CHAPTER 1: INTRODUCTION special order, and not for the general market, it is a contract for a

piece of work. (n)
CHAPTER 1
Nature and Form of the Contract Article 1468. If the consideration of the contract consists partly in
money, and partly in another thing, the transaction shall be
Article 1458. By the contract of sale one of the contracting parties characterized by the manifest intention of the parties. If such
obligates himself to transfer the ownership and to deliver a intention does not clearly appear, it shall be considered a barter if
determinate thing, and the other to pay therefor a price certain in the value of the thing given as a part of the consideration exceeds
money or its equivalent. the amount of the money or its equivalent; otherwise, it is a sale.
(1446a)
A contract of sale may be absolute or conditional. (1445a)
Article 1469. In order that the price may be considered certain, it
shall be sufficient that it be so with reference to another thing
Article 1459. The thing must be licit and the vendor must have a
certain, or that the determination thereof be left to the judgment of
right to transfer the ownership thereof at the time it is delivered. (n)
a special person or persons.

Article 1460. A thing is determinate when it is particularly
Should such person or persons be unable or unwilling to fix it, the
designated or physical segregated from all others of the same class.
contract shall be inefficacious, unless the parties subsequently agree
upon the price.
The requisite that a thing be determinate is satisfied if at the time
the contract is entered into, the thing is capable of being made
If the third person or persons acted in bad faith or by mistake, the
determinate without the necessity of a new or further agreement
courts may fix the price.
between the parties. (n)

Where such third person or persons are prevented from fixing the
Article 1461. Things having a potential existence may be the object
price or terms by fault of the seller or the buyer, the party not in
of the contract of sale.
fault may have such remedies against the party in fault as are
allowed the seller or the buyer, as the case may be. (1447a)
The efficacy of the sale of a mere hope or expectancy is deemed
subject to the condition that the thing will come into existence.
Article 1470. Gross inadequacy of price does not affect a contract of
sale, except as it may indicate a defect in the consent, or that the
The sale of a vain hope or expectancy is void. (n) parties really intended a donation or some other act or contract. (n)

Article 1462. The goods which form the subject of a contract of sale Article 1471. If the price is simulated, the sale is void, but the act
may be either existing goods, owned or possessed by the seller, or may be shown to have been in reality a donation, or some other act
goods to be manufactured, raised, or acquired by the seller after the or contract. (n)
perfection of the contract of sale, in this Title called "future goods."
Article 1472. The price of securities, grain, liquids, and other things
There may be a contract of sale of goods, whose acquisition by the shall also be considered certain, when the price fixed is that which
seller depends upon a contingency which may or may not happen. the thing sold would have on a definite day, or in a particular
(n) exchange or market, or when an amount is fixed above or below the
price on such day, or in such exchange or market, provided said
Article 1463. The sole owner of a thing may sell an undivided amount be certain. (1448)
interest therein. (n)
Article 1473. The fixing of the price can never be left to the
Article 1464. In the case of fungible goods, there may be a sale of an discretion of one of the contracting parties. However, if the price
undivided share of a specific mass, though the seller purports to sell fixed by one of the parties is accepted by the other, the sale is
and the buyer to buy a definite number, weight or measure of the perfected. (1449a)
goods in the mass, and though the number, weight or measure of
the goods in the mass, and though the number, weight or measure Article 1474. Where the price cannot be determined in accordance
of the goods in the mass is undetermined. By such a sale the buyer with the preceding articles, or in any other manner, the contract is
becomes owner in common of such a share of the mass as the inefficacious. However, if the thing or any part thereof has been
number, weight or measure bought bears to the number, weight or delivered to and appropriated by the buyer he must pay a
measure of the mass. If the mass contains less than the number, reasonable price therefor. What is a reasonable price is a question of
weight or measure bought, the buyer becomes the owner of the fact dependent on the circumstances of each particular case. (n)
whole mass and the seller is bound to make good the deficiency
from goods of the same kind and quality, unless a contrary intent
Article 1475. The contract of sale is perfected at the moment there
appears. (n)
is a meeting of minds upon the thing which is the object of the
contract and upon the price.
Article 1465. Things subject to a resolutory condition may be the
object of the contract of sale. (n)
From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the
Article 1466. In construing a contract containing provisions form of contracts. (1450a)
characteristic of both the contract of sale and of the contract of
agency to sell, the essential clauses of the whole instrument shall be
Article 1476. In the case of a sale by auction:
considered. (n)

