Law On Sales Reviewer 6j6b15

Art. 1458 



Through contract of sale, one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing and the other to pay therefore a price certain in money or its equivalent May be absolute of conditional

Characteristics  Consensual – perfected by consent  Bilateral – both parties are bound to fulfill obligations reciprocally (seller-deliver, buyer-pay)  Onerous – thing sold is conveyed in consideration of the price  Commutative – thing sold is considered the equivalent of the price paid and vice versa  Nominate – special designation in the civil code  Principal – validity and existence does not exist on another contract Essential requisites of a contract of sale  Consent or meeting of minds – seller to transfer and deliver, buyer to pay o Parties must have legal capacity o Acceptance of payment is an indication of his consent to a contract o Sales against will of owners  expropriation of property, execution of sale to enforce judgment of a court,





foreclosure sale of mortgage or pledged property Object or subject matter – determinate thing which is the object of the contract, capable of being made determinate, real or personal property Cause or consideration – price certain in money or its equivalent

Natural and accidental elements  Natural – deemed to exist in certain contracts  Accidental – may be present of absent depending on the stipulations of the parties Kinds of contract of sale  Absolute – sale is not subject to any condition, title or ownership es to the buyer upon delivery of the thing sold  Conditional – sale contemplates a contingency, contract is subject to certain conditions (full payment of purchase price) to which the transfer of ownership is not fulfilled until the condition is fulfilled Art. 1459 - thing must be licit and vendor has the right to transfer ownership thereof at the time it is delivered Requisites concerning objects  things – determinate, licit/lawful, not be impossible o within the commerce of men (outside- public ownership)



o illicit  contract void, cant be ratified rights – rights which are not intransmissible or personal may be object of sale (right of usufruct, right of conventional redemption) services may not be object of the contract of sale o rights intransmissible by law – right to vote, right to public office

Kinds of illicit things  illicit per se (of its nature)  per accidens – some provisions of the law declaring its illegal Right of vendor to transfer ownership  one can sell only what he owns  sufficient if right exists at time of delivery – does not require the vendor to have the right to transfer ownership at the time of the perfection of the contract Art. 1460 - determinate – particularly designated or physically segregated from all others of the same class - time the contract is entered into, the thing is capable of being made determinate without the necessity of a new or further agreement between the parties Subject matter must be determinate  when thing is determinate – physically segregated from all others of the same class o object of the contract of sale must be determinate



o determinate thing is identified by its individuality o not necessary the thing sold must be in sight at the time the contract is entered into sufficient if subject matter is capable of being made determinate

Art. 1461 - having potential existence may be subject of the contract of sale - efficacy of sale of mere hope or expectancy is subject to the condition that the thing will come into existence - sale of a vain hope or existence is void Art. 1462 - Future goods - existing goods owned or possessed by the seller or goods to be manufacture, raised, or acquired by the seller after the perfection of the contract - There may be a contract of sale of goods whose acquisition by the seller depends upon a contingency which may or may not happen Goods which may be the object of sale  Existing goods – goods owned or possessed by the seller  Future goods – goods to be manufactured, raised, or acquired Future goods as object of sale  Valid only as an executor contract to be fulfilled by the acquisition and delivery of the goods specified



Does not apply if the goods are to be manufactured especially for the buyer (contract for a piece of work, Art. 1467)

Art. 1463 - sole owner of a thing may sell an undivided interest therein Sale of undivided interest in a thing  by sale owner – sole owner may sell the entire thing or only a specified portion thereof or an undivided interest therein. o Effect of sale of an undivided thing – make the buyer to co-owner in the thing sold o Full ownership of his part and he may sell it (limited to the portion which may be allotted to him)  By co-owner – he can dispose of his share even without the consent of the other coowner/s Art. 1464 - in case of fungible goods, there may be a sale of an undivided share of a specific mass (definite number, weight or measure of the goods in the mass) - buyer becomes owner in common of such share - If the mass contains less than the number, weight, or mass bought, the buyer becomes the owner of the whole mass and the seller is bound to make good the deficiency from goods of the same kind and quality, unless contrary intent appears

Sale of an undivided share of a specific mass  Fungible goods – any unit is treated as the equivalent of any other unit (grain, oil, wine, gasoline, etc.)  Effect of sale – owner may sell only an undivided share thereof, provided the mass is specific or capable of being made determinate o Buyer becomes a coowner with the seller of the whole mass o Less than what is sold – seller shall supply whatever is lacking from goods of the same kind and quality, subject to any stipulation to the contrary  Risk of loss – if buyer becomes the co-owner, it follows that the whole mass is at the risk of loss of all the parties interested in it  Subject matter – subject matter is an incorporeal or intangible right o Ownership es to the buyer by the intention of the parties Art. 1466 - essential clauses of the whole instrument shall be considered when construing a contract containing provisions characteristics of both the contract of sale and the contract of the agency to sell sale vs agency to sell  agency – person binds himself to render some service or to do something in representation or











on behalf of another, with the consent or authority of the latter sale – buyer receives the goods as the owner. Agency – agent receives the goods of the principal who retains his ownership over them sale – buyer has to pay the price, agency – agent has to for the proceeds of the sale he may make on the principal’s behalf sale – buyer cannot return the object sold, agency – agent can return the object in case he is unable to sell the same to a third person sale – seller warrants the thing sold, agency – agent makes no warranty for which he assumers personal liability as long as he acts within his authority and in the name of the seller sale – buyer can deal with the thing sold as he pleases, agency – agent must act and is bound according to the instructions of his principal

