I.

INTRODUCTION
SALE a contract whereby one of the contracting parties (Seller)
obligates himself to transfer the ownership, and to deliver the possession,
of a determinate thing; and the other party (Buyer) obligates himself to
pay therefor a price certain in money or its equivalent.
ESSENTIAL REQUISITES OF CONTRACT OF SALE (Coronel v CA)
A. Consent (Meeting of the Minds)
B. Object (Subject Matter)
C. Cause/Consideration (Price)
TN: When all are present, a perfected contract of sale arises. Its validity
is not affected by the fact that previously a fictitious deed of sale was
executed by the parties or the fact of non-performance of obligations
thereafter.

TN: If there is defect or illegality, contract is voidable if vitiated consent;

otherwise, void as mandated under Art 1409 (Void and inexistent contracts)
STAGES OF CONTRACT OF SALE
A. Negotiation parties indicate their interests in the contract to the
time contract is perfected
B. Perfection concurrence of the essential elements of the sale
(meeting of minds as to object of contract and upon the price)
C. Consummation when parties perform their respective undertaking
under the contract of sale
OBLIGATIONS CREATED 1165
A. When what is to be delivered is a determinate thing, creditor can
compel debtor to make delivery
B. If indeterminate/generic, creditor can ask the obligation be complied
with at the expense of debtor
C. If the obligor delays, or has promised to deliver the same thing to two
or more persons who do not have the same interest, he shall be
responsible for any fortuitous event until he has effected the delivery.
CHARACTERISTICS OF A CONTRACT OF SALE
A. Nominate given a special name by the Civil Code (Sale)
B. Principal doesnt depend for its existence and validity upon another
contract
C. Consensual perfected by mere consent
1. Once there is a meeting of minds as to the price, sale is valid
a. Manner of its actual payment is irrelevant
b. Regardless of w/n there was breach
2. If the real price is not stated in the contract, valid but subject to
reformation
3. If there is no meeting of minds as to price, because the price
stipulated is simulate, the contract is void.
D. Bilateral and reciprocal it imposes obligations on both parties to the
relationship
E. Onerous thing sold is conveyed in consideration of price certain in
money or its equivalent
F. Commutative a thing of value is exchanged for equal value
SALE IS TITLE AND NOT MODE

SALE DISTINGUISHED FROM OTHER CONTRACTS

Sale v Donation
Donation is an act of liberality whereby a person disposes gratuitously of
a thing or right in favor of another person, who accepts it.
Sale is essentially an onerous contract, whereas donation is a gratuitous
contract.725
A sale is perfected by mere consent1457 Donation, being a solemn
contract, although consent is also required, must comply with the
formalities mandated by law for its validity.745-749

II.

PARTIES TO A CONTRACT OF SALE

CAPACITY OF PARTIES 1489-1492
GR: All persons authorized to obligate themselves may enter into a
contract of sale
ABSOLUTE INCAPACITY 1327, 1397, 1399
Absolute incapacity - when party can not bind himself in any case
Unemancipated minors, insane or demented persons, deaf-mute who
do not know how to write
Who may file action?
Action for annulment of contract may be instituted by all obliged
principally and subsidiarily. XPN: (1) persons who are capable against
the incapacitated contractor (2) Guilty party who exerted intimidation,
violence, or undue influence, or employed fraud, or caused mistake
NECESSARIES
Necessaries those things needed for sustenance, dwelling, clothing,
medical assistance, education, transportation according to the
financial capacity of incapacitated persons family
When necessaries are sold and delivered to a minor or incapacitated
person, he must pay a reasonable price.

RELATIVE INCAPACITY
Relative incapacity - When certain persons, under certain
circumstances, cannot buy certain property.1490-1491
General Rule: Husband and wife can not sell property to each other
XPN: (1) when a separation of property was agreed upon in the
marriage settlement (2) When there has been a judicial separation of
property
A. Contracts with Third Parties
B. Between Spouses
C. Applicability to Common-Law Spouses
SPECIAL DISQUALIFICATIONS1491-1492
A. Guardians property of the person under his guardianship
B. Agents property whose administration may have been entrusted to
him
C. Administrators property of the estate under his administration
D. Lawyers E. Judges

