Law On Sales Flashcards by Konrad Lorenz Uychoco

What is the purpose of a contract of sale?

A. Transfer of ownership by delivery
B. Transfer of ownership by payment of buyer
C. Transfer of ownership by reserving the right of purchase

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Ididit manufactures shoes for the general market. A, a basketball player, entered into a contract with Ididit to manufacture a specialized pair of basketball shoes that only fits to his size (US 10), and has specialized technology that is not featured in Ididit’s shoes sold in the general public. What contract is this?

A. Sale
B. Dacion en Pago
C. Contract to sell
D. Contract for a piece of work

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Ownership transfers upon delivery, even if no total payment has been made yet.

A. Absolute sale
B. Conditional sale
C. Contract to sell

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If consideration of the contract consists partly in money, and partly in another thing, the transaction shall be characterized as:

A. Contract to Sell
B. Barter
C. Contract of Sale
D. Depends on intention of the parties

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This element of a contract of sale is deemed part of the contract, even if not stipulated or even if parties are unaware.

Natural

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This element of a contract of sale is present only because the parties so stipulated

Accidental

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This element of a contract of sale is required for validity

Essential

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True or false: Minors and those without any capacity to act can enter into a valid contract of sale in certain instances.

True.

Contract of sale of “necessaries” (e.g. food, clothing which are necessary for them to survive)

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True or false: A husband and wife may sell property to each other if the marriage regime is absolute separation of property.

True

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In a contract of sale, who are the parties involved?

A. Buyer and Seller
B. Buyer, Seller, and an Agent
C. Engaging party, practitioner, and intended user
D. None of the choices

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Prestation or promise to be performed by the other party (for buyer, the delivery of object; the seller, the payment of the price).

Cause

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Gross inadequacy of price will always not affect a contract of sale. True or false?

False.

EXPN:

There is indication of defect in the consent; or
Parties intended another act or contract (but not sale)

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The fixing of the price can never be left to the discretion of one of the contracting parties. True or false?

True.

However, if price fixed by one of the parties is accepted by the other, the sale is perfected.

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The subject matter of a contract of sale, which may be things or rights.

Object

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J offered K to sell him 1,000 hectares of the planet Jupiter. What is the status of the sale?

A. Valid
B. Voidable
C. Void
D. Unenforceable

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When is a thing determinate?

A. Particularly designated
B. Physically segregated from all others of the same class
C. A & B
D. A or B

J made a contract of sale to L to sell the latter 3 kgs. of apples from the former’s fruit orchard. However, the fruits are not yet ripe for picking.

If the trees died because of an insect infestation and no fruits have been picked because of this, is the sale effective?

No.

E wanted to have money the easy way (without working). So, he went to a nearby PCSO Lotto outlet to purchase a ticket and hope that he might win millions of pesos. While he was heading to the outlet, he encountered Z, a good friend of his.
Hearing of E’s plans, Z, who previously won P50M in Lotto last year, sold his winning ticket to E for P500, which, according to E, “guaranteed” him easy access to P50M.

Is the sale valid?

No, the sale is void.

The sale of vain hope (for example, a lotto ticket already drawn) is already void, because once it is drawn, it can never win again, as lotteries place emphasis on chance.

When is sale perfected?

Mere consent as to object and price

When will transfer of ownership take place?

Upon delivery (either constructive or actual).

EXPN: if agreed upon by parties that ownership will not pass until full payment of the price.

When a sale is done by auction, when is it perfected?

Fall of the hammer or other customary manner.

Before the hammer falls, any bidder may retract his bid and the auctioneer may withdraw the goods from the sale

____________ money forms part of the purchase price and is proof of perfection of a contract of sale.

Earnest

___________ money is a separate consideration to give the offerree a definite period within which to decide whether or not to accept an offer, there is no perfected contract of sale yet and does not form part of the purchase price.

Option

Sayang, option ka lang niya and di ka niya pinili no? Hahaha

In sale of goods by description or sample, if the bulk of goods delivered do not correspond with the description OR the sample, contract may be:

Rescinded

In a sale of goods by description AND sample, if contract be by sample as well as description, it is not sufficient that bulk of goods correspond with the sample if they do not also correspond with the description. True or false?

True

Does a contract of sale require a specific form?

The following contracts of sales are subject to Statute of Frauds for its enforceability:

1. Those not to be performed within 1 year 2. Sale of personal property (price not less than or at least P500) 3. Sale of real property

When is the Recto Law applicable?

1. Contract of sale 2. Sale of personal property 3. Price payable in installments 4. Lease of personal property with option to buy when lessor has deprived lessee of possession or enjoyment of thing

Alternative remedies of seller in Recto Law

1. Exact fulfillment of obligation (if vendee fails to pay) 2. Cancel sale (vendee's failure to pay cover two or more installments) 3. Foreclose chattel mortgage, if one has been constituted (vendee's failure to cover two or more installments) The remedies are alternative (just PICK ONE!) Agreements to contrary are void

When the seller opts to cancel the installment sales under Recto Law, the seller is allowed:

1. Retention of reasonable amount of purchase price already paid; or 2. Retention of ALL of amount paid only if there is forfeiture clause

The Maceda Law applies to:

1. Contract of sale 2. Sale of residential realty 3. Sale is on installments

If installments paid are less than two years equivalent under the Maceda Law, the right of the buyer is:

1. Grace period - pay without interest within 60 days (applicable once every 5 years) 2. Buyer may sell/assign his interest 3. Pay entire balance

After 2 years' worth of installment, the buyer (under Maceda Law) has the following additional rights:

1. 60-day grace period + 1 month grace period for every year of installment payments after first 2 years installments 2. Seller rescinds, he shall give the Cash Surrender Value to buyer

Composition of cash surrender value under Maceda Law

Min. 50% of all payments (DP included) + 5% after 5 years + 5% for every additional year thereafter (maximum: 90% or 14 years worth of installment)

If the object is entirely lost, the effect of contract is

No effect

If the thing is lost in part only, the remedies of the buyer are:

1. Withdraw from contract; and 2. Demand remaining part, paying its price in proportion to total sum agreed upon

If the goods (w/o knowledge of seller) have perished in part or wholly or in a material part so deteriorated in quality as to be substantially changed in character, options of the buyer are:

1. Treat sale as avoided; or 2. Treat sale as valid in all of existing goods or in so much thereof as have not deteriorated, and pay agreed price for goods in which ownership will pas (if sale is divisible)

Risk of loss: the thing perishes with:

The owner