Art. 1467 - contract of sale – contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business manufactures of procures for the general market - contract for a piece of work – manufactured specially for the customer and upon his special order Sale vs piece of work  contract for piece of work – contractor binds himself to





execute a piece of work for the employer, contractor may either employ his labor or skill, or also furnish the material contract for work – object of contract is one not in existence and which never would have existed but for the order of the party desiring to acquire it, risk of loss before delivery is borne by the worker or contractor, not within statute of frauds contract of sale – loss before delivery is borne by the buyer

Art. 1468 - if considerations consists partly in money and partly in another thing, the transaction shall be characterized by the manifest intention of the parties - it shall be considered a barter if the value of the thing given as a part of the consideration exceeds the amount of the money or its equivalent, otherwise it is a sale contract of barter or exchange - one of the parties binds himself to give one thing in consideration of the other’s promise to give another thing contract of sale - vendor gives a thing in consideration for a price in money - price certain in money or its equivalent when distinction cannot be determined - manifest intention of the parties is paramount

-

-

such intention may be ascertained by taking into the contemporaneous and subsequent acts of the parties if intention cannot be ascertained, last sentence of the art. applies

Art. 1475 - contract of sale is perfected a the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price - from that moment, parties may reciprocally demand performance Perfection of the contract of sale - contracts are perfected by mere consent - perfected without the necessity of any other circumstance - ownership is not transferred until delivery of the of the thing - injured party may sue for the fulfillment or rescission with the payment of damages effect of failure to pay price/absence of price  price stipulated – demand specific performance or rescission with damages in either case  no price stipulated – sale is void and non-existent Art. 1476 - each lot is subject to separate contract of sale - perfected when auctioneer announces its perfection by the fall of the hammer, until

-

-

announcement is made, bidder may retract his bid and auctioneer may retract his goods unless the auction has been announced to be without reserve a right to bid may be reserved expressly by or on behalf of the seller where notice has not been given that a sale by auction is subject to a right to bid of behalf of seller, it shall not be lawful for the seller to bid himself or to employ or induce any person to bid at such sale on his behalf or for the auctioneer to employ any person to bid on behalf of the seller

Rules governing auction sales  sales of separate lots by auction are separate sales – separate contract in regard to each lot , parties may subsequently consolidate all the purchases into one transaction  sale perfected by the fall of the hammer – bidder may retract his bid and auctioneer may withdraw his goods anytime before the fall of the hammer  right of seller to bid in the auction o such right was reserved o notice was given that the sale is subject to bid on behalf of the seller o right to bid by the seller is not prohibited by the law or stipulation  where no notice was given of right to bid – unlawful for the





seller to bid directly or indirectly prevent puffing or secret bidding notice was given of right to bid – secrecy of puffing renders it a fraud upon bidding

Art. 1479 - promise to buy and sell a determinate thing for a price is reciprocally demandable - accepted unilateral promise to buy or to sell a determinate thing for a certain price is binding upon the promisor if the promise is ed by a consideration distinct from the price kinds of promise treated in art. 1479  accepted unilateral promise to sell in which the promisee elects to buy  accepted unilateral promise to buy in which the promisee elects to sell  bilateral promise to buy and sell reciprocally in which either of the parties chooses to exact fulfillment effect of unaccepted unilateral promise – no juridical effect or legal bond (policitation) option – privilege existing in one person for which he has paid a consideration which gives him the right to buy/sell

effect of accepted unilateral promise – a consideration distinct and separate from the price will give rise to a perfected contract effect of bilateral promise – perfected contract (consent from both parties) Art. 1483 - a contract of sale may be in writing, or by word of mouth, or partly in writing and partly by word of mouth, or may be inferred from the conduct of the parties - subject to the provisions of the statute of frauds Form of contract of sale  general rule – form of contract refers to the manner in which it is executed of manifested  where contract is covered by the statute of frauds – law requires that it be in writing subscribed by the party charged, otherwise, contract cannot be enforced by action  applicable statute – required for must be observed in order that the contract may both be valid and enforceable  accdg to the statute of frauds, the ff contracts must be in writing o sale of real property at a price not less than P500 o sale of real property or an interest therein regardless of price involved o sale or property not to be performed within a year from date thereof regardless of the nature



of the property and the price involved where form is required only for the convenience of the parties – the sale may be ed in the registry of deeds to make effective as against third persons the right acquired under such sale

sale of real property  sale of a piece of land or interest therein when made through an agent is void unless the agent’s authority is in writing  sale must be ed in the registry of deeds  sale must be in a public instrument or document  sale of land in a private instrument is valid as between the parties but it cannot be ed to bind or affect third persons statute of frauds applicable only to executor contracts