F. Others
III.

SUBJECT MATTER
REQUISITES OF A VALID SUBJECT MATTER1459-1465
A. Must be Licit1347,1459,1575,1409
1. Licit should not be contrary to law, morals, etc.
2. If sale is illicit, contract is void and can not be ratified
B. Must be determinate or determinable1460
1. Determinate when it is particularly designated or physically
segregated from all others of the same class
2. At the time the contract is entered into, the thing must be
capable of being made determinate without need of a new
agreement
C. Must be existing, future or contingent 1347,1348,1461
1. Emptio rei speratae
a. Sale of a thing not yet in existence
b. Subject to the condition that the thing will exist; Failure
of the condition, contract becomes ineffective
c. Future thing is certain as to itself but uncertain as to its
quantity and quality
d. Deals with a future thing
2. Emptio spei
a. Sale of the hope itself that the thing will come into
existence
b. It is agreed that the buyer will pay the price even if the
thing does not eventually exist
c. Not certain that the thing will exist, much less quality
and quantity (winning of a lottery ticket)
d. Relates to a thing which exists or is present the
hope/expectancy
e. Produces effects even though the thing does not come
into existence because the object is the hope itself,
unless it is a vain hope or expectancy (ex. The sale of a
falsified lottery ticket which can never win)
3. Subject to resolutory condition1465
a. Uncertain event upon the happening of which the
obligation is extinguished
4. Quantity of subject matter not essential for perfection
PARTICULAR KINDS
A. Generic things1246,1409(6)
B. Future goods1461
1. Things having potential existence may be the object of the COS.
C. Sale of undivided interest or share1463-1464
1. Sole owner may sell: entire thing or only a specific portion; or
an undivided interest without designating or identifying the
portion sold (they become co-owners)
D. Sale of things in litigation1381(4),1358(2)
1.
E. Things subject to resolutory condition
1.

IV.

OBLIGATION OF THE SELLER TO TRANSFER OWNERSHIP

SALE BY A PERSON NOT THE OWNER AT TIME OF DELIVERY1462,1505,1459
GR: one can sell only what one owns or is authorized to sell, and the
buyer can acquire no more than what the seller can transfer legally.
XPNS: When ownership transfers by non-owner

A. Estoppel1434
1. When a person conveys property to another of which at the
time he is not the owner, his subsequent acquisition validates
his previous conveyance.
B. Recording Laws; Torrens SystemPD1529
1. The rights of an innocent purchaser for value must be
respected and protected, notwithstanding the fraud employed
by the seller in securing his title
C. Statutory Sale/Order of Courts
D. Sale in Merchants Store, Market or Fair
SALE BY A PERSON HAVING VOIDABLE TITLE1506,559

V.

PRICE
MEANING OF PRICE1469-1474
REQUISITES FOR A VALID PRICE
A. Must be real
1. When price simulated
2. Effects when price simulated
3. False consideration
4. Non-payment of price
B. Must be in money or its equivalent
C. Must be certain or ascertainable at time of perfection
HOW PRICE IS DETERMINED
A. By third person1469
B. By the courts1469
C. By reference to a definite day1472
D. By reference to another thing certain
E. Never by one party1473,1182
INADEQUACY OF PRICE1355,1470
WHEN NO PRICE AGREED1474
MANNER OF PAYMENT MUST BE AGREED UPON
EARNEST MONEY V OPTION MONEY1482

VI.

FORMATION OF CONTRACT OF SALE

PREPARATORY1479
A. OFFER1475
1. Forms of offer1319,1325,1326
2. Forms of acceptance1319
3. Vices vitiating consent1330,1338,1331
B. OPTION CONTRACT1479,1324
1. Meaning of Consideration
C. RIGHT OF FIRST REFUSAL
D. MUTUAL PROMISE TO BUY AND SELL1479
PERFECTION1375,1319,1325,1326
A. When deviation allowed
B. Sale by Auction1476,1403(d),1326
C. Place of Perfection1391
D. Expenses of Execution and Registration 1487
FORMALITIES OF THE CONTRACT
A. Form not important1483,1356,1357,1358
B. XPNS: When form not important

1. Form
a.
2. Form
a.

important for enforceability

Statute of Frauds1403,1405
important for validity
Sale of realty through an agent1874
b.
Sale of large cattle1581,sec.529 Revised Adm. Code
c. Electronic Commerce ActRA8792 section7,8,11

VII.

TRANSFER OF OWNERSHIP
MANNER OF TRANSFER1477,1496
WHEN DELIVERY DOES NOT TRANSFER TITLE
A. Sale on return
B. Sale on approval, trial or satisfaction1502
C. Express reservation1478
D. Implied Reservation1503
E. When sale not valid
F. When seller is not the owner
KINDS OF DELIVERY
A. Real delivery1479
B. Constructive delivery1498
1. Symbolic delivery1498,1499,1513,1514
2. Traditio Longa Manu1499
3. Tradition Brevi Many1499
4. Traditio Constitutom Possessorium1500
5. Delivery to a Common Carrier1523
DOUBLE SALES1544
A. General Rule Prior tempore, prior jure
B. Requisites for Double Sale
C. Who is purchaser in good faith
D. Sale of movables1544,1497-1501
E. Sale of Immovable1544 par2
F. Sale by virtue of execution and attachment1544
G. Unregistered landPD1529sec113
H. First in possession in good faith
I. Oldest title1544 par 3

VIII.
IX.
X.
XI.
XII.
XIII.
XIV.

RISK OF LOSS
DOCUMENTS OF TITLE
REMEDIES OF AN UNPAID SELLER
A.
A
A
A