Article 1469
It is certain with reference to
In order that the price may be
considered certain, it shall be sufficient
that it be so with reference to another
thing certain, or that the
determination thereof is left to the
judgment of a specified person or
persons.
Should such a person or persons be
unable or unwilling to fix it, the
contract shall be inefficacious, unless
the parties subsequently agree upon the
price.
If the third person or persons acted in
bad faith or by mistake, the courts
may fix the price.
Where such third person or persons are
prevented from fixing the price or terms
by fault of the seller or the buyer, the
party not at fault may have such
remedies against the party at fault as are
allowed the seller or the buyer, as the
case may be.
When Price considered Certain
No sale without a price; No sale if the
price not certain or ascertainable in
money or its equivalent (like
promissory notes, checks and other
mercantile instruments);
Art. 1469 – price is considered certain
if it has reference to another thing
certain;
Some cases when price considered
certain:
a. Parties have fixed or agreed
upon a definite amount;
b.
another thing certain; or
c. The determination of the price is
left to the judgment of a
specified person or persons.
Effect where Price is Fixed by a
designated Third Person
General rule: The price fixed by the
third person specified by the parties is
binding upon them;
Exceptions:
1. When the third person acted in
bad faith or by mistake;
Mistake – in fixing the price, the
object of the sale was not really
considered;
Here, the court may fixed the
price; But mere error in judgment
cannot serve as a basis for
disregarding the price fixed;
2. When the third person
disregarded the specific
instructions or procedure laid
down by the parties, or the data
given him, or fixed an arbitrary
price.
Example:
S sold to B a diamond ring.
The determination of the price was left
to C whom the parties' thought was a
jeweler.
If C acted by mistake, as when he is
incompetent to know the price of the
diamond ring, or in bad faith as when he
connived with S, the court may fix the
price
Thus, the requisites for a valid price:
1. Real
The price is not simulated or
fictitious;
2. Certain or Ascertainable
Certain
if it is expressed and agreed in
terms of specific amount or its
equivalent;
Ascertainable
if it has reference to another
thing certain; its determination
is left to the judgment of special
person/s.
3. In Money or its Equivalent
4. Manner of payment must be
agreed upon
Article 1470
Gross inadequacy of price does not
affect a contract of sale, except as it
may indicate a defect in the consent, or
that the parties really intended a
donation or some other act or
contract.
General rule: Mere inadequacy of price
or that the bargain was a hard one does
not affect the validity of the contract of
sale; especially when both parties made
their own independent judgment;
But the inadequacy of the price may
indicate a defect in the consent such as
when fraud, mistake, or undue influence
is present;
Here, contract of sale may be annulled
(not on the inadequacy of the price, but
on vitiated consent);
Also, when the price is so grossly
inadequate or low – to be “shocking to
court’s conscience” that no man in his
right mind would accept;
Example:
S sold to B his 5-year old car for
P500,000 not aware that its fair market
is P650,000.
Is the sale valid?
Yes. Gross inadequacy of the selling
price does not invalidate the contract of
sale.
No showing that the consent of S was
vitiated.
Article 1471
If the price is simulated, the sale is
void, but the act may be shown to have
been in reality a donation, or some other
act or contract.
A simulated price is a fictitious price;
Contract of sale is consensual – parties
should agree, among others, on the
price;
Thus:
If there is meeting on the minds on the
price, sale is valid;
If the real price is not stated in the
contract, the sale is valid but subject to
reformation;
If price is simulated, there is no meeting
of the minds – sale is void.
Effect where Price Simulated
If the price is simulated or false, such as
when vendor really intended to transfer
the thing gratuitously, then the sale is
void but the contract shall be valid as
donation.
If the contract is not shown to be a
donation or any other act or contract
transferring ownership because the
parties do not intend to be bound at all,
the ownership of the thing is not
transferred. The contract is void and
inexistent.
