LAW ON SALES The requisite that a thing be determinate is satisfied if at the

time the contract is entered into, the thing is capable of

Article 1458. By the contract of sale one of the contracting being made determinate without the necessity of a new or
parties obligates himself to transfer the ownership and to further agreement between the parties.
deliver a determinate thing, and the other to pay therefor a
price certain in money or its equivalent. Article 1470. Gross inadequacy of price does not affect a
contract of sale, except as it may indicate a defect in the
A contract of sale may be absolute or conditional. consent, or that the parties really intended a donation or
some other act or contract.
✓ Obligations of the seller/vendor - deliver the object and
transfer the ownership. “Contracts where consent is given by mistake or because of
✓ Obligation of the buyer/vendee – to pay a price certain in violence, intimidation, undue influence or fraud are
money or its equivalent. voidable.” [Leonardo v. C.A., G.R. No. 125485, 13 September
2004]
ESSENTIAL REQUISITES
Shocking to the conscience
1) Consent or meeting of the minds – consent of both parties. “There is no dispute that mere inadequacy of price per se will
2) Object or subject matter – determinate thing. not set aside a judicial sale of real property. Nevertheless,
3) Cause or consideration – price certain in money or its where the inadequacy of the price is purely shocking to the
equivalent. conscience such that the mind revolts at it and such that a
reasonable man would neither directly nor indirectly be likely
Kinds of contract of sale to consent to it, the sale shall be declared null and void.”
[Francisco v. PNB, G.R. No. 158755, 18 June 2012]
1. Absolute – ownership is transferred upon delivery.
2. Conditional – ownership is transferred upon fulfillment of OPTION CONTRACT
condition. ✓ A preparatory contract
✓ May be exercised within the agreed time
Article 1459. The thing must be licit and the vendor must ✓ Option money
have a right to transfer the ownership thereof at the time it is
delivered. EARNEST MONEY
Article 1482. Whenever earnest money is given in a contract
LICIT or LAWFUL of sale, it shall be considered as part of the price and as proof
- Not contrary to law, morals, good customs, public order or of the perfection of the contract.
public policy.
- Must be within the commerce of men. “Earnest money, under Article 1482 of the Civil Code, is
ordinarily given in a perfected contract of sale. However,
BEYOND THE COMMERCE OF MEN earnest money may also be given in a contract to sell.
“Among those that may not be the subject matter (object) of
contracts are certain rights of individuals, which the law and In a contract to sell, earnest money is generally intended to
public policy have deemed wise to exclude from the compensate the seller for the opportunity cost of not looking
commerce of man. Among them are the political rights for any other buyers. It is a show of commitment on the part
conferred upon citizens, including, but not limited to, once's of the party who intimates his or her willingness to go
right to vote, the right to present one's candidacy to the through with the sale after a specified period or upon
people and to be voted to public office.” [Saura v. Sindico, compliance with the conditions stated in the contract to sell.”
G.R. No. L-13403, 23 March 1960] [Racelis v. Spouses Javier, G.R. No. 189609, 29 January 2018]

