Contract of sale – An agreement where one of the parties obligates himself to deliver a determinate

thing, while the other obligates himself to pay a sum of money or its equivalent.

Characteristics:

Consensual – perfected by mere consent.

Bilateral – both parties are bound to fulfill their obligations reciprocally towards each other

Onerous - A contract of sale is onerous because, to acquire the rights, valuable consideration must be
given.

Nominate – the law gives it a special name or designation

Principal – can exist on its own

Object must be licit – otherwise the contract of sale is void

Perfection – when there is consent or meeting of minds

Consummation – when both parties fulfilled their obligations

Failure to pay consideration – does not render the contract void because the elements are present

- Right to demand
- Right to rescind

Liable for damages if:

- Fraud
- Negligence
- Delay
- Contravenes the tenor of obligation

Consent is vitiated with:

- Violence – application of serious irresistible force

- Intimidation -
- Mistake – when there is doubt
- Fraud -
- Undue influence

2 types of simulation:

Absolute Simulation – the parties don’t intend to be bound

Relative simulation – parties conceal their true agreement

2 types of delivery:

Actual delivery – placement of the thing in control/possession of the buyer

Constructive delivery – delivery is affected by legal means

> Least of a property for more than a year must be in writing

Determinate thing (article 1460)

 Particularly designated
 Physically segregated

i. Traditio Simbolica - delivery of certain symbols representing the thing. Example: Delivery of keys of a
house

ii. Traditio Longa Manu - Delivery of thing by mere agreement; when seller points to the property
without need of actually delivering

iii. Tradicion Brevi Manu - the buyer, being already in possession of the thing sold due to some other
cause, merely remains in possession after the sale is effected, but now in concept of owner. e.g. From
lessee to becoming an owner

iv. Constitutum Possessorium- the seller remains in possession of the property in a different capacity.
e.g. From owner to lessee

3. QUASI-TRADITIO - delivery of rights, credits or incorporeal property, made:

a. When sale is made through a public instrument

b. Placing titles of ownership in the hands of the buyer;

c. Allowing buyer to make use of rights.

Earnest money – part of the price

Option money – not part of the price

Article 1403
Requisites of Negotiable instrument (absence of one, will make it not negotiable):

- Must be in writing (signed by the maker or drawer)

- Unconditional promise to pay a sum certain in money.
- Payable on demand or at a fixed future determinable time
- Must be payable to bearer or order.
- If the instrument is addressed to a drawee, he must be named or otherwise indicated therein
with reasonable certainty.

A negotiable instrument (i.e. promissory note) is a document that represents a promise or

order to pay a certain amount of money to the bearer or a designated person. To be considered
negotiable, an instrument must meet certain requirements, including:

1. Must be in writing: A negotiable instrument must be in writing, either on paper or in an

electronic form.
2. Must be signed: The instrument must be signed by the person who is creating it, such as
the issuer of a check or promissory note.
3. Must contain a promise or order to pay: The instrument must contain an unconditional
promise or order to pay a certain amount of money.
4. Must be payable on demand or at a definite time: The instrument must be payable on
demand or at a definite time in the future.
5. Must be payable to a specific person or to bearer: The instrument must be payable
either to a specific person or to the bearer (i.e., the person who is holding the
instrument).
6. Must be transferable: The instrument must be transferable by endorsement or delivery,
meaning that it can be legally transferred to another person.
7. Must be for a fixed amount of money: The instrument must be for a fixed amount of
money, which is either stated on the instrument or can be determined from its terms.