RFBT MIDTERMS REVIEWER EXCEPTIONS (FORM):

LAW ON SALES 1. Form is required (STATUTE OF

FRAUDS):
CONTRACT OF SALE
• Sale of personal property at a
• ART. 1458 price not less than PHP 500.
• Transfer the ownership and to deliver • Sale of real property (any interest
a determinate thing. therein).
• A price certain in money or its • Sale of property NOT TO BE
equivalent PERFORMED WITHIN A YEAR
• may be absolute or conditional. from the date (regardless of the
price).
ESSENTIAL REQUISITES 2. Law requires in a certain form for its
validity.
• CONSENT – meeting of minds.
3. Form is required only for the
• OBJECT – determinate; licit or lawful;
convenience of the party.
not impossible.
• CAUSE – price certain in money or its PERSONS WHO MAY NOT ENTER INTO A
equivalent (stipulated). CONTRACT OF SALE
CHARACTERISTICS OF A CONTRACT OF 1. ABSOLUTE INCAPACITY – persons who
SALE cannot bind themselves. (ART 1327,
C.C)
• Purpose
• Minors – exception: necessaries.
• Perfection
• Insane and demented persons –
• Subject Matter exception: lucid interval.
• Cause • Deaf and Mute – exception: those
• Bilateral Contract who can write.
• Nominate Contract • Subjected to civil interdiction.
• Commutative • Contract of sale is VOIDABLE.
PARTIES 2. RELATIVE INCAPACITY – certain
persons under certain circumstances
1. Vendor / Seller – must be legally cannot buy certain property.
capacitated to enter into contract. • Husband and Wife – sale
• Corporation – must be executed by between spouses. EXCEPT:
the BOD or an authorized corporate separation of property was
agent. agreed upon in the marriage
• Vendor must have a RIGHT TO settlements or there has been a
TRANSFER THE OWNERSHIP at judicial separation of property.
the time it is delivered. • Guardian – exception: out of ward
2. Vendee / Buyer – must be legally / custody.
capacitated. • Agent – exception: agency
NATURE AND FORM terminated.
• Executors and administrators.
• Consensual contract. • Public officers and employees.
• GR: may be entered in ANY FORM • Justice, judges, and prosecuting
provided all the essential requisites attorneys connected.
for its validity are present (ART. 1356)
 • Any others specially disqualified CONTRACT OF SALE VS CONTRACT TO
by the law SELL
• Sale to Aliens (Foreign)
TO SALE TO SELL
SUBJECT MATTER OF SALE Ownership is Ownership is
transferred to buyer transferred only
1. Must be LICIT or LAWFUL. UPON delivery of upon FULL
2. Must be a thing the seller of which the object. payment of the
has a RIGHT TO TRANSFER purchase price.
OWNERSHIP at the time of the Only one contract is
delivery. executed. Two contracts
3. Must be DETERMINATE. involved; Contract
4. Thing must have potential existence; Non payment of the to sell and Deed of
EMPTIO SPEI; EMPTIO REI price is a Absolute Sale.
RESOLUTORY
SPERATAE.
condition. FULL payment of
5. May be segregated or undivided
the price is a
share. Remedies: Specific SUSPENSIVE
6. Subject to resolutory condition. performance, condition.
PRICE Rescission,
Damages. Remedy: Damages.
1. PRICE OF THE THING SOLD MUST BE
CERTAIN. Otherwise, the sale is VOID.
OPTION MONEY VS EARNEST MONEY
PRICE IS CONSIDERED CERTAIN:
OPTION MONEY EARNEST MONEY
• Agreed upon by the parties. Consideration paid Money given as part
• In reference to another thing for the purpose of of the purchase
certain. holding one to his price and as a proof
promise to buy or of the perfection of
• Determination thereof is left to the
sell a determinate the contract.
judgement. thing
GROSS INADEQUACY OF PRICE – price is Buyer is bound to
insufficient to satisfy the real or actual price Not required to buy. pay the balance.
of the object of the sale. Does mot affect the
Non-refundable. Downpayment.
VALIDITY of the sale.
STAGES OF CONTRACT OF SALE
OBLIGATIONS OF THE VENDOR
1. Preparation – negotiation.
• Transfer of ownership
2. Perfection – meeting of the minds and the
• Deliver the thing sold
birth of the contract.
3. Consummation – termination; death of a • Deliver fruits and accessories
contract; the thing is delivered and paid • Make warranties
for. • Take care of the thing upon perfection
and prior delivery
• Pay for expenses for the execution
and registration of the sale
• Afford the buyer a reasonable
opportunity to examine the goods
upon delivery
 • Inform buyer to insure goods if it is GR: the thing perishes with the owner (res
usual to insure them. perit domino).

