LAW ON SALES

Subject Matter of the Sale

1. It must be licit (legal) (Art. 1459, CC)
2. It must be a thing the seller of which has a right to transfer ownership at the time of the delivery.
(Art. 1459, CC)
3. It must be determinate, meaning it is particularly designated or physically segregated from all others
of the same class (Art. 1460, CC)
4. It may be things having a potential existence (Art. 1461, CC) or goods to be manufactured, raised or
acquired by the seller after the perfection of the contract. (Art. 1462, CC) In either case, the failure of the
condition or contingency to materialize will invalidate the contract.
5. It may be segregated (detached from other things) or an undivided share or interest. (Art 1463-64,
CC) Ex. Half of your land can be subjected to sale
6. It may be subject to a resolutory condition. (Art. 1465, CC) Ex. The object of a pacto de retro sale

Price
1. Certainty – price of the thing sold must be certain; otherwise the sale is void by reason of the absence
of meeting of minds between the parties.
Price is considered certain:
a. When it is agreed upon by the parties (Art. 1473, CC);
b. When it is in reference to another thing certain (Art. 1469, CC);
c. When the determination thereof is left to the judgement or specified person or persons

2. Failure to pay the consideration vs. lack of consideration

Failure to pay the consideration is different from lack of consideration. The former results in a
right to demand the fulfillment or cancellation of the obligation under an existing valid contract while
the latter prevents the existence of a valid contract.

3. Gross inadequacy of price vs. simulated price

Gross inadequacy of price means the price is insufficient to satisfy the real or actual price of the
object of the sale. It does not affect the validity of the sale.
Exceptions:
1. If Consent is vitiated (may be annulled or presumed to be equitable mortgage);
2. If the parties intended a Donation or some other act/contract
3. If the price is so low as to be “shocking to the conscience”;
4. If the event of resale, a better price can be obtained
The price is simulated when neither party had the intention that the amount will be paid. If the
price is simulated, the sale is void.
Exception:
1. If it can be shown to be a donation or another contract