Joatham Anry T.

Genovis Sales Midterms Block B

1. a. Distinguish between the essential, natural and accidental

elements of a contract of sale.

Essential Elements are those components without which there

can be no substantial agreement. These components are
consent, offer, and cause.

Natural Elements are those components which are found in an

agreement by its tendency and assumed by law to exist, like
Warranty of stowed away deformities or ousting in agreement of
offer.

Accidental Elements are those which exist by uprightness of an

arrangement to grow, restricting, or adjusting an agreement.
Such coincidental components are condition, provisos, terms,
methods of installment, or punishments.

b. Give the essential elements of a contract of sale.

The essential elements of a sale contract are the consent or

accord, Determinate topic or subject matter; and exact price in
cash or its same value.

2. State  the  basic  difference   between a contract to sell, on the

one hand, and a contract of sale, on the other.

Contract of sale is the point at which the title to the property

passes to the purchaser when there is conveyance of the thing
sold. Contract to sell is the point at which the proprietorship is
held by the vender and isn't to pass to the vendee until full
installment of the price tag.

3. B purchased a condominium unit in Makati City from the Citiland

Corporation for a price of P10 Million, payable P3 Million down
and the balance with interest thereon
at 14%  per  annum  payable  in  sixty  (60)  equal  monthly inst
allments of P198,333.33. They executed a Deed of Conditional
Sale in which it is stipulated that should the vendee fail to pay
three (3) successive installments, the sale shall   be   deemed   
Joatham Anry T. Genovis Sales Midterms Block B

automatically   rescinded   without   the necessity of judicial

action and all payments made by the vendee shall be forfeited in
favor of the vendor by way of rental  for  the  use  and
occupancy  of  the  unit  and  as liquidated damages. For 46
months, B paid the monthly installments religiously, but on the
47th and 48th months, she failed to pay. On the 49th month,
she tried to pay the installments due but the vendor refused to
receive the payments tendered by her. The following month, the
vendor sent her a notice that it was rescinding the Deed of
Conditional Sale pursuant to the stipulation for automatic
rescission, and demanded that she vacate the premises. She
replied  that  the  contract  cannot  be  rescinded  without
judicial demand or notarial act pursuant to Article 1592 of the
Civil Code.

a)   Is Article 1592 applicable?

Article 1592 of the Civil Code is not applicable to conditional sale.

Jurisprudence will tell us that the Supreme Court that Article
1592 is only applicable and allowed to a contract of sale and will
not work with a Deed of Conditional Sale given that the seller
has made ways to reserve the title of the property until there is a
full amount of payment regarding the purchase price.

b)   Can the vendor rescind the contract?

Not possible, the vendor can't rescind the contract with the given
situation. The law provides that the seller on portion or installment
may not rescind the agreement or contract till after the pass of the
obligatory time of 30 days for each one year of installation of
payments, and solely after 30 days from notice of cancellation or
the rescission demand enacted by an act of notary. For this
situation, the seller’s refusal to acknowledge installment from the
seller on the 49th month was not valid and justified due to the fact
that the buyer was qualified for 60 days period and the installment
was offered inside that period. The notification of rescission served
by the seller on the buyer was not valid due to the fact that the
notification was not by a notarial act. With all of this, the seller is
still allowed to pay within 30 days from the notice of the notary
before the enactment of the recission. All of these were not
accounted and followed by the seller. Thus, the rescission has no
merit.
Joatham Anry T. Genovis Sales Midterms Block B

4.Bert offers to buy Simeon’s property under the following terms
and conditions: P1 million purchase price, 10% option money, the
balance payable in cash upon the clearance of the property of all
illegal occupants. The option money is promptly paid and Simeon
clears the property of illegal  occupants  in no time  at  all. 
However,  when Bert tenders payment of the balance and ask
Simeon for the deed for absolute sale, Simeon suddenly has a
change of heart, claiming that the deal is disadvantageous to him as
he has found out that the property can fetch three time the agreed
purchase price. Bert seeks specific performance but Simeon
contends that he has merely given Bert an option to buy and
nothing more, and offers to return the option money which Bert
refuses to accept.

a. Will   Bert’s   action   for   specific   performance prosper?

Explain.

