QUIZ I previously delivered to

him
What is a contract of sale? PAYMENT OF Non-payment of the Full payment is a
PRICE price is a negative positive suspensive
- The contract of sale is an agreement whereby one of the parties resolutory condition (see condition, the failure of
(called the seller or vendor) obligates himself to deliver something Art. 1179.), and the which is not a breach,
to the other (called the buyer or purchaser or vendee) who, on his remedy of the seller is to casual or serious, of the
part, binds himself to pay therefor a sum of money or its exact fulfillment or to contract but simply an
rescind the contract (see event that prevents the
equivalent (known as the price).
Arts. 1191, 1592.), obligation of the vendor
to convey title from
What are the characteristics of a contract of sale?
acquiring binding force.
OWNERSHIP OF The vendor has lost and the title remains in the
1. CONSENSUAL, because it is perfected by mere consent without
VENDOR cannot recover the vendor if the vendee
any further act; ownership of the thing does not comply with the
2. BILATERAL, because both the contracting parties are bound to sold and delivered, condition precedent of
fulfill correlative obligations towards each other — the seller, to actually or making payment at the
deliver and transfer ownership of the thing sold and the buyer, to constructively (see Art. time specified in the
pay the price; 1497.), until and unless contract
3. ONEROUS, because the thing sold is conveyed in consideration of the contract of sale itself
is resolved and set aside.
the price and vice versa
SALE OF SUBJECT Upon the fulfillment of In a contract to sell, there
4. COMMUTATIVE, because the thing sold is considered the the suspensive being no previous sale of
TO THIRD
equivalent of the price paid and vice versa. However, the contract PERSONS condition, the sale the property, a third
may be aleatory as in the case of the sale of a hope (e.g., becomes absolute and person buying such
sweepstakes ticket); this will definitely affect property despite the
5. NOMINATE, because it is given a special name or designation in the seller’s title thereto. fulfillment of the
the Civil Code, namely, “sale”; and suspensive condition
such as the full payment
6. PRINCIPAL, because it does not depend for its existence and
of the purchase price, for
validity upon another contract. instance, cannot be
deemed a buyer in bad
Characteristics of a general contract. faith and the prospective
buyer cannot seek the
1. CONSENT OR MEETING OF THE MINDS. — This refers to the relief of reconveyance of
consent on the part of the seller to transfer and deliver and on the the property.
part of the buyer to pay. (see Art. 1475.) the parties must have
legal capacity to give consent and to obligate themselves. (Arts.
1489, 1490, 1491.) The essence of consent is the conformity of
the parties on the terms of the contract, the acceptance by one of
the offer made by the other. What may be the object of a contract of sale?
2. OBJECT OR SUBJECT MATTER. — This refers to the determinate
1. It must be determinate or determinable at the time the contract is
thing which is the object of the contract. (Art. 1460). The thing
entered into. (Art 1460)
must be determinate or at least capable of being made
2. The subject matter must be lawful or licit (art 1459)
determinate because if the seller and the buyer differ in regard to
3. All rights which are not in transmissible or personal may also be
the thing sold, there is no meeting of the minds; therefore, there the object of sale (art 1459)
is no sale.
3. CAUSE OR CONSIDERATION. — This refers to the “price certain in Difference between a mere hope and a vain hope
money or its equivalent” (Art. 1458.) such as a check or a
promissory note, which is the consideration for the thing sold. - Sale of a Mere hope refers to an “expected thing” which is not yet
in existence in view of the condition that the thing will come into
Stages of a contract existence which may be the object of the sale.
o the future thing is certain as to itself but uncertain as to
1. NEGOTIATION –the period from the time the prospective its quantity and quality
contracting parties indicate their interesting the contract to the o the contract deals with a future thing,
time the contract is perfected o the sale is subject to the condition that the thing should
2. PERFECTION- takes place upon the concurrence of the essential exist, so that if it does not, there will be no contract by
reason of the absence of an essential element.
elements of the sale which are the meeting of the minds of the
- vain of hope emptio spei is the sale of the hope itself that the thing
parties as to the object of the contract and upon the price will come into existence, Where it is agreed that the buyer will pay
3. CONSUMMATION- begins when the parties perform their the price even if the thing does not eventually exist.
