Art.

1458 By the contract of sale one of the contracting parties obliges himself to transfer the ownership and to
deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. A contract of
sale may be absolute or conditional.

Sale - special contract (there is a different set of provisions that deals with it)

PARTIES:
 Vendor - transfer the ownership and deliver a thing
 Vendee - pay a price certain in money

Transfer of ownership in exchange for the price paid - very essence of a contract of sale

CHARACTERISTICS OF A CONTRACT OF SALE:

 Consensual - perfected by mere consent
 Bilateral and Reciprocal - both parties are bound by obligation; reciprocal obligation
 Commutative - value exchanged is considered to be at least equivalent to price (exc: aleatory)
 Principal - not dependent upon the existence of other contracts
 Onerous - with valuable consideration (not gratuitous)
 Nominate - special name provided in the law

ELEMENTS OF A CONTRACT OF SALE:

1. Essential elements (contract of sale is null and void if absent ung isa)
a. Consent or meeting of minds - consent to transfer ownership in exchange for price
b. Determinate subject matter
c. Price certain in money or its equivalent
2. Natural elements - elements inherent in a contract; integral part of the contract of sale; deemed to exist
(warranty)
3. Accidental elements - may be present or absent in the stipulation; depends on the will of parties

Absolute - no condition attached

Conditional - with condition (right to repurchase, may suspensive condition)

Art. 1459 The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it
is delivered.

- lawfulness of the object (within commerce of man) and rights to transfer the ownership (ownersip of the seller
does not need at the time of perfection of contract, not one of the elements for its perfection)

Art. 1460 A thing is determinate when it is particularly designated or physically segregated from all other of the
same class.
The requisite that a thing be determinate is satisfied if at the time the contract is entered into, the thing is
capable of being made determinate without the necessity of a new or further agreement between the parties.

Determinate - specific, particularly designated or physically segregated

Determinable - capable of being made determinate

Art. 1461 Things having a potential existence may be the object of the contract of sale. The efficacy of the sale of a
mere hope or expectancy is deemed subject to the condition that the thing will come into existence. The sale of a
vain hope or expectancy is void.

Emptio rei speratae (sale of things having Emptio spei (sale of hope or expectancy)
potential existence)
 If the expected thing does not materialize, the  It doesn’t matter if the expected thing materialize or not
sale is not effective
 Subject to a condition that the thing should  It produces effects even though the thing does not come
exist, otherwise, there will be no contract by into existence, the subject matter is the hope itself
 reason of an absence of an essential element,
which is the subject matter
 Deals with future thing  Deals with present thing

Vain hope - void (hopeless case)

Sale of a lotto ticket - sale of hope (valid)

KINDS OF THING
1. Goods (Article 1462)
2. Undivided interest (Article 1463)
3. Undivided shares in a specific mass of fungible goods (Article 1464)
4. Things subject to resolutory condition (Article 1465)

Art. 1462 The goods which form the subject of a contract of sale may be either existing goods, owned or possessed
by the seller, or goods to be manufactured, raised, or acquired by the seller after the perfection of the contract of
sale, in the title called “future goods.”
There may be a contract of sale of goods, whose acquisition by the seller depends upon the contingency
which may or may not happen.

Movable and tangible - traditional specifications of goods

Goods - existing goods, future goods, with contingency

Art. 1463 The sole owner of a thing may sell an undivided interest therein.

Undivided interest - ideal/abstract/proportional share; may sell undivided interest which is limited only to the
portion allotted to one party in the division of the thing, upon the termination of co-ownership

VENDOR CAN:
 Sell the entire land
 Sell just portion of the land by metes and bounds
 Sell his undivided interest (without identifying or specifically designating the portion sold) - buyer and seller
will become co-owners

Art. 1464 In the case of fungible goods, there may be a sale of an undivided share of a specific mass, though the
seller purports to sell and the buyer to buy a definite number, weight, or measure of the goods in the mass, and
though the number, weight, or measure of the goods in the mass is undetermined. By such a sale the buyer
becomes owner in common of such a share of the mass as the number, weight, or measure bought bears to the
number, weight, measure of the mass. If the mass contains less than the number, weight, or measure bought, the
buyer becomes the owner of the whole mass and the seller is bound to make good the deficiency from goods of
the same kind and quality, unless a contrary intent appears.

