-1-

I INTRODUCTION Sale: A contract by which one of the contracting parties obligates himself to transfer ownership, & to deliver possession, of a determinate thing, & the other to pay therefore a price certain in money or its equivalent. Elements of Sale

the thing w/c he has delivered while the same remains in the possession of the other party, and w/o prejudice to the rights acquired in good faith in the meantime by a 3 rd person Contract for Piece-of-Work: a contractor binds himself to execute a piece of work for the employer, in consideration of a certain price or compensation SALE Sale of an object Real obligation Specific performance may be a remedy for breach Manufacturing in the ordinary course of business For general market Habitually make CONTRACT FOR PIECE-OF-WORK Sale of service Personal obligation Specific performance not a remedy Manufacturing upon special orders of the customers Not for general market Not habitually made

1. 2. 3. 1. 2. 3.

Consent or meeting of the minds Determinate subject matter price certain in money or its equivalent

Stages of Contract of Sale Politicacion/Negotiation the prospective parties indicate interest in the contract Perfection/Birth concurrence of the essential elements of the sale Consummation/Death when the parties perform their respective undertaking under the contract of sale, culminating in the extinguishment thereof

Agency to Sell: a person binds himself to render something in representation of the principal, w/ the consent & authority of the latter SALE Not unilaterally revocable The buyer prays price of the object for the AGENCY TO SELL Revocable because of fiduciary relationship The agent isnt obliged to pay the price, and is merely obliged to deliver the price he may receive from the buyer The agent doesnt become the owner even after deliver The agent assumes no personal liability as long as he acts w/in his authority

Essential Characteristics of Sale

1. 2. 3. 4. 5. 6. 7. 8.

Nominate has a specific name or designation in law & is regulated by special provisions in law Principal can subsist independently from other contracts Consensual perfected by mere consent Bilateral gives rise to reciprocal obligations for both parties Reciprocal arise from the same cause; simultaneous performance; mutual debtor/creditor Onerous imposes valuable consideration as prestation Commutative a thing of value is exchanged for another of equivalent value Sale is Title & Not Mode does not transfer ownership but creates the obligation to transfer ownership

The buyer becomes owner after delivery The seller warrants

the

Dacion en pago: property is alienated by the debtor to the creditor in satisfaction of a debt in money Requisites of Dacion en Pago

1. 2. 3.

Donation: act of liberality where a person disposes gratuitously of a thing or right in favour of another who accepts it SALE Consensual contract Onerous No diminution of the estate DONATION Formal contract Gratuitous May deprive compulsory heirs of their legitimes

performance of the prestation in lieu of payment w/c may consist in the delivery of a corporeal thing or real right or a credit against a 3rd person difference between the prestation due and that w/c is given in substitution agreement between the creditor & debtor that the obligation is immediately extinguished by reason of the performance of a prestation different from that w/c is due DACION EN PAGO Real contract Requires the delivery transmission of ownership

Barter: one binds himself to give something in consideration of the others promise to give another thing When consideration is partly money & partly another thing

SALE Consensual contract Perfected by mere consent

and

1. 2.

Lease: the lessor binds him self to give to the lessee the enjoyment or use of a thing for a price certain and for a period SALE to LEASE Does not entail transfer of ownership, only use & enjoyment

Barter value of the thing is greater than money Sale value of the thing is less than or equal to money Obligation ownership

transfer

GR: Barter shall be governed by the provisions on sale Exception: 2 Rules Specifically Provided for By Barter Contracts 1) if one of the contracting parties having received the thing promised in barter, should prove that it did not belong to the person who gave it; he cannot be compelled to deliver that w/c he offered in exchange but he is entitled to damages

II PARTIES TO A CONTRACT OF SALE Who may enter into a contract of sale? A person (natural/juridical) granted legal capacity by law to obligate himself, may enter into a contract of sale, as seller or as buyer Juridical Persons 1. Corporations 2. Partnerships 3. Associations

2)

one who loses by eviction the thing received in barter may recover that w/c he gave in exchange w/ a right to damages, or he can only make use of the right to recover

SIENNA A. FLORES

SALES MEMORY AID

-2-

4.

Cooperatives

6.