OBLIGATIONS OF THE VENDEE 1. LOSS BEFORE PERFECTION

(including deterioration in quality)
• To accept delivery • Complete loss: sale is void.
• To pay the price of the thing sold at • Partial loss: may choose between
the time and place stipulated in the i. Withdrawal or rescission
contract ii. Demanding the
• To bear the expenses for the REMAINING part and
execution and registration of the sale paying its proportionate
and putting the goods in a deliverable price.
state if such is the stipulations 2. LOSS AFTER PERFECTION BUT
• Notify the seller in case of breach of BEFORE DELIVERY – seller bears the
warranty. risk of loss. Buyer is not obliged to pay
KINDS OF DELIVERY the price.
• ART. 1584 – Seller
1. ACTUAL or REAL – thing sold is placed • ART. 1480 – Buyer
under the physical control and
possession of buyer or agent. The goods are at the buyer’s risk:
2. CONSTRUCTIVE or LEGAL – does not
• If there is an agreement to that
confer physical possession of the thing
effect.
BUT BY CONSTRUCTION OF LAW.
• If the ownership of the goods is
(Equivalent to ACTS OF REAL
retained by the seller merely to
DELIVERY).
SECURE THE PERFORMANCE
a. Tradition Simbolica – delivery of
of the buyer.
certain symbols representing the
• Actual delivery has been delayed
thing. E.g., Keys of a house.
(fault of the buyer).
b. Traditio Longa Manu – delivery of
the thing by MERE PLACE OF DELIVERY
AGREEMENT. Points to the
property. PRESUMPTION: Buyer must take the goods
c. Tradicion Brevi Manu – buyer from the seller’s place of business or
being already in possession of residence.
the thing sold due to some other 1. Place of delivery – based on
cause, remans IN POSSESSION agreement stipulated.
after the sale is in effect. E.g., 2. Usage of Trade e.g. dealership.
Leese to own. 3. Seller’s place of business.
d. Constitutum Possessorium – 4. Residence of the seller.
seller remains in possession of 5. Where the thing is at the time of
the property in a different perfection.
capacity. E.g., owner to lessee.
3. QUASI TRADITIO – delivery of rights, DOUBLE SALE
credits or incorporeal property.
• 1 VENDOR, 1 OBJECT, 2 or MORE
LOSS OF THE THING VENDEE.
1. MOVABLE – 1st to take possession in
good faith.
2. IMMOVABLE • State what the warrantor will do,
1. 1st to register in good faith. • State what consumer must do to
2. 1st to take possession in good faith. avail.
3. Oldest title. • Stipulated the warranty period.
REMEDIES: Rescission with damages. BREACH OF EXPRESS WARRANTY –
within 30 days by either the warrantor or his
WARRANTY
representative.
1. Express warranty – affirmation of fact or
RIGHTS OF AN UNPAID SELLER
promise. Induces the buyer to purchase.
• Can be verbal or written. • Possessory lien.
• Express of opinion – made by an • Stoppage in transit
expert. • Right of resale
• Exaggeration of trade – dealer’s talk • Right to rescind or cancel the sale
or caveat emptor. • Seller retains ownership.
• Breach of express warranty – liable
for damages. RIGHTS OF RESCISSION BEFORE
2. Implied warranty – law constitute part of DELIVERY ARISES WHEN
every contract of sale.
• Buyer repudiated.
• Seller has the right to sell.
• Buyer manifested his inability to
• Against eviction – applies to real perform the obligation/
property; disturbance of peaceful
• Material breach.
possession.
• Against non-apparent servitudes OBLIGATIONS OF THE VENDEE
(burden)
GR: Vendor is not required to deliver until the
• Against hidden defects or unknown
vendee pays the purchase price. Vendee is
encumbrances.
not required to pay the price before the thing
• As to fitness or merchantability.
is delivered.
REMEDIES OF VENDEE / BUYER
• If stipulated – vendee is bound to
• Recoupment – breach to reduce or accept delivery and to pay the price
extinguish the price. at the time of delivery.
• Action of damages. • ABSENCE OF STIPULATION
o Accept the goods. o As to time, place of payment,
o Refuse to accept the goods. and delivery – vendee is
• Rescission bound to pay at the time and
• Remedies are alternative not place of delivery.
cumulative. o As to place of delivery – shall
be made whenever the thing
CONSUMER ACT OF THE PH might be at the moment the
contract was perfected.
• Written – covered warranty and when
• Only the time for delivery was
to avail.
stipulated – vendee is required to pay
• Terms are clear – in understandable
even before the thing is delivered.
language.
• Only the time of payment has been
• Identify the parts – to whom the
fixed – vendee is entitled to delivery
warranty is extended.
even before the payment of the price.
RIGHT OF THE VENDEE INCLUDED: lease of goods and real estate.