SALE OF SHARE IN A SPECIFIC MASS

 If the quantity of the mass is more than the quantity sold, the parties shall become co-owners
 If the quantity of the mass is less than the quantity sold, the buyer becomes the owner of the whole mass,
and the seller is bound to make good the deficiency which should be of the same kind and quality

Fungible goods - goods that cannot be used without consuming them (rice)

Art. 1465 Things subject to a resolutory condition may be the object of the contract of sale.

Resolutory event - uncertain event na if mangyari, maeextinguish yung obligation

Art. 1466 In construing a contract containing provisions characteristic of both the contract of sale and of the
contract of agency to sell, the essential clauses of the whole instrument shall be considered.

- difference of contract of sale and agency to sell depends upon the essential clauses of the whole instrument
 Contract of Sale Agency to Sell
 The buyer pays the price  The agent delivers the price which he got from the
buyer
 The buyer after delivery becomes the owner  The agent does not become the owner
 The seller warrants  The agent who sell assumes no personal liability as
long as he acts within his authority and in the name
of the principal

Agency to sell - authority can be verbal or in writing unless the law requires a particular form
Unenforceable contract - acted beyond authority

Art. 1467 A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his
business manufactures or procures for the general market, whether the same is on hand at the time or not, is a
contract of sale, but if the goods are to be manufactured specially for the customer and upon his special order,
and not for the general market, it is a contract for a piece of work.

Contract of sale - ordinary course of business, for general market (even if out of stock)
Contract for piece of work - manufactured specially for the customer

Art. 1468 If the consideration of the contract consists partly in money, and partly in another thing, the transaction
shall be characterized by the manifest intention of the parties. If such intention does not clearly appear, it shall be
considered as barter if the value of the thing given as a part of the consideration exceeds the amount of the
money or its equivalent; otherwise, it is a sale.

Partly in money and partly in another thing - the intention of the parties will control the situation
Barter - value of the thing exceeds the amount of money or equivalent by the buyer (if no intention)

Art. 1469 In order that the price may be considered certain, it shall be sufficient that it be so with reference to
another thing certain, or that the determination thereof be left to the judgment of a special person or persons.
Should such person or persons be unable or unwilling to fix it, the contract shall be inefficacious, unless
the parties subsequently agree upon the price.
If the third person or persons acted in bad faith or by mistake, the courts may fix the price.
Where such third person or persons are prevented from fixing the price or terms by fault of the seller or
the buyer, the party not in fault may have such remedies against the party in fault as are allowed the seller or the
buyer, as the case may be.

Price - certain (not certain= no consent)

 When it is stipulated
 When it has reference to another thing certain
 When it is fixed by a third person
 When it is fixed by the court

APPLICABLE IF WALANG SPECIFIC AMOUNT STIPULATED BY THE PARTIES:

 Reference to another thing certain
 Left to the judgment of a special person or persons

GENERAL RULE:
 Price fixed and determined by specified third person is binding between the parties

EXCEPTION:
 Third person or persons acted in bad faith or by mistake (courts may fix the price)
 Third person or persons are unable or unwilling to fix the price (contract is inefficacious)

Failure to pay the agreed price/ Money is fake - lack of consideration, no contract of sale
PARTY NOT IN FAULT REMEDIES:
 May demand for fulfillment (courts will fix the price) or rescission of the contract

Art. 1470 Gross inadequacy of price does not affect a contract of sale, except as it may indicate a defect in the
consent, or that the parties really intended a donation or some other act or contract.

GENERAL RULE:
 Gross inadequacy of price does not affect its validity (so long as nag agree yung dalawang parties)

EXCEPTION:
 May indicate a defect in the consent - fraud, mistake, or undue influence (annulled, vitiated consent)
 Price is too inadequate as to shock the conscience of man

Art. 1471 If the price is simulated, the sale is void, but the act may be shown to have been in reality a donation, or
some other act or contract.

Price is simulated - void

Valid provided na requirements for donation or other agreement are complied with (not a contract of sale)

Art. 1472 The price of securities, grain, liquids, and other things shall also be considered certain when the price
fixed is that which the thing sold would have on a definite day, or in particular exchange or market, or when an
amount is fixed above or below the price on such day, or in such exchange or market, provided said amount be
certain.

