NATURE AND FORM OF THE CONTRACT be real, not fictitious; otherwise, the sale

is void although the transaction may be

Legal de4inition of Sale shown to have been in reality a donation
or some other contract. (Art. 1471.)
Article 1458. By the contract of sale one of the
contracting parties obligates himself to transfer the Nemodat quod non habet (No one can give more
ownership and to deliver a determinate thing, and than what he has)
the other to pay therefor a price certain in money or
its equivalent. NOTE: It is essential that the vendors be the owners
of the property sold, otherwise they cannot dispose
Q: Based on the de;inition under Art. 1458, what is that which does not belong to them.
the very essence of a Contract of Sale?
Q: What is the effect of the absence of any of the
A: The very essence of a Contract of Sale is the above essential elements?
transfer of ownership in exchange of the price paid
or promised. A: The contract of sale is void.

Q: What are the Characteristics of a Contract of Q: Can there be a valid sale against the will of the
Sale? owner of the property?

1. Consensual – A sale is perfected by mere • When the property is subjected to

consent, manifested by the meeting of the expropriation (NCC Arts. 435 and 1488);
minds as to the offer and acceptance on the
subject matter, price and terms of payment. • In case of ordinary execution sale conducted
under Section 15, Rule 39 of the Revised
2. Bilateral – both the contracting parties are Rules of Civil Procedure:
bound to fulfill correlative obligations
towards each other: The seller will deliver • In case of judicial foreclosure sale under Rule
and transfer a determinate thing to the buyer 68; and
and the latter will pay an ascertained price
(or its equivalent). • In case of extra-judicial foreclosure sale
under Act 3135, as amended.
3. Commutative – The thing sold is considered
the equivalent of the price paid and the price Q: Are there other elements of a Contract of Sale? If
paid is the equivalent of the thing sold. yes, what are those?

4. Principal – Its existence does not depend • Natural Elements

upon the existence and validity of another
contract. • Accidental Elements

5. Onerous – The thing sold is conveyed in Q: What are the Stages of a COS?
consideration of the purchase price, and vice
versa. • Generation or Negotiation

6. Nominate – It has a specific name given by • Perfection - meeting of the minds

law, namely, “sale”.
• Consummation - when the object is
Q: What are the Essential Requisites of a Contract delivered and the price is paid
of Sale?
Q: What are the Kinds of Contract of Sale?
a. Consent – meeting of the minds to
transfer ownership in exchange for the As to the Presence or Absence of condition
price;
1) Absolute Sale - where the sale is not subject
b. Object / Determinate subject matter – to any condition whatsoever and where title
determinate thing which is the object of passes to the buyer upon delivery of the
the contract; and thing sold.

c. Consideration/cause – price certain in 2) Conditional Sale - where the sale

money or its equivalent. The price must contemplates a contingency (Arts. 1461,
 1462, par. 2; Art. 1465.), and in general, d) Things whose acquisition depends upon a
where the contract is subject to certain contingency which may or may not happen
conditions (see Art. 1503, par. 1.), usually, in
the case of the vendee, the full payment of Q: What is the right of 4irst refusal?
the agreed purchase price
All things and conditions being equal, and there is
Q: Emptio rei speratae vs. Emptio spei identity of terms and conditions offered to the
optionee and other prospective buyers, the optionee
Emptio rei speratae Emptio spei enjoys the right of ;irst priority.

1. Sale of an expected 1. Sale of a mere hope Q: What is an Earnest Money?

thing or expectancy that the
thing will come to Money given to the seller by the prospective buyer to
existence; Sale of the show that the latter is truly interested in buying the
hope itself property and its aim is to bind the bargain.

2. Sale is subject to the 2. Sale produces effect Q: Distinguish between an Earnest Money and an
condition that the thing even if the thing does Option Money.
will exist; if it does not, not come into
there is no contract existence, unless it is a
vain hope

3. The uncertainty is 3. The uncertainty is

with regard to the with regard to the
quantity and quality of existence of the thing
the thing and not the
existence of the thing

4. Object is a future 4. Object is a present

thing thing which is the hope Effect of Rescission on the Earnest Money Received
or expectancy
In the absence of express stipulation, the seller
cannot keep the earnest money received to answer
for the damages sustained in the event the sale fails
Q: What are Future Goods? due to the fault of the prospective buyer. (GR
126812, 11/24/1998)
Article 1462. The goods which form the subject of a
contract of sale may be either existing goods Q: What is the rule on expenses of Execution and
owned or possessed by the seller or goods to be Registration of Sale?
manufactured, raised, or acquired by the seller after
the perfection of the contract of sale, in this title ART. 1487. The expenses for the execution and
called “future goods”. registration of the sale shall be borne by the vendor,
unless there is a stipulation to the contrary.
May future goods be the object of a Contract of
Sale? Q: What are the requisites of a valid price?

