OBLICON_GENERAL PROVISION ON CONTRACTS PART 3

Summary

This video script explores various aspects of contract law, focusing on the concept of 'mistake' and its implications in contract formation. It distinguishes between 'mistake of fact' and 'error of law', explaining how these can affect a party's consent to a contract. The script also delves into the influence of violence, intimidation, and undue influence on consent, outlining the legal consequences of these factors. Additionally, it examines fraud, misrepresentation, and simulation in contracts, discussing their effects on contract validity and the potential for recovery in cases of absolute and relative simulation. The video aims to provide clarity on these complex legal topics, guiding viewers through the nuances of contractual agreements and the factors that can render them voidable or void.

Takeaways

• 📚 Mistake of Fact: A substantial error in the existence of a circumstance, fact, or event that, if known, would have led a party not to consent to a contract.
• 🤔 Error of Law: A mistake concerning the existence or interpretation of a legal provision, which does not excuse non-compliance with the law.
• 🚫 Violence and Force: Consent given under serious or irresistible physical force is not considered free, and the contract may be voidable.
• 😨 Intimidation: Requires a reasonable and well-grounded fear of imminent and grave evil, affecting the person or their family's property, liberty, or honor.
• 👤 Undue Influence: Occurs when one party improperly takes advantage of their power over another, depriving them of reasonable freedom of choice.
• 🤝 Fraud: One party induces another to enter a contract through deceitful words or concealment of critical facts, making the contract voidable.
• 🔍 Causal Fraud: The type of fraud that directly influences the consent of the other party, making the contract voidable.
• 💡 Incidental Fraud: A less influential type of fraud that does not cause consent but may lead to damages if committed by one party.
• 🎭 Simulation of Contracts: A contract where parties create a fictitious agreement for deceptive purposes, which can be either absolute or relative.
• 🚫 Absolute Simulation: A contract where parties do not intend to be bound, making it void.
• 🔄 Relative Simulation: A contract where parties are bound by their real agreement but simulate another for external appearances, valid unless illegal or against public policy.

Q & A

What is the definition of 'ignorance of the law' in the context of the video?

In the video, 'ignorance of the law' refers to a wrong or false notion about a matter, circumstance, fact, or event which in reality does not exist. It is considered a mistake of fact due to a party's ignorance or lack of knowledge.

What is the difference between a 'mistake of fact' and an 'error of law'?

A 'mistake of fact' is a substantial error that would have led a party not to give consent had they known about it. An 'error of law', on the other hand, refers to a mistake regarding the existence of a legal provision or the interpretation or application of it.

What are the conditions for a contract to be affected by mutual error regarding legal effects?

According to the video, mutual error regarding the legal effect of an agreement can be consented when the real purpose of the parties is frustrated, and this error is unavoidable because of the error of law.

What constitutes 'violence' or 'force' in the context of contract consent?

In the video, 'violence' or 'force' requires the use or employment of physical force to make consent defective. The force must be serious or irresistible, and it must be the determining factor as to why consent was given for the contract.

How does 'intimidation' differ from 'violence' in the context of contracts?

Intimidation differs from violence in that it does not require the exertion of physical force. Intimidation is internal and involves creating a reasonable and well-grounded fear of an imminent and grave evil, typically concerning the person, their property, or that of their family.

What are the conditions for 'undue influence' in a contract?

Undue influence occurs when a person takes improper advantage of their power over the will of another, depriving them of reasonable freedom of choice. Factors like confidential relations, mental weakness, and financial distress can contribute to undue influence.

What is 'fraud' in the context of contract law as described in the video?

Fraud in contract law is when one of the contracting parties uses insidious words or machinations to induce the other party to enter into a contract they would not have agreed to otherwise. This can include concealing facts that should have been divulged.

What is the difference between 'avoidable' and 'casual' fraud?

Avoidable fraud is committed to secure the consent of the other party and without it, the party would not have agreed to the contract. Casual fraud, however, does not have a decisive influence by itself and cannot cause the giving of consent but may lead to damages.

Can a third party's misrepresentation affect the validity of a contract?

A third party's misrepresentation does not vitiate consent unless it has created a substantial mutual mistake. However, if the third party is in collusion with one of the contracting parties, the contract becomes voidable.

What is 'simulation' in contract law, and what are its two types?

Simulation in contract law is a declaration of a fictitious will made by agreement of the parties to deceive. There are two types: absolute simulation, where parties do not intend to be bound at all, and relative simulation, where parties are bound to their real agreements.

Can there be recovery under absolutely simulated contracts?

