assent of both parties to the contract and the terms
thereof. There is valid consent if it is intelligent, free and voluntary, and it is conscious or
spontaneous. To vitiate the consent or render it defective there are following causes: (1) error
or mistake (2) violence or force (3) intimidation/threat/duress (4) undue influence, and (5) fraud
or deceit. These are the causes to make the contract voidable.

 ARTICLE 1331

Mistake or error is the false of a thing or a fact material to the contract. In this article, it refers to
mistake of fact, it may arise from ignorance or lack of knowledge, that the party would not have
given his consent had he known of the mistake. It is said the mistake may be unilateral, that is
when only one party is mistaken, or bilateral, when both parties are in error. The mistake of fact
which does not vitiate consent are as follows: (1) Mistake regarding object (2) Mistake regarding
condition of the contract (3) Mistake as to quantity or amount (4) Mistake regarding identity or
qualifications, and (5) Mistake which could have been avoided.

 ARTICLE 1332

In a contract where one person signs a document, we can assume that he does it with his full
knowledge and understanding of the contents. If later, he is falsely alleged fraud or mistake, he
is required to prove his allegation. Except, 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 is duty
bound to show or prove that there has been no fraud or mistake and that the terms of the
contract has been fully explained to the former.

 ARTICLE 1333

If a party knew beforehand the doubt, contingency, or risk affecting the object of the contract, it
is to be assumed that he was willing to take chances and cannot, therefore, claim mistake.
 ARTICLE 1334

Mistake of law which arises from an ignorance of some provision of law, or from an erroneous
interpretation of its meaning, or from an erroneous conclusion as to the legal effect of an
agreement, on the part of the parties. The rule here is the mistake of law does not invalidate the
consent. But it should have no proper application when there is a mistake on a doubtful
question of law or on the application of law.

 ARTICLE 1335

To make the consent defective, the force employed must be either serious or irresistible. The
violence requires the employment of physical force. There is intimidation when one of the
contracting parties follows the following requisites: (1) Intimidation must produce 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. If a contract is signed merely out of reverential fear or the fear of
displeasing a person to whom respect and obedience are due, the contract is valid. The threat of
a court action as a means to enforce a just or legal claim is justified and does not vitiate consent.

 ARTICLE 1336

Violence or intimidation may be employed by a third person who did not take part in the
contract. To make the contract voidable or annullable, it is necessary that the violence or
intimidation must be of the character required in Article 1335.

 ARTICLE 1337

Undue Influence is influence of a kind that so overpowers the mind of a party as to prevent him
from acting understandingly and voluntarily to do what he would have done if he had been left
to exercise freely his own judgment and discretion. To avoid a contract, the influence must be
undue or improper. And, the influence will not vitiate consent, if it is gained by kindness and
affection or argument and persuasion.

 ARTICLE 1338

Casual Fraud is the fraud committed by one party before or at the time of the celebration of the
contract to secure the consent of the other. It may be committed through insidious words or
machinations or by concealment.

 ARTICLE 1339

A neglect or failure to communicate or disclose that which a party to a contract knows and
ought to communicate constitutes concealment. The concealment is equivalent to
 misrepresentation or false representation. The injured party is entitled to rescind or annul the
contract whether the failure to disclose the material facts is intentional or unintentional.
 ARTICLE 1341

To constitute fraud, the misrepresentation must refer to facts, not opinions. A mere expression
of an opinion does not signify fraud. Except, it may be amount to fraud it must be made by an
expert, other contracting party has relied on the experts opinion, and the opinion turned out to
be false or erroneous.

 ARTICLE 1342

A third person has no connection with a contract. Consequently, a misrepresentation by him

does not vitiate consent. 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. The force or intimidation
employed by a third person on one of the parties makes a contract voidable.

 ARTICLE 1343

If the misrepresentation is not intentional but made in good faith, 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.

 ARTICLE 1344

In this article, it distinguishes the two kinds of fraud in the making of contract. First, the casual
fraud, which is the ground for the annulment of a contract, although it may also give rise to an
action for damages. And the second is the incidental fraud, which only renders the party who
employs it liable for damages.

The contract is considered valid, when the fraud is employed by both parties, neither may ask
for annulment as the fraud of one neutralizes that of the other.

 ARTICLE 1345 & ARTICLE 1346

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

agreement, the appearance of a contract which is either non-existent or concealed. There is two
kinds of Simulation (1) Absolute Simulation, when the contract does not really exist and the
parties do not intend to be bound at all. An absolutely simulated contracts are void (2) Relative
Simulation, when the contract entered into by the parties is different from their true agreement