Short answer. No, not fraud. Article 1343 of the Civil Code says a misrepresentation made in good faith is not fraudulent. It may, however, still constitute error, which is a separate ground that can affect the validity of a contract even without any dishonesty on the seller's part.
What the law says
Misrepresentation made in good faith is not fraudulent but may constitute error.
Civil Code, Article 1343 — Misrepresentation in Good Faith. Read the full provision →
Why honest belief takes fraud off the table
Fraud, as a ground affecting a contract's validity, generally involves some form of deliberate deception, insincerity, or bad faith in what was represented. Article 1343 draws a clear line: misrepresentation made in good faith is not fraudulent. If the seller genuinely and honestly believed what he told you, even if it turned out to be false, that misrepresentation does not meet the standard the law treats as fraud, because fraud requires more than simply being wrong about a fact.
What may constitute error means instead
Article 1343 does not leave a good faith misrepresentation without any legal consequence at all. It says such a misrepresentation may constitute error, pointing you toward a different, separate ground in the Civil Code's rules on the vices of consent. Error, generally, involves a mistaken belief about a fact that was significant enough to have induced you to enter the contract, without regard to whether the other party was being dishonest about it at the time.
Why the distinction between fraud and error matters
Fraud and error are treated differently under the Civil Code's rules on contracts, including what has to be proven and what consequences follow. Classifying a misrepresentation as error rather than fraud changes the legal path available to you, since error focuses on the mistaken belief and its role in your decision to contract, rather than on the other party's honesty or intent. Working out whether what happened here fits error, and what that requires you to show, is a separate inquiry from asking whether the seller lied.
What this means for your situation
If the seller genuinely believed what he told you was true, Article 1343 forecloses treating that statement as fraud, however damaging the false information turned out to be. Your path forward, if you want to challenge the contract over that misrepresentation, would need to rest on the rules governing error rather than fraud, which involves a different set of requirements about how significant and how mistaken the belief actually was at the time you agreed to the contract.
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.
- Josie Go Tamio vs. Encarnacion Ticson, G.R. No. 154895, November 18, 2004 — read the decision on LawPhil →