BY:

ATTY. ANGELI NE MAY T CABRERA

THE LAW ON SALES
ASSIGNED READING: To be summarized
1. Legal definition of sale (memorize!!)
2. Characteristic elements of sale
3. Essential Elements of sale
4. Natural and accidental elements of sale
5. Kinds of sale: Compare CONTRACT OF SALE and
CONTRACT TO SELL; SALE and AGENCY TO SELL; SALE
and BARTER/EXCHANGE
6. Requisites of object of sale
7. Kinds of illicit objects
8. When is price certain?
9. Who can fix the price?
10. Legal effect of failure to pay the price.
11. Discuss the principle of quantum meruit/merit?
SALES: DEFINITION
Art. 1458:
By the contract of sale one of the contracting parties
obligates himself to transfer the ownership of and to
deliver a determinate thing, and the other to pay
therefore a price certain in money or its equivalent.
A contract of sale maybe absolute or conditional
CHARACTERISITICS OF A CONTRACT OF SALE
1. Consensual 4. Commutative
2. Bilateral 5. Nominate
3. Onerous 6. Principal

ESSENTIAL REQUISITES OF A
CONTRACT OF SALE
1. Consent or meeting of the minds
a. seller consents to deliver and transfer ownership
while buyer consents to pay;
b. Parties must be legally capacitated
2. Object or subject matter determinate thing or
capable of being determinate; things and rights
3. Cause or consideration the price certain in
money or its equivalent ( check or promissory note)
KINDS OF SALE
ABSOLUTE sale is not subject to any condition
and where title or ownership immediately passes to
the buyer upon delivery of the thing (CONTRACT OF
SALE)
CONDITIONAL sale subject to a contingency,
usually the full payment of price and where delivery
does not transfer ownership until the condition is
fulfilled. (CONTRACT TO SELL)
REQUISITES OF OBJECTS OF SALE
1. Determinate or capable of being determinate
2. Licit or within the commerce of man; rights must
be transmissible

KINDS OF THINGS AS TO LEGALITY
A. LICIT
B. ILLICIT
B.1. Illicit per se ( of its nature)
B.2. Illicit per accidens ( decalred illegal by law)


RIGHT OF VENDOR TO TRANSFER
ONWERSHIP
GEN RULE: One can only sell what he owns
Exception: if authorized to do so ( otherwise,
unenforceable)

***the right to sell the thing may not exist yet at the
time of perfection but must exist at the time that the
ownership is to pass

WHAT MAY BE SOLD?
1. things or rights that are in existence
2. emptio rei speratae or sale of future things as long as it
has the potential or possible existence
***hedging
***future inheritance may not be sold but successional rights
may be the object of sale
3. emptio spei or the sale of hope or expectance; sale of vain
hope is void
4. goods the acquisition of which depends on a condition
which may or may not happen
5. sale of a sole owner of an undivided or aliquot part of his
property consisting of a specific mass or incorporeal rights
6. sale of properties or rights subject to resolutory conditions


SALE vs AGENCY TO SELL (Art 1466)
SALE AGENCY TO SELL
Buyer receive the goods as
owner
Agent receives the goods
owned by the principal
Buyer has to pay the price Agent has to account for
proceeds of sale he makes in
behalf of the principal
Buyer cannot return the
object sold
Agent can return the object if
he is unable to sell
Buyer can perform acts of
ownership over the thing
Agent must act within the
bounds of the agency and
according to the instructions
of the principal
SALE vs CONTRACT FOR A PIECE OF WORK
(Art. 1467)
SALE CONTRACT FOR A PIECE
OF WORK
Thing would have existed and
subject to sale to another
person even if order has not
been given
Thing transferred in not in
existence and would not have
existed but for the order of
the person acquiring it
Risk of loss before delivery is
borne by the buyer
Risk of loss is borne by
worker
Covered by the Statue of
Frauds (Art 1403 par 2)
Not within the ambit of the
Statute of Frauds
SALE vs BARTER (Art 1468)
SALE BARTER/EXCHANGE
Consideration is money or its
equivalent
Consideration is another thing
Rules in determining whether contract is sale or
barter/exchange if consideration is partly cash and in kind
Intention of parties By contemporaneous and
subsequent acts of the parties
Value of thing given > amt of
money/equivalent
Contract is BARTER
Value of thing given < amt of
money/equivalent
Contract is SALE
WHEN PRICE IS CONSIDERED CERTAIN
(Art 1469)
Price must be certain and capable of being ascertained in
money (currency) or its equivalent (mercantile documents)
PRICE IS CERTAIN IF:
1. parties have agreed/fixed a definite amount
2. it is in reference to another certain thing
3. the determination of the price is left to the judgment of a
specified person/s
EFFECT IF 3
RD
PERSON ACTED IN BAD FAITH OR BY
MISTAKE courts may fix the price
REMEDY IF 3
rd
person IS PREVENTED FROM FIXING THE
PRICE THE PRICE/TERMS BY FAULT OF THE SELLER
/BUYER party aggrieved may choose between fulfilment or
rescission with damages if there is bad faith
WHEN PRICE IS CONSIDERED CERTAIN
(Art 1470)
4. The price of securities, grain, liquids and other
things shall also be considered certain when :
a. The price is that which the thing sold would have
been on a definite day
b. The price is that which the thing sold would have
been in a particular exchange or market
c. The a certain amount is fixed above or below the
price on such day or such exchange/market
WHO CAN FIX THE PRICE? (Art 1472)
1. The fixing of the price can never be left to the
discretion of one of the contracting parties unless the
other one accepts.
2. Third persons
3. Courts
** If the price cannot be fixed, the contract is
inefficacious. However, if the thing or part thereof
has already been delivered to and appropriated by
the buyer, he must pay a reasonable price therefor.
(QUANTUM MERUIT/MERIT)

REFERENCES
TEXTBOOK:
DE LEON, De Leon, H. S. (2010). The Law on Sales, Agency and
Credit Transactions, Quezon City: REX Printing Company, Inc.

References:
Albano, Ed Vincent S. (2008). Civil law reviewer. Manila: Rex.
Black's law dictionary (8th ed) (2007). St. Paul, MN. : West Pub.
De Leon, Hector S. (2010). (5th ed). Comments and cases on
partnership, agency, and trust. Manila: Rex.
Rex case digest. (2006). Labor law and social legislation, legal
ethics, mercantile law. Quezon City: REX.
Villanueva, Cesar l. (2009). Law on sales. Manila: Rex.