SALES

Thing is capable of being made determinate

(w/o new agreement)

Article 1458- Definition of Contract of Sale

100 cavans in 3 bodegas (EXECUTORY

Parties: - buyer

CONTRACT TO SELL ONLY)

- seller

Kind: - condition- absolute

- conditional
- perfection- consensual
- real
- solemn

Characteristics: - consensual
- bilateral
- onerous
- commutative
- nominate
- principal

Requisites: - essential - consent

- object
- consideration
- natural
- accidental

Process: - negotiation and preparation

- perfection
- consummation

Article 1461- Things with potential existence as

object

Goods to be manufactured, or acquired by the

seller after perfection of contract of sale

Object of sale either goods owned or future

goods

Does not apply on piece of work

Article 1463- Undivided interest

Seller may sell the whole thing or undivided

interest

Buyer becomes co- owner (upon termination

of co- ownership, may sell his share)
Example: 1/2 of total cavans of rice (depends
on the total number of cavans to be packed)

Article 1464- Fungible Goods

- possible

Interchangeable and consumable goods

Right of vendor: - existing at least at the time

Any unit treated as the equivalent of any other

of delivery

If undivided, buyer becomes co- owner

Example: 100 cavans- at the end of season,

- lawful

Vain hope- invalid- expired lottery tickets

Article 1462- Future Goods

Thing: - determinate/ determinable

- licit

Expected thing- still valid even does not

materialize

transfer it

Expectancy subject to condition that the thing

will come

Article 1459- Licit things and vendors right to

Example: 100 cavans in 1 bodega, but not

- transmissible rights of

rice were packed and made 250 cavans,

vendor

deliver the 100. But if 75 cavans only, deliver

whole thing and supple the lacking 25 cavans

Article 1460- Definition of Determinate Thing

Particularly designated and physically

segregated from all others of the same kind

Article 1465- Resolutory Condition

Individuality

Can be object of sale

Uncertain event upon happening of which the

Article 1470- Gross inadequacy of price

obligation extinguished

Does not affect sale unless vitiated consent or

parties intended it as donation

Article 1466- Contract of Agency to Sell

When persons binds himself to render service

X- shocking to courts conscience or no man

in his right mind would accept

or do something on behalf of his principal

Contract of Sale
Buyer receives good as

Contract of Agency
Agent receives good but

Article 1471- Price Simulated

Sale is void but can be valid as donation

owner
Pays the price

not as the owner

Account for proceeds of

Absolute- parties dont intend to be bound

Relative- parties conceal true agreement

Cant return good

Seller warrants thing

sale he made
Return if unable to sell
Agent makes no

sold
Deals with thing sold

warranty
Act in accordance with

Article 1472- Price of Fungible goods

day or market value

principals instructions
Article 1467- Piece of Work

Especially manufactured for buyer

Not in existence unlike future good

Risk is borne by the worker and not covered

by Statue of Frauds

Test: is it suitable for sale to others?

Price certain or what would it be in particular

Article 1473- Fixing of Price

Both parties but if price made by one party

and accepted by the other, sale is perfected

Article 1474- Price not determined

Sale is inefficacious but if object is delivered

and appropriated, buyer must pay reasonable
price (depends on circumstance)-- market

Article 1468- Barter

value at the time and place fixed by contract

Thing in exchange of another thing

If partly in money and thing, look at the intent,

Article 1475- Consensual Contract

if not clear:

Contract perfected upon meeting of minds

Parties can reciprocally demand

Ownership transfer upon delivery

- value of thing > money paid --barter

- value of thing < money paid--sale
Article 1469- Price certain in money or
equivalent

No sale without price

-agreed by parties

Article 1476- Sales by auction

Each lot is subject to separate contract of sale

Perfected upon fall of gavel-- before that,

bidder can retract bid and seller can withdraw

-with reference to another thing

-determined by 3rd person- unable to fix, sales
is inefficacious unless parties, then, agreed on
price. If acted in BF then court will fix the price and
if prevented by fault of either party choose between
fulfillment or rescission with damages.

good unless without reserve

Seller can bid if notice was given, right is

reserved, and right not prohibited by law. This
is to prevent puffing/ secret bidding that
constitute fraud (inflate good sold by seller)

Article 1477- ownership upon delivery

Article 1483- Statute of Frauds

Article 1478- parties stipulate not to transfer

ownership until fully paid

Be in writing: -sale of personal property not

less than P500.00
-real property

Article 1479- Promise to buy and sell

-sale of property not to be

Bilateral promise (price certain and

performed within a year

determinate thing- demand!)

