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Sales Week 3

The document outlines the legal distinctions between earnest money and option money in property sales, emphasizing the necessity of the property owner's consent for any prior payment. It details the remedies available to vendors in installment sales of personal property and the rights of buyers under the Maceda Law when defaulting on real estate installment payments. Additionally, it covers the obligations of vendors, the modes of delivery, and the rights of unpaid sellers, including their remedies and conditions under which they can reclaim goods or cancel contracts.
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0% found this document useful (0 votes)
22 views20 pages

Sales Week 3

The document outlines the legal distinctions between earnest money and option money in property sales, emphasizing the necessity of the property owner's consent for any prior payment. It details the remedies available to vendors in installment sales of personal property and the rights of buyers under the Maceda Law when defaulting on real estate installment payments. Additionally, it covers the obligations of vendors, the modes of delivery, and the rights of unpaid sellers, including their remedies and conditions under which they can reclaim goods or cancel contracts.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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EARNEST MONEY

VS

OPTION MONEY
No perfected sale for prior payment of
earnest money without property owner’s
consent to the sale.
Loss or injury to the thing

a.Loss before perfection


b.Loss after perfection
Remedies of Vendor in Installment Sales of
Personal Property (RECTO LAW)
Article 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;
(2) Cancel the sale, should the vendee's failure to pay cover two or more
installments;
(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
purchaser to recover any unpaid balance of the price. Any agreement to
the contrary shall be void. (1454-A-a)
When deficiency may be recovered

1. In case of sale on straight-term


2. If security foreclosed is other than the chattel
mortgage constituted on the thing sold.
3. In the case of sale on execution of judgment
in favor of the seller
Sale of Real Property in Installment
(MACEDA LAW)
Section 3. In all transactions or contracts involving the sale or financing of
real estate on installment payments, including residential condominium
apartments but excluding industrial lots, commercial buildings and sales to
tenants under Republic Act Numbered Thirty-eight hundred forty-four, as
amended by Republic Act Numbered Sixty-three hundred eighty-nine,
where the buyer has paid at least two years of installments, the buyer is
entitled to the following rights in case he defaults in the payment of
succeeding installments:

(a) To pay, without additional interest, the unpaid installments due within the
total grace period earned by him which is hereby fixed at the rate of one
month grace period for every one year of installment payments made:
Provided, That this right shall be exercised by the buyer only once in every
five years of the life of the contract and its extensions, if any.
(b) If the contract is canceled, the seller shall refund to the buyer the cash
surrender value of the payments on the property equivalent to fifty per cent
of the total payments made, and, after five years of installments, an
additional five per cent every year but not to exceed ninety per cent of the
total payments made: Provided, That the actual cancellation of the contract
shall take place after thirty days from receipt by the buyer of the notice of
cancellation or the demand for rescission of the contract by a notarial act and
upon full payment of the cash surrender value to the buyer.

Down payments, deposits or options on the contract shall be included in the


computation of the total number of installment payments made.
Section 4. In case where less than two years of installments were
paid, the seller shall give the buyer a grace period of not less
than sixty days from the date the installment became due.
If the buyer fails to pay the installments due at the expiration of
the grace period, the seller may cancel the contract after thirty
days from receipt by the buyer of the notice of cancellation or
the demand for rescission of the contract by a notarial act.
Capacity to Buy and Sell
Obligations of the Vendor

1. To transfer the ownership of the thing sold.


2. To deliver the thing sold.
3. To warrant the thing sold.
4. To take care of the thing sold with the
diligence of a good father of a family unless
the law or the stipulation of the parties
require another standard of care.
Delivery or Tradition

It is a mode of acquiring ownership whereby


the object of the contract is placed in the
control and possession of the vendee, either
actually or constructively.
Kinds of Delivery or Tradition

1. Actual or Real Delivery


2. Constructive or Legal Delivery
A. By legal formalities
B. Traditio Simbolica
C. Traditio Longa Manu
D. Traditio Brevi Manu
E. Traditio Constitutum Possessorium
F. Quasi Tradition
Article 1505. Subject to the provisions of this Title, where goods are sold by a
person who is not the owner thereof, and who does not sell them under authority
or with the consent of the owner, the buyer acquires no better title to the goods
than the seller had, unless the owner of the goods is by his conduct precluded
from denying the seller's authority to sell.
Nothing in this Title, however, shall affect:
(1) The provisions of any factors' act, recording laws, or any other provision of
law enabling the apparent owner of goods to dispose of them as if he were the
true owner thereof;
(2) The validity of any contract of sale under statutory power of sale or under the
order of a court of competent jurisdiction;
(3) Purchases made in a merchant's store, or in fairs, or markets, in accordance
with the Code of Commerce and special laws. (n)
Article 1522. Where the seller delivers to the buyer a quantity of goods less
than he contracted to sell, the buyer may reject them, but if the buyer
accepts or retains the goods so delivered, knowing that the seller is not
going to perform the contract in full, he must pay for them at the contract
rate. If, however, the buyer has used or disposed of the goods delivered
before he knows that the seller is not going to perform his contract in full,
the buyer shall not be liable for more than the fair value to him of the goods
so received.
Where the seller delivers to the buyer a quantity of goods larger than he
contracted to sell, the buyer may accept the goods included in the contract
and reject the rest. If the buyer accepts the whole of the goods so delivered
he must pay for them at the contract rate.
Where the seller delivers to the buyer the goods he contracted to sell mixed
with goods of a different description not included in the contract, the buyer
may accept the goods which are in accordance with the contract and reject
the rest.
In the preceding two paragraphs, if the subject matter is indivisible, the
buyer may reject the whole of the goods.
The provisions of this article are subject to any usage of trade, special
agreement, or course of dealing between the parties. (n)
Unpaid Seller
Article 1525. The seller of goods is deemed to be an unpaid seller
within the meaning of this Title:
(1) When the whole of the price has not been paid or tendered;
(2) When a bill of exchange or other negotiable instrument has been
received as conditional payment, and the condition on which it was
received has been broken by reason of the dishonor of the
instrument, the insolvency of the buyer, or otherwise.
In articles 1525 to 1535 the term "seller" includes an agent of the
seller to whom the bill of lading has been indorsed, or a consignor or
agent who has himself paid, or is directly responsible for the price, or
any other person who is in the position of a seller. (n)
Rights of an Unpaid Seller

1. Possessory Lien
2. Right of Stoppage in Transitu
3. Right of Resale
4. Right to Rescind

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