respective undertaking under the contract of sale, culminating in o is not certain that the thing itself (winning a prize) will
the extinguishment thereof exist, much less its quantity and quality
o The contract relates to a thing which exists or is present
What is a conditional sale vs. a contract to sell? — the hope or expectancy produces effect even though
the thing does not come into existence because the
Conditional Sale Contract to Sell object of the contract is the hope itself, unless it is a
TRANSFER OF Title passes to the buyer upon the fulfillment of vain hope or expectancy (like the sale of a falsified
TITLE if the thing be already the suspensive condition sweepstake ticket which can never win). (Art 1461)
delivered upon the which is the full payment
fulfillment of the of the purchase price, Sole owner v. co ownership
condition by operation ownership will not
of law. automatically transfer to - Sole owner of a thing may sell the entire thing or only a specific
the buyer although the portion thereof; or of an undivided interest therein and such
property may have been interest may be designated as an aliquot part of the whole
 o Legal effect- of the sale of an undivided interest in a
thing to make the buyer a co-owner of the thing sold
- Co ownership- the co-owner of the thing can dispose of his share
without the consent of other co-owners.
o Legal effect- alienation shall be limited to the portion
which may be allotted to the vendor in the division of
the property upon termination of the co ownership.
What are fungible goods?
- Goods of which any unit is, from its nature or mercantile usage,
treated as an equivalent of any other unit (grain, oil, wine,
gasoline, etc.)
What is a contract for a piece of work?
- The contractor binds himself to execute a piece of work for a
customer and upon special order and the item is not for the
general market, in consideration of a certain price or
compensation.
Distinguish a contract of sale with agency to sell
- SALE
o Buyer receives the goods as owner
o Buyer has to pay the price
o Buyer, generally cannot return the object sold
o The seller warrants the thing sold
o The buyer can deal with the thing sold as he pleases,
being the owner
- AGENCY
o Agent receives the goods of the principal who retains
ownership of the goods
o Agent has simply to account for the proceeds of the
sale he may make on the principals behalf
o Agent can return the object in case he is unable to sell
the same to third persons
o The agent makes no warranty for which he assumes
liability as long as he acted within the principal’s
authority.
o Agent must act and is bound according To the
instruction of his principal
Difference between contract of sale and contract of lease
Distinguish sale from dation in payment
Dation in payment (or dacion en pago) is the alienation of property to the
creditor in satisfaction of a debt in money. (see Art. 1619.)
- In SALE there is no preexisting credit while in dation in payment
there is
- In sale, obligation is created, while dation in payment, obligation
is extinguished
- In sale, the cause is the price paid, from the viewpoint of the
seller, or the thing sold, from the viewpoint of the buyer, while
dation in payment, the extinguishment of the debt from the
viewpoint of the creditor
- In sale, there is more freedom in fixing the price than in dation in
payment; and
- In sale, the buyer still has to pay the price, while in dation in
payment the payment received by the debtor before the contract
is perfected
When price is considered certain
- Art 1469 enumerates that a price is considered certain when :
o The parties have fixed or agreed upon a definite
amount
o It be certain with reference to another thing certain
o The determination of the price is left to the judgement
of a specified person or persons
What is the effect if price is simulated? When does it occur?
Art 1471
- When a vendor intended to transfer the thing gratuitously , then
the sale shall be void but the contract shall be valid as a
donation; OR
- If the contract is not shown as a donation or any other act or
contract transferring ownership then it is void and inexistent
QUIZ II
What is reasonable price?
- Market price at the time and place fixed by the contract or by law
for the delivery of the goods (pg.62)
- Is a question of fact dependent on circumstance of each
particular case. [last part of ART 1474] (Atty’s note, in the book
De Leon cited William that at certain cases the reasonable price
may or may not agree with the current price of the commodity at
the port of shipment when such shipment was made)
Perfect Contract of sale
- A price fixed by one of the parties in a contract of sale which is
accepted by the other is a perfected valid contract of sale. (ART
1473)
When is there an offer:
1. must be certain
2. offer may fix the time and manner of payment which must be
accepted absolutely
3. when the offer allows the offeree a certain time before
acceptance, the offer may be withdrawn