Example:
S sold to B his land worth P100,000 for
only P70,000. This contract of sale is
valid although the price is grossly
inadequate.
However, if it is shown that B induced
S to sell the land through fraud,
mistake, or undue influence, the
contract may be annulled on that
ground.
If the price is simulated, B may prove
another consideration, like the liberality
of S and if such liberality is proved,
then the contract is valid as a donation;
Or, B may prove that the act is in reality
some other contract, like barter and,
therefore, the transfer of ownership is
unaffected.
Article 1472
The price of securities, grain, liquids,
and other things shall also be
considered certain, when the price fixed
is that which the thing sold would have
on a definite day, or in particular
exchange or market, or when an amount
is fixed above or below the price on
such day, or in such exchange or
market, provided said amount be certain
Price on a given day at particular
market
Price is considered certain if it could be
determined with reference to another
thing certain;
“provided said amount be certain” –
means when an amount is fixed above
or below the price on a given day or in a
particular exchange or market, the said
amount must be certain, otherwise, the
sale is inefficacious since the price
cannot be determined.
This article is especially applies to
fungible things like securities, grain,
liquids, etc., the prices of which are
subject to fluctuations of the market.
Article 1473
The fixing of the price can never be left
to the discretion of one of the
contracting parties. However, if the
price fixed by one of the parties is
accepted by the other, the sale is
perfected.
Fixing of price by one of the
contracting parties is not allowed
Reasons:
There can be no consent if the other
party does not agree to a price (he did
not and could not previously know);
To be just, the price must be determined
impartially by both parties, or left to the
judgment of a specified person or
persons;
But if the price fixed by one party is
accepted by the other, the contract is
deemed perfected because there exists a
true meeting of minds upon the price.
Article 1474
Where the price cannot be determined
in accordance with the preceding
articles, or in any other manner, the
contract is inefficacious. However, if
the thing or any part thereof has been
delivered to and appropriated by the
buyer, he must pay a reasonable price
therefor. What is a reasonable price is a
question of fact dependent on the
circumstances of each particular case.
Effect of Failure to determine price
1. Where contract executory - If
the price cannot be determined
in accordance with Articles
1469 and 1472, or in any other
manner, the contract is without
effect.
Thus, there is no obligation on
the part of the vendor to deliver
the thing and on the part of the
vendee to pay.
2. Where delivery has been made
– If the thing or any part thereof
has already been delivered and
appropriated by the buyer, the
latter must pay a reasonable
price therefor.
The reasonable price or value of
goods is generally the market
price at the time and place fixed
by the contract or by law for the
delivery of the goods.
Article 1475
The contract of sale is perfected at the
moment there is a meeting of minds
upon the thing which is the object of
the contract and upon the price.
From that moment, the parties may
reciprocally demand performance,
subject to the provisions of the law
governing the form of contracts.
Perfection of Contract of Sale
General rule: contracts are perfected
by mere consent;
Contract of sale is consensual –
perfected, without the necessity of any
other circumstances, from the moment
there is a meeting of minds upon the
thing which is the object of the contract
and upon the price;
If one of the contracting parties should
not comply with what is incumbent
upon him, the injured party may sue for
fulfillment or rescission with the
payment of damages in either case.
Right of Owner to fix his own Price
 1. The owner of a thing has the
right to quote his own price,
reasonable or unreasonable. It is
up to the prospective buyer to
accept or reject it. He may even
impose a condition hard to fulfill
and name a price quite out of
proportion to the real value of
the thing offered for sale.
(Cornejo vs. Calupitan, 87 Phil.
555 [1950])
2. He is also well within his right
to quote a small or nominal
consideration and such
consideration is just a s effectual
and valuable a consideration as a
larger sum stipulated or paid.
(Palacio vs. Adiosola, [C.A.]
