Art. 1335. Violence and Intimidation Violence refer to physical coercion while intimidation refers to moral coercion Requisites of Violence to vitiate consent: Employment of serious or irresistible force It must have been the reason why the contract was entered into Requisites for intimidation to vitiate consent Reasonable and well-grounded fear Of an imminent and grave evil Upon his person, property, or upon the person or property of his spouse, descendants or ascendants It must have been the reason why the contract was entered into The threat must be of an unjust act, an actionable wrong Whether or not the fear is reasonable or well-grounded depends upon the circumstances including age, condition and sex of the person concerned. Reverential fear fear of displeasing a person to whom respect and obedience are due The contract is still valid because reverential fear by itself does not annul consent in the absent of actual threat and it is not wrong. Threat to enforce just and legal claim it will not vitiate consent Ex. Threat to sue the debtor if he is not going to pay his debt on time after numerous demands from the creditor.Art. 1336. Violence or intimidation caused by third person Contract may still be annulled as contract is vitiated however to annul the contract, the character required should be those required in Art. 1335.Art. 1337. Undue Influence When a person is taking advantage of his power over the will of another, depriving the later of a reasonable freedom of choice. Requisites: Improper advantage Power over the will of another Deprivation of the latters will for a reasonable freedom of choice Influence exerted must be a kind that overpowers the mind as to destroy the partys free agency. Circumstances to be considered: Confidential, family, spiritual and other relations between the parties Mental weakness Ignorance Financial distress Undue influence caused by third person Still vitiates consent Contracts of adhesion Contracts where one party merely signs carefully prepared contracts by big companies should be strictly interpreted against the company, and liberally in favour of the individual, because the individual is usually helpless to bargain for better terms.Art. 1338. FRAUD Kinds of Fraud: Fraud in the celebration of the contract: Dolo causante were it not for the fraud, the other party would not have consented. Contract is VOIDABLE. Dolo incidente even without the fraud the parties would have agreed just the same, hence the fraud was only incidental in causing consent. Contract is valid, but there can be action for damages Fraud in the performance of the obligations stipulated in the contract Kind of fraud presupposes the existence of an already perfected contract Requisites of the Dolo Causante: Fraud must be material and serious Fraud must be have been employed by only one of the contracting parties Deliberate intent to deceive The other party must have relied on the untrue statement It must be alleged and proved by clear and convincing evidenceArt. 1339. Failure to disclose facts Concealment constitutes fraud when there is a duty to conceal them.Art. 1340. Usual exaggerations in Trade Caveat emptor the buyer must be on guard and it his duty to check the seller, otherwise the buyer gets the object at his own risk.Art. 1341. Mere expression of opinion The experts opinion is almost in the same category as a fact, particularly when this knowledge is relied upon by the other party.Art. 1342. Misrepresentation by a third person Fraud by a third person does not vitiate consent unless: The representation has created substantial mistake The mistake is mutual The presumption is both parties acted in good faith and since the third person has no connection to the contract, consequently, the act does not vitiate consent.Art. 1343. Misrepresentation made in good faith Misrepresentation made in good faith is not fraudulent but may constitute error.Art. 1344. Fraud Requisites of fraud to vitiate consent: The fraud must be serious The parties must not be in pari delicto (mutual guilt); otherwise, neither of the party may ask for annulment. The contract would, therefore, be considered valid. Ir should not have been known by the other contracting party.Art. 1345. Simulation of contract It is the process of intentionally deceiving others by producing the appearance of a contract that really does not exist (absolute simulation) or which differs from the true agreement (relative simulation). Requisites for simulation: An outward declaration of will different from the will of the parties; The false appearance must have been intended by mutual agreement; The purpose is to deceive third persons.Art. 1346. Simulation of contract Kinds of simulated contacts: Absolutely simulated fictitious contract: Here, the parties do not intend to be bound. Effect: the contract is VOID. Ex. As a joke, A and B entered into a contract without intention to be bound at all by the contract. Relatively simulated disguised contract: Here, the parties conceal their true agreement. Effect: the parties are bound to the real or true agreement except If the contract should prejudice a third person; Or if the purpose is contrary to law, morals, good customs, public order and policy. Absolutely simulated vs. Illegal contract In simulation the contract is not really desired to produce an illegal effect or in any way alter the juridical situation of the parties An illegal contract is real and effective and entered in such form as to circumvent a prohibited act