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DIPOLOG MEDICAL CENTER COLLEGE FOUNDATION

Sta. Filomena, Dipolog City

SCHOOL OF BUSINESS AND ACCOUNTANCY
SCOPE AND SEQUENCE

PHILOSOPHY OF DMC-CFI EDUCATION

Dipolog Medical Center College Foundation, Inc. maintains that full development of a person’s
potentials depends largely on the nature, level and suitability of stimuli and the challenges he encounter
in daily life. The role of DMCCFI as institution is such that it serves as a rich interactive environment
where the student is continually encouraged, motivated, and more importantly, challenged to produce
the optimal use of his innate and acquired skills.

SCHOOL VISION

Our vision is to be a leading educational institution, highly regarded for our commitment to
students; distinguished for excellence in instruction as responsive to the communities we serve.

SCHOOL MISSION

Guided by our vision, Dipolog Medical Center College Foundation will become a premier
educational institution through: quest for excellence, academic and professional competence, advance in
information technology, community involvement, working partnership, global perspective and over-all
learning experience.

GENERAL OBJECTIVES OF SCHOOL OF BUSINESS AND ACCOUNTANCY

The DMC College Foundation School of Business and Accountancy has the following objectives:
1. To mold all students to become computer literate, socially responsible, globally aware, analytical,
and reasonable decision-making individuals who are competent in interpersonal, oral and
written communication skills.
2. To produce graduates who are well-versed in the fundamental economic and business principles,
as well as the practical application of those principles in the simulated business setting.
3. To design our educational programs in ways that prepares students or leadership roles in the
dynamic, domestic and global.
4. To deliver business professional who will be perceived not just business managers but leaders in
the society.
5. To constantly update the curricula of the different programs to prepare students to adapt to the
rapidly changing technology and to recognize diversity in the work place.
6. TO ensure that faculty members are responsible, committed and qualified in their respective
fields or profession.
7. To promote among the faculty members integrity, professionalism and compliance to the latest
trends, standards and developments in their chosen field of expertise.
8. To emphasize social responsibility as one of the business cores in nurturing well-rounded
business professionals of the future.

COURSE CODE : BL 4
DIPOLOG MEDICAL CENTER COLLEGE FOUNDATION
Sta. Filomena, Dipolog City

COURSE TITLE : Law on Sales, Agency and Credit Transactions
CREDIT UNIT : 3 UNITS
LECTURE HOUR PER WEEK : 3 Hours

I. COURSE DESCRIPTION
This course deals with the law on sales covering contracts for the sale of goods including nature,
forms, and requisites, distinguished from dacion en pago, cession in payment, contract for a piece of
work, and barter, earnest money as distinguished from option money; rights/obligations of vendee
and vendor; remedies of unpaid seller; warranties; sale with a right to repurchase or conventional
redemption and legal redemption; sale on credit; and installment sales (personal property- Recto
law, real property- Maceda Law). It also covers the law on agency; its nature, form and kinds;
obligations of the agent and of the principal and modes of extinguishments. Also discussed are
pertinent provisions of the Labor Code and the law on credit transactions such s loan, deposit,
guarantee, pledge, real mortage, antichresis and chattel mortgage. Other relevant laws on
commerce and trade such Omnibus Investment Code, Foreign Investments Act, and Retail Trade
Liberalization Law are also discussed.

II. COURSE OBJECTIVES
At the end of this course, students must be able to:
1. Describe the nature and form of contract of sales
2. Identify who are capacitated to buy or sell
3. Enumerate the effects in the contract of sale if the thing sold has been lost
4. Enumerate the obligations of the vendor and vendee
5. Enumerate and describe the modes of extinguishment of contract of sales
6. Describe the nature and form of contract of agency
7. Enumerate the obligations of principal and agent
8. Enumerate and explain the different kinds of credit transactions.

III. METHODOLOGY
Graded group or individual reporting, interactive discussions and oral recitations.

IV. MEDIUM OF INSTRUCTION
English, Filipino and Cebuano are the medium of instruction of this course.

V. COURSE OUTLINE TIME FRAME
1. Orientation Week 1
1.1 Review of DMCCFI Philosophy of Education
1.2 Overview of the course description, citing significance
And integration in the context of DMCCFI Philosophy
Of education

2. Law on Sales- Part 1 Week 1-3
2.1 Chapter 1- Nature and Form of the Contract
2.1.1 Article 1458 Concept of Contract of sale
2.1.2 Article 1459 Requisites concerning objects, Kinds of illicit things,
Right of vendor to transfer ownership
2.1.3 Article 1460 Subject Matter Must be Determinate
DIPOLOG MEDICAL CENTER COLLEGE FOUNDATION
Sta. Filomena, Dipolog City