No. 7572-R, Sept. 10, 1952)
Effect of Failure to pay price/absence
of price
If there is a price stipulated
Failure to pay the stipulated price after
the execution of contract does not
convert the contract into one without
cause or consideration to invalidate the
contract (in the absence of contrary
agreement);
Reason: Payment of price is not an
essential requisite of a contract of sale;
The vendor’s remedy is generally to
demand specific performance or
rescission or cancellation of the sale
with damages in either case.
If there is no price stipulated
Sale is void and non-existent since there
is no cause or consideration;
Reason: No stipulation or meeting of
the minds regarding the purchase price,
hence, there is no contract of sale.
Article 1476
In the case of a sale by auction:
1. Where goods are put up for sale
by auction in lots, each lot is the
subject of a separate contract of
sale.
2. A sale by auction is perfected
when the auctioneer announces
its perfection by the fall of the
hammer, or in other customary
manner. Until each
announcement is made, any
bidder may retract his bid; and
the auctioneer may withdraw the
goods from the sale unless the
auction has been announced to
be without reserve.
Article 1476
3. A right to bid may be reserved
expressly by or on behalf of the
seller, unless otherwise provided
by law or by stipulation.
4. Where notice has not been given
that a sale by auction is subject
to a right to bid on behalf of the
seller, it shall not be lawful for
the seller to bid himself or to
employ or induce any person to
bid at such sale on his behalf or
for the auctioneer, to employ or
induce any person to bid at such
sale on behalf of the seller or
knowingly to take any bid from
the seller or any person
employed by him. Any sale
 contravening this rue may be
treated as fraudulent by the
buyer.
Rules Governing Auction Sales
1. Sales of separate lots by
auction are separate sales;
Where separate lots are the
subject of separate biddings,
there is a separate contract in
regard to each lot;
2. Sale perfected by the fall of
the hammer;
In auction sale, the seller is
merely making an invitation to
those present to make offers
which they do by making bids;
Each bid is an offer and the
contract is perfected only by the
fall of the hammer or in other
customary manner;
The bidder may retract his bid
and the auctioneer may
withdraw the goods from sale
any time before the hammer
falls;
3. Right of seller to bid in the
auction;
Seller or his agent may bid in
an auction sale provided:
such right was reserved;
notice was given that the sale is
subject to a right to bid on
behalf of the seller; and
the right to bid by the seller is
not prohibited by law or
stipulation.
Where no notice given of right
to bid
It shall be unlawful for the seller
to bid either directly or
indirectly or for the auctioneer
to employ or induce any person
to bid on behalf of the seller;
Purpose of the notice: To
prevent puffing or secret bidding
by or on behalf of the seller by
people who are not themselves
bound.
Article 1477
The ownership of the thing sold shall
be transferred to the vendee upon the
actual or constructive delivery thereof.
Article 1478
The parties may stipulate that
ownership in the thing shall not pass
to the purchaser until he has fully paid
the price.
Ownership of Thing transferred by
Delivery
General rule: It is only after delivery
(actual or constructive) of the thing sold
that purchaser acquires a real right or
ownership over it.
This is true even if the purchase price
has not yet been paid or the purchase
has been made on credit.
Exception to the rule:
The parties may stipulate that despite
the delivery, the ownership of the thing
shall remain with the seller until the
purchaser has fully paid the price.
Thus, here, non-payment of the price,
after the thing has been delivered,
prevents the transfer of ownership.
Two Aspects of Delivery (Tradition)
 1. De jure delivery or the execution Example:
of the deed of conveyance; and
If S offers or promised to sell to B his
2. Delivery of the material
car at a stated price and B just let the
possession.
promise go by without accepting it.
Neither S nor B is bound by any
contract.
Effect of Accepted Unilateral Promise
Article 1479 A unilateral promise to sell or to buy a
determinate thing for a price certain
A promise to buy and sell a determinate
does not bind the promisor even if
thing for a price certain is reciprocally
accepted and may be withdrawn at any
demandable.
time.
