Sales Part 2

avatar
Created by
Aira

Cards (26)

  • Earnest money (Art. 1482, NCC) 
    Nature of the money given 
    -Part of the purchase price 
    Application 
    -Given only when there is already a sale 
    Effect when given 
    -When the earnest money is given, the buyer is bound to pay the balance 
    Option money (Art. 1479, 2nd par.) 
    Nature of the money given 
    -Given as a distinct consideration for an option contract 
    Application 
    -Applies to a sale not yet perfected 
    Effect when given 
    -When the would-be buyer gives the option money, he is not required to but 
     
  • Contract of sale  
    Nature of the person who receives the object 
    -The buyer receives the goods as OWNER 
    Necessity of payment of the price 
    -The buyer has to PAY the price 
    Effect of the delivery with respect to the ownership of the thing 
    -The buyer, after dellivery, acquires ownership over the object of the contract 
    Warranties  
    -The seller warrants 
    Possibility of returning the object 
    -The buyer, as a general rule, cannot return the object sold 
  • Contract of agency TO SELL 
    Nature of the person who receives the object 
    -Agent receives the goods as the goods of the principal 
    Necessity of payment of the price 
    -The agent REMITS 
    Effect of the delivery with respect to the ownership of the thing 
    -The agent DOES NOT become the owner 
    Warranties 
    -The agent does not as long as he acts within his authority and in the name of the principal, unless he agress 
    Possibility of returning the object 
    -The agent CAN RETURN the object in case he is unable to sell the same to. Third person 
  • Sale v. Agency to Sell (1466)  
    Case: Quiroga v. Parsons  
    Facts:  
    Issue: What contract was perfected between the parties? Sale or Agency to Sell? 
     Ruling: In construing a contract containing provisions characteristic of both the contract of sale and of the contract of agency to sell, the essential clauses of the whole instrument shall be considered. (1466) 
  • Contract of Sale 
    Nature of the object 
    -The thing transferred is one which would have existed and been the object of sale to some other, even if the order had not been given. 
    Risk of loss 
    -Borne by the buyer 
    Formalities 
    -Within the statute of frauds 
  • Contract for a PIECE OF WORK- custom made 
    Nature of the object 
    -The thing transferred is one not in existence and which would never have existed but for the order of the party desiring to acquire it. 
    Risk of loss 
    -Borne by the worker or contractor 
    Formalities 
    -Under certain circumstances 
  • 3 Schools of Thought 
    1.  Massachusetts Rule - specifically done 
    2. New York Rule - if thing already exists, sale 
    3. English Rule - if material is more valuable, sale 
  • What then is the rule? 
    • If ordered in the ordinary course of business - SALE 
    • If manufactured SPECIALLY for the customer and upon his special order and not for the market - Piece of Work 
  • Barter (Art. 1468, 1638-1641, 1954) 
    First rule - Intention of the parties 
    • Sale is sale ( buyer/seller) 
    • Barter is barter 
    If intent does not clearly appear - 
    • if thing is more valuable than money –BARTER (T>M) 
    • If 50-50- SALE 
    • If thing is less valuable than the money – SALE (M>T) 
  • Delivery - Actual or Constructive 
    • General Rule - Delivery transfers ownership (1477) 
    • Exception - Pactum Reservati Dominii (stipulation reserving ownership) 
    • Express Reservation 
    1. 478-Contract to Sell 
    2. b. 1502-Sale on Trial 
    3. c. 1503, 1st par - Express Reservation 
    • 2. Implied - 1503 (3 instances) 
    • It is still in the name of seller, the bill of lading  
    • Even it is in the name of buyer, the seller kept it  
    • The buyer dishonors the bill of exchange and wrongfully retained the bill of lading 
  • Contract of Sale (Article 1458, NCC) 
    When the title passes to the vendee   
    -Title over the property generally passes to the vendee upon DELIVERY of the thing sold 
    Effect of Non-payment of Nonpayment the price 
    -Nonpayment is a resolutory condition 
    Effect of delivery 
    -The vendor has lost and cannot recover ownership until and unless the contract is resolved or rescinded 
    Transmission of ownership 
    -Title passes to the vendee after compliance with his obligation 
