1.CAUSES FOR EXTINGUISHMENT OF SALE.

 Common– those causes which are also the means of extinguishing all other contracts like
payment, loss of the thing, condonation, etc. (Art. 1231).
 Special –those causes which are recognized by the law on sales (those covered by Arts.
1484, 1532, 1539,1540, 1542, 1556, 1560, 1567, and 1591).
 Extra-special –conventional redemption and legal redemption
2. Differentiate right to redeem from option to purchase?
 Right of redemption is the legal right od mortgagor or borrower who owns real estate to
reclaim his or her property once certain terms have been met. The right of redemption
gives property owners who pay off their back taxes or liens on their property the ability to
prevent foreclose or the auctioning off of their property, sometimes even after an auction
or sale has occurred. The amount paid generally must also include the costs incurred in
the foreclose process, plus the entire amount of the mortgage if the payoff comes after
foreclose or auction.
 An option to purchase agreement is a legal contract signed between a buyer and seller of
a residential property, and basically gives a buyer the exclusive rights to purchase a
property from a seller in the future. To “reverse” the property from the seller, the buyer
must pay a small booking deposit, also known as the option fee. In exchange, the seller
cannot sell the property to another third party for a fixed period, or known as the option
period, and must adhere to the pre-agreed sale price in terms. In order to make the option
to purchase agreement as complete as possible, the seller can hire a property lawyer to
draft the document out before sending it to the buyer.
3. Define equitable mortgage.
 equitable mortgage. A mortgage in which the lender is secured by taking possession of all
the original title documents of the property that serves as security for the mortgage. It
gives the mortgagee the right to foreclose on the property, sell it, or appoint a receiver in
case of nonpayment.
4. Differentiate pacto de retro sale from mortgage.
PACTO DE RETRO SALE
 ownership is transferred but the ownership is subject to the condition that the seller might
recover the ownership within a certain period of time
 If the seller does not repurchase the property upon the very day named in the contract, he
loses all interest thereon
 there is no obligation resting upon the purchaser to foreclose. Neither does the vendor
have any right to redeem the property after the maturity of the debt.
 A vendor who decides to redeem or repurchase a property sold with pacto de retro in a
sense stands as the debtor and the vendee as the creditor of the repurchase price.
MORTGAGE
  Ownership is not transferred but the property is merely subject to a charge or lien as
security for the compliance of a principal obligation, usually a loan
 The mortgagor does not lose his interest in the property if he fails to pay the debt at its
maturity
 It is the duty of the mortgagee to foreclose the mortgage if he wishes to secure a perfect
title thereto, and after the maturity of the debt secured by the mortgage and before
foreclosure, the mortgagor has a right to redeem.
5. Define pactum commissorium.
 A stipulation whereby the thing pledged or mortgaged or under antichresis (Art. 2137)
shall automatically become the property of the creditor in the event of nonpayment of the
debt within the term fixed is known as pactum commissorium or pactocommisorio which
is forbidden by law and declared null and void.
6. Differentiate conventional redemption from legal redemption
CONVENTIONAL REDEMPTION
 Is the right which the vendor reserves to himself, to reacquire the property sold provided
he returns to the vendee the price of the sale, the expenses of the contract, any other
legitimate payments made therefore, and the necessary and useful expenses made on the
thing sold (Art. 1616.),and fulfills other stipulations which may have been agreed upon.

LEGAL REDEMPTION
 Is the right to be subrogated, upon the same terms and conditions stipulated in
thecontract, in the place of one who acquires a thing by purchase or dation in payment, or
by anyother transaction whereby ownership is transmitted by onerous title. May be
effected against movables or immovables. It must be exercised within 30 days from the
notice in writing by the vendor.
7. Differentiate contract of sale from assignment of credit.

CONTRACT OF SALE
 A contract of sale is a contract or agreement wherein one party (seller/vendor) obligates himself
to deliver and transfer something to the other party (buyer/vendee/purchaser), who, on his part,
obligates himself to pay the price.

ASSIGNMENT OF CREDIT
 which the owner of a credit transfers to another his rights and actions against a third
person in consideration of a price certain in money or its equivalent.
8. Define negotiable instrument.
 The law relating to negotiable instruments is to be found in the Negotiable Instruments Act,
1881. According to Section 13 of the Act, 1 negotiable instrument means a promissory note, bill
 of exchange or cheque payable either to order or bearer. This definition does not tell us much so
far as the meaning of negotiable instruments is concerned. 
 The general principal of law relating to transfer of property is that no one can pass a better title
than he himself has (memo date quod non-habet). The exception to this general rule arise by
virtue of statute or by a custom. 

9. What are the requisites of negotiability

 A negotiable instrument, briefly stated, is a contractual obligation to pay money.

However, whether or not an instrument is negotiable or non-negotiable depends entirely
on its form and content. In determining the negotiability of an instrument, the following
must be considered:
1. the whole of the instrument;
2. only what appears on the face of the instrument; and
3. the provisions of the Negotiable Instruments Law especially Section 1 thereof which
gives the requirements of negotiability.
 A valid instrument is not necessarily negotiable. Every negotiable instrument is
presumed to be a contract but not every contract is a negotiable instrument.

10. What are the Kinds of negotiable instruments?

Promissory note (Sec. 184); and
 Evidences a promise to pay money
E.g. normal promissory note,certificate of deposit and the bond
Bill of Exchange (Sec. 126)
 An unconditional  order  in  writing  addressed  by  one  person  to  another 
signed by the person giving it, requiring  the person to whom it is addressed to pay on
demand or at a fixed or determinable future time a sum certain in money to order or to
bearer.
 An order made by one person to another to pay money to third person
E.g. checks, draft
11. Differentiate promissory note from bill of exchange
PROMISSORY NOTE
 Promise to pay
 2 original parties
 Maker is primarily liable
 Only 1 presentment (for payment) is needed
BILL OF EXCHANGE
  Order to pay
 3 parties
 Drawer is secondarily liable
 2 presentments (for acceptance and for payment) are generally needed
12. Differentiate bill of exchange from check
 A cheque is always drawn on a banker, while a bill may be drawn on any person,
including a banker.
 A cheque can only be drawn payable on demand, whereas a bill may be drawn payable
on demand or on the expiry of a certain period after date or sight.
 A cheque drawn ‘payable to bearer on demand’ is valid but a bill drawn ‘payable to
bearer on demand’ is absolutely void and illegal (though a bill can be made payable to the
bearer after a certain time) (Sec. 31, The Reserve Bank of India Act).
 A cheque does not require any acceptance by the drawee before payment can be
demanded. But a bill requires acceptance by the drawee before he can be made liable
upon it.
 A cheque does not require any stamp, whereas a bill of exchange must be properly
stamped.
 Three days of grace are allowed while calculating the maturity date in the case of ‘time
bills’ (i.e., bills drawn payable after the expiry of a certain period). Since a cheque is
always payable on demand, there is no question of allowing any days of grace.
 Unlike cheques, a bill of exchange cannot be crossed.
 Unlike cheques, the payment of a bill cannot be countermanded by the drawer.
 Unlike bills, there is no system of Noting or Protest in the case of a cheque.
 The drawer of a bill is discharged from liability, if it is not duly presented for payment,
but the drawer of a cheque will not be discharged by delay of the holder in presenting it
for payment, unless through the delay, the drawer has been injured, e.g., by the failure of
the bank the drawer has lost the money which would have otherwise discharged the
amount of the cheque. However, where the drawer is so discharged, the payee may rank
as creditor of the bank for the amount of the cheque.