Sales: Theory and Practice I. Introduction A. Governing law B. History of law on sales C. Source of law on sales II.

Concept of contract of sale A. Concept of sale (Art. 1458) B. C aracteristics of contract of sale C. !ssential ele"ents of contract of sale# an overview (Art. 1$18) i. Consent (Art. 1$1%) ii. &'(ect (Arts. 1$4)*1$4%) iii. Cause (Art. 1$5+) ,. -in.s of contract of sale i. A'solute ii. Con.itional III. Parties to the contract of sale A. /ersons w o "ay enter into a contract of sale (Art. 148%) B. 0ype of incapacity i. A'solute ii. 1elative C. 1ules applica'le to specific sellers i. 2inors (Art. 1$3)4 1$%+5 6a"ily Co.e4 art. 3%+) ii. Hus'an. an. wife (Arts. 14+%4 14%+4 14%3) iii. /ersons .is7ualifie. to 'uy specific properties (Art. 14+%4 14%14 14%3) iv. &t er persons ,. /ractice notes# parties to contract of sale i. Hus'an. or wife ii. Corporation IV. Formation and perfection of contract of sale A. Consent8offer an. acceptance i. 9n general (Arts. 1$1%*1$3:) a) &ffer * certain (Art. 1$1%) * fi;ing ter"s of offer (Art. 1$31) * w en offer 'eco"es ineffective (Art. 1$3$) * perio. for acceptance (Art. 1$34) * w en offer accepte. w en acceptance "a.e 'y letter or telegra" or offer "a.e t roug agent (Arts. 1$1%4 1$33) * 'usiness a.vertise"ents (Arts. 1$35*1$3:) ') Acceptance * a'solute vs. 7ualifie. acceptance (Art. 1$1%) * e;press or i"plie. (Art. 1$3+) ii. /ractice notes# offer an. acceptance * counterpart signing B. &'(ect or su'(ect "atter i. 0 ing "ust 'e .eter"inate (Arts. 1$18<3=4 1$4%4 14584 14:+) ii. 0 ing "ust 'e licit (Art. 145%) a) 9n general ') 9llicit t ings (Art. 14+%) iii. 0 ing "ust 'e wit in t e co""erce of "en (Art. 1$4)) iv. 0 ing "ust not 'e i"possi'le (Art. 1$48) v. 0 ing "ust 'e an e;isting goo. or a future goo. (Arts. 1$4)4 14:14 14:3) a) Sale of t ings aving a potential e;istence (Arts. 14:1) ') Sale of "ere ope of e;pectancy (Art. 14:1) c) Sale of vain ope or e;pectancy (Art. 14:1) vi. Sales of specific t ings a) Sale of t ings in litigation (Art. 1$81(4)) ') Sale of an un.ivi.e. interest in a t ing (Art. 14:$) c) Sale of un.ivi.e. s are of a specific "ass (Art. 14:4) .) Sale of t ings su'(ect to a resolutory con.ition (Art. 14:5) vii. /ractice notes# o'(ect or su'(ect "atter of t e contract a) Sale of s ares > sale of no"inee s ares4 sale at less t an fair "ar?et value4 sale of s ares in a corporation engage. in a partly*nationali@e. activity4 rig t of first refusal4 pre*e"ptive rig ts4 tag*along rig ts4 .rag*along rig ts4 ta; re7uire"ents4 registration re7uire"ents ') Sale of lan. * sale of lan. to aliens4 ta; re7uire"ents4 registration re7uire"ents4 sale of lan. ac7uire. 'y o"estea. or free patent c) Sale of assets > sale of all or su'stantially all of t e assets4 sale in 'ul? .) Sale of "otor ve icles > registration re7uire"ents C. Cause or consi.eration i. /rice certain (Art. 14:%4 14)34 14)$4 14)4) a) A en price certain (Art. 14:%4 14)34 14)$)
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') !ffect w en price not certain (Art. 14)4) ii. Bac? of cause or consi.eration (Art. 14+%($)) iii. 9na.e7uacy of t e price (Art. 14)+) a)A en price ina.e7uate ') !ffect of ina.e7uate price * on voluntary sales * on involuntary sales iv. Si"ulate. price (Art. 14)1) a) A en price si"ulate. ') !ffect of si"ulate. price vi. /ractice notes# cause or consi.eration * ow pay"ent effecte.# cas 4 c ec?4 wire transfer4 etc. ,. /erfection of contract (Art. 14)5) i. &ffer an. Acceptance (Arts. 1$1%*1$3:) * stages of a contract of sale * concept of perfection5 perfection in consensual contracts vs. real contracts * necessity for pay"ent or .elivery of t ing * necessity for written agree"ent * re7uire"ents for offer an. acceptance * ow perfection "ay 'e prove. * "anner of pay"ent as a re7uire"ent for perfection * effect of non*pay"ent on perfecte. contract ii. /ay"ent of earnest "oney as proof of perfection (Art. 1483) iii. /erfection of sale 'y auction (Art. 14):) iv. !;propriation (Art. 1488) 6. Consu""ation of contract V. Formalities of contract of sale A. 9n General (Arts. 1$5:4 148$) i. Cer'al ii. Aritten B. 6or" re7uire. for enforcea'ility# Statute of 6rau.s (Art. 14+$4 14+54 14+:) i. concept ii. purpose iii. scope iv. ratification of contract C. 6or" re7uire. for vali.ity (Art. 1$5:) i. Sale of a piece of lan. or any interest t erein is "a.e t roug an agent (Art. 18)4) ,. 6or" re7uire. for convenience of t e parties (Art. 1$58) !. 9te"s to note# !lectronic Co""erce Act 6. /ractice notes# for"alities of contract of sale * notari@ation * consulari@ation or aut entication VI. Covenants: obligations of the seller A. &'ligations un.er t e Civil Co.e i. 0a?e care of t ing pen.ing .elivery (Art. 11:$) ii. /ay for e;penses for t e e;ecution an. registration of t e sale4 unless t ere is stipulation to t e contrary (art. 148)) * practice notes# pay"ent of inco"e ta;4 sta"p ta;4 local transfer ta;4 legal fees4 1egister of ,ee.s e;penses iii. 0ransfer owners ip (Arts. 14584 14%5) a) &wner "ust ave rig t to transfer owners ip (Arts. 145%) ') A en rig t to transfer owners ip "ust e;ist (Art. 145%) c) How effecte. (Arts. 14))4 14)84 14%:) iv. ,eliver t e t ing wit accessions an. accessories (Art. 15$)) a) Concept of .elivery5 intention to .eliver ') Conse7uence of .elivery c) ,elivery an. non*pay"ent of t e price .) Aays of effecting .elivery (Arts. 14%)*15+1) * actual .elivery * constructive (e;ecution of pu'lic instru"ent4 traditio symbolica4 traditio longa manu4 traditio brevi manu4 traditio constitutum possesorium) e) A en seller not 'oun. to .eliver (Arts. 15344 15$:4 11%8) f) 9nci.ents of .elivery * /lace of .elivery (Art. 1531) * 0i"e of .elivery (Arts. 1531) * !;penses of .elivery (Art. 1531) * /roof of .elivery g) Special rules * Contract of sale or return (Art. 15+3) * Contract of sale or approval (Art. 15+3) * ,elivery to carrier (Arts. 15+$4 153$) B. /ractice notes# usual covenants of t e seller
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i. /re*closing covenants# (a) access5 (') con.uct of operations prior to closing5 (c) approvals5 (.) notification to 'uyer5 (e) ot ers ii. /ost*closing covenants# (a) confi.entiality5 (') covenant not to co"pete5 (c) anti*poac ing covenant5 (.) pay"ent of inco"e ta;5 (e) ot ers iii. Affir"ative covenants an. negative covenants VII. Covenants: obligations of the buyer A. &'ligations un.er t e Civil Co.e i. Accept .elivery (Art. 1583) a) "eaning of acceptance ') "o.e of "anifesting acceptance (Art. 1585) * e;press * i"plie. c) .elivery 'y install"ents (Art.158$) .) rig t to e;a"ine goo.s prior to .elivery (Art. 1584) * type of .elivery conte"plate. * purpose of inspection * rig t not a'solute * waiver of rig t * ow rig t e;ercise (ti"e4 place4 "anner4 e;penses) * 'uyerDs rig t to re(ect goo.s * Collect on .elivery e) effect of acceptance (Art. 158:) * acceptance not a 'ar to action for .a"ages * notice to seller for 'reac of pro"ise or warranty f) w en 'uyerDs refusal to accept (ustifie.8wrongful (Arts. 158)4 1588) ii. /ay t e price (Art. 1583) a) w ere an. w en (Art. 1583) ') 'uyerDs lia'ility to pay interest (Art. 158%) c) rig t of ven.ee to suspen. pay"ent of price (Art. 15%+) .) effect of failure to pay price B. /ractice notes# usual covenants of t e 'uyer i. /re*closing covenants# (a) approvals5 (') ot ers ii. /ost*closing covenants # (a) pay"ent of sta"p ta;5 (') o'taining B91 Certificate Aut ori@ing 1egistration5 (c) ot ers iii. Affir"ative covenants an. negative covenants VIII. Conditions A. 2eaning of con.ition (Art. 1545) B. 0ypes of con.itions i. Con.itions prece.ent vs. con.itions su'se7uent ii. Con.itions for perfection vs. con.itions for perfor"ance C. !ffect of non*fulfill"ent of con.ition ,. /ractice notes# con.itions in contract of sale i. Esual contractual con.itions a) Con.itions prece.ent# (i) accuracy of representations5 (ii) perfor"ance of all covenants8no 'reac 5 (iii) consents5 (iv) no litigation8suit5 (v) .elivery of .ocu"ents5 (vi) ot ers ') Con.itions su'se7uent ii. 0i"e fra"e for "eeting con.itions# .rop .ea. .ate8long stop .ate iii. 1esult if closing con.ition not satisfie.# (a) no closing5 (') closing .elaye.5 (c) con.ition waive. an. closing occurs5 (.) con.ition c ange. to post*closing covenant an. closing occurs5 (e) ot ers IX. epresentations and !arranties A. 2eaning of representations an. warranties B. 0ype of warranties i. !;press > "eaning4 effect ii. 9"plie. > "eaning4 effect4 nature4 w en not applica'le C. Categories of representations an. warranties i. 1elating to t e contract itself ii. 1elating to t e su'(ect "atter of t e contract iii. 1elating to t e parties ,. ,istinguis e. fro" ot er ter"s i. Con.itions ii. &pinion4 .ealerDs tal? !. 1epresentations an. warranties of t e seller i. !;press > Art. 154: a) "eaning ') ter"inology use. c) ti"e of warranty4 for"4 sellerDs goo. fait ii. 9"plie. a) i"plie. warranty of title (Art. 154)) * warranty in case of eviction (Art. 1548*15:+) * "eaning of eviction (Art. 1548) * essential ele"ents of warranty against eviction
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* eviction vs. trespass in fact * re7uire"ent of final (u.g"ent5 .uty to appeal (Arts. 155)4 15584 155%4 154%) * ven.or as party to t e suit for eviction (Art. 155%) * effect of prescription (Art. 155+) * rig ts an. lia'ilities in case eviction occurs5 rig ts in case of partial eviction (Arts. 15554 155:) * waiver of warranty in case of eviction5 ?in.s5 effect5 presu"ption (Arts. 15484 155$4 1554) * eviction for nonpay"ent of ta;es (Art. 1551) * (u.icial sales (Art. 1553) * encu"'rance wit non*apparent 'ur.en (Art. 15:+) ') i"plie. warranty against i..en encu"'rances an. .efects (Art. 154)(')4 15:14 15::4 15)3*1581) * re7uisites for warranty against i..en .efects (Arts. 15:14 15::) * re"e.ies# accion re. i'itoria4 accion 7uanti "inoris (Arts. 15:)4 15)+) * warranty in sales of ani"als (Arts. 15)3* 1581) * (u.icial sales (Art. 15)+) c) i"plie. warranty as to fitness or "erc anta'ility or "erc anta'le 7uality (Art. 15:34 15:$4 15:44 15:54 15)+) * i"plie. warranty of 7uality8fitness > particular purpose of goo.s4 test4 sale un.er tra.e na"e4 usage of tra.e4 sale 'y sa"ple4 re"e.ies (Art. 15:3*15:44 15:5) * i"plie. warranty of "erc anta'ility8"erc anta'le 7uality (Art. 15:3) * re"e.ies# accion re. i'itoria4 accion 7uanti "inoris (Arts. 15:)4 15)+) 6. 1epresentations of t e 'uyer G. /ractice notes# representations of t e seller an. t e 'uyer i. 0ypical contractual representations of t e seller# (a) corporate e;istence4 power an. aut ority4 (') consents4 no violation5 (c) financial state"ents4 no un.isclose. lia'ility5 (.) "aterial a.verse c ange5 (e) title5 (f) litigation5 (g) ot ers ii. 0ypical contractual representations of t e 'uyer iii. A en representations "a.e (e.g.4 ti"e of e;ecution4 ti"e of closing4 etc.) iv. Bring*.own representations > concept4 w y re7uire. v. Survival of representations X. ules on ris" of loss and deterioration A. 0 eories of ris?s of loss i. 0 eory of tra.ition vs. t eory of perfection ii. 0 eory followe. 'y t e Spanis Civil Co.e an. t e / ilippine Civil Co.e B. /rinciple of res perit domino C. 1ules on ris? of loss an. .eterioration i. /rior to perfection of contract ii. At ti"e of perfection (Arts. 14+%($)4 14%$4 14%4) iii. After perfection of contract 'ut 'efore .elivery * 6ortuitous event (Art. 148+4 11:$*11:54 13:3*13:$4 13:%4 15+44 15$)*15$84 118%<14$=) * SellerDs fault (Arts. 148+4 11:54 13:3*13:$4 15+4<3=4 15$84 118%) iv. After .elivery (Arts. 15+44 15:84 15:%) ,. /ractice notes# ris? of loss an. .eterioration * .rafting notes to a..ress issues of loss an. .eterioration XI. #ctions and remedies for breach of agreement A. 9n general (Art. 15%4) i. Actions availa'le to seller a) pay"ent of price (Art. 15%5) ') .a"ages (Arts. 15%:) c) rescission of contract (Art. 15%)) ii. Actions availa'le to t e 'uyer a) specific perfor"ance (Art. 15%8) ') .a"ages (Art. 15%%) B. 1e"e.ies availa'le i. 1e"e.ies availa'le to t e seller a) lien on t e goo.s (Arts. 1535*153%4 15$5) ') rig t of stoppage of goo.s in transitu (Art. 15$+*15$34 15$5) c) rig t of resale (Art. 15$$) .) rig t of rescission (Art. 15$4) e) rescission in case of loss of i""ova'le property (Art. 15%1) (f) rescission in case of sale of "ova'le property (Art. 15%$) ii. 1e"e.ies availa'le to 'uyer a) re"e.ies in sale of goo.s 'y .escription an.8or sa"ple (Art. 1481) ') re"e.ies in case of loss of specific goo.s (Art. 14%4) c) re"e.ies in case of .elivery of goo.s less t an t e 7uantity contracte. (Art. 1533) .) re"e.ies in case of a sale of real property 'y unit of "easure (Arts. 15$%4 154+4 15414 154$) e) re"e.ies in case of sale of real property "a.e of a lu"p su" (Arts. 15434 154$) f) suspension of pay"ents (Art. 15%+) g) re"e.ies in sale of i""ova'le property (Art. 15%3) C. Special Baws i. 0 e 1ecto Baw (Arts. 1484*148:) re sale of personal property paya'le in install"ents a) 0ransactions covere. an. not covere. ') /urpose of t e law c) 1e"e.ies availa'le to t e ven.or
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. !lection of re"e.ies ii. 0 e 2ace.a Baw (1.A. Fo. :553) a) 0ransactions covere. an. not covere. (Sec. $) ') /urpose of t e law (Sec. 3) c) 1ig ts grante. to t e 'uyer * at least two years of install"ents (Sec. $) * less t an two years of install"ents (Sec. 4) * ot er rig ts of t e 'uyer (Secs. 54 :) .) Cancellation of sale 'y t e seller * re7uire"ents * perio. e) Calculation of install"ent pay"ents f) Stipulation to t e contrary (Sec. )) ,. /ractice notes# actions an. re"e.ies i. 0ypical contractual stipulations in case of 'reac ii. Breac of covenant iii. Breac of warranty XII. $%tinguishment of sale A. 9n general B. Causes of e;tinguis "ent (Art. 1:++) C. Conventional re.e"ption i. Concept of conventional re.e"ption (Art. 1:+1) ii. Su'(ect "atter of conventional re.e"ption iii. ,istinguis e. fro" option to 'uy iv. /erio. to re.ee" (Art. 1:+:) a) e;press agree"ent ') no e;press agree"ent c) court (u.g"ent# true sale wit rig t to repurc ase iv. !;ercise of rig t to re.ee" a) ow rig t e;ercise. (Art. 1:1:) * "anner of e;ercise * a"ounts t at s oul. 'e pai. * re7uire"ent of ten.er of pay"ent an. consignation ') w o e;ercises rig t * ven.or4 is assigns an. eirs * ven.orDs cre.itor (Art. 1:1+) * co*owners an. co* eirs (Arts. 1:134 1:1$4 1:14) c) fro" w o" to re.ee" (Arts. 1:+84 1:154 * ven.ee * ven.eeDs assigns (Art. 1:+8) * ven.eeDs eirs (Art. 1:15) v. !ffect of re.e"ption an. non*re.e"ption (Art. 1:1)4 1:184 1:+)4 1:+%4 1:11) * consoli.ation of owners ip (Art. 1:+)) * su'rogation of ven.ee (Art. 1:+%) * re.e"ption of entire property (Art. 1:11) * .istri'ution of fruits (Art. 1:1)) * return free fro" liens an. encu"'rances (Art. 1:18) ,. Begal re.e"ption i. Concept ii. A en applica'le a) Co*owners (Art. 1:3+) ') A.(oining lan.*owners of rural lan. (Art. 1:31) c) A.(oining lan.*owners of ur'an lan. (Art. 1:33) iii. /erio. to re.ee" (Art. 1:3$) iv. !;ercise of rig t to re.ee" (Art. 1:3$) v. 1e.e"ption8pre*e"ption un.er special laws a) lan. ac7uire. un.er free patent or o"estea. (C.A. Fo. 1414 sec. 11%) ') e;tra*(u.icial foreclosure of "ortgage (Act Fo. $1$54 sec. :) c) agricultural lan. (1.A. Fo. $8444 sec. 13) !. /ractice notes# ter"ination of contract of sale i. Groun.s for ter"ination ii. 2anner of ter"ination XIII. Special problems in sales A. Sale 'y non*owner (Arts. 55%4 15+54 14$4) i. w en owners ip re7uire. a) perfection ') consu""ation ii. rule on ac7uisition of owners ip 'y t e 'uyer in case of sale 'y non*owner5 principle 'e in. t e rule (ne"o .at 7uo. non a'et) iii. e;ceptions to t e rule a) estoppel ') recor.ing laws
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c) (u.icial power an. statutory sale .) "erc ant store iv. su'se7uent ac7uisition of title (Art. 14$4)5 iv. rule wit respect to i""ova'le property v. status of contract B. Sale 'y owner wit voi.a'le title non*owner (Arts. 55%4 15+:) i. rule on ac7uisition 'y owners ip 'y t e 'uyer5 principle 'e in. t e rule ii. Art. 55% in relation to Arts. 15+5 an. 15+: C. ,ou'le sales (Art. 1544) i. re7uisites for applica'ility of Article 1544 ii. rules un.er Article 1544 a) "ova'les * GpossessionG5 ow ac7uire. (see Art. 55%) ') i""ova'les * "eaning of HregistrationG * re7uire"ent of Ggoo. fait G * "eaning of HpossessionG * "eaning of Hol.est titleG iii. applica'ility of Art. 1544 to unregistere. lan.s iv. Article 1544 an. e;ecution sales XIV. Sale contract distinguished from other contracts A Dacion en pago (Art. 1345)5 i. concept ii. .istinguis e. fro" a contract of sale B. Contract to sell8contract of con.itional sale i. concept ii. .istinguis e. fro" a contract of sale C. Agency to 'uy an. sell (Art. 14::) i. concept ii. .istinguis e. fro" a contract of sale ,. Contract for a piece of wor? (Art. 14:)) i. concept ii. .istinguis e. fro" a contract of sale !. Barter an. e;c ange (Arts. 1:$8*1:414 14:8) i. concept (Art. 1:$8) ii. w en perfecte. an. consu""ate. iii. effect if giver not t e lawful owner of t ing .elivere. (Art. 1:$%) iv. effect of eviction (Art. 1:4+) v. test for .eter"ining w et er transaction is sale or 'arter (Art. 14:8) 6. !7uita'le "ortgage (Arts. 1:+3*1:+5) i. concept ii. pacto .e retro vs. "ortgage .istinguis e. iii. re7uisites for presu"ption t at t e transaction is an e7uita'le "ortgage (Arts. 1:+34 1:+4) iv. 'a.ges of e7uita'le "ortgage (Art. 1:+$) v. effect if contract is an e7uita'le "ortgage vi. re"e.y of refor"ation (Art. 1:+5) H. ,onation (Arts. )354 14)1) i. concept ii. .istinguis e. fro" a contract of sale 9. Bease (Art. 1:4$) i. concept ii. .istinguis e. fro" a contract of sale I. Assign"ent of cre.its an. incorporeal rig ts (Arts. 1:34*1:$)) i. concept ii. perfection (Art. 1:34) iii. 'in.ing effect (Art. 1:3:) iii. nee. for .e'torDs consent5 effect of pay"ent 'y .e'tor 'efore an. after notice (Art. 1:3:) iv. effect of assign"ent of cre.it on accessory rig ts (Art. 1:3))5 fruits an. e;penses (Arts. 1:$34 1:$$) v. warranties of t e assignor of t e cre.it a) in general (art. 1:38) ') w ere .e'torDs insolvency guarantee. (Art. 1:3%) c) sale of ere.itary rig t (Art. 1:$+) .) sale of w ole of certain rig ts4 rents or pro.ucts (Art. 1:$1) vi. legal re.e"ption in t e sale of cre.it in litigation (Arts. 1:$44 1:$5) XV. &ocuments of title '#rt. ()*+,()-*. A. Concept (Art. 15+)) B. 6unction of .ocu"ents of title C. !;a"ples of .ocu"ents of title ,. Classes of .ocu"ents of title !. Fegotia'le .ocu"ents of title i. w o negotiates (Art. 1513) ii. ow negotiate.
:

a) 'y .elivery (Art. 15+8) ') 'y in.orse"ent an. .elivery (Art. 15+%) iii. effect of negotia'le .ocu"ents of title "ar?e. Hnon*negotia'leG (Art. 151+) iv. effect of negotiation (Art. 151$) a) rig ts ac7uire. 'y t e 'uyer of t e negotia'le .ocu"ent of title w en properly negotiate. (Art. 151$) ') effect w ere negotiation i"paire. 'y 'reac of .uty4 etc. (Art. 1518) c) effect w ere .ocu"ent of title not properly negotiate. (Art. 15144 1st par.4 Art. 1515) v. warranties 'y seller of t e .ocu"ents of title (Art. 151:*151)) vi. rig ts of cre.itors against t e goo.s (Arts. 151%*153+) 6. Fon*negotia'le i. ow transferre. (Art. 1511) ii. effect of transfer (Art. 1514) XVI. Special /a!s A. /resi.ential ,ecree Fo. %5)4 secs. 3$*34 B. Bul? Sales Baw (Act Fo. $%53) C. 1etail 0ra.e Bi'erali@ation Act (1epu'lic Act Fo. 8):3)4 sec. $ an. 5 XVII. Practice notes: overvie! of the typical sale transaction0contract A. A at appens in a typical sale transaction i. ,ue .iligence ii. Fegotiation an. .rafting of contract iii. !;ecution of contract iv. Co"pliance wit (or waivers of) con.itions prece.ent v. Closing vi. /erfor"ance of post*closing covenants B. &verview# ow a typical sale an. purc ase agree"ent loo?s li?e i. /arties ii. 1ecitals iii. &perative provisions on sale iv. Con.itions for closing v. Covenants vi. 1epresentations an. warranties vii. 0er"ination viii. 2iscellaneous provisions i;. Signature page ;. Fotari@ation

