Short answer. No. The Civil Code makes responsibility arising from fraud demandable in all obligations, and it declares void any waiver of an action for future fraud. A clause where you agree in advance not to sue if the other party later defrauds you simply does not hold, whatever it says.
What the law says
Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void.
Civil Code, Article 1171 — Waiver of Future Fraud Is Void. Read the full provision →
Fraud liability cannot be shut out in advance
Article 1171 begins with a sweeping statement — responsibility arising from fraud is demandable in all obligations — and then draws the direct consequence: any waiver of an action for future fraud is void. The key word is future. This is not about forgiving fraud that already happened, which a party can generally choose to do once they know the facts; it is about a clause signed before any wrongdoing occurs, trying to disarm the other side ahead of time against fraud that has not yet happened.
Why the law refuses to let this be bargained away
Letting parties waive liability for fraud in advance would let the stronger or more dishonest party write itself a license to deceive, since the other side would have no recourse no matter how badly it was cheated. Fraud already involves a breach of the basic honesty a contract assumes; allowing it to be pre-waived would strip the waived party of any real protection against being defrauded by the very counterpart with whom they contracted. The prohibition exists to keep contracts from becoming tools for the fraud they are meant to prevent.
What stays enforceable, and what does not
A clause limiting liability for ordinary negligence, or setting reasonable terms for how disputes are resolved, is a different matter from a clause purporting to excuse fraud specifically. Article 1171 is narrowly aimed at waivers of an action for fraud not yet committed; it does not by itself invalidate every limitation-of-liability clause in a contract. If a clause in your contract is broad enough to sweep in fraud along with ordinary breaches, the fraud portion of that waiver is what this article strikes down.
What this means if you signed such a clause
If a contract you signed contains language releasing the other party from any liability for fraud, deceit, or misrepresentation going forward, that specific promise is not something a court will hold you to if fraud later occurs. Keep the contract and any evidence of what actually happened, since your claim for fraud stands on its own footing regardless of the waiver language — the clause simply does not remove your right to sue once fraud is proven.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Fedman Development Corporation vs. Federico Agcaoili, G.R. No. 165025, August 31, 2011 — read the decision on LawPhil →