SALES

1. What is a contract of sale?

 A contract of sale is an agreement between a seller and a buyer whereby the seller
agrees to give or deliver something to the buyer for a certain price which the buyer
agrees to pay.
53. When may the seller totally rescind the contract of sale?

 The buyer has repudiated the contract of sale

77. When is Recto Law inapplicable?

 The Recto Law is inapplicable in the following instances:

1. Sale of Personal property payable in straight terms - When there is an initial
payment and the balance is payable in the future.
2. Sale or Morgage of real estate;
3. Action for Replevin:
4. Contracts To sell of movables

CRT
8. Is a mortgage with a dragnet clause allowed?

 A mortgage with a “dragnet clause” is an “offer” by the mortgagor to the bank to

provide the security of the mortgage for advances of and when they were made. It can
be said that the “offer” was not accepted by the bank when a subsequent advance was
made because of a new security.

13. What is a judicial foreclosure?

• Judicial foreclosure refers to foreclosure proceedings on a property in which the mortgage
lacks a power of sale clause. In this case, the foreclosure proceedings are settled through the
courts.
PARTNERSHIP
1. What is a partnership?

 By the contract of partnership two or more persons bind themselves to contribute

money, property, or industry to a common fund, with the intention of dividing the
profits among themselves.
9. May a partnership be formed for the exercise of a profession?

 Yes, Two or more persons may also form a partnership for the exercise of a profession.

25. Can future properties be contributed?

 The general rule is that future properties cannot be contributed. The very essence of the
contract of partnership that the properties contributed be included in the partnership
requires the contribution of things determinate. The position of a partner is like that of a
donor, and donations cannot comprehend future property. Thus, property subsequently
acquired by inheritance, legacy, or donation cannot be included by stipulation except
the fruits thereof. Hence, any stipulation including property so acquired is void. Profits
from other sources (not from properties contributed) will become common property
only if there’s a stipulation.

31. What is a general partnership?

 General Partnership consists of general partners who are liable pro rata and subsidiarily
and sometimes solidarily, with their separate property for partnership debts.

35. What is a partnership by estoppel?

 Partner by estoppel or one who is not really a partner, not being a party to a partnership
agreement, but is liable as a partner for the protection of innocent third persons. He is
one who is represented as being, in fact, a partner, but who is not so as between the
partners themselves. He is liable for the debts of the firm to those who in good faith
believed him to be a partner;

39. Who shall manage the partnership?

  Either one, some or all of the partners designated as managing partner/s either in the
articles of partnership or after the contract of partnership had already been constituted.
 If there is no agreement, management is vested in all of the partners.

42. What is the extent of power of the managing partner appointed in the articles of
partnership?

1. If he acts in good faith - he may do all acts of administration despite the opposition of
his partners.

2. If he acts in bad faith, he cannot do any act of administration. It must be noted that
the presumption in law is in favor of good faith.
51. When is appraisal necessary?

 When the capital or a part thereof which a partner is bound to contribute consists of
goods, their appraisal must be made in the manner prescribed in the contract of
partnership, and in the absence of stipulation, it shall be made by experts chosen by the
partners, and according to current prices, the subsequent changes thereof being for the
account of the partnership
RCC
1. What is a corporation?

 A corporation is an artificial being created by operation of law, having the right of succession
and the powers, attributes, and properties expressly authorized by law or incidental to its
existence.

6. What are the essential requisites of a non-stock corporation?

 Essential Requisites for a non-stock corporation:

 Non-stock corporations may be formed for charitable, religious, educational, professional,
cultural, fraternal, literary, scientific, social, civic service, or similar purposes, such as trade,
industry, agricultural and similar chambers, or any combination thereof.
 Cover Sheet.
 Reservation Payment Confirmation.
 Articles of Incorporation (AI)
 By-laws (BL)
 Joint Undertaking to Change Name.
12. What is the consequence of a de facto status?
 Its right to exercise corporate powers shall not be inquired into collaterally in any private suit to
which such corporation may be a party. Such inquiry may be made by the Solicitor General in a
quo warranto proceeding.

13. When is there a corporation by estoppel?

 Corporation by estoppel happens when people misrepresented or misinterpreted themselves as

a corporation to third persons.

26. What are in indicators that a subsidiary is a mere alter ego of Parent Corporation?

 A subsidiary is a mere alter ego of Parent Corporation if it controls and directs its activities so
that it will have limited liability for its wrongful acts.

27. How is the veil of corporate existence pierced?

 The veil of corporate existence is pierced by making the persons composing it one with the
corporation so that those who are shall be liable will really be held liable.

49. When does a corporation commence its corporate existence?

 According to the SEC, the date of incorporation is the day when the existence of a
corporation commences pursuant to Section 19 of the Corporation Code and Section 31,
Chapter VIII, Book I of the Administrative Code of 1987.
51. When may stockholders be deprived of the right to nominate any director?

 Election of Directors and Trustees. – Except when exclusive right for holders of founders'
shares under Section 7 of this Code, each stockholder or member shall have the right to
nominate any director or trustee who possess all of the qualifications and none of the
disqualifications set for the in this Code
54. What is the binding effect of by-laws?

 Binding effect: ONLY from date of issuance of SEC of a certification that the by-laws
are not inconsistent with the Code [Sec. 45] Pending such approval, they cannot bind
stockholders or corporation.
55. When are third persons bound by the by-laws?

 That natural persons who are licensed to practice a profession, and partnerships or
associations organized for the purpose of practicing a profession, shall not be allowed to
organize as a corporation unless otherwise provided under special laws. Incorporators
who are natural persons must be of legal age.