SALES AND LEASE

Course Outline (Part 1)

UCC 1st Semester
Course Description : Sales basically is covered by Book IV, Title VII of the Civil Code
of the Philippines. It deals with the basic principles, rights and obligations of the
parties to a contract of sale; remedies in case of breach and the modes of
extinguishment of this contract.
Art 1458 to 1603
Course Objectives:
1. Understand the basic principles applicable to contracts of sale and contract of
lease.
2. Identify the rights and obligations of parties to a contract of sale and lease.
3. Appreciate and apply these fundamental principles to actual business
transactions.
4. Encourage diligence and the observance of honesty and fair dealings at all time.
5. Develop self - confidence and positive outlook in dealing with pressure and
stressful situations.
6. Learn tips and techniques in answering law school questions and the BAR.
Grades:
1. Midterm 30
2. Finals 30
3. Quizzes and Recitation 30
4. Attendance 10
CONTRACT OF SALE
CONCEPTS AND GENERAL PRINCIPLES
Definition of Sale
Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership and to deliver a determinate thing, and the
other to pay therefor a price certain in money or its equivalent.
Characteristics of Sale
A. Characteristics (consensual, bilateral, onerous, commutative, nominate,
principal)

1. Consensual (Art. 1475)

2. Bilateral (Art. 1458)

3. Onerous (Art. 1350)

4. Commutative (Art. 2010)

 5. Principal
6. Nominate (Art. 1458)

CASES:
1) EQUATORIAL REALTY DEVT vs Mayfair Theater, 370 scra 56 (2001)
2) San Lorenzo Devt Corp vs CA, 449 scra 99, 114 (2005)
3) VDA. DE APE vs CA, 456 SCRA 193, April 15, 2005
4) Torcuator vs Bernabe, 459 SCRA 439, June 8, 2005
5) Ang Yu Asuncion vs CA, 238 SCRA 602, December 2, 1994
6) Gaite vs Fonacier, 2 SCRA 830, July 31, 1961
Sale distinguished with other Contracts
a) Barter or Exhcnage ( NCC Arts 1954, 1683 to 1468)
b) Donation
c) Contract of Piece of Work (Massachusetts Rule) (NCC 1467)
d) Agency to Sell (NCC 1466)
e) Contract of Lease with Option to Buy
f) Dacion en Pago (1245)
Stages:
A. Negotiation
B. Perfection (1315, 1475)
C. Performance (1191, 1403(2))
D. Consummation

Cases:
7. Ainza vs Padua, 462 SCRA 614
8. Firme vs Bukal Enterprises and Dev Corp. 414 SCRA 190 (2003)
9. Manila Container Corp. vs PNB 511 SCRA 444 (2006)
10. San Miguel Properties Philippines vs Huang 336 scra 743 (2000)
11. Fule vs Court of Appeals 286 scra 698 (1998)
12. Toyota Shaw, Inc vs CA Gr No. L-116650, May 23, 1995
13. Sps. Edrada vs Sps Ramos, Gr No. 154413, August 31, 2005
14. Biñ an Steel Corp vs CA 391 SCRA 90 (2002)
15. National Housing Authority vs Grace Baptist Church 424 scra 147 (2004)
16. Almocera vs Ong, 546 scra 164 (2008)
17. Almira vs CA, 399 scra 351 (2003)
18. Carrascoso Jr. vs Court of Appeals 477 scra 666, 686 (2005)
19. Manongsong vs Estimo, 404 scra 683 (2003)
20. Polytechnic University of the Philippines vs CA, 368 scra 691 (2001)
21. Llyod’s Enterprises and Credit Corp. vs Dolleton 555 SCRA 143
22. Sanchez vs Rigos, GR No. L- 25494, June 14, 1972
23. Riviera Filipina, Inc. vs CA et al., GR No. 117355, April 5, 2002
24. Parañ aque Kings Enterprises Inc vs CA Gr No. 111538, February 26, 1997

A. Consent
Formation/ Perfection of Contract of Sale (NCC 1475)
1. Option Contract (NCC 1479)
2. Mutual Promise to buy and sell (NCC 1479)
 3. Status of Advertisement (NCC 1325 – 26)
4. Acceptance by letter or telegram (NCC 1319)
5. Perfection of sale by Auction (NCC 1476)
6. Earnest Money (NCC 1458)
7. Form of Sales (NCC 1483, 1874, 1581, 1403)
8. Right to Refusal

B. Object
Object of SALE (NCC 1306)
1. Subject Matter must be Licit (NCC 1459)
2. Subject Matter must be Determinate (NCC 1460)
3. Sale of Things having Potential Existence (NCC 1461)
4. Sale of Hope or Expectancy (NCC 1461)
5. Emptio Rei Speratae
6. Emptio Spei
7. Sale of Existing and Future Goods (NCC 1462)
8. Sale of Undivided Interest (NCC 1463)
9. Sale of Things subject of a resolutory condition (NCC 1465)

Cases:
25. Ereñ eta vs Bezore 54 scra 13 (1973)
25. Buenaventura vs CA, 416 scra 263 (2003)

C. Cause
PRICE
1. Certainty of Price (NCC 1469)
2. Who may determine price (NCC 1473-74)
3. Effect of gross inadequacy of price (NCC 1470)
4. Effect where price is simulated (NCC 1470)
5. Certainty of Price of securities, grains, liquids, etc. (NCC 1472)
6. Effect of Failure to determine price (Art 1474)
7. Meeting of minds as to price