Contract voidable due to mistake

Article 1330 of the Civil Code provides:
ART. 1330. A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable. (1265a)
Mistake is "a misunderstanding of the meaning or implication of something” or a “wrong action or statement proceeding from a faulty judgment."[1] In order that mistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or to those conditions which have principally moved one or both parties to enter into the contract.[2] There is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object of the contract.[3]

For a contract to be voidable due to mistake, the following requisites must concur:

a. The error must be substantial regarding: 

1. The object of the contract (error in re) which may be: 

Mistake as to the identity of the thing (error in corpore);

Mistake as to the substance of the thing (error in substantia);

Mistake as to the conditions of the thing provided; or

Mistake as to the quantity of the thing (error in quantitate).

2. The condition which primarily moved or induced one or both parties to enter the contract. 

3. Identity or qualifications of one of the parties (error in persona), but only if such was the principal cause of the contract. 

b. The error must be excusable; and

c. The error must be a mistake of fact and not of law.

Furthermore, mistake which vitiates consent is an error of fact, and not an error of law. Ignorance of the law excuses no one from compliance therewith [4]; but the modern tendency is to allow an excusable mistake of law to be invoked as vitiating consent.[5] 

In case of mistake, the burden of proof rests upon the person who committed it. However, the obligation to show that the terms of the contract had been fully explained to the party who is unable to read or understand the language of the contract, when fraud or mistake is alleged, devolves on the party seeking to enforce it.[6]

[1] Domingo Realty v. CA, G.R. No. 126236 (2007).

[2] Article 1331, Civil Code.

[3] Article 1333, Civil Code.

[4] Article 3, Civil Code.

[5] Tolentino. Obligations and Contracts.

[6] Article 1332, Civil Code.

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