LAW REVIEWER PART THREE

___________________-is a contract whereby one of the parties (called the seller or vendor)
obligates himself to deliver something to the other (called the buyer or purchaser or vendee)
who on his part,binds himself to pay therefore a sum of money or it’s equivalent known as the
price.
Characteristics of contract of sale:
1.______________--because it is perfected by mere consent without any further act at the
moment there is meeting of minds upon the thing which is the object of the contract and upon
the price.
2.______________-because both contracting parties are bound to fulfill obligations reciprocally
towards each other -the seller,to deliver and transfer ownership of the thing sold and the buyer
to pay the price.
3.______________-because the thing sold is conveyed in consideration of the price and vice
versa
4.______________-because the thing sold is considered the equivalent of them price paid and
and vice versa however,the contract may be aleatory as in the case of the sale of a hope
5.______________-because it is given a special name or designation in the Civil Code namely
Sale
6._______________-because it does not depend for it’s existence and validity upon another
contract unlike guaranty, pledge and mortgage
Essential requisites of a contract of sale:
1._______________________ -This refers to the consent on the part of the seller or vendor to
transfer and deliver and on the part of the buyer or vendee to pay.
2._______________________-This refers to the determinate thing which is the object of the
contract
3._______________________-This refers to the “price certain in money or it’s equivalent” such
as check or a promissory note or the assumption by the buyer of the mortgage debt of the
seller which is the consideration for the thing sold.
________________-or those which are deemed to exist in certain contracts in the absence of
any contrary stipulations like warranty against eviction or hidden defects
________________-or those which may be present or absent depending on the stipulations of
the parties like conditions, interest, penalty,time or place of payment
Two kinds of contract:
1.Absolute
2.Conditional
______________________________ -because of some provisions of law declaring it illegal
_________________ or goods owned or possessed by the seller
_________________or goods to be manufactured like the sale of milk bottles to be
manufactured with the name of the buyer pressed in the glass,raised or acquired
Sale of undivided interest in a thing:

 By sale owner
 By co-owner
________________-it means goods of which any unit is from its nature or by mercantile usage
treated as the equivalent of any other unit such as grain,oil,wine ,gasoline etc.
Sale of an undivided share of a specific mass:

 Meaning of fungible goods

 Effect of sale
 Risk of loss
 Subject matter
___________________-is an uncertain event upon the happening of which the obligation or
right subject to it’s extinguished.
___________________-a person binds himself to render some service or to do something in
representation or on behalf of another with the consent or authority of the latter.
_____________________-the contractor binds himself to execute a piece of work for the
employer in consideration of a certain price or compensation.
_____________________-one of the parties binds himself to give one thing in consideration of
the other’s promise to give another thing.
When price considered certain:

 No sale if price not certain or ascertainable

 Cases when price considered certain
Effect of gross inadequacy of price in involuntary or execution sales:

 General rule
 Where price is so low as to be shocking to the conscience
  Where seller given the right to repurchase.
_____________________-is one made by a court with respect to the property of a debtor for
the satisfaction of his unpaid indebtedness.
Stages of a contract of sale-:
1. Negotiation
2. Perfection
3. Consummation
Effect of failure to pay price/absence of price:
1.Price stipulated
2.No price stipulated
Rules governing auction sales:

 Sales of separate lots by auction are separate sales

 Sales perfected by the fall of the hammer
 Right of seller to bid in the auction
______________________or offer to sell or to buy a thing which is not accepted creates so
juridical effect or legal bond.Such unaccepted offer is called policitation
______________________-existing in one person for which he has paid a consideration which
gives him the right to buy or sell.
Four rules of regarding the risk of loss or deterioration:
1. If the thing is lost before perfection
2. If the thing is lost at the time of perfection
3. If the thing is lost after perfection but before it’s delivery
4. If the thing is lost after delivery
Sale of goods by description and or sample:

 Sale by description
 Sale by sample
 Sale by description and sample
___________________-is money given by the buyer to the seller to bind the bargain.
Form of contract of sale-:
1. General rule
2. Where contract covered by Statute of Frauds
3. Where form is required in order that a contract may be valid
 4. Where the form is required only for the convenience of the parties.
Remedies of vendor in sale of personal property payable in installments:
1. Elect fulfillment upon the vendee’s failure to pay
2. Cancel the sale if the vendee shall have failed to pay two or more installments
3. Foreclose the chattel mortgage if one has been constituted If the vendee shall have
failed to pay two or more installments
Right of vendor to recover unpaid balance of purchase price:

 Remedy of specific performance

 Remedy of cancellation
 Remedy of foreclosure
Kinds of incapacity:

