Law on Sales

• Contract of sale


  A contract whereby one of the parties obligates himself to deliver something to another who on his part, binds himself to pay therefor a sum of money or its equivalent
• Contract to sell


  A contract whereby one of the parties obligates himself to deliver something to another who on his part, binds himself to pay therefor a sum of money or its equivalent
• Contract for a piece of work


  A contract whereby the contractor binds himself to execute a piece of work for the employer in consideration of a certain price or compensation
• Contract of barter or exchange


  A contract whereby one of the parties binds himself to give one thing in consideration of the others promise to give another thing
• Characteristics of a contract of sale

  • Consensual, bilateral, onerous
  • Principal
  • Nominate
  • Commutative
• Absolute contract of sale


  A contract of sale that is not subject to any condition
• Essential requisites of a contract of sale

  • Consent
  • Object
  • Cause
• Natural elements


  Elements deemed to exist in certain contracts even in the absence of some stipulations
• Accidental elements


  Elements that may be included in a contract but are not essential to its existence
• Examples of accidental elements

  • Conditions
  • Interest
  • Penalty
  • Warranty against eviction
• Requirements for the object of a contract of sale

  • Determinate
  • Licit
  • Possible
• Stages of a contract of sale

  • Negotiation
  • Perfection
  • Consummation
• Earnest money


  Money given by the buyer to the seller to bind the bargain, considered as partial payment of the purchase price and proof of the perfection of the contract
• When a buyer buys an undivided interest in a thing, they become a co-owner of the thing
• In a sale of fungible goods, if the mass contains less than what was sold, the buyer becomes the owner of the whole mass
• Things subject to a resolutory condition may be the object of the contract of sale
• Contract of agency


  A contract whereby a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter
• Contract for a piece of work is not covered in the statute of frauds
• As a general rule, if the price is not ascertained or determined, there is no sale
• Instances where price is considered ascertained

  • The parties have fixed or agreed upon a definite amount
  • It be certain to another thing certain
  • The determination of the price is left to the judgement of a specified person/persons
• If the third person refuses or cannot fix the price, the parties may subsequently agree upon the price
• If the price is inadequate, it does not affect the contract. Thus, the contract is valid
• Effect if the price is simulated or false

  The contract is void
• The fixing of the price can never be left to the discretion of one of the contracting parties
• When the price hasn't been fixed and there has been delivery, the vendee must pay a reasonable price thereof
• Negotiation


  The period from the time the prospective contracting parties indicate interest
• Perfection


  The stage where the essential elements of the sale, the meeting of the minds of the parties upon the object and upon the price, occur
• Consummation


  The stage where the parties perform their respective undertakings
• Sales in public auction are perfected by the fall of the hammer or any other manner
• Conditions for the seller to have the right to bid in an auction

  • Such right is reserved
  • Notice was given that the sale is subject to a right to bid on behalf of the seller
  • His right is not prohibited by law
• It is only after delivery that the ownership of the thing sold is transferred to the vendee
• Policitatio


  A unilateral promise or offer to sell or to buy a thing which is not accepted, creating no juridical effect or legal bound
• Res perit domino


  The principle that the thing perishes with the owner
• 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
• A contract of sale may be entered into any form
• Contracts that must be in writing

  • Sale of personal property at a price not less than Php 500
  • Sale of real property
  • Sale of property not to be performed within a year from the date thereof
• Remedies of the vendor in sale of personal property payable in installments

  • Exact fulfillment of the obligation
  • Cancel the sale should the vendee fail to pay two or more installments
  • Foreclose the chattel mortgage
• Forfeiture of rents or installments paid

  Can only be done if stipulated
• As a general rule, the buyer shall pay the expenses and execution of the sale
• Minors' capacity to enter into contracts

  Minors are incapacitated to enter into contracts except for necessaries, which they shall pay a reasonable price for