Contract of sale is defined in Article 1458 of the Civil Code, thus:

Art. 1458. By the contract of sale, one of the contracting parties obligates himself to transfer the
ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in
money or its equivalent.
Xxx
Sale, by its very nature, is a consensual contract because it is perfected by mere consent. The
essential elements of a contract of sale are the following:
a) Consent or meeting of the minds that is consent to transfer ownership in exchange for the
price;
b) Determinate subject matter; and
c) Price certain in money or its equivalent.
In a contract to sell, the prospective seller explicitly reserves the transfer of title to the
prospective buyer, meaning, the prospective seller does not as yet agree or consent to transfer
ownership of the property subject of the contract to sell until the happening of an event, which
for present purposes we shall take as the full payment of the purchase price.
A contract in which one person or company agrees to sell something and another agrees to buy it
at a future time, for example when it is made or built
There are two common types of contracts relating to sale of land: contract to sell and contract of
sale. The main distinction between the two is that in a contract of sale, the ownership of the
property is transferred to the buyer upon the delivery of the thing sold while in a contract to sell,
the ownership is reserved by the seller and is not passed to the buyer until the purchase price is
fully paid (Reyes vs. Tuparan, 650 SCRA 283).
A contract to sell is akin to a conditional sale where the efficacy or obligatory force of the
vendor's obligation to transfer title is subordinated to the happening of a future and uncertain
event, so that if the suspensive condition does not take place, the parties would stand as if the
conditional obligation had never existed. The suspensive condition is commonly full payment of
the purchase price.[15]
The differences between a contract to sell and a contract of sale are well-settled in jurisprudence.
As early as 1951, in Sing Yee v. Santos,[16] we held that:
x x x [a] distinction must be made between a contract of sale in which title passes to the buyer
upon delivery of the thing sold and a contract to sell x x x where by agreement the ownership is
reserved in the seller and is not to pass until the full payment, of the purchase price is made. In
the first case, non-payment of the price is a negative resolutory condition; in the second case, full
payment is a positive suspensive condition. Being contraries, their effect in law cannot be
identical. In the first case, the vendor has lost and cannot recover the ownership of the land sold
until and unless the contract of sale is itself resolved and set aside. In the second case, however,
the title remains in the vendor if the vendee does not comply with the condition precedent of
making payment at the time specified in the contract.

In other words, in a contract to sell, ownership is retained by the seller and is not to pass to the
buyer until full payment of the price.
Contract of Sale
Title over the property passes to the buyer upon delivery unless there is a contrary agreement
Non-payment of the purchase price is a negative resolutory condition, meaning the sale becomes
ineffective upon the happening of such condition
After delivery of the objective, the seller loses ownership over it. Unless, the contract is set aside,
he cannot recover the object
Contract to Sell
Ownership is retained by the seller whether or not there is delivery. Ownership passes to the
buyer only upon full payment of the price
The payment in full is a positive suspensive condition, meaning, if the purchase price is not paid,
the obligation to deliver and to transfer ownership on the part of the seller does not become
effective
Whether there is delivery or not, the seller retains the ownership of the object. If the seller, due to
non-payment of the price is ousting the buyer from the property, he (seller) is not rescinding the
contract of sale but is precisely enforcing it
1. Difference between Sale and Agreement to Sell Contract: It is an agreement made
between two or more parties which the law will enforce. According to [Sec 2(h)] of
Indian Contract Act 1872 defines A contract is an agreement enforceable by law.
According to Salmond A contract is an agreement creating and defining obligation
between the parties. Difference between Sale and Agreement to Sell 1. Transfer of
property Sale : The property of goods passes from the seller to the buyer immediately. So
the seller is no more owner of the goods sold. In an Agreement to Sell : The transfer of
property of the goods is to take place at a future time or subject to certain conditions to be
fulfilled. 2. Type of goods Sale : A sale can only be in case of existing and specific goods
only. In an Agreement to Sell : An agreement to sell is mostly in case of future and
contingent goods ( associated or dependent ). Although it may refer to uncertain existing
goods. 3. Risk of loss Sale : In a sale if the goods are destroyed , the loss falls on the
buyer even though the goods are in the posssession of the seller.
2.