 __________-in the case of persons who cannot bind themselves

 __________-where it exists only with reference to certain persons or a certain class of
property.
______________-are those things which are needed for sustenance,dwelling, clothing and
medical attendance in keeping with the financial capacity of the family of the incapitated
person.
______________-is a contract whereby the parties by reciprocal concessions, avoid a litigation
or put an end to one already commenced.
______________-a creditor gratuitously abandons his right against his creditor.
Effect of loss of the thing at the time of sale:

 Thing entirely lost

 Thing only partially lost
Principal obligations of the vendor:
1. To transfer the ownership of the determinate thing sold
2. To deliver the thing
3. To warrant against eviction and hidden defects
4. To take care of the thing ,pending delivery with proper diligence
5. To pay for the expenses for the execution and registration of the deed of sale unless
there stipulation to the contrary.
Transfer of ownership effected by delivery:
1. Ways of effecting delivery
2. Intention to deliver essential
 3. Delivery to proper person
Ways of effecting to constructive delivery:
1. Equivalent to actual delivery
a) By the execution of a public instrument
b) By symbolical tradition or traditio symbolical
c) By traditio longa manu
d) By traditio brevi manu
e) By traditio consititutum possessorium
f) By quasi-delivery or quasi-traditio
2. Contrary may be stipulated
________________-is a derivative mode of acquiring ownership by virtue of which one has the
right and intention to alienate a corporeal thing transmits it by virtue of just title to one who
accepts the same.
Actual delivery of thing sold:

 When deemed made

 Not always essential to passing of title
 Proof of delivery
Execution of a public instrument or document:

 Meaning of public instrument

 General rule
 Exception
_______________________-refers to the kind of tradition.It takes place by the mere consent or
agreement of the contracting parties as when the vendor merely points to the thing sold which
shall thereafter be at the control and disposal of the vendee.
_______________________-This mode of legal delivery happens when the vendee has already
the possession it the thing sold by virtue of another title as when the lessor sells the thing
leased to the lessee.
_______________________-it takes place when the vendor continues in possession of the
property sold not as owner but in some other capacity
_________________-This mode of delivery of incorporeal things or rights
Where seller or his agent is consignee:

 Carrier becomes bailee for seller

 Rights of seller
Where seller’s title only for purpose of security:

 Form of bill of lading not conclusive

 Where ownership would have passed but for the form of the bill of lading
Where buyer or his agent is consignee but seller retains the bill of lading:

 Right to possession of goods as against buyer

 Effect of retention
Where bill of lading is sent forward with draft attached:
1. Delivery conditional
2. Duty of buyer if draft not honored
3. Right innocent third persons
Sale by a person not the owner
1.Where the owner of the goods is by his conduct precluded from denying the seller’s authority
to sell
2. Where the law enables the apparent owner to dispose of the goods as if they were the true
owner thereof.
3. Where the sale is sanctioned by statutory or judicial authority
4. Where the sale is made at merchant’s stores,fairs or markets
5. Where the seller has a voidable title which has not been avoided at the time of the sale
6. Where seller subsequently acquires title.
___________________________-includes any bill of lading,dock warrant,quedan or warehouse
receipt or order for the delivery of goods or any other document used in the ordinary course of
business in the sale or transfer of goods
____________-includes all chattels personal but not things in action or money of legal tender in
the Philippines
____________-relating to documents of title,means an order by indorsement on the
documents
____________-it is a contract or receipt for the transport of goods and their delivery to the
person named therein to order to to bearer .
____________-it is an instrument given by dock owners to an importer of goods warehoused in
the dock recognizing the importer’s title to the said goods
_______________-it is a contract or receipt for goods deposited with a warehouseman
containing the latter’s undertaking to hold and deliver the said goods to a specified persons,to
order or to bearer.
Classes of documents of title:
1. ___________________________or those by the terms of which the bailee undertakes
to deliver the goods to the bearer and those by the terms of which the bailee
undertakes to deliver the goods to the order of a specified person
2. __________________________-or those by the terms of which the goods covered are
deliverable to a specified person
Time of deliver of goods sold:
1. If no time is fixed by the contract
2. If the contract provides a fixed time for performance
3. Where the contract does not specify the time for delivery
_____________________-the carrier acts for the seller in collecting the purchase price.
_____________________-This means that the goods are to be delivered free of expense to the
buyer to the point where they are F.O.B
_____________________-they signify that the price fixed covers not only the cost of the goods
but the expenses or freight and insurance to be paid by the seller up to the point especially
named.
_____________________-the seller pays all charges and bears the risk until the goods are
placed alongside overseas vessel and within reach of it’s loading tackle.
_____________________-the price quoted applies only at the point of origin and the seller
agrees to place the goods at the disposal of the buyer at the agreed place on the date within
the period fixed.
_________________-the seller quotes a price including the cost of the goods on the dock at the
named port of importation.
_________________-is one who has not been paid or tendered the whole price or who has
received a bill of exchange or other negotiable instrument as conditional payment and the
condition on which it was received has been broken by reason of the dishonor of the
instrument.
Where whole of the price has not been paid:

 Tender of payment of buyer

 Payment of part of price
 Payment by negotiable instrument
When unpaid sellers possessory lien may be exercised:
1. Sales without stipulation as to credit
2. Expiration of term of credit
3. Insolvency of the buyer
When unpaid seller losses possessory lien:
1. Delivery to agent or bailee of buyer
2. Possession by buyer or his agent
3. Waiver of the lien
Requisites for the exercise of right to stoppage in transitu:
1. The seller must be unpaid
2. The buyer must be insolvent
3. The goods must be in transit
4. The seller must either actually take possession of the goods sold or give notice of his
claim to the carrier or other person in possession
5. The seller must surrender the negotiable document of title if any issued by the carrier or
bailee
6. The seller must bear the expenses of delivery of the goods after the exercise of the
right.
When goods considered no longer in transit:

 After delivery to the buyer or his agent in that behalf

 If the buyer or his agent obtains possession of the goods at a point before the
destination originally fixed
 If the carrier or bailee acknowledges to hold the goods on behalf of the buyer
 If the carrier or bailee wrongfully refuses to deliver the goods to the buyer.
_____________-means any uncertain event or contingency on the happening of which the
obligation if the contract depends
_____________-is any representation made by the seller of the thing with respect to it’s
character, quality or ownership by which he induces the buyer to purchase the same relying on
said representation.
_____________-is that which the law derives by implication or inference from the nature of the
transaction or the relative situation or circumstances of the parties irrespective of any intention
of the seller to create it.
Implied warranties in sale:

 Implied warranty as to seller’s title

  Implied warranty against hidden defects or unknown encumbrances
 Implied warranty as to fitness or merchantability
________________-may be defined as the judicial process whereby the vendee is deprived of
the whole or part of the thing purchased by virtue of a final judgement based on a right prior to
the sale of an act imputable to the vendor
Essential elements of the warranty against eviction:

 The vendee is deprived in whole or in part of the thing purchased

 He is so deprived by virtue of a final judgement
 The judgement is based on a right prior to the sale or an act imputable to the vendor
 The vendor was summoned in the suit for eviction at the instance of the vendee
 There is no waiver in the part of the vendee.
__________________-does not give rise to the application of the doctrine of eviction.
__________________-one acquires ownership and other real rights through the lapse of time
in the manner and under the conditions prescribed by the law.
Kinds of waiver of eviction:
1. _____________-is voluntarily made by the vendee without the knowledge and
assumption of the risks of eviction
2. _____________-is made by the vendee with knowledge of the risk of eviction and
assumption of it’s consequences
Right and Liabilities in case of eviction occurs:

 Return of value of thing

 Income or fruits of thing
 Costs of the suit
 Expenses of the contract
 Damages and interest
___________________- is an encumbrance imposed upon an immovable for the benefit of
another immovable belonging to a different owner.
Requisites for warranty against hidden defects:

 The defect must be important or serious

 It must be hidden
 It must exist at the time of the sale
 The vendee must give notice of the defect of the vendor within a reasonable time
  The actions for rescission or reduction of the price must be brought within the proper
period -six months from the delivery of the thing sold or within 40 days from the date of
the delivery in case of animas
 There must be no waiver of warranty on the part of the vendee
_______________ -includes their state or condition
_______________-is a warranty that goods are reasonably fit for the general purpose for which
they are sold
_______________-is a warranty that the goods are suitable for the special purpose of the buyer
which will not be satisfied by mere fitness for general purposes.
Effect of loss of thing sold on account of hidden defects:

 Vendor aware of hidden defects

 Vendor not aware of hidden defects
_____________________-is a defect in the article sold against which defect the seller is bound
to warrant
Three principal obligations of the vendee:
1. To accept delivery
2. To pay the price of the thing sold
3. To bear the expenses for the execution and registration of the sale and putting the
goods on a deliverable state if such is the stipulation
Rules governing delivery in installments:
1. General rule
2. Where separate price has been fixed for each installment
3. Where separate price was not fixed for each installment
_______________-is assent to become owner of the specific goods when delivery of them is
offered to the buyer
_______________-takes place when the buyer after delivery of the goods intimates to the
seller verbally or in writing that he has accepted them
_______________-when the buyer after delivery of the goods does any act inconsistent with
the Sellers ownership as when he sells or attempts to sell the goods or he uses or makes
alteration in them in a manner proper only for an owner.
Where buyer’s refusal to accept justified:

 Duty of buyer to take care of the goods without obligation to return

 Duty of seller to take delivery of the goods
  Seller’s risk of loss
 Right of buyer to resell goods
_______________-includes all chattels personal but not things in action or money of legal
tender in the Philippines.
Actions available:
1. Action by the seller for payment of the price
2. Action by the seller for damages for non -acceptance of the goods
3. Action by the seller for rescission of the contract
4. Action by the buyer for specific performance
5. Action by the buyer for rescission or damages for breach of warranty
Measure of damages for non-acceptance of goods:

 Difference between contract price and market price

 Full amount of damage
 Proximate changes
Seller’s right of rescission before delivery:

 When the buyer has repudiated the contract of sale

 When the buyer has manifested his inability to perform his obligations thereunder
 When the buyer has committed a breach of the contract of sale
Remedies of buyer for breach of warranty by seller:
1. Accept the goods and set up the seller’s breach to reduce or extinguish the price
2. Accept the goods and maintain an action for damages for the breach of the warranty
3. Refuse to accept the goods and maintain an action for damages for the breach of
warranty
4. Rescind the contract of sale by returning or offering the return of the goods and recover
the price.
Cause of extinguishment of sale:
 __________- or those causes which are also the means of extinguishing all other contracts
like payment,loss of the thing , Condonation
 __________or those causes which are recognized by the law of sales
 ___________- or those causes which are given special discussion by the Civil Code and
these are conventional redemption and legal redemption
______________________-is the right which the vendor reserves to himself to reacquire the
property sold provided the reimburses the vendee of the price,the expenses of the contract and
any other legitimate payments made on the thing sold .
________________-is one which although it lacks the proper formalities of a mortgage shows
the intention of the parties to make the property subject of the contract as a security for the
fulfillment of an obligation
________________-to provide safeguards and restrictions against the evils of sales with a right
of repurchase.
________________-is that remedy in equity by means of which a written instrument is made or
construed so as to express or conform to the real intention of the parties when such intention is
not expressed in the instrument.

Period for exercise of a right of redemption:

 No agreement/granting right
 Agreement merely grants right
 Definite period of redemption agreed upon
 Period of redemption agreed upon not specified
 Period agreed upon exceeds ten years
 Final judgement rendered that contract pacto de retro
Obligation of vendor a retro in case of redemption:
1. The price
2. Expenses of contract and other legitimate expenses:
a) Necessary expenses-are those incurred for the preservation of the thing or those
which seek to prevent the waste, deterioration,or loss of the thing
b) Useful expenses-are those which increase the value of the thing or create
improvements thereon.
Rights of a pre-emption and legal redemption of adjacent owners of urban lands:
1. Meaning
a) Pre-emption
b) Redemption
2. Requisites
3. Price
4. Preference
________________-is a contract by which one person transfers to another his rights and
actions against a third person in consideration of a price certain in money or it’s equivalent
________________-Is designed to prevent the defrauding of creditors by the secret sale in bulk
of all or substantially all of a mechants stock of goods
____________-refers to which are kept for sale
____________-must be construed to mean such things as are usually bought and sold in trade
by merchants
____________-refers to such articles or merchandise usually possessed or annexed to the
premises occupied by merchants to enable them better to store ,handle and display their wares
Effects of false statement in the schedule of creditors:

 Without knowledge of buyer

 With knowledge of buyer
 With names of certain creditors without notice ommitted
_________________-which is very broad enough to include all the situations in which one
person is employed to render service for another .
______________-is sometimes used in a sense other than to denote the relationship of
principle and agent
Characteristics of a contract of agency:
1. ____________-because it is perfected by mere consent
2._____________-because it can stand by itself without the need of another contract
3._____________-because it has its own name
4._____________-if it is gratuitous because it creates obligations for only one of the parties
5._____________-because it is entered into as a means to an end
Essential elements of agency:

 There is consent,express or implied of the parties to establish the relationship

 The object is the execution of a juridical tie in relation to third persons
 The agent acts a representative and not for himself
 The agent acts within the scope of his authority
_____________-one whom the agent represents and from who he derives his authority
_____________-one who acts for and represents another ;he is the person acting in a
representative capacity.
Nature of relations between principal and agent:

 Relations fiduciary in character

 Agent estopped from asserting interest adverse to his principal
 Agent must not act for an adverse party
  Agent must not use or disclose secret information
Agency distinguished from similar contracts:
1. Loan
2. Lease of service
3. Independent contract
4. Partnership
5. Negotiorum gestio
6. Brokerage
7. Sale

Kinds of agency:
1.As to manner of it’s creation:
a) Express
b) Implied
2.As to it’s character:
a) Gratuitous
b) Compensated or onerous
3.As to extent of business covered:
a) General
b) Special
4.As to authority conferred:
a) Couched in general terms
b) Couched in specific terms
5.As to it’s nature and effects:
a) Ostensible or representative
b) Simple or commission
__________________-is not identical to one Couched in general terms which is a special agency
when it involves only one or more specific transactions.