An accepted unilateral promise to buy
It is only if the promise is supported by
or to sell a determinate thing for a price
a consideration distinct and separate
certain is binding upon the promisor if
from the price that its acceptance will
the promise is supported by a
give rise to a perfected contract;
consideration distinct from the price.
In the preceding example, even if B
Three Kinds of Promise under Article
accepts the promise of S (a case of an
1479
accepted unilateral promise to sell), S is
1. An accepted unilateral promise not bound to sell his car to B because
to sell in which the promise there is no promise, in turn, on the part
(acceptor) elects to buy; of B to buy.
2. An accepted unilateral promise
But if the promise is covered by a
to buy in which the promise
consideration distinct from the price of
(acceptor) elects to sell; and
the car, as when B paid or promised to
3. A bilateral promise to buy and
pay a sum of money to S for giving him
sell reciprocally accepted in
the right to buy the car if he chooses
which either of the parties
within an agreed period at a fixed price,
chooses to exact fulfillment.
its acceptance produces consent or of
Effect of Unaccepted Unilateral the meeting of the minds.
Promise
A unilateral promise or offer to sell or
to buy a thing which is not accepted
creates no juridical effect or legal bond.
Such unaccepted offer is call
policitation.
However, if acceptance is made before
a withdrawal, it constitutes a binding
contract of sale although the option is
given without consideration. The offerer
cannot arbitrarily revoke the offer
without being liable for damages which
the offeree may suffer.
Effect of Bilateral Promise to Buy
and Sell When the promise is bilateral
(one party accepts the other’s promise
to buy and the latter, the former’s
promise to sell a determinate thing for a
price certain), it has practically the same
effect as a perfected contract of since it
is reciprocally demandable.
The concurrence of both acts – offer
and acceptance – generates a binding
contract of sale.
S promised to sell his car to B and B
promised to buy the said car for
P400,000. The parties are bound by
their contract so that in case one of
them should not comply with what is
incumbent upon him, the other has the
right to choose between the fulfillment
and the rescission of the obligation,
with payment of damages in either case.
Contract to Sell
A bilateral contract whereby the
prospective seller, while expressly
reserving the ownership of the subject
property despite delivery thereof to the
buyer, binds himself to sell the said
property exclusively to the prospective
buyer upon fulfillment of the condition
agreed upon, that is, the full payment of
the purchase price.
In a contract to sell, ownership of the
subject property will not automatically
transfer to the buyer upon the
fulfillment of the suspensive condition
(payment of the purchase price). The
prospective seller still has to convey
title to the prospective buyer by
entering into a contract of absolute sale.
Contract to Sell vs. Conditional
Contract of Sale
Contract to sell
Since there is no previous sale, a third
person buying the subject property
despite the fulfillment of the suspensive
condition (payment of purchase price),
cannot be deemed a buyer in bad faith;
So, prospective buyer cannot demand
conveyance of property;
Reason – there is no double sale;
Title to the property is transferred to the
buyer only after registration of the sale;
Conditional contract of sale
Upon fulfillment of the suspensive
condition, the sale becomes absolute;
Thus, the seller’s title is affected;
Here, there has been a prior delivery of
the subject property – and the seller’s
ownership or title to the said property is
automatically transferred to the buyer;
Consequently, the seller will no longer
have any title to transfer to any third
person;
Therefore, the second buyer of the
property cannot be considered a buyer
(registrant) in good faith;
If title is issued to the second buyer, the
first buyer may seek reconveyance of
the subject property.
Meaning of Option Contract
Second of paragraph of Article 1479
refers to what is called as “option” in
the commercial world.
Option is a privilege (no binding
obligation) existing in one person for
which he has paid a consideration
which gives him the right to buy/sell.
Example: Certain merchandise or
certain specified property, from/to
another person, if he chooses, at any
time within the agreed period at a fixed
price, or under, or in compliance with
certain terms and conditions.