S#/$S #SSI123$2T #2& #22452C$3$2TS Class #ssignment for 6une (7 &n Iune 144 we will cover parts 94 99 an. 999 of t e course outline. /lease stu.y# (a) t e following articles of t e Civil Co.e# Arts. 14584 148%4 14%+4 14%14 14%35 [Reference guide: De Leon, pp. 1-18, pp. 155-1 !" (') t e following cases# 1. Coo? vs. 2c2ic?ing4 3) / il. 1+ (1%14)5 3. C ing vs. Goyan?o4 G.1. Fo. 1:58)%4 Fove"'er 1+4 3++:5 $. ,ista(o vs. Court of Appeals4 G.1. Fo. 113%544 August 354 3+++5 4. 6iestan vs. Court of Appeals4 G.1. 815534 2ay 384 1%8+5 5. 2acariola vs. Asuncion4 A.2. Fo. 1$$*I 2ay $14 1%835 :. Calencia vs. Ca'anting4 A.2. 1$+34 April 3:4 1%%15 ). 6a'illo vs. 9nter"e.iate Appelate Court4 G.1. Fo. B*:88$84 2arc 114 1%%15 8. 1u'ias vs. Batiller4 G.1. Fo. B*$5)+34 2ay 3%4 1%)$5 %. Halili vs Court of Appeals4 G.1. Fo. 11$5$%4 2arc 134 1%%8. /lease also rea. t e following provisions# Civil Co.e4 Arts. 1$184 1$1%4 1$3)4 1$4)*1$5+4 1$%+4 14+%())5 6a"ily Co.e4 art. 1%4. 0 ere is no nee. to rea. co""entaries on t ese provisions. Class #ssignment for 6une -( &n Iune 314 we will cover part 999 until part 9C.C of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing last wee?4 please stu.y# (a) t e following articles of t e Civil Co.e# Arts. 145%*14:54 14:%*14)45 [Reference guide: De Leon, pp. # -#$, %#-&5, pp. 5%-' " (') t e following cases# 1. C.a. .e Ca'alu vs. 0a'u4 G.1. Fo. 18841)4 Septe"'er 344 3+135 3. 2elli@a vs. City of 9loilo4 G.1. Fo. B*34)$34 April $+4 1%:85 $. Fational Grains Aut ority vs. 9nter"e.iate Appellate Court4 G.1. Fo. )44)+4 2arc 84 1%8%5 4. Buenaventura vs. Court of Appeals4 G.1. Fo. 13:$):4 Fove"'er 3+4 3++$5 5. Heirs of Ereta vs. Heirs of Ereta4 G.1. Fo. 1:5)484 Septe"'er 144 3+115 :. 9ntac vs. Court of Appeals4 G.1. Fo. 1)$3114 &cto'er 114 3+135 ). 2ate vs. Court of Appeals4G.1. Fo. 13+)34*354 2ay 314 1%%85 8. &ng vs. &ng4 G.1. Fo. B*:)888 &cto'er 84 1%85. /lease also rea. t e following provisions# Civil Co.e4 Arts. 1$18(3)4 1$1%*1$3:4 1$4)4 1$4%4 1$81(4)4 14+%($)4(4)4()). 0 ere is no nee. to rea. co""entaries on t ese provisions. Class #ssignment for 6une -8 &n Iune 384 we will cover part 9C.B until part 9C.6 of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing last wee?4 please stu.y# (a) t e following Civil Co.e provisions# Arts. 14)5*14):5 14834 14885 [Reference guide: De Leon, pp. ' -8&, 1#!-1#1, 15& " (') t e following cases# 1. 1o'ern ,evelop"ent Corporation vs. /eopleDs Ban.less Association 4 G.1. 1)$:334 2arc 114 3+1$ (Art. 14)5). 3. Bi"?et?ai Sons 2illing 9nc. vs. Court of Appeals4 G.1. Fo. 1185+%. 2arc 3%4 1%%:5 (Art. 14)5)5 3. Heirs of 9gnacio vs. Ho"e Ban?ers Savings an. 0rust Co"pany4 G.1. 1)))8$4 Ianuary 3$4 3+1$ (Art. 14)5). 4. Cillonco 1ealty Co"pany vs. Bor"a eco4 9nc.4 G.1. Fo. B*3:8)3 Iuly 354 1%)5 (Art. 14)5)5 5. ,i@on vs. ,i@on4 G.1. Fo. 15:5$%4 Septe"'er 54 3++) (Art. 14):)5 :. /rovince of Ce'u vs. Heirs of 2orales4 G.1. Fo. 1)+1154 6e'ruary 1%4 3++8 (Art. 14):)5 ). 2anila 2etal Container Corporation vs. / ilippine Fational Ban?4 G.1. Fo. 1::8:34 ,ece"'er 3+4 3++: (Art. 1483). /lease also rea. t e following Civil Co.e provisions# Arts. 1$1%*1$3:. 0 ere is no nee. to rea. co""entaries on t ese provisions. Class #ssignment for 6uly ) &n Iuly 54 we will finis part 9C.B an. will try to cover until part C9.A.iv.(c) of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing .uring t e last class4 please stu.y# (a) t e following Civil Co.e provisions# Arts. 148$4 148)4 145%4 14))*14)84 14%55 [Reference guide: De Leon, pp. 1##1%#, 15#-15&, #$-%#, 85-88, 1 &-1 '" (') t e following cases# 1. ,alion vs. Court of Appeals4 G.1. Fo. )8%+$4 6e'ruary 384 1%%+ (Art. 1$58)5 3. Bi"?et?ai Sons 2illing 9nc. vs. Court of Appeals4 G.1. Fo. 1185+%4 2arc 3%4 1%%:5 (Art. 148$)5 $. &rtega vs. Beonar.o4 G.1. Fo. B*11$114 2ay 384 1%58 (Art. 148$)5 4. &'aJa vs. Court of Appeals4 G.1.Fo. B*$:34%4 2arc 3%4 1%85 (Art. 14)))5 5. &ce(o4 /ere@ K Co. vs. 0 e 9nternational Ban?ing Corporation4 G.1. Fo. B*1+:584 6e'ruary 144 1%18 (Art. 14%:). /lease also rea. t e following Civil Co.e provisions# Arts. 11:$4 1$5:4 14+$4 14+54 14+:. 0 ere is no nee. to rea. co""entaries on t ese provisions. Class #ssignment for 6uly (&n Iuly 134 we will finis part C an. will try to cover until part C9.A.iv.(.) of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing .uring t e last class4 please stu.y# (a) t e following Civil Co.e provisions# Arts. 14%:4 15+5*15+:4 15$)4 14%)*15+1 <1eference gui.e# ,e Beon4 pp. 1))*1)%4 311*33+4 3::*3:84 18+*1%:=5 (') t e following cases# 1. Cavite ,evelop"ent Ban? vs. Bi"4 G.1. Fo. 1$1:)%4 6e'ruary 14 3+++ (Art. 15+5)5
8

3. !,CA /u'lis ing K ,istri'uting Corp. vs. Santos4 G.1. Fo. 8+3%8 April 3:4 1%%+ (Art. 15+:)5 $. C.a. .e Sar"iento vs. Besaca4 G.1. Fo. B*15$854 Iune $+4 1%:+ (Art. 14%8)5 4. Santiago vs. Cilla"or4 G.1. 1:84%%4 Fove"'er 3:4 3+13 (Art. 14%8)5 5. Cilla"ar vs. 2angaoil4 G.1. Fo. 188::14 April 114 3+13 (Art. 14%8)5 :. /ower Co""ercial an. 9n.ustrial Corporation vs. Court of Appeals4 G.1. Fo. 11%)454 Iune 3+4 1%%) (art. 14%8)5 ). /asagui vs. Cilla'lanca4 G.1. Fo. B*31%%8 Fove"'er 1+4 1%)5 (Art. 14%8). /lease also rea. t e following Civil Co.e provisions# Arts. 55%4 14$4. 0 ere is no nee. to rea. co""entaries on t ese provisions. Class #ssignment for 6uly (9 &n Iuly 1%4 we will finis part C9.A.iv.g of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing .uring t e last class4 please stu.y# (a) t e following Civil Co.e provisions# Arts. 15344 15$:4 15314 15+34 15+$4 153$ < Reference guide: De Leon, pp. #&5#& , #'&-#'', #%&-#%8, 1$'-#!', #&#-#&5=5 (') t e following cases# 1. Bagon vs. Hooven Co"alco 9n.ustries4 9nc.4G.1. Fo. 1$5:5). Ianuary 1)4 3++1 (Art. 1531)5 3. Callarta vs. Court of Appeals4 G.1. Fo. B*4+1%5 2ay 3%4 1%8) (Art. 15+3)5 $. 9n.ustrial 0e;tile 2anufacturing Co. of t e / ilippines vs. B/I !nterprises4 G.1. Fo. ::14+4 Ianuary 314 1%%$ (Art. 15+3)5 4. Be n4 2eyer K Co vs. Langco4 G.1. Fo. 1$3+$4 Septe"'er 184 1%18 (Art. 153$)5 5. General 6oo.s Corporation vs. Fational Coconut Corporation4 G.1. Fo. B*8)1)4 Fove"'er 3+4 1%5: (Art. 153$)5 :. ,avi. vs. 2isa"is &cci.ental 99 !lectric Cooperative4 9nc.4 G.1. Fo. 1%4)854 Iuly 114 3+13 (Art. 153$). /lease also rea. Article 11%8 of t e Civil Co.e. 0 ere is no nee. to rea. co""entaries on Article 11%8. Class #ssignment for 6uly -: &n Iuly 3:4 we will try to cover part C999 of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing .uring t e last class4 please stu.y# (a) t e following Civil Co.e provisions# Arts. 1583*15%+4 1545 <Reference guide: De Leon, pp. %5$-% #( %!$-%1#"( (') t e following cases# 1. 9ntegrate. /ac?aging Corporation vs. Court of Appeals4G.1. Fo. 11511)4 Iune 84 3+++ (Art. 158$)5 3. 6ule vs. Court of Appeals4 G.1. Fo. 1133134 2arc 34 1%%8 (Arts. 15844 15854 158%)5 $. ,evelop"ent Ban? of t e / ilippines vs. 2e.rano4 G.1. Fo. 1:)++44 6e'ruary )4 3+11 (Art. 1545)5 4. Bi" vs. Court of Appeals4 G.1. Fo. 118$4)4 &cto'er 344 1%%: (Art. 1545)5 an. 5. ,elta 2otors Corporation vs. Genuino4 G.1. Fo. B*55::54 6e'ruary 84 1%8% (Art. 1545). /lease also rea.# (a) Sections 54 :4 ) an. 8 of t e sa"ple Stoc? /urc ase Agree"ent (pp. $%*44) foun. in t e 2aterials page of t is site5 (') ,HBDs Basic &verview of 9ncoter"s 3+1+ foun. in t e 2aterials page of t is site. #nnouncement for #ugust As .iscusse.4 we will ave t e "i.*ter" e;a"ination on August 3. Coverage 0 e e;a" will cover /arts 1 to : of t e course outline. Muestions will 'e source. fro" Civil Co.e provisions4 t e assigne. cases4 t e co""entaries an. "atters .iscusse. in class. 0 e e;a" will not cover# (a) t e sa"ple stoc? purc ase agree"ent5 an. (') t e ,HB s ipping ter"s (e;cept t at you s oul. ?now t e concept of 6&B an. C96). 0 e e;a" will also not cover Arts. 15+5 an. 15+: of t e Civil Co.e (an. t e assigne. cases on t ese articles)5 we will .iscuss t ese articles in su'se7uent classes. Certain 7uestions (an. t e correct response to t ese 7uestions) assu"e ?nowle.ge of 'asic provisions of &'ligations an. Contracts. 9n t is regar.4 please ensure t at you ?now w ic contracts are rescissi'le4 voi.a'le4 unenforcea'le an. voi.. 0 e purpose of t e e;a" is to test# (a) your ?nowle.ge of legal concepts an. .octrines5 an. (') your a'ility to apply legal concepts an. .octrines to particular situations. As suc 4 9 will not as? factual "atters a'out t e assigne. cases (e.g.4 .ate of sale4 o'(ect of t e sale4 a"ount of purc ase price4 etc.). 9t is sufficient to ?now t e 'asic fact pattern a'out t e cases an. w at legal concepts an. .octrines were applie. to t e cases. The ;uestionnaire 1. 0 e 7uestionnaire consists of fifty (5+) "ultiple c oice 7uestions (2CMs) nu"'ere. 1 up to 5+ containe. in eig t (8) pages. !ac 7uestion is wort two points. 3. 0 e e;a" perio. is one our. (0 is is si"ilar to t e 3+13 'ar e;a"inations in Civil Baw w ere an e;a"inee is given two ours to answer 1++ 2CMs.) Fo e;tra ti"e will 'e given to t ose w o will arrive late. $. Lour answers s oul. 'e written in t e 'lue 'oo? (not in t e 7uestionnaire). &nly answers written in t e 'lue 'oo? will 'e consi.ere.. 4. Lou "ay write on t e 7uestionnaire an. use it as scratc paper. 5. /lease insert t e 7uestionnaire insi.e your 'lue 'oo? an. return wit your 'lue 'oo?. : ,o not e;plain any answer in t e 'lue 'oo?. 6or e;a"ple4 in response to 7uestion no. 14 you only nee. to write H1.G followe. 'y a letter (i.e.4 GaG4 H'G4 HcG4 or H.G)4 .epen.ing on w ic is t e correct answer. ). 9f an answer contains "ore t an one letter4 no point will 'e given for t at 7uestion. 9n t is regar.4 please "ini"i@e erasures4 an. if you nee. to "a?e an erasure4 please "a?e sure to in.icate clearly w at is t e final answer. 4ther matters 1. ,uring t e e;a"4 all 'oo?s4 notes4 electronic e7uip"ent4 'ags an. ot er ite"s of possession s oul. 'e place. in front or at t e 'ac? of t e classroo". 0 e only ite"s on your .es? s oul. 'e t e 7uestionnaire4 t e 'lue 'oo? an. your pen. 3. 9f you finis t e e;a" 'efore t e en. of t e e;a" perio.4 you "ay alrea.y turn over t e 'lue 'oo?87uestionnaire an. leave t e classroo". However4 if you finis early4 9 suggest t at you review your answers 'efore surren.ering t e 'lue 'oo?. 9f you ave 7uestions4 please let "e ?now. Stu.y wellN
%

Class #ssignment for #ugust (: &n August 1:4 we will try to cover until part 9O.!.i of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing .uring t e last class4 please stu.y# (a) Art. 154: of t e Civil Co.e <Reference guide: De Leon, pp. %1#-%1'"( (') t e following cases# 1. Harrison 2otors Corp vs. Favarro4 G.1. Fo. 1$33:%4 April 3)4 3+++ (Art. 154:)5 an. 3. /ower Co""ercial an. 9n.ustrial Corp. vs. Court of Appeals4 G.1. Fo. 11%)454 Iune 3+4 1%%) (Art. 154:). /lease also rea. Sections $ an. 4 of t e sa"ple Stoc? /urc ase Agree"ent foun. in t e 2aterials page of t is site. Here is t e list of cases for #ugust -<# 1. Songco vs. Sellner4 G.1. Fo. 1151$. ,ece"'er 44 1%1) (Art. 154))5 3. 9nvest"ent K ,evelop"ent4 9nc. vs. Court of Appeals4 G.1. Fo. B*51$))4 Iune 3)4 1%88 (Art. 154))5 $. 2oles vs. 9nter"e.iate Appellate Court4 G.1. Fo. )$%1$4 Ianuary $14 1%8% (Art. 154))5 4. !scaler vs. Court of Appeals4 G.1. Fo. B*43:$:4 August 14 1%85 (Art. 15484 15584 155%)5 5. Ey vs. Ari@a4 G.1. Fo. 158$)+4 August 1)4 3++:. (Art. 15484 15584 155%)5 :. Muirong vs. ,B/4 G.1. Fo. 1)$4414 ,ece"'er $4 3++% (Arts. 15484 155:)5 ). An.aya vs. 2anansala4 G.1. Fo. B*14)144 April $+4 1%:+ (Art. 1554)5 an. 8. I2 0uason Co. 9nc vs. Court of Appeals4 G.1. Fo. B*413$$4 Fove"'er 314 1%)%. (Art. 1555). Class #ssignment for #ugust -< &n August 3$4 we will try to cover until part 9O.!.ii.a of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing .uring t e last class4 please stu.y Arts. 154)*15:+ of t e Civil Co.e <Reference guide: De Leon, pp. %1'-%%'". As previously announce.4 please stu.y t e following cases# 1. Songco vs. Sellner4 G.1. Fo. 1151$. ,ece"'er 44 1%1) (Art. 154))5 3. 9nvest"ent K ,evelop"ent4 9nc. vs. Court of Appeals4 G.1. Fo. B*51$))4 Iune 3)4 1%88 (Art. 154))5 $. !scaler vs. Court of Appeals4 G.1. Fo. B*43:$:4 August 14 1%85 (Arts. 15484 15584 155%)5 4. Ey vs. Ari@a4 G.1. Fo. 158$)+4 August 1)4 3++:. (Arts. 15484 15584 155%)5 5. Muirong vs. ,B/4 G.1. Fo. 1)$4414 ,ece"'er $4 3++% (Arts. 15484 155:)5 :. An.aya vs. 2anansala4 G.1. Fo. B*14)144 April $+4 1%:+ (Art. 1554)5 an. ). I2 0uason Co. 9nc vs. Court of Appeals4 G.1. Fo. B*413$$4 Fove"'er 314 1%)%. (Art. 1555). /lease also rea.# (a) Article 14%5 of t e Civil Co.e5 an. (') Sections $ an. 4 of t e sa"ple Stoc? /urc ase Agree"ent foun. in t e 2aterials page of t is site. Class #ssignment for #ugust <* &n August $+4 we will try to cover part 9O.!.3.c of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing .uring t e last class4 please stu.y# (a) t e following Civil Co.e provisions# Arts. 15:1*1581 <Reference guide: De Leon, pp. %%'-%58"( (') t e following cases# 1. Futri"i; 6ee.s Corporation vs. Court of Appeals4 G.1. Fo. 15331%4 &cto'er 354 3++4 (Art. 15:1) 3. Supercars 2anage"ent K ,evelop"ent Corporation vs. 6lores4 G.1. Fo. 1481)$4 ,ece"'er 1+4 3++4 (Arts. 154)4 15:14 an. 15::) $. -nec t vs. Court of Appeals4 G.1. Fo. B*:51144 6e'ruary 3$4 1%88 (Art. 15:1) 4. Consoli.ate. /lywoo. 9n.ustries4 9nc. vs. 96C Beasing an. Acceptance Corporation4 G.1. Fo. )35%$4 April $+4 1%8) (Arts. 15:1. 15:34 15:44 15::4 15:)) 5. Sc "i. K &'erly4 9nc. vs. 1IB 2artine@ 6is ing Corp.4 G.1. Fo. Fo. )51%84 &cto'er 184 1%88 (Arts4 15:14 15:$) :. / ilippine Fational Ban? vs. 2ega /ri"e 1ealty an. Hol.ings Corporation4 G.1. Fo. 1)$4544 &cto'er :4 3++8 (Arts. 154)4 15:1) ). Ba 6uer@a4 9nc. vs. 0 e Honora'le Court of Appeals4 G.1. Fo. B*34+:%4 Iune 384 1%:8 (Arts. 15::4 15)1) 8. 2oles vs. 9nter"e.iate Appellate Court4 G.1. Fo. )$%1$4 Ianuary $14 1%8% (Art. 15:14 15)1) %. ,e Gu@"an vs. 0oyota Cu'ao4 9nc.4 G.1. Fo. 14148+4 Fove"'er 3%4 3++: (Arts. 15:14 15::4 15)1) 1+. Ang vs. Court of Appeals4 G.1. Fo. 1))8)44 Septe"'er 3%4 3++8 (Art. 15)1) 11. Coca Cola Bottlers / ilippines 9nc. vs. Court of Appeals4 G.1. Fo. 11+3%54 &cto'er 184 1%%$ (Art. 15:)) 13. Cillostas vs. Court of Appeals4 G.1. Fo. %:3)14 Iune 3:4 1%%3 (Art. 15)1) 0 an? you. Class #ssignment for September : &n Septe"'er :4 we will try to cover part O9.A of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing .uring t e last class4 please stu.y# (a) t e following Civil Co.e provisions# Arts. 148+4 14%$ to 14%44 15+44 15$84 15:8*15:%4 15%4*15%% <Reference guide: De Leon, pp. 111-118, 1 1-1 %, #!'-#11, #'8-# $, %&$-%51, %85-%$8) (') t e following cases# 1. 1o"an vs. Gri"alt4 G.1. Fo. B*34134 April 114 1%+:5 3. For?is ,istri'utors4 9nc. vs. Court of Appeals4 G.1. Fo. %1+3% 6e'ruary )4 1%%15 $. C rysler / ilippines Corporation vs. Court of Appeals4 G.1. Fo. B*55:84 ,ece"'er 1%4 1%845 4. BawyerDs Cooperative vs. 0a'ora4 G.1. Fo. B*313:$. April $+4 1%:5. /lease also rea. t ew following provisions of t e Civil Co.e# Art. 11:$*11:54 118%4 13:3*13:$4 13:%4 15$)4 an. 1:$: (re .efinition of Hgoo.sG). Class #ssignment for September (< &n Septe"'er 1$4 we will try to cover part O9.B of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing .uring t e last class4 please stu.y# (a) t e following Civil Co.e provisions# Arts. 1535*15$54 14814 14%44 15334 15$%*154$4 15%+*15%$ <Reference guide: De Leon, pp. #& -#'&, 118-1#!, 1 #-1 %, #%8-#&1, #'$-#8!, % #-%8&"(
1+

(') t e following cases# 1. Cisayan Saw"ill Co"pany4 9nc. vs. Court of Appeals4 G.1. Fo. 1$1+)442arc $4 1%%$ (Art. 15%))5 3. 2en.o@a vs. ,avi.4 G.1. Fo. 14)5)54 &cto'er 334 3++4 (Art. 1481)5 $. Biet@ vs. Court of Appeals4 G.1. Fo. 1334:$4 ,ece"'er 1%4 3++5 (Arts. 15$%4 1543)5 4. Ce'u Ainlan. ,evelop"ent Corporation vs. &ng4 G.1. Fo. 1)$3154 2ay 314 3++% (Arts. 15$%4 15434 154$)5 5. ,el /ra.o vs. Car'allero4 G.1. Fo. 1483354 2arc $4 3+1+ (Art. 1543). 0 an? you. Class #ssignment for September -* &n Septe"'er 3+4 we will try to cover part O99 of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing .uring t e last class4 please stu.y# (a) t e following Civil Co.e provisions# Arts. 1484*148:5 1:++*1:+14 1:+:*1:3$ < Reference guide: De Leon, pp. 1%#-1&', 1&$-15#, %$$-&!%, &%1-&$&"( (') 1epu'lic Act Fo. :553 <Reference guide: De Leon, pp. 1&'-1&$, %8!-%8%, 5&8-55!"( (C) t e following cases# 1. Bevy Her"anos4 9nc. vs. Gervacio4 :% / il. 53 (1%$%)(Art. 1484)5 3. Fonato vs. 9AC4 14+ SC1A 355 (1%85) (Art. 1484<3=)5 $. ,elta 2otor Sales Corp vs. Fiu -i" ,uan4 31$ SC1A 35% (1%%3)(Art. 1484<3=)5 4. 0a(anlangit vs. Sout ern 2otors4 9nc.4 1+1 / il. :+: (1%5))(Art. 1484<$=)5 5. Fort ern 2otors 9nc. vs. Sapinoso4 $$ SC1A $5: (1%)+)(Art. 1484<$=)5 :. Cru@ vs. 6ilipinas 9nvest"ent an. 6inance Corporation4 3$ SC1A )%1 (1%:8)(Art. 1484<$=)5 ). Bor'on 99 vs. Servicewi.e Specialists4 9nc.4 358 SC1A :$4 (1%%:)(Art. 1484<$=)5 8. Garcia vs. Court of Appeals4 :1% SC1A 38+ (3+1+)(1.A. Fo. :553)5 %. Iestra ,evelop"ent an. 2anage"ent Corp vs. /acifico4 51$ SC1A 41$ (3++))(1.A. Fo. :553)5 1+. 2cBaug lin vs. Court of Appeals4 144 SC1A :%$ (1%8:)(1.A. Fo. :553)5 11. 2isterio vs. Ce'u State College of Science an. 0ec nology4 4:1 SC1A 133 (3++5)(Art. 1:+:)5 an. 13. 6rancisco vs. Boiser4 $$3 SC1A $+5 (3+++)(Art. 1:3$). /lease also rea.# Civil Co.e4 art. 1+885 Co""onwealt Act Fo. 1414 sec. 11%5 Act Fo. $1$54 sec. :5 1epu'lic Act Fo. $8444 sec. 13. 0 an? you. Class #ssignment for September -+ &n September -+4 we will try to cover part O9C.B of t e course outline. 9n a..ition to t e "atters t at we ave not finis e. .iscussing .uring t e last class4 please stu.y# (a) t e following Civil Co.e provisions# Arts. 15+54 15+:4 1544 < Reference guide: De Leon, pp. #11-##!, #8!-%!8, 18-# "( (') t e following cases# 1. SunBrot ers K Co vs. Celasco4 <CA=4 54 &.G. 51+$ (Art. 15+5)5 3. A@nar vs. Lap.iangco4 G.1. Fo. B*185$:4 2arc $14 1%:5 (Arts. 55%4 15+54 15+:)5 $. !,CA /u'lis ing K ,istri'uting Corp. vs. Santos4 G.1. Fo. 8+3%84 April 3:4 1%%+ (Art. 15+:)5 4. Car'onnell vs. Court of Appeals4 G.1. Fo. B*3%%)34 Ianuary 3:4 1%): (Art. 1544)5 5. C eng vs. Genato4 G.1. Fo. 13%):+4 ,ece"'er 3%4 1%%8 (Art. 1544)5 :. Consoli.ate. 1ural Ban? vs. Court of Appeals4 G.1. Fo. 1$31:14 Ianuary 1)4 3++5 (Art. 1544)5 ). ,agupan 0ra.ing vs. 2aca"4 G.1. Fo. B*184%)4 2ay $14 1%:5 (Art. 1544)5 8. Caru"'a vs. Court of Appeals4 G.1. Fo. B*3)58)4 6e'ruary 184 1%)+ (Art. 1544)5 %. A'rigo vs. .e Cera4 G.1. Fo. 1544+%4 Iune 314 3++4 (Art. 1544)5 10. 1osaroso vs. ,oria4 G.1. Fo. 1%484:4 Iune 1%4 3+1$ (Art. 1544)5 11. 1o"an Cat olic C urc vs. /ante4 G.1. Fo. 1)41184 April 114 3+13 (Art. 1544)5 an. 13. A.elfa /roperties4 9nc vs. Court of Appeals4 G.1. Fo. 1113$84 Ianuary 354 1%%5. /lease also rea.# Civil Co.e4 arts. 55%4 14$44 1345. Class #ssignment for 4ctober 7 &n &cto'er 44 we will finis t e rest of t e ite"s in t e course outline. /lease stu.y# (a) t e following Civil Co.e provisions# Arts. 14::*14:84 1:+3*1:+54 1:34*1:$54 1:$8*1:414 1:4$4 15+)*153+ <Reference guide: De Leon, pp. 1'-# , &5-5%, &$5-51#, 51 -5#!, &!%-&%1, '!#, ##!-#%&( 5#1-5%1"( (') t e following cases# 1. Celestino K Co"pany vs. Collector4 G.1. Fo. B*85+:4 August $14 1%5: (Art. 14:))5 3. Co""issioner vs. !ngineering !7uip"ent K Supply Co"pany4 G.1. Fo. B*3)+444 Iune $+4 1%)5 (Art. 14:))5 $. Muiroga vs. /arsons Har.ware Co.4 G.1. Fo. B*114%14 August 3$4 1%18 (Arts. 14::4 18:8)5 4. /uyat vs. Arco A"use"ent Co4 G.1. Fo. B*4)5$84 Iune 3+4 1%41 (Arts. 14::4 18:8)5 5. Bo vs. -IS !co*6or"wor? Syste" / il.4 9nc. 4 G.1. Fo. 14%43+4 &cto'er 84 3++$ (Art. 1:38)5 :. 1o'erts vs. /apio4 G.1. Fo. 1::)144 6e'ruary %4 3++) (Art. 1:+3)5 7. 2artires vs. C ua4 G.1. 1)434+4 2arc 3+4 3+1$ (Arts. 1:+34 3+88)5 8. Soli. Ho"es 9nc. vs. Court of Appeals4 G.1. Fo. 11)5+14 Iuly 84 1%%) (Art. 3+88)5 %. A. 6rancisco 1ealty vs. Court of Appeals4 G.1. Fo. 135+554 &cto'er $+4 1%%8 (1%%8)(Art. 3+88)5 1+. A'illa vs. Go'onseng4 G.1. Fo. 14::514 Ianuary 1)4 3++3 (Arts. 1:+34 1:+:)5 11. ,evelop"ent Ban? of t e / ilippines vs. 1egional 0rial Court of 2anila4 8: &.G.4 Fo. :4 11$) (1%8)). /lease also rea.# Civil Co.e4 arts. )354 14)14 13454 3+885 /resi.ential ,ecree Fo. %5)4 secs. 3$*345 Bul? Sales Baw (Act Fo. $%53)5 1etail 0ra.e Bi'erali@ation Act (1epu'lic Act Fo. 8):3)4 secs. $ an. 5. As &cto'er 4 is our class4 we "ay nee. to e;ten. t e class a little 'it if necessary to finis t e course outline. 0 an? you. #nnouncement for 4ctober 9
11

As .iscusse.4 t e final e;a" will 'e given on Ae.nes.ay4 &cto'er %. /lease coor.inate wit t e &ffice of t e College Secretary (&CS) wit respect to t e venue of t e e;a". 9 will sen. t e 7uestionnaire to t e &CS 'efore Ae.nes.ay. 9 ave also re7ueste. t e &CS to provi.e a proctor for t e essay e;a". 9f any pro'le" arises .uring t e .ay of t e e;a"4 please .o not esitate to contact "e. Coverage 1. 0 e 2CM e;a" on Sales will cover t e entire course an. will 'e given 'y t e &ffice of t e ,ean. 6or t e 2CM e;a"4 9 .o not ave infor"ation w et er so"e of t e 7uestions will 'e 'ase. on Supre"e Court .ecisions. 9n t e event t at t e 7uestion is 'ase. on a Supre"e Court .ecision (w ic we ave opefully ta?en up)4 your answer s oul. 'e 'ase. on t e Supre"e CourtDs ruling (an. t e applica'le provisions of law)4 an. not on "y view on w at s oul. ave 'een t e correct ruling. 3. 0 e 7uestions for t e essay portion will 'e fro" topics .iscusse. after t e "i.*ter"s e;a". 2ost of t e 7uestions will 'e HsituationalG5 owever4 so"e of t e 7uestions will 'e Ho'(ectiveG (e.g.4 su""ari@e t e rules on PPPPPPPPPPP). 9 will not as? 7uestions on H/ractice FotesG. 9n reviewing for t e e;a"4 it woul. 'e very i"portant for you to ?now an. un.erstan. t e provisions of law. 0 is inclu.es an un.erstan.ing of w en a particular provision applies. 6or e;a"ple# (a) so"e provisions "ay apply only w en t e sale involves a certain type of property (real vs. personal property) or a particular for" of pay"ent (full pay"ent vs. install"ent pay"ent)5 (') so"e actions an. re"e.ies "ay apply only un.er certain situations (e.g.4 'uyer is insolvent4 goo.s not yet .elivere. to t e 'uyer4 etc.). A en you review4 9 suggest t at you go over t e course outline an. test your ?nowle.ge against t e ite"s liste. in t e course outline. 6or t ose w o were not a'le to finis stu.ying t e class assign"ents4 9 suggest t at you finis stu.ying t e" t is wee?en.. 0ues.ay an. Ae.nes.ay s oul. 'e .evote. to a review of w at you ave alrea.y learne.. !ssay e;a" 0 e 7uestionnaire consists of twelve (13) 7uestions (nu"'ere. 1 to 13) containe. in two (3) pages. Begin your answer to eac nu"'ere. 7uestion on a separate page of t e 'lue 'oo?. Answer t e 7uestion .irectly an. concisely. ,o not repeat t e 7uestion. Arite legi'ly. /lease write your na"e an. stu.ent nu"'er on t e insi.e 'ac? cover of t e 'lue 'oo?. A en you are finis e. wit t e e;a"4 please put t e 7uestionnaire insi.e t e 'lue 'oo? an. give t e 'lue 'oo? to t e proctor. 2CM As state. a'ove4 t e 2CM e;a" will 'e given 'y t e &ffice of t e ,ean. &t er "atters ,uring t e essay e;a"4 all 'oo?s4 notes4 "o'ile p ones4 electronic e7uip"ent4 'ags an. ot er ite"s of possession s oul. 'e place. in front or at t e 'ac? of t e classroo". 0 e only ite"s on your .es? s oul. 'e t e 7uestionnaire4 t e 'lue 'oo? an. your pen. 6or t e 2CM e;a"4 please follow t e .irections t at will 'e given 'y t e proctor. 9f you ave 7uestions4 please let "e ?now. Stu.y wellN

13

Sales: Theory and Practice 9. 9ntro.uction A. Governing law B. History of law on sales C. Source of law on sales

99.