Sale of goods may be future or existing. • Certain or Ascertainable

Future goods are those still to be: • Real (not simulated)

a) Manufactured or printed • Expressed in money or its equivalent

b) Raised or future agricultural products • Manner of payment must be agreed upon
c) Acquired by the seller after the perfection of the Q: What is the effect of gross inadequacy of price
contract in a contract of sale?
• This is also referred to as the sale of Article 1470. Gross inadequacy of price does not
"hereafter-acquired" property affect a contract of sale, except as it may indicate a
defect in the consent, or that the parties really • Specific Performance upon Vendee's Failure
intended a donation or some other act or contract. to Pay;

Q: Can a Contract of Sale exist when no price is • Rescission upon failure to pay two or more
agreed upon? installments; and

GR: Contract is Inef;icacious • Foreclosure upon failure to pay two or more

installments.
XPN: Art. 1474, 2nd sentence.
Q: Are the remedies under Art. 1484 alternative or
Q: What are the formal requisites for the validity of cumulative? Explain.
a COS?
The remedies are alternative and are not to be
GENERAL RULE: Sale is a consensual contract and is exercised cumulatively or successively and the
perfected by mere consent. Generally, a contract of election of one is a waiver of the right to resort to the
sale is binding regardless of its form. (Art. 1356.) others.
EXCEPTIONS: In order to be enforceable by action, PARTIES TO A CONTRACT OF SALE
the following must be in writing:
1. Vendor/Seller; and
1. Sale of personal property at a price not less than
P500 2. Vendee/Buyer

2. Sale of real property or an interest therein The vendor AND the vendee must be legally
capacitated to enter into a contract. If a corporation,
3. Sale of property not to be performed within a year the contract must be executed by the Board of
from the date thereof Directors or by a corporate agent duly authorized by
the board
4. “Applicable statute” requires that the contract of
sale be in a certain form The vendor must have a right to transfer the
ownership at the time it is delivered.
Q: What is the so-called Recto Law?
Capacity to Buy or Sell
Provides for the remedies of a seller in the contracts
of sale of personal property by installments. Q: Who may enter into a Contract of Sale?

Coverage: Sale of personal property where the price GR: All persons, whether natural or juridical, who
is payable in several installments. can bind themselves, have legal capacity to buy and
sell. (Art. 1489(1), NCC]
Q: What are the requisites for the application of
Recto Law? Q: Who are those incapacitated to enter into a
COS?
• Contract of Sale;
PERSONS WHO MAY NOT ENTER INTO A COS
• Personal property:
1. Absolute Incapacity
• Payable in Installments; and
• Minors, insane and demented persons,
• In the case of the second and third remedies, imbeciles, deaf and dumb persons, prodigals
that there has been a Failure to pay two or and those subject to civil interdiction.
more installments
• As their personality is restricted, they have
Q: When there is initial payment and the balance is no capacity to purchase and sell by
payable in the future, can the Recto Law be themselves personally, but only through
applied? their legal representatives. (Art. 1327,CC)

No. It is not a sale on installment but rather a straight • Note: In case of minors or other persons
sale. without capacity to act, the contract of sale is
voidable. However, the purchase of
Remedies of the Vendor: necessaries is valid, for which they shall
 pay a reasonable price therefor. (Art. 37,
1489, NCC).

2. Relative Incapacity

• Spouses (Art. 1490, NCC)

• Agents, Guardians, Executors,

Administrators;

• Public Officers and Employees;

• Justices, Prosecutors, etc. in relation to the

property or right in litigation;

• Others specially disqualified by law. (Art.

1491, NCC)

3. Special Disqualifications

• Aliens who are disqualified to purchase

private agricultural lands (Art. XII, Secs. 3 &
7,1987 Constitution):

• Unpaid seller having a right of lien or having

stopped the goods in transit is prohibited
from buying the goods either directly or
indirectly in the resale of the same at public
or private sale which he may make or initiate
(NCC, Art. 1533(5): Art. 1476(4)

• The Officer or deputy holding the execution

cannot become a purchaser or be interested
directly or indirectly on any purchase at an
execution (Sec. 21, Rule 39. Rules of Court)

• In Sale by auction, seller cannot bid unless

notice has been given that such sale is
subject to a right to bid in behalf of the seller
(NCC Art. 1476)