Option contract is a preparatory
contract separate and distinct from the
main contract itself (subject matter of
the option). It is only when the option is
exercised when a sale may be perfected;
A contract by which the owner of
property agrees with another person that
he shall have the fight to buy his
property at a fixed price within a certain
time.
Article 1480
Any injury to or benefit from the thing
sold, after the contract has been
perfected, from the moment of the
perfection of the contract to the time of
delivery, shall be governed by articles
1163 to 1165, and 1262.
This rule shall apply to the sale of
fungible things, made independently
and for a single price, or without
consideration of their weight, number,
or measure.
Should fungible things to be sold for a
price fixed according to weight,
number, or measure, the risk shall not
be imputed to the vendee until they
have been weighed, counted, or
measured, and delivered, unless the
latter has incurred in delay.
Four Rules on Risk of Loss or
Deterioration
1. If the thing is lost before
perfection – seller and not the
one who intends to purchase it
bears the loss;
2. If the thing is lost at the time of
perfection – contract is void or
inexistent.
Legal effect – as if the object is
lost before perfection of the
contract of sale;
3. If the thing is lost after
perfection but before its
delivery, that is, even before the
ownership is transferred to the
buyer – the risk of loss is shifted
to the buyer as an exception to
the rule of res perit domino (or
“property lost to the owner”);
4. If the thing is lost after delivery
– buyer bears the risk of loss
following the general rule of res
perit domino.
Two Rules under Article 1480 perfection of the contract and before
delivery;
Fungible goods – goods that are
interchangeable with one another; But the vendee assumes the risk if he
goods that, by nature or trade usage, are has incurred in delay in receiving the
the equivalent of any other like unit, goods sold.
such as coffee or grain.
Article 1481
First rule – applies to non-fungible
In the contract of sale of goods by
things and fungible things sold
description or by sample, the contract
independently and for a single price or
may be rescinded if the bulk of the
for a price fixed without consideration
goods delivered do not correspond with
of their weight, number, or measure;
the description or the sample, and if the
Here, the risk of the thing sold passes to contract be by sample as well as by
the buyer, even though the thing has not description, it is not sufficient that the
yet been delivered to him; bulk of goods corresponds with the
sample if they do not also correspond
Thus, if a house (sold) be destroyed
with the description.
wholly or partly by fire – the loss falls
upon the buyer who must pay the price, The buyer shall have a reasonable
even though he has not received the opportunity of comparing the bulk with
thing; the description or the sample.
Seller is not liable for anything which
happens without his fraud or
Sale of Goods by Description and/or
negligence.
Sample
Buyer assumes the risk of loss caused
Term bulk of the goods does not
by fortuitous event (a) without the fault
designate the greater portion of the
of the seller; and (b) no delay, after the
goods;
perfection of the contract to the time of
delivery. It denotes the goods themselves as
distinguished from the sample and/or
Second rule – relates to fungible things
description with which they must
(rice, corn, etc.) sold for a price fixed in
correspond.
relation to weight, number, or measure;
1. Sale by sample When a small
Under the third paragraph, “the risk
quantity is exhibited by the
shall not be imputed to the vendee until
seller as a fair specimen of the
they have been weighed, counted, or
buIk, which is not present and
measured and delivered”
there is no opportunity to inspect
Paragraph 3 is an exception to the rule or examine the same;
that vendee bears the loss after the
 Parties contracted solely with
reference to the sample, with the
understanding that the bulk was
like it;
Exhibition of the sample by
seller was an inducement of the
sale or formed the sole basis
thereof;
In a sale by sample, the Vendor
warrants that the thing sold and
to be delivered by him shall
conform with the sample in
kind, character, and quality.
2. Sale by description
Occurs where a seller sells
things as being of a particular
kind and buyer does not know if
seller’s representations are true
or false, but relied on them as
true; Here, the purchaser has not
seen the article sold and relies
on the description given him by
the vendor, or has seen the
goods but the want of identity is
not apparent or inspection; If the
bulk of the goods delivered do
not correspond with the
description, the contract may be
rescinded.
