Contract of Sales

Characteristics: Consensual, Principal, Bilateral, Onerous, Commutative, Nominate

Obligations of the Vendor: To deliver the thing sold including the ACCESSIONS and
ACCESSORIES in the condition which they were upon the perfection of the contract.

If silent, FOB shipping point. Buyer is liable after shipping.

Contract of Sale Piece of Work Contract of Sale Contract to Sell

Sale of 500 OR MORE is covered by SOF Rule on Double Sale for Sales ONLY

Emptio Rei Speretae Emptio Spei Arras/Earnest money Option Money

Sale – Future Thing Sale – Hope Part of PP/Perfection Not Part of PP

After perfection, before delivery “res perit domino” – seller will suffer the risk of loss

Rights of an Unpaid Seller:

Right of stoppage in transit, right of resale, right to rescind the sale

Traditio (Types of Possession)

 Legal Formalities – public instrument  Brevi Manu – Vendee is already in possession. Finance
 Symbolica – giving the keys Lease with Bargain Purchase Option (Movables Only)
 Longa Manu – delivery of the thing by  Constitutum Possessorium – Vendor still in possession.
mere consent movable Sale and Leaseback (Movable and Immovable).

Recto Law - Personal Maceda Law - Residential

Selection of one, invalidates the other options: Covers contract to sell and conditional sales.
 One month failure – 1 remedy Installment Sales of Residential Property.
o Exact fulfillment with recovery of
deficiency (writ of attachment) Minimum Grace Cash Surrender
 2 or more failure – 3 remedies: Period Value
o Exact fulfillment, Less than 60 days None
o Cancel the sale and return the proceeds 2 years
less reasonable rent, 2-5 years 60 days + 30 50%
o Foreclose the chattel mortgage (no right days per 1 year
of recovery w/ or w/o stipulation) More than 60 days + 30 50% + 5% per
5 years days per 1 year year up to 90%
Foreclosure of another thing other than the one
sold (general rule will apply: deficiency can be
recovered) Minimum Grace Period availed once in every 5
years only.

Down payment not included in counting

Installment payment, but CSV will include it
 Sale On Trial/Approval VS. Sale or Return
Sale on trial or approval – buyer will own it if:
 buyer signifies his approval,
 buyer does an act adopting the
transaction,
 buyer does not signify his approval
within a reasonable time fixed in the
contract
Sale or return – buyer owns it upon delivery.
Sale of Real Estate at CPU or Lump Sum
Excess/Inadequate (prescription of 6 months)
Certain Price per Unit:
 Quanti Minoris (Reduction)
 Redhibitoria (Rescind) only if:
Poor quality 10% must be poor quality
Lacking Area 1/10 of area
Lumpsum price – Pay stipulated price even if
area is lacking/more than in the contract.
 Redhibitoria only if unconscionable.
 If vendor does not deliver the area within
the contract, you can rescind or reduction

Rules on Eviction – Seller’s Liabilities

No Waiver Waiver Consciente Waiver Intencionada
Bad Faith – VICED Liable for value of the thing at NO LIABILITY
Good Faith – VICE the time of eviction
Value of The Thing @ Eviction, Income/Fruits, Cost of Suit, Expenses, Damages (VICED)
Double Sale Rules on Transactions do not apply to unregistered titles.
 waiver is a donation of rights. If silent, less gratuitous transfer so Consciente
 Encumbrance or easement – encumbrance imposed upon an IMMOVABLE property for the benefit
of another immovable belongings.
 1 year of prescription for cancellation. After that, damages only.
 non-apparent, not mentioned in agreement, vendee would not have acquired the
immovable had he been aware thereof.

Remedies of Vendee in case of Breach of Warranties in case of HIDDEN DEFECTS.

 prescriptive period of 6 months from delivery of the thing sold
 withdrawal from contract or rescission – accion redhibitoria
 demanding a proportionate in the price – accion quanti minoris
Seller will be liable for thing with hidden defect regardless of the reason of the loss. THE REASON
FOR THE LIABILITY IS THE HIDDEN DEFECT whether aware or not (basta walang waiver).
 if good faith, price + expense + interest
 bad faith, price + expense + damages

Redhibitory Effect on Animals Seller Liable in case the Animal Dies of

(even a professional can’t check it)
 40 days prescription
 for animals sold in pairs – redhibitory only
 for separate – AR or AQM
 no warranty if sold at fairs, public auctions or
condemned livestock
Disease (Different from Redhibitory)
 disease exist at the same of the sale and is
the cause of death
 animal dies within 3 days (need to autopsy)
 Installment Delivery – seller makes a defective delivery/buyer neglects or refuses w/o just cause
 refuse to proceed with the contract and sue for damages for breach of entire contract or
 claim compensation for damages if the breach is severable

Immovable Property Sold Movable Property Sold

Remedy of Seller in case of Fear of Loss Rescission of Seller
 Property AND price – immediate rescission  Time of delivery, vendee does not appear
 Property or Price – fulfillment or rescission  Time of delivery, vendee does not pay the
WITH damages price unless a longer period is stipulated

Conventional Redemption Legal Redemption

Pacto de Retro Sale or Right of Repurchase
 if it cannot be identified if pacto de retro or
equitable mortgage, usually equitable
mortgage
 if proven na pacto de retro, buyer may
exercise the right within 30 days from the
rendition of judgment
 if no period, 4 years. Maximum of 10 years
The right of a 3rd person to repurchase a land
in exceptional cases
 repurchase by a co-owner
 adjoining rural lot owner – the one with the
smallest land will one. If same size, the first
one.
 adjoining urban lot owner (right of preemption
and legal redemption) – best justified use will
win
o right to purchase within 30 days of notice