  • Contract to SELL(Art. 1478, NCC) 
    When the title passes to the vendee   
    -By agreement, ownership is reserved in the vendor and will not pass, regardless of delivery, UNTIL FULL PAYMENT OF THE PRICE 
    Effect of Non-payment of Nonpayment the price 
    - Full payment is a positive suspensive condition 
    Effect of delivery 
    -Title remains in the vendor despite delivery 
    • Transmission of ownership 
    • Title remains 
  • Sale or return 
    • Resolutory Condition 
    • Will of the buyer 
    • Ownership is transferred upon delivery 
    • Option to RETURN instead of paying 
  • Sale on trial, Approval or Satisfaction- moment signifies acceptance 
    -Suspensive Condition 
    -Quality of goods 
    -Seller RETAINS ownership 
    -Ownership PASSES when buyer SIGNIFIES (3) 
    • Period 
    •  Acceptance 
    • No alteration 
  • Express Reservation 
    Art. 1503. When there is a contract of sale of specific goods, the seller may, by the terms of the contract, reserve the right of possession or ownership in the goods until certain conditions have been fulfilled. The right of possession or ownership may be thus reserved notwithstanding the delivery of the goods to the buyer or to a carrier or other bailee for the purpose of transmission to the buyer (1st par.) 
  • Implied Reservation 
    1. It is still in the name of seller, the bill of lading 
    2. Even it is in the name of buyer, the seller kept it 
    3. The buyer dishonors the bill of exchange and wrongfully retained the bill of lading 
  • Promise to buy or sell 
    • Article 1479. A (mutual) promise to buy and sell a determinate thing for a price certain is reciprocally demandable. 
    • An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price. (1451a) 
    • General Rule Mutual promise to buy and promise to sell 
    • Except- Policitacion - unaccepted unilateral promise to buy or sell the property A 
    • Law 1 - Offer plus acceptance = Consent 
  • Res Perit Domino- thing perishes with the owner (1480) 
    4 Instances of Loss (3 kinds of Loss- physical (perishes), legal, civil) 
    1. Lost before perfection- VOID no object, seller bears loss 
    2. Lost at the time of perfection- seller bears loss, VOID 
    3. Lost after perfection and BEFORE delivery- buyer bears loss 
    4. Lost after perfection and AFTER delivery- buyer bears loss, because ownership already transferred 
  • After Perfection and BEFORE delivery - BUYER 
    Exception 
    1.  3rd par, 1480 - Should fungible things be sold for a price fixed according to weight, number, or measure, the risk shall not be imputed to the vendee until they have been weighed, counted, or measured and delivered, unless the latter has incurred in delay. 
    2. Only to secure performance by the buyer of his obligation (buyer) 1504 (1)  
    3. Party at fault - 1504 (2) 
  • Sale by Sample / Sale by Description 
    • Art. 1481. In the contract of sale of goods by description or by sample, the contract may be rescinded if the bulk of the goods delivered do not correspond with the description or the sample, and if the contract be by sample as well as description, it is not sufficient that the bulk of goods correspond with the sample if they do not also correspond with the description. The buyer shall have a reasonable opportunity of comparing the bulk with the description or the sample. (n) 
  • Santos v. Macapinlac 
    Facts: A mortgaged his land to B but sold the land to C. 
    Issue: Can A sell the mortgaged land?  
    Ruling: Yes, because mortgaged remains the owner 
  • Martin v. Reyes 
    Facts: A sold a land to B which at the time of sale did not belong to A. 
    Issue: Is the sale valid? 
    Ruling: Yes, because ownership is required only at the time of termination not at the time of delivery 
  • Roman v. Grimalt 
    Facts: A person wanted to buy for P1,500 a schooner called "Sta. Maria." The parties agreed, but on the condition that that the seller's title papers should be perfected. Before the seller's title could be perfected, the ship was lost. The would-be seller now sues for the price. 
    Issue: Is the would-be buyer liable for the price? 
    Ruling: No, because there is a condition attached, seller should be proven 
  • Song Fo & Co. v. Orio 
    Facts: A launch was sold on credit. Shortly after delivery, it was destroyed by a fortuitous event. Issue: Is the buyer still liable for the price? 
    Ruling: Yes, because its already perfected and delivered