I.

II.

CONTRACT OF SALE, CONCEPTS

A.

Characteristics (consensual,
nominate, principal)

B.

Essential requisites of sales

bilateral,

onerous,

C.

Sale as distinguished from other contracts

1. Barter
2. Donation
3. Contract for piece of work

D.

Kinds of sale
1. Absolute
2. Conditional
- Contract to sell as distinguished from contract of sale

OBJECT OF SALE

A.

Subject matter must be licit.

B.

Subject matter must be determinate.

C.

Sale of things having potential existence.

1. Sale of hope or expectancy

2. emptio rei speratae
3. emptio spei
D.

III.

commutative,

Sale of existing and future goods.

E.

Sale of undivided interest

F.
G.

Sale of fungible goods

Sale of things subject to resolutory condition

PRICE

A.

Certainty of price

B.

Who may determine price

C.

Effect of gross inadequacy of price

D.

Effect where price is simulated

IV.

E.

Certainty of price of securities, grains, liquids, etc.

F.

Effect of failure to determine price

G.

Meeting of minds as to price

FORMATION/PERFECTION OF CONTRACT OF SALE

A.

Option contract
- Option contract distinguished from contract of sale

B.

Mutual promise to buy and sell

C.

Status of advertisements

D.

Acceptance by letter or telegram

E.

Perfection of sale by auction

F.

Earnest money; distinguished from option money

G.
V.

VI.

Form of Sales

PARTIES TO A CONTRACT OF SALE

A.

Sale by a minor

B.

Sale between spouses

C.

Special incapacity
1. Guardians, agents, and administrators
2. Judges
3. Lawyers
4. Public officers and employees

OBLIGATIONS OF THE SELLER

A.

Preservation of the object of sale

B.

Transfer of ownership and delivery of the object

Concept of delivery or tradition

1.

a. Ways of effecting delivery

(1) actual or real
(2) constructive or legal

(i)

public instrument
(ii)
traditio longa manu
(iii)
tradition brevi manu
(iv)
traditio constitutum possessorium
(v) quasi-traditio
(3) special rules on:
(i) Contract of sale or return
(ii) Contract of sale on trial or approval
(iii) Sale of specific goods with reserved title
(iv) Delivery to carrier on behalf of the buyer
(v) When person selling is not the owner
(vi) Sellers title is voidable
b. When obligation to deliver arises
c. Other rules on delivery:
(1) Sale of real property by unit of measure or number
(2) Sale of real estate made for a lump sum
(3) Rules in case of double sale

C.

Delivery of fruits and accessories

D.

Payment of expenses for execution and registration

E.

Conditions and Warranties

1. Condition; concept
2. Warranty
(1) express warranty (NCC 1546)
(2) implied warranties (NCC 1547)
(i) warranty on sellers title; liability in case of
eviction
(ii) warranty against hidden defects of, or
encumbrances upon the thing sold; vendors
responsibility in case of breach
(iii) quality or fitness of goods
--merchantability and fitness distinguished
--rule in case of sale under a patent or trade name
--effect of usage of trade
--rule in case of goods sold by sample

(vi)
(vii)
(viii)
(ix)
(x)

alternative remedies of buyer to enforce the

warranties

loss of thing sold due to hidden defects

applicability of warranty on judicial sales
prescriptive period of action
rule on sale of animals
VII.

DOCUMENTS OF TITLE
A.

Concept & functions

B.

Common forms of documents of title

1. dock warrant
2. bill of lading
3. warehouse receipt
4. quedan

C.

Classes of documents of title

1. Negotiable documents of title
a.
b.
c.
d.

how negotiation is made

who may negotiate
rights of person to whom document has been negotiated
transfer of order document without indorsement

2. Indorser not a guarantor

3. Negotiation not impaired by fraud, mistake, etc

4. Non-negotiable documents of title
- rights of person to whom document has been transferred
5. Warranties of a person negotiating or transferring document
6. Rules on levy/garnishment of documents of title

VIII. RIGHTS AND OBLIGATIONS OF THE VENDEE

A.

Principal obligations of the vendee:

1.
2.
3.
4.
B.

No obligation to accept delivery by installments

Modes of manifesting acceptance
Effect of a wrongful refusal to accept
Liability for interest

Rights of the vendee:

1. Right to examine the goods before delivery

2.
3.
4.
5.
6.
IX.

Acceptance not a bar to action for damages

No obligation to return goods wrongfully delivered
Right to suspension of payment of price
When rescission of sale of real property may be made
Rescission in case of sale of movable thing

ACTIONS FOR BREACH OF CONTRACT OF SALE OF GOODS

A.

Available remedies on the part of the seller:

1. Action for payment of price
2. Action for damages in case of non-acceptance of goods
3. Action for rescission of contract
4. Unpaid Seller
a. Concept
b. Remedies of an unpaid seller
(1)
Lien on the goods
(2)
Right of stoppage in transitu
(3)
Right of resale
(4)
Right to rescind

B.

Available remedies on the part of the buyer:

5. Action by buyer for specific performance
6. Action by buyer for rescission or damages for breach of warranty
7. Rule in case of sale by description or by sample

C.

Recto Law (Sale of Movables on Installments)

X.

RISK OF LOSS

XI.

EXTINGUISHMENT OF SALE
A.
B.
C.

Common Causes
Special Causes
Extra-special Causes
1. Conventional redemption
a.
b.
c.
d.
e.
f.
g.

Definition
Distinguished from option to purchase
Period of redemption
Effect when no redemption is made
Equitable mortgage
Right of the parties to the fruits of the land
Right of vendor a retro as to charges/encumbrances

2. Legal Redemption;

XII.

ASSIGNMENT OF CREDITS AND OTHER INCORPOREAL RIGHTS (NCC

1624 to 1635)
A.
B.
C.
D.
E.
F.
1
2
G.

Concept
Excluded Cases of Assignment
Perfection
Effects of Assignment
Warranties of Assignor
Special Rules
1. Assignment/Sale of Inheritance
2. Assignment of Incorporeal Right under Litigation
Right of Repurchase

Law on Sales
Outline

Submitted by;
Herbert T. Securata

Submitted to;
Atty. Marlonfritz B. Broto