PRICE
must be payable in money or its equivalent
It’s the sum stipulated as the equivalent of the thing
sold, and every incident taken into consideration for the
fixing of the same, put to the debit of the vendee, and
agreed to by him
ELEMENTS:
1. must real
-manner of payment must be agreed upon
Note: absence of any one of these elements doesn’t
necessarily render the transaction invalid.
SIMULATED PRICE – the price that is really not intended
by the buyer to pay and the seller to receive. The sale is
void.
Ex: may price ng ana nakastipulate pero wala naman
talagang bayaran na nangyare
FALSE PRICE – the price appearing on the instrument
(DOAS) is different from the price agreed upon by the
parties. The sale is valid provided it is proved that the
contract is based upon another cause which is lawful
and true
GROSS INADEQUACY OF THE PRICE
Gen Rule: does not affect the validity of the contract
EXCEPT:
1. may be an indication of a defect in the consent – valid
pa rin ung contract
2. may indicate that parties intended a donation or
some other act or contract – valid
3. price is purely shocking to the conscience – sale may
be declared null and void for lack of consent.
In a Forced Sale or Execution Sale, G.I of price is
immaterial in execution sale BECAUSE, the judgement
debtor may recover the loss from re acquiring the same
property or selling his right to redeem the property to
others.
*Huslt Case - nabenta ng 6M sa execution sale, pero
value ng prop talaga ay 83.6M. Sabi ng court, sa case
nato, G.I of the price is immaterial.
*PERO SYEMPRE, AGAIN IF PURELY SHOCKING TO THE
CONSCIENCE, pwedeng magwarrant ng nullification ng
foreclosure sale.
2.
Gen Rule: all monetary obligations shall be settled in
Phil Currency. Hence, in the absence of an agreement
between the parties, the buyer cant compel the seller to
accept payment in other currencies.
*If foreign currency ang bayaran, then the parties must
agree that such should be the currency at the time of
payment.
*If walang agreement, tas foreign currency meron ka,
then exchange rate at the time of payment gamitin mo
para convert foreign currency to peso, unless again may
agreement kayong parties for another foxed rate of
exchange.
3. must be certain or determinable at the time of the
perfection of the contract
Gen Rule: certain when its in reference to another thing
or left to the judgement of certain persons.
In fixing the price, the parties both fix the price and such
cant be left to the determination of one of the parties
only.
RULES WHEN LEFT TO THE DETERMINATION OF THIRD
PERSONS:
1. if unable or unwilling to fix the price – contract is
inefficacious
2. if acted in bad faith or by mistake – courts may fix the
price
3. prevented from fixing the price by the fault of the
seller and buyer – party not at fault may have such
remedies against the party at fault.
*If the price cant be determined according to such
rules, then the contract is inefficacious. However, if may
nadeliver na kay buyer, then the latter must pay a
reasonable price thereof.
4. manner of payment agreed upon
-not essential sa validity ng sale. Essential only to the
formation of a binding and enforceable contract of sale.
*If there was no agreement as regards the purchase
price and the manner and the manner and schedule of
payment, the court concluded that there was no
perfected contract of sale.
PRESUMPTION: There is a presumption in favor of a absolute since the prohibition is intended to protect a
sufficient consideration for a contract private interest only.

NON PAYMENT OF THE PRICE *The ratification or the 2nd contract would then be valid
from its execution and it does not retroact to the date
May intention naman na magbayad pero hindi lang
of the first contract.
nakapagbayad. Hence, no effect on the validity of a sale.
It only creates a right to demand payment or to rescind 4. Public officers and employees, with respect to the
the contract. property of the state or any of its subdivision thereof or
of any of the GOCC’S, held under the former’s
CAPACITY OF THE PARTIES
administration
Gen Rule: all parties who may oblige themselves may
5. Judges, Justices, prosecuting attorneys and other
enter into a contract of sale.
employees and officers of the court connected with the
KINDS OF INCAPACITY administration of justice, with regards to the properties
and rights in litigation or levied by execution by any
1. ABSOLUTE – those that cannot really enter in a court to which they exercise their functions
contract and cant bind themselves
*This includes those that may be acquired by
Ex: minors, deaf mutes who do not know how to write. assignment.
Insane or demented persons,
*The prohibition for lawyers is applicable during
2. RELATIVE – they cant bind themselves with respect to litigation.
certain persons or property
*contracts entered into by these persons are totally
Ex: Husband and wife void by reason of public policy that public office is a
EXCEPT: separation of property has been agreed upon public trust.
by the parties or when there has been a judicial OTHER PERSONS SPECIALLY DISQUALIFIED BY LAW
separation of property
1. aliens
*If not falling within the exceptions then VOID ang sale
however with regards sa consenting spouse, there s a 2. seller who is exercising the unpaid seller’s right of
continuing offer. resale cannot buy the goods either by public or private
sale.
PERSONS PROHIBITED FROM ACQUIRING BY
PURCHASE: FORMATION OF A CONTRACT OF SALE

