UC - SALES Atty.

Paquit EFFECT: sale will be rescinded

Discussion Notes If there is reservation, there is notice to all the participants, and no law prohibiting COS LEASE
him, ALLOWED. Secret bidding will be avoided. Lessor grants lessee the right of
PRICE: possession
NOT ALLOWED: Seller and his duly authorized representative *possession in the concept of owner =
1. REAL LESSOR
*simulated = void sale SALE VS OTHER CONTRACTS
May be valid for another contract. CONTRACT OF SALE CONTRACT AGENCY TO SELL Transfers ownership from seller to buyer
Possession in the concept of holder =
As agent, for the purpose of selling it to LESSEE
*IF PROVEN parties intended for another contract – valid donation; so long as it others
complied to the requisites. Ownership is transferred from seller to
Concurrent possessor in the same
buyer
AGENT MERELY receives the thing to object but of different concepts
*Gross inadequacy = shocking to the conscience of man, not automatic invalid sell it to others Buyer cannot return the object There is return
but may signify vitiation of consent/ parties intended another contract. Acts on behalf of the owner Consideration – price Consideration – rent

*If no proof of vitiation, valid contract of sale Seller is the principal

Principal authorizes agent to sell on his COS Option Contract
behalf to others Unilateral promise to buy or sell
2. CERTAIN AGENT accounts for the proceeds of
a. fixed by the parties themselves BUYER pays the price
the sales on behalf of the principal e.g. a promised to b to buy b’s car for
agreed specific amt. GR: Buyer cannot return the thing if Agent can return in case he is not able 1M for a certain period, if
b. in reference to another thing certain, price being certain contract is consummated to sell the item unaccepted, the promise not
consideration = FMV of certain thing Agent has no warranties to the buyer accepted, there is no effect, no
c. mode or manner of payment must be certain Principal has warranties to the buyer juridical tie, will not bind parties
if installment, indicate how much to be paid per installment;
how many installments Seller has warranties
Agent is liable if he acted beyond the if accepted, there is juridical title but
if unclear = price is not certain authority granted/did not follow the there must be a consideration other
d. fixed by a third person designated by the parties (seller and buyer) instruction of the principal than the purchase price to bind the
S & B designated 3rd person (not a party) to fix price
Buyer enjoys all attributes of ownership parties
If 3rd person refuses to fix the price = COS is INEFFICACIOUS = VOID Agent – no attribute of sale
of the property; full ownership
No price, void, absence of essential element of COS
PARTIES: seller & buyer Principal, agent GR: if there is no consideration
e. fixed but accompanied by mistake/bad faith, parties can go to court to fix, or
separate from the purchase price, no
the party themselves
COS BARTER bind b/n the parties
f. 3rd person is influence in bad faith by seller/buyer (by a party), the innocent
party may rescind + damages or Consideration is price certain in money Another thing
RULE: MIXED Consideration - partly consideration; thing/money EXCPN: arbitrarily done by the parties
ask fulfillment of contract +damages
1. LOOK at the manifest intention by the parties if COS or BARTER e.g. A w/o reason, did not continue
if he chose 1, the court will fix the price
if one party incurred damage
TITLE of the contract WILL NOT control, it is the CONTENT, but if there is a mixed SC – even if no consideration but
GR: Fixing of price cannot be left to the sole discretion of the seller or the buyer =
consideration, determines manifest intention, if title is COS, then sale acknowledged, if arbitrarily done,
it will contracdict the consensuality of the COS
damages may be awarded
If the other party accepts the price fixed by the other person = valid BEC there is Exchange of thing
e.g. exchange of car with another car Bilateral GR: no consideration, no bind, but
consent.
If the manifest intention is not shown/ unclear, proceed to #2. (EXCPN) if there is a showing that it
g. FUNGIBLE, security, grains – price becomes certain if:
2. Value is less than or equal to the Value of the thing is greater than the WAS arbitrarily done, the court may
-if fixed by the parties
money money award damages to the party
-if the price is that which the security particular
-set above/below the price on a particular day, exchange or market
The other party is given the privilege to
(e.g. Php5.00 above the price on June 12) COS CONTRACT FOR A PIECE OF WORK
buy or sell a determinate thing at a
The object is manufactured for a
In the ordinary course of business, fixed price within a particular period,
Eg. Consideration of 1 stock = price on June 12 certain person in special order
manufactured for a general market supported by a consideration other
1 stock = Php 60.00 = price is ascertainable
than the purchase price, which is
e.g. shoe size – special order, that
e.g. shoe – the product will be made option price
AUCTION SALE product will not be made w/o the
with or without order – made in the
1. if different lots, separate lots, separate contract of sale special order; not made in the
ordinary course of business Option money – consideration in an
2. when sale is perfected in an auction = fall of the hammer/ other customary ordinary course of business
option contract
manner
Will the product exist even without the
3. Q: can the owner of the thing/seller participate in the auction sale? Will the product exist even without the
order? YES If accepted, parties are reciprocally
GR: NO order? NO
demandable
EXCPN: Seller/employee bears risk of loss
a. reservation Buyer bears risk of loss after perfection
Not a formal contract but covered by
b. stipulation allowing it of contract but before delivery Employee bears-employed to make
statutes of fraud
c. there is no law/stipulation prohibiting it the special order
d. seller must give notice to other person that he is participating on the sale; he COS = Object Contract of service/labor
To protect yourself, put in writing for
has reservation; right to bid. Statute of fraud is applicable Statute of fraud is not applicable enforceability; but in itself, valid even if
oral.
A: If seller participates, what is being avoided is SECRET BIDDING/PUFFING/BY-
VALIDITY – Yes
BIDDING, so GR, they cannot participate.
Enforceability – put in writing
 For convenience – public instrument, sale of real property, to transfer the title, but
Option money Earnest money not validity.
GR: Not part of purchase price
SOF for executory contracts
Part of purchase price If partly executed – not apply SOF; e.g. partial payment; SOF is N/A
But may become earnest money upon
the agreement of parties
Given as proof that buyer intends to Expenses for registration and transfer of sale – vendor bears, presumed it is part of
Consideration in option contract purchase price, unless there is contrary stipulation
buy
Option contract is entered COS is entered
Risk of loss Expropriation – state buys your property, law on sale will not govern. It is the consti
and rules of court.
Before perfection of sale Seller
Seller; sale is inefficacious bec there is
Rules on sale – applicable to voluntary and involuntary sale
no object at the time of perfection; no
At the time of perfection
object; one element is absent; void;
If sale is cancelled, there is stipulation of forfeiture onpaid installment – valid, wala
seller bears
nang ibabalik
Buyer, all benefits are to the buyer
After perfection but before delivery Tho gr: restitution natanggap = ibalik; but if there is stipulation on forfeiture –
e.g.fruits; (debtor) – deterioration
cannot return, valid.
After perfection and after delivery Buyer
MARCH 2, quiz general provisions. Yellow paper. Objective and problems.
SALE by sample SALE by description
Rule: what you should receive must
Object given corresponds to the
comply or with the same as described;
sample shown
if NOT, rescind sale
Sole reason which induced you to
enter sale
If sale is both by sample and description, must correspond as to what was
described and shown as sample; if not, rescind the sale