2.1.4 Article 1461 Things having potential existence as object of sale,
Sale of hope or expectancy
2.1.5 Article 1462 Goods which may be the object of sale, Future goods as
object of sale
2.1.6 Article 1463 Sale of undivided interest in a thing
2.1.7 Article 1464 Sale of an undivided share of a specific mass
2.1.8 Article 1465 Sale of thing subject to a resolutory condition
2.1.9 Article 1466 Sale distinguished from agency to sell
2.1.10 Article 1467 Sale distinguished from contract for a piece of work
2.1.11 Article 1468 Sale distinguished from barter
2.1.12 Article 1469 When price is considered certain, Effect where price fixed
by third person, Effect where price not fixed by third person
designated
2.1.13 Articles 1470-1471 Effect of gross inadequacy of price in voluntary sales, Effect
of gross inadequacy of price in involuntary or execution sales
2.1.14 Article 1472 Price on a given day at particular market
2.1.15 Article 1473 Fixing of price by one of the contracting parties not allowed
2.1.16 Article 1474 Effect of failure to determine price
2.1.17 Article 1475 Perfection of contract sale, Effect of failure to pay
price/absence of price
2.1.18 Article 1476 Rules governing auction sales
2.1.19 Articles 1477-1478 Ownership of thing transferred by delivery, Exception to the
Rule
2.1.20 Article 1479 Kinds of promise treated in Article 1479, Effect of unaccepted
unilateral promise, Meaning of Option, Effect of accepted
unilateral promise, Effect of Bilateral Promise to buy and sell
2.1.21 Article 1480 Risk of loss or deterioration, Scope of Article 1480
2.1.22 Article 1481 Sale of goods by description and/or sample
2.1.23 Article 1482 Meaning of earnest money, Earnest money and option money
distinguished
2.1.24 Article 1483 Form of contract of sale, Sale of real property, Statute of frauds
applicable only to executor contracts
2.1.25 Article 1484 Remedies of Vendor in sale of personal property payable in
Instalments, Nature of the remedies, Right of Vendor to
recover unpaid balance of purchase price, Recovery of
deficiency after foreclosure prohibited
2.1.26 Article 1485 Lease of personal property with option to buy
2.1.27 Article 1486 Stipulation regarding forfeiture of instalments or rents paid
2.1.28 Article 1487 Expenses for execution and registration
2.1.29 Article 1488 Expropriation of property for public use

1st Long Examination Week 3

2.2 Chapter 2- Capacity to Buy or Sell Week 4
2.2.1 Article 1489 Person who may enter into a contract of sale, Kinds of
Incapacity, Liability for necessaries of minor or other person
without capacity to act, Sale by minors.
2.2.2 Article 1490 Relative incapacity of husband and wife, Reason for prohibition
DIPOLOG MEDICAL CENTER COLLEGE FOUNDATION
Sta. Filomena, Dipolog City

under Article 1490, Persons permitted to question sale
2.2.3 Article 1491 Incapacity by reason of relation to property, Reason for
prohibition under Article 1491, Other persons especially
disqualified, Effect of sale in violation of prohibition
2.2.4 Article 1492 Prohibition extends to sales in legal redemption, etc.

2.3 Chapter 3- Effects of the Contract When the Thing Sold Has Been Lost
2.3.1 Article 1493 Effect of loss of thing at the time of sale, When a thing
considered lost
2.3.2 Article 1494 Effect of loss in case of specific goods

