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36 Cards in this Set
- Front
- Back
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Art. 1458 Contract of Sale
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By the contract of sale one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.
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Elements of Sale
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a) consent or meeting of the minds
b) determinate subject matter c) price certain |
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Stages
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a) negotiation
b) perfection c) consummation |
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2 parameters for a valid consideration of sale
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a) condition must go into the condition of the price and not the subject matter
b) must be stipulated |
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Characteristics of sale
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a) Nominate - substance over title
b) Principal - maybe attached to another contract. test is whether it can stand on its own c) Consensual - performance is irrelevant d) Bilateral - power to rescind is implied and need not be stipulated e) Onerous - it should have real value (objective test) f) Commutative - equal value is exchanged. It refers to consideration as compared to the SM (subjective test) g) Title- does not affect dominion or ownership. Legal justification in the future on the part of the buyer to claim ownership |
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4 tests to differentiate a COS from Contract for Piece-of-work (POW)
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1467
[x] 1) Habituality Test - manufacturing in the ordinary course of business makes a sale [x] 2) Timing test - manufacturing upon a special order of the customers makes it a POW EEI 3) Nature of the object test CIR 4) Intent test - COS - parties intend that an object will be delivered w/o considering the work or labor; POW - Although there is the primary obligation to pay fee (or price), the main motivation is the “reputation, skill, mastery” of contractor. |
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How to determine if COS or one of agency
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An agent never bears the risk of the SM and is not liable for any portion of the price
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Who may be parties to a sale?
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Gen Rule: All Parties Having Capacity to Contract Can Be Valid Parties To a Sale
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Exception to who may be a parties of a sale.
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a) minors, demented and deaf-mutes
b) Art 1490 Spouses c) Art 1491 Relative incapacity provided by law |
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Effect of sale with regard to minors and other incapacitated persons and the available remedies
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The contract is voidable
Remedies a) specific performance b) ratification c) rescission - may be availed by both parties but minors need only to restitute up to the extent of the benefit received d) annulment - c) rescission - may be availed by both parties but minors need only to restitute up to the extent of the benefit received |
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Exception to the rule with regard to the contract of sale involving minors and other incapacitated persons.
Requisites. |
Necessaries - everything that is indispensable for sustenance. Refers only to things
Requisites: a) contract of sale is perfected b) delivered c) minor must be the buyer d) social standing should be considered |
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Kinds of sale made by married people and their effects
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a) sale to third parties - Void
b) sale between spouses - Void |
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Exception to the sale between spouses and the rationale
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Exceptions:
a) separation of property agreed upon in the marriage settlement b) judicial separation of property Rationale: a) to prevent fraud of creditors b) to prevent the dominant spouse from taking advantage of the weaker spouse c) prevent the circumvention of the prohibition against donations |
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1491 Relative incapacity mandated by law.
Effect. What are ratifiable? Exceptions. |
a) guardians - ward
b) agent - property under is admin (except if allowed) c) administrator and executors - estate (except purchase of inheritance rights) d) public officers or employees - property of the state e) judges and court officers or employees - property and rights under litigation f) lawyers w/ respect to the property of his client - object of litigation (except contingent fees) Sale is void a,b & c are ratifiable d, e, & f are not ratifiable because of public interest |
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Requisites of lawyer-client relationship
Exception |
a) there is a lawyer-client relationship
b) object is property under litigation of any kind whether adversarial or not c) during the pendency of the case (no pending motion) Contingency fee arrangements |
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Requisites of a valid subject matter (SM)
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a) possible
b) licit c) determinate or determinable |
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Valid existing, future or contingent (Art 1461 and 1347)
Absence is void under? |
a) emptio rei speratae - e.g. pendig crops
b) emptio spei - sale of a mere hope or expectancy ( sale of vain hope or expectancy is void) c) resolutory condition Absence is void under Art. 1409 (3) - Cause or object did not exist at the time of the transaction |
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Legality of sale
Illicit objects is void under? |
a) special laws that declare the sales of things illegal and therefore void
b) absolutely simulated COS where there is no intention to give or receive the SM c) Motive nullifies the sale if the illegal motive predetermines the purpose of the contract Void under 1409 (1) - contrary to law, public police, etc. |
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Elements of Price
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a) real - must be valuable consideration and not nominal.