1. Guardians, with respect to the property of the NEGOTIATION – parties express their interest in
person/s under their guardianship entering into a contract of sale

2. Agents, with respect to the property of the principal Policitacion – an unaccepted offer.
that they are holding under their administration, unless
OFFER – must be certain as to the object and as to the
there is consent by the principal
cause
3. executors and administrators, with respect to the
OFFER BECOMES INEFFECTIVE WHEN? – DIIC (long diic)
estate under administration
ACCEPTANCE – may be express or implied, must be
*the contracts they entered into are voidable. However,
unmistakable, unqualified and identical in all the
since valid pa rin sya, they can still enter into a new
material respects of the offer.
contract
Ex of express – definitive “yes” or affixing of the
*the defect can be cured by the subsequent execution
signature
of another contract of sale when the cause of nullity has
ceased to exist. The nullity is merely relative and not
Ex of implied – inferred from the act, conduct or words
of the parties that clearly manifest an intention to
accept the offer
QUALIFIED ACCEPTANCE – one that involves a new
proposal and constitutes a counter offer
*if si buyer, nung pinirmahan nya alam nya na iba ung
location ng property as against dun sa location sa
advertisement, pero still pinirmahan nya, then walang
evidence of causal fraud
OPTION CONTRACT

Other kinds of acceptance: Contract wherein the seller agrees with another person
that the latter shall have the right to buy the former’s
1. through letter or telegram – from the time it came to
property at a fixed price within a certain time.
his knowledge
*It is not a purchase, but it merely secures the privilege
2. through an agent – from the time acceptance is
to buy. Its not a sale of property but a sale of right to
communicated to the agent. (knowledge of the agent is
purchase. It imposes no binding obligation on the
also knowledge of the principal)
person holding the option aside from the consideration
3. acceptance in behalf of a corp must be made by an in the offer.
authorized officer
*It’s a preparatory contract.
4. acceptance within the prescribed period or within
A unilateral promise to buy or sell is only binding if
reasonable time.
founded upon a consideration. Even if the promise to
RULES WHEN OFFERER CAN WITHDRAW OFFER sell was accepted, the seller is not bound thereby
because of the absence of a consideration.
a. Generally anytime w/o communicating the
withdrawal to the offeree Ex: A offers to B for 1M ung house and gives B 1 week to
decide. If B accepts the offer, A will still not be bound
b. If the offerer allowed a certain period for the offeree because of the absence of a consideration.
to accept then the offer can be withdrawn at any time
before acceptance by communicating such to the *What if seller gives buyer option to buy for 2M. Buyer
offeree gives 500k as option money and wants to buy it for
1.5M. Sa case na to if seller sells it to another person, ok
c. if acceptance has been made, then can withdraw at lang un kase wala naman acceptance dun sa unang
any time before the acceptance is made to the offere by buyer. 1.5 nya gusto bilhin eh 2m binebenta.
communicating the withdrawal to the offeree.
REVIVAL OF AN EXPIRED OPTION
d. if offeree is allowed a certain period to accept and is
based upon a consideration, then can only withdraw (see page 166-167)
after the lapse of the period.
DIFFERENCE BETWEEN OPTION CONTRACT AND CTS
FRAUD
OPTION CONTRACT CONTRACT TO SELL
There is fraud when insidious words or machinations of sale of a right or privilege Sale of the thing
one of the contracting parties, the other one is induced to purchase
to enter into a contract which without them ,he would Obligation to sell arises Obligation to sell arises
not have agreed to. when optionee makes when the buyer pays the
the decision to buy purchase price
DOLO causante – fraud that vitiates consent and must Optionee has no May obligation to make
be proved by clear and convincing evidence and not obligation to make a payment
merely preponderance of evidence payment
option money is separate Money given by the
*After the perfection of the sale, and buyer issues a and distinct from the buyer forms part of the
worthless check, is not the type of fraud that vitiates purchase price purchase price
consent