• To not accept delivery on installment; Government cannot direct buy, must undergo
unless stipulated. a bidding process.
• Right of examination during delivery
• Infrastructure - construction of roads,
and before acceptance.
train, buildings, dam.
• Right to suspension of payment.
• Consulting Services – no one can
EXTINGUISHMENT OF SALE perform these services internally.
E.g., legal; external auditors, IT
1. CONVENTIONAL REDEMPTION – right experts; engineers and architects.
of repurchase. • GOODS – items, supplies, materials,
• Express intention to repurchase; general supplies.
• Payment or valid tender of o Public Businesses or
redemption price; Government Undertaking.
• Payment of necessary and useful o Personal and Non-personal
expenses made property or contractual
PERIOD TO EXERCISE services.
GR: Right to redeem must be in writing. • Additional: Consulting services 0
• If the right is stipulated without a feasibilities and assistance.
period to repurchase the property, • GR: PUBLIC BIDDING
the period of redemption shall be
4 years from the date of the PRINCIPLES IN PUBLIC BIDDING –
contract Competitive Bidding.
• If the period to redeem is
PACTS
stipulated, must be exercised
within the period fixed upon but • Public Monitoring – publication of
not to exceed 10 years bidding; must be available to the
• From the time of final judgement public.
in a civil action, the vendor a retro • Accountability – PE & BAC held liable
has 30 days within which to for any regularities; criminal and civil
exercise the right to repurchase liabilities.
2. LEGAL REDEMPTION – right to be • Competitiveness – GR: Everyone
subrogated, upon the same terms and can freely bid. Exception: Related to
conditions stipulated in the contract. the HOPE or members of the BAC by
• Redemption of co-owners. consanguinity or affinity up to 3rd civil
• Redemption by owner of degree.
adjoining lands. • Transparency – public should be
• Redemption on by a debtor. aware of the overall bidding process.
• Redemption by other co-heirs. • Streamlined Process – same
procurement process.
END USER – buyer.
GOVERNMENT PROCUREMENT
PARTIES INVOLVED:
GOVERNMENT PROCUREMENT –
acquisition of goods, consulting services, • Head of Procuring Entity or HOPE
infrastructure projects by the procuring entity • Bids and Awards Committee or BAC
(PE). • Technical Working Group or TWG
 • End User • Procurement Head
• Prospective Bidders • Prospective Bidder
• Determining the project and the
BIDS AND AWARDS COMMITTEE –
changes within the offers.
consists of maximum of 7 members.
• BAC will explain the offer; feasibility,
• Chairperson and adjustments.
• Vice Chairperson • E.g. adjustment – change of time of
• Member 1 – 5 delivery.
• Chairperson or V. Chair must be 6. Purchase of Bid Document
present during the bidding. • Minimum of 500 Php and Maximum
of 75,000 Php.
BIDDING PROCEDURE OR PROCESS 7. Submission of Bids
Note: Must be given notice 1 year (?) before 8. Opening
the bidding process. • GR: Submission and Opening must
be done simultaneously.
1. End User • Exception: There is a stipulated date,
• Purchase request. time, place. No form.
2. Budget Officer • Cannot submit beyond the stipulated
• Checks if the end user has sufficient time but can be submitted before.
funds.
• Issues certificate of availability of BID OF ENVELOPE
funds (CAF). o Technical and Legal Envelope