b) money or its equivalent c) certain or ascertainable - must be money or has the same characteristics of money during the time of perfection d) manner of payment |
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In order to be ascertainable, the price must be:
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a) fixed in reference to other things
b) can be mathematically computed using a formula c) designated to be fixed by a third party- suspensive condition. Inefficacious/unenforceable. Extinguished if the 3rd party refuses to fix the price. |
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Instances when the court can fix the price
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third person tasked to fix the price acted in:
a) bad faith b) mistake |
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Inadequacy of price does not mae the COS void except
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a) nominal price (no real price)
b) certain cases with regard to judicial sales |
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Requisites of inadequacy of price in judicial sales
Exception |
a) gross inadequacy of price to the point of being unconscionable
b) proof that the thing resold can fetch a better price Exception is if there's a right of redemption |
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Rules on offer
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a) Offer is at the complete will of Offeror, who may destroy it at will prior to acceptance
b) Will “disappear” or lapse upon the happening of the condition or period placed upon it c) When floated unconditionally, will be extinguished through the passage of reasonable time d) Cannot be accepted partially or even substantially (Counter-offer extinguishes original Offer) d) Legal effect of acceptance is taken only from point of view of Offeror (Offeror may still extinguish Offer at any time before he has knowledge of Acceptance) e) Only a “certain” Offer when met by an “Absolute” Acceptance will give rise to a valid SALE. |
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Absolute acceptance
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a) no condition or amendment to the terms of the offer
b) may clarify but it should never touch the terms/coverage of the subject matter and price |
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Kinds of option contract
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a) Valid option contract - has a separate consideration. if accepted before withdrawn, gives rise to a valid COS
b) Void option contract - lack of separate consideration. Valid as an offer (Sanchez doctrine) |
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Post-Ang Yu doctrine
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An offeror can withdraw the offer anytime within the option period regardless if there is a separate condition or not.
a) with consideration - damages under breach of contract b) w/o consideration - tort under Art. 19 |
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Perfection happens when
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a) there must be certain offer (SM and price with all its requisites)
b)absolute acceptance (w/o a counter-offer) |
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Instances when a non-absolute acceptance is allowed (Villonco doctrine)
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a) De minimis - change in acceptance is insignificant that there is a substantial acceptance
b) Change does not go into the subject matter or consideration (e.g. buyer should pay in pants) Note: If the offer was to pay and cut your hair and the acceptance did not include the cutting of hair; this is tantamount to a counter-offer |
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Form of sale.
For enforceability? |
No form because Sale is a consensual contract
If the sale is covered by the Statute of Frauds, it must be: a) in writing and b) signed by the party sought to be bound |
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Sale covered by the Statute of Frauds
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a) Sale which by its terms is not to be performed within one (1) year.
b) Sale of Movables, at least P500 c) Sale of Immovables, at any price |
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Exceptions to the Statute of Frauds
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a) when there is a note or memorandum in writing and subscribed by the party charged or his agent
b) partial performance c) failure to object in the presentation of evidence (waiver) d) sales are effected through electronic commerce |
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Memo must contain a description of:
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a) Subject Matter (possible, licit, determinate/determinable)
b) Price (real, valuable, certain or ascertainable, manner of payment) c) signed by the party sought to be charged (except electronic document) |
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What constitutes partial execution
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a) performance must touch upon i) subject matter or ii) price. iii) it cannot cover other consideration
b) it must involve/compromise party sought to be charged |
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Sale of immovables
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a) private document to be enforceable between paties
b) must be in a public instrument and registered with the registry of deeds to bind third parties |
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Elements of Dacion Eng Pago
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a) there is a debtor-creditor relationship
b) pre-existing debt and c) intention to accept property in lieu of the existing debt There must be delivery |
