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Sales Vids > Nature and Form of Contract > Flashcards

Nature and Form of Contract Flashcards

1
Q

Layman’s contract of sale explained

A

Explain the parties

Transfer of ownership of a thing
Transfer of consideration

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2
Q

When is a contract of sale perfected?

A

Upon the meeting of the minds alone(1305)

  1. Object
  2. Sale
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3
Q

Consensual v. Real Contract

A

Real Contract - Rqeuires delivery

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4
Q

Bilateral

A

Obligation of both parties to each otehr

  • Deliver
  • Purchase price
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5
Q

Onerous

A

It comes with a price. You don’t get it for free.

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6
Q

Commutative

A

GR : Equal, the thing is considered equivalent to the price

E : Aleatory contracts, one of the obligations is to do a thing upon the happening of an uncertain event. (sweep stakes)

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7
Q

Commutative

A

GR : Equal, the thing is considered equivalent to the price

E : Aleatory contracts, one of the obligations is to do a thing upon the happening of an uncertain event. (sweep stakes)

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8
Q

Nominate

A

It is a specific contract regulated by specific provisions NCC 1307, NCC 1458.

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9
Q

Principal

A

It exists on its own. As opposed to an accessory contract.

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10
Q

What are the essential elements of a contract of sale?

A
  1. Consent - Meeting of Minds
  2. Object - Determinate or Determinable
  3. Cause or Consideration - Price Certain or monetary equivalent
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11
Q

NCC 1458

A

By the contract of sale one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.

A contract of sale may be absolute or conditional.

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12
Q

What are the natural and accidental elements?

A
  1. Natural - deemed to exist in absence of any contrary stipulations. (Warranty against eviction NCC 1548, hidden defects NCC 1561)
  2. Accidental - Stipulated
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13
Q

What is closing?

A

Date or Days that the parties execute the instruments of the transaction. Everything is signed, documents are exchanged.

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14
Q

What is Processing?

A

post closing

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15
Q

What is Pre-closing?

A

Before the closing dates

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16
Q

Why are warranties natural?

A

For public policies, for the protection of the public. To protect everyone from abuses

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17
Q

A sale is not a mode but a title?

A

Sale is only a legal basis to effectuate ownership. The most sale can do is to create an obligation to transfer ownership by delivering an object.

It is delivery that actually transfers ownership.

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18
Q

What are the modes of ownership?

A

SPOILDT

  1. Succession
  2. Possession
  3. Occupation
  4. Intellectual Creation
  5. Law
  6. Donation
  7. Tradition
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19
Q

What happens during negotiation?

A

They begin to negotiate the terms.

From the time the parties indicate interest until the time of perfection.

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20
Q

What happens during perfection?

A

Occurs upon the meeting of the minds (1305)

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21
Q

What happens during consummation

A

Parties perform their correlative obligations

Begins when the parties perform their respective undertakings.

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22
Q

Option Money

A

NCC 1479(2)

Prospective buyer (optionee) pays “option money” and if the seller (optioner) accepts the money, the seller promises not to sell to anyone else for a certain period of time.

The optionee can choose not to exercise the option and allow it to expire.

Option money is distinct from the price.

NCC 1479 - (Montilla vs. CA 161 SCRA 167)

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23
Q

Explain a simple closing? (TCTs)

A
  1. Price is exchanged for the owner’s duplicate of the TCT
  2. The TCT is the assertion that sale has been made.

Generally parties will not agree to give the manager’s check until they have the consideration.

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24
Q

What is a manager’s check?

A

The manager’s check certifies that the person giving the check has that money.

Vito will get a manager’s check from BPI and it’s automatically removed from Vito’s account.

The manager’s check certifies that Vito had that money. Once the buyer gets the check and presents it to the bank and the amount is transferred.

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25
Q

Is closing the same as perfection?

A

No. Closing is when the documents are signed, the sale may have been perfected before hand.

26
Q

Is Selling insurance or Selling a travel package a sale in the technical term?