OPTION MONEY EARNEST MONEY

 Separate and distinct Part of the purchase
from purchase price price
Proof that a sale is yet to Proof of perfection of
be perfected contract
Not required to buy Buyer is bound to pay the
balance
*When earnest money is given in a contract to sell,
walang perfected contract of sale kase conditioned pa
sa full payment ng purchase price.
*First Optima Case – iniinsist ni buyer na nagbayad sya
ng DP sa receptionist ng seller, pero hindi earnest
money yun, seller did not yet agree to sell !
RIGHT OF FIRST REFUSAL
Contractual grant whereby the owner of a determinate
thing agrees not to sell such thing w/o first offering it to
the holder of the right.
It need not be written, hence can be proven with oral
evidence
Effect: offer muna sa holder ng right of first refusal and
then can sell to to others under the same terms and
conditions offered to the grantee or under such terms
and conditions more favorable to the grantor.
*The consideration for a grant of first refusal is based
on the reciprocal obligations of the parties. (ex. Lease)
*If the right of first refusal is granted to two or more
persons then all of them must consent. Such right is
indivisible even if the thing is divisible.
*right of first refusal contained in the original lease
agreement is not revived in an implied new lease
contract. Only the terms in the original lease agreement
that are GERMANE to the lessee’s possession and
enjoyment of the property is revived.
*Contract entered into violation of the right of first
refusal is RESCISSIBLE. However, if the third person is a
buyer in good faith, then his or her right shall be
preferred. Remedy nun is action for damages.
LEASES WITH OPTION TO BUY
May right of first refusal ba dito ? – YES when there is
an option to purchase clause in the lease contract.
PEFECTION – there is meeting of the minds of the
paries upon the thing and upon the price.
How perfected? Generally by mere consent, EXCEPT
when subj to a suspensive condition.
EFFECT OF PERFECTION:
The parties can reciprocally demand performance of the
obligation from each other because at the time the
contract is perfected there is already a binding force on
the contract.
*sa isang case may perfected sale na kaso si buyer
nagpastop payment order, and then sabi, sa ibang tao
nalang ibenta, kay S. Between S and the seller, walang
perfected contract of sale, kase may subjective novation
na nangyare substitution of the debtor.
*the buyer in accepting the offer imposed several
conditions to its acceptance. The seller tried in good
faith to comply pero was not able to do so. Hence, there
was no birth of a perfected contract of sale (see page
139)
SALE BY AUCTION
Each “lot” is the subject of a separate contract of sale
Before perfection, a bidder may retract his bid
How about si auctioneer, when can he withdraw the
goods before perfection ?
During the bidding process, the auctioneer can
withdraw the goods as long as such auction is with
reserve. In such a case, the auctionner acts as the
offeror and has the power of acceptance and impliedly
the power to reject the bids. Included in the power to
reject is the withdrawal of the goods from the auction
anytime during the bidding process before perfection
In an auction w/o reserve, once the auctioneer calls for
a bid, he or she cant withdraw the goods, unless there
was no bid made within a reasonable time.
How perfected? By the mere fall of the hammer or in
any other manner, which includes the drop of the gavel,
shouting of the word sold while pointing to the highest
bidder or the announcement of the highest bidder w/o
the fall of the hammer. Kapag perfected na bawal nang
iwithdraw ung goods and bawal na magretract ng bod si
bidder
Can the seller have the right to bid? Yes, provided the
fgg are conditions are present:
a. right to bid must be expressly reserved by or on
behalf of the seller
b. right to bid must not be prohibited by law or
stipulation
c. notice must be given that the sale is subject to a right
to bid by or on behalf of the seller.
*any sale whereby the seller employs “by bidders” or
“puffers” w/o notice may be treated as fraudulent by
the buyer. Thus the buyer may annul the sale on ground
of vitiated consent due to fraud
“Caveat Emptor” means buyer beware is applicable in a
sale by auction.
SALE BY SAMPLE – parties treated the sample as the std
of quality and they contracted solely with reference to
the sample and seller warrants that the bulk of goods
delivered correspond to the sample or description
*If the goods delivered do not correspond with the
sample or description then the buyer may ask for
recission of the sale.
SALE BY DESCRIPTION – the seller sells things as being
of a particular kind, the buyer not knowing whether the
seller’s representations are true or false, but still relying
on them as true and is the basis for the transaction
*Sale in this kind may still happen regardless of whether
the buyer has seen the goods or not, as long as the
buyer buys them only on the basis of the description
made by the seller.
SIMILARITY OF SALE BY SAMPLE AND DESCRIPTION:
It creates an obligation on the part of the seller to
deliver the agreed goods in accordance with the terms.
There is an implied condition that the goods shall
correspond with the sample or description
CONDITIONS THAT MUST BE PRESENT IN A SALE BY
SAMPLE OR DESCRIPTION
a. the goods correspond with the sample or with the
description
b. the buyer must have a reasonable opportunity of
comparing the bulk with the sample or description
c. the goods shall be free from any defect which is not
apparent on reasonable examination of the sample and
which would render the goods unmerchantable
CONSUMMATION – parties may reciprocally demand
from each other the obligations and the parties fulfill it.
FORMATION OF CONTRACT
Gen Rule: no form is required
EXCEPTION: sale transactions under the statue of frauds
and sale that is required by la to be in a certain form to
be valid.
SALE OF REAL PROPERTY
Walang prescribed form for its validity. However, the
form of a contract that transmits or extinguishes real
rights over immovable property should be in a public
instrument. The necessity of a public instrument is only
for convenience. The buyer can compel the seller to
execute a DOAS
STATUTE OF FRAUDS
1. agreement that is not to be performed within a year
from the making thereof
2. sale of goods, chattels or things in action the price of
which is 500 or more
3. lease of real property for more than 1 year.
The ffg must be in writing and subscribed to by the
party charged or his agent. If not in writing then
unenforceable. The rqmt
Statute of Frauds applies only to executory contracts
SALE THAT IS REQUIRED BY LAW TO BE IN A SPECIFIC
FORM
a. Sale of an immovable property through an agent –
reqd ang special power of atty.
b. sale of large cattle
SALE IN A FORM OF ELECTRONIC DOCUMENT
The reqmt of the law that a contract must be in writing
is met even if the contract is in the form of an electronic
document.
Reqmt: e document maintains its integrity and reliability
Sa e signature valid when it is proved by showing that a
prescribed procedure, not alterable by the parties
existed.
(see more on pp 206-208)
EXPROPRIATION – governing law is R.A 8974 LOSS OF THE THING IN CONSEQUENCE OF THE HIDDEN
FAULTS
LOSS
The seller is liable and the extent of his liability will
a thing is lost when it perishes, goes out of commerce or
depend on whether he is aware of the hidden fault or
when its existence is unknown.
defect at the time of sale.
RES PERIT DOMINO – thing perishes with the owner
RIGHTS AND OBLIGATIONS OF THE VENDOR
LOSS BEFORE PERFECTION – seller bears the risk of loss
TRANSFER OWNERSHIP
kase sya pa yung owner.
The mode that transfers ownership is delivery and not
LOSS AT PERFECTION
contracts !
a. totally lost – contract has no effect kase wala ng
Delivery is the actual giving up of control and custody of
determinate thing
the property on the part of the vendor and the
b. partial lost – buyer may either withdraw from the assumption of the same by the vendee.
contract OR demand the remaining part and pay a
*The act of delivery must be coupled with the intention
proportionate price thereof.
of delivering the same.
LOSS AFTER PERFECTION BUT BEFORE DELIVERY
*Norkis case – the act of registering the motor was only
In accordance with the stipulation of the parties, kung done to comply with loan rqmts of DBP and no intention
sino magbear ng risk of loss. to deliver