Incapacitated Persons 1. minors 2. insane/demented persons 3. deaf-mutes who do not know how to write 4. intoxicated 5. under hypnotic spell 6. senile & elderly GR: contracts entered into by incapacitated persons are voidable Exception: when the subject matter are necessaries Requisites for Exception:

1. 2.

there must be a perfected contract of sale there must be delivery of the necessaries

Lawyers property & rights w/c may be the object of litigation, while litigation is pending & it is sale to a lawyer of record a. exception 1: sale of land, acquired by a client to satisfy a judgment in his favour, to his attorney as long as the property was not the subject of the litigation b. exception 2: contingency fee arrangement w/c grants the lawyer of record proprietary rights to the property in litigation since the payment of said fee is not made during the pendency of the litigation but only after rendering of judgment i. subject to the supervision of the courts; may be reduced/annulled

Necessaries 1. sustenance 2. dwelling 3. clothing 4. medicine 5. education 6. transportation GR: the incapacitated party is not obliged to make restitution Exception: beneficial reimbursement GR: Sales between spouses (& common-law spouses) are void Exceptions: 1. when theres a separation of property agreed upon in marriage settlements 2. judicial separation of property agreed upon Rationale for Prohibition 1. to prevent a spouse from defrauding his creditors by transferring his properties to the other spouse 2. to prevent the dominant spouse from unduly taking advantage of the weaker spouse 3. to avoid indirect violation of prohibition against donations between spouses GR: In the sale of conjugal properties, the consent of the husband is required, and in the in the absence of consent of one renders the entire sale is null and void; such transaction is a continuing offer on the part of the consenting spouse Exception: It may be perfected upon acceptance by the other spouse or authorization by the court before the offer is withdrawn Application of Pari Delicto Doctrine Prohibiting Recovery 1. spouses 2. heirs 3. prior creditors 4. the state (in payment of proper taxes) Persons cannot acquire by purchase, even at a public/judicial auction, either in person or through the mediation of another:

Note: Art. 1491 & 1492 are void contracts & court approval will not validate the sale. Where Rule Also Applies 1. legal redemption 2. compromises 3. renunciations Susceptible of Ratification 1. guardians 2. agents 3. administrators Ratification

1. 2. 3.

by means of a new contract new contract is valid from its execution validity does not retroact

Permanent Disqualification: Public Wrong 1. public officers 2. judicial officers 3. lawyers

III SUBJECT MATTER OF SALE Requisites of Subject Matter

1. 2. 3.

must be existing must be licit must be determinate or determinable

Effect of Lack of any Requisite 1. no contract of sale results 2. there is an inexistent contract 3. neither party may seek for specific performance 4. neither party may be held liable for breach of contract Act Constitutes a Criminal Offense Both Parties in pari delicto - parties shall have no action against each other - both shall be prosecuted - the things/price of the contract shall be confiscated innocent/less guilty: - may claim what he has given - not bound to comply w/ his promise Guilty: - shall have no action against the innocent 1 - shall be prosecuted - The things/price of the contract shall be confiscated Act Does NOT Constitute a Criminal Offense - neither party may recover what he has given - neither may demand specific performance innocent/less guilty: - may ask for restitution - cannot be compelled to comply w/ his promise Guilty: - loses what he has given - neither may demand specific performance

1. 2. 3. 4. 5.

Agents property whose sale or administration may have been entrusted to him

a.

exception: consent of the principal was given

Guardians property of the person under his guardianship Executor/Administrator property of the estate under his administration a. exception: hereditary rights Public Officers/Employees - property of the State of any subdivision/instrumentalities/agencies/GOCCs Justices/Judges/Prosecuting Attorneys/Clerk of Court property & rights in litigation or levied upon on execution before the court w/in whose jurisdiction they exercise their functions

Only 1 party is guilty

SIENNA A. FLORES

SALES MEMORY AID

-3-

Existing: exists or could be made to exist to allow the seller reasonable certainty of being able to comply w/ his obligation, taking into consideration state of technology & science

2. 3.

the false appearance agreement

must

be

intended

by

mutual

1. 2. 3.

Existing: possessed/owned by the seller Future: goods to be manufactured/raised/acquired by the seller after perfection of contract a. Exception: those involving future inheritance Contingent: subject to a suspensive condition

the purpose is to deceive 3rd persons

GR: motive for entering into a contract doesnt affect the contract Exception: when the motive pre-determines the cause, the motive may be regarded as the cause Void Sales of Land

Emptio Rei Speratae: contracts covering future things & subject to a suspensive condition Emptio Spei: the commutative nature of a contract of sale seems not to have been complied with Contract of Sale Legal concept Deed of Sale Merely evidence of a contract

1. 2. 3. 4.

