Mistake in Contract Law

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Questions and Answers

When are contracts perfected?

By mere consent (correct)

By delivery of the object

By authorization of the party

By implicit consent

Which type of contracts are not perfected until the delivery of the object?

Bilateral contracts

Void contracts

Real contracts (correct)

Unilateral contracts

What happens if someone contracts in the name of another without authorization?

The contract is immediately revoked

The contract is unenforceable unless ratified by the person represented (correct)

The contract is legally binding

The contract is enforceable without ratification

In real contracts, what is the key element for their perfection?

Delivery of the object Signup and view all the answers

What is required for a contract to be considered perfected according to Art. 1316?

Mere consent Signup and view all the answers

Who has the authority to contract in the name of another?

Only those authorized by the other party or by law Signup and view all the answers

What does the serious character of fraud refer to?

Its importance Signup and view all the answers

Why can the annulment of a contract not be invoked solely due to the presence of a minor or common acts of fraud?

They are almost inseparable from ordinary commercial transactions Signup and view all the answers

What type of fraud must be the principal or causal inducement to vitiate consent?

Fraud that would have prevented consent without it Signup and view all the answers

What is the difference between absolute and relative simulation of a contract?

The intent to be bound Signup and view all the answers

What is the legal status of an absolutely simulated or fictitious contract?

Void Signup and view all the answers

What cannot be invoked if there are ordinary deviations from the truth?

Annulment of a contract Signup and view all the answers

Which of the following is a common exception to the general rule that a contract cannot produce any effect on third persons?

The contract is entered into in order to defraud a third person Signup and view all the answers

What is the legal capacity of a person who is not a party to a contract or an assignee thereunder?

They cannot challenge the validity of the contract Signup and view all the answers

What is a 'Stipulation pour autrui' in the context of contracts?

A stipulation deliberately conferred by the contracting parties as a favor upon a third person Signup and view all the answers

Which type of mistake with regard to persons can vitiate consent in a contract?

Mistake with regard to the identity or the qualifications of one of the contracting parties Signup and view all the answers

In what situation does Art. 1332 apply according to the text?

When one party is unable to read or understand the language of the contract Signup and view all the answers

What happens if the person enforcing a contract fails to show that the terms have been fully explained to an illiterate party?

The presumption of mistake remains unrebutted and controlling Signup and view all the answers

Under what conditions is there no mistake according to Art. 1333?

If a doubt, contingency, or risk affecting the object of the contract was known to the party alleging a mistake Signup and view all the answers

Which type of mistake is specifically mentioned as relevant in Article 1332?

Mistakes with regard to the contents of the document Signup and view all the answers

What happens if a mistake is alleged by a party who knew about a doubt regarding the object of the contract?

The alleged mistake is not valid if the party knew about the doubt, contingency, or risk Signup and view all the answers

What is required for a thing, right, or service to be the object of a contract?

It must be within the commerce of men, susceptible of appropriation, and transmissible. Signup and view all the answers

What is the status of res communes in terms of appropriation?

They are outside the commerce of men and cannot be appropriated. Signup and view all the answers

In the case of selling 20 kilograms of marijuana, why was the contract invalidated?

Because the object was unlawful. Signup and view all the answers

Why was the sale of an animal considered invalid in one of the illustrations?

Because the object was not determinate or determinable. Signup and view all the answers

Which of the following is a valid object for a contract based on the text?

A pair of love birds Signup and view all the answers

What are two essential conditions for a thing, right, or service to be the object of a contract?

It should be susceptible of appropriation and transmissible. Signup and view all the answers

Study Notes

Effect of Contract on Third Persons

A contract cannot produce any effect whatsoever as far as third persons are concerned.
Exceptions:
- Where the contract contains a stipulation in favor of a third person.
- Where the third person comes into possession of the object of a contract creating a real right.
- Where the contract is entered into in order to defraud a third person.
- Where the third person induces a contracting party to violate his contract.

Stipulations in Favor of Third Persons

Stipulation pour autrui: a stipulation in a contract, clearly and deliberately conferred by the contracting parties as a favor upon a third person.
The third person must have accepted it before it could be revoked.
Kinds of beneficial stipulations:
- Those where the stipulation is intended for the sole benefit of the third person.
- Those where an obligation is due from the promise to the third person.

Requisites of Stipulations

There must be a stipulation in favor of a third person.
Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law.

Perfection of Contracts

Perfection of a contract refers to that moment in the life of the contract when there is finally a concurrence of the wills of the contracting parties with respect to the object and the cause of the contract.
General rule: contracts are perfected by mere consent.
Exceptions: real contracts.

Representation and Authorization

No one may contract in the name of another without being authorized by the latter, or unless he has by law a right to represent him.
A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person in whose behalf it has been executed, before it is revoked by the other contracting party.

Mistake in Contracts

The only mistake with regard to persons which will vitiate consent are mistakes with regard to the identity or the qualifications of one of the contracting parties.
Mistake with regard to the name of one or both of the contracting parties will not invalidate the contract.

Illiterate Parties

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.

To vitiate consent, the fraud must be the principal or causal inducement or consideration for the consent of the party who is deceived.
The annulment of the contract cannot be invoked just because of the presence of a minor, or common acts of fraud whose veracity could easily have been investigated.

Simulation of Contracts

Simulation of a contract may be absolute or relative.
Absolute simulation: when the parties do not intend to be bound at all.
Relative simulation: when the parties conceal their true agreement.

Validity of Contracts

An absolutely simulated or fictitious contract is void.
The object in this case is invalid as they are outside the commerce of men.
For a thing, right, or service to be the object of a contract, it must be within the commerce of men, and consequently, two conditions must concur:
- The thing, right, or service should be susceptible of appropriation.
- It should be transmissible from one person to another.

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Description

Learn about the types of mistakes that can vitiate consent in contract law, particularly focusing on identity or qualification of the contracting parties. Understand how mistakes related to the name of the parties do not invalidate a contract.