Ex: Ginawang reference unf price of other store na nagbebenta ng same product, like 100 less than their price (price
is certain, valid)

Art. 1473 The fixing of the price can never be left to the discretion of the contracting parties. However, if the price
fixed by one of the parties is accepted by the other, the sale is perfected.

- both parties must agree to the fixed price

Art. 1474 Where the price cannot be determined in accordance with the preceding articles, or in any other
manner, the contract is inefficacious. However, if the thing or any part thereof has been delivered to and
appropriated by the buyer, he must pay a reasonable price thereof. What is a reasonable price is a question of fact
dependent on the circumstances of each particular case.

Price cannot be determined - void, inefficacious (buyer and seller cannot fulfill obligations)
If delivered - pay a reasonable price

Art. 1475 The contract of sale if perfected at the moment there is a meeting of minds upon the thing which is the
object of the contract and upon the price.
From that moment, the parties may reciprocally demand performance, subject to the provisions of the law
governing the form of contracts.

- nature of the contract and its perfection

STAGES IN THE LIFE OF CONTRACT OF SALE:

1. Negotiation
2. Perfection - upon meeting of minds
3. Consummation - actual delivery of determinate thing, transfer of ownership, and payment

REQUIRMENTS FOR PERFECTION:

 When the parties are face to face
o Offer must me accepted without qualification (qualified acceptance constitutes counter offer)
 When thru correspondence
 o From the time the offeror receives the letter or nagkaron ng knowledge about the acceptance of the
offeree (vendor can still withdraw if di niya pa ala mung acceptance ni buyer)
 When the sale is subject to a suspensive condition
o From the moment the condition is fulfilled
 When there is agent
o Communicated the acceptance to the principal

Art. 1476 In the case of a sale by auction:

(1) Where goods are put up for sale by auction in lots, each lot is the subject of a separate contract of sale.

Lot - property, thing, or bulk of goods; each has separate contract of sale

(2) A sale by auction is perfected when the auctioneer announces its perfection by the fall of the hammer,
or in other customary manner. Until such announcement is made, any bidder may retract his bid; and the
auctioneer may withdraw the goods from the sale unless the auction has been announced to be without reserve.

Fall of the hammer or in other customary manner (shouting sold, announcement of the highest bidder) - perfection
of sale by auction
Every bidding - offer
Without reserve - withdraw only if there is no bidder

(3) A right to bid may be reserved expressly by or on behalf of the seller, unless otherwise provided by law
or by stipulation.

(4) Where notice has not been given that a sale by auction is subject to a right to bid on behalf of the
seller, it shall not be lawful for the seller to bid himself or to employ or induce any person to bid at such sale on
his behalf or for the auctioneer, to employ or induce any person to bid at such sale on behalf of the seller or
knowingly take any bid from the seller or any person employed by him. Any sale contravening this rule may be
treated as fraudulent by the buyer.

- right of the seller to bid provided the right to bid is reserved and there is notice that the sale by auction is subject to
a right to bid on behalf of the seller (fraudulent if no notice)

Art. 1477 The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive
delivery thereof.

Symbolic delivery occurs when something representing the transferred property is physically transferred.
Constructive delivery occurs when the parties conduct themselves as if a transfer of property has occurred without
an actual or symbolic transfer.

Constructive - if you pick up a parcel on behalf of your friend and agree to hold on to it for him
Symbolic - the key of the godowns with the goods in it, when handed over to the buyer

Art. 1478 The parties may stipulate that ownership in the thing shall not pass to the purchaser until he has fully
paid the price

- exception to article 1477

Payment of the price does not affect the transfer of ownership unless may stipulation

Art. 1479 A promise to buy and sell a determinate thing for a price certain is reciprocally demandable.
An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the
promissor if the promise is supported by consideration distinct from the price.