By Non-Christian if not approved by the Provincial Governor (Sec. 145 of Revised Administrative Code) Friar land w/o consent of Sec. of Agriculture (Act. 1120) Made in violation of land reform laws declaring tenant-tillers as full owners of the land they tilled Reclaimed lands are lands of the public domain and cannot, w/o congressional fiat, be subject of a sale

Licit: not outside the commerce of man Illegal Subject Matter 1. narcotics 2. gunpowder & explosives 3. firearms & ammunitions 4. wild bird or mammal 5. dynamited fish 6. rare wild plants 7. animals suffering from contagious diseases 8. poisonous plants or fruits Determinate 1. particularly designated 2. physically segregated from all the others of the same class Determinable 1. at the time the contract is entered into, the thing is capable of being made determinate a. by formula b. by description 2. w/o necessity of a new/further agreement bet. the parties Valid Objects of Sale 1. a generic thing may be the proper object of a contract if sale, so long as they fulfill the characteristic of being determinable at the point of perfection 2. undivided interest 3. undivided share in a mass of fungible goods What is NOT essential for perfection? Quantity, so long as the source of the subject is certain What is ESSENTIAL for perfection? Identity, Nature, Quality GR: sellers ownership need not exist at perfection, provided he has a right to transfer ownership at the time the object is delivered Exception: in a contract of mortgage, the mortgagor must be the absolute owner of the thing mortgaged, in anticipation of a possible foreclosure sale Inoperative/Impossible Service: when delivery of ownership is not longer possible Sale Validated: Subsequent acquisition of title by non-owner seller 1. There must be a valid contract 2. There must be physical delivery Completely Simulated Sale: contract is void/non-existent for the parties dont intend to be legally bound Requisites for Absolute Simulation

IV PRICE AND OTHER CONSIDERATION Price: the sum stipulated as the equivalent of the thing sold & also every incident taken into consideration for the fixing of the price Requisites of Price

1. 2. 3.

Must be real Must be money or its equivalent (valuable consideration) Must be certain or ascertainable at perfection there is every intention on the part of the buyer to pay the price, & every expectation on the part of the seller to receive such price as the value of the subject matter he obligates himself to deliver theres no price to support the contract of sale GR: When price is simulated, it is void Exception: when it was shown to be some other contract presumed to exist & the burden of proof is on the person assailing it

REAL PRICE SIMULATED PRICE

PRICE NOT STATED IN THE CONTRACT

FALSE PRICE Relatively Simulated The contract entered into by the parties is diff. from their true agreement The parties are bound by their real agreement, subject to reformation

LACK OF PRICE Absolutely Simulated Parties never intended to be bound Void

Principle of in pari delicto nonoritur action: denies recovery to guilty parties

1. 2.

Applicable: the nullity of the contract arises from the illegality of the consideration/purpose of the contract Not Applicable: inexistent and void contracts where the price/consideration is simulated

Price NOT STATED in the Contract: Failure to Pay Consideration Consummation Valid, but constitutes breach Right to demand fulfilment or rescission Money or its Equivalent 1. cash Lack of Consideration Perfection Prevents existence of valid contract void

1.

outward declaration of a will different from the will of the parties

SIENNA A. FLORES

SALES MEMORY AID

-4-

2. 3. 4.

checks bonds commercial papers

V FORMATION OF CONTRACT OF SALE Formation of Contract of Sale

Consideration can take different forms 1. promise of a thing 2. service Certain: Expressed & agreed in terms of specific pesos and/or centavos Ascertainable 1. w/ reference to another thing certain or the determination thereof be left to the judgment of specified person/s 2. the terms of the contract furnish a basis/measure for ascertaining the amount agreed upon, w/o having to refer back to either/both of the parties a. such formula isnt allowed for the determination of the subject matter of the sale Price Determined to be Ascertainable

1. 2. 3.

Politicacion/Preparation/Negotiation/Bargaining freedom to contract Perfection/Birth the moment the parties come to agree on the terms of the contract Consummation/Death fulfilment/performance of the terms agreed upon Preparatory or Politicacion Stage

GR: Freedom to contract signifying the right to choose w/ whom to contract with Exceptions: 1. Option Contract

2.

