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The document defines and outlines the key elements and characteristics of a contract of sale under Philippine law. A contract of sale is an agreement where one party (the seller) obligates themselves to transfer ownership of a determinate thing to the other party (the buyer), who in turn obligates themselves to pay a price. Essential elements include consent, a lawful and determinate object, and a certain price. A contract of sale gives rise to reciprocal obligations for delivery and transfer of ownership by the seller and payment by the buyer.
The document defines and outlines the key elements and characteristics of a contract of sale under Philippine law. A contract of sale is an agreement where one party (the seller) obligates themselves to transfer ownership of a determinate thing to the other party (the buyer), who in turn obligates themselves to pay a price. Essential elements include consent, a lawful and determinate object, and a certain price. A contract of sale gives rise to reciprocal obligations for delivery and transfer of ownership by the seller and payment by the buyer.
The document defines and outlines the key elements and characteristics of a contract of sale under Philippine law. A contract of sale is an agreement where one party (the seller) obligates themselves to transfer ownership of a determinate thing to the other party (the buyer), who in turn obligates themselves to pay a price. Essential elements include consent, a lawful and determinate object, and a certain price. A contract of sale gives rise to reciprocal obligations for delivery and transfer of ownership by the seller and payment by the buyer.
Definition: The contract of sale is an agreement whereby one of
contracting parties obligates himself to transfer the ownership of and deliver a determinate thing to the other who, on his part, binds himself to pay therefore for a sum of money or its equivalent.
Characteristics:
1) Consensual - in order to be perfected, it requires no other things
other than mere consent and meeting of minds upon the thing to be object of the contract and the price of such thing. 2) Bilateral - gives rise to reciprocal obligations for both parties: the obligation of the seller to deliver and transfer ownership of the thing sold and the obligation of the buyer to pay the price. 3) Onerous - one party performs his obligation with the expectation that the other party will perform his obligation in return. Therefore the thing sold is delivered in consideration of the price paid and vice versa. 4) Commutative - the thing sold is considered the equivalent of the price sold; except in the case of aleatory contract such as the sale of hope. 5) Nominate - it is designated in the Civil Code with the special name “Sale”. 6) Principal - its existence and validity do not depend upon any other contract.
Essential Elements of a Contract of Sale:
1. Consent or meeting of the minds – refers to the conformity of the
parties to the terms of the contract. 2. Object or subject matter – refers to the determinate thing which is the object of the contract. The object of the contract must be determinate, lawful, and within the commerce of men. Any of the following goods can be object of a contract of sale: a. Existing Goods –those owned or possessed by seller at the time of perfection; b. Future Goods – those to be manufactured, raised, acquired by seller after perfection of the contract or whose acquisition by seller depends upon a contingency (Art. 1462) Even a sale of future goods is valid but only as an executory contract to be fulfilled by the acquisition & delivery of goods specified. c. Sale of Undivided Interest or Share: A sole owner may sell an undivided interest or portion of his property. (Art. 1463) Sale of an undivided share in a specific mass of fungible goods makes the buyer a co-owner of the entire mass in proportion to the amount he bought. (Art. 1464) A co‐ owner cannot sell more than his share d. Sale of Things in Litigation Sale of things under litigation is rescissible if entered into by the defendant , without the approval of the litigants or the court (Art. 1381) No rescission is allowed where the thing is legally in the possession of a 3rd person who did not acted in bad faith. e. Things subject to Resolutory Condition, such as things acquired under legal or conventional right of redemption.
Indeterminate Quantity of Subject Matter
The fact that the quantity is not determinate shall not be an obstacle to the existence and validity of the contract provided it is possible to determine the same, without need of a new contract. (Art. 1349).
3. Cause or consideration – refers to the price certain in money or its
equivalent. The term ‘price’ is the money consideration for a sale of goods. Accordingly, consideration in a contract of sale has necessarily to be in money. If the ownership of the goods is transferred for any consideration other than the money, that will not be a sale but a barter or exchange. However, consideration can be paid partly in money and partly in goods. In that case the intention of the parties shall be observed in order to determine whether the contract is a sale or a barter. Similarly, if a person offers the goods to another person without consideration, it amounts to a gift or charity and not a sale.Furthermore, payment is not necessary at the time of making the contract of sale.
Other Elements:
Natural Elements – those which are deemed to exist in certain
contracts, in the absence of any contrary stipulations, like warranty against eviction. Accidental Elements – those which may be present or absent depending on the stipulations of the parties, like conditions, interest, penalty, time or place of payment.
Stages in the Contract of Sale
I. Negotiation II. Perfection - meeting of minds III. Consummation - when the object is delivered and the price is paid.
Parties to the Contract:
Vendor/Seller:the one obliged to deliver and transfer the ownership of
the thing that he or she sold.
Vendee/Buyer:the one obliged to pay the price certain in money or its
equivalent
Kinds of a Contract of Sale:
As to presence or absence of conditions:
Absolute – the contract is not subject to any condition and the
title passes to the buyer upon delivery of the thing sold. Conditional – the contract is subject to certain conditions, such as the full payment of the purchase price. Ownership in this case is transferred only upon fulfillment of the conditions.
Other kinds:
As to the nature of the subject matter – real or personal, tangible or
intangible. As to the manner of payment – cash or installment. As to its validity – valid, rescissible, unenforceable, void.
Forms of Contract of Sale
In general there are no required forms for a contract of sale as it may be entered into in any form, be in writing, oral, or partly in writing and partly oral, provided that all the essential requisites for its validity are present. Exception is made when the contract of sale should be covered by the Statute of Frauds where the law requires that the agreement must be in writing; otherwise, the contract cannot be enforced by action (Art. 1403). Under the Statute of Frauds of the Civil Code, the following contracts must be in writing to be enforceable: a) sale of personal property at a price not less than P500; b) sale of real property or an interest therein regardless of the price involved; and c) sale of property not to be performed within a year from the date thereof regardless of the nature of the property and the price involved.
Sources of the Law on Sales
Sales are governed by the provisions of the Civil Code: 1. Book IV, Title VI, Articles 1458-1637 (Sales). 2. Title I, Arts. 1156-1422 (Obligations and Contracts).
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