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INTRODUCTION
• CONTRACT OF SALE
• One of the contracting parties obligates himself to transfer the ownership of and
to deliver a determinate thing, and the other to pay therefore a price certain in
money or its equivalent. A contract of sale may be absolute or conditional.
2. SPOUSES - A spouse may, without the consent of the other spouse, enter
into sales transactions in the regular pursuit of their profession, vocation, or
trade
CHARACTERISTICS OF CONTRACT OF SALE
1. Nominate
2. Principal
3. Consensual
4. Bilateral
5. Reciprocal
6. Onerous
7. Commutative
8. Title and not a mode
Q: What are the elements of a contract of sale?
A: ANE
1. Accidental elements – dependent on parties’ stipulations; Examples:
a. Conditions
b. Interest
c. time & place of payment
d. penalty
2. Natural elements – those that are inherent even in absence of
contrary provision.
E.g. warranties
3. Essential elements – for validity:
a. Consent
b. Determinate subject matter
c. Consideration
Q: What is the effect and/or consequence of the
absence of consent of the owner in a contract of sale
of said property?
6. Wholesale or retail:
a. Wholesale
b. Retail
Note: Statute of Frauds applies only to executory contracts but not to partially
executed contracts.
Q: ARE THERE INSTANCES WHERE THE STATUTE OF
FRAUDS IS NOT ESSENTIAL FOR THE VALIDITY OF A
CONTRACT OF SALE
A: Yes.
1. When there is a note or memorandum in writing and subscribed
to by the party or his agent (contains essential terms of the
contract);
2. When there has been partial performance/execution (seller
delivers with the intent to transfer title/receives price);
3. When there has been failure to object to presentation of
evidence aliunde as to the existence of a contract without being
in writing and which is covered by the Statute of Frauds;
4. When sales are effected throughelectronic commerce.
B. OPTION CONTRACT
Q: What is an option contract?
A: A contract granting a privilege in one person, for which he
has paid a consideration, which gives him the right to buy
certain merchandise or specified property, from another
person, at anytime within the agreed period, at a fixed price.
• The implied renewal of the lease on a month‐tomonth basis did not have the
effect of extending the life of the option to purchase which expired at the
end of the original lease period. The lessor is correct in refusing to sell on the
ground that the option had expired. (2001 Bar Question)
• Q: How is an option exercised?
SALE DONATION
Onerous Gratuitous/onerous
Value of thing is equal or less than amount of money Value of thing is more than amount of money = Barter
= Sale
Buyer pays for price of object Agent not obliged to pay for price; must account for
the
proceeds of the sale.
Buyer becomes owner of thing Principal remains the owner even if the object
delivered to
agent
Buyer‐seller relationship
Novates creditor‐debtor relationship into seller‐buyer
SALE LEASE
Payment as a condition
Full payment of the price is a positive suspensive condition. Note: Failure to
Non‐payment of the price is a resolutory condition. Vendor loses ownership over
fully pay the price is not a breach but an event that prevents the
the property and cannot recover it until and unless the contract is resolved or
obligation of the vendor to convey title from becoming effective.
rescinded.
Remedies available
1. Specific
1. Resolution
2. Performance
2. Damages
3. Rescission
4. Damages
Q: WHO ARE THOSE RELATIVELY INCAPACITATED
TO ENTER INTO A CONTRACT OF SALE?
A:
1. Spouses (Art. 1490, NCC)
2. Agents, Guardians, Executors andAdministrators, Public Officers and
Employees, Court Officers and Employees, and others speciallydisqualified by
law. (Art. 1491, NCC)
Note: Under Art. 1490 of the NCC, spouses cannot sell property to each other,
except:
a. When a separation of property was agreed in the marriage settlements; or
b. When there has been a judicial separation of property agreed upon
between them.
Q: WHO ARE THOSE PERSONS
SPECIALLY DISQUALIFIED BY LAW TO
ENTER INTO CONTRACTS OF SALE?
A: ALIEN‐UnOS
1. ALIENs who are disqualified to purchase private agricultural lands (Art. XII Secs. 3 &
7)
2. Unpaid seller having a right of lien or having stopped the goods in transitu, is
prohibited from buying the goods either directly or indirectly in the resale of the same
at public/private sale which he may make (Art. 1533 [5]; Art. 1476 [4])
3. The Officer holding the execution or deputy cannot become a purchaser or be
interested directly or indirectly on any purchase at an execution. (Sec. 21 Rule 39,
Rules of Court)
4. In Sale by auction, seller cannot bid unless notice has been given that such sale is
subject to a right to bid in behalf of the seller. (Art. 1476)
Q: WHAT ARE THE REQUISITES OF A
PROPER OBJECT OF
SALE?
1. Things
a. Determinate or determinable
b. Lawful (licit), otherwise contract is void
c. Should not be impossible (within the commerce of men)
2. Rights
GR: Must be transmissible.
XPN:
a. Future inheritance
b. Service – cannot be the object of sale. They are not determinate things and no
transfer of ownership is available but it can be the object of certain contracts such
uas contract for a piece of work.
• Q: Can rights be the objects of sale?