(1) Where goods are put up for sale by auction in lots,
Article 1467. A contract for the delivery at a certain price of an
each lot is the subject of a separate contract of sale.
article which the vendor in the ordinary course of his business
manufactures or procures for the general market, whether the same
is on hand at the time or not, is a contract of sale, but if the goods (2) A sale by auction is perfected when the auctioneer
are to be manufactured specially for the customer and upon his announces its perfection by the fall of the hammer, or in

1|P a g e

The expenses for the execution and registration of the sale shall be borne by the vendor. the property of the person or persons who may be under his guardianship. and under article 191. (2) Cancel the sale. it shall unpaid balance of the price. In the case referred to in the two preceding articles. A promise to buy and sell a determinate thing for a contrary. in any manner whatsoever. a contract of sale may be made in writing. after the contract has been perfected. should the vendee made. or without consideration of person without capacity to act. (1457a) Should fungible things be sold for a price fixed according to weight. (n) Article 1486. or measured and delivered. he must pay a reasonable price their weight. (1454-A-a) the buyer. (n) (1) The guardian. this provision shall apply to judges and government experts who. therefor. Until such announcement is (1) Exact fulfillment of the obligation. The parties may stipulate that ownership in the thing shall not pass to the purchaser until he has fully paid the price. Article 1482. (n) Article 1487. Article 1484. In this case. Article 1483. if one stipulation. All persons who are authorized in this Code to obligate the contract to the time of delivery. the property of the of mouth. shall be governed by articles themselves. (1451a) CHAPTER 2 Capacity to Buy or Sell Article 1480. Article 1490. (1454a) (2) Agents. a Article 1477. Article 1488. In the contract of sale of goods by description or by sample. In a contract of sale of personal property the price of (4) Public officers and employees. he shall have (4) Where notice has not been given that a sale by auction no further action against the purchaser to recover any is subject to a right to bid on behalf of the seller. has been constituted. and the auctioneer fail to pay. number. the administration of which has been intrusted to them. from the moment of the perfection of Article 1489. or of any government- following remedies: owned or controlled corporation. Whenever earnest money is given in a contract of sale. or institution. (1455a) price certain is reciprocally demandable. (1452a) (1) When a separation of property was agreed upon in the marriage settlements. unless the consent of the principal has been given. or measure. unless the latter has incurred in delay. modifications contained in the following articles. The ownership of the thing sold shall be transferred to stipulation that the installments or rents paid shall not be returned the vendee upon the actual or constructive delivery thereof. bid from the seller or any person employed by him. the vendor may exercise any of the State or of any subdivision thereof. either in person or through the mediation of another: The buyer shall have a reasonable opportunity of comparing the bulk with the description or the sample. except: until they have been weighed. the property whose administration or sale may have been intrusted to them. The following persons cannot acquire by purchase. Any when the lessor has deprived the lessee of the possession or sale contravening this rule may be treated as fraudulent by enjoyment of the thing. The husband and the wife cannot sell property to each number. (3) A right to bid may be reserved expressly by or on behalf of the seller. even at a public or judicial auction. Any agreement to the not be lawful for the seller to bid himself or to employ or contrary shall be void. Necessaries are those referred to in article 290. it shall be considered as part of the price and as proof of the perfection of the contract. the risk shall not be imputed to the vendee other. (n) to the vendee or lessee shall be valid insofar as the same may not be unconscionable under the circumstances. it is not sufficient that the bulk of goods correspond with the sample if they do not also correspond with the description. 2|P a g e . made Where necessaries are those sold and delivered to a minor or other independently and for a single price. should the vendee's failure to pay cover two or more installments. (1454-A-a) induce any person to bid at such sale on his behalf or for the auctioneer. any bidder may retract his bid. or measure. The expropriation of property for public use is An accepted unilateral promise to buy or to sell a determinate thing governed by special laws. to employ or induce any person to bid at Article 1485. Any injury to or benefit from the thing sold. unless there is a stipulation to the Article 1479. other customary manner. the contract may be rescinded if the bulk of the goods (2) When there has been a judicial separation of property delivered do not correspond with the description or the sample. Article 1491. (n) estate under administration. Subject to the provisions of the Statute of Frauds and of any other applicable statute. unless otherwise provided by law or by (3) Foreclose the chattel mortgage on the thing sold. should the vendee's failure to pay cover two or more installments. take part in the sale. This rule shall apply to the sale of fungible things. or partly in writing and partly by word (3) Executors and administrators. may withdraw the goods from the sale unless the auction has been announced to be without reserve. (1458a) if the contract be by sample as well as description. (1456) for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price. the property of the which is payable in installments. may enter into a contract of sale. counted. or may be inferred from the conduct of the parties. saving the 1163 to 1165. or Article 1481. or by word of mouth. (n) Article 1478. The preceding article shall be applied to contracts such sale on behalf of the seller or knowingly to take any purporting to be leases of personal property with option to buy. and 1262.

