SALES PRE-MIDTERM REVIEWER – ATTY. ADVIENTO ROOM 405
consummation or death, which is the fulfillment or performance of the terms agreed upon in the contract. The second phase of the generation or negotiation stage in this case was the execution of the VSP. It must beemphasized that thereunder, the downpayment of the purchase price was P53,148.00 while the balance to be paid oninstallment should be financed by B.A. Finance Corporation. It is, of course, to be assumed that B.A. Finance Corp. wasacceptable to Toyota, otherwise it should not have mentioned B.A. Finance in the VSP.Accordingly, in a sale on installment basis which is financed by a financing company, three parties are thusinvolved: the buyer who executes a note or notes for the unpaid balance of the price of the thing purchased oninstallment, the seller who assigns the notes or discounts them with a financing company, and the financing companywhich is subrogated in the place of the seller, as the creditor of the installment buyer. Since B.A. Finance did notapprove Sosa's application, there was then no meeting of minds on the sale on installment basis. We are inclined tobelieve Toyota's version that B.A. Finance disapproved Sosa's application for which reason it suggested to Sosa that hepay the full purchase price. The VSP was a mere proposal which was aborted in lieu of subsequent events. It follows that the VSP createdno demandable right in favor of Sosa for the delivery of the vehicle to him, and its non-delivery did not cause anylegally indemnifiable injury. Petition is GRANTED.3. Effect of offer and counter-offer
Manila Metal Container Corporation v. PNB, GR No. 166862, Dec. 20, 2006
Facts: To secure a loan it had obtained from PNB, petitioner executed a real estate mortgage over the lot. Petitionerexecuted an Amendment of Real Estate Mortgage over its property. Petitioner secured another loan from PNB, payablein quarterly installments of P32,650.00, plus interests and other charges.PNB filed a petition for extrajudicial foreclosure of the real estate mortgage and sought to have the property sold atpublic auction and was declared the winning. The Certificate of Sale issued in its favor was registered and wasannotated at the dorsal portion of the title on February 17, 1983. Thus, the period to redeem the property was toexpire on February 17, 1984. Petitioner reiterated its request for a one year extension from February 17, 1984 withinwhich to redeem/repurchase the property on installment basis. It reiterated its request to repurchase the property oninstallment. Meanwhile, some PNB personnel informed petitioner that as a matter of policy, the bank does not accept"partial redemption." Since petitioner failed to redeem the property, the Register of Deeds issued a new title in favor of respondent PNB. Petitioner's offers had not yet been acted upon by respondent PNB. SAMD recommended to themanagement of respondent PNB that petitioner be allowed to repurchase the property for P1,574,560.00. PNBmanagement informed petitioner that it was rejecting the offer and the recommendation of the SAMD. (Gracie’s Note:In a nutshell, there was a series of offers and counter-offers.)Petitioner filed a complaint against PNB for "Annulment of Mortgage and Mortgage Foreclosure, Delivery of Title, orSpecific Performance with Damages." PNB averred that it had acquired ownership over the property after the period toredeem had elapsed. It claimed that no contract of sale was perfected between it and petitioner after the period toredeem the property had expired.Issue: whether or not the offer and counter-offer resulted to a perfected contract of saleRuling: There was no perfected contract of sale between the parties.
A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, togive something or to render some service.41 Under Article 1318 of the New Civil Code, there is no contract unlessthe following requisites concur: (1) Consent of the contracting parties; (2) Object certain which is the subjectmatter of the contract; (3) Cause of the obligation which is established.
Contracts are perfected by mere consent. Once perfected, they bind other contracting parties and the obligationsarising have the form of law between the parties and should be complied with in good faith. The parties are boundnot only to the fulfillment of what has been expressly stipulated but also to the consequences which, according totheir nature, may be in keeping with good faith, usage and law. By the contract of sale, one of the contractingparties obligates himself to transfer the ownership of and deliver a determinate thing, and the other to pay a pricecertain in money or its equivalent. The absence of any of the essential elements will negate the existence of aperfected contract of sale. In
Boston Bank of the Phils. v. Manalo
: “A definite agreement as to the price is anessential element of a binding agreement to sell personal or real property because it seriously affects the rightsand obligations of the parties. Price is an essential element in the formation of a binding and enforceable contractof sale. The fixing of the price can never be left to the decision of one of the contracting parties. But a price fixedby one of the contracting parties, if accepted by the other, gives rise to a perfected sale.”
A contract of sale is consensual in nature and is perfected upon mere meeting of the minds. When there is merelyan offer by one party without acceptance of the other, there is no contract. When the contract of sale is notperfected, it cannot serve as a binding juridical relation between the parties. The stages of a contract of sale areas follows: (1) negotiation; (2) perfection; and (3) consummation.
A negotiation is formally initiated by an offer, which, however, must be certain. At any time prior to the perfectionof the contract, either negotiating party may stop the negotiation. At this stage, the offer may be withdrawn; thewithdrawal is effective immediately after its manifestation. To convert the offer into a contract, the acceptancemust be absolute and must not qualify the terms of the offer; it must be plain, unequivocal, unconditional andwithout variance of any sort from the proposal.
A qualified acceptance or one that involves a new proposal constitutes a counter-offer and a rejection of theoriginal offer. A counter-offer is considered in law, a rejection of the original offer and an attempt to end thenegotiation between the parties on a different basis. Consequently, when something is desired which is not exactlywhat is proposed in the offer, such acceptance is not sufficient to guarantee consent because any modification orvariation from the terms of the offer annuls the offer. The acceptance must be identical in all respects with that of the offer so as to produce consent or meeting of the minds.