LAW 105 ART. 1459.

The thing must be licit

and the vendor must have a right to
ART. 1458 A contract of sale transfer the ownership thereof at the
involves one party agreeing to time it is delivered. (n)
transfer ownership and deliver a
specific item, while the other party Article 1460 A determinate thing is
agrees to pay a specified price in one that is specifically identified or
money or its equivalent. separated from similar items.

The seller is obligated to transfer This requirement is fulfilled if, when

ownership and deliver the item, while the contract is made, the item can be
the buyer is obligated to pay the agreed clearly identified without needing to
price. make a new agreement.

Two (2) kinds of Contract of Sale: Article 1461 Things that might exist
a. Absolute- Sale is not subject to in the future can be sold. However, if
any condition and delivery transfers the sale is based on a mere hope or
ownership; and expectation, it only works if the item
b. Conditional- Delivery does not actually comes into existence. If it's a
transfer ownership until condition is false hope or expectation, the sale is
not valid.
fulfilled.
Article 1462 In a contract of sale, the
Characteristics of a sale: goods can be either:
a. Consensual; binding the moment
both parties agree to its terms, 1. Existing goods: Items that the
without the need for further seller already owns or has.
formalities, as long as all essential 2. Future goods: Items that the seller
elements of the contract are met. will make, grow, or get after the
b. Bilateral; one in which both contract is signed.
parties make mutual promises to
each other Additionally, a contract can also
involve goods that the seller may
c. Onerous; is one where both
acquire based on an uncertain event.
parties have obligations or duties to
fulfill, often involving an exchange of Article 1463 The sole owner of an
value, such as goods, services, or item can sell a share or part of that
money. item, even if it is not physically
d. Commutative; a type of divided.
transaction where what each party
gives is roughly equal to what they Article 1464 says that for identical
receive in return. items (like grains or liquids), a seller
e. Nominate; and a type of contract can sell part of a larger group, even if
that has a specific name and is the exact amount isn’t clear.
governed by particular rules under
- The buyer owns a share based on
the law. how much they bought.
f. Principal. a contract that stands
on its own and does not depend on - If the total amount is less than
any other contract for its existence or expected, the buyer gets everything
validity. It contains the main that’s there, and the seller must
obligations between the parties and provide more of the same to make up
is not subordinate to another for it unless they agreed on
agreement. something different.
Article 1465 Items that are subject to - It will be considered a sale if the
a condition that could end the money amount is greater than or
contract can still be sold. equal to the value of the other item.

Example Article 1469 For a price to be

considered certain, it can either:
Leila is selling her house with the
condition that the sale will only be 1. Be linked to the value of
valid if the buyer gets approved for a something specific, or
mortgage within 30 days. 2. Be decided by a specific person or
group.
Condition: The sale depends on the
buyer being approved for the loan. If that person or group can’t or won’t
If approved: The sale goes through, set the price, the contract won’t be
and the buyer owns the house. valid unless the parties agree on a
If not approved: The sale is canceled, price later. If the person made a
and the seller retains ownership of mistake or acted in bad faith, the
the house. courts can set the price.

In this case, the sale of the house is If the person responsible for setting
subject to a resolutory condition (the the price can’t do so because of the
mortgage approval), meaning the fault of the buyer or seller, the party
sale could end based on whether that not at fault can seek remedies
condition is met. against the one who is at fault.

Article 1466 When looking at a Article 1470 A very unfair price in a

contract that has elements of both a sale doesn’t invalidate the contract.
sale and an agency to sell, all However, it could suggest that there
important parts of the contract was a problem with the agreement or
should be taken into account to that the parties really meant to give a
understand it full. gift or make some other type of deal.

Article 1467 If a seller agrees to Article 1471 The price in a sale is

deliver an item at a set price that they fake or not genuine, the sale is not
usually make or obtain for the valid. However, it can be shown that
general market (regardless of the transaction was actually a gift or
whether they have it in stock), it is another type of agreement.
considered a contract of sale.
However, if the seller is making Article 1472 The price of items like
something specifically for a stocks, grains, and liquids is
customer’s special order and not for considered certain if:
the general market, it is classified as
a contract for a piece of work. 1. The price is set for a specific day
or market, or
Article 1468 If a contract involves 2. A specific amount is added to or
both money and something else, the subtracted from the price on that day
type of transaction depends on what or in that market, as long as that
the parties intended. amount is clear and definite.