the price with its interest. whenever. Rescission creates the obligation to return the things In cases of intimidation. consequently. (n) In addition to these presumptions. if incapacity. The prohibitions in the two preceding articles are and need not have been obtained by the party seeking the applicable to sales in legal redemption. Rescission shall be only to the extent necessary to cover the damages caused. Article 1382. when the donor did not reserve sufficient and shall apply to lawyers. (4) Those which refer to things under litigation if they have even though there may have been no damage to the contracting been entered into by the defendant without the parties: knowledge and approval of the litigants or of competent judicial authority. (1459a) in any instance or some writ of attachment has been issued. from the time the guardianship ceases. the design to defraud creditors CONTRACTS may be proved in any other manner recognized by the law of evidence. Neither shall rescission take place when the things which are the And when the action refers to contracts entered into by minors or object of the contract are legally in the possession of third persons other incapacitated persons. Contracts validly agreed upon may be rescinded in the should be impossible for him to return them. (1295) contract. compromises and rescission. (1294) Article 1391. renunciations. Ratification extinguishes the action to annul a voidable person causing the loss. (1290) If there are two or more alienations. it Article 1380. The following contracts are voidable or annullable. The action to claim rescission must be commenced the wards whom they represent suffer lesion by more than within four years. and so on successively. The action for annulment shall be brought within four years. (1296a) the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or Article 1387. CHAPTER 7 (3) Those undertaken in fraud of creditors when the latter Voidable Contracts cannot in any other manner collect the claims due them. it can be carried out only when he who demands rescission can return whatever he may be In case of mistake or fraud. shall indemnify the latter for damages suffered by them on account of the alienation. (1297a) CHAPTER 6 Rescissible Contracts Article 1388. courts. (1298a) (1) Those which are entered into by guardians whenever Article 1389. (5) All other contracts specially declared by law to be subject to rescission. (5) Justices. due to any cause. (1292) These contracts are binding. and the defect of the consent ceases. (n) This period shall begin: Article 1385. (1301a) In this case. 1 and 2 of article 1381 superior and inferior courts. The action for rescission is subsidiary. or until the domicile of the latter is known. Article 1384. with respect to the property property to pay all debts contracted before the donation. Payments made in a state of insolvency for obligations to whose fulfillment the debtor could not be compelled at the time they were effected. cases established by law. They are susceptible of ratification. who did not act in bad faith. (n) Article 1383. (1) Those where one of the parties is incapable of giving consent to a contract. the period of four years shall not begin until the termination of the former's (2) Those agreed upon in representation of absentees. Whoever acquires in bad faith the things alienated in fraud of creditors. this property by gratuitous title are presumed to have been entered into prohibition includes the act of acquiring by assignment in fraud of creditors. Rescission referred to in Nos. together with their fruits. from the time which were the object of the contract. indemnity for damages may be demanded from the Article 1392. are also rescissible. (1309a) 3|P a g e . For persons under guardianship and for absentees. one-fourth of the value of the things which are the object thereof. it cannot be instituted except when the party suffering damage has no other legal means to obtain reparation for the same. Alienations by onerous title are also presumed fraudulent when made by persons against whom some judgment has been rendered (6) Any others specially disqualified by law. intimidation. The decision or attachment need not refer to the property alienated. same. the first acquirer shall be liable Article 1381. and rights which may be the object of any litigation in which they may take part by virtue of their profession. unless they are annulled by a proper action in court. (1299) the latter suffer the lesion stated in the preceding number. and other officers and shall not take place with respect to contracts approved by the employees connected with the administration of justice. clerks of Article 1386. violence or undue influence. judges. prosecuting attorneys. undue influence or fraud. The following contracts are rescissible: first. violence. from the time of the discovery of the obliged to restore. Article 1390. Article 1492. (1291a) (2) Those where the consent is vitiated by mistake. All contracts by virtue of which the debtor alienates territory they exercise their respective functions.

