LAW 3-First discussion

WHAT IS CONTRACT?
-by the contract of sale, one of the contracting 5. NOMINATE- it has a special name given to
parties obligates himself to transfer the it by law namely “CONTRACT OF SALE”
ownership and deliver a determinate thing, and
the other to pay therefor a price certain in 6. PRINCIPAL- it can stand on its own without
money or its equivalent. being dependent upon another contract.

STAGES OF CONTRACT OF SALE Essential elements (those without which there

1. NEGOTIATION – contracting parties can be no valid sale):
indicate interest in the contract to the
time the contract is perfected. There is 1)Consent or meeting of the minds, i.e.,
a bargaining as to object of the consent to transfer ownership in exchange for
contract and as to price. the price.
2. PERFECTION – It takes place upon the 2) Determinate subject matter or object
concurrence of the essential element (generally, there is no sale of generic thing;
of the sale, which is meeting of the moreover, if the parties differ as to the object,
minds of the parties as to object of the there can be no meeting of the minds).
contract and as to price. 3) Price certain in money or its equivalent (this
- If the contract of sale is perfected, is the cause or consideration). (The price need
both parties are bound to perform not be in money.)
their respective obligations.
CAPACITY TO BUY OR SELL
If there is a breach of contract, the remedy of
innocent parties is to demand performance GR: all persons whether natural or juridical.
plus damages. (If umatras or umangal): Who can bind themselves have legal capacity to
enter into contract of sale.
Fulfillment+damages (mental, temporal, etc.)
KINDS OF INCAPACITY
Innocent-----> charge in court--->compel other 1. ABSOLUTE INCAPACITY – Persons who
to fulfill plus compensation for damages cannot enter into a COS in all
circumstances. Otherwise, the COS is
3. CONSUMMATION – It begins when the defective, either VOIDABLE OR
parties perform their respective UNENFORCEABLE.
undertakings under the contract of
sale, culminating the extinguishment Example: minors, insane, demented
thereof. When the object is delivered persons, deaf mutes who do not know
and the price is paid. how to write.

CHARACTERISTICS OF A CONTRACT OF SALE 2. RELATIVE INCAPACITY – persons under

1. CONSENSUAL- the contract is perfected by certain circumstances, cannot buy
mere consent of the parties. certain property.

2. BILATERAL- the parties are bound by Example: Husband and Wife, agents,
reciprocal obligations executors and administrators, public
SELLER- to deliver and transfer officers and employees.
ownership of the thing sold
BUYER- to pay the price Who can and cannot enter in COS
1. MINOR (cannot enter into contracts,
3 ONEROUS- Imposes a valuable cannot consent to a contract)
consideration which is price certain in - Status of a contract entered by a
money or its equivalent. minor is VOIDABLE with regard to
necessities.
4 COMMUTATIVE- the thing of value is Exception: mga necessities
exchanged for equal value.
 2. Husband and Wife How to determine ownership?
-certified true copy
Exception: -technical description (Lot no./area
specific/warranties)
1.) Prenuptial agreement executed prior to the -verify sa geodetic engineer
marriage
2.) When there is judicial separation of property In case of foreign owner:
(magseseperate na ng asset, hiwalay na pero -with agent (equipped with power of attorney)
hindi pa annulled). Back of title
-liends
3. Incapacitated person can enter COS -power of attorney
during their Lucid interval only.
KINDS OF DELIVERY (pg.78)
4. Highly Intoxicated – drunk or under
the influence of drugs. 1. REAL OR ACTUAL DELIVERY
2. LEGAL OR CONSTRUCTIVE DELIVERY
5. Moron or Low IQ – lack of intelligence 3. QUASI-TRADITION

- If a person deprives intelligence (void) KINDS OF LEGAL OR CONSTRUCTIVE DELIVERY

-may civil interdiction
-prodigals(a person who is major in age but is a 1. Legal Formalities
habitual spendthrift or has extravagant habits 2. Symbolical Tradition or Traditio
and is adjudged by a court as being incapable of Simbolica
managing his assets) 3. Traditio Longa Manu
4. Traditio Brevi Manu
A vitiated consent only gives rise to a voidable 5. Traditio Constitutum Possessorium
agreement. Under the Civil Code, the vices of
consent are mistake, violence, intimidation, EMPTIO REI EMPTIO SPEI
undue influence or fraud. If consent is given SPERATAE
through any of the aforementioned vices of Sale of the thing with Sale of hope or
consent, the contract is voidable. potential existence. expectancy that the
Example: still thing will come into
KINDS OF ILLICIT THINGS ungrown fruits existence.
1. illicit per se (are things that are Example: Sale of lotto
inherently unlawful) ex: decayed food ticket
unfits for consumption Sale is subject to the Sale is effective even
condition that the if the thing does not
2. illicit per accidens (because of some thing will exist. If come into existence.
provisions of law declaring it illegal) does not, there is no
Ex: prohibited lottery tickets and prohibited contract.
drugs The object is a future The object is a
thing present thing which is
RIGHT OF VENDOR TO TRANSFER OWNERSHIP the hope or
expectancy.
1. ONE CAN SELL ONLY WHAT HE OWNS
-it is essential in order for a sale to be valid, he
must be the OWNER or at least must be VAIN HOPE – the sale of vain hope is VOID.
authorized by the owner of the thing sold. It is a Example: sale of lotto ticket that was already
well known principle of law that nobody can run.
dispose of that which he does not have.