3. Bid and Awards Committee or BAC o Financial Envelope
• Posting in the following: 1. Legal
o Philgephs – PH procurement. • Philgeps Regulation – platinum
o Website of Procuring Entity registration.
(PE); Facebook. • Mayor’s permit.
o Conspicuous Place; Public; • DTI / SEC business permit
Newspaper.
• BIR Registration
4. Pre-Procurement Conference 2. Technical Speficication
• Includes: BAC, End User,
Procurement Head. NOTE: Must comply with the requirements
• Technical Specification – Goods above or else it will be considered ineligible
• Terms of Reference – Infrastructure to bid. If it is already complete, it is declared
and Consulting Services. as eligible to bid and will proceed to the
• Brand Specification or LEADING TO opening of financial envelope.
BRAND is prohibited. Exception: If it FINANCIAL ENVELOPE
can only operate with a certain brand;
replacement of an existing good. • Audit
• Example of Leading to brand: IOS • Financial statements
only or Windows only; this will lead to
Budget must not exceed the bidding amount.
limited bidders participating in the
bidding process. E.g. Budget is 300,000 pesos.
5. Pre-bid Conference
• BAC • A – 301,000 – ineligible
• End User • B – 200,000
 • C – 180,000 CONTRACT MANAGEMENT TEAM
• D – 250,000
APPROVAL (HOPE)
GR: Lowest Calculated Bid.
• Calendar Days.
EXCEPTION: Most Economically Beneficial . • 10 days to sign – contracting parties.
• Performance security bond – before
• In this scenario, the winning bid is
entering into an agreement;
180,000.
guarantees the performance.
• Offers are not subjected to change
• E.g., Cash, checks, surety bond.
after opening the envelope. But it can
• NOTICE OF AWARD (NOA) – 7 days
be subject to change BEFORE
to pay PSB (Mandatory).
opening the envelope.
• NOTICE TO PROCEED (NTP).
• In case all bidders are ineligible; the
excess or funds will be back in the TERMINATION OR CANCELLATION
savings or treasury.
• Unlawful acts
CRIMINAL LIABILITY: Penalized for 12 • Default or Delay
years. • Convenience
It’s not allowed to mention where is the place SUB-CONTRACTING – GR: Not allowed.
of manufacturing. EXC: stipulated.
9. Post – Qualification ADVANCE PAYMENT – GR: Not allowed.
• E.g., Face Shield – bought at price of EXC: lease of venues.
100 Php but it is priced at 5 Php.
• Can be post disqualified – proceed to LIQUIDATED DAMAGES
the next bidder and undergo in • Reaches 10% - may rescind or
another post qualification. terminate.
• If there is no qualified bidders, it is • 15% - negative slippage
considered as a FAILURE and will • Take over the Contract
proceed to a new BIDDING.
• PSB – forfeited
• Public Bidding Exception:
Emergency. TERMINATION OF CONTRACT
• Checking if all documents are
• Default
legitimate.
• Convenience
• BAC will check all requirements from
each agency. • Insolvency
• Checking of Declared address. • Unlawful acts
• Legitimacy Check: Name of the • Due to the contractor or consultant/
company; Employees. TERMINATION FOR DEFAULT
• If qualified: LOWEST CALCULATED
& RESPONSIVE BID Any of the following conditions:
10. HOPE – Head of Procurement Entity • Outside force majeure, failure
11. AWARD reached 10% of liquidated damages.
• GR: 90 days to complete the • Result of force majeure, they have 90
procurement process. days (fixed) to deliver, reached 10%
• Usually, can be done within 30 days. of liquidated damages.
TERMINATION FOR UNLAWFUL ACTS 4. Shopping