or some note or memorandum. In a contract where both parties are incapable of giving return. but when a sale is made by Article 1398. the value thereof shall be the basis for damages. terms of sale. as the case may be. (1314a) Registry of Deeds. unless they the inception. The action for the annulment of contracts may be instituted by all who are thereby obliged principally or subsidiarily. (1304) ( f ) A representation as to the credit of a third person. Ratification cleanses the contract from all its defects from the moment it was constituted. with interest from the same date. In the following cases an 4|P a g e . the loss of the thing shall not be an obstacle to Article 1406. of the subject matter of the contract. incumbent upon him.Article 1393. (1303a) (e) An agreement for the leasing for a longer period than one year. therefore. When the defect of the contract consists in the property or of an interest therein. As long as one of the contracting parties does not restore what in virtue of the decree of annulment he is bound to Article 1407. (1313) (c) An agreement made in consideration of marriage. are ratified by the failure to object to the the proceedings. Ratification may be effected expressly or tacitly. of such things in (1302a) action or pay at the time some part of the purchase money. Article 1401. or who has acted beyond his powers. 2 of article 1403. nor can those who exerted hundred pesos. (1311a) agreement cannot be received without the writing. (1307a) Article 1404. The action for annulment of contracts shall be extinguished when the thing which is the object thereof is lost Article 1405. CHAPTER 9 Void and Inexistent Contracts (2) Those that do not comply with the Statute of Frauds as set forth in this number. and the price with amount and kind of property sold. Ratification may be effected by the guardian of the incapacitated person. one who has been given no authority or legal representation. Unenforceable contracts cannot be assailed by third (1) Those entered into in the name of another person by persons. When a contract is enforceable under the Statute of the success of the action. persons who are capable cannot allege the incapacity of or things in action. An obligation having been annulled. or a secondary evidence of its contents: Article 1394. or guardian. referred to through the fraud or fault of the person who has a right to institute in No. unless said loss took place through the Frauds. Ratification does not require the conformity of the thereof. of the act which necessarily implies an intention to waive his right. except in cases provided by law. or employed fraud. In obligations to render service. and a public document is necessary for its registration in the fraud or fault of the plaintiff. (1312) (b) A special promise to answer for the debt. evidence. or receive part of such goods and chattels. The following contracts are unenforceable. or by the acceptance of benefit under them. or the caused mistake base their action upon these flaws of the contract. Article 1400. at a price not less than five those with whom they contracted. presentation of oral evidence to prove the same. violence. or by his agent. or for the sale of real Article 1399. CHAPTER 8 Unenforceable Contracts (n) If ratification is made by the parents or guardians. It is agreement hereafter made shall be unenforceable by understood that there is a tacit ratification if. chattels However. price. (1308) as the case may be. with their fruits. the thing at the time of the loss. the contracting auction and entry is made by the auctioneer in parties shall restore to each other the things which have been the his sales book. Unauthorized contracts are governed by article 1317 and the principles of agency in Title X of this Book. unless the same. Article 1396. at the time of the sale. unless the buyer accept and intimidation. of both contracting parties. the other cannot be compelled to comply with what is consent. the person who has a right to invoke it should execute an charged. with knowledge of the action. (n) (a) An agreement that by its terms is not to be performed within a year from the making Article 1395. he shall return the fruits received and the value of consent to a contract. other than a mutual promise to marry. the parties may avail themselves of the right under Article 1357. incapacity of one of the parties. If the right of action is based upon the incapacity of any one of the contracting parties. or some of them. evidences. and subscribed by the party ceased. contracting party who has no right to bring the action for annulment. Article 1397. be in writing. Contracts infringing the Statute of Frauds. it is a sufficient memorandum. the incapacitated person is not obliged to make any restitution except insofar as he has been benefited by the thing or price received by him. default. are ratified: Article 1408. reason which renders the contract voidable and such reason having thereof. Whenever the person obliged by the decree of annulment to return the thing can not do so because it has been lost (3) Those where both parties are incapable of giving through his fault. or undue influence. Article 1402. the contract shall be validated from Article 1403. (d) An agreement for the sale of goods. or miscarriage of another. names of the purchasers and person on whose account the sale is made. its interest. of one of the contracting parties shall give the contract the same effect as if only one of them were incapacitated. express or implied ratification by the parent.

