SALES Rules to Determine Whether Contract Is Sale

or Barter
I. Manifest Intention of the Parties
SALE- a contract whereby one of the
II. When Intention Does Not Appear and
contracting parties (Seller) obligates himself to
Consideration Consists Partly in Money and
transfer the ownership, and to deliver the
Partly in Another Thing:
possession, of a determinate thing; and the
(i) It is a barter, where the value of the thing
other party (Buyer) obligates himself to pay
given as part of the consideration exceeds the
therefor a price certain in money or its
amount of money given or its equivalent;
equivalent.
(ii) It is a sale, where the value of the thing given
as part of the consideration equals or is less
Parties- (a)Buyer & (b)Seller
than the amount of money
a. Two OBLIGATIONS of the SELLER:
(i) Transfer the Ownership, and
Contract of Sale Contract for a Piece-of-
(ii) Deliver the DETERMINATE thing;
Work
b. An OBLIGATION of the BUYER:
(i) Pay the PRICE in the ordinary manufactured specially
course of business for a customer
Element of a Contract of Sale obligation to give obligation to do
1. Consent- meeting of the minds to transfer
ownership in exchange for the price Contract of Sale Contract to Sell
2. Subject Matter- “determinate” thing or at (Agency)
least “determinable” in the ordinary manufactured specially
3. Price- certain in money or its equivalent course of business for a customer
obligation to give obligation to do
Stages in the Life of Sale
1. Negotiation- policitacion or preparation Capacity of Parties
stage; GR: Minors, insane and demented persons, and
2. Perfection- conception or “birth”; and deafmutes who do not know how to write, have
3. Consummation- or “death.” no legal capacity to contract, and therefore are
disqualified from being parties to a sale.
Characteristics of Sale (VOIDABLE)
1. Consensual- perfected by mere consent XPN: 1. Necessity
2. Bilateral-imposes obligations to both parties 2. Emancipation (marriage of minor)
3. Reciprocal- parties must perform Prohibited Sales
simultaneously; each party is debtor & creditor 1. Sale between husband and wife UNLESS
of each other property regime is of complete separation
4. Onerous- valuable consideration is given 2. Agent, with respect to the property whose
5. Commutative- exchanges thing of equivalent administration or sale may have been entrusted
values to him, UNLESS there is written consent of the
6. Nominate- has a name given by law principal
7. Principal- can stand on its own 3. Guardian, with respect to the property of the
person who is under his guardianship
Sale Is Title and Not Mode 4. Executor or administrator, with respect to the
Sale is merely title that creates the property of the estate under his administrations
obligation on the part of the seller to transfer 5. Public officers and employees, with respect to
ownership and deliver possession, but on its property of the State or any subdivision thereof,
own sale is not a mode that transfers ownership. or of any government-owned or controlled
It would be delivery or tradition that is the mode corporation, or institution, the administration of
to transfer ownership and possession to the which has been entrusted to them; it includes
buyer. judges and government experts who, in any
manner whatsoever, take part in the sale
 Earnest Money Option Money
6. Justices, judges, prosecuting attorneys, clerks part of the purchase price distinct consideration
of courts, and other officers and employees given only when there is applies to a sale not
connected with the administration of justice, with already a sale yet perfected
respect to the property and rights in litigation or when earnest money is when the would-be
levied upon an execution before the court within given, the buyer is bound buyer gives option
whose jurisdiction or territory they exercise their to pay the balance money, he is not
respective functions required to buy
7. Lawyers, with respect to the property and GR: No form required, perfected by mere
rights which may be the object of any litigation in consent
which they may take part by virtue of their XPN: 1. Covered by Statute of Frauds- must be
profession. in WRITING (For Enforceability)
a. Sale of personal property of at least
Requisites of Valid Subject Matter ₱500.00
1. Licit b. Sale of real property regardless of
2. Possible thing value
3. Determinate or at least determinable 2. Sale of large cattle- must be in
WRITING, REGISTERED with the municipal
Emptio Rei Speratae Emptio Spei treasurer who shall issue a CERTIFICATE OF
has potential existence sale of mere hope or TRANSFER
(e.g. harvest) expectancy (e.g. lottery 3. Sale of parcel of land by an agent-
ticket) must have WRITTEN AUTHORITY from