• If declared bankrupt 52. A 52. B

• Prima facie evidence that the Readily available e.g. Regular
supplier has engaged before or of the shelf goods. office supplies.
during the implementation of the Consumables.
contracts in unlawful deeds or 1M Threshold.
behavior (corrupt or fraudulent). Request for
quotation: 200k All canvass.
TERMINATION OF CONTRACTS threshold.

PROCEDURE: 1 canvass.
1. Verification
5. Negotiated
2. Notice to terminate – right to due
• TWO FAILED BIDDING
process.
o 2 public bidding
3. Show Cause – explanation; 7 days to
o LTF – Legally, Technical,
reply. 10 days to fix; motion to accept.
Financial.
4. Decision
• EMERGENCY CASE
GR: Procurement Method = BIDDING o Disrupted public services.
o E.g. flood, earthquake.
Exception: Alternative Mode of Procurement
• TAKE OVER CONTRACT
ALTERNATIVE MODE OF • AGENCY TO AGENCY
PROCUREMENT o Memorandum of Agreement
(MOA)
1. Limited Source Bidding o Undertaking.
• Selective Bidding • SMALL VALUE
• E.g. war equipment o Not included in Shopping A & B.
• Goods and Consulting services; e.g. • HGHLY TECHNICAL CONSULTANT
Bataan Power Plant materials. o Few expertise in the field – 6
2. Direct Contracting months contract.
• Single source procurement • PETROLEUM, AIRLINE TICKET,
• Certificate of Sole Distributorship – ONLINE SUBSCRIPTION.
notarized.
• Certificate of Exclusivity – notarized. ADDITIONAL NOTES:
• Goods only. BAC S. 35
• Propriety in nature – patent.
3. Repeat Order 1. No bd received.
• Previously awarded 2. None of the bidders are qualified.
3. Refuse to execute the award.
REQUIREMENT
S.41 – HOPE – RESERVATION CLAUSE
• Public Bidding
• Within 6 months 1. Collusion
• 25% of the total; 4 units per item 2. Did not follow the procurement
if there is a large amount. process
3. Violated the “no contact rule”
4. For any legally and justifiable
reason.
BP NO. 22 • Fine not less than but not more than
double the amount of the check. Fine
VIOLATION OF BP 22
shall not exceed 200,000.
• Can be held; criminal and civil liability. • Both, at the discretion of the court.

CHECK – negotiable instrument. PRESCRIPTIVE PERIOD

BOUNCING CHECKS • 4 years after the knowledge.