Jurisprudence will tell us that the action of Bert for specific

performance will and can prosper given the fact that there was an
agreement of sale which is binding and valid contrary to an option
contract. The acceptance of Simeon of the 10% from the agreed
price perfected the sale. This sale is considered as earnest money
and under the civil code shall be counted as part of the said price
and the needed proof that it is a perfected contract.

b. May Simeon justify his refusal to proceed with the sale by the
fact that the deal is financially disadvantageous to him? Explain.

Jurisprudence will tell us that the Simeon has no merit in his pursuit
to justify his refusal to proceed with the sale by the fact that
the deal is financially disadvantageous to him. Getting into a
bad is not a legal ground or basis thereof for pulling back from a
contract of sale which is binding in the situation that there is no
actionable wrongdoing by the other party involved.

5. a. Who are the persons specially disqualified by law to enter

into a contract of sale?

These persons disqualified by law to enter into a contract of sale

are minors, deaf-mutes who are not capable of reading and
writing, and clinically insane persons. In extension the guardian,
administrators, government employees, foreigners, and any
other persons disqualified by the law as per the civil code.
Joatham Anry T. Genovis Sales Midterms Block B

b. What are the exceptions to the prohibition of sale between

spouses?

The exceptions include a scenario when there is already a

separation of property that was stipulated and agreed upon
regarding marriage settlements and there has been a separation
of property which is judicial in nature as per the civil code.

6. a. What are the distinctions between earnest money and

option money?

Jurisprudence will tell us that earnest money is under already of

the purchase price. This is also only available when there is
already a valid sale. This also insures that the buyer has a
binding obligation to pay the balance. Option money is a specific
type of consideration in the presence of an option contract. This
will only be applicable to an unperfected sale. This gives the
buyer the freedom not to buy and even to back out depending on
the option contract.

b. What is an option?

AN option allows no commitment or obligation on the individual

holding the option beside the thought for the proposition. Until
acknowledged, it is not accounted for as a sale.

7. Plaintiff granted defendant the right to sell as an “agent” Quiroga

beds in the Visayas. The defendant was obliged under the contract
to pay for the beds, at a discount of 25% as commission on the
sales. The payment had to be made whether or not the defendant
was able to sell the beds. Is this a contract of sale, or an agency to
sell?

This is a contract of sale given the fact that there was a valid
obligation for the supply of beds with the accompanying obligation of
paying the price. The agent doesn't address the cost, he simply
conveys it. In case he can't s ell, he returns the merchandise. This
isn't accurate in the current agreement, at a cost was already given
and there was an obligation to pay the equivalent notwithstanding
regarding whether the respondent had sold the beds. Commission
on sales amounts to nothing but just a discount on the said price. A
contract is what is stipulated by law and not the other way around
where it is stipulated by the parties involved.
Joatham Anry T. Genovis Sales Midterms Block B

8. a. What are the kinds of constructive delivery?

Legal is done when the sale is enacted with the use of a public
instrument. Its enaction is the same as the deliverance of the object in
the agreed upon contract.

Symbolic Traditio is used when regarding movable properties. The

deliverance of the property may occur even without the movable
property’s presence but an object that allows access to it like a key
perhaps is already valid.

Traditio Longa Manu is when there is a direct visual line of sight and
visual confirmation of the object of sale between the buyer and the
seller where the seller makes it readily available for the buyer.

Traditio Brevi Manu is when the possessor of an object is not the

owner is then allowed to be both as the possessor and the owner. The
deliverance of the object already happened and its just a matter of
transferring the ownership to the possessor.

Traditio Constitutum Possesorium is the exact opposite of Traditio

Brevi Manu wherein the owner becomes possessor with a new
transaction.

b. When is title not transferred despite delivery?

This happens with Traditio Constitutum Possesorium which is the exact

opposite of Traditio Brevi Manu wherein the owner becomes possessor
with a new transaction. An example is like when an owner of an house
sells his house to another person but ends up being a tenant of that
same house then he is still a possessor but not the owner of the tile
anymore despite the delivery.

9. A contract of sale involving a lot stipulates that the “payment of the

full consideration based on a survey shall be due and payable in five
years from the execution of a formal deed of Sale.” Is this a
conditional contract of sale?

No it is not conditional given the fact that the payment is payable from
the execution of a formal deed of sale which shows that the title is
Joatham Anry T. Genovis Sales Midterms Block B

already in the process of being transferred without the full payment

yet which is contrary to a conditional contract of sale where ownership
is only acquired upon full price payment as per the civil code.