What to Memorize for Midterms
I. Sale
Art. 1458, NCC
By the contract of sale one of the
contracting parties obligates himself to
transfer the ownership and to deliver a
determinate thing, and the other to pay
therefor a price certain in money or its
equivalent.
Elements: CSC
Requisites for Valid Subject
Matter: SLS
Art. 1874, NCC
When a sale of a piece of land or any
interest therein is through an agent, the
authority of the latter shall be in writing;
otherwise, the sale shall be void. (n)
Art. 1403, NCC
The following contracts are
unenforceable, unless they are ratified:
(1) Those entered into in the name of
another person by one who has been
given no authority or legal
representation, or who has acted
beyond his powers;
(2) Those that do not comply with the
Statute of Frauds as set forth in this
number. In the following cases an
agreement hereafter made shall be
unenforceable by action, unless the
same, or some note or memorandum,
thereof, be in writing, and subscribed
by the party charged, or by his agent;
evidence, therefore, of the agreement
cannot be received without the
writing, or a secondary evidence of its
contents:
(a) An agreement that by its terms
is not to be performed within a
year from the making thereof;
(b) A special promise to answer for
the debt, default, or miscarriage of
another;
(c) An agreement made in
consideration of marriage, other than
a mutual promise to marry;
(d) An agreement for the sale of
goods, chattels or things in action, at
a price not less than five hundred
pesos, unless the buyer accept and
receive part of such goods and
chattels, or the evidences, or some of
them, of such things in action or pay
at the time some part of the purchase
money; but when a sale is made by
auction and entry is made by the
auctioneer in his sales book, at the
time of the sale, of the amount and
kind of property sold, terms of sale,
price, names of the purchasers and
person on whose account the sale is
made, it is a sufficient memorandum;
(e) An agreement of the leasing for a
longer period than one year, or for the
sale of real property or of an interest
therein;
(f) A representation as to the credit of
a third person.
(3) Those where both parties are
incapable of giving consent to a contract.
Obligations of Seller: DTWPP
Obligations of Buyer: AP
II. Agency
Art. 1868, NCC
By the contract of agency a 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.
Art. 1319, NCC
Consent is manifested by the meeting of
the offer and the acceptance upon the
 What to Memorize for Midterms
thing and the cause which are to
constitute the contract. The offer must be
certain and the acceptance absolute. A
qualified acceptance constitutes a
counter-offer.
Art. 1870, NCC
Acceptance by the agent may also be
express, or implied from his acts which
carry out the agency, or from his silence
or inaction according to the
circumstances.
Obligations of an Agent
1. Art. 1881, NCC. The agent must act
within the scope of his authority. He
may do such acts as may be
conducive to the accomplishment of
the purpose of the agency.
2. Art. 1884, NCC. The agent is bound
by his acceptance to carry out the
agency, and is liable for the damages
which, through his non-performance,
the principal may suffer.
3. Art. 1886, NCC. Should there be a
stipulation that the agent shall
advance the necessary funds, he shall
be bound to do so except when the
principal is insolvent. (n)
4. Art. 1887, NCC. In the execution of
the agency, the agent shall act in
accordance with the instructions of
the principal.
In default thereof, he shall do all that
a good father of a family would do, as
required by the nature of the business.
(1719)
5. Art. 1888, NCC. An agent shall not
carry out an agency if its execution
would manifestly result in loss or
damage to the principal. (n)
6. Art. 1889, NCC. The agent shall be
liable for damages if, there being a
conflict between his interests and
those of the principal, he should
prefer his own. (n)
7. Art. 1891, NCC. Every agent is bound
to render an account of his
transactions and to deliver to the
principal whatever he may have
received by virtue of the agency, even
though it may not be owing to the
principal.
Obligations of the Principal
1. Art. 1910, NCC. The principal must
comply with all the obligations which
the agent may have contracted within
the scope of his authority.
As for any obligation wherein the
agent has exceeded his power, the
principal is not bound except when he
ratifies it expressly or tacitly.
2. Art. 1912, NCC. The principal must
advance to the agent, should the latter
so request, the sums necessary for the
execution of the agency.
Should the agent have advanced
them, the principal must reimburse
him therefor, even if the business or
undertaking was not successful,
provided the agent is free from all
fault.
The reimbursement shall include
interest on the sums advanced, from
the day on which the advance was
made.
3. Art. 1913, NCC. The principal must
also indemnify the agent for all the
damages which the execution of the
agency may have caused the latter,
without fault or negligence on his
part.
 What to Memorize for Midterms
Art. 1918, NCC. The principal is not
liable for the expenses incurred by the A stipulation for the common enjoyment
agent in the following cases: of any other profits may also be made; but
the property which the partners may
(1) If the agent acted in contravention acquire subsequently by inheritance,
of the principal's instructions, unless legacy, or donation cannot be included in
the latter should wish to avail himself such stipulation, except the fruits thereof.
of the benefits derived from the (1674a)
contract;
Kinds of Partners: CIGLSSL
(2) When the expenses were due to
the fault of the agent; IV. Loans
Kinds:
(3) When the agent incurred them 1. Commodatum
with knowledge that an unfavorable 2. Mutuum
result would ensue, if the principal
was not aware thereof; Commodatum vs.
Muutum
(4) When it was stipulated that the Essentially May be
expenses would be borne by the gratuitous gratuitous
agent, or that the latter would be Ownership is Ownership
allowed only a certain sum. (n) retained by the goes to the
bailor or lender borrower
III. Partnership It is a loan for It is a loan for
Art. 1767, NCC use or consumption
By the contract of partnership two or temporary
more persons bind themselves to possession
contribute money, property, or industry to It involves real It refers to
a common fund, with the intention of or personal personal
dividing the profits among themselves. property property
Two or more persons may also form a The same thing Same amount
partnership for the exercise of a that was that was
profession. (1665a) borrowed shall borrowed shall
be returned be returned
Kinds of Partnership
Liability: GL V. Pledge and Mortgages
Object: UP Art. 2085, NCC. The following requisites
are essential to the contracts of pledge
Art. 1779, NCC and mortgage:
In a universal partnership of all present (1) That they be constituted to secure the
property, the property which belongs to fulfillment of a principal obligation;
each of the partners at the time of the
constitution of the partnership, becomes (2) That the pledgor or mortgagor be the
the common property of all the partners, absolute owner of the thing pledged or
as well as all the profits which they may mortgaged;
acquire therewith.
 What to Memorize for Midterms
(3) That the persons constituting the
pledge or mortgage have the free disposal
of their property, and in the absence
thereof, that they be legally authorized for
the purpose.

Real Mortgage Pledge

Constituted on Constituted on
real property (Art. personal property
2124) (Art. 2094)
As a rule, The thing pledged
mortgagor retains must be placed in
the property the possession of
the creditor, or of
a third person by
common
agreement
Not valid against Not valid against
third persons if third persons
not registered. unless a
(Art. 2125) description of the
thing pledged
appear in a public
instrument. (Art.
2096, NCC)

Real Mortgage Chattel

Mortgage
Constituted in Constituted in
immovables. movables.
May guarantee Cannot guarantee
future obligations future obligations