Concept of contract of sale A. Concept of sale (Art. 1458) #rt. (7)8. By t e contract of sale one of t e contracting parties o'ligates i"self to transfer t e owners ip an. to .eliver a .eter"inate t ing4 an. t e ot er to pay t erefor a price certain in "oney or its e7uivalent. A contract of sale "ay 'e a'solute or con.itional. (1445a) B. C aracteristics of contract of sale C. !ssential ele"ents of contract of sale# an overview (Art. 1$18) #rt. (<(8. 0 ere is no contract unless t e following re7uisites concur# (1) Consent of t e contracting parties5 (3) &'(ect certain w ic is t e su'(ect "atter of t e contract5 ($) Cause of t e o'ligation w ic is esta'lis e.. (13:1) i. Consent (Art. 1$1%) #rt. (<(9. Consent is "anifeste. 'y t e "eeting of t e offer an. t e acceptance upon t e t ing an. t e cause w ic are to constitute t e contract. 0 e offer "ust 'e certain an. t e acceptance a'solute. A 7ualifie. acceptance constitutes a counter*offer. Acceptance "a.e 'y letter or telegra" .oes not 'in. t e offerer e;cept fro" t e ti"e it ca"e to is ?nowle.ge. 0 e contract4 in suc a case4 is presu"e. to ave 'een entere. into in t e place w ere t e offer was "a.e. (13:3a) ii. &'(ect (Arts. 1$4)*1$4%) S!C09&F 3. * &'(ect of Contracts #rt. (<7+. All t ings w ic are not outsi.e t e co""erce of "en4 inclu.ing future t ings4 "ay 'e t e o'(ect of a contract. All rig ts w ic are not intrans"issi'le "ay also 'e t e o'(ect of contracts. Fo contract "ay 'e entere. into upon future in eritance e;cept in cases e;pressly aut ori@e. 'y law. All services w ic are not contrary to law4 "orals4 goo. custo"s4 pu'lic or.er or pu'lic policy "ay li?ewise 'e t e o'(ect of a contract. (13)1a) #rt. (<78. 9"possi'le t ings or services cannot 'e t e o'(ect of contracts. (13)3) #rt. (<79. 0 e o'(ect of every contract "ust 'e .eter"inate as to its ?in.. 0 e fact t at t e 7uantity is not .eter"inate s all not 'e an o'stacle to t e e;istence of t e contract4 provi.e. it is possi'le to .eter"ine t e sa"e4 wit out t e nee. of a new contract 'etween t e parties. (13)$) iii. Cause (Art. 1$5+)

S!C09&F $. * Cause of Contracts #rt. (<)*. 9n onerous contracts t e cause is un.erstoo. to 'e4 for eac contracting party4 t e prestation or pro"ise of a t ing or service 'y t e ot er5 in re"uneratory ones4 t e service or 'enefit w ic is re"unerate.5 an. in contracts of pure 'eneficence4 t e "ere li'erality of t e 'enefactor. (13)4) ,. -in.s of contract of sale i. A'solute ii. Con.itional

999.

/arties to t e contract of sale A. /ersons w o "ay enter into a contract of sale (Art. 148%) #rt. (789. All persons w o are aut ori@e. in t is Co.e to o'ligate t e"selves4 "ay enter into a contract of sale4 saving t e "o.ifications containe. in t e following articles. A ere necessaries are t ose sol. an. .elivere. to a "inor or ot er person wit out capacity to act4 e "ust pay a reasona'le price t erefor. Fecessaries are t ose referre. to in Article 3%+. (145)a) 0ype of incapacity i. A'solute ii. 1elative C. 1ules applica'le to specific sellers i. 2inors (Art. 1$3)4 1$%+5 6a"ily Co.e4 art. 3+%) #rt. (<-+. 0 e following cannot give consent to a contract# (1) Ene"ancipate. "inors5 (3) 9nsane or .e"ente. persons4 an. .eaf*"utes w o .o not ?now ow to write. (13:$a) #rt. (<9*. 0 e following contracts are voi.a'le or annulla'le4 even t oug t ere "ay ave 'een no .a"age to t e contracting parties# (1) 0 ose w ere one of t e parties is incapa'le of giving consent to a contract5 (3) 0 ose w ere t e consent is vitiate. 'y "ista?e4 violence4 inti"i.ation4 un.ue influence or frau.. 0 ese contracts are 'in.ing4 unless t ey are annulle. 'y a proper action in court. 0 ey are suscepti'le of ratification. (n) #rt. -*9. /ursuant to t e natural rig t an. .uty of parents over t e person an. property of t eir une"ancipate. c il.ren4 parental aut ority an. responsi'ility s all inclu.e t e caring for an. rearing t e" for civic consciousness an. efficiency an. t e .evelop"ent of t eir "oral4 "ental an. p ysical c aracter an. well*'eing. (n) #rt. (7*9. 0 (1) 0 ose w (3) 0 ose w ($) 0 ose w (4) 0 ose w (5) 0 ose w (:) 0 ose w ii. Hus'an. an. wife (Arts. 14+%4 14%+4 14%3) e following contracts are ine;istent an. voi. fro" t e 'eginning# ose cause4 o'(ect or purpose is contrary to law4 "orals4 goo. custo"s4 pu'lic or.er or pu'lic policy5 ic are a'solutely si"ulate. or fictitious5 ose cause or o'(ect .i. not e;ist at t e ti"e of t e transaction5 ose o'(ect is outsi.e t e co""erce of "en5 ic conte"plate an i"possi'le service5 ere t e intention of t e parties relative to t e principal o'(ect of t e contract cannot 'e ascertaine.5 1$ B.

'+. Those e%pressly prohibited or declared void by la!. 0 ese contracts cannot 'e ratifie.. Feit er can t e rig t to set up t e .efense of illegality 'e waive.. #rt. (79*. 0 e us'an. an. t e wife cannot sell property to eac ot er4 e;cept# (1) A en a separation of property was agree. upon in t e "arriage settle"ents5 or (3) A en t ere as 'een a (u.icial separation or property un.er Article 1%1. (1458a) #rt. (79-. 0 e pro i'itions in t e two prece.ing articles are applica'le to sales in legal re.e"ption4 co"pro"ises an. renunciations. (n) iv. /ersons .is7ualifie. to 'uy specific properties (Art. 14+%4 14%14 14%3) #rt. (7*9. 0 e following contracts are ine;istent an. voi. fro" t e 'eginning# (1) 0 ose w ose cause4 o'(ect or purpose is contrary to law4 "orals4 goo. custo"s4 pu'lic or.er or pu'lic policy5 (3) 0 ose w ic are a'solutely si"ulate. or fictitious5 ($) 0 ose w ose cause or o'(ect .i. not e;ist at t e ti"e of t e transaction5 (4) 0 ose w ose o'(ect is outsi.e t e co""erce of "en5 (5) 0 ose w ic conte"plate an i"possi'le service5 (:) 0 ose w ere t e intention of t e parties relative to t e principal o'(ect of t e contract cannot 'e ascertaine.5 '+. Those e%pressly prohibited or declared void by la!. 0 ese contracts cannot 'e ratifie.. Feit er can t e rig t to set up t e .efense of illegality 'e waive.. #rt. (79(. 0 e following persons cannot ac7uire 'y purc ase4 even at a pu'lic or (u.icial auction4 eit er in person or t roug t e "e.iation of anot er# (1) 0 e guar.ian4 t e property of t e person or persons w o "ay 'e un.er is guar.ians ip5 (3) Agents4 t e property w ose a."inistration or sale "ay ave 'een entruste. to t e"4 unless t e consent of t e principal as 'een given5 ($) !;ecutors an. a."inistrators4 t e property of t e estate un.er a."inistration5 (4) /u'lic officers an. e"ployees4 t e property of t e State or of any su'.ivision t ereof4 or of any govern"ent*owne. or controlle. corporation4 or institution4 t e a."inistration of w ic as 'een intruste. to t e"5 t is provision s all apply to (u.ges an. govern"ent e;perts w o4 in any "anner w atsoever4 ta?e part in t e sale5 (5) Iustices4 (u.ges4 prosecuting attorneys4 cler?s of superior an. inferior courts4 an. ot er officers an. e"ployees connecte. wit t e a."inistration of (ustice4 t e property an. rig ts in litigation or levie. upon an e;ecution 'efore t e court wit in w ose (uris.iction or territory t ey e;ercise t eir respective functions5 t is pro i'ition inclu.es t e act of ac7uiring 'y assign"ent an. s all apply to lawyers4 wit respect to t e property an. rig ts w ic "ay 'e t e o'(ect of any litigation in w ic t ey "ay ta?e part 'y virtue of t eir profession. (:) Any ot ers specially .is7ualifie. 'y law. (145%a) #rt. (79-. 0 e pro i'itions in t e two prece.ing articles are applica'le to sales in legal re.e"ption4 co"pro"ises an. renunciations. (n) iv. &t er persons /ractice notes# parties to contract of sale i. Hus'an. or wife ii. Corporation

,.

S#/$S $VI$=$ =$$> II,III 'update !ith outline. IV. Formation and perfection of contract of sale #. Consent0offer and acceptance i. 9n general a) 6or" of offer #rt. (<-). Enless it appears ot erwise4 'usiness a.vertise"ents of t ings for sale are not .efinite offers4 'ut "ere invitations to "a?e an offer. #rt. (<-:. A.vertise"ents for 'i..ers are si"ply invitations to "a?e proposals4 an. t e a.vertiser is not 'oun. to accept t e ig est or lowest 'i..er4 unless t e contrary appears. ') 6or" of acceptance ii. /ro"ise to 'uy an. sell #rt. (7+9. A pro"ise to 'uy an. sell a .eter"inate t ing for a price certain is reciprocally demandable. An accepted unilateral promise to 'uy or to sell a .eter"inate t ing for a price certain is binding upon t e pro"issor if t e pro"ise is supporte. 'y a consideration .istinct fro" t e price. iii. /ractice notes# offer an. acceptance * counterpart signing ?. 4b@ect or sub@ect matter: &$T$ 3I2#T$A /ICITA $XISTI210F5T5 $ 144&SA 4=2$ =0 I1BT T4 T #2SF$ 4=2$ SBIP i. 0 ing "ust 'e determinate a) A en t ing .eter"inate #rt. (7)8. By t e contract of sale one of t e contracting parties o'ligates i"self to transfer t e owners ip an. to deliver a determinate thing4 an. t e ot er to pay t erefor a price certain in "oney or its e7uivalent. A contract of sale "ay 'e a'solute or con.itional. #rt. (7:*. A t ing is ,!0!129FA0! !hen it is particularly designated or physical segregated from all other of the same class . 0 e re7uisite t at a t ing 'e .eter"inate is satisfie. if at t e ti"e t e contract is entere. into4 t e t ing is capa'le of 'eing "a.e .eter"inate !ithout the necessity of a ne! or further agreement bet!een the parties . (n) &$FI2ITI42 4F &$T$ 3I2#T$: w en it is particularly .esignate. or p ysical segregate. fro" all ot er of t e sa"e class 14

=B$2 S#TISFI$&: 9f at t e ti"e t e contract is entere. into4 t e t ing is capa'le of 'eing "a.e .eter"inate wit out t e necessity of a new or furt er agree"ent 'etween t e parties ') Sale of an undivided interest in a t ing #rt. (7:<. 0 e sole owner of a t ing "ay sell an un.ivi.e. interest t erein. S#/$ 4F 52&IVI&$& I2T$ $ST I2 # TBI21 (1) ?y sole o!ner > 0 e sole owner of a t ing "ay sell t e entire t ing5 or only a specific portion t ereof5 or an un.ivi.e. interest t erein an. suc interest "ay 'e .esignate. as an ali7uot part of t e w ole. B!GAB !66!C0# 0o "a?e 'uyer a co*owner of t e t ing sol.. As co*owner4 e ac7uires full owners ip of is part an. e "ay4 t erefore4 sell it. However4 suc sale is li"ite. to t e portion w ic "ay 'e allotte. to i" in t e .ivision of t e t ing upon t e ter"ination of t e co*owners ip. (3) ?y co,o!ner > 0 e co*owners can .ispose of t eir s ares even wit out t e consent of t e ot er co*owners. 0 e effect of t e alienation s all 'e li"ite. to t e portion w ic "ay 'e allotte. to t e ven.or in t e .ivision of t e property upon t e ter"ination of t e co*owners ip. c) Sale of undivided share of a specific "ass #rt. (7:7. 9n t e case of fungible goods4 t ere "ay 'e a sale of an un.ivi.e. s are of a specific "ass4 t oug t e seller purports to sell an. t e 'uyer to buy a definite numberA !eight or measure of the goods in the mass 4 an. t oug t e nu"'er4 weig t or "easure of t e goo.s in t e mass is undetermined. By suc a sale t e 'uyer 'eco"es o!ner in common of suc a s are of t e "ass as t e nu"'er4 weig t or "easure 'oug t 'ears to t e nu"'er4 weig t or "easure of t e "ass. 9f t e "ass contains B!SS t an t e nu"'er4 weig t or "easure 'oug t4 t e buyer becomes the o!ner of the !hole mass an. t e seller is 'oun. to ma"e good the deficiency fro" goo.s of t e sa"e ?in. an. 7uality4 EFB!SS a contrary intent appears. S#/$ 4F #2 52&IVI&$& SB# $ 4F # SP$CIFIC 3#SS 0 e Civil Co.e classifies "ova'le goo.s into consu"a'le or non consu"a'le t ere'y .iscar.ing t e ol. classification into fungi'le an. non fungi'le. 0 is c ange in classification see"s to 'e in na"e only as t e .efinition of fungi'le goo.s as t ose w ic cannot 'e use. wit out 'eing consu"e un.er t e ol. Civil Co.e is precisely ot at of consu"a'le goo.s. &$FI2ITI42 F521I?/$: Capa'le of 'eing consu"e.5 "eans goo.s w ic any unit is e7uivalent of anot er unit eg. &il4 gas Art. 14:4. 0 is rig t is an incorporeal right5 owners ip transfers 'y 9F0!F09&F of t e parties $FF$CT 4F S#/$ > 0 e owner of a "ass of goo.s "ay sell only an un.ivi.e. s are t ereof4 provi.e. t e "ass is S/!C969C or CA/ABB! &6 B!9FG 2A,! ,!0!129FA0! o By suc sale4 t e 'uyer 'eco"es C&*&AF!1 wit t e seller of t e w ole "ass in t e proportion in w ic t e .efinition s are 'oug t 'ears to t e "ass o 0 e ali7uot s are of eac owner can 'e .eter"ine. only 'y t e "easure"ent of t e entire "ass IS> 4F /4SS > As co*owner4 t e w ole "ass is at ris? of all t e parties intereste. in it4 inclu.ing t e 'uyer4 in proportion to t eir various ol.ings #PP/IC#?I/ITC T4 242F521I?/$ 144&S > 9t "ay also 'e applie. to goo.s not strictly fungi'le in nature. o !g. Barrels of flour4 'ales of cotton4 cattle4 s eep ii. 0 ing "ust 'e licit #rt. (7)9. 0 e t ing "ust 'e licit an. t e ven.or "ust ave a rig t to transfer t e owners ip t ereof at t e ti"e it is .elivere.. a) 9n general $D5ISIT$S C42C$ 2I21 4?6$CT: (1) *+ings. Asi.e fro" 'eing (a) determinateA t e law re7uires t at t e su'(ect "atter "ust 'e (') licit or la!fulA t at is4 it s oul. not 'e contrary to law4 "orals4 goo. custo"s4 pu'lic or.er4 pu'lic policy an. s oul. not 'e (c) impossible. 9n ot er wor.s4 li?e any ot er o'(ect of a contract4 t e t ing "ust 'e ,it+in t+e commerce of "en. (3) Rig+ts. All rig ts w ic are not intransmissible or personal "ay also 'e t e o'(ect of sale4 li?e t e rig t of usufruct4 t e rig t of conventional re.e"ption4 cre.it4 etc. !O. 9ntrans"issi'le 'y law# 1ig t to vote4 rig t to pu'lic office4 "arital an. parental rig ts4 etc. !O. /ersonal in c aracter# 1ig t to 'e a partner in partners ip4 rig t to act as an agent of anot er4 rig t of t e 'ailee to use t e t ing loane. in a contract of co""o.atu" 24T #//4=$&: Fo contract "ay 'e entere. upon future in eritance !OC!/0 in cases e;pressly aut ori@e. 'y law. A ile services "ay 'e t e o'(ect of a contract4 t ey cannot 'e t e o'(ect of a contract of sale. ') 9llicit t ings 9f su'(ect "atter of t e sale is 9BB9C904 t e contract is C&9, an. cannot4 t erefore4 'e 1A0969!,. 9n suc a case4 t e rig ts an. o'ligations of t e parties are .eter"ine. 'y applying t e following articles of t e Civil Co.e (9F /A19 ,!B9C0& 1EB!)# #rt. (7((. A en t e nullity procee.s fro" t e illegality of the cause or ob@ect of the contract 4 an. t e act constitutes a criminal offense4 'ot parties 'eing in pari delicto4 t ey s all ave no action against eac ot er4 an. 'ot s all 'e prosecute.. 2oreover4 t e provisions of t e /enal Co.e relative to t e .isposal of effects or instru"ents of a cri"e s all 'e applica'le to t e t ings or t e price of t e contract. 0 is rule s all 'e applica'le w en only one of t e parties is guilty5 'ut t e innocent one may claim !hat he has givenA and shall not be bound to comply !ith his promise. #rt. (7(-. 9f t e act in w ic t e unla!ful or forbidden cause consists does not constitute a criminal offense 4 t e following rules s all 'e o'serve.# (1) A en t e fault is on t e part of both contracting parties4 neither may recover w at e as given 'y virtue of t e contract4 or .e"an. t e perfor"ance of t e ot erQs un.erta?ing5 (3) A en only one of t e contracting parties is at fault4 he cannot recover w at e as given 'y reason of t e contract4 or as? for t e fulfill"ent of w at as 'een pro"ise. i". 0 e ot er4 w o is not at fault4 may demand the return of w at e as given wit out any o'ligation to co"ply is pro"ise. #rt. (7*9. 0 e following contracts are 9F!O9S0!F0 an. C&9, fro" t e 'eginning# '(. Those !hose causeA ob@ect or purpose is contrary to la!A moralsA good customsA public order or public policyE 15

(3) 0 ose w ic are a'solutely si"ulate. or fictitious5 ($) 0 ose w ose cause or o'(ect .i. not e;ist at t e ti"e of t e transaction5 (4) 0 ose w ose o'(ect is outsi.e t e co""erce of "en5 (5) 0 ose w ic conte"plate an i"possi'le service5 (:) 0 ose w ere t e intention of t e parties relative to t e principal o'(ect of t e contract cannot 'e ascertaine.5 ()) 0 ose e;pressly pro i'ite. or .eclare. voi. 'y law. 0 ese contracts cannot 'e ratifie.. Feit er can t e rig t to set up t e .efense of illegality 'e waive.. iii. 0 ings "ust 'e e%isting goods or future goods (potential e;istence4 "ere ope of e;pectancy4 t ings in litigation4 t ings su'(ect to a resolutory con.ition) #rt. (7:(. 0 ings aving a potential e%istence "ay 'e t e o'(ect of t e contract of sale. 0 e efficacy of t e sale of a mere hope or e%pectancy is .ee"e. su'(ect to t e con.ition t at t e t ing will co"e into e;istence. 0 e sale of a vain ope or e;pectancy is voi.. #rt. (7:-. 0 e goo.s w ic for" t e su'(ect of a contract of sale "ay 'e eit er e%isting goods4 owne. or possesse. 'y t e seller4 or goo.s to 'e "anufacture.4 raise.4 or ac7uire. 'y t e seller after t e perfection of t e contract of sale4 in t is 0itle calle. Ffuture goods.R 0 ere "ay 'e a contract of sale of goo.s4 w ose ac7uisition 'y t e seller .epen.s upon a contingency !hich may or may not happen. 144&S =BICB 3#C ?$ TB$ 4?6$CT 4F S#/$: (1) !;isting goo.s or goo.s owne. or possesse. 'y t e seller5 (3) 6uture goo.s or goo.s to 'e 2AFE6AC0E1!, (li?e t e sale of "il? 'ottles to 'e "anufacture. wit t e na"e of t e 'uyer presse. in t e glass)4 1A9S!, (sale of t e future arvest of palay fro" a rice fiel.)4 or ACME91!, (sale of a .efinite parcel of lan. t e seller e;pects to 'uy) A60!1 t e perfection of t e contract of sale F5T5 $ 144&S #S 4?6$CT 4F S#/$ A sale of future goo.s4 even t oug t e contract is in t e for" of a present sale4 is CAB9, only as an !O!CE0&1L contract to be fulfilled by the ac;uisition and delivery of the goods specified . ,G /roperty or goo.s w ic at t e ti"e of t e sale are not owne. 'y t e seller 'ut w ic t ereafter are to 'e ac7uire. 'y i"4 cannot be the sub@ect of an e%ecuted sale but may be the sub@ect of a contract for the future sale and delivery thereof even t oug t e ac7uisition of t e goo.s .epen.s upon a contingency w ic "ay or "ay not appen. Cen.or ASSE2!S 19S- of ac7uiring title an. "a?ing t e conveyance or respon.ing in .a"ages for t e ven.eeDs loss of is 'argain. (1) /ar. 1 .oes not apply if t e goo.s are to 'e "anufacture. especially for t e 'uyer an. not rea.ily salea'le to ot ers in t e "anufacturerDs regular course of 'usiness. 0 e contract4 in suc case4 "ust 'e consi.ere. as one for a piece of wor?. (e-. .uy a table from a person ,+o outsources it from some,+ere / future good .0* if 1 buy a table from +im ,+o ma2es it specifically for me, 34* contract of sale5 future good but 643*R76* for piece of ,or2 ) (3) Art. 14:3 conte"plates a contract of sale of S/!C969C goo.s w ere one of t e parties 'in.s i"self to transfer t e owners ip of an. .eliver a .eter"inate t ing an. t e ot er to pay a price certain. 1e7uires t at t ere 'e A ,!B9C!1L &6 G&&,S4 actual or constructive4 to 'e applica'le. ,oes not apply to a transaction w ere t ere was no suc .elivery5 neit er was t ere any intention to .eliver a .eter"inate t ing. a) Sale of t ings aving a potential e%istence #rt. (7:(. 0 ings aving a potential e%istence "ay 'e t e o'(ect of t e contract of sale. 0 e efficacy of t e sale of a "ere ope or e;pectancy is .ee"e. su'(ect to t e con.ition t at t e t ing will co"e into e;istence. 0 e sale of a vain ope or e;pectancy is voi.. P4T$2TI#/ $XIST$2C$# 9t is reasona'ly certain to co"e into e;istence as t e natural incre"ent or usual inci.ent of so"et ing in e;istence alrea.y 'elonging to t e seller4 an. t e title will vest in t e 'uyer t e "o"ent t e t ing co"es into e;istence. (eg. Bii? sa 'untis na 'a'oy4 wine fro" a vine4 grain a fiel. "ay grow4 "il? of a cow4 wool fro" a s eep4 w at "ay 'e cast fro" a fis er"anDs net4 goo.will of a tra.e) *S 0 e t ing sol.4 "ust 'e S/!C969C an. 9,!F0969!,. 0 ey "ust also 'e &AF!, BL 0H! C!F,&1 at t e ti"e. ') Sale of mere hope of e%pectancy #rt. (7:(. 0 ings aving a potential e;istence "ay 'e t e o'(ect of t e contract of sale. 0 e efficacy of the sale of a mere hope or e%pectancy is .ee"e. SEBI!C0 to t e con.ition t at t e t ing will co"e into e;istence. 0 e sale of a vain ope or e;pectancy is C&9,. *S Sale refers to an H!O/!C0!, 0H9FGG w ic is not yet in e;istence4 an. not to t e ope or e;pectancy w ic alrea.y e;ists4 in view of t e con.ition t at t e t ing will co"e into e;istence. *S CAB9, even if t e t ing ope or e;pecte. .oes not co"e into e;istence EFB!SS t e ope or e;pectancy is CA9F4 in w ic case4 t e sale is C&9, *S eg. winnings in a (u.ge"ent5 ope of winning a pri@e in sweepsta?es tic?et S#/$ 4F TBI21 $XP$CT$& or $3PTI4 $I SP$ #T#$ Sale of t ing not yet in e;istence su'(ect to t e con.ition t at t e t ing will e;ist an. on failure of t e con.ition4 t e contract 'eco"es ineffective an. ence4 t e 'uyer as no o'ligation to pay t e price. 6uture t ing is certain as to itself 'ut uncertain as to its 7uantity an. 7uality. Suc sale is su'(ect to t e con.ition t at t e t ing will co"e into e;istence4 w atever its 7uantity or 7uality Contract .eals wit a future t ing S#/$ 4F B4P$ ITS$/F or $3PTI4 SP$I Sale of t e ope itself t at t e t ing will co"e into e;istence4 w ere it is agree. t at t e 'uyer will pay t e price even if t e t ing .oes not eventually e;ist. 9t is not certain t at t e t ing itself will e;ist4 "uc less its 7uantity an. 7uality