1. Closing of account DIFFERENCE BETWEEN BP 22 AND

2. Refusal. ESTAFA

WHO ARE LIABLE? BP 22 ESTAFA

Good Faith not a Good faith is a valid
• Individual or entity valid defense. defense.
• Close accounts but still issues
checks. Liability exist if Liability for payment
• Aware that account is empty. issued as payment of pre-existing
for pre-existing obligation not exists
ELEMENTS obligation. in the absence of
deceit.
1. Making, drawing, and issuance of any
Accused both drew
checks to apply for account or for value. and issue the Liable by merely
2. Knowledge – time of issue – no sufficient check. issuing a worthless
funds in or credit. There is a presumption. check.
5 days to make
PRESUMPTION OF KNOWLEDGE
good of the check. 3 days.
• 90 days from the date of the check
• SUPREME COURT – not applicable CONSUMER ACT OF THE PHILIPPINES
because it is a state of mind.
• Demand letter – notice to pay. CONSUMER ACT
• Within 5 banking days.
• Policy of the state to protect the
NOTICE TO PAY interests of the customer.
• CONSUMER PROTECTION.
• Refusal or bouncing check • RA NO. 7349
• Amount of check
• Opportunity to pay within 5 days. OBJECTIVE

DEMAND LETTER 1. protection against hazards to health and

safety;
• Signature, date, name 2. protection against deceptive, unfair and
• Clear proof. unconscionable sales acts and practices;
3. Dishonor of Check – bounce of check / 3. provision of information and education to
refusal. facilitate sound choice and the proper
exercise of rights by the consumer;
PENALTY
4. provision of adequate rights and means
• Imprisonment of not less than 20 of redress.
days but not more than 1 year.
5. involvement of consumer representatives e) its general make or active
in the formulation of social and economic ingredients;
policies. f) the net quality of contents, in terms of
weight, measure or numerical count
Deceptive, Unfair and Unconscionable
rounded of to at least the nearest
Sales Acts or Practices
tenths in the metric system;
• Concealment, false representation or g) country of manufacture, if imported;
fraudulent manipulation. and
• False Benefits. h) if a consumer product is
• E.g., Limited Stocks – false manufactured, refilled or repacked
availability. under license from a principal, the
label shall so state the fact.
DECEPTIVE ACTS OR PRACTICES
PRICE TAG REQUIREMENT
• False Benefits
• False Statement of Quality • Must have an appropriate price tag,
label, or making publicly displayed.
• Misrepresented Condition
• False Availability REMEDIES (MIN STANDARD FOR
• Product not as represented WARRANTIES)
• False supply quantity
1. Remedy.
• Unnecessary repair
2. Refund or replacement without
• Non-existent price advantage
charge.
• False warranty claim
• False sponsorship. LEMON LAW

UNFAIR AND UNCONSCIONABLE SALES LEMON LAW

• Taking advantage of consumers • Policy of the state promoting full

ignorance. protection to the rights of consumers
• Grossly overpriced product services. in the sale of MOTOR VEHICLES.
• Consumer unable to receive • Brand new, self-propelled, 4 wheeled
promised benefit. road vehicle
• Seller is aware that consumer has no • Exception: Two wheeled; Heavy
capacity to pay. equipment; rails or tracks vehicles;
• Excessively one sided. agricultural vehicles.

LABELLING AND FAIR PACKAGING REQUISITES

• Must conform to the provisions. • Brand new motor vehicles

• Purchased in the Philippines.
MINIMUM REQUIREMENTS • Within 12 months from the date of the
a) its correct and registered trade name original delivery; up to 20,000
or brand name; kilometers of operation/
b) its duly registered trademark; • Reported to be in non-conformity with
c) its duly registered business name; the manufacturer / distributor’s
d) the address of the manufacturer, standards.
importer, re-packer of the consumer
product in the Philippines;
ADDITIONAL NOTES

• Repair Attempts – 4 separate

attempts by SAME manufacturer.
• Notice of Availment – in writing.
• Bring the vehicle to MDDR for final
repair attempt.
• Deemed Successful repair – within
30 days not returned for repair
(calendar days from the date of the
notice).
• Non-conformity issue still exists after
30 days – invoke rights.
DISCLOSURE OF RESALE
Mandatory disclosure of the following in
writing:

• The motor vehicle was returned to the

manufacturer, distributor, authorized
dealer or retailer (MDADR)
• Nature of the nonconformity which
caused the return;
• The condition of the motor vehicle at
the time of the transfer to the MDADR