- If it’s clear what they meant, that Article 1473 The price cannot be left
will define the transaction. up to just one party to decide.
- If their intention isn’t clear: However, if one party sets a price
It will be considered barter (a trade) if and the other party agrees to it, the
the value of the item given is greater sale is complete.
than the money.
 Article 1474 If the price cannot be shall not be lawful for the seller to
determined based on the previous bid him self or to employ or induce
rules or any other way, the contract any person to bid at such sale on his
is not valid. However, if the buyer has behalf or for the auctioneer, to
received and used the item, they employ or induce any person to bid
must pay a fair price for it. What at such sale on behalf of the seller or
counts as a fair price depends on the knowingly to take any bid from the
specific situation. seller or any person employed by
him. Any sale contravening this rule
ART. 1475. The contract of sale is may be treated as fraudulent by the
perfected at the moment there is a buyer. (n)
General Rule
meeting of minds upon the thing
which is the object of the contract 1. If items are auctioned in separate
and upon the price. lots, each lot is a separate sale.
2. A sale is finalized (perfected) when
From that moment, the parties may the auctioneer announces it (e.g., by the
reciprocally demand performance, fall of the hammer). Until this
subject to the provisions of the announcement, any bid can be
law governing the form of contracts. withdrawn, and the auctioneer may also
withdraw the item unless the auction is
-This agreement marks the "perfection" without reserve.
of the contract, meaning that from this 3. The seller can reserve the right to bid,
point, both buyer and seller can legally unless restricted by law or agreement.
require each other to fulfill their 4. If there’s no notice of a right to bid for
obligations under the contract, such as the seller, it’s illegal for the seller or
delivering the item or paying the price. auctioneer to place bids on behalf of the
However, this right to demand seller. Violating this rule makes the sale
performance is still subject to any legal potentially fraudulent.
requirements regarding the contract's
form, which may vary depending on the ART. 1477. The ownership of the
jurisdiction or type of item being sold. thing sold shall be transferred to the
vendee upon the actual or
ART. 1476. In the case of a sale by constructive delivery thereof.
auction:
(1) Where goods are put up for sale -Ownership of an item sold is
by auction in lots, each lot is the transferred to the buyer once it is
subject of a separate contract of actually delivered to them.
sale.
(2) A sale by auction is perfected ART. 1478. The parties may stipulate
when the auctioneer announces its that ownership in the thing shall not
perfection by the fall of the hammer, pass to the purchaser until he has
or in other customary manner. Until fully paid the price.
such announcement is made, any
bidder may retract his bid; and the -The seller and buyer can agree that
auctioneer may withdraw the goods ownership won’t transfer to the buyer
from the sale unless the auction has until the full price is paid.
been announced to be without
reserve. ART. 1479. A promise to buy and sell
(3) A right to bid may be reserved a determinate thing for a price certain
expressly by or on behalf of the is reciprocally demandable. An
seller, unless otherwise provided by accepted unilateral promise to buy or
law or by stipulation. to sell a determinate thing for a price
(4) Where notice has not been given certain is binding upon the if the
that a sale by auction is subject to a promise is supported by a con
right to bid on behalf of the seller, it sideration distinct from the price.
 -Buyer can cancel a sale if the delivered
- A mutual promise to buy and sell a goods don't match the provided sample
specific item at a set price creates or description. If both a sample and
obligations for both parties. description were given, the goods must
However, if only one party makes a match both to be acceptable. The buyer
promise to buy or sell, it becomes should also have a reasonable time to
binding on that party only if there is an check the goods against the sample or
additional consideration beyond the description before deciding.
price. The buyer shall have a reasonable
opportunity of comparing the bulk with
ART. 1480. Any injury to or benefit the description or the sample.
from the thing sold, after the contract
has been perfected, from the moment ART. 1482. Whenever earnest money
of the perfection of the contract to is given in a contract of sale, it shall
the time of delivery, shall be be considered as part of the price
governed by articles 1163 to 1165, and as proof of the perfection of the
and 1262. contract.

