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rights,
valuable
SALES
Chapter 1 Nature and Form of the Contract
b. Natural elements (those which are inherent in
the contract, and which in the absence of any
contrary provision, are deemed to exist in the
contract.)
c.
As to whether the object is tangible or
intangible
2.
4. unenforceable sale
5. void sale
b.
1. commutative sale
2. aleatory sale
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Chapter 1 Nature and Form of the Contract
f.
1. cash sale
2. sale on the installment plan
DATION IN PAYMENT
1. There is no pre-existing
credit.
1. There is a pre-existing
credit.
2. extinguishes obligations.
3.
The
cause
or
consideration here is the
price, from the viewpoint of
the seller, or the obtaining of
the object, for the viewpoint
of the buyer.
4. There is greater freedom
in the determination of the
price.
3.
The
cause
or
consideration here, from the
viewpoint of the person
offering
the
dation
in
payment, is the extinguishin
of his debt; from the
viewpoint of the4 creditor, it
is the acquisition of the
object offered in lieu of the
original credit.
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Chapter 1 Nature and Form of the Contract
CONTRACT OF SALE
CONTRACT TO SELL
2. Ownership is retained by
the seller, regardless of
delivery and is not to pass
until full payment of the
price.
3. Since the seller retains
ownership, despite delivery,
he is enforcing and not
rescinding the contract if he
seeks to oust the buyer for
failure to pay.
CESSION
1. As defined, there is
transfer of ownership and
delivery of a determinate
thing.
CESSION
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Chapter 1 Nature and Form of the Contract
In a sale, the seller transfers ownership; in a lease, the
lessor or landlord transfers merely the temporary
possession and use of the property.
Kinds of Extrajudicial Foreclosure Sale
1. Ordinary execution governed by the
pertinent provisions of Rule 39 of the Rules of
Court.
2. Judicial foreclosure governed by Rule 68
of the Rules of Court.
3. Extrajudicia foreclosure governed by Act
3135, as amended by Act 4118, otherwise
known as An Act to Regulate the Sale of
Property Under Special Powers Inserted In or
Annexed to Real Estate Mortgages.
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Chapter 1 Nature and Form of the Contract
* While there can be sale of future property, there can
generally be no donation of future property.
d. A person has a right over a thing (although he is not the
owner of the thing itself) may sell such right. Hence, a
usufructuary may generally sell his usufructuary right/
e. If the buyer was already the owner of the thing sold at the
time of sale, there can be no valid contract.
Article 1460. A thing is determinate when it is
particularly designated or physically segregated from
all others of the same class.
The requisite that a thing be determinate is satisfied
if at the 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.
Determinate specific, but it is not essential really that at
the time of perfection, the object be already specific. It is
sufficient that it be capable of being determinate without
need of any new agreement. Thus, there can be a sale of 20
kilos of sugar of a named quality.
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Chapter 1 Nature and Form of the Contract
an expected thing)
hope itself)
Future goods
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Chapter 1 Nature and Form of the Contract
Article 1464. In the case of fungible goods, there may
be a sale of an undivided share of a specific mass,
though the seller purports to sell and the buyer to
buy a definite number, weight or measure of the
goods in the mass, and though the number, weight or
measure of the goods in the mass undetermined. By
such a sale the buyer becomes owner in common of
such a share of the mass as the number, weight or
measure bought bears to the number, weight or
measure of the mass. If the mass contains less than
the number, weight or measure 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 a contrary intent
appears.
Example of Share in a Specific Mass
In a stock of rice, the exact number of cavans which is still
unknown, Jose buys 100 cavans. If there are really 150, Jose
becomes co-owner of the whole lot, his own share being 2/3
thereof. The sale is of a specific object since the mass is
specific.
Article 1465. Things subject to a resolutory condition
may be the object of the contract sale.
AGENCY TO SELL
2.
The
agent
who
is
supposed to sell does not
become the owner, even if
the property has already
been delivered to him.
3. The agent who sells
assumes no personal liability
as long as he acts within his
authority and in the name of
the principal.
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Chapter 1 Nature and Form of the Contract
Rules to Determine if the Contract is One of Sale or a
Piece of Work
a. If ordered in the ordinary course of business - SALE
b. If manufactured specially and not for the market piece of
work contract
Schools of Thought
a. Massachusetts Rule If specially done at the order of
another, this is a contract for a piece of work.
b. New York Rule If the thing already exists, it is a SALE; if
not, WORK.
c. English Rule If material is more valuable, sale; if skill is
more valuable, work.