“A public plaza is beyond the commerce of man and so EARNEST MONEY v. OPTION MONEY
cannot be the subject of lease or any other contractual “ Earnest money and option money are not the same but
undertaking.” [Villanueva et al. v. Castañeda, et al., G.R. No. distinguished thus:
L-61311, 21 September 1987] (a)earnest money is part of the purchase price, while option
money is the money given as a distinct consideration for an
“Forest lands, being the self-replenishing, versatile and all- option contract;
important natural resource that they are, need to be (b)earnest money is given only where there is already a sale,
reserved and saved to promote the people's welfare. By while option money applies to a sale not yet perfected; and,
their very nature or by executive or statutory fiat, they are (c)when earnest money is given, the buyer is bound to pay
outside the commerce of man.” the balance, while when the would-be buyer gives option
[Gordula v. C.A, G.R. No. 127296, 22 January 1998] money, he is not required to buy, but may even forfeit it
depending on the terms of the option.” [Rizalino v. PDC, G.R.
DETERMINATE THING No. 157493, 5 February 2007]
Article 1460. A thing is determinate when it is particularly
designated or physical segregated from all others of the
same class.
Article 1483. Subject to the provisions of the Statute of or by an acceptance of benefits under them.” [Heirs of Alido v.
Frauds and of any other applicable statute, a contract of sale Campano, G.R. No. G.R. No. 226065, 29 July 2019]
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 REMEDIES OF VENDOR (installment sale)
the conduct of the parties. Article 1484. In a contract of sale of personal property the
price of which is payable in installments, the vendor may
Recall exercise any of the following remedies:
“Contracts which have all essential requisites for their validity
are obligatory regardless of the form they are entered into, (1) Exact fulfillment of the obligation, should the vendee fail
except when the law requires that a contract be in some to pay;
form to be valid or enforceable.” [Heirs of Alido v. Campano, (2) Cancel the sale, should the vendee's failure to pay cover
G.R. No. G.R. No. 226065, 29 July 2019] two or more installments;
(3) Foreclose the chattel mortgage on the thing sold, if one
STATUTE OF FRAUD has been constituted, should the vendee's failure to pay
“In the following cases an agreement hereafter made shall be cover two or more installments. In this case, he shall have no
unenforceable by action, unless the same, or some note or further action against the purchaser to recover any unpaid
memorandum, thereof, be in writing, and subscribed by the balance of the price. Any agreement to the contrary shall be
party charged, or by his agent; evidence, therefore, of the void.
agreement cannot be received without the writing, or a
secondary evidence of its contents: CONTRACT OF LEASE WITH OPTION TO BUY
Article 1485. The preceding article shall be applied to
Subscribed means signed contracts purporting to be leases of personal property with
option to buy, when the lessor has deprived the lessee of the
(d) An agreement for the sale of goods, chattels or things in possession or enjoyment of the thing.
action, at a price not less than five hundred pesos, unless the
buyer accept and receive part of such goods and chattels, or If there is stipulation that the amount paid will not be
the evidences, or some of them, of such things in action or returned, may the buyer/lessee be allowed to recover some
pay at the time some part of the purchase money; but when amount?
a sale is made by auction and entry is made by the auctioneer
in his sales book, at the time of the sale, of the amount and Amount that may be returned
kind of property sold, terms of sale, price, names of the Article 1486. In the case referred to in the two preceding
purchasers and person on whose account the sale is made, it articles, a stipulation that the installments or rents paid shall
is a sufficient memorandum;” not be returned to the vendee or lessee shall be valid insofar
as the same may not be unconscionable under the
FORMAL REQUISITE – SALE OF IMMOVABLES circumstances.

“The following must appear in a public document: In contract of sale, who will pay for the execution and
registration of the sale?
(1) Acts and contracts which have for their object the
creation, transmission, modification or extinguishment of Who will pay for the expenses
real rights over immovable property; sales of real property or Article 1487. The expenses for the execution and registration
of an interest therein xxx” [Art. 1358, Civil Code] of the sale shall be borne by the vendor, unless there is a
stipulation to the contrary.
“A sale of real property, though not consigned in a public
instrument or formal writing, is, nevertheless, valid and PRINCIPAL OBLIGATIONS OF THE VENDOR
binding among the parties, for the time-honored rule is that ✓ To deliver the thing.
even a verbal contract of sale of real estate produces legal ✓ To transfer the ownership of the thing sold.
effects between the parties. Stated differently, although a ✓ To warrant against eviction and hidden defects.
conveyance of land is not made in a public document, it does ✓ To take care of the thing prior to the delivery.
not affect the validity of such conveyance. Article 1358 does ✓ To pay for the expenses for the execution and
not require the accomplishment of the acts or contracts in a registration.
public instrument in order to validate the act or contract but
only to insure its efficacy.” [Heirs of Alido v. Campano, G.R. DELIVERY OF ACCESSIONS & ACCESSORIES
No. G.R. No. 226065, 29 July 2019] Art. 1537. The vendor is bound to deliver the thing sold and
its accessions and accessories in the condition in which they
FOR EVIDENTIARY PURPOSES were upon the perfection of the contract.
“The form prescribed by law is for evidentiary purposes, non-
compliance of which does not make the contract void or All the fruits shall pertain to the vendee from the day on
voidable, but only renders the contract unenforceable by any which the contract was perfected.
action. In fact, contracts which do not comply with the
Statute of Frauds are ratified by the failure of the parties to
object to the presentation of oral evidence to prove the same,
Recall IMPLIED WARRANTY
Art. 1166. The obligation to give a determinate thing includes Art. 1547. In a contract of sale, unless a contrary intention
that of delivering all its accessions and accessories, even appears, there is:
though they may not have been mentioned.
(1) An implied warranty on the part of the seller that he has a
Can you still remember the distinction between accessions right to sell the thing at the time when the ownership is to
and accessories? pass, and that the buyer shall from that time have and enjoy
the legal and peaceful possession of the thing;
ACCESSIONS
- Fruits of a thing (2) An implied warranty that the thing shall be free from any
- Additions to or improvements upon a thing hidden faults or defects, or any charge or encumbrance not
declared or known to the buyer. xxx"
Can you give example of accession?
WARRANTY AGAINST EVICTION
ACCESSORIES Art. 1553. Any stipulation exempting the vendor from the
- those attached to a principal thing for its completion, obligation to answer for eviction shall be void, if he acted in
ornament, or better use. bad faith.