This rule shall apply to the sale of -When earnest money (a deposit) is
fungible things, made independently given in a sale, it counts as part of the
and for a single price, or without purchase price and confirms that the
consideration of their weight, sale contract is finalized or "perfected."
number, or measure. This means both parties are now bound
by the contract.
Should fungible things be sold for a
price fixed according to weight, ART. 1483. Subject to the provisions
number, or measure, the risk shall of the Statute of Frauds and of any
not be imputed to the vendee until other applicable statute, a contract of
they have been weighed, counted, or sale may be made in writing, or by
measured, and delivered, unless the word of mouth, or partly in writing
latter has incurred in delay. (1452a) and partly by word of mouth, or may
be inferred from the conduct of the
-Once a sale contract is finalized, any parties.
gain or loss to the item before delivery
follows Articles 1163 to 1165 and 1262. -A contract of sale can be formed in
For bulk goods sold at a single price, writing, verbally, partly both, or through
this rule applies immediately. But if the actions of the buyer and seller.
priced by weight, number, or measure, However, certain sales contracts may
risk passes to the buyer only after the need to be in writing to be legally
goods are weighed, counted, or enforceable, as required by the Statute
measured and delivered unless the of Frauds or other applicable laws.
buyer delays.
ART. 1484. In a contract of sale of
ART. 1481. In the contract of sale of personal property the price of which
goods by description or by sample, is payable in installments, the vendor
the contract may be rescinded if the may exercise any of the following
bulk of the goods delivered do not remedies:
correspond with the description or
the sample, and if the contract be by (1) Exact fulfillment of the obligation,
sample as well as by description, it is should the vendee fail to pay;
not sufficient that the bulk of goods (2) Cancel the sale, should the
correspond with the sample if they vendee’s failure to pay cover two or
do not also correspond with the more installments;
description.
(3) Foreclose the chattel mortgage on -In lease-to-own or installment sale
the thing sold; if one has been contracts, any clause stating that paid
constituted, should the vendee’s installments or rents won’t be refunded
failure to pay cover two or more is allowed, as long as it’s fair and not
installments. In this case, he shall excessively harsh.
have no further action against the
purchaser to recover any unpaid ART. 1487. The expenses for the
balance of the price. execution and registration of the sale
shall be borne by the vendor, unless
Any agreement to the contrary shall there is a stipulation to the contrary.
be void.
-The seller pays for the sale's execution
1. Demand Payment: The seller can and registration costs, unless the
require the buyer to pay any missed contract says otherwise.
installment.
ART. 1488. The expropriation of
2. Cancel the Sale: If the buyer misses property for public use is governed
“two or more installments”, the seller by special laws.
can cancel the contract, take back the
property, and end the sale. The process of taking private property
for public use (expropriation) is
3. Foreclose the Mortgage: If the regulated by specific laws.
property is under a chattel mortgage,
the seller can repossess it after two Examples of expropriation for public use
missed payments. After repossession, include:
the seller can’t demand any remaining
balance from the buyer. 1. Building Infrastructure: The
government may expropriate private
ART. 1485. The preceding article land to build roads, bridges, railways, or
shall be applied to contracts highways that serve the public.
purporting to be leases of personal
property with option to buy, when the 2. Public Facilities:Land can be taken
lessor has deprived the lessee of the to build schools, hospitals, parks, or
possession or enjoyment of the government buildings that benefit the
thing. community.

-This article applies the previous rules to 3. Utilities Expansion: Expropriation

lease-to-own contracts for personal may be used to build or expand public
property. If the lessor (owner) takes utilities like water treatment plants,
away the item or stops the lessee from power stations, or pipelines.
using it, the remedies for missed
payments—demanding payment, These actions are governed by laws
canceling the contract, or foreclosing— that require fair compensation to the
can be enforced as if it were a sale property owner.
contract.