Contract relates to a t ing w ic e;ists or is present > t e ope or e;pectancy Sale is su'(ect to t e con.ition t at t e t ing s oul. e;ist4 so t at /ro.uces effect even t oug t e t ing .oes not co"e into if it .oes not4 t ere will 'e no contract 'y reason of t e a'sence of e;istence 'ecause t e o'(ect of t e contract is t e ope itself4 an essential ele"ent unless it is a vain ope or e;pectancy (li?e sale of falsifie. sweepsta?e tic?et w ic can never win) P $S53PTI42 I2 C#S$ 4F &45?T# /resu"ption is in favor of emptio rei speretae w ic is in ?eeping wit co""utative c aracter of t e contract 1:

o o

A contract of sale is nor"ally co""utative an. onerous# not only .oes eac one of t e parties assu"e a correlative o'ligation 'ut suc party anticipates perfor"ance 'y t e ot er fro" t e very start A ere in a sale4 t e o'ligation of one party can 'e lawfully su'or.inate. to an uncertain event4 so t at t e ot er un.erstan.s t at e assu"es t at ris? of receiving not ing for w at e gives as in t e case of a sale of opes or e;pectations (emptio spei)4 it is not in t e usual course of 'usiness to .o so4 ence4 t e contingent c aracter of t e o'ligation "ust clearly appear.

c) Sale of things in litigation #rt. (<8(. 0 e following contracts are rescissi'le# (1) 0 ose w ic are entere. into 'y guar.ians w enever t e war.s w o" t ey represent suffer lesion 'y "ore t an one*fourt of t e value of t e t ings w ic are t e o'(ect t ereof5 (3) 0 ose agree. upon in representation of a'sentees4 if t e latter suffer t e lesion state. in t e prece.ing nu"'er5 ($) 0 ose un.erta?en in frau. of cre.itors w en t e latter cannot in any ot er "anner collect t e clai"s .ue t e"5 '7. Those !hich refer to things under litigation if they have been entered into by the defendant !ithout the "no!ledge and approval of the litigants or of competent @udicial authorityE (5) All ot er contracts specially .eclare. 'y law to 'e su'(ect to rescission. .) Sale of t ings sub@ect to a resolutory condition #rt. (7:). 0 ings su'(ect to a resolutory condition "ay 'e t e o'(ect of t e contract of sale. $S4/5T4 C C42&ITI42# is an uncertain event upon t e appening of w ic t e o'ligation (or rig t) su'(ect to it is e;tinguis e.. Hence4 t e rig t ac7uire. in virtue of t e o'ligation is also e;tinguis e.. &ne of t e o'ligations of t e ven.or is to transfer t e owners ip of t e t ing o'(ect of t e contract. If the resolutory condition attac ing to t e o'(ect of t e contract4 w ic o'(ect "ay inclu.e t ings as well as rig ts4 should happen4 t en t e vendor cannot transfer the o!nership of !hat he sold since there is no ob@ect. !g. S sol. to B parcel of lan. wit con.ition t at S can repurc ase w8n 3 years5 B sol. lan. to C 'efore 3 years5 S repurc ase. 'efore to years5 Sale of B to C falls. iv. &wner "ust ave right to transfer o!nership #rt. (7)9. 0 e t ing "ust 'e licit an. t e ven.or "ust ave a right to transfer the o!nership t ereof at t e ti"e it is delivered. (1) Seller "ust 'e &AF!1 or AE0H&19T!, 'y owner of t e t ing sol.. *S one cannot trans"it or .ispose of t at w ic .oes not 'elong to i" (nemo dat 8uod non-+abet) *S one can sell only w at one owns or is aut ori@e. to sell4 an. t e 'uyer can ac7uire no "ore t an w at t e seller can transfer legally -9 Loo2 at .aviera and missing page

(5) A ere real property4 su'(ect of unrecor.e. sale4 su'se7uently "ortgage. 'y seller w ic "ortgage was registere. *S 0 e "ortgageeDs registere. "ortgage rig t over t e property is inferior to t at of t e 'uyerDs unregistere. rig t. 0 e unrecor.e. sale 'etween t e 'uyer an. t e seller is preferre. for t e reason t at if t e seller (original owner) a. parte. wit is owners ip of t e t ing sol. t en4 e no longer a. owners ip an. free .isposal of t at t ing so as to 'e a'le to "ortgage it again. #rt. (7:<. 0 e sole owner of a t ing "ay sell an undivided interest t erein. -9 Loo2 at .aviera and missing page a) 9n general ') A en rig t to transfer owners ip "ust e;ist c) Sale 'y a'solute owner .) Sale 'y co*owner e) Sale 'y agent f) Sale 'y trustee g) Sale 'y one wit voidable title #rt. ()*:. A ere t e seller of goo.s as a voidable title t ereto4 'ut is title as not been avoided at the time of the sale 4 t e 'uyer ac7uires a good title to t e goo.s4 provi.e. e 'uys t e" in good faith4 for value4 an. !ithout notice of t e sellerQs .efect of title. $D5ISIT$S F4 V#/I& C42T #CT 4F S#/$: 6or S!BB!1 o Coi.a'le title of goo.s (not C&9, 'ecause no rig t fro" t e start) o Fot avoi.e. at ti"e of sale (if annulle.4 no rig t any"ore) 6or BEL!1 o Goo. fait o 6or value o Ait out notice of t e sellerDs .efect of title ) Sale 'y non,o!ner #rt. ()*). Su'(ect to t e provisions of t is 0itle4 w ere goo.s are sol. 'y a person !ho is not the o!ner t ereof4 an. w o does not sell them under authority or !ith the consent of the o!ner 4 t e 'uyer ac7uires no better title to t e goo.s t an t e seller a.4 EFB!SS t e owner of t e goo.s is by his conduct preclu.e. fro" .enying t e sellerQs aut ority to sell. Fot ing in t is 0itle4 owever4 s all affect# (1) 0 e provisions of any factorsH actA recording la!sA or any other provision of la! ena'ling t e apparent owner of goo.s to .ispose of t e" as if e were t e true owner t ereof5 (3) 0 e vali.ity of any contract of sale un.er statutory po!er of sale or un.er t e order of a court of competent @urisdiction5 1)

($) /urc ases "a.e in a merchantHs storeA or in fairsA or mar"etsA in accor.ance wit t e Co.e of Co""erce an. special laws. 1$2$ #/ 5/$: 9f seller is not owner or as no aut ority or consent fro" owner4 'uyer ac7uires no 'etter title to goo.s t an t e seller a. $XC$PTI42: '!stoppel to .eny sellerDs aut ority) 9f 'y con.uct of owner4 e is preclu.e. fro" .enying sellerDs aut ority 24T #FF$CT: (Boo? at ,e Beon an. Baviera) * 6actors acts4 recor.ing laws * Iu.icial sale * /urc ase at "erc antDs store4 "ar?et or fair v. /ractice notes# o'(ect or su'(ect "atter of t e contract a) Sale of s ares > sale of no"inee s ares4 sale at less t an fair "ar?et value4 sale of s ares in a corporation engage. in a partly*nationali@e. activity4 rig t of first refusal4 pre*e"ptive rig ts4 tag*along rig ts4 .rag*along rig ts4 ta; re7uire"ents4 registration re7uire"ents ') Sale of lan. * sale of lan. to aliens4 ta; re7uire"ents4 registration re7uire"ents4 sale of lan. ac7uire. 'y o"estea. or free patent c) Sale of assets > sale of all or su'stantially all of t e assets4 sale in 'ul? .) Sale of "otor ve icles > registration re7uire"ents C. Cause or consideration i. /rice certain a) A en price certain #rt. (7:9. 9n or.er t at t e price "ay 'e consi.ere. certain4 it s all 'e sufficient t at it 'e so !ith reference to another thing certain4 or t at t e .eter"ination t ereof 'e left to the @udgment of a special person or persons. S oul. suc person or persons 'e unable or un!illing to fi% it 4 t e contract s all 'e 9F!669CAC9&ES4 03L:;; t e parties subse;uently agree upon t e price. 9f t e third person or persons acte. in bad faith or by mista"e4 t e C&E10S "ay fi; t e price. A ere suc t ir. person or persons are prevente. fro" fi;ing t e price or ter"s 'y fault of t e seller or t e 'uyer4 t e party not in fault "ay ave suc remedies against the party in fault as are allowe. t e seller or t e 'uyer4 as t e case "ay 'e. =B$2 P IC$ C42SI&$ $& C$ T#I2 (1) Fo sale if price not certain or ascertaina'le. *S /rice oug t to 'e settle. for t ere can 'e no sale wit out a price *S 9t "ust 'e capa'le of 'eing ascertaine. in "oney or its e7uivalent U 2&F!L# currency5 90S !ME9CAB!F0# pro"issory notes4 c ec?s an. ot er "ercantile instru"ents generally accepte. as representing "oney *S 0 e fact t at t e e;act a"ount to 'e pai. for t e t ing sol. is not precisely fi%ed4 is no 'ar to an action to recover suc co"pensation4 provi.e. t e contract4 'y its ter"s furnis es a 'asis for ascertaining t e a"ount agree. upon. (3) Cases w en price consi.ere. certain *S /arties ave fi;e. or agree. upon a .efinite a"ount *S 9t 'e reference to anot er t ing certain (eg. gas4 fi;e. price nung 'arrel sa worl. "ar?et pero gas in.i4 nagfafluctuate5 in reference sa 'arrel4 price certain pa rin yung sa gas5 usu. !;a"ple .ito yung "ga finis e. pro.uct na in.i fi;e. ang price pero yung raw "aterial na ginaga"it para sa ?anila ay fi;e.) $FF$CT =B$ $ P IC$ FIX$& ?C TBI & P$S42 &$SI12#T$& G!F!1AB 1EB!# 0 e price fi;e. 'y a t ir. person .esignate. 'y t e t ir. parties is B9F,9FG upon t e" !OC!/09&FS# (1) A en t ir. person acts in BA, 6A90H or 'y 29S0A-! as w en t e t ir. person fi;e. t e price aving in "in. not t e t ing w ic is t e o'(ect of t e sale4 'ut anot er analogous or si"ilar t ing *S court can t en fi; t e price *S 2ere error in (u.ge"ent cannot serve as 'asis for i"pugning t e price fi;e. (3) A en t e t ir. person .isregar.s specific instructions or t e proce.ure "ar?e. out 'y t e parties or t e .ata given i"4 t ere'y fi;ing an ar'itrary price *S court "ay fi; t e price $FF$CT =B$ $ P IC$ 24T FIX$& ?C TBI & P$ S42 &$SI12#T$& 9f reason is t at e 1!6ES!S or CAFF&0 69O 90 (w8out fault of seller or 'uyer) o C&F01AC0 9S 9F!669CAC9&ES as if no price a. 'een agree. upon !OC!/0 if parties agree on price 9f reason is t at e is /1!C!F0!, (t roug fault of seller or 'uyer) o /arty not in fault "ay o'tain re.ress against t e party in fault# 1!SC9SS9&F or 6EB69BB2!F0 wit .a"ages in eit er case o 9f 6EB69BB2!F04 courts will fi; t e price #rt. (7+-. 0 e price of securities4 grain4 li7ui.s4 an. ot er t ings s all also 'e consi.ere. C!10A9F4 !hen the price fi%ed is that !hich the thing sold !ould have on a definite day 4 or in a particular e%change or mar"et4 or w en an amount is fi%ed above or belo! the price on such day4 or in such e%change or mar"etA provided said amount be certain. P IC$ 42 # 1IV$2 &#C #T P# TIC5/# 3# >$T 6ollows t e principle in Article 14:% t at a price is consi.ere. C!10A9F if it coul. 'e .eter"ine. wit reference to anot er t ing certain H<rovided said amount be certainG. A en an a"ount is fi;e. above or belo, t e price on a given .ay or in a particular e;c ange or "ar?et4 t e sai. a"ount "ust 'e C!10A9F5 ot erwise4 t e sale is inefficacious 'ecause t e price cannot 'e .eter"ine. 0 is article is especially applica'le to fungi'le t ings li?e securities4 grain4 li7ui.s4 etc. t e price of w ic are su'(ect to fluctuations of t e "ar?et #rt. (7+<. 0 e fi;ing of t e price can F!C!1 'e left to t e .iscretion of one of t e contracting parties. However4 if t e price fi;e. 'y one of t e parties is accepted by the otherA the sale is perfected. 18

FIXI21 4F P IC$ ?C 42$ 4F TB$ C42T #CTI21 P# TI$SA 24T #//4=$& eason: 24 C42S$2T or meeting of minds (1) 9f consent is essential to a contract of sale4 t e .eter"ination of t e price cannot 'e left to t e .iscretion of one of t e contracting parties5 ot erwise4 it cannot 'e sai. t at t e ot er consente. to a price e .i. not an. coul. not previously ?now. The validity of compliance of the contact cannot be made to depend upon the !ill of one party. (3) 2oreover4 to 'e IES04 t e price "ust 'e .eter"ine. 92/A109ABBL 'y 'ot parties or left to t e (u.ge"ent of a specifie. person or persons. However. A ere t e price fi;e. 'y one party is accepte. 'y t e ot er4 t e contract is .ee"e. perfecte. 'ecause in t is case4 t ere e;ists a true "eeting of "in.s upon t e price. ') !ffect w en price not certain #rt. (7+7. A ere t e price cannot 'e .eter"ine. in accor.ance wit t e prece.ing articles4 or in any ot er "anner4 t e contract is 9F!669CAC9&ES. However4 if t e t ing or any part t ereof as 'een delivered to and appropriated 'y t e 'uyer e must pay a $#S42#?/$ P IC$ therefore. A at is a reasona'le price is a ;uestion of fact dependent on the circumstances of each particular case. $FF$CT 4F F#I/5 $ T4 &$T$ 3I2$ P IC$ (1) =+ere contract e-ecutory. 9f t e price cannot 'e .eter"ine. in accor.ance wit FCC 14:% an. FCC 14)34 or in any ot er "anner4 an. t e 'argain is still e;ecutory4 t e contract is wit out effect. /rice certain is an essential ele"ent of t e contract of sale. Conse7uently4 t ere is no o'ligation on t e part of t e ven.or to .eliver t e t ing an. on t e part of t e ven.ee to pay. >#) =+ere delivery +as been made ii. Bac? of cause or consi.eration #rt. (7*9. 0 e following contracts are ine;istent an. voi. fro" t e 'eginning# ($) 0 ose w ose cause or o'(ect .i. not e;ist at t e ti"e of t e transaction5 0 ese contracts cannot 'e ratifie.. Feit er can t e rig t to set up t e .efense of illegality 'e waive.. iii. 9na.e7uacy of t e price #rt. (7+*. Gross ina.e7uacy of price does not affect a contract of sale 4 !OC!/0 as it "ay in.icate a defect in the consent4 or t at the parties really intended a donation or so"e ot er act or contract. a) A en price ina.e7uate 1$2$ #/ 5/$: ,oes not affect contract of sale $XC$PTI42: 9f it "ay in.icate a .efect of consent or parties really inten.e. a .onation or so"e ot er act or contract ') !ffect of ina.e7uate price * on voluntary sales (sales wit contract4 etc.) 1$2$ #/ 5/$: 2ere ina.e7uacy of t e price or allege. ar.ness of t e 'argain .oes not affect its vali.ity w en 'ot parties are in a position to for" an in.epen.ent (u.g"ent concerning t e transaction (if free fro" invali.ating .efects) A valua'le consi.eration4 owever s"all or no"inal4 if given or stipulate. in G&&, 6A90H is4 in t e a'sence of frau.4 sufficient AH!F 0& ,!0!129F! 96 /19C! A,!MEA0!# /rice o'taining at t e .ate of e;ecution of contract not t ose o'taining a nu"'er of years later AH!1! B&A /19C! 9F,9CA0!S ,!6!C0 9F C&FS!F0 o A en frau.4 "ista?e or un.ue influence is present (contract annulle. not 'ec. of ina.e7uacy 'ut 'ec. consent is vitiate.) o Contracts of sale entere. into 'y guar.ians or representatives of a'sentees w enever t e war.s or a'sentees w o" t ey represent suffer B!S9&F 'y "ore t an V of t e value of t e t ings w ic are t e o'(ect t ereof (1!SC9SS9BB!) AH!1! B&A /19C! ,&!S F&0 9F,9CA0! ,!6!C0 o Fot proven. Allegation of ina.e7uacy of price "ust 'e proven o A en parties agree on a price as t e actual consi.eration4 t e sale is not si"ulate. an. t erefore vali. .espite ina.e7uacy of price AH!1! /19C! S& B&A AS 0& B! HSH&C-9FG 0& C&FSC9!FC!G o Ha "an in is senses an. not un.er a .elusionG# Sale "ay 'e set asi.e an. .eclare. an e7uita'le "ortgage to secure a loan o But w ere t e price pai. is "uc ig er t an t e assesse. value of property an. sale is effecte. 'y a fat er to is .aug ter in w ic filial love "ust 'e ta?en into account4 t e price is not to 'e construe as so ina.e7uate , on involuntary sales (auction sale4 (u.icial sale) $g. A (u.icial or e;ecution sale is one "a.e 'y a court wit respect to t e property of a .e'tor for t e satisfaction of is in.e'te.ness (e;tra(u.icial foreclosure sale4 (u.icial foreclosure sale4 or.inary e;ecution sale) 1$2$ #/ 5/$: 2ere ina.e7uacy of price is not a sufficient groun. for t e cancellation of an e;ecution sale if t ere is no s owing t at in t e event of a resale4 a 'etter price can 'e o'taine.. AH!1! S!BB!1 9S G9C!F 0H! 19GH0 0& 1!/E1CHAS! (Cali.) o Cali.ity is not affecte. w ere t e law gives to t e owner t e rig t to re.ee"4 as w en a sale is "a.e at pu'lic auction4 upon t e t eory t at t e lesser t e price4 t e easier it is for t e owner to effect t e re.e"ption o He "ay reac7uire property or also sell is rig t to re.ee" an. t us recover t e loss e clai"s e suffere. 'y reason of t e price o'taine. at t e e;ecution sale $XC$PTI42: A ere price is so low as to 'e Hs oc?ing to t e conscienceG ("ay 'e set asi.e) iv. Si"ulate. price #rt. (7+(. 9f t e price is si"ulate.4 t e sale is C&9,4 'ut t e act may be sho!n to have been in reality a donationA or some other act or contract. a) A en price si"ulate. SI35/#TI42: &ccurs w en an apparent contract is a .eclaration of a fictitious will .eli'erately "a.e 'y agree"ent of t e parties4 in or.er to pro.uce4 for t e purpose of .eception4 t e appearance of a (uri.ical act w ic .oes not e;ist or is .ifferent fro" t at w ic was really e;ecute. $D5ISIT$S: An outwar. .eclaration of will .ifferent fro" t e will of t e parties 1%

0 e false appearance "ust ave 'een inten.e. 'y "utual agree"ent 0 e purpose is to .eceive t ir. persons

') !ffect of si"ulate. price 1$2$ #/ 5/$: Coi.4 if a'solute (1) 9f contract is not s own to 'e a .onation or any ot er act or contract transferring owners ip 'ecause t e parties .o not inten. to 'e 'oun. at all# &wners ip not transferre.4 C&F01AC0 C&9,5 action .oes not prescri'e (3) /urc ase price not pai. alt oug .ee. of sale states it as 'een pai.# FEBB an. C&9, for lac? of consi.eration *S Fonpay"ent of price .oes not prove si"ulation4 at "ost it gives t e seller t e rig t to sue for collection ( owever4 if it is state. in t e .ee. t at it as alrea.y 'een pai. *S 0 en si"ulate.). 9n a contract of sale4 pay"ent of t e price is a resolutory con.ition an. t e re"e.y of t e seller is to e;act fulfill"ent or in case of su'stantial 'reac 4 to rescin. t e contract ($) 9f t ere is no "eeting of t e "in.s of t e parties as to t e price4 'ecause t e price stipulate. in t e contract is si"ulate.4 t e contract is C&9,. Art. 14)1 states t at if t e price is si"ulate4 SAB! 9S C&9,. $XC$PTI42: Cali.4 if (1) A en t e ven.or really inten.e. to transfer t e t ing gratuitously# Sale is C&9, 'ut contract CAB9, as .onation (3) 0 e fact t at t e seller continues to pay realty ta;es on t e lan. sol. even after t e e;ecution of t e contract .oes not necessarily prove owners ip4 "uc less si"ulation of sai. contract ($) 1!BA09C! S92EBA09&F# A en t e parties inten.e. to 'e 'oun. 'y t e contract of sale4 e;cept t at t e .ee. .i. not reflect t e actual purc ase price. Contract re"ains CAB9, an. !F6&1C!ABB!. *S Su'(ect to 1!6&12A09&F in or.er t at t e contract "ay e;press t e true intention of t e parties v. /ay"ent of earnest "oney #rt. (78-. A enever earnest "oney is given in a contract of sale4 it s all 'e consi.ere. as part of the price an. as proof of the perfection of the contract. $# 2$ST 342$C '&4=2P#C3$2T.: is so"et ing of value given 'y t e 'uyer to t e seller to s ow t at t e 'uyer is really in earnest4 an. to 'in. t e 'argain. 9t is actually a partial pay"ent of t e purc ase price an. is consi.ere. proof of t e perfection of t e contract. 9t for"s part of t e consi.eration only if t e sale is perfecte. an. t e sale is consu""ate. upon full pay"ent of t e purc ase price. Since earnest "oney constitutes an a.vance or .own pay"ent4 it "ust 'e .e.ucte. fro" t e total price By agree"ent4 t e a"ount "ay 'e "erely a .eposit of w at woul. eventually 'eco"e earnest or .ownpay"ent an. not as part of t e purc ase price or perfection of contract 'ut only as a GEA1AF0!! t at t e 'uyer woul. not 'ac? out. 9f t atDs t e case4 itDs not really !A1F!S0 2&F!L 'ut proof of t e concurrence of all essential ele"ents of contract w ic esta'lis es e;istence of perfecte. contract. 0H!1! 9S F& SAB! AH!1! 0H! /A109!S S09BB HAC! 0& AG1!! &F 0H! ACC!/0ABB! 0!12S &6 /AL2!F0. A10. 1454. ,elivery of part of t e purc ase price s oul. not 'e un.erstoo. as constituting earnest "oney to 'in. t e agree"ent in t e a'sence of so"et ing in t e contract s owing t at suc was t e intention of t e parties $# 2$ST 342$C /art of t e purc ase price Given only w ere t ere is alrea.y a perfecte. sale 4PTI42 342$C '(7+9A par -. 2oney given as .istinct consi.eration for an option contract Applies to a sale not yet perfecte.

A.. to notes 1483 /g 133 vi. /ractice notes# cause or consi.eration * ow pay"ent effecte.# cas 4 c ec?4 wire transfer4 etc.