Recovery under absolutely simulated contracts depends on whether the simulation was for an illicit purpose. If not, the simulation must be proved to recover what may have been given. If it was for an illegal purpose, the party must come with clean hands, following the principle that those who come to court must come with clean hands.

Outlines

00:00

📜 Mistake of Fact and Error of Law in Contracts

The video discusses the concept of 'mistake of fact' in contract law, where a party enters into a contract based on a false belief about a fact that, if known, would have influenced their decision to contract. It emphasizes that not all mistakes are legally significant and only those that are 'substantial' can render a contract voidable. The video also touches on 'error of law', which refers to a misunderstanding of the legal implications or interpretation of a contract. It is clarified that ignorance of the law is not an excuse for non-compliance with legal obligations.

05:03

🚫 The Impact of Violence and Intimidation on Contract Validity

This paragraph delves into the effects of violence and intimidation on the validity of a contract. It explains that consent given under duress or threat is not considered free and can lead to the annulment of the contract. The video outlines the conditions under which intimidation or threat is considered valid, such as the presence of a reasonable fear of imminent and grave harm to the person or their property. It also addresses the scenario where a third party, not involved in the contract, employs violence or intimidation, which can also nullify the obligation.

10:06

👤 Undue Influence and Fraud in Contractual Agreements

The video script covers the topics of undue influence and fraud in contracts. Undue influence occurs when one party takes advantage of their power over another, depriving them of free will. Factors like family relations, mental weakness, and financial distress are considered when assessing undue influence. Fraud is described as the deliberate deception by one party to induce another to enter into a contract they would not have otherwise agreed to. The video differentiates between 'avoidable fraud', which directly influences consent, and 'accidental fraud', which does not affect consent but may lead to damages.

15:07

🎭 The Consequences of Misrepresentation and Simulation in Contracts

Misrepresentation and simulation are explored in this paragraph, with misrepresentation being a false statement made by one party that induces another to enter into a contract. The video clarifies that misrepresentations made in good faith do not constitute fraud but could lead to other legal consequences. Simulation, on the other hand, involves parties creating a fictitious contract to deceive others. The script distinguishes between 'absolute simulation', where parties do not intend to be bound, and 'relative simulation', where parties are bound by their true agreement but conceal it for deception purposes.

20:07

📝 Recoverability and Legal Implications of Simulated Contracts

The final paragraph discusses the recoverability of assets or damages in cases of simulated contracts. It states that recovery is possible if the simulation was not for an illicit purpose. However, if the simulation was intended for an illegal purpose, the parties may be barred from recovery due to the principle that those who come to court must come with clean hands. The video highlights the importance of proving simulation and the legal consequences of engaging in such deceptive practices.

Keywords

💡Ignorance

Ignorance in the context of the video refers to a lack of knowledge or understanding about a particular matter or fact. It is related to the theme of the video as it discusses how ignorance can lead to mistakes in contracts and legal agreements. For example, the script mentions that 'ignorance of the law excuses no one,' emphasizing the importance of being knowledgeable about legal matters.

💡Mistake of Fact

A 'Mistake of Fact' is a legal concept where a party enters into a contract based on a false belief about a material fact. In the video, this concept is crucial as it explains a situation where a contract may be voidable if a party would not have consented had they known the true facts. The script illustrates this with the phrase 'a wrong or false notion about such matter.'

💡Substantial Fact

A 'Substantial Fact' is a fact that is significant enough to influence the decision-making of a party in a contract. The video emphasizes that for a mistake to be considered substantial, it must be of a nature that would have prevented a party from giving consent had they been aware of it. The script refers to this as 'a contracting party must not have given consent had he known the existence of such mistake.'

💡Error of Law

An 'Error of Law' occurs when there is a misunderstanding about the legal implications or the interpretation of a law. The video explains that unlike mistakes of fact, errors of law are about legal misconceptions rather than factual inaccuracies. The script states that 'error of law is likewise a mistake but it refers to mistake in the existence of a legal provision or on the interpretation or application thereof.'

💡Mutual Error

Mutual Error is a situation where both parties to a contract are mistaken about a fundamental aspect of what they are agreeing to. The video discusses how mutual error regarding the legal effect of an agreement can lead to the contract being voidable. The script provides the context 'mutual error as regards the legal effect of an agreement when the real purpose of the parties is frustrated.'

💡Violence or Force

In the video, 'Violence or Force' refers to the use of physical force to obtain consent for a contract, which invalidates the consent given. The script explains that 'violence or force requires the use or employment of physical force for consent given to be defective,' and that the force must be either serious or irresistible for consent to be considered not free.