To be enforceable

Option to buy- an accepted unilateral promise

Applicable to executory contract only- no

to buy or sell a determinate thing for a price

performance yet!

certain is binding upon the promisor if promise

is supported by a consideration distinct from

Article 1484- Recto Law

the price

Personal property payable in installments,

Policitation- unaccepted promise

Option- privilege to existing in one persons for

- exact fulfillment of obligation (if failed)

which he has pain a consideration distinct

- cancel the sale (fail to pay 2 or more

remedies are:

from the price and not refundable (promise

installments)

only so not binding)

- foreclosure of chattel mortgage (same)

* right of first refusal- right of first priority

Not exercised cumulatively, alternative

choices

Article 1480- Loss of thing due

Before perfection- seller (res perit domino)

Article 1485- Lease of personal property with

At the time of perfection- void

option to buy

After P. but before delivery- buyer

After P. and D.- buyer

Article 1484 remedies are applicable

Article 1486- ^ installments paid not to be

Article 1481- By goods and by description

By goods- parties contracted sale solely with

reference of the sample

By description- sells things of particular kind,

buyer not knowing whether true or not, but
believing it as true

Both- must satisfy all the warranties

If not-- can be rescinded

Article 1482- Earnest Money

Part of price and proof of perfection

Option Money
Distinct consideration

Earnest Money
Part of purchase price

from price
Sale not perfected
Not required to buy

Already a sale
Pay the balance

returned can be agreed upon unless

unconscionable
Article 1487- Execution and registration of sale
borne by the seller
Article 1488- Expropriation of property for
public use is governed by special laws
Article 1489- Capacity to buy and sell

All person may enter contract as long as they

can fulfill obligations
-XPNS: - absolute- incapacity- those
who cant bind themselves
-deaf mute, illiterate,

insane, and minor (minor- except for necessaries

which are need for sustenance; sale by them valid

demand for fulfillment (price proportion to the

of mistaken the age by appearance)

total sum of good remaining)

- relative incapacity- exists only

with reference to certain persons

Lost- when perishes or goes out of commerce

or disappears in such way that its existence is
unknown or cannot be recovered, or lose its

Article 1490- Husband and Wife

former utility (deteriorated)

Cant sell and donate to each other except for

moderate gifts

Article 1494- Effect of loss in case of specific

Or if their marriage settlement is separation of

goods

property or court decree of judicial separation

rd

of property (to protect rights of 3 persons;

only heir and creditors at the time of sale can

Either indivisible or divisible good perishes

without the knowledge of the seller

question validity of sale)

Remedy: -treat sale as avoided (not

applicable if divisible)
- as valid and buyer pays the

Article 1491- Relative Incapacity

agreed price for the goods, if divisible

To prevent fraud and minimize temptations

- guardian- property of under guardianship

buyer will only pay the price proportionate to

- agents- property of principal

the remaining goods

If indivisible and elects to continue the sale,

- executors- property of decedent in estate

- public officers- property of state

Article 1495- Principal obligations of the vendor

-judge- property in litigation

- those specified by law

- deliver the thing

- alien- private agri land

- warrant against hidden defects

- unpaid seller- buy good in/directly

and eviction

-officer conducting execution sale

Obligations- transfer ownership

- take care of thing with proper

Effect of first three is voidable since private

diligence
- pay for expenses of the

interest while others is void since public

execution and registration of the deed of

interest

sale (unless otherwise stipulated)