sale of future property sale of present property principal

Types of Delivery
VOID Sale: 1. Actual- the thing sold is placed in the control
1. Future Inheritance and possession of the buyer
2. Sale of vain hope 2. Constructive
a. Execution of public instrument
GR: Sale by Non-Owner- VALID b. Symbolic Delivery- must involve or cover the
Although the seller must be the owner of subject matter
the thing in order to transfer ownership to the c. Traditio Longa Manu- by pointing
buyer, he need NOT be the owner thereof at the d. Traditio Brevi Manu- would-be buyer was
time of perfection; it is sufficient that he be already in possession of subject matter of sale
the owner at the time of the delivery. (lessee-owner)
XPN: Judicial Sale e. Constitutum Possessorium- seller was
already in possession of subject matter of sale
Price- signifies the sum stipulated as the (owner-lessee)
equivalent of the thing sold
REQUISITES: Rules on Effects of Delivery for Movables
1. Certain 1. Seller delivers to the buyer a quantity of
2. In money or its equivalent goods LESS THAN what he contracted to sell,
3. Real the buyer may:
a. reject them
Inadequacy of Price- GR: VALID b. if the buyer accepts or retains the goods
XPN: 1. Rescissible Contracts delivered, knowing that the seller is not going to
2. Voidable Contracts perform the contract in full, he must pay for them
3. Void Contracts at the contract rate
2. If, however, the buyer has used or disposed
of the goods delivered before he knows that the
seller is not going to perform his contract in full,
the buyer shall not be liable for more than the
Formalities fair value to him of the goods so received
 3. Seller delivers to the buyer a quantity of does not of itself establish that the agreement
goods LARGER THAN what he contracted to thus referred to is a warranty.
sell, the buyer may:
a. accept the goods covered in the contract and Kinds of Warranty
reject the rest 1. Express Warranty- Caveat Emptor
b. accept the whole of the goods delivered and 2. Implied Warranty
pay for them at the contract rate A. Warranty of ownership- seller guarantees
c. if the subject matter is indivisible, the buyer that he has a right to sell the thing sold and to
may reject the whole of the goods transfer ownership to the buyer who shall not be
4. Seller delivers to the buyer the goods disturbed in his legal and peaceful possession
contracted but MIXED with goods of a different thereof.
description, the buyer may: B. Warranty against eviction
a. accept the contracted goods and reject the Requisites for recovery of damages:
rest a. Buyer is deprived of part/whole of thing sold
b. if the subject matter is indivisible, the buyer b. Eviction is by final judgment
may reject the goods entirely. c. Eviction is based on a right that existed even
prior to the sale
Double Sale: d. Vendor has been summoned at the instance
REQUISITES: 1. At least 2 valid sales of vendee and made a party in the action for
2. Same subject matter eviction
3. At least 2 buyers with diff. Interests e. There is no waiver on the part of the vendee
4. Only 1 seller C. Warranty against hidden defect
Alternative Remedies:
Ownership Rule: a. Action Redhibitoria- action for rescission;
1. If movable/personal property: action for recovery of the price paid with legal
-1st possessor in good faith interests but with a return of the thing purchased
2. If immovable/real property: b. Action Aestimatoria or Quanti Minoris- if
-1st to register in good faith price is already paid in full, it is an action for
-1st possessor in good faith RECOVERY of part of purchase price
-oldest title in good faith corresponding to defects; if price is not yet paid,
it is an action for REDUCTION of price
Instances of Loss corresponding to defects
Before perfection VOID Seller bears
At the time of perfection VOID lost When implied warranty not applicable
After perfection, before delivery VALID Depends 1. “As is and where is” sale
After perfection, after delivery VALID Buyer 2. Sale of second-hand articles
3. Sale by virtue of authority in fact or law
(sheriff, auctioneer, mortgagee, pledgee or
WARRANTY- a statement or representation others)
made by the seller of goods, contemporaneously
and as a part of the contract of sale, having
reference to the character, quality, or title of the
goods, and by which he promises or undertakes
to insure that certain facts are or shall be as he
then represents them.
-It is not necessary that the word “warranty” or
“warrant” be used by the seller to constitute a
warranty. Any word is sufficient to show the
intention of the parties to consider the
representation or promise as an express
warranty; and the fact that a stipulation in the
contract of sale is specially called a “warranty”