Can you give example of accessories? CONSCIENTE v. INTENCIONADA

Art. 1554. If the vendee has renounced the right to warranty
DOUBLE SALE in case of eviction, and eviction should take place, the vendor
shall only pay the value which the thing sold had at the time
What is the distinction between movable property and of the eviction. Should the vendee have made the waiver
immovable property? with knowledge of the risks of eviction and assumed its
consequences, the vendor shall not be liable.
Art. 1544. If the same thing should have been sold to
different vendees, the ownership shall be transferred to the WAIVER CONSCIENTE
person who may have first taken possession thereof in good - Voluntarily made
faith, if it should be movable property. - Without knowledge and assumption of the risk of
eviction.
Should it be immovable property, the ownership shall belong
to the person acquiring it who in good faith first recorded it WAIVER INTENCIONADA
in the Registry of Property. - Voluntarily made
- With knowledge and assumption of the risk of
Should there be no inscription, the ownership shall pertain to eviction.
the person who in good faith was first in the possession; and,
in the absence thereof, to the person who presents the HOW TO ENFORCE THE WARRANTY
oldest title, provided there is good faith. AGAINST EVICTION ?
Art. 1557. The warranty cannot be enforced until a final
WARRANTY judgment has been rendered, whereby the vendee loses the
Why do you think it is important to know that law relating to thing acquired or a part thereof.
warranty?
OBSERVANCE DUE PROCESS
Express Waranty Art. 1558. The vendor shall not be obliged to make good the
Art. 1546. Any affirmation of fact or any promise by the seller proper warranty, unless he is summoned in the suit for
relating to the thing is an express warranty if the natural eviction at the instance of the vendee.
tendency of such affirmation or promise is to induce the
buyer to purchase the same, and if the buyer purchase the PRINCIPAL OBLIGATIONS OF THE VENDEE
thing relying thereon. No affirmation of the value of the thing, ✓ To accept delivery.
nor any statement purporting to be a statement of the ✓ To pay the price of the thing sold.
seller's opinion only, shall be construed as a warranty, unless
the seller made such affirmation or statement as an expert OBLIGATIONS OF THE VENDEE
and it was relied upon by the buyer. Article 1582. The vendee is bound to accept delivery and to
pay the price of the thing sold at the time and place
Sales talk stipulated in the contract.

Tell us your personal experience on warranty problem. If the time and place should not have been stipulated, the
payment must be made at the time and place of the delivery
of the thing sold.
RIGHT TO EXAMINE THE GOODS
Article 1584. Where goods are delivered to the buyer, which
he has not previously examined, he is not deemed to have
accepted them unless and until he has had a reasonable
opportunity of examining them for the purpose of
ascertaining whether they are in conformity with the
contract if there is no stipulation to the contrary.

Unless otherwise agreed, when the seller tenders delivery of

goods to the buyer, he is bound, on request, to afford the
buyer a reasonable opportunity of examining the goods for
the purpose of ascertaining whether they are in conformity
with the contract.

PAYMENT PRIOR TO EXAMINING THE GOODS

1584. Continuation
Where goods are delivered to a carrier by the seller, in
accordance with an order from or agreement with the buyer,
upon the terms that the goods shall not be delivered by the
carrier to the buyer until he has paid the price, whether such
terms are indicated by marking the goods with the words
"collect on delivery," or otherwise, the buyer is not entitled
to examine the goods before the payment of the price, in the
absence of agreement or usage of trade permitting
such examination.“

EXPRESS ACCEPTANCE v. IMPLIED ACCEPTANCE IMPLIED

Article 1585. The buyer is deemed to have accepted the
goods when he intimates to the seller that he has accepted
them, or when the goods have been delivered to him, and he
does any act in relation to them which is inconsistent with
the ownership of the seller, or when, after the lapse of a
reasonable time, he retains the goods without intimating to
the seller that he has rejected them.”

WARRANTY AFTER ACCEPTANCE

“Article 1586. In the absence of express or implied
agreement of the parties, acceptance of the goods by the
buyer shall not discharge the seller from liability in damages
or other legal remedy for breach of any promise or warranty
in the contract of sale. But, if, after acceptance of the goods,
the buyer fails to give notice to the seller of the breach in any
promise of warranty within a reasonable time after the buyer
knows, or ought to know of such breach, the seller shall not
be liable therefor.”