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.