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Sales

Sales

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Published by Sui

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Categories:Types, Business/Law
Published by: Sui on Jul 23, 2011
Copyright:Attribution Non-commercial

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QuickTime™ and aTIFF (Uncompressed) decompresso
 
A
TENEO
C
ENTRAL
B
AR
O
PERATIONS
2007
Civil Law
SUMMER REVIEWER
 
 —Adviser:
Dean Cynthia del Castillo
Head:
Joy Ponsaran, Eleanor Mateo
; Understudy:
Joy Tajan, John Paul Lim;
Subject Head: Patricia Marie Regina Roque;
Pledgees
: Melina Rose Gutierrez, Kristine Margret Malang
 
are needed to see this picture.
CH. 1 – CONTRACT OF SALECONTRACT OF SALE
– One of the contractingparties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other topay therefore a price certain in money or itsequivalent. A contract of sale may be absolute or conditional.
Contract of Sale
 
Contract to Sell
 Absolute ConditionalReal obligation –obligation to givePersonal obligation –obligation to doTitle passes to thebuyer upon deliveryOwnership is reserved inthe seller and will pass tothe buyer only upon fullpayment of the priceNon-payment of theprice is a negativeresolutory conditionFull payment is a positivesuspensive condition, thefailure of which is not abreach but prevents theobligation of the vendor toconvey title to ariseremedies available:1. specificperformance2. rescission3. damagesremedies available:1. resolution2. damages
I. ELEMENTS OF A CONTRACT OF SALE
1. Consent2. Determinate subject matter 3. Price certain in money or its equivalent
II. STAGES IN LIFE OF CONTRACT OF SALE1.
Negotiation
 2.
Perfection
 3.
Consummation
 III. OBLIGATIONS CREATED -
2 sets of realobligations to give
IV. CHARACTERISTICS OF CONTRACT OFSALE:
 
1
. Nominate
2
. Principal
3
. Consensual
4
. Bilateral
5
. Reciprocal
6
. Onerous
7
. Commutative
8
. Title and not a mode
V. DISTINGUISHED FROM OTHERCONTRACTS
 
Donation
 
Sale
Gratuitous or onerous
 
Onerous
 
Formal contract
 
Consensual contract
 
Governed by law ondonation
 
Governed by law on sale
 Barter
 
Sale
Consideration: giving of athing
 
Consideration: giving of money as payment
 
Governed by law on sales: species of the genussales
 
If consideration consists party in moneyand partly by thing –look at manifest intention;If intention is not clear:value of thing is morethan amount of money –barter If intention is not clear:value of thing is equalor less than amount of money – sale
 Contract for piece ofworkSale
Goods are to bemanufactured speciallyfor a customer and uponspecial order and not for the general marketContract for delivery of an article which thevendor in the ordinarycourse of businessmanufactures or procures for generalmarket (whether on handor not)Essence is service Essence is objectJurisprudence:1.
Timing test 
 under art 1467:whether the thingtransferred would havenever existed but for theorder 2.
Habituality test 
 if manufacturer engages in activity withneed to employextraordinary skills andequipment (
Celestino v CIR 
)3.
Nature of the object test 
 each product’s natureof execution differs fromthe others; products are
 
Qu(Uncompr e need
Civil Law Summer Reviewer
 
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B
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not ordinary products of manufacturer (EEI v CIR)
Agency to Sell
 
Sale
 Agent not obliged to payfor price, merely obligedto deliver price receivedfrom buyer.Buyer pays for price of objectPrincipal remains owner even if object deliveredto agentBuyer becomes owner of thing; in agencyAgent assumes norisk/liability as long aswithin the authority givenSeller warrantsMay be revokedunilaterally becausefiduciary and even if revoked w/o groundNot unilaterally revocableAgent not allowed toprofitSeller receives profitPersonal Contract;Rescission is notavailableReal Contract
Dation in Payment Sale
Pre-existing credit No pre-existing creditObligations areextinguishedObligations are createdDebtor’s consideration:extinguishment of thedebtCreditor’s consideration:acquisition of the objectoffered in lieu of theoriginal creditConsideration of seller:priceConsideration of buyer:acquisition of the objectLess freedom indetermining the priceGreater freedom indetermining the pricePayment is received bythe debtor before thecontract is perfectedBuyer still has to pay theprice
Lease
 
Sale
 Use of thing is for aspecified period only withan obligation to returnObligation to absolutelytransfer ownership of thing
 