PRELIMINARY EXAMINATION Week 4

2.4 Chapter 4- Obligations of the Vendor Week 5-7
2.4.1 Section 1- General Provisions
2.4.1.1 Article 1495 Principal obligations of the vendor, Obligations
to transfer ownership and to deliver
2.4.1.2 Article 1496 Ways of effecting delivery, Ways of effecting
constructive delivery
2.4.2 Section 2- Delivery of the thing sold
2.4.2.1 Article 1497 Concept of tradition or delivery, Importance of
Tradition, Actual delivery of the thing sold
2.4.2.2 Article 1498 Execution of a public instrument or document,
Where the thing not subject to control of
Vendor, Symbolic tradition
2.4.2.3 Article 1499 Traditio longa manu, Tradition brevi manu
2.4.2.4 Article 1500 Traditio constitutum possessorium
2.4.2.5 Article 1501 Quasi-traditio, Delivery by agreement signifying
a transfer of possession
2.4.2.6 Article1502 Contracts of sale or return, and of sale on trial
or approval or satisfaction, Sale or return
distinguished from sale on trial
2.4.2.7 Article 1503 Delivery of specific goods sold generally passes
Title, Reservation of right of possession or
ownership when specific goods are shipped,
Where seller or his agent is consignee, Where
seller’s title only for purpose of security, Where
buyer or his agent is consignee but seller retains
the bill of lading, Where bill of lading is sent
forward with draft attached, Effect of buyer’s
obtaining possession of bill of lading without
honouring draft
2.4.2.8 Article 1504 Risk of loss generally attends title, Risk of loss
by fortuitous event after perfection but before
delivery
2.4.2.9 Article 1505 Sale by a person not the owner
2.4.2.10 Article 1506 Sale by one having a voidable title
2.4.2.11 Article 1507 Nature and function of documents of title, Most
DIPOLOG MEDICAL CENTER COLLEGE FOUNDATION
Sta. Filomena, Dipolog City

common forms of document of title, Classes of
document of titles
2.4.2.12 Article 1508 Negotiation of negotiable document by delivery
2.4.2.13 Article 1509 Negotiation of negotiable document by
indorsement
2.4.2.14 Article 1510 Negotiable documents of title marked “non-
negotiable”
2.4.2.15 Article 1511 Transfer of non-negotiable documents
2.4.2.16 Article 1512 Persons who may negotiate a document
2.4.2.17 Article 1513 Rights of person to whom document has been
Negotiated
2.4.2.18 Article 1514 Rights of person to whom document has been
Transferred, Rights of third person to goods
where document
2.4.2.19 Article 1515 Transfer of order document without
Indorsement, Subsequent indorsement of
negotiable document transferred
2.4.2.20 Article 1516 Warranties on sale of documents
2.4.2.21 Article 1517 Indorsement not a guarantor
2.4.2.22 Article 1518 When negotiation not impaired by fraud,
mistake, duress, etc.
2.4.2.23 Article 1519 Attachment or levy upon goods covered by a
negotiable document
2.4.2.24 Article 1520 Creditor’s remedies to reach negotiable
documents
2.4.2.25 Article 1521 Place of delivery of goods sold, Time of delivery
of goods sold, Delivery of goods in possession of
a third person, Hour of delivery of goods sold,
Duty of seller to put goods in deliverable
condition
2.4.2.26 Article 1522 Delivery of goods less than the quantity
Contracted, Delivery of goods more than
quantity contracted, Delivery of goods mixed
with others, Effect of indivisibility of subject
matter, Rules may be controlled by usage of
trade, etc.
2.4.2.27 Article 1523 Delivery to carrier on behalf of buyer, Seller’s
duty after delivery to carrier, Definition of trade
terms
2.4.2.28 Article 1524 Delivery simultaneous with payment of price,
When delivery must be made before payment
of the price
2.4.2.29 Article 1525 Meaning of unpaid seller, Where whole of the
price has not yet been paid
2.4.2.30 Article 1526 Remedies of an unpaid seller, Basis of rights of
unpaid seller
2.4.2.31 Article 1527 When unpaid seller’s possessory lien may be
exercised
DIPOLOG MEDICAL CENTER COLLEGE FOUNDATION
Sta. Filomena, Dipolog City

2.4.2.32 Article 1528 Lien not generally lost by part delivery
2.4.2.33 Article 1529 When unpaid seller losses possessory lien
2.4.2.34 Article 1530 Right of seller to stop goods in transit,
Requisites for the exercise of rights of stoppage
in transit, Basis of right of stoppage in transit
2.4.2.35 Article 1531 When goods are in transit, When goods
considered no longer in transit, Attornment by
the bailee, Effect of refusal of carrier to attorn
or deliver the goods, Delivery to a ship, etc.
chartered or owned by buyer, Effect of partial
delivery
2.4.2.36 Article 1532 Ways of exercising the right to stop, Effect of
outstanding bill of lading

2.4.2.37 Article1533. Resale
2.4.2.37 Article 1534. Rescind
2.4.2.38 Article 1535. Effect of sale of goods subject to lien or
stoppage in transit
2.4.2.39 Article 1536. Right of vendor to withhold delivery in sale on
credit
2.4.2.40 Article 1537. Right of vendee to the fruits

2.4.2.41 Article 1538. Rules in case of loss, deterioration or improvement
of thing before delivery
2.4.2.42 Article 1539. Sale of real property

2.4.2.43 Article 1540. Where there is a greater area or number
2.4.2.44 Article 1541. Judicial sales rules
2.4.2.45 Article 1542. Sale of real estate made for a lump sum
2.4.2.46 Article 1543. Prescription o actions
2.4.2.47 Article 1544. Rules as to preference of ownership in case of
double sale.

