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Monday, August 9, 2010

Theory of Cognition vs. Theory of Manifestation

MERCANTILE LAW QUESTION 1997



The Civil Code adopts the theory of cognition, while the Code of Commerce generally recognizes the theory of manifestation, in the perfection of contracts. How do these two theories differ?

SUGGESTED ANSWER:
Under the theory of cognition, the acceptance is considered to effectively bind the offeror only from the time it came to his knowledge. Under the theory of manifestation, the contract is perfected at the moment when the acceptance is declared or made by the offeree. 

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