Right of 1st Refusal

1. 2.
3. 4.

by 3rd persons appointed at perfection by the courts, only when done: a. w/ bad faith b. by mistake by reference to a definite day, particular exchange or market by reference to another thing certain

Offer: must be certain Acceptance: must be absolute, plain, unequivocal, unconditional When Offer Becomes Ineffective 1. death 2. civil interdiction 3. insanity 4. insolvency 5. counter-offer: qualified/conditional acceptance of offer

GR: price is never by one or both parties Exception: the price is separately accepted by the other party GR: When price is uncertain, the sale is inefficacious Exception: if the buyer appropriates the object, he must pay a reasonable price (basis: unjust enrichment) Appropriation: acceptance by the buyer & having treated the subject matter as his own, even when it doesnt involve transformation Requisites for Recovery of Price 1. meeting of the minds as to subject matter 2. agreement price would be paid, w/c is neither certain or ascertainable 3. delivery of the subject matter GR: in absence of stipulation - immediately demandable Exception: when there is stipulation as to manner of payment GR: Inadequacy of price does not affect ordinary sale Exceptions:

6.
7. 8. Matters 1. 2. 3. Option 1. 2. 3. 4. 5. 6.

express/implied revocation of the offer by the offeree expiration of the period fixed in the offer for acceptance subject matter becomes illegal/impossible That May be Fixed by Offeror time place manner of acceptance preparatory contract granting a privilege to buy or sell specifying the thing to be sold w/in an agreed time determined price valuable consideration distinct & separate from the price

1. 2.

fraud, mistake, or undue influence indicative of a defect in consent - may be annulled on ground of vitiated consent Gross inadequacy of price may avoid judicial sale a. Shocking to the conscience of man b. Reasonable man will not agree to dispose of his property c. There is showing that in the vent of a resale, a better price can be obtained d. Exception: there is a right of redemption Lesion of more than of value of the thing makes the sale rescissible unless approved by court a. Guardians wards b. Representation of absentees gross inadequacy of price in sale a retro raises presumption of equitable mortgage a. remedy of seller have it reformed as a mortgage contract b. remedy of buyer foreclose the equitable mortgage

Elements of Option Contract 1. consent 2. subject matter a. determinate object b. price certain & manner of payment 3. prestation Characteristics of Option Contract

1. 2. 3.
4. 5.

Onerous: option w/o separate consideration is void as an option contract Consensual: perfected even w/o the separate consideration being paid because it may be something paid or promised Unilateral: only the optioner is obliged, even when the optionee has not paid separate consideration not a purchase, but merely secures the privilege to buy not a sale of property, but a sale of the right to purchase Sale Fixes definitely the rights & obligations of both parties at execution and leaves no choice to either whether or not to proceed with the contract

3. 4.

Option States the terms & conditions on w/c the owner is wiling to sell his land

Consideration: anything of value & presumed to exist 1. something paid

SIENNA A. FLORES

SALES MEMORY AID

-5-

2.

something promised

Without Separate Consideration 1. Void as Option 2. Valid as Offer W/O Separate Consideration 1. offeror may withdraw offer before acceptance 2. if acceptance was made, offeror may withdraw before knowledge of acceptance 3. right to withdraw must not be exercised arbitrarily or whimsically W/ Separate Consideration 1. contract of option is perfected 2. withdrawal of offer is breach of contract Need not be written.

relations govern Exception: It must be enforced according to the law on contracts if the right of 1st refusal is attached to a valid principal contract Must be clearly embodied in a written contract

3.

if withdrawn, offeror is liable for damages, but he may not be sued for specific performance on the proposed contract (exception: if it was intended to be part of the consideration for the main contract earnest money)

Right of 1st Refusal: a contractual grant, not of the sale of property, but of the 1st priority to buy the property in the event the seller sells the same Nature 1. 2. 3. 4. 5. of Right of 1st Refusal preparatory juridical relations governed not by contracts governed by codal provisions on human relations cannot be the subject of specific performance not subject to contractual enforcement breach of right would allow recovery of damages

Exercise of Option Contract: notice need not be coupled w// actual payment Period to Enforce Valid Exercise of Option: w/in 10 years after accrual of cause of action Optioner Obligation not to enter into the principal contract w/ any other person during the period stipulated Separate Consideration Optionee Has the right, but not the obligation to buy

Exercise of the Right of 1st Refusal: dependent not only on the grantors eventual intention to enter into binding juridical relation w/ another, but also on the terms that are to be firmed up Sublessee: may not take advantage of the right of 1st refusal of lessee Obligation of Offeror in Right of 1st Refusal 1. basis must be the current offer of the seller to sell or offer to purchase of a prospective buyer

2.