&. Perfection of contractE consummation of contract #rt. (7+). 0 e contract of sale is perfecte. at t e "o"ent t ere is a meeting of minds upon t e t ing w ic is t e o'(ect of t e contract an. upon t e price. 6ro" t at "o"ent4 t e parties may reciprocally demand performance4 su'(ect to t e provisions of t e law governing t e for" of contracts. P$ F$CTI42 4F C42T #CT 'follo!s the general rule that contracts are perfected by mere consent. '(. 3oment of consent *S C&FS!FSEAB# 9t is perfect at t e "o"ent of consent wit out t e necessity of any ot er circu"stances *S /!16!C0!,# At t e "o"ent of "eeting of "in.s upon 0H9FG (su'(ect of contract) an. t e /19C! *S reciprocal o'ligations of t e parties arise even w en neit er as 'een .elivere. a. Contract not invali. "erely 'ecause no signature of ven.ee5 !ssence of contract is confor"ity of t e parties on 0!12S of contract an. t e ACC!/0AFC! 'y one of t e offer '. !;istence of 2E0EAB C&FS!F0 ('eing a state of "in.) inferre. fro" t e confluence of 0A& AC0S i. An offer certain as to t e o'(ect of t e contract an. its consi.eration ii. An acceptance of t e offer w ic is a'solute in t at it refers to t e e;act o'(ect an. consi.eration e"'o.ie. in sai. offer (F& C&EF0!1 &66!1) c. 9FCA/AC90A0!,# Fot inco"petent 'y "ere a.vance. years 'ut if t ese ave i"paire. "ental faculties so as to prevent a person fro" intelligently protecting is property rig ts4 t e 9FCA/AC90A0!, (3) Conduct of parties: Appropriate con.uct "ay s ow consent a. Action of parties "ay in.icate t at a 'in.ing o'ligation as 'een un.erta?en '. Fo perfecte. sale if con.itional an. con.ition is not fulfille. c. A letter of intent to 'uy an. sell is neit er a contract to sell nor a con.itional contract of sale '<. Transfer of o!nership a. Sale 'y itself .oes not transfer or affect owners ip. 9t (ust creates t e o'ligation to transfer owners ip. '. &wners ip is not transferre. until t e .elivery of t e t ing. c. 0 e parties "ay owever stipulate t at t e owners ip of t e t ing even if .elivere. s all not pass to purc aser until full pay"ent. (4) 6or" of contract G!F!1AB 1EB!# Bin.ing regar.less of for" !OC!/09&F# ("ust co"ply wit for") 3+

*S 6alls wit in Statute of 6rau.s *S 6alls wit in any ot er applica'le statute w ic re7uires a certain for" for its enforcea'ility of vali.ity !OA2/B!S# Contract of sale in private instru"ent *S contract 'in.ing 'etween parties upon perfection an. a party "ay co"pel t e ot er to e;ecute a pu'lic instru"ent e"'o.ying t e contract Sale of real estate *S Begally effective against t ir. persons only fro" t e .ate of its registration (5) Consent reluctantly given Still voluntary5 CAB9, (:) Fotari@e. .ee. of sale states receipt of price 0o overco"e a pu'lic .ocu"ent sole"nly e;ecute. 'efore t e notary pu'lic4 t e evi.ence to t e contrary "ust 'e clear4 strong an. convincing. /A1&B !C9,!FC! not suffice ()) ApplicantDs 7ualification to 'uy still su'(ect to investigation 2ere application to 'uy 'ecause still su'(ect to revocation (8) C attel "ortgage of car 'y "ortgagor*'uyer prior to transfer of title to is na"e ,oes not ren.er t e sai. "ortgage 'y t e 'uyers invali.4 'ecause t e "ortgagors were alrea.y t e owner of t e car w en t e "ortgage was e;ecute. 1egistration for transfer "erely a."inistrative procee.ing w ic .oes not 'ear relation to t e contract of sale (%) Breac of contract 'y one party 9n(ure. party "ay sue fulfill"ent or rescission wit pay"ent of .a"ages in eit er case Ciolation of reciprocity 'etween t e parties 'roug t a'out 'y a 'reac of o'ligation 'y one of t e" =B$2 &$FI2IT$ #1 $$3$2T 42 3#22$ 4F P#C3$2T $SS$2TI#/ 1$2$ #/ 5/$: 9t is not t e act of pay"ent of price t at .eter"ines t e vali.ity of t e contract so .espite t e "anner of pay"ent or even 'reac of t at4 a contract is 'in.ing $XC$PTI42: (Courts "ay fi; perio. or perio.s of pay"ent w ere t ere is lac? of agree"ent to t e sa"e) (1) 9n 9FS0ABB2!F0S# Fot perfecte. contract of sale if t e parties still ave to agree on ow an. w en .ownpay"ent an. install pay"ents are to 'e "a.e (3) A en parties stipulate t at in a..ition to t e su'(ect "atter an. t e price4 con.itions an. ter"s of pay"ent are essential or "aterial to t e contract (usu4 ter"s an. con.itions are acci.ental not essential BE0 not ere) ($) MEAB969!, ACC!/0AFC! (4) An agree"ent on t e price 'ut a .isagree"ent on t e "anner of its pay"ent will not result in consent. 0 is lac? of consent is separate an. .istinct fro" lac? of consi.eration. An agree"ent on ter"s of pay"ent is integral to t e ele"ent of a price certain. $FF$CT 4F F#I/5 $ T4 P#C STIP5/#T$& P IC$ 1$2$ #/ 5/$# Cali.ity of contract not vitiate. F#I/5 $ T4 P#C C42SI&$ #TI42 0 ere is a consi.eration 'ut it as not 'een pai. 1esults in a rig t to .e"an. fulfill"ent or cancellation of t e o'ligation un.er an e;isting vali. contract CAB9,4 .e"an. fulfill"ent /#C> 4F C42SI&$ #TI42 0 ere is no price &1 /rice state. as pai. never 'een pai. (si"ulate.) /revents t e e;istence of a vali. contract FEBB AF, C&9,5 Fo effect

$3$&C 4F V$2&4 o ,e"an. specific perfor"ance or rescission wit .a"ages in eit er case o Best evi.ence of pay"ent of purc ase price is official receipt not sales invoices

I1BT 4F 4=2$ T4 FIX BIS 4=2 P IC$ !ven if unreasona'le8s"all or no"inal consi.eration4 it is up to prospective 'uyer to accept or re(ect it $. Items to note i. /erfection of sale 'y auction #rt. (7+:. 9n t e case of a sale 'y auction# (1) A ere goo.s are put up for sale 'y auction in lots4 eac lot is the sub@ect of a separate contract of sale. (3) A sale 'y auction is /!16!C0!, !hen the auctioneer announces its perfection by the fall of the hammerA or in other customary manner. Entil suc announce"ent is "a.e4 any 'i..er "ay retract is 'i.5 an. t e auctioneer "ay wit .raw t e goo.s fro" t e sale unless t e auction as 'een announce. to 'e wit out reserve. ($) A rig t to 'i. "ay 'e reserved e%pressly 'y or on 'e alf of t e seller4 EFB!SS ot erwise provi.e. 'y law or 'y stipulation. (4) A ere notice has not been given t at a sale 'y auction is su'(ect to a right to bid on behalf of the seller4 it s all not 'e lawful for t e seller to 'i. i"self or to e"ploy or in.uce any person to 'i. at suc sale on is 'e alf or for t e auctioneer4 to e"ploy or in.uce any person to 'i. at suc sale on 'e alf of t e seller or ?nowingly to ta?e any 'i. fro" t e seller or any person e"ploye. 'y i". Any sale contravening t is rule "ay 'e treate. as fraudulent by the buyer. (n) 5/$S 14V$ 2I21 #5CTI42 S#/$S (1) Sales of separate lots 'y auction are separate sales. A ere separate lots are su'(ect of separate 'i..ings an. are separately ?noc?e. .own4 t ere is a separate contract in regar. to eac lot. As soon as t e a""er falls on t e first lot4 t e purc aser of t at lot as a co"plete an. separate 'argain. He nee. not "ale anot er. A en t e 3n. lot is put up an. ?noc?e. .own to t e ig est 'i..er4 t ere is a separate co"plete contract as to t e sai. lot w et er t e 'i..er w o secure. t e first lot or w et er anot er person appens to 'e t e ig est 'i..er. 31

/ossi'le t at t e parties "ay su'se7uently consoli.ate all t e purc ases into one transaction > as 'y giving a single note > for t e aggregate price

(3) Sale perfecte. 'y t e fall of t e a""er 9n putting up t e goo.s for sale4 t e seller is "erely "a?ing an invitation to t ose present to "a?e offers w ic t ey .o 'y "a?ing 'i.s4 one of w ic is ulti"ately accepte.. !ac 'i. is an offer an. t e contract is perfecte. only 'y t e fall of t e a""er or in ot er custo"ary "anner. 9t follows t at t e 'i..er "ay retract is 'i. an. t e auctioneer "ay wit .raw t e goo.s fro" sale any ti"e 'efore t e a""er falls. However4 if t e sale as 'een announce. to 'e wit out reserve4 t e auctioneer cannot wit .raw t e goo.s fro" sale once a 'i. as 'een "a.e an. t e ig est 'i..er as a rig t to enforce is 'i.. ($) 1ig t of seller to 'i. in t e auction 0 e seller or is agent "ay 'i. in an auction sale provi.e. a. Suc rig t was reserve. '. Fotice was given t at t e sale is su'(ect to a rig t to 'i. on 'e alf of t e seller i. 9f no notice# EFBAA6EB 6&1 S!BB!1 * unlawful to 'i. eit er .irectly or in.irectly or for t e auctioneer to e"ploy or in.uce any person to 'i. on 'e alf of t e seller ii. 1!AS&F# /revent puffing or secret 'i..ing 'y or on 'e alf of t e seller 'y people w o are not t e"selves 'oun. * 0 e e"ploy"ent of a puffer or 'y 'i..er to en ance or inflate t e price of t e goo.s sol. is a 61AE, upon t e purc aser an. a sufficient groun. for relieving i" fro" is 'i. an. avoi.ing t e sale. * 0 is is true even if t e e"ploy"ent of t e puffer 'y t e auctioneer was ;;; c. 1ig t to 'i. 'y t e seller is not pro i'ite. 'y law or stipulation F&0!S# putol pg 84 ii. !;propriation #rt. (788. 0 e e;propriation of property for pu'lic use is governe. 'y special laws. (145:) $XP 4P I#TI42 4F P 4P$ TC F4 P5?/IC 5S$ * 0 e proce.ure for t e e;ercise of t e power of e"inent .o"ain is provi.e. for in 1ule :) 1&C. !;propriation "ust 'e .ecree. 'y co"petent aut ority an. for pu'lic use an. always upon t e pay"ent of (ust co"pensation. (Art. 4$54 par. 14 Civil Co.e5 Art. 9994 Sec. %4 C&FS0.) * #rt. 7<). Fo person s all 'e .eprive. of is property e;cept 'y co"petent aut ority an. for pu'lic use an. always upon pay"ent of (ust co"pensation. S oul. t is re7uire"ent 'e not first co"plie. wit 4 t e courts s all protect an.4 in a proper case4 restore t e owner in is possession. ($4%a) Section 9. /rivate property s all not 'e ta?en for pu'lic use wit out (ust co"pensation. iii. Iu.icial sales #rt. ()7(. 0 e provisions of t e two prece.ing articles s all apply to (u.icial sales. (n) #rt. ()<9. 0 e o'ligation to .eliver t e t ing sol. inclu.es t at of placing in t e control of t e ven.ee all t at is "entione. in t e contract4 in confor"ity wit t e following rules# 9f t e sale of real estate s oul. 'e "a.e wit a state"ent of its area4 at t e rate of a certain price for a unit of "easure or nu"'er4 t e ven.or s all 'e o'lige. to .eliver to t e ven.ee4 if t e latter s oul. .e"an. it4 all t at "ay ave 'een state. in t e contract5 'ut4 s oul. t is 'e not possi'le4 t e ven.ee "ay c oose 'etween a proportional re.uction of t e price an. t e rescission of t e contract4 provi.e. t at4 in t e latter case4 t e lac? in t e area 'e not less t an one*tent of t at state.. 0 e sa"e s all 'e .one4 even w en t e area is t e sa"e4 if any part of t e i""ova'le is not of t e 7uality specifie. in t e contract. 0 e rescission4 in t is case4 s all only ta?e place at t e will of t e ven.ee4 w en t e inferior value of t e t ing sol. e;cee.s one*tent of t e price agree. upon. Fevert eless4 if t e ven.ee woul. not ave 'oug t t e i""ova'le a. e ?nown of its s"aller area of inferior 7uality4 e "ay rescin. t e sale. (14:%a) #rt. ()7*. 9f4 in t e case of t e prece.ing article4 t ere is a greater area or nu"'er in t e i""ova'le t an t at state. in t e contract4 t e ven.ee "ay accept t e area inclu.e. in t e contract an. re(ect t e rest. 9f e accepts t e w ole area4 e "ust pay for t e sa"e at t e contract rate. iv. Bilateral pro"ise to 'uy an. sell #rt. (7+9. A pro"ise to 'uy an. sell a .eter"inate t ing for a price certain is reciprocally .e"an.a'le. An accepte. unilateral pro"ise to 'uy or to sell a .eter"inate t ing for a price certain is 'in.ing upon t e pro"issor if the promise is supported by a consideration distinct from the price. (1451a) < >I2&S 4F P 43IS$ T $#T$& I2 TBIS # TIC/$ (1) An accepte. unilateral pro"ise to sell in w ic t e pro"isee (acceptor) elects to 'uy5 (3) An accepte. unilateral pro"ise to 'uy in w ic t e pro"isee (acceptor) elects to sell5 an. ($) A 'ilateral pro"ise to 'uy an. sell reciprocally accepte. in w ic eit er of t e parties c ooses to e;act fulfill"ent $FF$CT 4F 52#CC$PT$& 52I/#T$ #/ P 43IS$ *S Fo (uri.ical effect or legal 'on. * /&B9C90AC9&F# Enaccepte. i"perfect pro"ise or offer * A perio. "ay 'e given to t e offeree wit in w ic to accept t e offer. v. &ptions 3$#2I21 4F 4PTI42: is a contractual privilege e;isting in one person for w ic e as pai. a consi.eration w ic gives i" t e rig t to 'uy8sell4 for e;a"ple4 a certain "erc an.ise or a certain specifie. property4 fro"8to anot er person4 if e c ooses4 at any ti"e wit in t e agree. perio. at a fi;e. price4 or un.er or in co"pliance wit certain ter"s an. con.itions. 2#T5 $ 4F 4PTI42 C42T #CT (1) An option is a contract. 9t is a preparatory contract4 separate an. .istinct fro" t e "ain contract itself (su'(ect "atter of t e option) w ic t e parties "ay enter into upon t e consu""ation of t e option. 9t "erely secures t e privilege to 'uy8sell. (3) 9t gives t e party grante. t e &/09&F or t e rig t to ,!C9,!4 w et er or not to enter into a principal contract4 w ile it B9F,S t e party w o as given t e option4 not to enter into a principal contract wit any ot er person ,E19FG t e agree. ti"e an. 33

wit in t at perio.4 to !F0!1 into suc contract wit t e one to w o" t e option was grante. if t e latter s oul. .eci.e to use t e option. 19GH0 &6 691S 1!6ESAB# w ile t e o'(ect "ig t 'e "a.e .eter"inate4 t e e;ercise of t e rig t woul. 'e .epen.ent not only on t e grantorDs eventual intention to enter into a 'in.ing (uri.ical relation wit anot er 'ut also on ter"s4 inclu.ing t e price4 t at are yet to 'e fir"e. up. ($) &/09&F v !A1F!S0# A en !A1F!S0 2&F!L is given4 t e 'uyer is B&EF, to /AL t e 'alance4 w ile t e A&EB,*B! BEL!1 w o gives &/09&F 2&F!L is not re7uire. to 'uy 'ut "ay even forfeit it .epen.ing on t e ter"s of t e option. &/09&F 2&F!L B!C&2! !A1F!S0 2&F!L# 9f t e parties so agree4 or it "ay actually 'e in t e nature of earnest "oney w en consi.ere. wit t e ot er ter"s or wor.s use. in t e contract. F&0!# Art. 1483 spea?s of a contract of sale4 note of earnest given in a contract to sell. !arnest "oney is consi.ere. part of t e purc ase price only if t e sale is consu""ate. upon full pay"ent of t e purc ase price. vi. Contract to sell C42T #CT 4& S#/$ Transfer of title 0itle passes to 'uyer upon .elivery of t e t ing sol. C42T #CT T4 S$//0$XC/5SIV$ I1BT #2& P IVI/$1$ T4 P5 CB#S$ A90H S09/EBA09&F t at owners ip in t e t ing s all not pass to t e purc aser until e as fully pai. t e price# &wners ip is reserve. in t e seller an. is not to pass until the full payment of the purchase A90H&E0 S09/EBA09&F (especially w ere t e 'uyer too? possession of t e property upon e;ecution of contract)# A at t e parties conte"plate. is contract of a'solute sale 6ull pay"ent is positive suspensive con.ition4 t e failure of w ic is not a 'reac 4 casual or serious4 of t e contract 'ut si"ply an event t at prevents t e o'ligation of t e ven.or to convey title fro" ac7uiring 'in.ing force. * A ere t e seller pro"ises to e;ecute a ,ee. of a'solute sale upon full pay"ent of t e purc ase price4 t e agree"ent is only a contract to sell. 0itle re"ains in t e ven.or if t e ven.ee .oes not co"ply wit t e con.ition prece.ent of "a?ing pay"ent at t e ti"e specifie. in t e contract. 0 ere is no actual sale EFB!SS an. EF09B full pay"ent of t e price is "a.e 9f t e ven.or s oul. e(ect t e ven.ee for failure to "eet t e con.ition prece.ent e is enforcing ;;; (-ulang)

Payment of price

Fonpay"ent of price is a negative resolutory con.ition an. re"e.y of seller is to e;act fulfill"ent or to rescin. t e contract

4!nership of vendor escission of the contract

Cen.or as lost an. cannot recover t e owners ip of t e t ing sol. an. .elivere.4 actually or constructively4 EF09B an. EFB!SS t e contract of sale itself is resolve. an. set asi.e

vi. Assign"ent of cre.its an. incorporeal rig ts #rt. (:-7. An assign"ent of cre.itors an. ot er incorporeal rig ts s all 'e perfected in accordance !ith the provisions of #rticle (7+). (n) * 14)5# "eeting of t e "in.s #rt. (:-). An assign"ent of a cre.it4 rig t or action s all pro.uce no effect as against third person 4 EFB!SS it appears in a public instrument4 or t e instrument is recorded in the egistry of Property in case t e assign"ent involves real property. (153:) #rt. (:-:. 0 e .e'tor w o4 before having "no!ledge of the assignment 4 pays is cre.itor s all 'e released fro" t e o'ligation. (153)) #rt. (:-+. 0 e assign"ent of a cre.it includes all the accessory rights4 suc as a guaranty4 "ortgage4 ple.ge or preference. (1538) #rt. (:-8. 0 e vendor in good faith s all 'e responsible for the e%istence and legality of the credit at t e ti"e of t e sale4 EFB!SS it s oul. ave 'een sol. as .ou'tful5 'ut 24T for the solvency of the debtor4 EFB!SS it as 'een so e%pressly stipulated or EFB!SS t e insolvency was prior to t e sale an. of co""on ?nowle.ge. !ven in t ese cases e s all only 'e liable for the price received an. for t e e%penses specifie. in Fo. 1 of Article 1:1:. 0 e vendor in bad faith s all always 'e answera'le for t e payment of all e%pensesA and for damages. (153%) #rt. (:-9. 9n case t e assignor in good faith s oul. ave "a.e i"self responsible for the solvency of the debtor 4 an. t e contracting parties s oul. not ave agree. upon t e .uration of t e lia'ility4 it s all last for one year only4 fro" t e ti"e of t e assign"ent if t e perio. a. already e%pired. 9f t e cre.it s oul. 'e paya'le wit in a ter" or perio. w ic as not yet e;pire.4 t e liability shall cease one year after the maturity . (15$+a) #rt. (:<*. &ne w o sells an inheritance wit out enu"erating t e t ings of w ic it is co"pose.4 s all only 'e ans!erable for his character as an heir. (15$1) #rt. (:<(. &ne w o sells for a lump sum t e w ole of certain rig ts4 rents4 or pro.ucts4 s all co"ply 'y ans!ering for the legitimacy of the !hole in general5 'ut e s all not be obliged to !arrant each of t e various parts of w ic it "ay 'e co"pose.4 !OC!/0 in t e case of eviction fro" t e w ole or t e part of greater value. (15$3a) #rt. (:<-. S oul. t e ven.or ave profited by some of the fruits or received anything from the inheritance sold 4 e s all pay the vendee t ereof4 if t e contrary as not 'een stipulate.. (15$$) #rt. (:<<. 0 e ven.ee s all4 on is part4 reimburse the vendor for all that the latter may have paid for the debts of and charges on the estate an. satisfy t e cre.its e "ay ave against t e sa"e4 EFB!SS t ere is an agree"ent to t e contrary. (15$4) #rt. (:<7. A en a cre.it or ot er incorporeal rig t in litigation is sol.4 t e .e'tor s all ave a right to e%tinguish it 'y reimbursing t e assignee for t e price t e latter pai. t erefor4 the @udicial costs incurre. 'y i"4 an. t e interest on t e price fro" t e .ay on w ic t e sa"e was pai.. A cre.it or ot er incorporeal rig t s all 'e consi.ere. in litigation fro" t e time the complaint concerning the same is ans!ered. 0 e .e'tor "ay e;ercise is rig t !ithin thirty days from the date the assignee demands payment fro" i". 3$

#rt. (:<). 6ro" t e provisions of t e prece.ing article s all 'e !OC!/0!, t e assign"ents or sales "a.e# (1) 0o a co,heir or co,o!ner of t e rig t assigne.5 (3) 0o a creditor in pay"ent of is cre.it5 ($) 0o t e possessor of a tene"ent or piece of lan. w ic is su'(ect to t e rig t in litigation assigne.. #rt. (:<:. 9n t e prece.ing articles in t is 0itle governing t e sale of goo.s4 unless t e conte;t or su'(ect "atter ot erwise re7uires# (1) R&ocument of title to goodsF inclu.es any 'ill of la.ing4 .oc? warrant4 R7ue.an4R or ware ouse receipt or or.er for t e .elivery of goo.s4 or any ot er .ocu"ent use. in t e or.inary course of 'usiness in t e sale or transfer of goo.s4 as proof of t e possession or control of t e goo.s4 or aut ori@ing or purporting to aut ori@e t e possessor of t e .ocu"ent to transfer or receive4 eit er 'y en.orse"ent or 'y .elivery4 goo.s represente. 'y suc .ocu"ent. F1oodsF inclu.es all c attels personal 'ut not t ings in action or "oney of legal ten.er in t e / ilippines. 0 e ter" inclu.es growing fruits or crops. F4rderF relating to .ocu"ents of title "eans an or.er 'y en.orse"ent on t e .ocu"ents. FDuality of goodsF inclu.es t eir state or con.ition. RSpecific goodsF "eans goo.s i.entifie. an. agree. upon at t e ti"e a contract of sale is "a.e. An antece.ent or pre*e;isting clai"4 w et er for "oney or not4 constitutes R valueF w ere goo.s or .ocu"ents of title are ta?en eit er in satisfaction t ereof or as security t erefor. (3) A person is insolvent wit in t e "eaning of t is 0itle w o eit er as ceased to pay his debts in t e or.inary course of 'usiness or cannot pay his debts as t ey 'eco"e .ue4 w et er insolvency procee.ings ave 'een co""ence. or not. ($) Goo.s are in a Fdeliverable stateR wit in t e "eaning of t is 0itle w en t ey are in suc a state t at t e 'uyer woul.4 un.er t e contract4 'e 'oun. to ta?e .elivery of t e". (n) #rt. (:<+. 0 e provisions of t is 0itle are su'(ect to t e rules lai. .own 'y t e 2 ortgage /a! and the /and regar. to i""ova'le property. (15$)a) egistration /a! wit

S#/$S $VI$=$ V. Formalities of contract of sale #. In 1eneral '#rts. (<):A (78<. #rt. (<):. Contracts s all 'e obligatoryA in !hatever form t ey "ay ave 'een entere. into4 provided all the essential re;uisites for t eir vali.ity are present. However4 w en t e la! re7uires t at a contract 'e in so"e for" in or.er t at it "ay 'e valid or enforceable4 or t at a contract 'e proved in a certain !ay4 t at re7uire"ent is a'solute an. in.ispensa'le. 9n suc cases4 t e rig t of t e parties state. in t e following article cannot 'e e;ercise.. (13)8a) #rt. (78<. Su'(ect to t e provisions of t e Statute of Frauds an. of any ot er applica'le statute4 a contract of sale "ay 'e "a.e in !riting4 or 'y !ord of mouth4 or partly in !riting an. partly by !ord of mouth4 or "ay 'e inferred from the conduct of t e parties. (n) F4 3 4F C42T #CT 4F S#/$ * 0 e for" of a contract refers to t e "anner in w ic it is e;ecute. or "anifeste.. A contract of sale as no prescri'e. for". 9t nee. not contain a tec nical .escription of t e su'(ect property4 real or personal. (Faraya v CA) (1) 1$2$ #/ 5/$: Contract vali. in any for" provi.e. all t e essential re7uisites are present. 9t "ay 'e in writing5 it "ay 'e oral5 it "ay 'e partly in writing an. partly oral. 9t "ay even 'e inferre. fro" t e con.uct of parties. Sale is a consensual contract an. is perfecte. 'y "ere consent. $XC$PTI42S: (3) =+ere form is re8uired in order t+at a contract may enforceable. 9n case t e contract of sale s oul. 'e covere. 'y t e Statute of 6rau.s4 t e law re7uires t at t e agree"ent (or so"e note or "e"oran.u" t ereof) 'e in writing su'scri'e. 'y t e party c arge.4 or 'y is agent5 ot erwise4 t e contract cannot 'e enforce. 'y action (14+$<3=). ($) =+ere form is re8uired in order t+at a contract may be valid. A ere t e Happlica'le statuteG re7uires t at t e contract of sale 'e in a certain for" for its vali.ity4 t e re7uire. for" "ust 'e o'serve. in or.er t at t e contract "ay 'e 'ot vali. an. enforcea'le (Art. 1$5:) (4) =+ere form is re8uired only for t+e convenience of t+e parties. 9n certain cases4 a certain for" (ie. pu'lic instru"ent) is re7uire. for t e convenience of t e parties in or.er t at t e sale "ay 'e registere. in t e 1egistry of ,ee.s to "a?e effective as against t ir. persons t e rig t ac7uire. un.er suc sale. As 'etween t e contracting parties4 t e for" is not in.ispensa'le since t ey are allowe. 'y law to co"pel eac ot er to o'serve t at for" (1$5)4 1$58<1=). Hence4 t e fact t at t e ,ee. of Sale of a parcel of lan. still a. to 'e signe. an. notari@e.4 an. recor.e. in t e 1egistry of ,ee.s .oes not "ean t at no contract a. alrea.y 'een perfecte.. A sale of lan. is vali. regar.less of t e for" it "ay ave 'een entere. into as long as t e re7uisites for a vali. contract of sale are present. &n t e ot er an.4 t e fact t at a .ee. of sale is a notari@e. .ocu"ent .oes not necessarily (ustify t e conclusion t at t e sai. sale is a true conveyance to w ic t e parties t ereto are irrevoca'le 'oun.. 0 oug its notari@ation vests in its favor t e presu"ption of regularity an. .ue e;ecution >?an@ano v <ere@), it is not t e function of t e notary pu'lic to vali.ate an. "a?e 'in.ing an instru"ent never inten.e. 'y t e parties to ave any 'in.ing legal effect upon t e". 0 e intention of t e parties still an. always is t e pri"ary consi.eration in .eter"ining t e true nature of t e contract. A ere t e ven.or .i. not personally appear 'efore t e notary pu'lic4 suc fact raises .ou't regar.ing t e ven.orDs consent to t e sale notwit stan.ing t at t e .ee. states t e contrary. An invali.ly notari@e. .ee. of sale "ust 'e consi.ere. "erely as a private .ocu"ent. !ven if vali.ly notari@e.4 t e .ee. woul. still 'e classifie. as a private .ocu"ent if it is "erely su'scri'e. an. sworn to 'y way of Aurat 'ut was not properly ac?nowle.ge.. i. Cer'al ii. Aritten ?. Form re;uired for enforceability: Statute of Frauds '#rt. (7*<A (7*)A (7*:. 34