ART. 1486. In the cases 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.
 property from the other spouse's, often
Chapter 2 due to specific reasons like financial
irresponsibility, abandonment, or for
CAPACITY TO BUY OR SELL protecting personal assets. Once granted,
each spouse has control over their own
ART. 1489. All persons who are property, similar to a separation of
authorized in this Code to obligate property agreed upon in a marriage
themselves, may enter into a contract settlement.
of sale, saving the modifications
contained in the following articles. ART. 1491. The following persons
cannot acquire by purchase, even at
Where necessaries are sold and a public or judicial auction, either in
delivered to a minor or other person person or through the mediation of
without capacity to act, he must pay a another:
reasonable price therefor. Necessaries
are those referred to in article 290. (1) The guardian, the property of the
person or persons who may be under
Anyone legally able to enter contracts can his guardianship;
make a sale, with certain exceptions (2) Agents, the property whose
noted in later articles. If essential items
administration or sale may have been
("necessaries," like food or clothing) are
entrusted to them, unless the
sold to a minor or someone legally unable
consent of the principal has been
to contract, they must still pay a fair price
for those items. given;
(3) Executors and administrators, the
Ex. property of the estate under
if a minor buys food or medicine, which administration;
are considered essential items (4) Public officers and employees,
(necessaries), from a store. Even though the property of the State or of any
the minor may not legally enter most subdivision thereof, or of any
contracts, they would still be required to government owned or controlled
pay a reasonable price for these essential corporation, or institution, the
goods, as they are items necessary for administration of which has been
daily life. entrusted to them; this provision
shall apply to judges and
ART. 1490. The husband and the wife government experts who, in any
cannot sell property to each other, manner whatsoever, take part in the
except: sale;
(5) Justices, judges, prosecuting
(1) When a separation of property attorneys, clerks of superior and
was agreed upon in the marriage inferior courts, and other officers and
settlements; or employees connected with the
administration of justice, the
(2) When there has been a judicial property and rights in litigation or
separation of property under article levied upon an execution before the
191.* (1458a) court within whose jurisdiction or
territory they exercise their
1. If they agreed to separate their property respective functions; this prohibition
in their marriage agreement. includes the act of acquiring by
assignment and shall apply to
2. If a court has ordered a separation of lawyers, with respect to the property
their property under the law (Article 191). and rights which may be the object of
any litigation in which they may take
Article 191 of the Family Code refers to
part by virtue of their profession;
judicial separation of property. This
(6) Any others specially disqualified
legal process allows a spouse to request
by law. (1459a)
the court to divide and separate their
 entirely lost, the contract shall be
Certain individuals are prohibited from without any effect.
purchasing certain types of property,
even in auctions: But if the thing should have been lost
in part only, the vendee may choose
1.Guardians: Cannot buy property between withdrawing from the
belonging to the person(s) under their contract and demanding the
guardianship. remaining part, paying its price in
proportion to the total sum agreed
2. Agents: Cannot buy property they upon.
manage or are responsible for selling,
unless their principal approves. If an item is completely lost when a sale
contract is finalized, the contract
3. Executors/Administrators: Cannot becomes void. If only part of the item is
buy property belonging to the estate lost, the buyer can either cancel the
they are managing. contract or buy the remaining part at a
proportionally reduced price.
4. Public Officials/Employees: Cannot
buy government property they oversee, ART. 1494. Where the parties purport
including judges and experts involved in a sale of specific goods, and the
sales. goods without the knowledge of the
seller have perished in part or have
5. Judges, Prosecutors, Court Clerks, wholly or in a material part so
and Justice System Employees: deteriorated in quality as to be
Cannot buy property or rights involved substantially changed in character,
in cases within their jurisdiction. the buyer may at his option treat the
Lawyers also cannot acquire property sale:
involved in cases they handle. (1) as avoided; or