2, SUFFICIENT IF RIGHT EXISTS AT TIME OF

DELIVERY

-It is sufficient if he has the right to sell the thing

at the time when the ownership is to pass.
CONTRACT TO SELL VS CONTRACT TO SALE
 SALE VS BARTER
Contract of sale Contract to sell
From the moment of Seller remains as the SALE BARTER
both parties agreed owner until the buyer A thing is given in A thing is given in
on the COS there is a pays the full purchase exchange of a price exchange of another
transfer of ownership price. certain in money or thing.
even if purchase price its equivalent
has not yet been fully
paid. Unless If the consideration is partly in money and
otherwise stipulated. partly in another thing:
Non-payment of the Full payment of the
purchase price is a purchase price is a 1. The transaction is characterized by the
negative resolutory positive suspensive manifest intention of the parties.
condition. (Extinguish condition (give rise to - The nature of their agreement will
obligation) the obligation) depend on their intention. If their
Risk of loss is in the Risk of loss is in the intention is a contract of sale, then
buyer seller it is Sale or if their intention is a
Sale is already No perfected sale yet contract of barter, then it is a
perfected Barter.
Subsequent buyer is Subsequent buyer is 2. If there is no manifest intention:
presumed to be in presumed to be in a. Barter – if the value of the
bad faith good faith thing is more valuable than
Once wala na sa Pwede pa I-recover money.
buyer, d na pwede I- b. Sale – if the value of the thing
recover is equal or less than the
Vendor loses and Title remains in the amount of money.
cannot recover vendor if the vendee
ownership of the does not comply with
thing sold until the conditions of the NATURAL ELEMENTS
contract of sale is contract 1. Warranty against hidden defects
resolved and set 2. Warranty against eviction
aside

ACCIDENTAL ELEMENTS
CONTRACT FOR PIECE OF WORK - Stipulations agreed by the parties
Example: terms and manner of
payment in penalty or interest

RECTO LAW

In a contract of sale of personal

property, the price of which is payable in
installments, the vendor may exercise any of
the following remedies:

(1) Exact fulfillment of the obligation, should the

vendee fail to pay;

(2) Cancel the sale, should the vendee's failure

to pay cover two or more installments;

(2) Foreclose the chattel mortgage on the thing

sold, if one has been constituted, should the
vendee's failure to pay cover two or more
installments. In this case, he shall have no
further action against the purchaser to recover
any unpaid balance of the price. Any agreement Maceda law
to the contrary shall be void.
AN ACT TO PROVIDE PROTECTION TO BUYERS
OF REAL ESTATE ON INSTALLMENT PAYMENTS.
Subject: Personal property, there is default in
payment due Objective: to protect buyers of real estate
installments against onerous and oppressive
REQUISITES OF RECTO LAW conditions
1. Sale of personal property
2. Price is payable in several installments Section 3
3. There has been failure to pay installments Includes: residential condominium apartments
- Chattel mortgage has been executed (Option Excludes: industrial lots, commercial buildings
3) and sales to tenants
- The chattel mortgage must be the thing sold
itself (Option 3) 3(a):
-pay w/o additional interest w/in grace period
RIGHTS OF THE VENDOR earned
- To recover unpaid balance of purchase price Additional interest (ito yung penalty interest)

What is the primary obligation of the -grace period is earned at rate of 1 month per 1
purchaser? year installment
- to pay the purchase price Provided: can only be exercised once every five
years of its existence
1st option
3(b):
What is the exact fulfillment? (specific -if the contract is cancelled, seller shall refund
performance) the buyer a cash surrender value of the
-spirit of the law payments made
-full purchase/ full installment -equivalent to fifty percent, and an additional 5
percent every year of additional installments.
Provided:
2nd option The actual cancellation shall take place after 30
days from the receipt by the buyer from
Paano magiging effective yung cancellation ng the seller of the:
sale?
1. mutual restitution, if possible. a. notice of cancellation or demand for
2. If no stipulation/silent: rescission of the contract by notarial act; AND
Add: return purchase price b. upon full payment of the cash surrender
Less: depreciation value to the buyer.
Add: damages
Add:return property
Formula:
3rd option Months(paid)
-obligado I-transfer ang ownership, para Multiply: monthly payment
makapagsanla Add: Downpayment
Total payments
(transfer of ownership) Multiply:percentage
Seller--------------------------------->property Cash surrender value
(Install payments)
Isasangla niya kay seller, Section 4
in case di kaya bayaran a) If the buyer fails to pay the installment
Note: before its due date, the seller should give
Pag laspag na, cancel sale the buyer a grace period of at least 60 days
to settle.
b) If the buyer fails to pay within the 60 days
grace period, the seller may cancel the
contract after 30 days from the date the
buyer received a notarized notice of
cancellation or the demand for rescission
of the contract. The buyer can still pay
within the given 30 days grace period with
interest.

Section 5
Remedies:
(Section 3 and 4)
-

Additional:
-sell his rights
-assign the same to another person
-reinstate the contract by updating the account