#rt. (7*<. 0 e following contracts are 52$2F4 C$#?/$4 unless t ey are #TIFI$&# (1) 0 ose entere. into in t e na"e of anot er person 'y one w o as 'een given no aut ority or legal representation4 or w o as acte. 'eyon. is powers5 (3) 0 ose t at .o not co"ply wit t e Statute of 6rau.s as set fort in t is nu"'er. 9n t e following cases an agree"ent ereafter "a.e s all 'e unenforcea'le 'y action4 unless t e sa"e4 or so"e note or "e"oran.u"4 t ereof4 'e in writing4 an. su'scri'e. 'y t e party c arge.4 or 'y is agent5 evi.ence4 t erefore4 of t e agree"ent cannot 'e receive. wit out t e writing4 or a secon.ary evi.ence of its contents# (a) An agree"ent t at 'y its ter"s is not to 'e perfor"e. wit in a year fro" t e "a?ing t ereof5 (') A special pro"ise to answer for t e .e't4 .efault4 or "iscarriage of anot er5 (c) An agree"ent "a.e in consi.eration of "arriage4 ot er t an a "utual pro"ise to "arry5 (.) An agree"ent for t e sale of goo.s4 c attels or t ings in action4 at a price not less t an five un.re. pesos4 unless t e 'uyer accept an. receive part of suc goo.s an. c attels4 or t e evi.ences4 or so"e of t e"4 of suc t ings in action or pay at t e ti"e so"e part of t e purc ase "oney5 'ut w en a sale is "a.e 'y auction an. entry is "a.e 'y t e auctioneer in is sales 'oo?4 at t e ti"e of t e sale4 of t e a"ount an. ?in. of property sol.4 ter"s of sale4 price4 na"es of t e purc asers an. person on w ose account t e sale is "a.e4 it is a sufficient "e"oran.u"5 (e) An agree"ent of t e leasing for a longer perio. t an one year4 or for t e sale of real property or of an interest t erein5 (f) A representation as to t e cre.it of a t ir. person. ($) 0 ose w ere 'ot parties are incapa'le of giving consent to a contract. #rt. (7*). Contracts infringing t e Statute of 6rau.s4 referre. to in Fo. 3 of Article 14+$4 are ratified 'y t e failure to o'(ect to t e presentation of oral evi.ence to prove t e sa"e4 or 'y t e acceptance of 'enefit un.er t e". #rt. (7*:. A en a contract is enforcea'le un.er t e Statute of 6rau.s4 an. a pu'lic .ocu"ent is necessary for its registration in t e 1egistry of ,ee.s4 t e parties "ay avail t e"selves of t e rig t un.er Article 1$5). i. 6oncept En.er t e Statute of 6rau.s4 t e following contracts "ust 'e in writing5 ot erwise4 t ey s all 'e unenforcea'le 'y action# (a) Sale of personal property at a price not less t an /5++.++ (') Sale of real property or of an interest t erein regar.less of t e price involve. (c)Sale of property not to 'e perfor"e. wit in a year fro" t e "a?ing t ereof regar.less of t e nature of t e property an. t e price involve.. S#/$ 4F $#/ P 4P$ TC 4 #2 I2T$ $ST TB$ $I2. (1) A sale of a piece of lan. or interest t erein w en "a.e t+roug+ an agent is voi. unless t e agentDs aut ority is in writing. (Art. 18)4) (3) 6or t e sale of real property to 'e effective against t ir. persons4 t e sale "ust 'e registered in t+e Registry of Deeds (or /roperty) of t e province or city w ere t e property is locate.. 0 e sale "ust 'e in a pu'lic .ocu"ent (eg. ac?nowle.ge. 'efore a notary pu'lic or any pu'lic officer aut ori@e. 'y law to a."inister oat ) for ot erwise4 t e registration will 'e refuse.. ($) 0 e real purpose of registration of a contract of sale 'eing to give notice to t ir. persons an. to protect t e 'uyer against clai"s of t ir. persons arising fro" su'se7uent alienations 'y t e ven.or4 it is certainly not necessary to give efficacy to t e .ee. of sale4 as 'etween t e parties to t e contract an. t eir privies 'ecause actual notice is e8uivalent of registration. 9t is settle. t at registration is not a "o.e of ac7uiring owners ip. (4) 0 e sale of lan. in a private instru"ent is CAB9, an. B9F,9FG upon t e parties4 for t e ti"e* onore. rule is t at even a verbal contract of sale of real estate pro.uces legal effects 'etween t e parties4 since sale is a consensual contract an. is perfecte. 'y "ere consent. (5) 0 e fact t at t e notari@ation of a .ee. of sale of real property is false is of no conse7uence4 for it need not be notari@ed5 it is enoug t at it 'e in writing. 34&$ 4F S#TISF#CTI42 4F TB$ ST#T5T$ 4F F #5&S 0 e statute specifies $ ways in w ic contracts of sales of goo.s wit in its ter"s "ay 'e 'in.ing4 na"ely# (1) 0 e giving of a "e"oran.u"5 (3) Acceptance an. receipt of part of t e goo.s (or t ings in action) sol. an. actual receipt of t e sa"e (art. 1585) ($) /ay"ent or acceptance at t e ti"e so"e part of t e purc ase price 0 e re7uire"ent of a "e"oran.u" is o'viously suita'le eit er for a contract to sell or a sale. 0 e ot er 3 "o.es of satisfaction see" "ore naturally to apply to sales t an to e;ecutory contracts. 0 e Statute of 6rau.s applies not only to goo.s 'ut to t ings in action as well. 0 us4 an assign"ent of cre.it at a price not less t an /5++.++ is wit in t e operation of t e Statute. ii. <urpose 0 e purpose of t e Statute of 6rau.s is to prevent frau. an. per(ury in t e enforce"ent of o'ligations .epen.ing for t eir evi.ence upon t e unassiste. "e"ory of witnesses 'y re7uiring certain enu"erate. contracts an. transactions to 'e evi.ence in writing. (Clau.el v CA) iii. ;cope 0 e Statute of 6rau.s refers to specific ?in.s of transactions an. cannot apply to any ot er transaction t at is not enu"erate. t erein. 0 e application of t e Statute presupposes t e e;istence of a perfecte. contract. A rig t of first refusal is not a"ong t ose liste. as unenforcea'le un.er t e statute. At 'est4 it is a contractual grant not of t e sale of t e property involve.4 'ut of t e rig t of first refusal over t e property soug t to 'e sol.. Hence4 a rig t of first refusal nee. not 'e written to 'e enforcea'le an. "ay 'e proven 'y oral evi.ence. (1osencor v 9n7uing) ST#T5T$ 4F F #5&S #PP/IC#?/$ 42/C T4 $X$C5T4 C C42T #CTS 0 e Statute of 6rau.s is applica'le only to e;ecutory contracts (w ere no perfor"ance4 ie. .elivery an. pay"ent as as yet 'een "a.e 'y 'ot parties) an. not to contracts !hich are totally 'consummated. or partially performed. 9t .oes not for'i. oral evi.ence to prove a co"plete.4 e;ecute. or partially consu""ate. sale. $#S42: 0 e reason is t at t e partial perfor"ance li?e t e writing4 furnis es relia'le evi.ence of t e intention of t e parties or t e e;istence of t e contract. A contrary rule woul. result in in(ustice or unfairness to t e party w o as perfor"e. is o'ligation4 an. woul. pro"ote frau. an. 'a. fait on t e part of t e party w o as not perfor"e. is o'ligation4 for it woul. ena'le i" to ?eep t e 'enefits alrea.y .erive. 'y i" fro" t e transaction an. at t e sa"e ti"e4 eva.e t e responsi'ilities or lia'ilities assu"e. or contracte. 'y i". 35

CI C53ST#2C$S I2&IC#TI21 P# TI#/ P$ F4 3#2C$. A ere t ere is partial perfor"ance of a parol contract of sale of realty4 t e principle e;clu.ing evi.ence of suc contract .oes not apply. &t er circu"stances in.icating partial perfor"ance of an oral contract of sale of realty are relin7uis "ent of rig ts4 continue. possession 'y a purc aser w o is alrea.y in possession4 'uil.ing or i"prove"ents4 ten.er of pay"ent4 ren.ition of services4 pay"ent of ta;es4 surveying of t e lan. at t e ven.eeDs e;pense an. acceptance of initial pay"ent. #PP/IC#TI42 P $S5PP4S$S $XIST$2C$ 4F # P$ F$CT$& C42T #CT . 0 e application of t e Statute of 6rau.s presupposes t e e;istence of a perfecte. contract an. re7uires only t at a note or "e"oran.u" su'scri'e. 'y t e party c arge. or 'y is agent 'e e;ecute. in or.er to co"pel (u.icial enforce"ent. A ere t ere is no perfecte. contract4 t ere is no 'asis for t e application of t e Statute. iv. Ratification of contract #rt. (7*). Contracts infringing t e Statute of 6rau.s4 referre. to in Fo. 3 of Article 14+$4 are #TIFI$& 'y t e failure to ob@ect to the presentation of oral evidence to prove the same4 or 'y t e acceptance of benefit un.er t e". P 4C$&5 $: Contracts infringing t e Statute of 6rau.s are ratifie. w en t e .efense fails to o'(ect to t e intro.uction of parol evi.ence4 or as?s 7uestions on cross*e;a"ination4 w ic elicits evi.ence proving t e e;istence of a perfecte. contract of sale. (Bi"?et?ai v CA) P# 4/ $VI&$2C$ 5/$ '(989 $VIS$& 5/$S 42 $VI&$2C$. S$C. 9. Evidence of written agreements. > A en t e ter"s of an agree"ent ave 'een re.uce. to writing4 it is consi.ere. as containing all the terms agree. upon an. t ere can 'e4 'etween t e parties an. t eir successors in interest4 no evidence of such terms other than the contents of the !ritten agreement.'1$2$ #/ 5/$. However4 a party may present evidence to "o.ify4 e;plain or a.. to t e ter"s of t e written agree"ent if e puts in issue in is plea.ing# '$XC$PTI42S. (a) An intrinsic a"'iguity4 "ista?e or i"perfection in t e written agree"ent5 (') 0 e failure of t e written agree"ent to e;press t e true intent an. agree"ent of t e parties t ereto5 (c) 0 e vali.ity of t e written agree"ent5 or (.) 0 e e;istence of ot er ter"s agree. to 'y t e parties or t eir successors in interest after t e e;ecution of t e written agree"ent. 0 e ter" Hagree"entG inclu.es wills. ()a) C. Form re;uired for validity '#rt. (<):. #rt. (<):. Contracts s all 'e o'ligatory4 in w atever for" t ey "ay ave 'een entere. into4 provi.e. all t e essential re7uisites for t eir vali.ity are present. However4 w en t e law re7uires t at a contract 'e in so"e for" in or.er t at it "ay 'e vali. or enforcea'le4 or t at a contract 'e prove. in a certain way4 t at re7uire"ent is a'solute an. in.ispensa'le. 9n suc cases4 t e rig t of t e parties state. in t e following article cannot 'e e;ercise.. (13)8a) i. ;ale of a piece of land or any interest t+erein is made t+roug+ an agent >7rt. 18 &) #rt. (8+7. A en a sale of a piece of lan. or any interest t erein is t roug an agent4 t e aut ority of t e latter s all 'e in writing5 ot erwise4 t e sale s all 'e void. (n) &. Form re;uired for convenience of the parties '#rt. (<)8. #rt. (<)8. 0 e following "ust appear in a P5?/IC &4C53$2T# (1) Acts an. contracts w ic ave for t eir o'(ect t e creation4 trans"ission4 "o.ification or e;tinguis "ent of real rig ts over i""ova'le property5 sales of real property or of an interest t erein a governe. 'y Articles 14+$4 Fo. 34 an. 14+55 (3) 0 e cession4 repu.iation or renunciation of ere.itary rig ts or of t ose of t e con(ugal partners ip of gains5 ($) 0 e power to a."inister property4 or any ot er power w ic as for its o'(ect an act appearing or w ic s oul. appear in a pu'lic .ocu"ent4 or s oul. pre(u.ice a t ir. person5 (4) 0 e cession of actions or rig ts procee.ing fro" an act appearing in a pu'lic .ocu"ent. All ot er contracts w ere t e a"ount involve. e;cee.s five un.re. pesos "ust appear in writing4 even a private one. But sales of goo.s4 c attels or t ings in action are governe. 'y Articles4 14+$4 Fo. 3 an. 14+5. (138+a) $. Items to note: $lectronic Commerce #ct T4 24T$ .#. 8+9- * AF AC0 /1&C9,9FG AF, ES! &6 !B!C01&F9C C&22!1C9AB AF, F&F*C&22!1C9AB 01AFSAC09&FS4 /!FAB09!S 6&1 EFBAA6EB ES! 0H!1!&64 AF, &0H!1 /E1/&S!S (Iune 144 3+++) /$1#/ $C412ITI42 4F $/$CT 42IC &#T# 3$SS#1$S #2& $/$CT 42IC &4C53$2TS (1) Cali.ity an. enforcea'ility (9nfor"ation not .enie. C8! solely on t e groun. t at it is in t e for" of an electronic .ata "essage or electronic .ocu"ent4 purporting to give rise to suc legal effect > Sec. :) * !lectronic .ocu"ents s all ave t e legal effect4 vali.ity or enforcea'ility as any ot er .ocu"ent or legal writing. o A re7uire"ent un.er law t at infor"ation is in writing is SA09S69!, if t e infor"ation is in t e for" of an electronic .ata "essage or electronic .ocu"ent o A re7uire"ent un.er law for a person to provi.e infor"ation in writing to anot er person is satisfie. 'y t e provision of t e infor"ation in an electronic .ata "essage or electronic .ocu"ent o A re7uire"ent un.er law for a person to provi.e infor"ation to anot er person in a specifie. non*electronic for" is satisfie. 'y t e provision of t e infor"ation in an electronic .ata "essage or electronic .ocu"ent if t e infor"ation is provi.e. in t e sa"e or su'stantially t e sa"e for" o Fot ing li"its t e operation of any re7uire"ent un.er law for infor"ation to 'e poste. or .isplaye. in specifie. "anner4 ti"e or location5 or for any infor"ation or .ocu"ent to 'e co""unicate. 'y a specifie. "et o. unless an. until a functional e7uivalent s all ave 'een .evelope.4 installe. an. i"ple"ente. (3) 9ncorporation 'y reference * 9nfor"ation s all not 'e .enie. vali.ity or enforcea'ility solely on t e groun. t at it is not containe. in an electronic .ata "essage or electronic .ocu"ent 'ut is "erely incorporate. 'y reference in t at electronic .ata "essage. ($) Ariting

3:

A ere t e law re7uires a .ocu"ent to 'e in writing4 or o'liges t e parties to confor" to a writing4 or provi.es conse7uences in t e event infor"ation is not presente. or retaine. in its original for"4 an electronic .ocu"ent is sufficient if t e latter# o "aintains its integrity an. relia'ility5 an. o can 'e aut enticate. so as to 'e usa'le for su'se7uent reference4 in t at# i. it as re"aine. co"plete an. unaltere.4 apart fro" t e a..ition of any en.orse"ent an. any aut ori@e. c ange4 or any c ange w ic arises in t e nor"al course of co""unication4 storage an. .isplay5 an. ii. it is relia'le in t e lig t of t e purpose for w ic it was generate. an. in t e lig t of all relevant circu"stances. (4) &riginal * A ere t e law re7uires t at a .ocu"ent 'e presente. or retaine. in its original for"4 t at re7uire"ent is "et 'y an electronic .ocu"ent or electronic .ata "essage if* o i. 0 ere e;ists a relia'le assurance as to t e integrity of t e electronic .ocu"ent or electronic .ata "essage fro" t e ti"e w en it was first generate. in its final fro" an. suc integrity is s own 'y evi.ence aliunde (.ifferent evi.ence t an .ocu"ent itself)5 an. o ii. 0 e .ocu"ent or "essage is capa'le of 'eing .isplaye. to t e person to w o" it is to 'e presente.# o 6or t e purpose of (i) a'ove# (a) t e criteria for assessing integrity s all 'e w et er t e infor"ation as re"aine. co"plete an. unaltere.4 apart fro" t e a..ition of any en.orse"ent an. any c ange w ic arises in t e nor"al course of co""unication4 storage an. .isplay 5 an. (') t e stan.ar. of relia'ility re7uire. s all 'e assesse. in t e lig t of purpose. for w ic t e infor"ation was generate. an. in t e lig t of all t e relevant circu"stances. * An electronic .ata "essage or electronic .ocu"ent "eeting an. co"plying wit t e re7uire"ents of Sec. : or ) of 1A 8)%3 s all 'e t e 'est evi.ence of t e agree"ent an. transaction containe. t erein. (5) Sole"n contracts * Fo provision of 1.A. 8)%3 s all apply to vary any an. all re7uire"ents of e;isting laws on for"alities re7uire. in t e e;ecution of .ocu"ents for t eir vali.ity. * Hence4 w en t e law re7uires t at a contract 'e in so"e for" in or.er t at it "ay 'e vali. or enforcea'le4 or t at a contract is prove. in a certain way4 t at re7uire"ent is a'solute an. in.ispensa'le. /$1#/ $C412ITI42 4F $/$CT 42IC SI12#T5 $S * An electronic signature relating to an electronic .ocu"ent or .ata "essage s all 'e e7uivalent to t e signature of a person on a written .ocu"ent if t e signature# (1) 9s an electronic signature is .efine. in Sec. :(g) of t e 1ules (3) is prove. 'y s owing t at a prescri'e. proce.ure4 not altera'le 'y t e parties intereste. in t e electronic .ocu"ent or .ata "essage4 e;iste. un.er w ic # (a) A "et o. is use. to i.entify t e party soug t to 'e 'oun. an. to in.icate sai. partyDs access to t e electronic .ocu"ent of electronic .ata "essage necessary for is consent or approval t roug t e electronic signature5 (') Sai. "et o. is relia'le an. appropriate for t e purpose for w ic t e electronic .ocu"ent or electronic .ata "essage was generate. or co""unicate.4 in lig t of all circu"stances4 inclu.ing any relevant agree"ent5 (c) 9t is necessary for t e party soug t to 'e 'oun.4 in or.er to procee. furt er wit t e transaction4 to ave e;ecute. or provi.e. t e electronic signature5 an. (.) 0 e ot er party is aut ori@e. an. ena'le. to verify t e electronic signature an. to "a?e t e .ecision to procee. wit t e transaction aut enticate. 'y t e sa"e. 0 e parties "ay agree to a.opt supple"entary or alternative proce.ures provi.e. t at t e re7uire"ent of paragrap (') are co"plie. wit C43352IC#TI42 4F $/$CT 42IC &#T# 3$SS#1$S #2& $/$CT 42IC &4C53$2TS >1) Bormality and validity of electronic contracts * &ffer an. acceptance an. ot er re7uire"ents for for"ality an. vali.ity "ay 'e e;presse. in electronic or can 'e prove. electronic * !;cept if stipulate. >#) 6onsummation of electronic transactions ,it+ ban2s * !lectronic transactions t roug 'an?s is C&FSE22A0!, un.er 911 of BS/ upon actual dispensing of cas+ or t+e debit of one account and t+e corresponding credit to anot+er, ,+et+er suc+ transaction is initiated by t+e depositor or by an aut+ori@ed collecting party (applies to A02 transactions) * All electronic transactions involving 'an?s4 7uasi*'an?s4 trust entities an. ot er institutions un.er supervision of BS/ s all 'e covere. 'y 911 issue. 'y BS/ >%) Recognition by parties of electronic data message * !lectronic .eclaration of will or ot er state"ent 'etween originator an. a..ressee will not .enie. legal effect4 vali.ity or enforcea'lity F. Practice notes: formalities of contract of sale * notari@ation * consulari@ation or aut entication VI. Covenants: obligations of the seller #. 4bligations under the Civil Code

P I2CIP#/ 4?/I1#TI42S 4F TB$ V$2&4 (1) to transfer t e owners ip of t e .eter"inate t ing sol.5 (3) to .eliver t e t ing4 wit its accessions an. accessories4 if any4 in t e con.ition in w ic t ey were upon t e perfection of t e contract ($) to warrant against eviction an. against i..en .efects (4) to ta?e care of t e t ing4 pen.ing .elivery4 wit proper .iligence (5) to pay for t e e;penses of t e .ee. of sale4 unless t ere is a stipulation to t e contrary 3)

i. Ta"e care of thing pending delivery '#rt. ((:<. #rt. ((:<. !very person o'lige. to give something is also o'lige. to ta?e care of it !ith the proper diligence of a good father of a family4 EFB!SS t e la! or t e stipulation of t e parties re7uires anot er stan.ar. of care. (1+%4a) ii. Pay for e%penses for the e%ecution and registration of the saleA unless there is stipulation to the contrary 'art. (78+. #rt. (78+. 0 e e;penses for t e e;ecution an. registration of t e sale s all 'e 'orne 'y t e ven.or4 unless t ere is a stipulation to t e contrary. (1455a) $XP$2S$S F4 $X$C5TI42 #2& $1IST #TI42 * Cen.or as .uty to pay not only t e e;penses for t e e;ecution of t e sale 'ut also for t e registration of t e sa"e in t e a'sence of any agree"ent 'etween t e parties to t e contrary (ie. e;ecute an. .eliver t e .ee. of a'solute sale an. certificate of title) * !;penses incurre. SEBS!ME!F0 to t e transfer of t e title are to 'e 'orne 'y t e 'uyer4 EFB!SS cause. 'y t e fault of t e seller (ie. su'se7uent e;penses# pay"ent for notari@ing t e .ee. an. o'taining a new certificate title) * practice notes# pay"ent of inco"e ta;4 sta"p ta;4 local transfer ta;4 legal fees4 1egister of ,ee.s e;penses

iii. Transfer o!nership '#rts. (7)8A (79). #rt. (7)8. By t e contract of sale4 one of the contracting parties obligates himself to transfer the o!nership an. to .eliver a .eter"inate t ing4 an. t e ot er to pay t erefor a price certain in "oney or its e7uivalent. A contract of sale "ay 'e a'solute or con.itional. #rt. (79). 0 e vendor is bound to transfer the o!nership of an. .eliver4 as well as warrant t e t ing w ic is t e o'(ect of t e sale. (14:1a) 24T$S: (1) &wners ip 'y ven.or at time of perfection of contract not essential. 9t is sufficient t at e as a rig t to transfer t e owners ip t ereof at the time it is delivered. 0 e o'ligation to transfer owners ip an. to .eliver is really implied in every contract of sale &ne w o sells something he does not C$T o!n is bound by the sale w en e ac7uires it later. A en a property 'elonging to a person is unlawfully ta?en 'y anot er4 t e for"er as t e rig t of action against t e latter for t e recovery of t e property. Suc rig t "ay 'e transferre. 'y t e sale or assign"ent of t e property an. t e transferee can "aintain suc action against t e wrong.oer. (3) 0ransfer not essential to perfection of contract But if t e seller does not deliver at t e ti"e stipulate.4 t e 'uyer "ay as? for t e rescission of t e contract or fulfillment wit t e rig t to damages in eit er case. ($) Fo o'ligation to "a?e .elivery .uring period of redemption. 0 e purc aser in e;ecution sales4 owever4 is not entitle. to i""e.iate possession of t e property sol.. 0 e effective conveyance of t e lan. is acco"plis e. 'y t e .ee. w ic is issue. only after the period of redemption has e%pired. 9n cases of e;tra(u.icial foreclosure sale4 t e "ortgagor "ay re.ee" t e real property sol. !ithin ( year from the date of registration of t e sale. 9n (u.icial foreclosure of real estate "ortgage4 t e general rule is t at t e "ortgagor cannot e;ercise is rig t of re.e"ption after t e sale is confir"e. 'y t e court. (4) 1ig t of ven.ee to transfer of certificate of title Correspon.ing o'ligation to transfer not only possession an. e"ploy"ent of lan. 'ut also t e certificate of title (5) 1ig t of 'uyer to recover t e price pai. Can recover o Epon representation t at e as certain aut ority to transfer property4 w en in fact e as no title or aut ority4 t en t ere is no consi.eration for t e pay"ent. o A ere contract is set asi.e 'y reason of t e "utual "aterial "ista?e of t e parties as to t e i.entity or 7uantity of t e lan. sol. o Cen.or refuses or fails to .eliver t e title4 purc ases is entitle. to t e interest on t e "oney pai. fro" t e ti"e of pay"ent a) 4,ner must +ave rig+t to transfer o,ners+ip >7rts. 1&5$) #rt. (7)9. 0 e t ing "ust 'e licit an. t e ven.or "ust ave a rig t to transfer t e owners ip t ereof at the time it is delivered. (n) 24T$S: (1) Seller "ust 'e &AF!1 or AE0H&19T!, 'y owner of t e t ing sol.. *S one cannot trans"it or .ispose of t at w ic .oes not 'elong to i" (nemo dat 8uod non-+abet) *S one can sell only w at one owns or is aut ori@e. to sell4 an. t e 'uyer can ac7uire no "ore t an w at t e seller can transfer legally ($) A ere property sol. registere. in na"e of seller w o e"ployer frau. in securing is title *S G!F!1ABBL# A forge. or frau.ulent .ee. is a nullity an. conveys no title4 *S H&A!C!1# 0 ere are instances w en suc a .ocu"ent "ay 'eco"e t e root of a vali. title A ere t e certificate of title was alrea.y transferre. fro" t e na"e of t e true owner to t e forger an. w ile it re"aine. t at way4 t e lan. was su'se7uently sol. to an innocent purc aser for value ('uyer not re7uire. to e;plore furt er t an 0orrens title) 1!C&E1S!# 0rue owner of t e property is to 'ring an action for .a"ages against t ose w o cause. or e"ploye. t e frau.4 an. if t e latter are insolvent4 an action against t e 0reasurer of t e / ilippines "ay 'e file for recovery of .a"ages against t e Assurance 6un. (4) A ere property sol. in violation of a rig t of first refusal of anot er person *S ,&C019F!# Contract of sale entere. into in violation of a rig t of first refusal of anot er person4 w ile vali.4 is 1!SC9SS9BB! *S A rig t of first refusal is neit er Ha"orp ous nor "erely preparatoryG an. can 'e e;ecute. accor.ing to its ter"s *S BAS9S &6 19GH0 &6 6. 1. 9F C&F01AC0S &6 SAB!# Current offer of t e seller to sell or t e offer to purc ase of t e prospective 'uyer. 38

