Short answer. Not on inadequate price alone. Article 1355 of the Civil Code says that lesion or inadequacy of cause shall not invalidate a contract, unless there was fraud, mistake, or undue influence. A low price is not enough by itself — you need one of those additional grounds.
What the law says
lesion or inadequacy of cause shall not invalidate a contract, unless there has been fraud, mistake or undue influence
Civil Code, Article 1355 — Lesion or Inadequacy of Cause. Read the full provision →
What Article 1355 says about inadequate price
Article 1355 states a rule that surprises many sellers: lesion or inadequacy of cause shall not invalidate a contract, unless there has been fraud, mistake or undue influence. 'Lesion' refers to the damage one party suffers because of an unequal exchange — including selling property for much less than its worth. The Civil Code has decided that this kind of economic imbalance, standing alone, is not a basis to undo a freely made contract. Parties are generally free to agree on a price, even a price that appears unfavorable in hindsight.
The three exceptions that matter
The rule does not leave sellers without any recourse. If a contract was infected by fraud — deception that led you to agree to terms you would not otherwise have accepted — it may be annulled. If it was the product of mistake — a genuine misapprehension of a material fact, not just regret — that is also a ground. And if undue influence was at work — someone exploiting a relationship or power imbalance to override your free will — annulment may be available. The low price can be important evidence of one of these defects, but the defect itself must be proven separately.
Lesion does apply in some specific situations
Article 1355 opens with the qualifier except in cases specified by law. There are statutory provisions elsewhere in the Civil Code and in other laws where lesion does matter — certain partitions of estates, for instance, may be rescinded if one heir suffers lesion by more than one-fourth of the value of the things allotted. These are the exceptions, not the general rule. Outside those specific contexts, a sale at a low price is a valid sale.
What a low price can still show
Even though a low price alone does not void a sale, it may support an argument that something else was wrong. A price that is shockingly below market may raise a question of whether the seller truly understood what they were agreeing to, whether they were misled about the property's value, or whether someone in a position of trust or authority pressured them to accept. If any of those factors can be demonstrated, the inadequate price becomes one element of a larger case. The strength of the claim depends on the facts and the surrounding circumstances, not on the price disparity alone.
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.
- Spouses Domingo and Lourdes Paguyo vs. Pierre Astorga, et al, G.R. No. 130982, September 16, 2005 — read the decision on LawPhil →
- Spouses Bernardo Buenaventura, et al. vs. Court of Appeals, et al, G.R. No. 126376, November 20, 2003 — read the decision on LawPhil →
- Manuel A. Torres, et al. vs. Court of Appeals, et al, G.R. No. 120138, September 5, 1997 — read the decision on LawPhil →
- Eduardo M. Cojuangco, Jr. vs. Republic of the Phillipines, G.R. No. 180705, November 27, 2012 — read the decision on LawPhil →