BANKING.docx

Ii for there to be a valid contract all the three 3

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II For there to be a valid contract, all the three (3) elements of consent, subject matter, and price must be present. 41 Consent wrongfully obtained is defective. The party to a contract whose consent was vitiated is entitled to have the contract rescinded. Accordingly, Article 1390 of the Civil Code 42 stipulates that a contract is voidable or annullable even if there is no damage to the contracting parties where "consent is vitiated by mistake, violence, intimidation, undue influence or fraud." Under Article 1338 of the Civil Code "[t]here is fraud when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to." However, not all instances of fraud enable the voiding of contracts. Article 1344 clarifies that in order to make a contract voidable, the fraud "should be serious and should not have been employed by both contracting parties." 43 Thus, Tankeh v. Development Bank of the Philippines 44 explained, "There are two types of fraud contemplated in the performance of contracts: dolo incidente or incidental fraud and dolo causante or fraud serious enough to render a contract voidable." 45 The fraud required to annul or avoid a contract "must be so material that had it not been present, the defrauded party would not have entered into the contract." 46 The fraud must be "the determining cause of the contract, or must have caused the consent to be given." 47 Petitioner's contention on how crucial the dimensions and area of the Unit are to his decision to proceed with the purchase is well-taken. The significance of space and dimensions to any buyer of real property is plain to see. This is particularly significant to buyers of condominium units in urban areas, and even more so in central business districts, where the scarcity of space drives vertical construction and propels property values. It would be immensely guileless of this Court to fail to appreciate how the advertised area of the Unit was material or even indispensable to petitioner's consent. As petitioner emphasized, he opted to register for and participate in the auction for the Unit only after determining that its advertised area was spacious enough for his residential needs. 48 III The significance of the Unit's area as a determining cause of the Contract to Sell is readily discernible. Falsity on its area is attributable to none but to respondent, which, however, pleads that it should not be considered as having acted fraudulently given that petitioner conceded to a sale on an as-is-where-is basis, thereby waiving "warranties regarding possible errors in boundaries or description of property." 49
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Section 12 of the Contract to Sell spells out the "as-is-where-is" terms of the purchase: Section 12. The BUYER recognizes that he is buying the property on an "as-is-where-is" basis including errors in boundaries or description of property, if any etc. and among others, he shall
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