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LAW on Sales first articles

Sales, Agency, Labor And Other Commercial Laws (Far Eastern University)

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Question of Fact RULE: Delivery to the carrier is delivery to the buyer, if the seller is
required to send the goods to the buyer.
- An issue that has not been determined and authoritatively
answered by the law. Unpaid Seller
1. When the whole of the prices has not been paid or tendered
2. When a bill of exchange or other negotiable instrument has
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been received as conditional payment, and the condition on
Quantity of goods delivered is LESS which it was received has been broken by reason of the
dishonor of the instrument the insolvency of the buyer or
1. Buyer may reject the goods otherwise.
2. Buyer may accept;
a. If the acceptance is with knowledge that the seller is Bill of Exchange
not going to perform the contract, the buyer shall pay at
- An unconditional written order by one person to another,
contract rate.
signed by the maker, requiring the person addressed to
b. If the buyer has used or disposed of the goods
pay to a third party a specified sum on demand or at a
delivered before he knows that the seller is not going to
fixed or ascertainable future time.
perform his obligation, the buyer shall not be liable for
more than the Fair Value to him of the goods so Negotiable Instrument
received.
- A written instrument that is signed by the maker or drawer,
Fair Value includes an unconditional promise or order to pay a
specified sum of money , is payable on demand or at a
- An estimate of a good, service or asset’s potential price,
definite time, and is payable to order or bearer.
based on a rational and unbiased assessment of the
amount at which it could currently be bought and sold Dishonor
between willing parties.
- To refuse to accept or pay ( a negotiable instrument) when
Quantity of Goods delivered is MORE presented.
1. Buyer may accept the goods included in the contract and Insolvency
reject the rest
- The condition of being unable to pay debts as they fall due
2. Buyer may accept the whole of the goods and pay for them at
or in the usual course of business.
the contract rate
- The inability to pay debts as they mature.
3. If indivisible, the buyer may reject the whole of the goods.
Agent
Mixed with Goods of Different Description
- Someone who is authorized to act for or in place of another
1. Buyer may accept the goods which are in accordance with the
- A representative
contract and reject the rest;
2. If indivisible, the buyer may reject the whole of the goods. Bill of Lading

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- A document acknowledging the receipt of goods by a GR: The unpaid seller may exercise his right of lien on the remainder
carrier or by the shipper’s agent and the contract for the that has not been delivered.
transportation of those goods
EXC: When part delivery has been made under such circumstances
- A document that indicates the receipt of goods for
as to show an intent to waive the lien or right of retention
shipment and that is issued by a person engaged in the
business of transporting or forwarding goods.
Indorsed When unpaid seller loses his lien
- To sign a negotiable instrument, either to accept 1. When he delivers the goods to a carrier or other bailee for the
responsibility for paying an obligation memorialized by the purpose of transmission to the buyer without reserving the
instrument or to make the instrument payable to someone ownership in the goods or the right to the possession thereof;
other than the payee 2. When the buyer or his agent lawfully obtains possession of the
goods
Consignor
3. By waiver thereof.
- The person named in a bill as the person from whom
When right of stoppage in transit available?
goods have been received for shipment.
1. The unpaid seller has parted with the possession of the goods
Lien
2. The buyer of goods is or becomes insolvent.
- A legal right or interest that a creditor has in another’s
Insolvent
property lasting usually until a debt or duty that it secures
is satisfied. - Having liabilities that exceed the value assets.
Remedies of an unpaid seller Goods are considered “in transit”
1. Possessory Lien - From the time when they are delivered to a carrier by
2. Right of stopping the goods in transit land ,water or air or other bailee for the purpose of
3. Right of resale transmission to the buyer, until the buyer, or his agent in
4. Right to Rescind that behalf, takes delivery of them from such carrier or
other bailee
Possessory Lien
- If the goods are rejected by the buyer, and the carrier or
- A lien allowing the creditor to keep possession of the other bailee continues in possession of them, even if the
encumbered property until the debt is satisfied. seller has refused to receive them back.
When unpaid seller has possessory lien? When goods are no longer “in transit”?
1. Goods have been sold without any stipulation as to credit 1. If the buyer, or his agent obtains delivery of the goods before
2. Goods have been sold on credit, but the term of credit has their arrival at the appointed destination
expired 2. If, after the arrival of the goods at the appointd destination, the
3. The buyer becomes insolvent carrier or other bailee acknowledges to the buyer or his agent
that he holds the goods on his behalf and continues in

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possession of the as baileefor the buyer or his agent, and it is The seller shall not thereafter be liable to the buyer upon the
immaterial that further destination for the goods may have contract of sale, but may recover from the buyer damages for any loss
been indicated by the buyer occassioned by the breach of contract.
3. If the carrier or other bailee wrongfully refuses to deliver the
GR: The unpaid seller’s right of lien or stoppage in transitu is not
goods to the buyer or his agent in that behalf.
affected by any sale, or other disposition of the goods which the buyer
may have made.
How the right of stoppage in transitu be exercised? EXC: The seller has assented or given his consent thereto.
1. Obtaining actual possession of the goods
2. Giving notice of his claim to the carrier or other bailee
Unit Price Contract
To whom notice is given?
- The purchase price is determined by way of reference to a
1. The person in actual possession of the goods stated rate per unit area.
2. His principal
Lump Sum Contract
- Someone who authorizes another to act on his or her
behalf as an agent. - A full purchase price for an immovable the area of which
may be declared based on an estimate or where both the
Right of Resale
area and boundaries are stated.
- An unpaid seller having a right of lien or having stopped
Judicial Sale
the goods in transitu may resell the goods in the following
cases: - A sale conducted under the authority of a judgement or
- 1. Goods are perishable nature court order.
- 2. The seller expressly reserves the right of resale in case
the buyer should make default
- 3. The buyer has been in default in the payment of the
price for an unreasonable time.
- ( applies if yung title is nasa buyer na)
Right to Rescind
- An unpaid seller having the right of lien or having stopped
the goods in transitu, may rescind the transfer of title and
resume the ownership in the goods:
1. The seller expressly reserved the right to do so
2. The buyer has been in default in the paymet of the
price for an unreasonable time
Effect of exercise of the right to rescind

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