SALES (Arts.

1458 – 1637)
Article 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership of
and deliver a determinate thing, and the other to pay therefore a price certain in money or its equivalent. A
contract of sale may be absolute or conditional.
Elements of a Contract of Sale
I. Essential elements/requisites – Those without which a contract of sale would not exist.
a. Consent of the contracting parties
b. Subject matter which should be a determinate thing
c. Price certain in money or its equivalent
II. Natural elements – Those inherent in a contract of sale, which in the absence of stipulation excluding them,
are deemed to exist
a. Warranty against eviction
b. Warranty against hidden defects and encumbrances

III. Accidental elements – They refer to particular stipulations of the parties such as terms, place and time of
payment, and other conditions agreed upon.

Characteristics of a Sale
a.) Consensual – it is perfected by mere consent of the parties
b.) Principal – it can exist by itself without being dependent upon another contract
c.) Bilateral – the parties are bound by reciprocal obligations
d.) Onerous – valuable considerations are given by both parties to acquire rights
e.) Commutative – the parties exchange almost equivalent values
f.) Nominate – it has a special name given to it by law

Form of a contract of sale

Subject to the provisions of the Statute of Frauds and of any other applicable statute, a contract of sale may be
in any of the following forms:
a. In writing, or
b. By word of mouth, or
c. Partly in writing and partly by word of mouth, or
d. May be inferred from the conduct of the parties
(Art. 1483)
Under the Statute of Frauds, the sale involving the following must be in writing to be enforceable:
a. Sale of real property or of any interest therein (regardless of the price)
b. Sale of goods, chattels or things in action the price of which is P500.00 or more. (Art. 1403) Things in
action include credit, shares of stock and other incorporeal properties.
-Sale of a piece of land through an agent
The authority of the agent to sell a piece of land must be in writing; otherwise, the sale is void. (Art. 1874)
a. The authority of the agent to sell a piece of land should be in writing, otherwise void.
b. If the authority of the agent is in a private instrument or in a public instrument and the sale
was:
i. Entered into orally – the sale unenforceable
(Art. 1403)
The Law on Sales, Agency and Credit Transactions Sales Summary Report
ii. In a private instrument – the sale is valid
iii. In a public instrument – the sale is valid
- In order, however, that the sale may be recorded in the
Register of Deeds, both the authority of the agent and sale must be in a public instrument. (Art. 1358 p1&3)
Earnest money is part of the purchase price, while option money is separate and distinct from the purchase
price. Earnest money is paid upon the perfection of a contract of sale, while option money is paid for a sale that
is yet to be perfected.
Obligations of the Vendor
1. To transfer the ownership of the thing sold
2. To deliver the thing sold
3. To warrant the thing sold
4. To take care of the thing sold with the diligence of a good father of a good family unless the law or the
stipulation of the parties requires another standard of care (Art. 1163, Art. 1480)
Obligations of the Vendee
1. To accept the delivery of the thing sold (Art. 1582)
2. To pay the price of the thing (Art. 1582)
Kinds of Delivery or Tradition
1. Actual or real delivery
2. Constructive or legal delivery
a. By legal formalities
b. Symbolic delivery
c. Traditio longa manu
d. Traditio brevi manu
e. Traditio constitutum possessorium
3. Delivery of incorporeal property (quasi-traditio)
a. By constructive tradition
b. Placing the titles of ownership in the possession of the vendee (such as delivering the stock certificate
covering the shares of stocks sold)
c. Use by the vendee of his rights, with the consent of the vendor (Art. 1501)
Warranty is any representation made by the seller of the thing with respect to its character, quality, or
ownership, by which he induces the buyer to purchase the same relying on said representation.
i. Express Warranty - any affirmation of fact or any promise by the seller relating to the thing is an express
warranty if the natural tendency of such affirmation or promise is to induce the buyer to purchase the same, and
if the buyer purchases the thing relying thereon.
ii. Implied warranty - arises from the mere fact that a contract of sale is perfected. It does not apply to one who
sells by virtue of an authority in fact or in law (sheriff sale). There are two kinds of implied warranty:
Warranty against eviction- An implied warranty on the part of the seller that he has a right to sell at the time
when ownership is to pass and that the buyer shall from that time have and enjoy the legal and peaceful
possession of the thing. Eviction is the judicial process whereby the vendee by virtue of a final judgment based
on a right prior to the sale or an act imputable to the vendor, is deprived of the whole or a part of the thing
purchased.