3. Sale by description and
sample
Here, the goods must satisfy all
warranties appropriate to either
kind of sale; It is not sufficient
that the bulk of the goods
correspond with the sample if
they do not also correspond with
the description and vice versa.
Article 1482
Whenever earnest way is given in a
contract of sale, it shall be considered as
part of the price and as proof of the
perfection of the contract.
Earnest money (“arras”) is money
given by the buyer to the seller to bind
the bargain. It is actually a partial
payment of the purchase price and is
considered as proof of the perfection of
the contract.
A deposit paid (often in escrow) by the
prospective buyer (real estate) to show a
good faith intention to complete the
transaction, and ordinarily forfeited if
the buyer defaults.
Since earnest money constitutes an
advance payment, it must be deducted
from the total price.
Earnest Money vs. Option Money
1. Earnest money is part of the
purchaser price, while option
money is money given as
distinct consideration for the
option contract;
2. Earnest money is given only
where there is already a sale;
option money applies to a sale
not yet perfected;
3. When earnest money is given,
the buyer is bound to pay the
balance, while when the would-
be buyer gives option money, he
is not required to buy.
But option money may become
earnest money if the parties so
agree.
Article 1483
Subject to the provisions of the Statute
of Frauds and of any other applicable
statute, a contract of sale may be made
in writing, or by word of mouth, or
partly in writing and partly by word of
mouth or may be inferred from the
contract of the parties.
Form of Contract of Sale
“Form of a contract”
Refers to the manner in which the
contract is executed or manifested;
General rule: a contract may be
entered into in any form (in writing, or
by word of mouth, or partly in writing
and partly by word of mouth) provided
all the essential requisites for its validity
are present.
Exception: Contracts covered
Statute of Frauds:
1. It must be in writing subscribed
by the party charged, otherwise
the contract cannot be enforced
by action;
2. If law requires the contract of
sale be in certain form for its
validity, the required form must
be observed for that contract to
valid and enforceable;
3. Where form is required for a
contract to be valid; and
4. Where the form is required only
for the convenience of the
parties (public instrument;
registration of sale in the
Registry of Deeds).
The Statute of Frauds requires the
following contracts to be in writing,
otherwise they cannot be enforced in
a court litigation:
a. Sale of personal property at a
price not less than P500.00;
b. Sale of real property or an
interest therein regardless of the
price involved; and
c. Sale of property not to be
performed within a year from
the date thereof regardless of the
nature of the property and the
price involved.
Sale of Real Property or an Interest
therein
When made through an agent is void
unless the agent’s authority is in
writing;
by
For a sale of real property to be
effective against third persons, the said
sale must be registered in the Registry
of Deeds of the province or city where
the property is located;
The sale must be in a public instrument
or document (notarized) for otherwise
the registration will be refused.
Sale of land in a private instrument is
valid as between the parties but it
cannot be registered to bind or affect
third persons.
Statute of Frauds applicable only to
Executory Contracts
Executory contracts (where no
performance, like delivery and
payment, has as yet been made by both
parties) and not to contracts which are
totally (consummated) or partially
performed.
S orally sold to B a parcel of land. The
sale is valid but it is unenforceable
because the law requires that it be in
writing to be enforceable;
If the contract of sale is in a private
writing, then it is valid and binding but
only as between the parties and not as
against third persons without notice
until the sale is registered in the
Registry of Property.
B has the right to compel S to put the
contract in a public instrument so that it
can be registered to affect third persons.
Article 1484
In a contract of sale of personal
property, the price of which is payable
in installments, the vendor may exercise
any of the following remedies:
1. Exact fulfillment of the
obligation, should the vendee
fail to pay;
2. Cancel the sale, should the
vendee’s failure to pay cover
two or more installments;
3. Foreclose the chattel mortgage
on the thing sold, if one has
been constituted, should the
vendee’s failure to pay cover
two or more installments. In this
case, he shall have no further
action against the purchaser to
recovery any unpaid balance of
the price. Any agreement to the
contrary shall be void.