💡Intimidation

Intimidation is the act of instilling fear to influence someone's actions or decisions. The video discusses how intimidation can affect the validity of a contract if it leads to a well-grounded fear of imminent and grave harm. The script mentions that 'intimidation or threat must have produced a reasonable and well-grounded fear of an evil.'

💡Undue Influence

Undue Influence occurs when one party takes advantage of a position of power to influence the decisions of another, depriving them of free choice. The video explains the circumstances that may constitute undue influence, such as exploiting someone's mental weakness or financial distress. The script states 'improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice.'

💡Fraud

Fraud in the video is described as a deliberate act of deception intended to secure the consent of another party to a contract. The script differentiates between 'avoidable fraud' and 'casual fraud,' where the former refers to deception that would lead a party to enter a contract they otherwise would not, and the latter refers to minor deceptions that do not influence the consent but may lead to damages. The script mentions 'fraud exists when through the insidious words or machinations of one of the constructing parties, the other party is induced to enter into a contract.'

💡Simulation

Simulation in the context of contracts refers to a situation where parties enter into an agreement with the intention to deceive or conceal the true nature of the agreement. The video distinguishes between 'absolute simulation,' where there is no intention to be bound by the contract, and 'relative simulation,' where parties are bound by their true agreement. The script explains 'absolutely simulated contract this kind of simulation takes place when the contracting parties do not actually intend to be bound at all.'

Highlights

Ignorance of the law excuses no one, emphasizing the importance of understanding legal principles.

Mistake of fact is defined and explained, highlighting its impact on contract consent.

Substantial mistake must be significant enough to affect a party's consent to a contract.

Error of law is distinguished from mistake of fact, relating to legal provisions and their interpretation.

Article 13, 34 discussed, explaining mutual error regarding legal effects of an agreement.

The concept of violence in contracts is introduced, detailing its impact on consent.

Serious or irresistible force is required for consent to be considered defective due to violence.

Intimidation is differentiated from violence, focusing on internal fear rather than external force.

Requirements for intimidation or threat are outlined, including producing a reasonable fear of imminent evil.

Article 13, 36 discusses the annulment of obligations due to violence or intimidation by third parties.

Undue influence is defined and circumstances that may indicate it are listed.

Fraud in contracts is explained, including its types and the conditions that make a contract voidable.

Causal fraud is identified as a critical factor making a contract voidable.

Incidental fraud is distinguished and its implications for damages are discussed.

Misrepresentation by a third party and its impact on contract validity is examined.

Good faith misrepresentations are discussed in the context of contract law.

Simulated contracts are explained, including absolute and relative simulation.

Recovery under absolutely simulated contracts is discussed, contingent on the absence of illicit purpose.

Transcripts

[Music]

hi everyone welcome to my channel

always remember ignorance of pillow

excuses no one

this is legally engineer

somehow um

that he is disqualified should

a wrong or false notion about such

matter a belief in the existence of some

circumstance

fact or event which in reality does not

[Music]

exist

because mistake is contemplated as a

mistake of fact which may be due to a

party's

ignorance or lack of knowledge

so this mystical fact shall be

substantial which means that a

contracting party

must not have given consent had he known

the existence of

such mistake because not all kinds of

mistake will actually be shipped

and he would make a contract

against

[Music]

that is what you call mistake mistake of

fact

and uh it must be an adult substantial

and substantial uh

to the point that the party

uh will not give his consent had he

known of such

of the existence of the mistake so

that's mistake

now um

error of law is likewise a mistake but

it refers to mistake in the existence of

a legal probation

or on the interpretation or application

thereof

so yeah

[Music]

ignorance of the excuses no one from

compliance they're with under article

three of the new system

my exception under article 13 34 which

provides that a mutual error

as regards the legal effect of an

agreement when the real purpose of the

parties is frustrated

may be consented

mutual error in as regards to a

provision of

law or interpretation of a provision of

law

uh mcgee avoidable

because of the error of law

uh

so violence or force requires the use or

employment

of physical force for consent given to

be defective

the force that was employed must be

either serious or irresistible

in both instance consent cannot be said

to be free

however the force employed must have

been the determining because why consent

was given for the contract

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of law or is a mistake of fact that the

force employed must have been the

determining cost

why consent was given for the contract

so

no violence or force that was exerted by

the other party

consent would not be given okay

yeah so

unlike violence it need not resort to

exertion of a physical force

since intimidation is internal while

violence is external

externality

the following requests must conquer that

intimidation or threat

first so first the intimidation or

threat must have produced a reasonable

and well grounded fear of an evil

the said evil must be so imminent and

grave the evil must be upon his person

or property

or that of his spouse descendants or

ascendance

and forth the same must be the reason

why he

[Music]

person and her property impersonator uh

you have to take note that the term

person is not just limited to the life

and physical integrity but this also

includes the liberty

and honor and it covers all injuries

which are not

oh physical integrity

pero will it suffice

to be a threat

produced as a reasonable and

well-grounded

the evil must be about his personal

property or that of his spouse

to send dance or ascendant

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is

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right so now let's go to article 13