Article 1468 If the consideration of the contract
consists partly in money, and partly in another thing,
the transaction shall be characterized by the
manifest intention of the parties. If such intention
does not clearly appear, 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.
Rules to determine whether contract is one of Sale or
Barter
2. If 50-50 SALE
3. If thing is less valuable than the money SALE
Article 1469. In order that the price may be
considered certain, it shall be sufficient that it be so
with reference to another thing certain, or that the
determination thereof be left to the judgment of a
specified person or persons.
Should such person or persons be unable or unwilling
to fix it, the contract shall be inefficacious, unless the
parties subsequently agree upon the price.
If the third person or persons acted in bad faith, or
by mistake, the courts may fix the price.
Where such third person or persons are prevented
from fixing the price or terms by fault of the seller or
the buyer, the party in fault as are allowed the seller
or the buyer, as the case may be.
Certainty of the Price
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Chapter 1 Nature and Form of the Contract
Fictitious sale
If the sale of conjugal property is fictitious and therefore
non-existent, the widow who has an interest in the property
subject of the sale may be allowed to contest the sale, even
BEFORE the liquidation of the conjugal partnership, making
the executor a party-defendant if he refuses to do so.
Article 1472. The price of securities, grain, liquids,
and other things shall also be considered certain,
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Chapter 1 Nature and Form of the Contract
when the price fixed is that which the thing sold
would have on a definite day, or in a particular
exchange or market, or when an amount is fixed
above or below the price on such day, or in such
exhange or market, provided said amount be certain.
Certainty of Price of Securities
Ex: I can sell to you today my Mont Blanc fountain pen at
the price equivalent to the stock quotation two days from
today of 100 shares of PLDT.
If stock market price cannot be ascertained
If the stock quotation price two days later cannot really be
ascertained at that time (2 days later), the sale is
inefficacious.
Article 1473. The fixing of the price can never be left
to the discretion of one of the contracting parties.
However, if the price fixed by one of the parties is
accepted by the other, the sale is perfected.
Price cannot be left to ones partys discretion
Reason: The other could not have consented to the price,
for he did not know what is was.
Article 1474. Where the price cannot be determined
in accordance with the preceding articles, or in any
other manner, the contract is inefficacious. However,
if the thing or any part thereof has been delivered to
and appropriated by the buyer, he must pay a
reasonable price therefore. What is a reasonable
price is a question of fact dependent on the
circumstances of each particular case.
is consummated upon
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Chapter 1 Nature and Form of the Contract
Note: if negotiated thru a phone, it is as if the parties are
face to face.
Note: If the buyer has already accepted, but the seller does
not know yet of the acceptance, the seller may still
withdraw.
Transfer of Ownership
a.Mere perfection of the contract does not transfer
ownership. Ownership of the object sold is transferred only
after delivery (tradition), actual, legal or constructive.
SALES
Chapter 1 Nature and Form of the Contract
The rule is, therefore, this: After delivery of the object,
ownership is transferred.
b.It is valid If it is stipulated that even with delivery there
will be no change or transfer of ownership till the purchase
price has been fully paid. (But the stipulation is not binding
on innocent third persons such as customers at a store. The
customers must not be prejudiced.
The Sales Tax
Even if the object sold has not yet been delivered, once
there has been a meeting of the minds, the sale is perfected
and, therefore, the sales tax (15% on the gross) is already
due. It accrues on perfection, not on the consummation of
the sale.
manufacture
of
soap
or
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Chapter 1 Nature and Form of the Contract
(1) Where goods are put up for sale by auction in
lots, each lot is the subject of a separate contract of
sale.
(2) A sale by auction is perfected when the
auctioneer announces its perfection by the fall of the
hammer, or in other customary manner. Until such
announcement is made, any bidder may retract his
bid; and the auctioneer may withdraw the goods from
the sale unless the auction has been announced to be
without reserve.
(3) A right to bid may be reserved expressly by on
behalf of the seller, unless otherwise provided by law
or by stipulation.
(4) Where notice has not been given that a sale by
auction is subject to a right to bid on behalf of the
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 behalf of the seller or any person
employed by him. Any sale contravening this rule
may be treated as fraudulent by the buyer.
When Sale by Auction is Perfected
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Chapter 1 Nature and Form of the Contract
Second paragraph
(ACCEPTED
UNILATERAL
PROMISE)
Only one makes the promise.
This promise is accepted by
the other. Hence, A promise
to sell to B accepts the
promise, but does not in turn
promise to buy.