6. Other Legally Disqualified (2) as valid in all of the existing

Persons: Any other specific individuals goods or in so much thereof as have
disqualified by law. not deteriorated, and as binding the
buyer to pay the agreed price for the
ART. 1492. The prohibitions in the goods in which the ownership will
two preceding articles are applicable pass, if the sale was divisible.
to sales by virtue of legal
redemption, compromises and If a seller unknowingly tries to sell
renunciations. (n) specific goods that have either partially
or entirely perished, or have
These prohibitions also apply to sales deteriorated significantly in quality, the
involving legal redemption (buying back buyer has two options:
property), settlement agreements, and
waivers, meaning the restricted 1. Cancel the Sale:The buyer can
individuals cannot acquire these types choose to void the sale entirely.
of interests either.
3. Accept the Remaining Goods:The
Chapter 3 buyer can opt to keep the sale valid for
the undamaged goods and pay the
EFFECTS OF THE CONTRACT WHEN agreed price for those, provided the sale
THE THING SOLD HAS BEEN LOST can be divided into parts.
ART. 1493. If at the time the contract
of sale is perfected, the thing which
is the object of the contract has been
 the object of the contract, if from the
Chapter 4 deed the contrary does not appear or
cannot clearly be inferred.
OBLIGATIONS OF THE
VENDOR With regard to movable property, its
delivery may also be made by the
SECTION 1. delivery of the keys of the place or
depository where it is stored or kept.
— General Provisions
A sale made with a formal contract
ART. 1495. The vendor is bound to
(public instrument) counts as delivery of
transfer the ownership of and deliver,
the item unless stated otherwise. For
as well as warrant the thing
movable property, delivery can also be
which is the object of the sale.
made by handing over the keys to
(1461a)
where the item is stored.
The seller (vendor) is obligated to
ART. 1499. The delivery of movable
transfer ownership of the item being
property may likewise be made by
sold, deliver it to the buyer, and ensure
the mere consent or agreement of the
that the item is free from defects,
contracting parties, if the thing sold
guaranteeing it is as promised in the
cannot be transferred to the
contract.
possession of the vendee at the time
of the sale, or if the latter already had
ART. 1496. The ownership of the
it in his possession for any other
thing sold is acquired by the vendee
reason.
from the moment it is delivered to
him in any of the ways specified in
Delivery of movable property can also
articles 1497 to 1501, or in any other
be made simply by the mutual
manner signifying an agreement that
agreement of the buyer and seller,
the possession is transferred from
especially if the item can't be physically
the vendor to the vendee.
transferred at the time of sale or if the
buyer already has it in their possession.
The buyer (vendee) gains ownership of
the item once it is delivered to them,
Traditio longa manu.
either through methods outlined in
The first part of Article 1499 refers to
Articles 1497 to 1501, or any other
traditio longa manu.
agreed way that shows the seller
This mode of delivery takes place by the
(vendor) is transferring possession of
mere consent or agreement of the
the item to the buyer.
contracting parties as when the vendor
merely points to the thing sold which
SECTION 2. shall thereafter be at the control and
— Delivery of the Thing Sold disposal of the vendee
ART. 1497. The thing sold shall be Traditio brevi manu.
understood as delivered, when it is This mode of legal delivery happens
placed in the control and possession when the vendee has already the
of the vendee. possession of the thing sold by virtue of
The item being sold is considered another title as when the lessor sells the
delivered when it is physically handed thing leased to the lessee. Instead of
over to the buyer and placed under their turning over the thing to the vendor so
control and possession. that the latter may, in turn, deliver it, all
ART. 1498. When the sale is made these are considered done by action of
through a public instrument, the law
execution thereof shall be equivalent
to the delivery of the thing which is
 the ownership passes to the buyer
ART. 1500. There may also be on delivery, but he may revest the
tradition constitutum possessorium. ownership in the seller by returning
or tendering the goods within the
Traditio constitutum possessorium. time fixed in the contract, or, if no
This type of delivery is the opposite of time has been fixed, within a
"traditio brevi manu," where the seller reasonable time. (n)
keeps possession of the property after
the sale but not as the owner, such as When goods are delivered to the
when the seller becomes the buyer's buyer on approval or on trial or on
tenant. In this case, the law treats the satisfaction, or other similar terms,
property as delivered based on the the ownership therein passes to the
mutual consent or agreement of the buyer.
parties, without the need for physical
transfer. (1) When he signifies his approval or
acceptance to the seller or does any
ART. 1501. With respect to other act adopting the transaction;
incorporeal property, the provisions (2) If he does not signify his approval
of the first paragraph of article 1498 or acceptance to the seller, but
shall govern. In any other case retains the goods without giving
wherein said provisions are not notice of rejection, then if a time has
applicable, the placing of the titles of been fixed for the return of the
ownership in the possession of the goods, on the expiration of such
vendee or the use by the vendee of time, and, if no time has been fixed,
his rights, with the vendor’s consent, on the expiration of a reasonable
shall be understood as a delivery. time. What is a reasonable time is a
(1464) question of fact. (n)