A

Insurance - No. Insurance is its own nominate contract governed by insurance laws. Sale is a governed by NCC 1458.

Travel Agent - Yes it is a sale of a determinate thing.

27
Q

What is an absolute sale?

A

Not subject to any condition whatsoever.

The title passes upon actual or constructive delivery.

28
Q

Con. Contract of Sale with reserve title vs. Contract TO Sell

A

ConCon of
- Transfer happens when delivery and the condition occur.

Con to

  • Delivery does not transfer ownership by itself
  • Upon their agreement to enter in a contract of sale. (Absolute Deed of Sale)
29
Q

Ownership of Seller in Contract OF VS Contract TO after delivery?

A

Contract TO - seller is still owner

Contract OF - Buyer is now owner

30
Q

What kind of conditions are involved in a contract of sale with reserve title VS contract TO sell? (Passing board example condition)

A

Contract OF

  • Negative Resolutory Condition
  • Contract is dissolved

Contract TO

  • Suspensive condition for Contract OF
  • Nothing happens, they haven’t agreed to sell yet
31
Q

If the price is not paid

Contract OF vs. Contract TO

A

Contract OF

  • Seller may rescind
  • Specific performance

Contract TO
- Innocent party has no remedy

32
Q

Buyer in Bad Faith

A
  1. When he purchases real estate with knowledge of a defect or lack of title in his seller OR
  2. When he has knowledge of facts which should have alerted him to conduct further inquiry or investigation.
33
Q

What kind of sale is it if it contains (OF or TO)

“Upon happening of this condition the parties will execute a sale document”

A

TO. Contracts TO sell require an additional contract of sale to transfer title.

If it were a Contract OF, the title would have transferred at once.

34
Q

Do the provisions of sale govern a contract TO sell?

A

No. There’s no sale yet.

35
Q

Is there double sale in a contract TO sell?
Contract TO sell with A
Contract OF sale with B

A

No. The contract TO sell is not yet a sale. Only the contract OF sale will govern.

36
Q

A and B agree that upon the happening of a condition, they will enter into a contact OF sale. What type of contract currently exists?

A

Contract TO sell

37
Q

What is a foreclosure sale?

A

A sale that occurs because the party cannot pay the principal contract. (To satisfy the principal obligation)

The termination of all rights of the mortgagor in the property covered by the mortgage. It denotes the procedure adopted by the mortgagee to terminate the rights of the mortgagor on the property and includes the sale itself. In judicial foreclosures, the “foreclosure” is not complete until the Sheriff’s Certificate executed, acknowledges and recorded. In the absence of a Certificate of Sale, no title passes by the foreclosure proceedings to the vendee. (Development Bank of the Philippines v. Zaragoza, G.R. No. L-23493, August 23, 1978, citing Lindgreen v. Lindgreen, 75 NW 1034, 1036, 73 Minn. 90 and other cases)

38
Q

Uy v. Heirs of Uy-Renales (2019)

Case 1

A

Siblings and Uncle fighting over parcel of land. Allegedly the land was sold by the grandma to the granddaughter.

We were summoned by our grandmother to see her. When we met her, she gave this document to us and saying, “keep this because this is yours.”

W/N the sale was valid. (No)

No Consent. No meeting of the minds. No agree to buy.

39
Q

Is a notarized contract of sale conclusive on the existence of a sale?

A

No. If it is proven the elements are lacking.

Uy v. Uy-Renales

40
Q

Agustin v. De Vera (2019)

Case 2

A

De Vera sold a piece of land to Agustin. De Vera sold it to his sister. Sister claims that the first sale was a contract TO sell.

W/N the first contract was a contract TO sell. (NO)

Contract TO sell must contain express stipulation

  1. Vendor reserves title
  2. Vendor right to unilaterally rescind upon non-payment within period.
41
Q

San Miguel v. Sps. Huang (2000)

Case 3

A

Sps. Huang sought to buy land from San Miguel. Huang gave 1 Million pesos of “earnest money” as a deposit while negotiating. Negotiations failed and San Miguel returned the money.