36 this is about again violate violence

or intimidation

which violence or intimidation shall

announce the obligation

although it may have been employed

better person who did not take

part in the contract so in the violence

or intimidation

it will announce the obligation although

it is employed by a stranger or a third

person

who is a stranger to the parties in the

[Music]

contract

[Music]

even if employment third person who is

not

partnered to a contract it will annul

the obligation

[Music]

in order to visit consent materiality

it's not about the person who's giving

the intimidation or violence but

the fact that he or she decided to give

he

his or her consent because of the body

that's your intimidation regardless

where that

violence is coming from against

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implement there is a influence when a

person takes improper advantage

of his power over the will of another

depriving the latter of a reasonable

freedom of choice

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and um the following circumstances shall

be considered in this case

one confidential family spiritual and

other relations between the parties

second you mental witness you take

advantage of the mental weakness or

ignorance of a person and financial

distress of the person alleged to have

been

unduly influenced

[Music]

because

[Music]

the person who's uneducated that's

ignorance

yes okay

fraud exists when through the insidious

words or machinations of one of the

constructing parties

the other party is induced to enter into

a contract which without

those he would not have agreed to so

narrative in the money of rodney

and my incidental fraud review

so caution fraud is the fraud committed

by one of the contracting parties before

or at the time of the celebration

of the conscious so as to secure the

consent of the other

it may be committed through insidious

words or machinations or by conservative

facts

which should have been divulged

so you introduce words

avoidable

fraud because without which the parties

would not have given their consent to be

bound by the foreign

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is causal fraud there is

so it will make the contract avoidable

yes so how about incident accidental

fraud

this the kind of fraud which does not

have such a

decisive influence by itself this fraud

cannot cause the giving of consent but

it only refers to some particular or

accident of the person

employing it to pay damages so dunamis

[Music]

so in that case the party will be

uh obliged to pay damages

perfectly yes perfectly

at the time of the performance of the

obligation or

after the valid contract has been

entered into

or can it be committed by a third person

yes your

misrepresentation by third person does

not vitiate consent

unless of course such misrepresentation

has created

substantial mistake and the same is

mutual

so general nathan from committed best

third person does not

shake the contract contract except

if he contra if a third person is in

connivance or collusion with one of the

contracting parties

then he shall be considered as an

accomplice to the fraud

and such contract shall become voidable

so if

it can be proven that the third person

actually

is

yes so also

another exception if a third person is

not inclusion with any of the

contracting parties but

it leads them both into error or

whatever then the consent is considered

as

be shaped thus the horn shock is said to

be vulnerable

so

so how about misrepresentations made in

good faith

does it fishy well it's not

fraudulent but it may constitute there

or

in good faith elegance or people no

intention to commit fraud

there is no intention to commit that but

again so you have to check um

[Music]

um

um

of contracts so

it is a declaration of a fictitious will

deliberately made by agreement of the

parties in order to produce

for the purposes of deception the

appearance of a

juridical act which does not exist or is

different from that pitch

was really executed

so there are two kinds of assaminated

contracts

absolute and

[Music]

absolutely simulated contract this kind

of simulation takes place when the

contracting parties

do not actually intend to be bound at

all

this kind of simulation takes place when

the parties would conceal their true

agreement

in a relatively disseminated contract

the parties are bound to their real

agreements with such assimilation

thus not prejudice a third person and

is not intended for any purpose contrary

to law morals with customs public order

error or

public policy

but absolutely simulated unconscious

that is a

void contract because the parties do not

intend to be bound up

at all so there is absence of consent

when it comes to relative uh the

contract

is valid and the parties

are bound to their engineering agreement

provided

a third person is that prejudice and the

intention of the parties

enter into that

take note of the difference uh between

the

absolute and relative simulation

relation of construction effects

of the status of the function now

attorney can there

can there be recovery under absolutely

simulated contracts

so it depends if the simulated contract

does not have

illicit purpose or he didn't have an

illegal

purpose no simulated contract simulation

must be proved in order to recover what

may have been

given but if the simulator

or on the other hand simulated

construction

illegal object or illegal purpose then

the party should be considered

with a clean hand such that

environmental rules

shall apply

those who come to court must come with

clean hands

[Music]

[Music]

okay i go after attorney and find a case

against him in court

you