For intangible property (incorporeal When goods are delivered "on sale or
property), the rules in the first paragraph return" (where the buyer has the option
of Article 1498 apply. In other cases, to return the goods), ownership passes
delivery is considered to occur when the to the buyer upon delivery. However,
buyer receives the ownership the buyer can return the goods within
documents or begins using their rights the agreed-upon time (or a reasonable
with the seller's consent. time if no time is specified) to transfer
ownership back to the seller.
Quasi-traditio.
Tradition can only be made with respect When goods are delivered on approval,
to corporeal things. In the case of trial, or satisfaction, the buyer takes
incorporeal things, delivery is effected: ownership once they approve or accept
the goods or take actions indicating
(1) by the execution of a public acceptance.
instrument; or
(2) when that mode of delivery is not If the buyer does not approve or accept
applicable, by the placing of the titles of the goods but keeps them without
ownership in the possession of the rejecting them, ownership transfers:
vendee; or - If a return period is specified, after the
(3) by allowing the vendee to use his period ends.
rights as new owner with - If no return period is specified, after a
the consent of the vendor. reasonable time, which is determined by
the circumstances.
ART. 1502. When goods are delivered
to the buyer “on sale or return” to
give the buyer an option to return the
goods instead of paying the price,
 from the buyer will obtain the
ART. 1503. Where there is a contract ownership in the goods, although the
of sale of specific goods, the seller bill of exchange has not been
may, by the terms of the contract, honored, provided that such
reserve the right of possession or purchaser has received delivery of
ownership in the goods until certain the bill of lading indorsed by the
conditions have been fulfilled. The consignee named therein, or of the
right of possession or ownership goods, without notice of the facts
may be thus reserved not with making the transfer wrongful. (n)
standing the delivery of the goods to
the buyer or to a carrier or other
bailee for the purpose of The seller can reserve ownership of
transmission to the buyer. goods until certain conditions are met,
even if the goods are delivered to the
Where goods are shipped, and by the buyer or a carrier.
bill of lading the goods are
deliverable to the seller or his agent, If goods are shipped with a bill of lading
or to the order of the seller or of his making them deliverable to the seller or
agent, the seller thereby reserves the their agent, the seller keeps ownership.
ownership in the goods. But if, If ownership would have passed to the
except for the form of the bill of buyer on shipment, the seller only keeps
lading, the ownership would have possession to secure the buyer’s
passed to the buyer on shipment of performance.
the goods, the seller’s property in the
goods shall be deemed to be only for If the bill of lading makes the goods
the purpose of securing performance deliverable to the buyer but the seller
by the buyer of his obligations under retains it, the seller maintains
the contract. possession of the goods.

Where goods are shipped, and by the If the seller sends the bill of exchange
bill of lading the goods are and bill of lading to secure payment, the
deliverable to the order of the buyer buyer must return the bill if they don’t
or of his agent, but possession of the pay. If the bill is transferred to a third
bill of lading is retained by the seller party in good faith, that third party may
or his agent, the seller thereby gain ownership, even if the buyer hasn’t
reserves a right to the possession of paid.
the goods as against the buyer.
ART. 1504. Unless otherwise agreed,
Where the seller of goods draws on the goods remain at the seller’s risk
the buyer for the price and transmits until the ownership therein is
the bill of exchange and bill of lading transferred to the buyer, but when
together to the buyer to secure the ownership therein is transferred
acceptance or payment of the bill of to the buyer, the goods are at the
exchange, the buyer is bound to buyer’s risk whether actual delivery
return the bill of lading if he does not has been made or not, except that:
honor the bill of exchange, and if he
wrongfully retains the bill of lading (1) Where delivery of the goods has
he acquires no added right thereby. been made to the buyer or to a bailee
If, however, the bill of lading provides for the buyer, in pursuance of the
that the goods are deliverable to the contract and the ownership in the
buyer or to the order of the buyer, or goods has been retained by the seller
is indorsed in blank, or to the buyer merely to secure performance by the
by the consignee named therein, on buyer of his obligations under the
who purchases in good faith, for contract, the goods are at the buyer’s
value, the bill of lading, or goods risk from the time of such delivery;
(2) Where actual delivery has been
delayed through the fault of either
the buyer or seller the goods are at
the risk of the party in fault. (n)

Unless agreed otherwise, the seller

bears the risk of the goods until
ownership is transferred to the buyer.
Once ownership is transferred, the
buyer assumes the risk, even if the
goods haven’t been physically delivered
yet.

If the goods are delivered to the buyer

or a third party (bailee) for the buyer,
and the seller keeps ownership to
secure the buyer’s obligations, the
buyer assumes the risk once delivery is
made.

If delivery is delayed due to the fault of

either the buyer or seller, the party at
fault bears the risk of the goods.