OBLIGATION OF THE VENDOR Delivery in its natural sense.

means something in addition to the delivery of property

or title: it means transfer of possession.
ART. 1495. The vendor is bound to transfer the ownership of and deliver, as
well as warrant the thing which is the object of the sale. Kinds of delivery or tradition
1. Actual or real delivery - This is delivery by physically placing the thing sold in the
ART. 1496. The ownership of the thing sold is acquired by the vendee from the hands of the vendee (in the case of movables) or physically placing it in his
moment it is delivered to him in any of the ways specified in articles 1497 to possession and control (in the case of immovables).
1501, or in any other manner signifying an agreement that the possession is 2 Constructive or legal delivery
transferred from the vendor to the vendee. a. By legal formalities
b. Symbolic delivery (traditio simbolica)
Principal obligations of the vendor c. Traditio longa manu
(1) to transfer the ownership of the determinate thing sold; d. Traditio brevi manu
(2) to deliver the thing, with its accessions and accessories, if any, in the condition in e Traditio constitutum possessorium
which they were upon the perfection of the contract;
(3) to warrant against eviction and against hidden defects 3. Delivery of incorporeal property (quasi-traditio)
(4) to take care of the thing, pending delivery, with proper diligence; and a. By constructive tradition - Delivery of incorporeal property by the execution of a
(5) to pay for the expenses of the deed of sale, unless there is a stipulation to the public document.
contrary. b Placing the titles of ownership in the possession of the vendee (such as delivering
the stock certificate covering the shares of stock).
Obligation to transfer ownership and deliver C. Use by the vendee of his rights, with the consent of the vendor, (Art. 1501) (such
(1) Ownership by vendor at time of perfection of contract not essential. as when the buyer of a book copyright prints the book on authority of the seller.)
(2) Transfer not essential to perfection of contract. "Sale or return" and "sale on approval"
(3) No obligation to make delivery during period of redemption.
(4) Right of vendee to transfer of certificate of title. Sale or return
(5) Right of buyer to recover the price paid. The ownership of the goods is transferred to the buyer on delivery, but the buyer has
the option to revest their ownership on the seller by returning them within the time
fixed in the contract, or if no time has been fixed, within a reasonable time. (Art 1502)
Delivery or tradition, concept
Delivery is a mode of acquiring ownership whereby the object of Ihe contract is Sale on approval or on trial or on satisfaction
placed in the control and possession of the vendee. either actually or constructively. Ownership of the goods remains with the seller despite delivery but shall be
transferred to the buyer in the following cases:

Edrian Alcachupas
Raivin Tiama
BSAcc 2B
a. When he signifies his approval or acceptance of the goods. 3. When by the terms of the bill of lading, the goods are to be delivered to the order
b. When he does an act adopting the transaction. of the buyer or his agent, but the bill of lading is retained by the seller or his agent.
Thus, the buyer is deemed to have approved of the goods if he starts consuming or
using them. 4. When the seller draws on the buyer a bill of exchange for the price of the goods
c. If he does not signify his approval or acceptance of the goods but retains the and transmits the bill of exchange and the bill of lading to the buyer to secure
goods without giving notice of rejection within the time fixed in the contract, or within acceptance or payment of the bill of exchange, but the buyer dishonors such bill of
a reasonable time, and such time has expired. (Art. 1502) exchange. (Art. 1503)

Distinctions between "sale or return" and "sale on approval or on trial or satisfaction" However, if the bill of lading is negotiated to a purchaser for value in good faith,
ownership of the goods is passed on to him. (Art. 1503)
1. In "sale or return", ownership of the goods passes to the buyer upon delivery. In
"sale on approval", ownership passes to the buyer upon his acceptance of the goods Shipment terms and risk of loss
or the expiration of the time given to him to signify his acceptance.
1. FOB (free on board) (place of shipment) Here, the goods are delivered free to the
2 In "sale or return", the risk of loss is on the buyer. In "sale on approval", the risk of place of shipment. Under this term, the seller delivers the goods at his expense and
loss is on the seller. at his risk to a carrier in the place designated in the contract. Title and risk of loss
pass to the buyer on delivery to a carrier at shipping point.
3. In "sale or return", the buyer may return the goods even if he is satisfied of its
quality. In "sale on approval", the buyer has no right to return the goods if he is 2. FOB (place of destination) Under this term, the goods are delivered free to the
satisfied of its quality. place of destination. Here, the seller bears the risk of loss of the goods until they
have been delivered to the destination shown in the contract.
Transfer of ownership by delivery of specific goods to carrier or other bailee
General rule: Delivery of specific goods to a carrier or other bailee for the purpose of 3. FAS (free alongside ship) (named vessel) - The term requires the seller to deliver
transmission to the buyer transfers ownership to the buyer. the goods, at his own risk, alongside the vessel or at a dock designated by the buyer.
Exceptions, ie., ownership of specific goods is retained by the seller despite delivery Once this is done by the seller, title and risk of loss pass to the buyer.
to carrier or other bailee in the following cases:
1.When there is a stipulation to that effect. 4. CIF (cost, insurance, and freight), (named destination) - Under this term, the seller
quotes a lump sum price to the buyer. Here, the price of the goods includes the cost
2. When by the terms of the bill of lading, the goods are to be delivered to the seller of shipping them to the buyer, and the cost of insurance to cover the goods during
or his agent or to the order of the seller or his agent.