Consideration is rent Consideration is priceLessor need not beowner Seller needs to be owner of thing to transfer ownership
NOTE: Lease with option to buy:
really a contractof sale but designated as lease in name only; it is asale by installments
CH. 2 - PARTIES TO A CONTRACT OF SALENOTE: GENERAL RULE -
All persons who areauthorized in this Code to obligate themselves mayenter into a contract of sale
I. MINORS, INSANE AND DEMENTEDPERSONS, AND DEAF-MUTES1.
Contracts are voidable, subject to annulmentor ratification
 2.
Also includes:
 
- State of drunkenness- Hypnotic spell- Where necessaries are those soldand delivered to a minor or other person without capacity to act, hemust pay a reasonable pricetherefore
II. SPOUSES -
A spouse may, without the consentof the other spouse, enter into sales transactionsin the regular pursuit of their profession, vocation,or trade
 Art. 1490
. The husband and the wife cannot sell property to each other, except: (1) When a separation of property was agreed upon in the marriage settlements; or (2) When there has been a judicial separation or property under Article 191.
NOTE:
Prohibition likewise applies to common-lawspouses
III. OTHERS - TRUST RELATIONSHIPS1.
Art. 1491 Two groups of parties prohibitedfrom acquiring by purchase certainproperties:
a
. Guardian/Agent/Executors andAdministrators
i.
Direct or indirect
ii.
May be ratified since only privatewrong is involved
b
. Public Officers and employees/Officers of the Court
i.
Cannot be ratified since public wrongis involved
ii.
Requisites for the prohibition to applyto attorneys:1. existence of attorney clientrelationship;2. property is the subject matter in litigation;
 
QuickTime™ and aTIFF (Uncompresseare needed to se
Civil Law Summer Reviewer
 
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3. while in litigation (from filingof complaint to final judgment)
NOTE:
Exception to the prohibition against attorneys:contingent fee arrangement where the amount of legal fees is based on a value of property involved inlitigation
Art. 1492.
 
The prohibitions in the two preceding articles are applicable to sales in legal redemption, compromises and renunciations.
 
III. Legal Status of Contract
 
1.
Void (case law) – guardian/executor/public officers / officers of thecourt
2.
Voidable (civil code) – agent; VALID if with consent
CH. 3 - SUBJECT MATTER OF SALE1. REQUISITES:1. Things
a.
“Possible”
- existing, future, andcontingenti. whether the subject matter isof a type and nature thatexists or could be made toexist to allow the seller reasonable certainty of beingable to comply with hisobligations
b. Liciti.
not outside the commerce of man
 ii.
if illicit, contract is void
 c. Determinate or determinablei.
determinate: particularlydesignated or physicallysegregated from all others of the same class
 ii.
determinable:
 
1. thing is capable of being madedeterminate2. without the necessityof a new further contract
2. Rights
– must be transmissible, except:a. future inheritanceb. service
Emptio rei speratae Emptio spei
Sale of an expected thing Sale of a mere hope or expectancy that the thingwill come to existence;sale of the hope itself Sale is subject to thecondition; that the thingwill exist; if it does not,there is no contractSale is effective even if the thing does not comeinto existence, unless it isa vain hopeUncertainty is with regardto the quantity andquality of the thing andnot the existence of thethingThe uncertainty is withregard to the existence of the thingObject is a future thing Object is a present thingwhich is the hope or expectancy
NOTE:
Quantity of subject matter is not essential for perfection; must determine nature and quality of subject matter 
NOTE:
Seller need not be the owner of the subjectmatter at the time of perfection: sufficient that he isthe owner at the time of delivery. exception:foreclosure sale
CH. 4 - PRICEI. REQUISITES:1. Reala.
when at the perfection of the contractof sale, there is every intention onthe buyer to pay the price, and everyexpectation on the part of the seller to receive such price as the value of the subject matter he obligateshimself to deliver 
2. In money or its equivalenta.
consideration for a valid contract of sale can be the price and other valuable consideration; at the veryleast, a true contract of sale musthave price as part of itsconsideration
3. Certain or ascertainablea.
certain: expressed and agreed interms of specific pesos and/or centavos
b.
ascertainable:
i.
by third persons
ii.
by the courts – in caseswhere the third person fixesthe price in bad faith or bymistake
iii.
by reference to a definiteday, particular exchange or market
iv.
by reference to another thingcertain

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