*S &nly after t e grantee fails to e;ercise is rig t un.er t e sa"e ter"s an. wit in t e perio. conte"plate. can t e owner vali.ly offer to sell t e property to a t ir. person4 again4 un.er t e sa"e ter"s as offere. to t e grantee *S H&A!C!1# A en t ere is no s owing of BA, 6A90H on t e part of t e ven.ee4 t e contract of sale "ay not 'e rescin.e. an. t e re"e.y of t e person wit t e rig t of first refusal is an action for .a"ages against t e ven.or (5) A ere real property4 su'(ect of unrecor.e. sale4 su'se7uently "ortgage. 'y seller w ic "ortgage was registere. *S 0 e "ortgageeDs registere. "ortgage rig t over t e property is inferior to t at of t e 'uyerDs unregistere. rig t. 0 e unrecor.e. sale 'etween t e 'uyer an. t e seller is preferre. for t e reason t at if t e seller (original owner) a. parte. wit is owners ip of t e t ing sol. t en4 e no longer a. owners ip an. free .isposal of t at t ing so as to 'e a'le to "ortgage it again. b) =+en rig+t to transfer o,ners+ip must e-ist >7rt. 1&5$) #rt. (7)9. 0 e t ing "ust 'e licit an. t e ven.or "ust ave a rig t to transfer t e owners ip t ereof at t e ti"e it is .elivere.. (n) 24T$S: (3) 19GH0 2ES0 !O9S0 A0 092! &6 ,!B9C!1L *S Fot re7uire. t at t e ven.or "ust ave t e rig t to transfer owners ip of t e property at t e ti"e of perfection *S /erfection per se .oes not transfer owners ip5 it occurs upon actual or constructive .elivery *S Sale4 'eing a consensual contract4 is perfecte. 'y "ere consent an. owners ip of seller is not an ele"ent for its perfection *S 9t is sufficient t at t e seller as t e Hrig t to transfer t e owners ip at t e ti"e it was .elivere.G *S Seller is .ee"e. only to impliedly !arrant t at H e as a rig t to sell t e t ing at t e ti"e w en t e owners ip is to passG 1!AS&F# Since future goo.s or goo.s w ose ac7uisition 'y t e seller .epen.s upon a contingency "ay 'e t e su'(ect "atter of sale4 it woul. 'e inconsistent for t e article to re7uire t at t e t ing sol. "ust 'e owne. 'y t e seller at t e ti"e of sale inas"uc as it is not possi'le for a person to own a t ing or rig t not in e;istence c) Co, effected >7rts. 1& , 1& 8, 1&$') #rt. (7++. 0 e owners ip of t e t ing sol. s all 'e transferre. to t e ven.ee upon t e actual or constructive .elivery t ereof. (n) #rt. (7+8. 0 e parties "ay stipulate t at owners ip in t e t ing s all not pass to t e purc aser until e as fully pai. t e price. (n) #rt. (79:. 0 e owners ip of t e t ing sol. is ac7uire. 'y t e ven.ee fro" t e moment it is delivered to him in any of t e ways specifie. in Articles 14%) to 15+14 or in any other manner signifying an agreement that the possession is transferred fro" t e ven.or to t e ven.ee. (n) 1$2$ #/ 5/$: &wners ip of t ing transferre. 'y .elivery F&0 BL 2!1! /AL2!F0 (1) 3ecessity of delivery: ,elivery is essential in contract of sale. Ait out it4 t e purc aser "ay not en(oy t e t ing sol. to i". 9t is only after .elivery t at purc aser ac7uires real rig t or owners ip over it. Contract consu""ate. 'y .elivery of t e t ing sol. an. of t e purc ase "oney (3) <urc+ase on credit# &wners ip passes upon .elivery even if on cre.it $XC$PTI42S: (1) Contrary stipulation #rt. (7+8. 0 e parties may stipulate t at owners ip in t e t ing s all not pass to t e purc aser until e as fully pai. t e price. (n) /arties "ay stipulate t at owners ip of property sol. "ay pass &FBL w en purc aser as fully paid t e price o <actum reservati dominii or contractual reservation of title co""on in sales on install"ent. 9t is a stipulation of parties in w ic non pay"ent of t e price4 after t e t ing is .elivere.4 prevents transfer of owners ip o A contract w ic contains t is ?in. of stipulation is a contract to sell5 agree"ent "ay 'e i"plie. 9n case of loss4 seller is not lia'le &nly 'in.ing to contracting parties4 assigns an. eir 'ut not upon t ir. persons wit out notice 1!AS&F# Security for t e 'enefit of ven.or w o as not 'een fully pai. 9f t ere is .ou't# SES/!FS9C! /!19&,SSES/!FS9C! C&F,909&F for t e pay"ent of t e stipulate. price 'ecause .ou't s oul. 'e resolve. in favor of t e greatest reciprocity of interests /arties "ay ABS& stipulate t at owners ip of property sol. "ay pass !C!F w en purc aser as not fully paid t e price (3) Contract to sell# &wners ip re"ains wit seller an. not pass until full pay"ent /ay"ent is positive suspensive con.ition4 t e failure of w ic is not a breac+4 casual or serious4 'ut si"ply an event t at prevents t e o'ligation of t e ven.or to convey title fro" ac7uiring 'in.ing force Fonpay"ent not resolutory con.ition Stipulations in contract for t e reservation of owners ip of t e t ing sol. until full pay"ent of its purc ase price an. for t e loss or .estruction of t e t ing 'eing for t e account of t e 'uyer > are vali. an. can e;ist in con(unction wit t e ot er ($) Contract of insurance A perfecte. contract of sale even wit out .elivery vests in t e vendee an e8uitable title4 an e;isting interest over t e goo.s sufficient to 'e t e su'(ect of insurance iv. &eliver the thing !ith accessions and accessories '#rt. ()<+. #rt. ()<+. 0 e ven.or is 'oun. to deliver the thing sold and its accessions and accessories in t e con.ition in w ic t ey were upon t e perfection of t e contract. All t e fruits s all pertain to t e ven.ee fro" t e .ay on w ic t e contract was perfected. (14:8a) C42&ITI42 4F TBI21 T4 ?$ &$/IV$ $& *S Cen.or is o'lige. to preserve t e t ing pen.ing .elivery 'ecause t e t ing sol. an. its accessions an. t e accessories "ust 'e in t e con.ition in w ic t ey were upon t e perfection of t e contract *S SellerDs .uty to .eliver t e t ing sol. in a con.ition suita'le for its en(oy"ent 'y t e 'uyer for t e purposes conte"plate. *S A ile a sale of a .eter"inate t ing inclu.es all its accessions an. accessories even t oug t ey "ay not ave 'een "entione.4 a sale of t e latter is not sufficient to convey title or rig t to t e for"er &$FI2ITI42S ACC!SS9&FS# are fruits of a t ing5 or a..itions to4 or i"prove"ents upon4 a t ing suc as t e young of ani"als4 ouse or trees on a lan. 3%

ACC!SS&19!S# anyt ing attac e. to a principal t ing for its co"pletion4 orna"ent or 'etter use suc as a picture fra"e4 ?ey of ouse

a) 6oncept of delivery( intention to deliver 6oncept# 01A,909&F is a .erivative "o.e of ac7uiring owners ip 'y virtue of w ic one w o as t e rig t an. intention to alienate a corporeal t ing4 trans"its it 'y virtue of a (ust title to one w o accepts t e sa"e <resence of intention to deliver and to accept a transfer of possession: ,elivery s oul. 'e couple. wit t e 9F0!F09&F of .elivering t e t ing sol.. 0 e act wit out t e intention is insufficient5 t ere is no tra.ition. 9e. 9ssuance of a sales invoice .oes not prove transfer of owners ip of t e t ing sol. to t e 'uyer4 an invoice 'eing not ing "ore t an a .etaile. state"ent of t e nature4 7uantity an. cost of t e t ing sol.4 an. consi.ere. not a 'ill of sale b) 6onse8uence of delivery (1) 0ransfer of owners ip *S &wners ip is not transferre. 'y "ere contract 'ut 'y .elivery *S Critical factor is actual intention of cre.itor to .eliver an. its acceptance 'y t e ven.ee *S Contracts only constitute titles or rig ts to transfer or ac7uire owners ip4 w ile .elivery or tra.ition is "et o. of acco"plis ing t e sa"e4 t e title an. t e "et o. of ac7uiring it 'eing .ifferent in our law. But not if stolen (3) Bia'ility in case of loss *S 9f place in ven.eeDs control or is agent4 t e .elivery is co"plete an. ven.ee cannot avoi. lia'ility in case of loss ($) 1ig t of ven.or to clai" pay"ent *S ,elivery pro.uces natural effects44 t e principal of w ic 'eing t e transfer of owners ip wit out pre(u.ice to t e rig t off t e ven.or to clai" pay"ent of t e price *S A ere 'uyer as not 'eco"e t e owner for lac? of .elivery4 is action is not accion reivindicatoria 'ut one against t e ven.or for specific perfor"ance or rescission wit .a"ages (4) Consu""ation of contract *S ,elivery wit pay"ent "ar?s consu""ation of contract of sale. /erfection is w en "eeting of "in.s 'etween parties ta?es place. (5) !n(oy"ent of t e t ing sol. *S ,elivery is also necessary c) Delivery and non-payment of t+e price 3onpayment of purc+ase price# /ay"ent of purc ase price not essential to t e transfer of owners ip4 as long as t e property sol. as 'een .elivere.. Fonpay"ent only creates a rig t to .e"an. pay"ent or to rescin. t e contract4 or to cri"inal prosecution in t e case of 'ouncing c ec?s. d) =ays of effecting delivery >7rts. 1&$ -15!1) #rt. (79+. 0 e t ing sol. s all 'e un.erstoo. as .elivere.4 w en it is placed in the control and possession of the vendee . (14:3a) (AC0EAB ,!B9C!1L) #rt. (798. A en t e sale is "a.e t roug a public instrument4 t e !O!CE09&F t ereof s all 'e e;uivalent to the delivery of t e t ing w ic is t e o'(ect of t e contract4 if fro" t e .ee. t e contrary .oes not appear or cannot clearly 'e inferre.. Ait regar. to movable property4 its .elivery "ay also 'e "a.e 'y t e &$/IV$ C of the "eys of t e place or .epository w ere it is store. or ?ept. (14:$a) #rt. (799. 0 e .elivery of movable property "ay li?ewise 'e "a.e 'y t e mere consent or agreement of the contracting parties4 if t e t ing sol. cannot 'e transferre. to t e possession of t e ven.ee at t e ti"e of t e sale4 or if t e latter already had it in his possession for any ot er reason. (14:$a) #rt. ()**. 0 ere "ay also 'e tra.ition constitutum possessorium. (n) #rt. ()*(. Ait respect to incorporeal property4 t e provisions of t e first paragraph of article (798 s all govern. 9n any ot er case w erein sai. provisions are not applica'le4 t e placing of the titles of o!nership in the possession of t e ven.ee or t e use 'y t e ven.ee of is rig ts4 wit t e vendorHs consent4 s all 'e un.erstoo. as a .elivery. (14:4) 24T$S: $ffected in ff !ays: (1) 'y actual or real .elivery (3) 'y constructive or legal .elivery ($) 'y .elivery in any ot er "anner signifying an agree"ent t at t e possession is transferre. to t e ven.ee * 9n all .ifferent "o.es of .elivery4 t e critical factor is t e actual intention of the vendor to deliver 4 an. its acceptance 'y t e ven.ee. 0 e act4 wit out t e intention4 is insufficient * Alt oug transfer of owners ip is t e pri"ary purpose of sale4 .elivery re"ains an in.ispensa'le re7uisite as our law .oes not a."it t e .octrine of transfer of owners ip of property 'y "ere consent. * 0 e .elivery "ust 'e "a.e to t e ven.ee or is aut ori@e. representative. A ere t e ven.ee .i. not na"e any person to w o" t e .elivery s all 'e "a.e in is 'e alf4 t e ven.or is 'oun. to .eliver e;clusively to i". * actual .elivery (1) A en .ee"e. "a.e > 0 ere is actual .elivery w en t e t ing sol. is place in t e control an. possession of t e ven.ee or is agent. 0 is involves t e p ysical .elivery of t e t ing an. isusually .one 'y t e passing of a "ova'le t ing fro" an. to an. (3) 3ot al,ays essential to passing of title *S /arties "ay agree w en an. on w at con.itions t e owners ip in t e su'(ect of t e contract s all pass to t e 'uyer. 9e. /ass after full pay"ent * constructive (e;ecution of pu'lic instru"ent4 traditio symbolica4 traditio longa manu4 traditio brevi manu4 traditio constitutum possesorium) =ays of effecting constructive delivery $+

(1) !7uivalent to actual .elivery > Constructive .elivery is a general ter" co"pre en.ing all t ose acts w ic 4 alt oug not conferring p ysical possession of t e t ing4 ave 'een el. 'y construction of law to 'e e7uivalent to acts of real .elivery. !ffecte. 'y# a. By t e e;ecution of a pu'lic instru"ent (14%8) /ossession is transferre. to 'uyer 'y notari@e. .ee. of conveyance (applies to "ova'le an. i""ova'le) o As a specie of constructive .elivery4 t e e;ecution of a pu'lic .ocu"ent is also a for" of sy"'olic .elivery o /ossession W owners ip is transferre. o As it is e7uivalent to .elivery4 prior p ysical possession is not re7uire.. -ey wor. is XcontrolD not possession ,elivery presu"ptive only o Hif fro" t e .ee. t e contrary .oes not appear or cannot clearly 'e inferre.. H o /rior p ysical .elivery or possession is not re7uire. o Can 'e re'utte. 'y evi.ence to t e contrary o /resu"ption is .estroye. w en .elivery is not effecte. 'ecause of a legal i"pe.i"ent Fot intention5 stipulation 6ailure to ta?e "aterial possession Sale of t ing not su'(ect to control of ven.or ("ust 'e in control for .elivery to 'e effecte.) Sale of registere. lan. ("o.ifie. 'y /roperty 1egistration ,ecree5 "ust 'e registere. 'ut as 'etween 'uyer an. seller4 transfer of owners ip ta?es effect) /ossession of a part as constructive possession of w ole '. c. By sy"'olical tra.ition or traditio symbolica i. /arties "a?e use of a to?en sy"'ol to represent t ing .elivere. ii. 9e. -ey4 .elivery or.ers By traditio longa manu i. 0 e .elivery of movable property "ay li?ewise 'e "a.e 'y t e mere consent or agreement of the contracting parties Cen.or "erely points Mualifie. 'y if t e t ing sol. cannot 'e transferre. to t e possession of t e ven.ee at t e ti"e of t e sale By traditio brevi manu i. 0 e .elivery of movable property "ay li?ewise 'e "a.e ;;; if t e latter alrea.y a. it in is possession for any ot er reason. Bessor sells t ing to lessee By traditio constitutum possessorium i. &pposite of traditio brevi manu Cen.or continues in possession of t e property sol. not as owner 'ut in so"e ot er capacity 9e. ven.or stays as a tenant of ven.ee By 7uasi*.elivery or 8uasi-traditio i. 0ra.ition "a.e only wit corporeal ii. 9ncorporeal !;ecution of pu'lic instru"ent A en t at "o.e is not applica'le4 'y placing titles of owners ip in possession of ven.ee Allowing ven.ee to use is rig ts as new owner wit consent of ven.or a. ,elivery of negotia'le .ocu"ent of title

..

e.

f.

(3) Contrary "ay 'e stipulate. > 2ay stipulate t at transfer of owners ip only after full pay"ent or fulfill"ent of con.itions e) A en seller not 'oun. to .eliver (Arts. 15$:4 11%8) #rt. ()<:. 0 e ven.or is not 'oun. to .eliver t e t ing sol. in case the vendee should lose the right to ma"e use of the terms as provi.e. in Article 11%8. (14:)a) #rt. ((98. 0 e .e'tor s all lose every right to ma"e use of the period# (1) A en after t e o'ligation as 'een contracte.4 e becomes insolvent4 unless e gives a guaranty or security for t e .e't5 (3) A en e does not furnish to the creditor the guaranties or securities w ic e as pro"ise.5 ($) A en 'y is own acts e has impaired said guaranties or securities after t eir esta'lis "ent4 an. w en t roug a fortuitous event t ey .isappear4 EFB!SS e i""e.iately gives new ones e7ually satisfactory5 (4) A en t e .e'tor violates any underta"ingA in consideration of w ic t e cre.itor agree. to t e perio.5 (5) A en t e .e'tor attempts to abscond. (113%a) 24T$S: 0 e ven.or is not 'oun. to .eliver t e t ing sol. in case t e ven.ee s oul. lose t e rig t to "a?e use of t e ter" stipulate. in t e following cases# (1) A en after t e o'ligation as 'een contracte.4 e becomes insolvent4 unless e gives a guaranty or security for t e .e't5 * 9nsolvency .oes not conte"plate a (u.icially .eclare. insolvency or suspension of pay"ents 'ecause t e .e'tor cannot give a guaranty or security in suc a case (3) A en e does not furnish to the creditor the guaranties or securities w ic e as pro"ise.5 ($) A en 'y is own acts e has impaired said guaranties or securities after t eir esta'lis "ent4 an. w en t roug a fortuitous event t ey .isappear4 EFB!SS e i""e.iately gives new ones e7ually satisfactory5 (4) A en t e .e'tor violates any underta"ingA in consideration of w ic t e cre.itor agree. to t e perio.5 (5) A en t e .e'tor attempts to abscond. (113%a) f) 9nci.ents of .elivery (/lace4 0i"e4 2anner4 Con.ition4 9nstall"ents) * /lace of .elivery (Art. 1531) #rt. ()-(. A et er it is for t e 'uyer to ta?e possession of t e goo.s or of t e seller to sen. t e" to t e 'uyer is a ;uestion depending in each case on the contract 4 e-press or implied4 'etween t e parties. Apart fro" any suc contract4 e;press or i"plie.4 or usage of tra.e to t e contrary4 t e place of .elivery is t e sellerQs place of 'usiness if e as one4 an. if not is resi.ence5 'ut in case $1

of a contract of sale of specific goods 4 w ic to t e ?nowle.ge of t e parties w en t e contract or t e sale was "a.e were in some other placeA then that place is the place of delivery. A ere 'y a contract of sale t e seller is 'oun. to sen. t e goo.s to t e 'uyer4 'ut no time for sending them is fi%ed 4 t e seller is 'oun. to sen. t e" !ithin a reasonable time. A ere t e goo.s at t e ti"e of sale are in t e possession of a third person4 t e seller as not fulfille. is o'ligation to .eliver to t e 'uyer EFB!SS an. EF09B suc third person ac"no!ledges to the buyer that he holds the goods on the buyerHs behalf. ,e"an. or ten.er of .elivery "ay 'e treate. as ineffectual unless made at a reasonable hour. A at is a reasona'le our is a 7uestion of fact. Enless ot erwise agree.4 t e e;penses of an. inci.ental to putting t e goo.s into a .elivera'le state "ust 'e borne by the seller. (n) 24T$S: 1$2$ #/ 5/$: Agree"ent 'etween t e parties5 !;press or i"plie. 4TB$ S: 1. Esage of tra.e 3. SellerDs place of t e 'usiness if e as none $. SellerDs resi.ence $XC$PTI42: Sale of specific goo.s# /lace of .elivery is t e place w ere t e goo.s were accor.ing to t e partiesD ?nowle.ge w en t e contract of sale was "a.e ,!2AF,# ,e"an. or ten.er of .elivery s all 'e "a.e at a reasonable hour !O/!FS!S &6 ,!B9C!1L# * Actual or inci.ental "ust 'e 'orne 'y seller * !OC!/0# if ot erwise agree. 96 9F 0H! /&SS!SS9&F &6 0H91, /!1S&FS * Fo .elivery EFB!SS $r. person ac?nowle.ges to t e 'uyer t at e ol.s t e goo.s on t e latterDs 'e alf A,, /A

* 0i"e of .elivery (Arts. 15344 1531) #rt. ()-7. 0 e ven.or s all not 'e 'oun. to .eliver t e t ing sol.4 if t e ven.ee as not pai. i" t e price4 or if no perio. for t e pay"ent as 'een fi;e. in t e contract. (14::) * Cen.or not 'oun. to .eliver t e t ing sol. if t e ven.or as not pai. t e price or if no perio. for pay"ent was fi;e.4 EFB!SS sol. on cre.it

,E1A09&F# Agree"ent5 9f none# 1!AS&FABB! 092! * A at constitutes reasona'le ti"e for .elivery is to .eter"ine 'y circu"stances atten.ing t e particular transaction4 suc as t e c aracter of t e goo.s4 t e purpose for w ic t ey are inten.e.4 t e a'ility of t e seller to pro.uce t e goo.s if t ey are to 'e "anufacture.4 t e facilities availa'le for transportation an. t e .istance t e goo.s "ust 'e carrie.4 an. t e usual course of 'usiness in t e particular tra.e AH!F 092! 9S &6 0H! !SS!FC! * A enever t e intention of t e parties is clear t at perfor"ance of its ter"s s all 'e acco"plis e. e;actly at t e stipulate. .ay. * 9"plie. fro" t e nature of t e contract itself or of t e su'(ect "atter or of t e circu"stance un.er w ic t e contract is "a.e * Con.ition of t ing .elivere. (Art. 15$)) #rt. ()<+. 0 e ven.or is 'oun. to .eliver t e t ing sol. an. its accessions an. accessories in the condition in !hich they !ere upon the perfection of the contract. All t e fruits s all pertain to t e ven.ee fro" t e .ay on w ic t e contract was perfecte.. (14:8a) 24 24T$S P# T4 S#/$S $VI$=$ g) Special rules * Contract of sale or return (Art. 15+3) #rt. ()*-. A en goo.s are .elivere. to t e 'uyer Ron sale or returnR to give t e 'uyer an option to return t e goo.s instea. of paying t e price4 t e owners ip passes to t e 'uyer of .elivery4 'ut e "ay revest t e owners ip in t e seller 'y returning or ten.ering t e goo.s wit in t e ti"e fi;e. in t e contract4 or4 if no ti"e as 'een fi;e.4 wit in a reasona'le ti"e. (n) A en goo.s are .elivere. to t e 'uyer on approval or on trial or on satisfaction4 or ot er si"ilar ter"s4 t e owners ip t erein passes to t e 'uyer# (1) A en e signifies is approval or acceptance to t e seller or .oes any ot er act a.opting t e transaction5 (3) 9f e .oes not signify is approval or acceptance to t e seller4 'ut retains t e goo.s wit out giving notice of re(ection4 t en if a ti"e as 'een fi;e. for t e return of t e goo.s4 on t e e;piration of suc ti"e4 an.4 if no ti"e as 'een fi;e.4 on t e e;piration of a reasona'le ti"e. A at is a reasona'le ti"e is a 7uestion of fact. (n) 24T$S: #&& * Contract of sale or approval (Art. 15+3) #rt. ()*-. A en goo.s are .elivere. to t e 'uyer Ron sale or returnR to give t e 'uyer an option to return t e goo.s instea. of paying t e price4 t e owners ip passes to t e 'uyer of .elivery4 'ut e "ay revest t e owners ip in t e seller 'y returning or ten.ering t e goo.s wit in t e ti"e fi;e. in t e contract4 or4 if no ti"e as 'een fi;e.4 wit in a reasona'le ti"e. (n) A en goo.s are .elivere. to t e 'uyer on approval or on trial or on satisfaction4 or ot er si"ilar ter"s4 t e owners ip t erein passes to t e 'uyer# (1) A en e signifies is approval or acceptance to t e seller or .oes any ot er act a.opting t e transaction5 (3) 9f e .oes not signify is approval or acceptance to t e seller4 'ut retains t e goo.s wit out giving notice of re(ection4 t en if a ti"e as 'een fi;e. for t e return of t e goo.s4 on t e e;piration of suc ti"e4 an.4 if no ti"e as 'een fi;e.4 on t e e;piration of a reasona'le ti"e. A at is a reasona'le ti"e is a 7uestion of fact. (n) $3

24T$S: #&& * ,elivery to carrier (Art. 153$) #rt. ()*<. A en t ere is a contract of sale of specific goo.s4 t e seller "ay4 'y t e terms of the contract4 reserve the right of possession or o!nership in the goods until certain conditions have been fulfilled. 0 e rig t of possession or owners ip "ay 'e t us reserve. notwit stan.ing t e .elivery of t e goo.s to t e 'uyer or to a carrier or ot er 'ailee for t e purpose of trans"ission to t e 'uyer. =here goods are shipped4 an. 'y t e B9BB &6 BA,9FG t e goo.s are .elivera'le to the seller or his agent4 &1 to t e order of the seller or of his agent 4 t e seller thereby $S$ V$S the o!nership in the goods . But4 if e;cept for t e for" of t e 'ill of la.ing4 t e owners ip woul. ave passe. to t e 'uyer on s ip"ent of t e goo.s4 t e sellerDs property in t+e goods s+all be deemed to be only for t+e purpose of securing performance by t+e buyer of +is obligations under t+e contract. A ere goo.s are s ippe.4 an. 'y t e 'ill of la.ing t e goo.s are deliverable to order of the buyer or of his agentA BE0 possession of t e 'ill of la.ing is retaine. 'y t e seller or is agent4 t e seller t ere'y reserves a right to the possession of t e goo.s as against t e 'uyer. A ere t e seller of goo.s .raws on t e 'uyer for t e price an. trans"its t e 'ill of e;c ange an. 'ill of la.ing toget er to t e 'uyer to secure acceptance or payment of the bill of e%change 4 t e 'uyer is 'oun. to return t e 'ill of la.ing if e .oes not onor t e 'ill of e;c ange4 an. if e wrongfully retains t e 'ill of la.ing e ac7uires no a..e. rig t t ere'y. 9f4 owever4 t e 'ill of la.ing provi.es t at t e goods are deliverable to the buyer or to the order of the buyerA or is indorsed in blan"A or to the buyer by the consignee na"e. t erein4 one w o purchases in good faith4 for value4 t e 'ill of la.ing4 or goo.s fro" t e 'uyer will o'tain t e owners ip in t e goo.s4 alt oug t e 'ill of e;c ange as not 'een onore.4 provi.e. t at suc purchaser has received delivery of the bill of lading indorsed by the consignee named thereinA or of the goodsA !ithout notice of t e facts "a?ing t e transfer wrongful. (n) #rt. ()-<. A ere4 in pursuance of a contract of sale4 t e seller is authoriIed or re;uired to send the goods to the buyer 4 .elivery of t e goo.s to a carrier4 w et er na"e. 'y t e 'uyer or not4 for t e purpose of trans"ission to t e 'uyer is .ee"e. to 'e a .elivery of t e goo.s to t e 'uyer4 !OC!/0 in t e case provi.e. for in #rticle ()*<A firstA second and third paragrap s4 or EFB!SS a contrary intent appears. EFB!SS ot erwise aut ori@e. 'y t e 'uyer4 t e seller "ust "a?e suc contract wit t e carrier on 'e alf of t e 'uyer as "ay 'e reasona'le4 aving regar. to t e nature of t e goo.s an. t e ot er circu"stances of t e case . If the seller omit so to do4 an. t e goo.s are lost or .a"age. in course of transit4 t e buyer may decline to treat the delivery to the carrier as a delivery to himselfA or may hold the seller responsible in damages. EFB!SS ot erwise agree.4 w ere goo.s are sent 'y t e seller to t e 'uyer un.er circu"stances in w ic t e seller "no!s or ought to "no! that it is usual to insure 4 t e seller "ust give such notice to the buyer as "ay ena'le i" to insure t e" .uring t eir transit4 an.4 if t e seller fails to .o so4 t e goo.s s all 'e .ee"e. to 'e at his ris" during such transit. (n) 24T$S: When Ownership not transferred upon deliveryD G!F!1AB 1EB!# &wners ip passes to 'uyer upon .elivery to carrier !OC!/09&FS# * Contrary intention appears 'y t e ter"s of t e contract4 as w ere t e seller is re7uire. to .eliver t e goo.s to t e 'uyer at t e point of .estination * Cases provi.e. in 3n. an. $r. paragrap s of Art. 153$ o Seller o"its to contract wit carrier on 'e alf of 'uyer an. goo.s were lost or .a"age. o Seller .i. not notify 'uyer as to ena'le t e latter to insure goo.s .uring transit w en t e for"er ?nows or oug t to ?now t at it is usual to insure * Cases provi.e. in t e 1st4 3n. an. $r. paragrap of Art. 15+$ o By t e ter"s of t e contract4 seller reserves rig t of possession or owners ip By t e for" of t e 'ill of la.ing4 t e seller reserve. title4 wit intent to re"ain t e owner for all purposes4 an. not "erely for t e sole purpose of securing pay"ent o A en goo.s are lost or .a"age. in t e course of transit an. t e seller .i. not "a?e contract wit t e carrier on 'e alf of t e 'uyer as "ay 'e reasona'le4 aving regar. to t e nature of t e goo.s an. t e ot er circu"stances of t e case o A en goo.s are lost or .a"age. in t e course of transit an. t e seller .i. not give notice to the buyer as "ay ena'le i" to insure t e" .uring t eir transit w en t e seller "no!s or ought to "no! that it is usual to insure Delivery to Carrier: Transfer of ownership where goods sold delivered to carrier 1$2$ #/ 5/$: ,elivery of goo.s to t e carrier is .elivery to t e 'uyer * /1&C9,!,# Seller is aut ori@e. or re7uire. un.er t e contract to trans"it t e goo.s to t e 'uyer t roug a co""on carrier * !66!C0S# 0itle passe. to t e 'uyer at t e point of s ip"ent o 19S- &6 B&SS falls upon 'uyer o 1A09&FAB!# 9f a seller consigns goo.s to anot er specifie. person4 it in.icates an intention to .eliver to t e carrier as bailee for t e person na"e. an. if suc s ip"ent was aut ori@e. 'y t at person as a 'uyer4 t e owners ip vests in i" o &n t e ot er an.4 if reserve. 'y seller4 as in e .irects carrier to re.eliver t e goo.s at t eir .estination to t e seller i"self4 or to is or.er4 it in.icates an. intention t at carrier shall be bailee for t e seller an. t e owners ip will re"ain in t e latter =+ere ;eller or +is agent is consignee (1) Carrier 'eco"es 'ailee for seller a. Bill of la.ing4 goo.s are .elivera'le to seller or is agent or to t e or.er of seller or is agent '. S ows reservation of owners ip c. Applica'le even goo.s s ippe. in 'uyerDs vessel (3) 1ig ts of seller a. 1etain goo.s until 'uyer perfor"s o'ligation un.er contract '. 9n violation of contract4 .ispose of goo.s to t ir. persons i. Bia'le for .a"ages to 'uyer 'ut secon. purc aser fro" selller ac7uires a 'etter rig t =+ere ;ellerEs *itle is only for purpose of security (1) 6or" of 'ill of la.ing not conclusive $$