4. offer becomes ineffective upon the death, civil, interdiction,
insolvency or insanity of either of the parties
Effect of Lack of consideration
- in a contract of sale, it renders the contract NULL AND VOID, since
there is an essential requisite missing, i.e. consideration or price.
While failure to pay does not invalidate the contract of sale, it
gives the seller the right to demand recission or specific
performance and damages in either
What is a sale by auction?
- Selling of lot or several lots by offering it to various persons, called
bidders, who shall make an offer to buy the lot or lots. The rules
governing a sale by auction:
1. Sale of separate lots by auction are separate sales – where
separate lots are the subject of separate biddings are
separately knocked down, there is a separate contract in
each regard. (Art 1476, (1))
2. Sale is perfected by the fall of the hammer – each bid is an
offer and the contract is perfected only by the fall of the
hammer or in other customary manner. It follows that the
bidder may retract his bid and the auctioneer may withdraw
the goods from sale any time before the hammer falls.
3. Right of seller to bid in the auction – the seller or his agent
may bid in an auction provided that:
a. Such right was reserve
b. Notice was given that the sale is subject to a
right to bid in behalf of the seller
i. Where no notice given of such right to
bid, it shall be unlawful for the seller
 to bid directly or indirectly or for him
to induce or employ any person to bid
on behalf of the seller
ii. Being a right that may be expressly
reserved by the seller, where there is
notice the bidding would not operate
as a fraud
c. The right to bid by the seller is not prohibited by
law or stipulation
Is delivery necessary to consummate the sale?
- Delivery of the thing sold is essential in a contract of sale. Without
it, the purchaser may not enjoy the thing sold to him. It is only
after the delivery of the thing sold that the purchaser acquires a
real right or ownership over it. (ART. 1477, p78-79)
Unilateral promise vs. bilateral promise
- Unilateral promise or offer to sell or to buy a thing for a price
certain when accepted is binding upon the promisor if the
promise is supported by a consideration distinct from the price
(ART 1479) but when not accepted creates no juridical effect or
legal bond.
- While a bilateral promise to sell or buy is a reciprocal obligation
between the parties when reciprocally accepted in which either of
the parties chooses to exact fulfillment (p. 81). that is, one party
accepts the other’s promise to buy and the latter, the former’s
promise to sell a determinate thing for a price certain, it has
practically the same effect as a perfected contract of sale since it
is reciprocally demandable. (pg. 103)
What is an option?
- Option is a contractual privilege existing in one person for which
he has paid consideration which gives him:
o The right to buy/ sell certain merchandise or certain
specified property
o From/to another
o At any time within the agreed period at a fixed price
o Under or in compliance with certain terms and
conditions (p.82-82)
Risk of loss or deterioration
- The buyer assumes the risk of loss; except when:
o It is lost through the fault of the seller
o The thing lost is a generic thing
o the thing lost is fungible which is weighed or
numbered; and
o the thing falls under those defined as “goods”
- the buyer bears the risk of impairment, except when:
o the thing is impaired or in the risk of being impaired
through the sellers fault; AND
o the thing is generic
QUIZ III
TRUE or FALSE
1. “bulk of goods” is used to designate the greater portion of the
goods.
FALSE bulk of goods, as used by law, does not designate the
greater portion of the goods. It denotes the goods themselves as
distinguished from the sample and/or description with which
they must correspond (p 112)
2. A certain amount given by a buyer to guarantee that he does not
back out can later on become earnest money.
TRUE since earnest money is given by the buyer to the seller to
bind the bargain
3. In a contract of sale payable in installments, the remedies are not
to be exercised successively unless the first remedy fails due to no
fault of the creditor.
FALSE remedies are alternative and are not to be exercised
cumulatively or successively and the election of one is a waiver of
the other remedies
4. If earnest money is paid by a prospective buyer, he is not bound
to buy a thing.
FALSE earnest money is partial payment of the purchase price and
is considered as proof of the perfection of the contract
5. Remedies available in sale of installment are also applicable to
contract of sale as long as all the essential requisites are present.
FALSE. Art 1484 is aimed at those sales where the price is payable
in several installments. Where the balance, after payment of the
initial sum, should be paid in its totality at the time specified, the