2.4.3 Section 3. Conditions and Warranties
2.4.3.1 Article 1545. Condition
2.4.3.2 Article 1546. Warranty and Express warranty
2.4.3.3 Article 1547. Implied warranty

2.4.3.4 Subsection 1. Warranty in case of eviction

2.4.3.4.1 Article 1548. Meaning of eviction

2.4.3.4.2 Article 1549. Vendee has no duty to appeal from
judgment
2.4.3.4.3 Article 1550. Effect of prescription
2.4.3.4.4 Article 1551. Deprivation for non-payment of taxes
2.4.3.4.5 Article 1552. Liability of judgment debtor
2.4.3.4.6 Article 1553. Stipulation waiving warranty
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Sta. Filomena, Dipolog City

2.4.3.4.7 Article 1554. Waiver
2.4.3.4.8 Article 1555. Rights and liabilities in case eviction occurs
2.4.3.4.8 Article 1556. Rights of vendee in case of partial eviction
2.4.3.4.9 Article 1557. Final judgment of eviction essential
2.4.3.4.10 Article 1558. Formal summons to vendor essential
2.4.3.4.11 Article 1559. Vendor to be made co-defendant
2.4.3.4.12 Article 1560. Right of vendee where immovable sold
encumbered with non-apparent burden.

2.4.3.5 Subsection 2. Warranty Against Hidden Defects of or Encumbramces
Upon the Thing sold.

2.4.3.5.1 Article 1561. Requisites for warranty against hidden
defects.
2.4.3.5.2 Article 1562. Implied warranties of quality
2.4.3.5.3 Article 1563. Sale under a patent or trade name
2.4.3.5.4 Article 1564. Effect of usage or trade
2.4.3.5.5 Article 1565. Merchantability of goods sold by sample
2.4.3.5.6 Article 1566. Effect of ignorance of vendor of hidden
defects
2.4.3.5.7 Article 1567. Alternative remedies of the buyer to
enforce warranty
2.4.3.5.8 Article 1568. Effect of loss of defective thing sold.
2.4.3.5.9 Article 1569. Effect of loss of defective thing sold
2.4.3.5.10 Article 1570. Warranty in judicial sales
2.4.3.5.11 Article 1571. Limitation of Action
2.4.3.5.12 Article 1572. Sale of two or more animals together
2.4.3.5.13 Article 1573. Sale of two or more things together
2.4.3.5.14 Article 1574. Sale of animals at fairs or at public
auctions or a condemned
2.4.3.5.15 Article1575. When sale of animals void
2.4.3.5.16 Article 1576. Redhibitory defect
2.4.3.5.17 Article 1577. Limitation of action in sale of animals
2.4.3.5.18 Article 1578. Responsibility of vendor where animal dies
2.4.3.5.19 Article 1579. Liability of buyer in case sale of animal is
rescinded
2.4.3.5.20 Article 1580. Alternative remedies of vendee in sale of
animals
2.4.3.5.21 Article 1581. Form of sale of large cattle.

MIDTERM EXAMINATION Week 8

2.5 Chapter 5 Obligations of the Vendee Week 9
2.5.1 Article 1582- Principal obligations of vendee
2.5.2 Article 1583- Rules governing delivery in instalments
2.5.3 Article 1584- Buyer’s right to examine goods
2.5.4 Article 1585- Modes of manifesting acceptance
2.5.5 Article 1586- acceptance not a bar to action for damages
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2.5.6 Article 1587- Where buyer’s refusal to accept justified
2.5.7 Article 1588- Effect of buyer’s refusal to accept
2.5.8 Article 1589- Liability of vendee for interest where payment made
after delivery
2.5.9 Article 1590- When vendee can suspend payment
2.5.10 Article 1591- When vendor may rescind sale of immovable property
2.5.11 Article 1592- Where automatic rescission of sale of immovable property
stipulated
2.5.12 Article 1593- Where automatic rescission of sale of movable property
stipulated

2.6 Chapter 6 Actions for Breach of Contract of Week 10
Sale of Good
2.6.1 Article 1594- Provisions governing breach of contract of sale of goods
2.6.2 Article 1595- Seller’s right of action for the price
2.6.3 Article 1596- Seller’s right of action for damages
2.6.4 Article 1597- Seller’s right of rescission before delivery
2.6.5 Article 1598- Buyer’s right to specific performance
2.6.6 Article 1599- Remedies of buyer for breach of warranty by seller.