RECTO LAW (incorporated in the Civil Code)

-covers installment sales of personal property
-sale of pp by installment; more than 2 installments
-intention is installment
-remedies of unpaid seller

1. pd, 1st and 2nd installments paid, 3rd and 4th unpaid; remedy of seller:
a. exact fulfillment, go to court, ask for specific performance

if there is stipulation that if 1 installment is unpaid, due and demandable

2. in case there are 2 or more unpaid installments, seller can cancel the sale
a. seller brings action to cancel the sale
2 unpaid – give chance prior cancellation
Law favors contract of sale, not cancellation.

3. 2/more unpaid installment to foreclose the Chattel Mortgage if there is any

Eg. CAR
Only available if there is CM, if none, #3 is N/A
If foreclosed – execution sale; proceeds of foreclosure sale will go to the seller; he
has no recourse against the deficiency even if there is stipulation to the contraryl

Eg. 2/more unpaid installments, seller can foreclose the property CM

Purchase price = 1M
10INSTALLMENTS of 100k
Unpaid 800K
IF SOLD at 400k, 400k will go to the seller
The balance of 400k, seller cannot enforce action for the deficiency even if
indicated on the stipulation, stipulation is void.
Because in a foreclosure sale, seller buys, in CM, price is cheaper than real
amount of property, law protects, para hindi lugi si buyer, nawalan na ng
property na mas mahal, magbabayad pa ng mas mahal if pinayagan na pati
deficiency babayaran.

GR: 1, 2, 3 – in the alternative, only choose 1

What if he exacts fulfillment but not possible? He can cancel the sale

Statute of frauds – for enforceability only, valid is sale between the parties.