SALES OUTLINE

st

1 Semester, Adamson College of Law, SY 2014-2015

Atty. Noel Ostrea

20 June 2014

Nature and Form

1. Definition

1.2.Review of essential requisites and characteristics of

contracts in general
1.3.8 Characteristics of a Contract of Sale
1.4.Contrast with other special contracts
1.4.1.
Barter
1.4.2.
Lease
NB: Special case of lease with option to buy
Case:
Blanco v. Quasha, GR 133148,
1999.Nov17. (sale-leaseback)
1.4.3.
Piece of work
Cases:
Celestino Co v Collector, GR 8506,
1956.Aug31 (en banc)
Engg & Machinery Corporation, GR 52267,
1996.Jan 24
Leighton v CNP Industries, GR 160972,
2010.Mar09
NB: Yu Dino v CA, GR 113564, 2001.Jun20
1.4.4.
Bailments: lease, deposit, loan, guaranty
1.4.5.
Agency to sell
Case:
Brokmann v People, GR 199150,
2012.Feb06.
1.4.6.
Consignment sale
Cases:
Royal Shirt v Co Bon Tic, GR L-6313,
1954.May14 (en banc)
Agilent v Integrated Silicon, GR 154618,
2004.Apr14
1.4.7.
Assignment of rights (Chapter 8, Art. 1624-1635 of
Sales Title.)
Case: Aquintey v Sps Tibong, GR 166704,
2006.Dec20
.

Capacity to Buy and Sell and Essential Requisites of

Sale
2. Parties

2.1.Valid parties
2.2.Incapacitated parties to a contract of sale; effect on contract
2.2.1.
Minors, insane persons, demented persons and deafmutes
2.2.2.
Prohibited parties (prohibited contracts)
2.2.2.1.
Husbands and wives (1490)
Q:
Are common law spouses covered by the
prohibition?
(Calimlim-Canullas v. Gortun, GR L-57499,
June 22, 1984.)
2.2.2.2.
Other prohibited parties (1491)
3. Valid Subject-matter

3.1.Characteristics of valid subject-matter: determinate or

determinable (1458, 1460), lawful (1347, 1409) and
possible (1348)
3.2.Sale by non-owner
3.3.Sale by owner with voidable title(1505) and exceptions
3.4.Sale of hope
3.5.In existence, whether on hand at the time or not (1467), or
future goods (1462) or having a potential existence (1461),
whole or fractional (an undivided interest) (1463), or
subject to a condition, resolutory (1465), or otherwise, or
in litigation, with the approval of the court (1381). But
there can be no donation of future goods (751) or sale or
transaction involving future inheritance.
4. Price

4.1.In general
4.2.When fixed by a party
4.3.Effect, simulated price or simulated sale
Case:
Heirs of Intac v CA, GR 173211, 2012.Oct11
4.4.Effect, gross inadequacy of price;
4.4.1.
Equitable mortgage and pacto de retro sales
4.4.2.
Effect of right of redemption
4.5.Effect of failure to pay (1595-1596)
5. Stages in Contract of Sale, incl. Perfection (1475)

5.1.Auction Sale
6. Form in a Contract of Sale

6.1.When essential for validity

6.2.When required for enforceability
6.3.When desirable for the convenience of the parties

6.4.Equitable Mortgage
6.4.1.
Definition and nature
6.4.2.
Indicia under Art. 1602
6.4.3.
Remedy of aggrieved party
Case: Deheza-Inamarga v Alano, GR 171321, 2008.Dec18.
.

Special Circumstances

7. Special Kinds of Sales Contracts

7.1.Politacion
Case:
Capalla v. COMELEC, GR No. 201112,
2012.Jun13 (en banc) (nature of option)
7.2.Option Contract v earnest money (1482)
Case:
Rizalino v Paraiso, GR 157493, 2007.Feb05.
(option money v earnest money)
7.3.Right of First Refusal
Case:
Tuazon v Del Rosario-Suarez, GR 168325,
2010.Dec08 (v option contract)
7.4.Conditional Sales/Contract to Sell
7.4.1.
Definition and Nature
Cases:
Sps. Bonostro v. Sps. Luna, GR 172346,
2013.Jul24
Laforteza v. Machuca, GR 137552, 2000.Jun16
7.5.Installment sales, movables (Recto Law; 1484)
Case:
___________________
.

Obligations of the Parties

Obligations of the Seller

8. Warranties

8.1.Express warranties v. dealers talk

Cases:
Moles v. IAC, GR 73913, 1989.Jan31.
Teran v. Villanueva, GR L-34697, 1932.Mar26 (en
banc) (dealers talk)
8.2.Implied warranties
9. Delivery; Transmission of ownership by delivery (1477, etc.)

9.1.Plus accessions and accessories

9.1.1.
Actual (1497)
9.1.2.
Constructive (1498-1501, 1496), including documents
of title
9.2.Effects in general
9.3.Exceptions

Case:

Villamar v. Mangaoil, GR 188661, 2012.Apr

11.
9.4.Commercial terms of delivery
9.5.Who bears the risk of loss? (1480 v 1504, 1538)
10. Double Sales (1544)

Obligations of the Buyer

11. To pay Price Certain

11.1.
Remedies of Unpaid Seller (1524, 1526, 1540)
11.2.
When buyer can suspend payment (1590)
.

Breach

12. Remedies

12.1.
Accion redhibitoria (1567rescission)
12.2.
Accion quanti minoris (proportionate reduction in price)
.

Extinguishment

1. Grounds for extinguishment, in general

2. Redemption
2.1.Conventional
2.1.1.
When there is a stipulation
2.1.2.
When there is no stipulation
2.1.3.
Requirement of 1616
2.2.Legal (1619)
2.2.1.
Co-owners (1620)
2.2.2.
Co-heirs (1088)
2.2.3.
Adjoining owners (1621, 1622)
2.2.4.
Debtor (1634)
2.2.5.
Others
.