2.7 Chapter 7 Extinguishment of Sale Week 10
2.7.1 Article 1600

2.7.2 Section 1- Conventional Redemption Week 10
Articles 1601- 1618
2.7.3 Section 2- Legal Redemption Week 11
Articles 1619 to 1623

2.8 Chapter 8 Assignment of Credits and Other Week11
Incorporeal Rights
2.8.1 Article 1624- Assignment of credit
2.8.2 Article 1625- Binding effect of assignment
2.8.3 Article 1626- Effect of payment by debtor before knowledge of
assignment
2.8.4 Article 1627- Extent of assignment of credit
2.8.5 Article 1628- Warranties of the assignor of credit
2.8.6 Article 1629- Duration of assignor’s liability where debtor’s
solvency guaranteed
2.8.7 Article 1630- Sale of Successional or hereditary rights
2.8.8 Article 1631- Sale of whole of certain rights, rents or products
2.8.9 Article 1632- Liability of vendor of inheritance for fruits received
2.8.10 Article 1633- Liability of vendee for debts of and charges on,
estate
2.8.11 Article 1634- Legal redemption in sale of right in litigation
2.8.12 Article 1635- Exceptions to debtor’s right of legal redemption
DIPOLOG MEDICAL CENTER COLLEGE FOUNDATION
Sta. Filomena, Dipolog City

SEMIFINAL EXAMINATION Week 12

2.9 Chapter 9 General Provisions Week 13
2.9.1 Article 1636- Definition of terms
2.9.2 Article 1637- Sale of immovable subject to registration law

2.10 Chapter 10 Barter or exchange Week 13
2.10.1 Article 1638- Barter
2.10.2 Article 1639- Effect where giver not lawful owner of thing
delivered.
2.10.3 Article 1640- Effect of eviction
2.10.4 Article 1641- Applicability of provisions on sales

2.11 Chapter 11 Bulk Sales Law Week 13
2.11.1 Sec 1- Purpose of the law
2.11.2 Sec 2- When sale or transfer in bulk not covered by the bulk sales
law
2.11.3 Sec 3-5- Protection accorded to creditors by the law, effect of
violation of law on transfer
2.11.4 Sec 6-7- acts punished by law

3. Contract of Agency
3.1 Contract of agency Week 14
3.1.1 Nature, characteristics and kinds of contract of agency
3.1.2 Form and perfection of a contract of agency
3.1.3 The agent- his rights and obligations
3.1.4 The principal-his rights and obligations
3.1.5 Guaranty of commission agents
3.1.6 Modes of extinguishment

4. Pledge Week 14
4.1 Nature and binding effect on third persons
4.2 Obligations/rights of pledgor and pledge
4.3 Pactum commissorium
4.4 Modes of extinguishment

5. Mortgage Week 14
5.1 Real and chattel
5.2 Nature
5.3 Requisites
5.4 Rights and obligations of mortgagor and mortgagee
5.5 Requisites to have binding effect on third persons
5.6 Mode of extinguishment

6. Law on credit transactions/bailment Week 14
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Sta. Filomena, Dipolog City

6.1 Loan
6.2 Deposit
6.3 Guaranty
6.4 Pledge
6.5 Mortgage (real and chattel)
6.6 Antichresis

FINAL EXAMINATION Week 15

VI. REFERENCES

Law on Sales, Agency and Credit Transactions 2010 edition
By Hector S. De Leon, Hector M. De Leon, Jr.

Notes in Business Law
By Fidelito R. Soriano

Pointers in Business Law volume 1 and volume 2
By Carlos B Suarez, Alexander Q. Suarez

VII. EVALUATION PROCEDURES
CLASS PARTICIPATION/ QUIZZES 40%
ATTENDANCE 10%
PROJECTS/ ASSIGNMENTS 10%
MAJOR EXAMINATION 40%
TOTAL 100%

DATE REVISED: January 2016

PREPARED BY: Gina Lou M. Cacho, CPA

CHECKED BY: MRS. RACHELL-ANN B. BULJATIN, CPA
OIC-Dean, School of Business and Accountancy

APPROVED BY: Dr. DINO JOEY L. CORDOVA
Dean of Instruction/ VP for Academic Affairs