SC: The usual exaggerations in trade; are not in themselves fraudulent

Article 1340 of the Civil Code recognizes the reality of some exaggerations in trade which negates fraud. It reads:

"Art. 1340. The usual exaggerations in trade, when the other party had an opportunity to know the facts, are not in themselves fraudulent[.]"

The law allows considerable latitude to seller's statements, or [dealer's talk]; and experience teaches that it is exceedingly risky to accept it at its face value. The refusal of the seller to warrant his estimate should have admonished the purchaser that that estimate was put forth as a [mere opinion] ; and we (this Court) will not now hold the seller to a liability equal to that which would have been created by a warranty, if one had been given. [...]

It is not every false representation relating to the subject matter of a contract which will render it void. It must be as to matters of fact [substantially affecting] the buyer's interest, [not] as to matters of opinion, judgment, probability, or expectation.

When the purchaser undertakes to make an investigation of his own, and the seller does nothing to prevent this investigation from being as full as he chooses to make it, the purchaser cannot afterwards allege that the seller made misrepresentations.

NOTE |

We are aware that where one party to a contract, having special [or] expert knowledge, takes advantage of the ignorance of another to impose upon him, the false representation may afford ground for relief, though otherwise the injured party would be bound. (Emphasis supplied).

G.R. No. 171428 November 11, 2013

TANKEH vs. DBP, STERLING SHIPPING LINES, INC., et al.

👨‍⚖️ LEONEN, J.

SC: The usual exaggerations in trade; are not in themselves fraudulent

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