Edrian Alcachupas
Raivin Tiama
BSAcc 2B
their carriage to the named destination. Although the word "destination" is used, title 3. When the sale is made under the provisions of any factor's acts. recording laws or
and risk of loss pass to the buyer ofl delivery to a carrier at shipping point. any other provisions of law enabling the apparent owner to dispose of the goods as if
he were the true owner thereof. (Art. 1505)
5. C & F (named destination) This is the same as CIF, except that the seller is not
required to insure the goods. 4. When the sale is made under a statutory power of sale or under the order of court
of competent jurisdiction. (Art. 1505)
6. Ex-ship - Here, the seller is responsible for the goods until they are unloaded from
whatever ship that is used. 5. When the purchase is made in a merchant's store, or in fairs, or markets. (Art.
1505)
7. Ex Works (point of origin) - Under this term, the seller quotes a price covering only
the point of origin (factory, warehouse), and agrees to place the goods at the agreed Time and place of delivery of thing sold
place on the date or within the period fixed. The seller bears the risk of loss until
such time that the buyer is obliged to take delivery of the goods. 1. Place of delivery

8. Ex Dock (named port of importation) Here, the seller quotes a price including the a. Place stipulated.
cost of the goods and all additional expenses necessary to place the goods on the b. If there is no stipulation, place fixed by usage or trade.
dock at the place of importation. The seller bears the risk of loss until the expiration c. In the absence of both, the seller's place of business if he has one; if none, the
of the free time within which the goods are allowed on the dock at the place of seller's place of residence. However, in the case of sale of specific goods, which to
importation. the knowledge of the parties when the contract was made were in some other place,
that place shall be the place of delivery. (Art 1521)
Sale by a person who is not the owner of the thing sold
2. Time for delivery of goods
When goods are sold by a person who is not the owner thereof, the buyer acquires
no better title than the seller had, except in the following cases: a. Time stipulated.
b. If there is no stipulation, delivery must be made within a reasonable time from the
1. When the sale is made under authority or with the consent of the owner. execution of the contract. (Art. 1521

2. When the owner is precluded by his conduct from denying the seller's authority to 3.. Goods in the possession of a third person The seller has not fulfilled his obligation
sell. to deliver the goods unless such third person acknowledges to the buyer that he
holds the goods on the buyer's behalf. (Art. 1521)

Edrian Alcachupas
Raivin Tiama
BSAcc 2B
4. Demand or tender of delivery

5. Expenses of delivery The seller bears the expenses of and incidental to putting the
goods into a deliverable state, unless otherwise stipulated. (Art. 1521)

When vendor is not bound to deliver the thing sold

1. If the vendee has not paid him the price. (Art. 1524)

2. If no period for the payment of the price has been fixed in the contract. (Art. 1524)

3. If a period has been fixed for the payment of the price, the vendor is bound to
deliver the thing sold. However, he is not bound to deliver if the vendee loses the
right to make use of the period (Art. 1536) as follows:

a. When the vendee becomes insolvent, unless he gives a guaranty or security for
the payment of the price.
b. When the vendee fails to furnish the guaranties or securities that he has promised.
c. When the guaranties or securities have been impaired through his own acts or
when through a fortuitous event they disappear, unless he immediately gives new
ones equally satisfactory.

d. When the vendee violates any undertaking in consideration of which the vendor
agreed to the period
E. When the vendee attempts to abscond. (Art. 1198)

Edrian Alcachupas
Raivin Tiama
BSAcc 2B