Romero, Rhea Mae M.

3rd Year/ BS Accountancy

1. Define the following and cite your legal basis (Basis may be the law or existing Supreme
Court decision)

a. Contract of Sale – This contract of sale may be absolute or conditional base on Article 1458,
one of the contracting parties obligates himself to transfer the ownership of and to deliver a
determinate thing and the other to pay therefore a price certain in money or its equivalent.
But we should remember that the Civil Code not only requires the delivery, but also the
ownership of the thing sold. Also, the vendor does not have to be the owner at the time the
sale is perfected. It is sufficient that he/she is the owner at the time the thing sold is delivered.

Characteristics of a Contract of Sale

Consensual Commutative Onerous

Principal Nominate

Bilateral Reciprocal

 Stages in the Contract of Sale

 Generation or Negotiation
 Perfection
 Consummation

b. Price
c. Consent without
This these,
are the there can
Elements of abeContract
no valid Sale
sale.
d. Specific or determinate thing

 Republic Act No. 7581 The Price Act, this Act shall be referred as the “Price Act.”
An act providing protection to consumers by stabilizing the prices of basic necessities
and prime commodities and by prescribing measures against undue price increase
during emergency situation and like occasions. Means that all the basic necessities or
essentials must be affordable.
 While consent or meeting of the minds, transfer the ownership of and to deliver on
the part of the seller to pay on the part of the buyer.
 Determinate Subject matter is a requisites of a valid contract of sales that must be
determinate. Accordingly, a contract of sale is not perfected until the parties have
agreed upon not only the price but also the thing sold. Article 1460, When thing is
determinate it is particularly designated or physically segregated from all others of
the same class. It is not required that the thing sold must be in sight at the time the
contract is entered into. It is sufficient that is capable of being made determinate
without necessity of a new or further agreement between the parties.
 e. Resolutory Condition
 Under Article 1465 of the Civil Code, things subject to resolutory condition may be
the object of the contract of sale. However, if the resolutory condition happens to
extinguish the thing then the rule would be the same as applied to all obligations
subject to a resolutory condition under Article 1190.

f. Traditio longa manu

 This is delivery of a thing merely by agreement, such as when the seller points the
property subject matter of the sale by way of delivery without need of actually
delivering physical possession thereof, under the Article 1499 of the Civil Code, the
delivery of movable property may be made by the mere consent or agreement of the
contracting parties, if the thing sold cannot be transferred to the possession of the
buyer at the time of the sale.

g. Traditio brevi manu

 This mode of delivery is opposite of constitutum possessorium, where before the
sale, would be buyer was already in possession of the would be subject matter of the
sale, say as lessees. Upon sale to them of the rights, interests and participation as to
the one-half portion, they remained in possession, not on the concept of lessees
anymore but as owners now through symbolic delivery known as tradition brevi
menu.

2. Differentiate the following:

h. Contract to Sell vs. Contract of Sale

Contract of Sale Contract to Sell

 Non- payment of price is  The payment in full of the price is a

a resolutory condition.
 Title of the property
passes to the buyer upon
delivery.
 After delivery has been
made, the seller has lost
ownership and cannot
recover it unless the
contract is resolved or
rescinded.
positive suspensive condition.
 Ownership is retained by the seller,
regardless of delivery and is not to
pass until full payment of the
picture.
 Since the seller retains ownership,
despite delivery. He/she is enforcing
and not rescinding the contract if he
seeks to oust the buyer for failure
to pay.
 i. Sale vs. Barter

Sale Barter

- Cause or consideration is - The cause or consideration

money is another thing

Article 1468. If the consideration of the contract consists party in money, and partly in another thing. The transaction shall be
characterized by the manifest intention of the parties. If such intention does not clearly appear, it shall be considered a barter if
the value of the thing given as a part of the consideration exceeds the amount of the money or its equivalent; otherwise it is a sale.

j. Earnest money vs Option money

Earnest Money Option Money

- Part of the purchase price. - Money given as a distinct

consideration for an option contract.
- Given only where there is
already a sale. - Applies to a sale not yet perfected.

- When earnest buyer is given, - when would be buyer gives option

the buyer is bound to pay the money, he/she is not required to buy
balance. but may even forfeit it depending on
the term of the option.

3. Enumerate the contracts or transactions covered by the statue of frauds under the Civil
Code of the Philippines.

 Nature and Purpose of Statue of Frauds

 Sales Coverage in Statue of Frauds
 Exceptions to Coverage of Statue in Sales Contracts
 Nature of Memorandum
 Partial Performance
 Effect of Partial Execution on Third Parties
 Nature and Coverage of Partial Performance
 Waiver of Provisions of Statue of Frauds