- mutual promise and unilateral promise

Unilateral promise
 If there is no acceptance by the offeree, unilateral promise is without legal effect
  Without consideration, offer is not binding until accepted
o Accepted before withdrawal, constitute a binding sale
 With consideration distinct from the price (option money)
o Acceptance will create a binding force dun sa nagpromise

Art. 1480 Any injury to or benefit from the thing sold, after the contract has been perfected, from the moment of
the perfection of the contract to the time of delivery, shall be governed by Articles 1163 to 1165, and 1262.
This rule shall apply to the sale of fungible things, made independently and for a single price, without
consideration of their weight, number, or measure.
Should fungible things be sold for a price fixed according to weight, number, or measure, the risk shall not
be imputed to the vendee until they have been weighed, counters, or measured and delivered, unless the latter
has incurred in delay.

WHO BEARS THE RISK OF LOSS:

 Seller - object was lost before perfection
 Buyer - object was lost after the delivery to the buyer (res perit domino: owner bears the loss)
 Buyer - object was lost after perfection but before the delivery (during that period, it is the buyer who gets
the benefits)
o EXCEPTION:
 fungible things sold for a price fixed according to weight, number, or measure until they
have been weighed, counters, or measured and delivered (unless may delay like naaksidente
si buyer)
 if seller is guilty of fraud, negligence, default, or violation of contractual term
 if the object sold is a generic thing

Art. 1481 In the contract of sale of goods by description or by sample, the contract may be rescinded if the bulk of
the goods delivered do not correspond with the description or the sample, and if the contract be by sample as
well as description, it is not sufficient that the bulk of goods correspond with the sample if they do not also
correspond with the description.
The buyer shall have a reasonable opportunity of comparing the bulk with the description or the sample.

Sale by description - seller sells the thing, buyer is relying on the description of the seller
Sale by sample - only the sample is exhibited or shown, bulk of goods is not present (same quality sila) if di same,
pwede ibalik at a reasonable time (breach of warranty)
Sale by sample as well as description - both are present

Art. 1482 Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as
proof of the perfection of the contract.

Earnest money Option money

 Applies in perfected sale  There is still no perfected contract of sale
 Part of the purchase price  The money is given as a distinct consideration for
the option contract
 Buyer is required only to pay for the balance  The would-be buyer is not required to buy. The
option money may even be forfeited.

Art. 1483 Subject to the provisions of the Statute of Frauds and of any other applicable statute, a contract of sale
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 the conduct of the parties.

- for validity purposes

FOR ENFORCEABILITY:
 Sale of real property or of an interest therein must be in writing, otherwise, the sale is unenforceable (valid
but unenforceable: not enforced by law) - public document and recorded in the registry of property
  Sale of personal/movable property
o Price is 500 or more - in writing
o Less than 500 - oral/verbal contract is enforceable

Art. 1484 In a contract of sale of personal property, the price of which is payable in installments, the vendor may
exercise any of the following remedies:
(1) Exact fulfillment of the obligation, should the vendee fail to pay; (buyer fails one or more installment)
(2) Cancel the sale, should the vendee’s failure to pay cover two or more installments; (mutual restitution:
both parties must return whatever has been received)
(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendee’s
failure to pay cover two or more installments. In this case, he shall have no further action against the purchases to
recover any unpaid balance of the price. Any agreement to the contrary shall be void. (must be actual foreclosure,
di na pwede marecover kay buyer ung unpaid balance)

- contract of absolute sale or personal property on installment only

PURPOSE: prevent the abuse in the foreclosure of chattel mortgages (bebenta sa mababang halaga and sisingilin pa
rin si buyer for the deficiency)

Alternative not cumulative - only 1 is accepted to be exercised

Art. 1485 The preceding article shall be applied to contracts purporting to be leases of personal property with
option to buy, when the lessor has deprived the lessee of the possession or enjoyment of the thing.

- lease is construed as sale - sale on installment

PURPOSE: to prevent indirect violation of article 1484

Art. 1486 In the case referred to in the two preceding articles, a stipulation that the installments or rents paid shall
not be returned to the vendee or lessee shall be valid insofar as the same may not be unconscionable under the
circumstances.

GENERAL RULE:
 Cancellation or rescission requires mutual restitution (partial payment must also be returned)

EXCEPTION:
 Valid stipulation (no returning of the price that has been partially paid)

Art. 1487 The expenses for the execution and registration of the sale shall be borne by the vendor, unless there is
a stipulation to the contrary.

Art. 1488 The expropriation of property for public use is governed by special laws.

Expropriation - involuntary in nature, not a sale (unless voluntary binenta sa government)