W/N there was a perfected contract of sale. (NO)

Ironically NCC 1482 only creates a disputable presumption. It is still the concurrence of all the essential elements that perfects a sale.

NCC 1482 “earnest money given in a sale transaction is considered part of the purchase price and proof of the perfection of the sale.”

42
Q

What are the two types of incapacity under the law? Explain (NCC 1489)

A

Absolute - Cannot bind themselves

Relative - Restricted relative to (1) persons (2) property

43
Q

Who are absolutely incapacitated?

A

NCC 1327

  1. Unemancipated Minors
  2. Insane or Demented Persons
  3. Deaf mutes who do not know how to write
44
Q

Who are at a greater disadvantage those with relative or absolute incapacity?

A

Relative incapacitated, the law makes the sale void.

45
Q

What is the status of a sale to a minor?

A

Voidable

46
Q

What is the status of sale to someone with an absolute incapacity? (Insane or deaf mutes who cannot read or write)

A

Voidable

47
Q

What are necessaries?

A

Those which are needed for sustenance, dwelling, clothing, medical attendance, education and transportation according to the financial capacity of the family of the incapacitated person.

Necessaries are what FC 194 refers to. (Support) NCC 1489

48
Q

What is the rule on necessaries sold and delivered to persons without capacity to act?

A

They must pay a reasonable price therefore. The excess is returned.

49
Q

Who can ratify a sale with 1 unemancipated minor?

A

Guardian or Parent

50
Q

Who can ratify a sale between 2 people without capacity to act?

A

GR : Unenforceable (NCC 1403(3))
E :
(1) If the guardian of one party ratifies - > voidable
(2) If both guardians ratify -> valid

51
Q

What is the status of a sale between spouses?

A

Void. (NCC 1490)

52
Q

What is the status of sale of land by minors who misrepresent their age at the time of the sale?

A

If the minors have passed the age of adolescence and are not adult age.

NCC 1431 and ROC 131, Sec. 1

The courts, in their interpretation of the law, have laid down the rule that the sale of real estate, made by minors who pretend to be of legal age, when in fact they are not, is valid, and they will not be permitted to excuse themselves from the fulfillment of the obligations contracted by them

53
Q

What is the capacity of the old and ill to contract?

A

Generally valid. Weakness of mind alone, not caused by insanity, is not ground for avoiding a contract. (Cui v. Cui)

54
Q

Cui v. Cui

Case 4

A

Petitioners alleged that the 83 year old Don Mariano Cui was influenced by the respondents through, deceit.

W/N the contract of sale can be avoided. (No)

Generally valid. Weakness of mind alone, not caused by insanity, is not ground for avoiding a contract. (Cui v. Cui)

55
Q

Under what circumstances will the courts void a contract by an old or ill person?

A

When the transaction happened just a month before he/she died and was not in the right mental state at the time of the transaction.

For example, witnesses were saying the seller was wetting the bed, could not sign, could not speak directly and could not recall his properties.

56
Q

Labagala v. Santiago

Case 5

A

Labagala claims to be the daughter of Joseph. The 15 year old Labagala claims that Joseph sold the entire property to her. The sister now assail the sale.

W/N the sale was valid. (NO)

There could not be a valid sale because Labagala was only 15 at the time.

57
Q

Why can parents ratify a voidable sale of their children? Legal basis

A

Under the FC parents have parental authority over the person of their children and their property.

58
Q

Can parents sell the property of their children?

A

Court approval is required.

It is almost better for the children to sell it themselves and then for the parents to ratify.

NCC 1490

59
Q

In which case can the husband and wife sell to each other?

A
  1. Separation of Property in Marriage settlement or
  2. Separation of Property by judicial separation

NCC 1490

60
Q

May the husband and wife sell to each other if they own exclusive property but their property regime is not exclusive property?

A

No. There needs to be separation of property.

61
Q

What is the idea behind the relative incapacity of husband and wife?

A

The law is trying to protect the husband and wife from each other. From forcing each other to sell.

Sales Vids (6 decks)

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