transaction is not by installment as contemplated in Article 1484.
6. In sales of personal property to by installments or leases of
personal property with an option to buy, the parties may agree
that the installments or rents shall not be returned
TRUE, ART 1486 in sales of personal property by installments or
leases of personal property by installments with the option to
buy, the parties may stipulate that the installments or rents paid
are not to be returned. It is valid insofar as the same may not be
unconscionable under the circumstances otherwise the court has
the power to order the return of a portion of the total amount
paid in installments or rents
7. As a general rule, a contract of sale has no prescribe form. It may
be oral or in writing but never partly oral and partly in writing.
FALSE ART 1483 provides, as a general rule, that a contract of
sale may be entered into in any form (In writing, word of mouth,
partly in writing and partly by word of mouth, or may be inferred
from the conduct of the parties). EXCEPTION: when it is subject to
the provision of the Statute of Fraud and any other applicable
statute.
8. Seller verbally sells his land. The sale is not valid because it is not
in writing and it is likewise unenforceable for the same reason.
FALSE the sale is valid (ART 1356) but it is unenforceable because
the law requires that it be in writing to be enforceable (Art 1403)
9. Earnest money may be deducted from the purchase price.
FALSE it must be deducted from the purchase price.
10. A sale by sample is like a sale by description.
TRUE, a sale by sample is really a species of sale by description.
The sample is employed instead of words to communicate to the
buyer the characteristics of the goods being sold. It is itself a tacit
assertion of the qualities of the bulk it represents. (p 111)
11. In sale by installments, buyer fails to pay three installments. Seller
opts to foreclose and sells the thing in a public auction. Proceeds
of the auction is an amount much less than the balance. Seller can
go after the unpaid balance if this has been agreed upon.
FALSE. Art 1484 when the remedy chosen by the seller is remedy
of foreclosure he shall have no further action against the vendee
for the recovery of any unpaid balance of the price and any
agreement to the contrary is void. Recovery of deficiency after
foreclosure is prohibited to protect the mortgagor form the
abuses committed in connection with foreclosure of chattel
mortgages.
12. Earnest money is always part of a consummated sale.
TRUE. Earnest money is part of the purchase price, given only
when there is already a sale, and when given buyer is bound to
pay the balance
13. A deed of sale of real property notarized by a fake notary public is
no longer binding between the parties.
FALSE The sale of land in a private instrument is valid and binding
upon the parties, for the time-honored rule is that even a verbal
 contract of sale of real estate produces legal effects between the
parties since sale is a consensual contract and is perfected by
mere consent. The fact that the notarization of a deed of sale of
real property is false is of no consequence, for it need not be
notarized; it is enough that it be in writing.
OBJECTIVES
a. Jose sold his car to Pedro in installments payable in 6 months and
covered by a chattel mortgage. After paying for 3 months, Pedro
stopped. Jose wrote a demand letter to exact fulfillment of the
obligation. Pedro refused to pay. Jose filed an action to foreclose
on the chattel mortgage, Pedro objects and says that this cannot
be done as Jose already had opted to elect fulfillment upon
Pedro’s failure to pay and therefore can no longer foreclose. Who
is correct? Decide.
Jose is correct. The 1st issue is WON Jose elected
remedy of specific performance barring him to foreclose the
mortgage. The writing of a demand letter does not equate to him
choosing the remedy of specific performance and therefore other
remedies are still available. It follows that on the 2nd issue
whether Jose may move to foreclose the mortgage is valid if
Pedro has failed to pay two or more installments as these are the
remedies given to a vendor in sale of personal property payable
bin installments.
b. In the same case above, Jose files a suit for specific performance
and causes the levy on the car. The sheriff sells the car at a public
auction. But the proceeds of the sale were not enough. Jose goes
after the other properties of Pedro to recover the balance. Pedro
objects and contends that this is equivalent to a foreclosure so
Jose is not entitle to the unpaid balance. Who is correct? Decide.
Jose is correct. The 1st issue is WON the levy on the car
is equivalent to foreclosure. The mere fact that the seller secures
possession of the personal property through an attachment after
filing an action for collection of the unpaid balance, with a prayer
for an issuance of a writ of preliminary attachment does not
necessarily mean that he intends to resort to a foreclosure of the
