SALES – July 31

Questions for Recitation

Villanueva Textbook for Sales

1. What is the capacity of persons (natural and juridical) to enter into a contract of sale?
- GR: any person who has the capacity to act/power to do acts with legal effects (power
to obligate himself) may enter into a contract of sale.
- Natural persons: age of majority
- Juridical persons: those with a juridical personality separate and distinct from
shareholders/partners/members is expressly recognized by law (Civil and Corporations
codes) w/ full juridical capacity to obligate themselves/enter into valid contracts.

When is it acquired? May it be lost?

- Natural persons: upon reaching the age of majority
- Juridical persons: expressly recognized/empowered by law to do so
- Minors, insane and demented persons, deaf-mutes who do not know how to write
have no legal capacity (but contracts entered by them merely voidable)
- Senility and serious illness does not deem a person incompetent to contract, but when
such age/infirmity has impaired mental faculties so as to prevent person from properly,
intelligently, and firmly protecting property rights then he is incapacitated
- When juridical entities are dissolved/they are inexistent in the eyes of the law then the
capacity to enter into contracts have been lost (since no more personality to speak of)
- Specific incapacity mandated by law:
> agents; when principal has not consented to sale
> guardians; property of person under his guardianship
> executor/administrator; property of estate under his administration
> public officers and employees; property of the state
> justices, judges, prosecutors, clerks of court, other officers/employees connected w/ administration of
justice; property in litigation
> lawyers; property/rights which may be object of any litigation in which they may take part by virtue of
their profession

2. When are the parties deemed to have arrived at a meeting of minds over the object
and the price?
- Meeting of the minds happens when a certain offer and an absolute acceptance meet
- During the perfection stage of a contract of sale, after the negotiations and
preparations and before the parties perform their respective undertakings
- There is meeting of the minds upon the concurrence of the object being a possible
thing, licit, and determinate or at least determinable and the price as real, money or its
equivalent, and certain or ascertainable

What are the rules if the parties are present, or when they are absent?
- acceptance

Is there a special rule in case of online sales?

3. What is the difference when an object is illicit and when the object is outside the
commerce of man?
- Objects outside the commerce of men are contemplated under illicit things under the
law. A thing is illicit when the law prohibits its sale: i.e.,
> animals suffering from contagious diseases,
> sale of future inheritance,
> those sales declared void under special laws (narcotics, gunpowder, explosives,
firearms and ammunition - wild animals and rare wild or poisonous plants or fruits – sale
of friar lands w/o consent of Sec. of Agri.),
> sale of land to a foreigner

If the object is illicit, is there a contract of sale?

- When the subject matter is illicit, the resulting contract of sale is void. The illegality of
the subject matter, even though it may be determinate and existing and capable of
actual delivery, under mines the demandability of the underlying obligation of the seller
to deliver, and thus renders sale void.

Is the crime of sale of illegal drugs, therefore, an impossible crime?

- No. Sale of which is deemed by a special law as illegal therefore void.
- If the act performed would be an offense other than a felony against
persons/property, there is no impossible crime.
- Requisites of an impossible crime:
> act performed would have been an offense to persons/property
> act done with evil intent
>accomplishment inherently impossible (legal/factual)
>act performed should not constitute violation of other parts of RPC

4. What is the meaning of price?

- Price is the sum stipulated as the equivalent of the thing sold an also every incident
taken into consideration for the fixing of price put to the debit of the buyer and agreed
by him
- Ideal price is sum certain in money or its equivalent

Who fixes or sets the price?

- Both parties (consensuality of sale, meeting of the minds as to price)
- Although the designation of a third party to fix the price is valid and such designation
by itself makes the price ascertainable – giving rise to a valid contract of sale

What factors affect the fixing or setting of the price?

- Price must be:
> real – when at the perfection of sale, there is legal intention on part of buyer to pay
price and legal expectation on part of seller to receive price as the value of the object he
promises to deliver
> in money or its equivalent – sale must be supported by valuable consideration
 > certain or ascertainable – expressed and agreed upon in specific terms / when it is in
reference to another thing certain or determination is left to judgement of specified
person/s

Are price controls legal?

- Yes. This is an example of when a third party determines the price in the sale.
- Public policy, so that it won’t be grossly inadequate/unconscionable, or shocking to the
conscience

5. What is the effect if the price is inadequate?

- Lesion or inadequacy of price does not invalidate a contract, unless there has been
fraud, mistake, or undue influence.
- Gross inadequacy of price does not affect a contract of sale, except when it indicates a
defect in consent, or when parties really intended a donation or some other
act/contract.

Are there situations when the price is expectedly lower than what the thing would
normally fetch in the general market? Why are they allowed?
- Yes, to allow room for bargaining and discounts.
- Sale still had a valuable consideration even though it was lower than what was
expected
- Inadequacy of price does not invalidate a contract of sale |
*Vales v Villa: one man cannot complain because another is more able, or better trained, or has a better
sense of judgement than he has