3 - SALES Flashcards
(37 cards)
What are the main parties involved in a contract of sale?
The parties are the Seller and the Buyer.
What obligations does the seller have in a contract of sale?
The seller must:
1. Transfer ownership.
2. Deliver the thing.
3. Warrant the thing.
4. Preserve the thing.
What obligations does the buyer have in a contract of sale?
The buyer must pay the price.
What are the characteristics of a contract of sale?
The characteristics are:
1. Bilateral: Obligations are on both parties.
2. Consensual: Perfected by mere consent.
3. Commutative: Exchange of equivalents.
4. Nominate: Has a specific name.
5. Onerous: It involves an exchange that is not gratuitous.
6. Principal: It can stand alone.
What is the first essential requisite of a contract of sale?
Consent or Meeting of the Minds (Article 1475).
Who cannot give valid consent in a contract of sale?
Persons who cannot give valid consent include:
1. Minor
2. Insane
3. Deaf-mute who cannot write
4. Demented persons
What vices can vitiate consent?
Vices of consent include:
- Mistake: a false belief about something essential to the contract, such as the identity of one of the parties, or the nature or object of the contract.
- Violence: the use of physical force to compel someone to enter into a contract.
- Intimidation: the use of threats to create fear in someone’s mind, causing them to enter into a contract.
- Undue Influence: taking advantage of a position of power or trust to unfairly persuade someone to enter into a contract.
- Fraud: the use of deceit or trickery to induce someone to enter into a contract.
What is prohibited among spouses regarding contracts of sale?
Husbands and wives cannot sell property to each other (Article 1490), with exceptions such as separation of property agreements and judicially approved separations.
Who cannot acquire property by purchase, according to Article 1491?
The following persons cannot acquire by purchase:
1. Guardian/Ward (Voidable if the guardian purchases the ward’s property)
2. Agent/Principal (Voidable unless the principal consents)
3. Executor or Administrator/Estate (Voidable until annulled)
4. Public officers or employees (Void)
5. Justices, judges, or court employees concerning property under litigation (Void)
What constitutes the object or subject matter of a sale?
The object can be a thing or a right; however, service cannot be a valid object.
What qualifies as a determinate thing in a contract of sale?
A determinate thing is particularly designated and separated from others of the same class. If the thing sold is indeterminate, it must be capable of being made determinate.
What exceptions exist regarding the object of the sale?
- The object must be licit or within the commerce of men.
- The seller must have the right to transfer ownership at the time of delivery (Article 1459).
- Sales involving things that may come into existence (Emptio rei speratae, Article 1461) are valid.
- Sales of hope or expectancy (Emptio spei, Article 1461) may be void if they involve vain hopes.
What is required regarding the cause or price in the contract of sale?
The price must be certain:
1. Fixed by the parties.
2. Referenced to another certain thing.
3. Determined by a third person, but if they are unable or unwilling, the court may fix the price.
What rules apply regarding the form of contracts of sale?
Subject to the Statute of Frauds:
- Personal property (₱500 or more) must be in writing.
- Real property must be in writing regardless of price.
- For sale of land through an agent, authority must be in writing.
What distinguishes an absolute contract of sale from a conditional one?
- Absolute: Ownership transfers upon delivery.
- Conditional: Ownership transfers upon the fulfillment of conditions, usually full payment of the purchase price.
How does a contract of sale differ from an agency to sell?
The key differences lie in the ownership transfer and obligations regarding the price, where a sale transfers ownership, while an agency does not.
How can you determine if a contract is a sale or barter when part of the consideration is money?
- Manifest intention of the parties.
- If the value of the non-monetary consideration exceeds the money, it’s a barter.
- If the monetary value exceeds the non-monetary, it’s a sale.
What is the difference between earnest money and option money?
- Earnest Money: Part of the purchase price.
- Option Money: A reservation fee that is non-deductible unless agreed upon to be part of the purchase price.
Who bears the risk of loss of the object in a sale?
- Before perfection, the seller bears the loss.
- At the time of perfection, the seller still bears the loss.
- After perfection but before delivery, the buyer bears the loss (Supreme Court ruling).
- After perfection and delivery, the buyer bears the loss.
What is the Recto Law, and who benefits from it?
The Recto Law (Article 1484) applies to sales of personal property in installments and benefits the buyer.
What are the seller’s remedies under the Recto Law?
The seller can:
1. Demand exact fulfillment (for one or more failures to pay).
2. Cancel the sale (for two or more failures to pay).
3. Foreclose the chattel mortgage (for two or more failures to pay).
What does the Maceda Law cover?
The Maceda Law (R.A. No. 6552) covers sales of real property in installments, granting the buyer specific rights in case of default.
What are the principal obligations of the seller under Article 1495?
The seller must:
1. Transfer ownership (cannot be waived).
2. Deliver the thing (cannot be waived).
3. Warrant the thing (can be waived).
4. Preserve the thing.
When is ownership typically transferred in a sale?
Ownership is generally transferred upon delivery, unless the parties agree otherwise.