1. 2.

Does NOT Guaranty: absolute right to exercise option Guarantees: before optioner breaches his obligation & withdraws the offer, an acceptance by the optionee would give rise to a valid & binding contract of sale

only after the lessee grantee fails to exercise its rights under the same terms & w/in the period contemplated can the owner validly offer to sell the property to a 3rd person, again under the same terms as offered to the grantee

Remedy of Offeree in case of Breach: Rescission, but ONLY if the buyer did not act in good faith as he was aware of the right of 1 st refusal granted to another person by his seller Mutual 1. 2. 3. Promise/Agreement to Buy & Sell binding as an executory agreement certainty of the price must exist the parties are given the right to demand from the other the fulfilment of the obligation 4. the parties may ask for damages for breach where it is not possible to carry out the terms

Valid Option Contract 1. optionee has the right to exercise the option or accept the offer anytime during the option period and such would give rise to a valid and binding contract of sale

2. 1. 2.

optioners attempt to withdraw the offer during the period would be void

Rules on 3rd Party Buyer Still Prevail buyer in good faith optionee may only sue optioner for damages for breach of contract of sale & not option contract buyer in bad faith optionee performance against optioner may file for specific

Article 1354 Although the cause is not stated in the contract, it is presumed that it exists & is lawful, unless the debtor proves the contrary. Applies to contracts in general. Consideration is presumed to exist.

Article 1479 An accepted unilateral promise to buy/sell a determinate thing for a price certain is binding upon the promissory if the promise is supported by a consideration distinct fr the price. Refers to sales in particular, more specifically to an unaccepted unilateral promise to buy or to sell. Consideration is not presumed, and the promisee has the burden of proving such consideration.

Contracts to Sell 1. obligations to agree to enter into contracts of sale 2. personal obligations 3. cannot demand specific performance 4. suspensive condition: full payment of purchase price 5. ownership not automatically transferred though the property may have been delivered 6. seller still has to convey title by entering into a contract of absolute sale Perfection Mutual Consent 1. offer certain 2. acceptance absolute GR: Acceptance of offer must be: 1. absolute 2. unequivocal 3. unconditional 4. plain Exception: deviations are allowed when they were not material Form of Acceptance 1. express 2. implied

OPTION CONTRACT Price is certain Consideration separate from that of the contract of a contract of sale Law on sales govern

RIGHT OF 1ST REFUSAL No agreement yet as to price Consideration for lease includes consideration for right of 1st refusal GR: Codal provisions on human

SIENNA A. FLORES

SALES MEMORY AID

-6-

Qualified Acceptance 1. counter offer 2. rejection of the original offer 3. involves a new proposal 4. an attempt to end the negotiation between the parties on a different basis GR: advertisements are merely invitations to make an offer Exception: if it appears otherwise, such as when it specifies the determinable subject matter and price Sale by Auction: perfected when perfection by the fall of the hammer auctioneer announces its

1. 2. 3. 4.

doesnt guaranty its validity nor is it conclusive of the true agreement of the parties presumption of regularity and due execution sufficient, clear & convincing evidence is required to overthrow that presumption when notary public not real documents were converted into private documents

Value of Business Forms

1. 2. 3.

acknowledgement that a business transaction has in fact transpired vital pieces of evidence of commercial transactions written memorials of the details of the consummation of contracts

GR: until such announcement, auctioneer may withdraw goods from the sale Exception: auction has announced to be w/o reserve Earnest 1. 2. 3. Money: Disputable Presumption it is part of the price it is proof of perfection it constitutes an advance payment to be deducted from the total price Not Applicable: in contracts to sell Earnest Money Part of the purchase price Given only where there is already a sale When earnest money is given, the buyer is bound to pay the balance Option Money The money is given as a separate consideration for the option contract Applies to a sale not yet perfected When the would-be buyer gives option money, he is not required to buy, but may even forfeit it