In an Agreement to Sell : In an Agreement to Sell if the goods are destroyed the loss falls
on the seller even though the goods are in the posssession of the buyer. 4. Consequences
of the breach Sale : In a sale the buyer fails to pay the price of goods (or) if there is a
breach of contract by the buyer the seller can sue for the price even though the goods are
still in his possession. In an Agreement to Sell : If there is a breach of contract by the
buyer the seller can only sue for the damages and not for the price. 5. Right to re-sell Sale
: In a sale the seller cannot re-sell the goods. In an Agreement to Sell : The buyer who
takes the goods for consideration and without notice of the prior agreement gets him a
good title. The original buyer can only sue the seller for damages. 6. General and
particular property Sale : The sale of contract plus conveyance and creates Jus in rem

i.e., gives right to the buyer to enjoy the goods as against the word and large including the
seller. In an Agreement to Sell : An agreement to sell is merely a contract pure and simple
and creates Jus in personam i.e., gives a right to the buyer against the seller to sue for
the damages. 7. Insolvency of buyer Sale : In a sale if the buyer becomes insolvent before
he pays for goods, the seller in the absence of the lien over the goods, must return them to
the official receiver or assignee. He can only claim the reteable dividend for the price of
the goods.
3. In an Agreement to Sell : In an Agreement to Sell , If the buyer becomes insolvent and
has not yet paid the price the seller is not bound to part with the goods until he is paid for.
8. Insolvency of the seller Sale : In a sale the seller becomes insolvent, the buyer being
the owner is entitled to recover the goods from the official receiver of the assignee. In an
Agreement to Sell : If the buyer who has paid the price, finds that the seller has become
insolvent he can only claim a reteable dividend and not the goods because property in
them has not yet passed to him. A "sale" is (colloquially) a completed transaction where
the only remaining duties of the buyer may be timely rejection after inspection, and the
only remaining duty of seller is to honor any express or implied warranty. This assumes
the full price was paid during the sale and the goods were delivered, otherwise, the sale is
not technically complete. An "agreement to sell" is a contract that envisions (or defines) a
future sale, thus all conditions precedent and other terms (delivery, payment, etc),
continue to be "executory", that is, are yet to be fully carried out. A breach of this contract
could result in a court order of specific performance, or for damages caused by the loss of
the opportunity to buy or sell. Difference between Sale and Agreement to Sell: Sale is an
executed contract while agreement to sell is an executory contract. In sale property
transfers immediately at the time of sale but in agreement to sell property is transferred
after sometime. A sale creates jus-in-ram (right against the whole world). But agreement
to sell create jus-in-personam (right against an individual) In case of sale risk passes
along with the property, in case of agreement to sell as the property is not transferred, risk
is also not transferred.
conditional sale
n. a sale of property or goods which will be completed if certain conditions are met (as agreed)
by one or both parties to the transaction. Example: Hotrod agrees to buy Tappit's 1939 LaSalle
for $1,000 cash if Tappit can get the car running by September 1st.

Chattel Mortgage
A transfer of some legal or equitable right in Personal Property as security for the payment of
money or performance of some other act. Chattel mortgages have generally been superseded by
other types of Secured Transactions under the Uniform Commercial Code (UCC), a body of law
adopted by the states that governs commercial transactions.
The rights of the lender who gives a chattel mortgage are valid only against others who know or
should know of the lender's security interest in the property. Since the borrower possesses the
property, others cannot realize that a chattel mortgage exists without notice. Each state, therefore,
has developed a system for recording instruments showing the existence of chattel mortgages for
particular items of property; these records are usually located in the county clerk's office.
If a recording system is in existence a buyer is presumed to know about a mortgage. Once,
therefore, the mortgage is properly recorded, the buyer obtains the debt in addition to the
property.
Cross-references
Recording of Land Titles.
West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All
rights reserved.
chattel mortgage
n. an outmoded written document which made a chattel (tangible personal asset) security for a
loan of a certain amount. It has been replaced in most states by a security agreement, the form of
which is designated in a Uniform Commercial Code as UCC-1. These security agreements must
be filed with a specific public agency (e.g. a state Secretary of State) to protect buyers of the
personal property and lenders making loans secured by the property. (See: UCC-1)
A mortgage is a document in which the owner uses the title to real property as security for a loan
described in a promissory note. The mortgage must be signed by the owner
(borrower/mortgagor), acknowledged before a notary public, and recorded with the County
Recorder or Recorder of Deeds. If the owner fails to make payments on the promissory note
then the lender can foreclose on the mortgage to force a sale of the real property and receive the
proceeds, or receive the property itself at a public sheriff's sale.
Before the property is sold, the mortgagor must be noticed and offered an opportunity to pay all
delinquent payments and costs of foreclosure to save the property. In some states the property
can be redeemed by such payment even after foreclosure. When the mortgage is paid in full, the
lender is required to execute a "satisfaction of mortgage" (sometimes called a "discharge of
mortgage") and record it to clear the title to the property.
A purchase-money mortgage is one given by a purchaser to a seller of real property as partial
payment. A mortgagor may sell the property either "subject to a mortgage" in which the property
is still security and the seller is still liable for payment, or the buyer "assumes the mortgage" and
becomes personally responsible for payment of the loan. Most states using mortgages treat them
as liens on the property. Some states use a "deed of trust" (or "trust deed") as a mortgage. Under
the deed of trust system title is technically given to a trustee to hold for the lender, who is called
a beneficiary.
CHATTEL MORTGAGE

KNOW ALL MEN BY THESE PRESENTS:

I, (Name of Mortgagor) of legal age, single/married to____________________ with postal
address at _____________________________hereinafter known as the MORTGAGOR, and
_________________________________
of
legal
age,
single/married
to
______________________ with postal address at _______________________________
hereinafter known as the MORTGAGEE, witnesseth:
That the MORTGAGOR is indebted unto the MORTGAGEE in the sum of (Amount in
Words) (000,000.00), Philippine Currency, receipt of which is acknowledged by the
MORTGAGOR upon the signing of this instrument, payable within a period of _____ years, with
interest thereon at the rate of (___) % per annum;
That for, and consideration of , this indebtedness, and to assure the performance of said
obligation to pay, the MORTGAGOR hereby conveys by way of CHATTEL MORTGAGE unto
the MORTGAGEE, his heirs and assigns, the following personality now in the possession of said
MORTGAGOR
MAKE
:
MOTOR NO.
SERIES
:
SERIAL/CHASSIS NO.
TYPE OF BODY :
PLATE NO.
YEAR MODEL
:
FILE NO.

:
:
:
:

That the condition of this obligation is that should the MORTGAGOR perform the obligation
to pay the hereinabove cited indebtedness of (Amount in Words) (000,000.00) together with
accrued interest thereon, this chattel mortgage shall at once become null and void and of no
effect whatsoever, otherwise, it shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have hereunto set their hands, this ____day of
____________ 20___ at ____ Philippines.

_______________________________
_______________________________
MORTGAGOR
MORTGAGEE
IN THE PRESENCE OF:
_______________________________

_______________________________

ACKNOWLEDGEMENT

Republic of the Philippines)

________________________ ) S.S
BEFORE ME, personally appeared:
Name
(Name of Mortgagor)
(Name of Mortgagee)

CTC Number
10000000
10000000

Date/Place Issued
Jan 01, __ / Quezon City
Jan 11, __ / Las Pinas City

Known to me and to me known to be the same persons who executed the foregoing instrument
and acknowledged to me that the same is their free and voluntary act and deed.
WITNESS MY HAND AND SEAL, on the date and place first above written.

Notary Public
Doc. No.______;
Page No. ______;
Book No.______;
Series of 20__.
Note: Chattel mortgages requires an Affidavit of Good Faith attached to it -sample below:
AFFIDAVIT OF GOOD FAITH
We, the undersigned MORTGAGOR AND MORTGAGEE hereby jointly and severally swear
that we executed the foregoing Chattel Mortgage in order to secure the indebtedness therein and
for no other purpose or purposes contrary to law.
____________________________
MORTGAGOR

_____________________________
MORTGAGEE

CHATTEL MORTGAGE
KNOW ALL MEN BY THESE PRESENTS:

I, (Name of Mortgagor) of legal age, single/married to____________________ with

postal address at ______________________________________ hereinafter known as the
MORTGAGOR, and _______________________________________ of legal age,
single/married to
______________________ with postal address at ________________________ hereinafter
known as the MORTGAGEE, witnesseth:
That the MORTGAGOR is indebted unto the MORTGAGEE in the sum of (Amount in
Words) (000,000.00), Philippine Currency, receipt of which is acknowledged by the
MORTGAGOR upon the signing of this instrument, payable within a period of ____ years,
with interest thereon at the rate of (___) % per annum;
That for, and consideration of , this indebtedness, and to assure the performance of said
obligation to pay, the MORTGAGOR hereby conveys by way of CHATTEL MORTGAGE
unto the MORTGAGEE, his heirs and assigns, the following personality now in the
possession of said MORTGAGOR
MAKE : MOTOR NO. :
SERIES : SERIAL/CHASSIS NO. :
TYPE OF BODY : PLATE NO. :
YEAR MODEL : FILE NO. :

That the condition of this obligation is that should the MORTGAGOR perform the obligation
to pay the hereinabove cited indebtedness of (Amount in Words) (000,000.00) together with
accrued interest thereon, this chattel mortgage shall at once become null and void and of no
effect
whatsoever, otherwise, it shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have hereunto set their hands, this ____day of
____________ 20___ at ____ Philippines.
_______________________________ _______________________________
MORTGAGOR MORTGAGEE
IN THE PRESENCE OF:
_______________________________ _______________________________

ACKNOWLEDGEMENT

Republic of the Philippines)

________________________ ) S.S
BEFORE ME, personally appeared:
Name CTC Number Date/Place Issued
(Name of Mortgagor) 10000000 Jan 01, __ / Quezon City
(Name of Mortgagee) 10000000 Jan 11, __ / Las Pinas City
Known to me and to me known to be the same persons who executed the foregoing instrument
and acknowledged to me that the same is their free and voluntary act and deed.
WITNESS MY HAND AND SEAL, on the date and place first above written.
Notary Public
Doc. No.______;
Page No. ______;
Book No.______;
Series of 20____.