mortgage. It follows that the vendor who has chosen to exact the
fulfillment of the obligation is not limited to the proceeds of the
sale of the mortgaged goods. He may still recover from the
purchaser the unpaid balance of the price, if any, on the real and
personal properties of the purchaser not exempt by law from
attachment or execution.
QUIZ IV RECITATION
Who cannot enter into a contract?
- The law determines that a party who suffers from either
o Absolute – those who can’t bind themselves such as
minors and incapacitated persons (e.g. insane or
demented persons, deaf mutes who dot know how to
write); or
o relative incapacity – where there exist only with
reference to certain persons or certain cases
Effect of contract entered by an incapacitated person?
- Voidable
Are all contracts entered by insane VOID?
- VALID when contracted during lucid intervals
- VALID when necessaries are sold to him, without the intervention
of the parent or guardian, he must pay a reasonable price
therefor. (Art 1489 par 2)
Who are persons prohibited belonging under their custody or ward?
- Guardian and wards because of the intimate and fiduciary
relationship
- Agents, intimate and trust
- Administrators and executors - The prohibition refers only to
properties under the administration of the executor or
administrator at the time of the acquisition and does not extend,
therefore, to property not falling within this class. Characterized
by the highest trust and confidence and act to preserve the estate
and guard against its dissipation
- Public officials – prohibition refers to properties: (1) belonging to
the State, or of any subdivision thereof, or of any government-
owned or -controlled corporation or institution, (2) the
administration of which has been entrusted to the public officials
or employees.
The reasons are grounded on public order and public
policy. Assuming the transaction to be fair and not tainted with
irregularity, it is still looked upon with disfavor because it places
the officer in a position which might become antagonistic to his
public duty
- Lawyers, judges, prosecuting attorneys and other officers and
employees connected with the administration of justice – The
prohibition applies when, for example, a lawyer has not paid for
the property and it was merely assigned to him in consideration of
legal services rendered at a time when the property is still subject
of a pending case.
- Others especially disqualified by law
Can the husband and wife sell properties to each other?
- No. Except when there is
o A separation of property agreed upon in the marriage
settlements; or
o There has been a judicial separation of property
under art 191 of the NCC (now art 135 of the Family
Code)
What are necessities?
Things which are needed for sustenance, dwelling, clothing and
medical attendance, in keeping with the financial capacity of the family of
the incapacitated person
What is a compromise? Negotiate
- Compromise is a contract whereby the parties, by reciprocal
concession, avoid a litigation or put an end to one that has
already commenced (Art 2028). It is the amicable settlement of a
controversy.
-
Perishable or loss
- A thing is lost when it:
o perishes which includes where there has been material
deterioration or complete change in the nature of the
thing in such a manner that it loses its former utility
taking into consideration the time the contract was
entered into ;
o goes out of commerce; or
o disappears in such a way that its existence is unknown
and cannot be recovered
- when thing is lost entirely, the contact is void and inexistent since
there is an essential requisite missing, i.e. object of the sale
- When the thing is lost partially, vendee may withdraw from the
contract or demand the remaining part, paying the proportionate
price.
Specific goods
- The object of the sale consists of a mass of “specific goods” or
goods identified and agreed upon at the time a contract of sale is
made
Does the seller have correlative right in relation to his obligation
- Collection of payment
Can a vendor sell something that he does not own?
- He need not be the owner of the thing at the time of the contract,
it is sufficient that he has a “right to transfer the ownership at the
time it is delivered. (art 1459)
What is actual delivery?
- Thing sold is placed in the Control and possession of the vendee
Obligation to take care of and preservation of thing mean?
- Diligence of a good father
- Delivery with all accession and accessories
- Preserve the thing and not transform, alter or alienate
What type of delivery through a deed of conveyance that is notarized?
- Constructive or symbolic delivery
Contract of sale or return and sale on trial
- Sale of return
o subject to a resolutory condition
o depends entirely on the will of the buyer
o ownership of the goods passes to the buyer on
delivery and subsequent return reverts ownership to
seller