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; or
3. Foreclose the chattel mortgage,
if one has been constituted, if
the vendee shall have failed to
pay two or more installments.
These remedies are alternative
and are not be exercised
cumulatively or successively
and the election of one is a
waiver of the right to resort to
the others;
Thus, where the vendor asks the
court to order the vendee to pay
the remaining unpaid sum of the
purchase price, the vendor
thereby waives the other
remedies.
Right of Vendor to Recover Unpaid
Balance of Purchase Price
1. Remedy of specific
performance Here, vendor has
the right to recover not only the
proceeds of the sale, but the
unpaid balance of the price from
the purchaser (his real and
personal properties not exempt
 by law from attachment or
execution).
2. Remedy of cancellation Vendor
can demand only the return of
payments already made unless
there is a stipulation about
forfeiture.
3. Remedy of foreclosure (chattel
mortgage) Vendor shall have no
further action against the vendee
for the recovery of any unpaid
balance of the price and any
agreement to the contrary is
void.
The recovery of deficiency after
foreclosure prohibited [in order
to avoid simulated sale on
auction (lowest bid)].
Article 1485
The preceding article shall be applied to
contracts purporting to be leases of
personal property with option to buy,
when the lessor has deprived the lessee
of the possession or enjoyment of the
thing.
Lease of personal property with option
to buy (by the lessee) – considered as
“sales of personalty payable in
installments”;
Thus, the rules in in Article 1484 are
equally applicable;
Purpose: to prevent vendors from
resorting to this form of contract which,
usually, is in reality of a contract of sale
or personal property payable in
installments in contravention of the
provisions of Article 1484.
Example:
B entered in a contract called “contract
of lease” with S whereby B (lessee)
leased the car of S (lessor) with the
following terms:
1. That B shall pay P10,000 upon
signing the contract, and on or
before the 5 th day every month,
P2,000 by way of rental. The
contract fixed the value of the
vehicle to be P100,000;
2. That B has the option to
purchase the car for the said
amount and the payments made
by way of rentals shall be
deducted from the amount
agreed in the option, and upon
the full value fixed being paid,
the lease would terminate and
title to the leased property would
be transferred to B;
3. That S would have the right to
terminate the contract and
repossess the vehicle should B
fail to make payments on date
specified, and in such event, the
payments therefore made should
remain the property of S and not
be recoverable by B.
Here, the contract is one of sale
on installments (with S as seller
and B as buyer) and not lease
and is, thus, subject to the
provision of Article 1485
Article 1486
In the cases referred to in two preceding
articles, a stipulation that the
installments or rents paid shall not be
returned to the vendee or lessee shall be
valid insofar as the same may not be The expropriation of property for public
unconscionable under the use is governed by special laws.
circumstances.
Also known as power of eminent
The article talks of a stipulation domain;
authorizing forfeiture of installments or
For public use;
rents paid;
The procedure is provided for in Rule
In sales of personal property by
67 of the Rules of Court;
instalments or leases of personal
property with option to buy, the parties Expropriation must be decreed by
may stipulate that the installments or competent authority and for public use
rents paid are not to be returned; and upon payment of just compensation
Said stipulation is valid “insofar as the
same may not be unconscionable under
circumstances” otherwise the court may
order the return of a portion of the
amount paid in installments or rents.
Article 1487
The expenses for the execution and
registration of the sale shall be borne by
the vendor, unless there is a stipulation
to the contrary.
Vendor has the duty to pay not only the
expenses for the execution of the sale
but also for the registration of the same
(general rule) in the absence of any
contrary agreement between parties
(exception);
But expenses incurred subsequent to the
transfer of title are to be borne by the
buyer, unless caused by the fault of the
seller

Article 1488