Nature And Form Of Contracts Flashcards
What is a CONTRACT OF SALE? (Art. 1458)
By the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and to deliver the determinate thing, and the other to pay therefor a price certain in or its equivalent.
A contract of sale may be absolute or conditional.
What are the CHARACTERISTICS of a contract of sale?
1) Consensual
2) Bilateral
3) Onerous
4) Commutative
5) Nominate
6) Principal
How can be a price be certain? (Art. 1469)
In order that the price may be considered CERTAIN, it shall be sufficient that it be so:
1) with reference to another thing certain; or
2) that the determination thereof be left to the judgment of a specified persons.
Should such person or persons be unable or unwilling to fix it, the contract shall be inefficacious, unless…
3) the parties subsequently agree upon the price.
What if the third person specified to determine the price certain acted in bad faith? (Art. 1469)
If the third person or persons acted in bad faith or by mistake, THE COURT MAY FIX THE PRICE.
What if the third person specified to determine the price certain is prevented by the fault of the buyer/seller? (Art. 1469)
Where such third person or persons a prevented from fixing the price or terms by fault of the seller or the buyer, the party not in fault may have such remedies against the party in fault as are allowed the seller or the buyer as the case may be.
What is a DETERMINATE THING? (Art. 1460)
A thing is a determinate when:
1) It is particularly designated; or
2) Physically segregated from all others of the same class.
The requisite that a thing be determinate is satisfied if at the time the contract is entered into, the thing is capable of being determinate without the necessity of a new or further agreement between the parties.
To be valid, what are the required characteristics of an object of a contract of sale? (Art. 1459)
The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered.
*determinate and within the commerce of men.
What is a CONTRACT TO SELL?
It is a bilateral contract of conditional sale whereby the prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective buyer upon fulfillment of the condition agreed upon (usually the payment of the full price)
When is a deed of conditional sale is a deed of absolute sale? (Dignos v. CA)
A deed of sale is absolute in nature although denominated as a Deed of Conditional Sale where nowhere in the contract in question is a proviso or stipulation to the effect that the title to the property sold is reserved in the vendor until the full payment of the purchase price, nor is there a stipulation giving the vendor the right to unilaterally rescind the contract the moment the vendee fails to pay within a fixed period.
What are the 2 kinds of illicit things?
1) Illicit per se;
2) Illicit per accidens (by provision of law)
Emptio rei speratae and Emptio Spei (Art. 1461)
Things having a potential existence may be the object of the contact of sale.
The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that the thing will come into existence.
The sale of a vain hope or expectancy is void.
Future Goods? (Art. 1462)
The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller or
Goods to be manufactured, raised, or acquired by the seller after the perfection of the contract of sale, in this Title called “Future Goods.” (see. 1467)
There may be a contract of sale of goods, whose acquisition by the seller depends upon a contingency which may or may not happen.
What is a Contract of Agency? (Art. 1868)
By the contract of agency a person binds himself to render some service or to d something in representation or on behalf of another with the consent or authority of the latter
Contract for a piece of work? (Art. 1467)
A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business manufactures or procures for the general market, whether the same is on hand at the time or not, is a contract of sale…
But if the goods are to be manufactures SPECIALLY for the customer and upon his special order, and not for the general market, it is a contract piece of work.
When the consideration of a contract consist partly in money and partly in another thing, when can you consider it a SALE? When can you consider it a BARTER? (Art. 1468)
If the consideration of the contract consists partly in money and partly in another thing , the transaction shall be characterized by the manifest intention of the parties.
If such intention does not clearly appear, it shall be considered a barter if the value of the thing given as a part of the consideration exceeds the amount of the money or its equivalent; otherwise it is a sale.
What is the effect of GROSS INADEQUACY OF PRICE? (Art. 1470)
Gross inadequacy of price does not affect of a contract of sale, EXCEPT as it may be indicate a defect in the consent, or that the parties really intended a donation or some other act or contract.
“Gross inadequacy shocking to the conscience of men”
Requisites of (Relative) simulation? (see. Art. 1345)
1) An outward declaration of will different from the will of the parties;
2) The false appearance must have been intended by mutual agreement; and
3) The PURPOSE is to deceive 3rd persons.
In a contract of sale, when is the ownership of the thing transferred? (Art. 1477-1478)
The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof.
However…
The parties may stipulate that the ownership in the thing shall not pass to the purchaser until he has fully paid the price.
Sampaguita v. Jalwindor
Ownership is not transferred by perfection of the contract but by delivery, either actual or constructive, This is true even if the purchase has been made on credit. Payment of the purchase is not essential to the transfer of ownership as long as the property sold has been delivered.
Wha are the rules applicable to auctions? (Art. 1476)
In the case of a sale by auction:
1. Where goods are put up for sale by auction in lots, each lot is the subject of a separate contract of sale.
2. A sale by auction is perfected when the auctioneer announces its perfection by the fall of the hammer, or in other customary manner. Until such announcement is made, any bidder may retract his bid; & the auctioneer may w/draw the goods from the sale unless the auction has
been announced w/o reserve.
3. A right to bid may be reserved expressly by or on behalf of the seller, unless o/w provided by law or by stipulation.
4. Where notice has not been given that a sale by auction is subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid himself or to employ or induce any person to bid at such sale on his behalf or for the auctioneer, to employ or induce any person to
bid at such sale on behalf of the seller or knowingly to take any bid from the seller or any person employed by him. Any sale contravening this rule may be treated as fraudulent by the buyer.
What is an OPTION? (Art. 1324)
A contractual privilege existing in one person for which he has paid a consideration which give him the right to buy or sell from to another person, if he chooses, at any time within the agreed period at a fixed price, or under, or in compliance with certain terms and conditions.
When the offeror has allowed the offeree a certain period to accept, the offer may be withdrawn at anytime before acceptance by communicating such withdrawal except when the opition is founded upon a consideration as something is paid or promised.
When is an option contract binding to the promissor? (Art. 1479)
A promise to buy and sell a determinate thing for a price certain is reciprocally demandable.
An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price.
Atkins v. Cua Hian Tek
If the option is given without consideration, it is a mere offer of a contract of sale, which is not binding until accepted. If, however, acceptance is made before a withdrawal, it constitutes a binding contract of sale, even though the option was not supported by a sufficient consideration.
What is EARNEST MONEY?
Something of value given by the buyer to the seller to show that the buyer is really earnest to bind to the bargain.