and the act constitutes a criminal contract. or authorizes the setting of a principal object of the contract cannot be ascertained. whereby a laborer undertakes to work longer than the maximum thus fixed. he shall be entitled to recover the (7) Those expressly prohibited or declared void by law. These contracts cannot be ratified. (1305) Article 1412. he may. if the public interest will thus be subserved. the contract may be repudiated by one of the parties before the purpose has been accomplished. any person paying any amount in excess of the maximum price allowed may recover such excess. When the agreement is not illegal per se but is merely the beginning: prohibited. In case of a divisible contract. and a contract is entered into (4) Those whose object is outside the commerce of men. law. When the nullity proceeds from the illegality of the Article 1422. The defense of illegality of contract is not available to inexistence of a contract does not prescribe. or ask for the fulfillment of what has been promised him. the courts may. Article 1418. deficiency. good customs. offense. Article 1411. and both shall be prosecuted. The other. This rule shall be applicable when only one of the parties is guilty. is also void and inexistent. public order or public policy. When money is paid or property delivered for an illegal purpose. and the prohibition by the law is designed for the protection of the plaintiff. he may demand additional compensation for service (5) Those which contemplate an impossible service. Article 1415. Article 1417. he cannot recover what he has given by reason of the contract. When the law fixes. the latter may be enforced. but the innocent one may claim what he has given. (3) Those whose cause or object did not exist at the time of the transaction. neither may recover what he has given by virtue of the contract. allow the party repudiating the contract to recover the money or property. determined by statute. and a contract is agreed upon by which a laborer accepts a lower wage. recover what he has paid or delivered. the provisions of the Penal Code relative to the disposal of effects or instruments of a crime shall be applicable to the things or the price of the contract.Article 1409. separated from the legal ones. third persons whose interests are not directly affected. (6) Those where the intention of the parties relative to the Article 1419. if public policy is thereby (1) Those whose cause. If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense. Neither can the right to set up Article 1420. morals. Where one of the parties to an illegal contract is incapable of giving consent. (2) When only one of the contracting parties is at fault. or authorizes the fixing of the maximum number of hours of labor. object or purpose is contrary to enhanced. both parties being in pari delicto. may demand the return of what he has given without any obligation to comply his promise. they shall have no action against each other. In such case. Interest paid in excess of the interest allowed by the usury laws may be recovered by the debtor. the courts may. or demand the performance of the other's undertaking. who is not at fault. or by authority of law. and shall not be bound to comply with his promise. 5|P a g e . When the price of any article or commodity is (2) Those which are absolutely simulated or fictitious. Article 1414. with interest thereon from the date of the payment. Moreover. if the interest of justice so demands allow recovery of money or property delivered by the incapacitated person. minimum wage for laborers. A contract which is the direct result of a previous illegal cause or object of the contract. or before any damage has been caused to a third person. (1306) Article 1413. When the law sets. rendered beyond the time limit. Article 1410. The following contracts are inexistent and void from Article 1416. The action or defense for the declaration of the Article 1421. if the illegal terms can be the defense of illegality be waived. the following rules shall be observed: (1) When the fault is on the part of both contracting parties.

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