Sales of Immovables; Special Case

1. Condominia
1.2.Subdivision and Condominium Buyers Protective Decree
(PD 957)
1.3.The Condominium Act (RA 4726)
2. Installment sale of immovable (Maceda Law; RA 6552)
3. Rescission of sale of immovable
4. Form of agency to sell immovable (1874, 1878)

Case: _______________________
.
NB:

Special Laws
Bulk Sales Law (Act No. 3952)

--End, Syllabus Proper

QUESTIONS IN SALES LAW
June 2014

Nature
1. What is a sales contract? (712, 1458)
2. What are the essential obligations of a seller?
3. What are the essential obligations of a buyer? (1582, NB:
1524, 1595)
4. What are the essential elements of a contract of sale?
5. What are the eight (8) characteristics of a contract of sale?
6. What is the essential requisite of a seller? (NB: 1505)
7. What are the stages of a contract of sale?
8. What is a politacion? (1479 par. 2)
9. What is the effect on a sales contract based on:
9.1.Transfer of ownership? (1545, 1462 par. 2, 1465 and 1503)
9.2.The nature of the object of the sale?
9.3.The volume or quantity of the object of the sale?
9.4.The sale being by description, by sample, or both? (1481)
9.5.When the goods object of a sale are delivered on sale or
return? (1502)
9.6.When the goods object of a sale are delivered on trial or
on satisfaction? (1502)
9.7.Auction sale? (1476)
9.8.The deterioration or benefit/improvement of the object of
the sale? (1480, 1538)
9.9.The consideration being payable on installment?
10.What are the kinds of contract:
10.1.
Based on whether the object or service is existing or made
to order? (1467)
10.2.
Based on the nature of the consideration? (1468)

10.3.
Based on the kind of title acquired by the buyer? (1624)
11.What are the three (3) legal requirements for the object of a
sale to be valid?
12.Concerning price:
12.1.
What is the effect of a simulated price on a contract of
sale? (1471)
12.2.
What is the effect of a gross inadequacy of price on a
contract of sale? (1470, NB: 1602)
12.3.
What is the effect of an indeterminate price in a contract of
sale? (1474)
12.4.
What are the differences between earnest money and
option money?
13.How is the ownership of the thing sold transferred to the
buyer?
14.Who generally pays for the expenses for the execution and
registration of a private sale?
Form
15.What is the proper form of a contract of sale? (1483)
Parties and Incapacities
16.Who are the persons or parties who are incapacitated from
entering into a contract of sale?
Obligations of the Seller
17.What is delivery?
18.What is the legal effect of delivery?
19.What are the two (2) kinds of delivery?
20.What are the six (6) kinds of constructive delivery?
21.What are the modes of delivery in commercial transactions
(denominated by initials)? (NB 1523)
22.When is delivery complete? (NB: 1539, 1537, 1523)
23.What are the kinds of warranties? (1546, 1547)
24.What are the two (2) kinds of implied warranties?
25.What are the elements of an implied warranty against
eviction? (1548)
26.What are the elements of an implied warranty against hidden
defects? (1561)
27.What are the remedies of a buyer in case of breach of an
express warranty? (1599)

28.What is an unpaid seller? (1525)

29.What are the remedies of an unpaid seller? (1526)
30.When are goods not in transit? (1531)
31.What are the rules in case of a double sale? (1544)
Obligations of the Buyer
32.What are the two (2) obligations of a buyer?
33.What is the liability of a buyer who neglects or fails to pay?
(1595)
34.When does acceptance take place? (1584)
35.What are the different kinds of acceptance? (1585)
36.What is the liability of a buyer who neglects or fails to pay?
(1596)
37.What is the effect of wrongful delivery? (1587)
38.When does a buyer owe a seller interest after delivery? (1589)
39.When can a seller exercise a right to rescission? (1597)
40.When can a buyer exercise a right to specific performance?
(1598)
41.When can a buyer exercise a right to rescission? (1591-93)
42.When can a buyer validly suspend payment? (1590)
43.What are the remedies of a buyer when the seller delivers to
the buyer a quantity of goods greater or less than that
contracted to sell?
Loss of the Thing
44.What is the legal effect of loss of the thing?
Modes of Extinguishment of Sale
45.Regarding extinguishment:
45.1.
What are the general modes of extinguishment (of
contracts)?
45.2.
What are the specific provisions in sales law providing for
extinguishment?
45.3.
What are the modes of redemption? And how is the right
exercised?
45.4.
What is an assignment?
Conventional Redemption

46.What is the effect of a pacto de retro sale? (1609)

47.What are the obligations of a seller who exercises his right to
redeem? (1616)
48.What happens to growing fruits at the time of redemption?
(1617)
49.What happens to existing leases at the time of redemption?
(1618)
Legal Redemption
50.What is legal redemption?
51.Who can exercise the right of legal redemption?

--End--