Article 1492- Applicable in sales redemption,
compromises, and renunciation

Compromise- contract where parties avoid

Article 1496- Ways of effecting delivery

Ownership passes from the moment thing is

litigation or put an end to on already settled

delivered to the buyer in any ways specified in

Renunciation- creditor gratuitously gives up or

Articles 1497- 1501, or in any other manner

abandons his right against debtor

signifying agreement on transfer of

possession

Article 1493- Effect of loss of thing at the time

of the sale

If at the time the contract is perfected and is

entirely lost- contract is without any effect

If lost, in part- vendee may withdraw or

Ways of delivery: - Actual or real

- Constructive or Legal
>execution of public
instrument
>traditio symbolica

> traditio longa manu

> traditio brevi manu

Article 1499- Traditio Longa Manu and Brevi

>traditio constitutum

Manu

possesorium

> quasi- delivery

thing sold cannot be transferred at the time of

- in any other manner agreed

by parties

the sale.

T.L.M- points to the thing sold which shall

Delivery is indispensable requisite of sale. It

thereafter be at the control and disposal of

should be done with the intention to transfer

vendee.

the thing and ownership.

Delivery by mere agreement because the

In an absolute sale, transfer of ownership is

T.B.M- vendee has the thing sold in his

possession already. (lease)

simultaneously done with delivery.

Article 1500- Traditio Constitutum
Article 1497- Tradition or delivery

A thing is delivered if it is placed in control and

Possessorium

Opposite of T.B.M., vendor continues to be

possession of vendee

possession of property sold not as owner but

Tradition- derivative mode of acquiring

in some other capacity.

ownership by virtue of which one who has the

right and intention to alienate corporeal thing,

Article 1501- Quasi- traditio

transmits it by virtue of a just title to one who

If incorporeal things, 1st paragraph of Article

accepts the same.

1498 will apply. If not applicable, delivery is

Delivery together with payment- marks the

the placing of the title of ownership to the

consummation of contract of sale

vendee or use of vendee of his right with

Actual delivery- when vendee possesses the

sellers consent.

thing

Tradition is only for corporeal thing, so for

incorporeal things it is quasi- traditio and

Article 1498- Execution of public instrument or

delivery is effected through : - execution of

document

public instrument

Public instrument- one which is acknowledged

- placing of titles in vendees

name

before a notary public or any official

- allow vendee use his right

authorized to administer

Execution = delivery

Symbolic tradition- if movable property,

Article 1502- Sale or return and Sale on trial

delivery of the keys of the place where it is

kept constitutes delivery of the thing sold

but may revert ownership by returning the

Symbolic tradition by execution of public

goods within the time fixed or within

instrument = actual delivery when thing is

reasonable time.

subject to the control of vendor

Sale or return- ownership passes on delivery

Sale on trial or approval- ownership passes

Constructive delivery is symbolic when parties

when buyer stipulates approval or acceptance

make use of a token to represent the thing to

or if not signify approval, retain the good

be delivered.

without giving notice for rejection and if time

fixed expires.
Sale or return
Subject to resolutory c.

Sale on trial
Subject to

Depends on buyers will

suspensive c.
Depends on quality of

Ownership passes and

goods
Ownership retains to

can be reverted to seller

seller until buyers

Risk of loss- buyer

acceptance
Risk of loss- seller

Article 1503- Bill of Lading

Sale of specific goods- seller may reserve the

right of possession and ownership until certain
conditions be fulfilled

If shipped, though Bill of Lading goods are

deliverable to seller or agent first, it means
seller reserved his right or it serves as
security for performance of buyers obligation

If shipped, deliverable to buyer but bill of

lading retains with the seller, meant to
reserved sellers right

If Bill of Lading is together with a bill of

exchange then latter was refused to honor,
the bill of lading should be returned (this
method means delivery upon payment)

Delivery to carrier = delivery to buyer

Without bill of lading, buyer cannot obtain the

good

Article 1504- Good at the sellers risk until

ownership transfers

Upon transfer, risk shifted to buyer

Exception to that rule: - delivery made but

ownership retains to the seller for security of
buyers performance of obligation
- actual delivery has been delayed
through the fault of either party (risk borne by
delayed party)

Article 1505- sold by not the owner, buyer have

no right acquired

Article 1506- Sellers voidable title

Voidable title but not avoided- buyer acquires

good title provided he is good faith and
without knowledge of sellers defective title

Article 1521-