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Chapter 1 Nature and Form of the Contract
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Chapter 1 Nature and Form of the Contract
or destroyed without the fault of the debtor, and before he
has incurred in delay.
When by law or stipulation, the obligor is liable even for
fortuitous events, the loss of the thing does not extinguish
the obligation, and he shall be responsible for damages. The
same rule applies when the nature of the obligation requires
the assumption of risk. (1182a))
This rule shall apply to the sale of fungible things,
made independently and for a single price or without
consideration of their weight, number, or measure.
Should fungible things be sold for a price fixed
according to weight, number, or measure, the risk
shall not be imputed to the vendee until they have
been weighed, counted, or measured, and delivered,
unless the latter has incurred delay.
distinguished
SALES
Chapter 1 Nature and Form of the Contract
The buyer shall have a reasonable opportunity of
comparing the bulk with the description or the
sample.
Sale by description Where seller sells things as being of
a certain kind, the buyer merely relying on the sellers
representations or descriptions. Generally, the buyer has not
previously seen the good, or even if he has seen them, he
believes (sometimes erroneously) that the description tallies
with the goods he has seen.
Sale by sample that where the seller warrants that the
bulk (not the major part or the majority of the goods but the
goods themselves) of the goods shall correspond with the
sample in kind, quality, and character. On the sample is
exhibited. The bulk is not present, and so there is no
opportunity to examine or inspect it.
Sale by description and sample must satisfy the
requirements in both, and not in only one.
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Chapter 1 Nature and Form of the Contract
Article 1484. In a contract of sale of personal
property the price of which is payable in installments,
the vendor may exercise any of the following
remedies:
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Chapter 1 Nature and Form of the Contract
property with option to buy, when the lessor has
deprived the lessee of the possession or enjoyment
of the thing.
Leases of Personal Property with Option to Buy
-
of
the
SALES
Chapter 1 Nature and Form of the Contract
exercised by the buyer only once in every five years
of the life of the contract and its extensions, if any.
(b) If the contract is canceled, the seller shall refund
to the buyer the cash surrender value of the
payments on the property equivalent to fifty per cent
of the total payments made, and, after five years of
installments, an additional five per cent every year
but not to exceed ninety per cent of the total
payments made: Provided, That the actual
cancellation of the contract shall take place after
thirty days from receipt by the buyer of the notice of
cancellation or the demand for rescission of the
contract by a notarial act and upon full payment of
the cash surrender value to the buyer.
Down payments, deposits or options on the contract shall be
included in the computation of the total number of
installment payments made.lawphi1
Section 4. In case where less than two years of
installments were paid, the seller shall give the buyer a
grace period of not less than sixty days from the date the
installment became due.
If the buyer fails to pay the installments due at
expiration of the grace period, the seller may cancel
contract after thirty days from receipt by the buyer of
notice of cancellation or the demand for rescission of
contract by a notarial act.
the
the
the
the
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Chapter 1 Nature and Form of the Contract
with private housing developers involving installment
schemes.
Art. 1487. The expenses for the execution and
registration of the sale shall be borne by the
vendor, unless there is a stipulation to the
contrary.
Who Pays for
Registration
Expenses
in
Execution
and
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Chapter 1 Nature and Form of the Contract
valuation declared in the tax declaration of the
subject property by the owner or assessor which ahs
been declared unconstitutional.
CHAPTER 2
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Chapter 1 Nature and Form of the Contract
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Chapter 1 Nature and Form of the Contract
acquiring by assignment and shall apply to
lawyers, with respect to the property and
rights which may be the object of any litigation
in which they may take part by virtue of their
profession.
Purchase by Attorney
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Chapter 1 Nature and Form of the Contract
Cross Reference
by
reason
of the
fiduciary
Legal
Example:
If a wards property is sold, the guardian, even if he be an
adjacent owner, and even if all the other requisites for legal
redemption are present, cannot exercise the right of legal
redemption.
SALES
Chapter 1 Nature and Form of the Contract
CHAPTER 3
EFFECTS OF THE CONTRACT WHEN THE THING SOLD
HAS BEEN LOST
Art. 1493. If at the time the contract of sale is
perfected, the thing which is the object of the
contract has been entirely lost, the contract shall be
without any effect.
But if the thing should have been lost in part only,
the vendee may choose between withdrawing from
the contract and demanding the remaining part,
paying its price in proportion to the total sum agreed
upon. (1460a)
REMEDIES:
1. Cancellation (avoidance);
2. Specific performance as to the remaining existing
goods. (if the sale was divisible).