If walang stipulation, then if lost w/o seller’s fault, then *Sampaguita – nung nainstall na ung jalousies, may
buyer bears the risk of loss. (case ng fortuitous event) control and in possession na si buyer kaya sya na may
ari regardless kung may payment or wala.
*exception dito ay (1) in case of fungible goods sold for
a fixed price according to weight, number or measure *EDCA – acquisition of good faith by buyer is
(2) in case of generic thing where seller bears the risk of equivalent to title, only applicable to movable things
loss
SALE OF PERSON NOT THE OWNER
LOSS, DETERIORATION AND IMPROVEMENT BEFORE
In this case, the buyer acquires no better title than the
DELIVERY
what the seller had EXCEPT:
Kapag LOSS – kung if w/o sellers fault, then buyer bears
1. the sale is made under authority or with consent of
risk of loss
the owner
Kapag DETERIORATION – if w/o fault of seller, then
2. when the owner is precluded by his conduct from
borne by the buyer. If fault of seller, buyer may choose
denying the sellers authority
recission or fulfillment with damages in either case
3. when the sale is made under any provisions of any
Kapag IMPROVEMENT and walang kinalaman si seller,
factor’s act, recording laws or any other provisions of
then inure to the benefit of the buyer. If improved at
law enabling the apparent owner to dispose of the
the expense of seller, the buyer shall only have a
goods as if he were the true owner thereof
usufructuary right.
4. when sale is made under a statutory power of sale or
LOSS AFTER DELIVERY
under the order of court of competent jurisdiction
Generally buyer as the owner bears the risk of loss
5. when purchase is made in a merchants store or in
EXCEPT
fairs or markets.
1. seller retains ownership
WHERE SELLER’S TITLE TO THE GOODS IS VOIDABLE
2. actual deliveyr is delayed because of the fault of
either the buyer or the seller.
Buyer acquires good title from the goods provided he 3. TRADICIO BREVI MANU – the buyer is already in
buys them in good faith or for value and w/o notice of possession of the thing sold at the time of the sale and
the seller’s defect of title. thereafter acquires ownership by virtue of the sale