GR: the contract of sale that was not registered doesnt affect its validity & is binding between the parties Exception: a sale of land cannot be considered binding on 3rd persons if it isnt embodied in a public instrument & recorded in the Registry of Deeds GR: The Statute of Frauds is descriptive of statutes w/ require certain classes of contracts to be in writing, otherwise they are unenforceable Exceptions: 1. when the note/memorandum be in writing & subscribed by the party charged or his agent 2. theres been partial consummation of the contract f sale 3. theres been failure to object to the presentation of evidence aliunde as to the existence of a contract w/o being in writing & w/c is covered by the Statute of Frauds 4. sales are effected through electronic commerce Purpose of Statute of Frauds: to prevent fraud and perjury Memorandum

Duties of a Seller 1. pay for expenses for registration & execution of sale 2. in case of goods, putting goods into a deliverable state 3. withhold taxes due Form of Sales GR: Form is not important for the validity of a contract of sale May be in writing May be by word of mouth May be partly in writing, partly by word of mouth May be inferred from the conduct of the parties Exceptions: (when form is important)

1. 2. 3. 1. 2.

must be in writing must be subscribed by the party charged or his agent must contain all the essential terms of the contract

Ratification of Contracts infringing the Statute of Frauds failure to object to the presentation of oral evidence acceptance of benefits under them GR: Partial performance removes a contract from the coverage of the Statute of Frauds 1. partial payment of purchase price 2. possession 3. making of improvements 4. rendition of services 5. payment of taxes 6. relinquishment of rights 7. involves an act of complicity on the party sought to be charged Exception: delivery of the deed to the agent of the buyer, w/ no intention to part w/ the title until the purchase price is paid, doesnt take the case out of the Statute of Frauds Receipt: merely an acknowledgement of the sum received, w/o indication of the total purchase price or of the monthly instalments to be paid, hence it cannot be the basis of a valid sale Electronic Document information or the representation of information, data, figures, symbols, or other modes of written expression, described or however represented, by w/c a fact may be proved and affirmed, w/c is received, recorded, Electronic Signature any distinctive mark, characteristic and/or sound in electronic form, representing the identity of a person & attached or logically associated w/ the electronic data message or electronic document or any methodology or procedures employed or adopted such

1. 2. 3.

power to sell a piece of land or interest therein must be in writing, otherwise the sale by agent is void sale of large cattle must be in writing, otherwise sale is void. No sale of large cattle shall be valid unless the sale is registered w/ the municipal treasurer who shall issue a certificate of transfer sale of land by a non-Muslim hill tribe cultural minorities is void if not approved by the NCIP

Art. 1358 on Public Instruments 1. for convenience

2.
3. 4.

to adversely affect 3 parties not for validity not for enforceability

rd

Deed of Sale: a formal or symbolic delivery of the property sold & authorizes the buyer to use the document as proof of ownership Notary Public: shall certify that the person acknowledging the instrument or document is known to him and that he is the same person who executed it, & acknowledged that the same is his free act & deed Effect of Notarization of Deed of Sale

Defn

SIENNA A. FLORES

SALES MEMORY AID

-7-

transmitted, stored, processed, retrieved or produced electronically Legal Recognition Where the law requires the document to be in writing, that requirement is met by said electronic doc. if the latter maintains its integrity & reliability & can be authenticated so as to be usable for subsequent reference:

1.

it has remained complete & unaltered, apart from the addition of any endorsement & authorized change, or any change w/c arises in the normal course of communication, storage & display it is reliable in light of the purpose for w/c it was generated

person w/ the intention of authenticating or approving an electronic data message or electronic document An electronic signature on the electronic doc. shall be equivalent to the signature of a person on a written document if the signature is an electronic signature & proved by showing that a prescribed procedure, not alterable by the parties interested in the electronic doc., existed under w/c

b.