o risk of loss or injury is borne by buyer
- Sale on trial
o subject to a suspensive condition
o depends on the character or quality of the goods
o ownership remains with the seller until the buyer
signifies his approval or acceptance
o risk of loss or injury is borne by the seller
What is the effect of a minor acting as one of legal age?
- Cannot excuse himself of the obligation and therefore cannot
rescind the contract
QUIZ V
True or False
1. As a general rule, delivery to the carrier is deemed delivery to the
buyer.
TRUE
2. If the above statement is true, the risk of loss falls upon the buyer.
TRUE
3. When the bill of lading states the goods are deliverable to the
seller or his agent, the seller reserves ownership in the goods
unless the goods are shipped on the buyer vessel.
FALSE, even on board the buyer’s vessel the seller may reserve
the ownership of the goods.
4. The seller has the right to possess the good until the buyer fulfills
his obligation and may even sell the goods to third persons at his
risk.
TRUE
5. The form of the bill of lading expresses the intention of the seller
to the transfer or retention of ownership over the property and is
therefore always conclusive as to the intention.
FALSE
6. The seller can designate himself as consignee in the bill of landing
but for the purpose of reserving the property for security only.
TRUE
7. The buyer on the other hand can be the consignee but possession
can still be retained by the seller as against the buyer.
8. As a general rule if the thing is lost by fortuitous event the risk is
borne by the owner of the thing at the time of the loss
9. If the owner is by his conduct barred from denying the sellers
authority to sell the buyer may acquire a valid title even if the
seller had no authority to sell
10. A sale by someone who is not the owner against the will of the
owner can never be a valid sale. FALSE
11. Good faith and for value can be a valid defense when a byer
acquires good even w/ notice of seller defects in its ownership.
FALSE he must have no notice from the seller of the defect in its
ownership
12. In a negotiable a special endorsement to whom it be delivered
with the marking non negotiable will affect the negotiability of the
instrument. FALSE
13. A negotiable document of tile may be negotiated by the
indorsement of the person to whose order the goods are by the
terms of the document deliverable. TRUE
14. When a document of title which contains the words “not
negotiable”, non-negotiable or the like TRUE
15. if the goods perished
objectives
What is a bill of lading
- evidence
- a contract of receipt for the transport of good and their delivery
to the person named therein, to order or to bearer
- title
What is the principle of rex perito domino? Exceptions?
- as general rule that if the things is lost by fortuitous event, the risk
is borne by the owner of the thing at the time of the loss.
Exceptions:
o where the seller reserves the ownership of the goods
merely to secure the performance by the buyer of is
obligations under the contract, the ownership is
considered transferred to the buyer who, therefore,
assumes the risk from the time of delivery
o where the actual delivery has been delayed through
the fault of either the buyer or seller, the goods are at
the risk of the party at fault with respect to any loss
which might not have occurred but for such fault. In
this case, the law punishes the party at fault
Requisites for acquisition of good title by buyer
- Art 1506 states that the buyer acquires a good title to the goods
provided he buys them:
o before the title of the seller has been avoided
o in good faith for value
o without notice of the sellers defect of title
Who may negotiate the title?
ART. 1512. A negotiable document of title may be negotiated
1. By the owner thereof; or
2. By any person to whom the possession or custody of the
document has been entrusted by the owner, if, by the terms of
the document the bailee issuing the document undertakes to
deliver the goods to the order of the person to whom the
possession or custody of the document has been entrusted, or if
at the time of such entrusting the document is in such form that it
may be negotiated by delivery. (n)
 QUIZ VI Art 1527 numerated the following cases when an unpaid seller of goods in
possession of the same retain possession of them:
What is the effect of the indorsement of a document of title? Is it a contract
of guaranty? 1. Where the goods have been sold without any stipulation as to
credit
- It is a contract of the indorser with the indorsee that on certain 2. Where the goods have been sold on credit, but the term of credit,
conditions, the indorser will pay the instrument if the party but the term of the credit expired
primarily liable fails to do so; AND 3. Where the buyer becomes insolvent
- It is also a conveyance of the indorser by the indorser, not a
contact of guaranty What is the basic and nature of right of stoppage “in transitu”?

