Short answer. No. The Civil Code is blunt about it: there is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object of the contract. Someone who went in with his eyes open cannot later call the outcome a mistake because the risk materialised.
What the law says
There is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object of the contract.
Civil Code, Article 1333 — Knowledge of the Risk. Read the full provision →
Mistake and disappointment are different things
Mistake, as a ground for annulling a contract, means you were operating under a false belief about something essential — the substance of the thing, or those conditions which principally moved you to enter the agreement. It is about a defect in consent at the moment of signing. What this article rules out is the very different complaint that a known gamble went badly. If you were aware that title was contested, that the machine was sold as-is, that the area on the ground might not match the plan, then you consented to that uncertainty. The risk was part of what you bought.
Knowledge of the doubt is enough — certainty is not required
The article does not say the party must have known the outcome. It speaks of knowing the doubt, contingency or risk. So a buyer who was told the boundary was unsurveyed cannot claim mistake when the survey comes back short; a buyer who knew an occupant was refusing to leave cannot claim mistake when the occupant stays. Awareness that the matter was uncertain is what closes the door. This is also why price often signals consent to risk: a discount taken because a property is problematic is evidence that the problem was known and priced in.
What this rule does not shut down
Knowing that a deal was risky does not license the other side to lie to you. Fraud, where one party induces the contract through insidious words or by concealing what he had a duty to disclose, is a separate ground and is unaffected by this article. So is intimidation, violence and undue influence. And a party who expressly warranted a fact — clean title, working condition, a stated area — cannot escape that warranty by pointing out that the buyer knew the general field was uncertain. The distinction is between a risk you accepted and a representation you were entitled to rely on.
Where this leaves you in practice
If your complaint is genuinely that you knew the deal was a gamble and lost, the law will not undo it, and a suit framed as mistake is likely to fail. The more productive question is whether something else went wrong: was a specific assurance given and broken, was a material fact concealed, was a warranty in the contract not honoured, or has the other side simply failed to perform what he promised? Those are live grounds with their own remedies. Keep in mind, too, that annulment on any ground must be brought within the period the law allows, and that continuing to take benefits under a contract you say is defective can itself be read as accepting it. Move early, in writing, and be precise about which complaint you are actually making.
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.
- Domingo Realty, Inc., et al. vs. Court of Appeals, et al, G.R. No. 126236, January 26, 2007 — read the decision on LawPhil →