METHODS OF DELIVERY Ex: Finance lease

ACTUAL – thing is placed in control and possession of 4. TRADICIO CONSTITUTUM POSSESSORIUM – seller
the buyer continuous his possession of the thing but not anymore
in the concept of an owner
CONSTRUCTIVE – delivery takes place in another
manner which is indicative of the intention to deliver DELIVERY TO COMMON CARRIER
the thing for the purpose of transferring ownership
General Rule - delivery to the carrier is transfer of
thereof
ownership to the buyer.
QUASI TRADITION – delivery of rights, credits or
EXCEPTIONS:
incorporeal property is made by (a) placing titles of
ownership in the hands of the buyer (b) allowing buyer 1. contrary intention appears
to make use of the rights.
2. seller reserves right of ownership until certain
TRADITION BY OPERATION OF LAW – ex is 1434 conditions are performed
SALE MADE THROUGH PUBLIC INSTRUMENT 3. based on bill of lading, the goods are deliverable to
the seller or his agent or to the order of the seller or his
General rule: the execution of a public instrument
agent
amounts to constructive delivery EXCEPT:
4. based on bill of lading, the good are deliverable to
1. the contrary is provided in the instrument
the buyer or his agent or to the order of the buyer or his
2. when mere presumptive delivery and not conclusive agent.
is created in cases where buyer fails to take material
ACCEPTED TRADE AND SHIPPING TERMS AND
possession of the subject sale
SYMBOLD THAT SIGNIFY DELIVERY
*rationale neto ay a person who does not have actual
1. F.O.B – seller shall deliver and load the goods at
possession of the thing sold cant transfer constructive
sellers point at sellers expense but duty to pay freight is
possession by execution of a public instrument. (ikaw na
on buyer
nagbebenta dapat in actual possession ka)
a. FOB SHIPPING POINT – buyer is the owner from
*since execution of public instrument as in this case ay
when the goods are delivered to the carrier at the
presumption of delivery lang, it is deemed negated
sellers point
when the buyer fails to take actual possession of the lad
sold. b. FOB DESTINATION – buyer is the owner when the
goods are delivered to him (example is shopee)
KINDS OF CONSTRUCTIVE DELIVERY
2. F.A.S – once the goods are placed alongside the
1. SYMBOLIC DELIVERY – parties make use of a token or
vessel then the goods are considered delivered and the
symbol to represent the thing sold, and the delivery of
buyer becomes the owner.
such is considered constructive.
3. C&F – seller pays for cost and freight from point of
2. TRADICIO LONGA MANU – delivery of movable made
origin up to point of destination
by mere consent or agreement of the parties if the thing
sold cant be transferred to the possession of the vendee 4. C.I.F – cost, insurance and freight are borne by the
at the time of the sale seller.
*Ex is yung case ni Board of Liquidators 5. FIOS – shipper takes care of the loading while
unloading ay si consignee ang bahala
6. FREIGHT COLLECT – consignee or receiver of the
goods will pay for the freight and other charges.

*the foregoing merely make rules of presumption which

yield to proof of contrary intention.

SALE OR RETURN – buyer becomes the owner of the

goods upon delivery and he or she has the right to
revest ownership back to the seller when he returns the
goods within the specified time or within the reasonable
time

SALE ON APPROVAL – seller is still the owner despite

delivery to the buyer except when:

1. buyer accepts

2. buyer does an act impliedly accepting (ex is kung

gnamit na nya)

3. buyer does not signify his approval but fails to return

within a reasonable time the goods.

SALE OR RETURN SALE ON APPROVAL

Ownership passes to Ownership passes upon
buyer upon delivery acceptance by the buyer
risk of loss is on the Risk of loss is on the
buyer seller
Buyer may return the Cant return the goods if
goods even if satisfied of he is satisfied with its
its quality quality

SALE BY LUMP SUM

There shall be no increase or decrease of the price

although there be a greater or lesser are or number
than that stated in the contract. HOWEVER, THE
DISCREPANCY MUST NOT BE SUBSTANTIAL.

The words “more or less” covers a reasonable excess or

deficiency.