Where is the place of delivery of the good sold? - The essential basis of the right of stoppage in transit is clearly the
injustice of allowing the buyer to acquire ownership and
1. Where there is an agreement, express or implied, the place of possession of the goods when he has not paid and, owning to his
delivery is that agreed upon; insolvency, cannot pay the price which was to be given in return
2. Where there is no agreement, the place of delivery is determined for the goods
by usage of trade
3. Where there is no agreement and there is also no prevalent When can an unpaid seller exercise his right to resell and in what 3
usage, the place of delivery is the seller’s place of business; instances.
4. In any other case, the place of delivery is the seller’s place of
residence; and Art 1533
5. In case of specific goods, which to the knowledge of the parties at
1. Where the goods are perishable in nature
the time the contract was made were in some other place, that
2. Where the right to resell is expressly reserved, in case the buyer
place is the place of delivery, in the absence of any agreement or
should make a default
usage of trade to the contrary.
3. When the buyers delays in the payment of the price for an
What may the buyer do if the seller, under a contract to deliver specific unreasonable time.
quantity of goods, delivers a small quantity?

1. The buyer may reject the goods delivered

2. Accept the goods and must pay the price at the contract rate if he
knew no more were to be delivered
3. Accept the goods and must pay for the fair value of the goods, if
he did not know that the seller is going to be guilty of a breach
of contract.

What does COD, FOB, CIF mean? What is the diff. between FOB point of
delivery and FOB point of destination?

- COD- Collect on Delivery. The carriers acts for the seller in

collecting the purchase price. The buyer must pay for the goods
before he can obtain possession.
- FOB- Free on board. The goods are to be delivered free of
expense to the buyer to the point where they are F.O.B. FOB
point of delivery cost is free till it reaches the carrier, FOB point
of destination free till it reaches the actual destination and not
the port where the goods arrived.
- CIF- Cost Insurance and Freight. They signify that the price fixed
covers not only the cost of goods, but the expenses of freight and
insurance to be paid by the seller up to the point especially
named.

When is the vendor justified not to deliver the goods purchased by vendee?

Art 1524 states when the vendor is justified not to deliver

- if the vendee has not been paid; or

- if no period for the payment has been fixed in the contract

What are the remedies of an unpaid seller?

Art 1526 enumerates the remedies of an unpaid seller

1. A lien on the goods or right to retain them for the price while he is
in possession of them
2. In case of the insolvency of the buyer , a right of stopping the
goods in transit after he has parted with the possession of them
3. A right release as limited by this Title.
4. A right to rescind the sale as likewise limited by this Title

When may an unpaid seller of goods, in possession of the same retain

possession until payment or tender of price?