reliance on the electronic signature reasonable under the circumstances

is

not

Consummation of Electronic Transactions: electronic transactions made through networking amount banks, or linkages thereof w/ other entities/networks, shall be deemed consummated upon the actual dispensing of cash or the debit of 1 account & the corresponding credit to another Electronic Commerce in Carriage of Goods 1. furnishing the marks, number, quantity or weight of goods, stating or declaring the nature/value of goods; issuing a receipt for goods; and confirming that goods have been loaded 2. notifying a person of terms & conditions of the contract; & giving instructions to a carrier 3. claiming delivery of goods; authorizing release of goods; & giving notice of loss/damage to goods 4. giving any other notice/statement in connection w/ the performance of the contract 5. undertaking to deliver goods to a named person or authorized person to claim delivery 6. granting, acquiring, renouncing, surrendering, transferring or negotiation rights in goods 7. acquiring/transferring rights/obligations under the contract Simulation: an apparent contract is a declaration of a fictitious will, deliberately made by agreement of the parties, in order to produce, for the purpose of deception, the appearance of a juridical act w/c doesnt exist or is diff. from that w/c was really executed Requisites of Simulation

1. a

method is used to identify the party sought to be bound & to indicate said partys access to the electronic document necessary for his consent or approval through the electronic signature method is reliable & appropriate for the purpose for w/c the electronic document was generated/communicated in light of all the circumstances is necessary for the party sought to be bound, in order to proceed further w/ the transaction, to have executed or provided the electronic signature other party is authorized & enabled to verify the electronic signature & to make the decision to proceed w/ the transaction authenticated by the same

2.

2. said

Where the law requires that a document be presented or retained in its original form, that requirement is met by an electronic document if:

3. it

1. 2. 3.

1. there

an outward declaration of a will different from the will of the parties false appearance must have been intended by mutual agreement purpose is to deceive 3rd persons Non-Badges of Simulation

exists a reliable assurance as to the integrity of the document form the time it was 1st generated in its final form document is capable of being displayed to the person to whom it is to be presented

4. the

2. that

Electronic Commerce Act Sec. 6: information shall not be denied validity or enforceability solely on the ground that it is in the form of an electronic date message purporting to give rise to such legal effect, or that it is merely incorporated by reference in that electronic data message Sec. 12: nothing in the application of the rules on evidence shall deny the admissibility of an electronic data message or electronic document in evidence 1. on the sole ground that it is in electronic form 2. on the ground that it is not the standard written form Standard of reliability: shall be assessed in the light of the purpose for w/c the right/obligation was conveyed and in the light of all the circumstances, including any relevant agreement Presumption Relating to Electronic Signatures 1. the electronic signature is the signature of the person to whom it correlates

Badges of Simulation 1. non-payment of the stipulated consideration 2. absence of any attempt by the buyers to assert their alleged rights over the subject property 3. failure of alleged creditors to collect rentals from alleged seller

the agreement didnt provide for the absolute transfer of ownership of the land to buyer since delivery of certificate of ownership & execution of deed of absolute sale were stipulated as suspensive conditions 2. bare assertions that the signature appearing on the deed of sale is not that of her husband 3. gross inadequacy of price Accion Pauliana: Remedy Allowed When Sale Simulated

1.

1.
2.

subsidiary remedy - party suffering damage can avail of it only when he has no other legal means to obtain reparation both contracting parties have acted maliciously so as to prejudice the creditors who were prevented from collecting their claims this remedy is unavailing if a 3 rd person, acting in good faith, is in lawful possession of the property

3.

GR: consideration is different from motive, and the latter does not affect the validity of the sale Exception: when the illegal motive predetermined the purpose of the contract Effect When Sale Declared Void

2.

the electronic signature was affixed by that person w/ the intention of signing/approving the electronic doc. unless: a. the person relying on the electronically signed electronic doc. knows or has notice of defects in or unreliability of the signature

1. 2.

action for declaration imprescriptible

of

the

contracts

nullity

is

possessor is entitled to keep the fruits during the period for w/c the buyer held the property in good faith

SIENNA A. FLORES

SALES MEMORY AID

-8-

3.

parties must restore what has been given since the relationship between any parties in any contract even if subsequently voided must always be characterized & punctuated by good faith & fair dealing

Effect of Acquisition of Land by Alien

1. 2. 3. 4. 5.

has no standing to seek legal remedies to recover the property has no standing to seek legal remedies to recover the purchase price the transaction is void ab initio for being in violation of the constitutional prohibition against aliens owning private land neither a court of equity nor a court of law will administer a remedy provisions of unjust enrichment will not apply since they cover contracts w/c are merely prohibited in order to benefit private interests

SIENNA A. FLORES

SALES MEMORY AID