0 at goo.s are .elivera'le to or.er of seller .oes not necessarily negate passing of title to goo.s upon .elivery to carrier (3) A ere owners ip woul. ave passe. 'ut for t e for" of 'ill of la.ing a. A en t e o'(ect of t e seller in reserving owners ip is si"ply to secure i"self in regar. to perfor"ance 'y 'uyer of latterDs o'ligation '. By s ipping t e goo.s4 t e seller as .efinitely lost all use of t e" to t e 'uyer c. 9f t e s ipper coul. 'e perfectly sure t at t e 'uyer woul. fulfill is o'ligation4 it can ar.ly 'e .ou'te. t at e woul. ave "a.e a straig t consign"ent to t e latetr ;ignificance ,+ere title +eld merely as security (1) 1is? of loss on 'uyer a. Beneficial owner (Buyer) 'ears ris? of loss not t e ol.er of security (seller) even t oug legal title re"ains in seller '. 1!AS&F# Suc 'argain is a sale to t e 'uyer an. a "ortgage 'ac? 'y i" of t e goo.s to secure t e price. 0 e title .oes not pass to t e 'uyer until e receives t e or.er 'ill of la.ing properly in.orse. (3) BuyerDs rig t of action 'ase. on owners ip a. 2ay 'ring an action 'ase. on owners ip in "a?ing ten.er of t e price !66!C0 &6 1!0!F09&F# Bien 'y t e seller after property passe. to 'uyer #&& P# :ffect of Borm of .ill of Lading 0 e seller "ay4 'y t e for" of t e 'ill of la.ing4 consign t e goo.s to i"self or to is agent an. t us prevent title fro" passing to t e 'uyer until t e latter pays t e price o 9n t is case4 t e seller is P $S53$& to have reserved o!nership over t e goo.s4 notwit stan.ing t e .elivery of t e goo.s to t e co""on carrier He "ay consign t e goo.s to t e or.er of t e 'uyer or t e latterDs agent4 'ut 'y retaining t e negotia'le 'ill of la.ing4 e t ere'y prevents t e 'uyer fro" o'taining t e goo.s fro" t e carrier until t e price is pai. o 0 e seller is P $S53$& to have retained merely P4SS$SSI42 over t e goo.s4 ence4 title passe. to t e 'uyer at t e point of s ip"ent. A en t e seller forwar.s t e 'ill of la.ing toget er wit t e .raft .rawn on t e 'uyer for t e price o P $S53$& I2T$2TI42 of the seller is not to part !ith o!nership over t e goo.s until t e .raft is onore. 'y t e 'uyer H&A!C!14 t e for" in w ic t e 'ill of la.ing is ta?en as in.icative of title to t e goo.s is F&0 C&FCBES9C! an. is 1!BE00ABB!. o =here the contract provided that not!ithstanding the fact that the goods are shipped to the sellerJs orderA the goods are at the ris" of the buyer from and after delivery to the carrier4 t e consign"ent of t e goo.s to t e or.er of t e seller s ows t at t e title reserve. 'y t e seller was only for t e purpose of security4 an. t e 'eneficial interest in t e goo.s passe. to t e 'uyer at t e point of s ip"ent. o Alt oug t e goo.s were s ippe. an. consigne. to t e 'uyer un.er a straig t 'ill of la.ing4 'ut t e circumstances sho! that the partiesJ intention !as for the title not to pass to the buyer until the latter received the goods at the destination point o Agree"ent t at if t e stea"er .i. not arrive4 no pay"ents were to 'e "a.e4 t us s owing t at t e ris? of t e voyage was on t e seller4 an. t at t e title was not transferre. to t e 'uyer upon .elivery to t e carrier ,!69F909&F &6 SH9//9FG 0!12S (1) C.&.,. > Hcollect on .eliveryG * 9f goo.s are "ar?e. C&,4 t e carrier acts for t e seller in collecting t e purc ase price * 0 e 'uyer "ust pay for t e goo.s 'efore e can o'tain possession * C&, ter"s .o not prevent title fro" passing to t e 'uyer on .elivery to t e carrier w ere t ey are solely inten.e. as security for t e purc ase price (3) 6.&.B. > Hfree on 'oar.G * Goo.s are to 'e .elivere. free of e;pense to t e 'uyer to t e point w ere t ey are 6&B * G!F!1AB# /oint of 6&B4 eit er t e point of s ip"ent or t e point of .estination4 .eter"ines w en owners ip passes * 0itle presu"a'ly passes w en t e goo.s are .elivere. 6&B ($) C.9.6. > Hcost4 insurance an. freig tG * /rice fi;e. covers not only t e cost of goo.s 'ut t e e;pense of freig t an. insurance to 'e pai. 'y t e seller up to t e point of .estination. 0itle passes to t e 'uyer at t e "o"ent of .elivery to t e point especially na"e. Presumption arising form payment of freight * 6&B an. C96 "a?e rules of presu"ption w ic yiel. of proof of contrary intention * BEL!1 /AL 61!9GH0# Goo.s 'eco"e is at t e point of s ip"ent * S!BB!1 /AL 61!9GH0# ,uty of seller is to ave goo.s transporte. to t eir ulti"ate .estination an. t at title to property .oes not pass until t e goo.s ave reac e. t eir .estination B. /ractice notes# usual covenants of t e seller i. /re*closing covenants# (a) con.uct of operations prior to closing5 (') actions relating to closing5 (c) notification to 'uyer5 (.) ot ers ii. /ost*closing covenants# (a) confi.entiality5 (') covenant not to co"pete5 (c) anti*poac ing covenant5 (.) pay"ent of inco"e ta;5 (e) ot ers iii. Affir"ative covenants an. negative covenants VII. Covenants: obligations of the buyer $4

a.

#. 4bligations under the Civil Code (accept .elivery4 pay t e price) /19FC9/AB &BB9GA09&FS &6 C!F,!! 1. 0o accept t e .elivery of t e t ings sol. 3. 0o pay t e price of t e t ing sol. at t e ti"e an. place stipulate. in t e contract $. 0o 'ear t e e;penses for t e e;ecution an. registration of t e sale an. putting t e goo.s in a .elivera'le state4 if suc is t e stipulation i. Accept delivery '#rt. ()8-A ()8<. #rt. ()8-. 0 e ven.ee is bound to accept delivery an. to pay the price of t e t ing sol. at t e ti"e an. place stipulated in t e contract. 9f t e ti"e an. place s oul. not have been stipulated4 t e pay"ent "ust 'e "a.e at t e ti"e an. place of t e delivery of t e t ing sol.. (15++a) 24T$S: (1) Cen.or not re7uire. to .eliver t ing sol. until price is pai. nor t e ven.ee to pay t e price 'efore t ing is .elivere. in t e a'sence of an agree"ent to t e contrary (3) 9f stipulate.4 t en ven.ee is 'oun. to accept t e .elivery an. to pay t e price at t e ti"e an. place .esignate. ($) 96 t ere is no stipulation4 pay at ti"e an. place of .elivery (4) A'sence of stipulation as to place4 at w erever t e t ing "ig t 'e at t e "o"ent t e contract was perfecte. (5) 9f only time of delivery was stipulate.4 ven.ee is re;uired to pay even 'efore t e t ing is .elivere. to i"5 if only time for payment is stipulate.4 ven.ee is entitled to delivery even 'efore t e price is pai. #rt. ()8<. Enless ot erwise agree.4 t e 'uyer of goo.s is not bound to accept delivery thereof by installments. A ere t ere is a contract of sale of goo.s to 'e .elivere. 'y state. install"ents4 w ic are to 'e separately paid for4 an. t e S!BB!1 "a?es defective deliveries in respect of one or more instalments4 or t e BEL!1 neglects or refuses !ithout @ust cause to ta"e delivery of or pay for one more instalmentsA it ,!/!F,S in eac case on t e terms of t+e contract and t+e circumstances of t+e case4 w et er t e breach of contract is so material as to (ustify t e in(ure. party in refusing to procee. furt er an. suing for .a"ages for 'reac of t e entire contract4 or w et er t e 'reac is severableA giving rise to a claim for compensation 'ut not to a rig t to treat t e w ole contract as 'ro?en. (n) 24T$S: 1$2$ #/ 5/$: Buyer not 'oun. to accept .elivery of goo.s 'y install"ents (even pay price) * !ntitle. to .elivery an. accept .elivery at t e sa"e ti"e $XC$PT: Agree"ent of parties (1) Separate price fi;e. for eac install"ent# Breac .epen.s on ter"s of contract if severa'le or not * S!C!1AB9B90L# A et er t e 'reac is so "aterial as to (ustify t e aggrieve. party in refusing to procee. furt er wit t e entire contract or so "aterial t at t e 'reac is severa'le4 giving rise to "erely a clai" for .a"ages (a) Breac of 1 install"ent Affects w ole contract# Sue for .a"ages for entire contract5 (') A ere 'reac severa'le# 1ise to a clai" for co"pensation for t e particular 'reac 'ut not t e w ole contract * Su'stantial v Casual

a) mode of manifesting acceptance >7rt. 1585) #rt. ()8). 0 e 'uyer is .ee"e. to ave accepte. t e goo.s w en e intimates to the seller that he has accepted them4 &1 w en t e goo.s ave 'een delivered to i"4 an. e does any act in relation to them !hich is inconsistent !ith the o!nership of the seller4 &1 w en4 after the lapse of a reasona'le ti"e4 e retains the goods wit out inti"ating to t e seller t at e as re(ecte. t e". (n) 2&,!S &6 2AF96!S09FG ACC!/0AFC! (1) !;press acceptance# 9nti"ates ver'ally or in writing is acceptance (3) 9"plie. acceptance# a. Act inconsistent wit sellerDs owners ip i. Sells or atte"pts to sell ii. Eses t e" iii. 2a?es alteration in a "anner proper only for owner '. Buyer4 after laps of reasona'le ti"e4 retain goo.s wit out inti"ating re(ection * * * &$/IV$ C Act of ven.or5 is o'ligation Cen.ee not ing to .o wit act of .elivery * * * #CC$PT#2C$ Act of ven.ee4 is o'ligation Acceptance not con.ition to co"plete .elivery Seller "ust .eliver even wit out acceptance yet

Acceptance of 'uyer "ay prece.e actual .elivery. 1eceipt 'efore acceptance4 acceptance 'efore receipt is possi'le.

b) rig+t to e-amine goods prior to delivery >7rt. 158&) #rt. ()87. A ere goo.s are delivered to the buyer4 w ic e as not previously e%amined4 e is not deemed to have accepted t e" EFB!SS an. until e as a. a reasonable opportunity of e%amining t e" for t e purpose of ascertaining w et er t ey are in confor"ity wit t e contract if t ere is no stipulation to t e contrary. 5nless ot erwise agree.4 w en t e seller tenders delivery of goo.s to t e 'uyer4 e is bound4 on re8uest4 to afford the buyer a reasonable opportunity of e;a"ining t e goo.s for t e purpose of ascertaining w et er t ey are in confor"ity wit t e contract. A ere goo.s are delivered to a carrier by the seller 4 in accor.ance wit an order fro" or agree"ent wit t e 'uyer4 upon t e ter"s t at t e goo.s s all not 'e .elivere. 'y t e carrier to t e 'uyer until he has paid the price4 w et er suc ter"s are in.icate. 'y "ar?ing t e goo.s wit t e wor.s Fcollect on deliveryAF or ot erwise4 t e buyer is not entitled to e%amine the goods B!6&1! t e pay"ent of t e price4 in t e a'sence of agree"ent or usage of tra.e per"itting suc e;a"ination. (n) 24T$S: Acceptance is assent to 'eco"e owner of t e specific goo.s w en .elivery of t e" is offere. to 'uyer. (1) Actual .elivery conte"plate.# Con.ition prece.ent to t e transfer of owners ip (3) Goo.s .elivere. C&,8not C&, a. F&0 C&, $5

'.

i. ii. iii. C&, i. ii. iii.

1ig t to e;a"ine is con.ition prece.ent to paying t e price after owners ip as passe. F&0 ABS&BE0!# on re7uest Ait in reasona'le ti"e Aaiver "ay 'e "a.e 'efore pay"ent5 Buyer still entitle. to e;a"ine goo.s after .elivery an. pay"ent of price 1ig t of e;a"ination is con.ition su'se7uent after transfer of owners ip

c) effect of acceptance >7rt. 158') #rt. ()8:. 9n t e a'sence of e;press or i"plie. agree"ent of t e parties4 acceptance of t e goo.s 'y t e 'uyer s all not discharge the seller from liability in damages or ot er legal remedy for breach of any pro"ise or warranty in t e contract of sale. But4 if4 after acceptance of t e goo.s4 t e 'uyer fails to give notice to t e seller of t e 'reac in any pro"ise of (or) warranty !ithin a reasonable time after t e 'uyer ?nows4 or oug t to ?now of suc 'reac 4 t e seller s all not be liable t erefor. (n) /E1/&S!# /rotect seller against 'elate. clai"s Hof G"ust 'e rea. as or d) ,+en buyerEs refusal to accept Austified5,rongful >7rts. 158 , 1588) #rt. ()8+. Enless ot erwise agree.4 w ere goo.s are .elivere. to t e 'uyer4 an. e refuses to accept them4 aving t e right so to .o4 e is not bound to return them to the seller 4 'ut it is sufficient if e notifies t e seller t at e refuses to accept t e". 9f e voluntarily constitutes i"self a depositary t ereof4 e s all 'e liable as suc . (n) *S IES0969!, #rt. ()88. 9f t ere is no stipulation as specifie. in t e first paragrap of article 153$4 w en t e 'uyerQs refusal to accept t e goo.s is !ithout @ust cause4 t e title thereto passes to i" fro" t e "o"ent t ey are placed at his disposal. (n) ii. Pay the price Art. !"#$% a) ,+ere and ,+en >7rt. 158#) #rt. ()8-. 0 e ven.ee is 'oun. to accept .elivery an. to pay t e price of t e t ing sol. at the time and place stipulated in the contract. 9f t e ti"e an. place s oul. not ave 'een stipulate.4 t e pay"ent "ust 'e "a.e at the time and place of the delivery of the thing sold. (15++a) b) buyerEs liability to pay interest >7rt. 158$) #rt. ()89. 0 e ven.ee s all owe interest for t e period bet!een the delivery of the thing and the payment of the price 4 in t e following t ree cases# (1) S oul. it ave 'een so stipulated5 (3) S oul. t e t ing sold and delivered produce fruits or income5 ($) S oul. e be in default4 fro" t e ti"e of (u.icial or e;tra(u.icial .e"an. for t e pay"ent of t e price. (15+1a) c) rig+t of vendee to suspend payment of price >7rt. 15$!) #rt. ()9*. S oul. t e ven.ee 'e disturbed in the possession or o!nership of t e t ing ac7uire.4 or s oul. e ave reasonable grounds to fear suc .istur'ance4 'y a vindicatory action or a foreclosure of mortgage4 e "ay S5SP$2& t e pay"ent of t e price until t e ven.or as cause. t e .istur'ance or .anger to cease4 EFB!SS t e latter gives security for t e return of t e price in a proper case4 or it as 'een stipulated t at4 notwit stan.ing any suc contingency4 t e ven.ee s all 'e 'oun. to "a?e t e pay"ent. A mere act of trespass s all not authoriIe t e suspension of t e pay"ent of t e price. (15+3a) d) effect of failure to pay price ?. Practice notes: usual covenants of the buyer i. <re-closing covenants: (a) approvals5 (') ot ers ii. <ost-closing covenants : (a) pay"ent of sta"p ta;5 (') o'taining B91 Certificate Aut ori@ing 1egistration5 (c) ot ers iii. 7ffirmative covenants and negative covenants VIII. Conditions #. 3eaning of conditions ?. Types of conditions i. 6onditions precedent >7rt. 15&5) #rt. ()7). A ere t e o'ligation of eit er party to a contract of sale is sub@ect to any condition w ic is not performed4 suc party "ay refuse to proceed !ith the contract or e "ay !aive performance of t e con.ition. 9f t e ot er party as pro"ise. t at t e con.ition s oul. appen or 'e perfor"e.4 suc first "entione. party "ay also treat the nonperformance of the condition as a breach of !arranty. A ere t e o!nership in the thing has not passed 4 t e 'uyer "ay treat t e fulfill"ent 'y t e seller of is o'ligation to .eliver t e sa"e as .escri'e. an. as warrante. e;pressly or 'y i"plication in t e contract of sale as a condition of the obligation of the buyer to perform his promise to accept and pay for the thing. (n) ii. 6onditions subse8uent C. Practice notes: conditions in contract of sale i. 0sual contractual conditions a) Con.itions prece.ent# $:

(i) accuracy of representations5 (ii) perfor"ance of all covenants8no 'reac 5 (iii) consents5 (iv) no litigation8suit5 (v) .elivery of .ocu"ents5 (vi) ot ers ') Con.itions su'se7uent ii. *ime frame for meeting conditions: drop dead date5long stop date iii. Result if closing condition not satisfied: (a) no closing5 (') closing .elaye.5 (c) con.ition waive. an. closing occurs5 (.) con.ition c ange. to post*closing covenant an. closing occurs5 (e) ot ers IX. epresentations and !arranties 7. ?eaning of representations and ,arranties .. *ype of ,arranties i. !;press > "eaning4 effect ii. 9"plie. > "eaning4 effect4 nature4 w en not applica'le 6. 6ategories of representations and ,arranties i. 1elating to t e contract itself ii. 1elating to t e su'(ect "atter of t e contract iii. 1elating to t e parties D. Distinguis+ed from ot+er terms i. Con.itions ii. &pinion4 .ealerDs tal? :. Representations and ,arranties of t+e seller i. !;press > Art. 154: #rt. ()7:. Any affir"ation of fact or any pro"ise 'y t e seller relating to t e t ing is an e;press warranty if t e natural ten.ency of suc affir"ation or pro"ise is to in.uce t e 'uyer to purc ase t e sa"e4 an. if t e 'uyer purc ase t e t ing relying t ereon. Fo affir"ation of t e value of t e t ing4 nor any state"ent purporting to 'e a state"ent of t e sellerQs opinion only4 s all 'e construe. as a warranty4 unless t e seller "a.e suc affir"ation or state"ent as an e;pert an. it was relie. upon 'y t e 'uyer. (n) a) "eaning ') ter"inology use. c) ti"e of warranty4 for"4 sellerDs goo. fait ii. 9"plie. a) i"plie. warranty of title (Art. 154)) #rt. ()7+. 9n a contract of sale4 unless a contrary intention appears4 t ere is# (1) An i"plie. warranty on t e part of t e seller t at e as a rig t to sell t e t ing at t e ti"e w en t e owners ip is to pass4 an. t at t e 'uyer s all fro" t at ti"e ave an. en(oy t e legal an. peaceful possession of t e t ing5 (3) An i"plie. warranty t at t e t ing s all 'e free fro" any i..en faults or .efects4 or any c arge or encu"'rance not .eclare. or ?nown to t e 'uyer. 0 is Article s all not4 owever4 'e el. to ren.er lia'le a s eriff4 auctioneer4 "ortgagee4 ple.gee4 or ot er person professing to sell 'y virtue of aut ority in fact or law4 for t e sale of a t ing in w ic a t ir. person as a legal or e7uita'le interest. (n) * warranty in case of eviction (Art. 1548*15:+) #rt. ()78. !viction s all ta?e place w enever 'y a final (u.g"ent 'ase. on a rig t prior to t e sale or an act i"puta'le to t e ven.or4 t e ven.ee is .eprive. of t e w ole or of a part of t e t ing purc ase.. 0 e ven.or s all answer for t e eviction even t oug not ing as 'een sai. in t e contract on t e su'(ect. 0 e contracting parties4 owever4 "ay increase4 .i"inis 4 or suppress t is legal o'ligation of t e ven.or. (14)5a) #rt. ()79. 0 e ven.ee nee. not appeal fro" t e .ecision in or.er t at t e ven.or "ay 'eco"e lia'le for eviction. (n) #rt. ())*. A en a.verse possession a. 'een co""ence. 'efore t e sale 'ut t e prescriptive perio. is co"plete. after t e transfer4 t e ven.or s all not 'e lia'le for eviction. (n) #rt. ())(. 9f t e property is sol. for nonpay"ent of ta;es .ue an. not "a.e ?nown to t e ven.ee 'efore t e sale4 t e ven.or is lia'le for eviction. (n) #rt. ())-. 0 e (u.g"ent .e'tor is also responsi'le for eviction in (u.icial sales4 unless it is ot erwise .ecree. in t e (u.g"ent. (n) #rt. ())<. Any stipulation e;e"pting t e ven.or fro" t e o'ligation to answer for eviction s all 'e voi.4 if e acte. in 'a. fait . (14):) #rt. ())7. 9f t e ven.ee as renounce. t e rig t to warranty in case of eviction4 an. eviction s oul. ta?e place4 t e ven.or s all only pay t e value w ic t e t ing sol. a. at t e ti"e of t e eviction. S oul. t e ven.ee ave "a.e t e waiver wit ?nowle.ge of t e ris?s of eviction an. assu"e. its conse7uences4 t e ven.or s all not 'e lia'le. (14))) #rt. ())). A en t e warranty as 'een agree. upon or not ing as 'een stipulate. on t is point4 in case eviction occurs4 t e ven.ee s all ave t e rig t to .e"an. of t e ven.or# (1) 0 e return of t e value w ic t e t ing sol. a. at t e ti"e of t e eviction4 'e it greater or less t an t e price of t e sale5 (3) 0 e inco"e or fruits4 if e as 'een or.ere. to .eliver t e" to t e party w o won t e suit against i"5 ($) 0 e costs of t e suit w ic cause. t e eviction4 an.4 in a proper case4 t ose of t e suit 'roug t against t e ven.or for t e warranty5 (4) 0 e e;penses of t e contract4 if t e ven.ee as pai. t e"5 (5) 0 e .a"ages an. interests4 an. orna"ental e;penses4 if t e sale was "a.e in 'a. fait . (14)8) #rt. ()):. S oul. t e ven.ee lose4 'y reason of t e eviction4 a part of t e t ing sol. of suc i"portance4 in relation to t e w ole4 t at e woul. not ave 'oug t it wit out sai. part4 e "ay .e"an. t e rescission of t e contract5 'ut wit t e o'ligation to return t e t ing wit out ot er encu"'rances t at t ose w ic it a. w en e ac7uire. it. He "ay e;ercise t is rig t of action4 instea. of enforcing t e ven.orQs lia'ility for eviction. 0 e sa"e rule s all 'e o'serve. w en two or "ore t ings ave 'een (ointly sol. for a lu"p su"4 or for a separate price for eac of t e"4 if it s oul. clearly appear t at t e ven.ee woul. not ave purc ase. one wit out t e ot er. (14)%a) #rt. ())+. 0 e warranty cannot 'e enforce. until a final (u.g"ent as 'een ren.ere.4 w ere'y t e ven.ee loses t e t ing ac7uire. or a part t ereof. (148+) #rt. ())8. 0 e ven.or s all not 'e o'lige. to "a?e goo. t e proper warranty4 unless e is su""one. in t e suit for eviction at t e instance of t e ven.ee. (1481a) #rt. ())9. 0 e .efen.ant ven.ee s all as?4 wit in t e ti"e fi;e. in t e 1ules of Court for answering t e co"plaint4 t at t e ven.or 'e "a.e a co*.efen.ant. (1483a) $)

#rt. ():*. 9f t e i""ova'le sol. s oul. 'e encu"'ere. wit any non*apparent 'ur.en or servitu.e4 not "entione. in t e agree"ent4 of suc a nature t at it "ust 'e presu"e. t at t e ven.ee woul. not ave ac7uire. it a. e 'een aware t ereof4 e "ay as? for t e rescission of t e contract4 unless e s oul. prefer t e appropriate in.e"nity. Feit er rig t can 'e e;ercise. if t e non*apparent 'ur.en or servitu.e is recor.e. in t e 1egistry of /roperty4 unless t ere is an e;press warranty t at t e t ing is free fro" all 'ur.ens an. encu"'rances. Ait in one year4 to 'e co"pute. fro" t e e;ecution of t e .ee.4 t e ven.ee "ay 'ring t e action for rescission4 or sue for .a"ages. &ne year aving elapse.4 e "ay only 'ring an action for .a"ages wit in an e7ual perio.4 to 'e counte. fro" t e .ate on w ic e .iscovere. t e 'ur.en or servitu.e. (148$a) * "eaning of eviction (Art. 1548) #rt. ()78. !viction s all ta?e place w enever 'y a final (u.g"ent 'ase. on a rig t prior to t e sale or an act i"puta'le to t e ven.or4 t e ven.ee is .eprive. of t e w ole or of a part of t e t ing purc ase.. 0 e ven.or s all answer for t e eviction even t oug not ing as 'een sai. in t e contract on t e su'(ect. 0 e contracting parties4 owever4 "ay increase4 .i"inis 4 or suppress t is legal o'ligation of t e ven.or. (14)5a) * essential ele"ents of warranty against eviction * eviction vs. trespass in fact * re7uire"ent of final (u.g"ent5 .uty to appeal (Arts. 155)4 15584 155%4 154%) #rt. ())+. 0 e warranty cannot 'e enforce. until a final (u.g"ent as 'een ren.ere.4 w ere'y t e ven.ee loses t e t ing ac7uire. or a part t ereof. (148+) #rt. ())8. 0 e ven.or s all not 'e o'lige. to "a?e goo. t e proper warranty4 unless e is su""one. in t e suit for eviction at t e instance of t e ven.ee. (1481a) #rt. ())9. 0 e .efen.ant ven.ee s all as?4 wit in t e ti"e fi;e. in t e 1ules of Court for answering t e co"plaint4 t at t e ven.or 'e "a.e a co*.efen.ant. (1483a) #rt. ()79. 0 e ven.ee nee. not appeal fro" t e .ecision in or.er t at t e ven.or "ay 'eco"e lia'le for eviction. (n) * ven.or as party to t e suit for eviction (Art. 155%) #rt. ())9. 0 e .efen.ant ven.ee s all as?4 wit in t e ti"e fi;e. in t e 1ules of Court for answering t e co"plaint4 t at t e ven.or 'e "a.e a co*.efen.ant. (1483a) * effect of prescription (Art. 155+) #rt. ())*. A en a.verse possession a. 'een co""ence. 'efore t e sale 'ut t e prescriptive perio. is co"plete. after t e transfer4 t e ven.or s all not 'e lia'le for eviction. (n) * rig ts an. lia'ilities in case eviction occurs5 rig ts in case of partial eviction (Arts. 15554 155:) #rt. ())). A en t e warranty as 'een agree. upon or not ing as 'een stipulate. on t is point4 in case eviction occurs4 t e ven.ee s all ave t e rig t to .e"an. of t e ven.or# (1) 0 e return of t e value w ic t e t ing sol. a. at t e ti"e of t e eviction4 'e it greater or less t an t e price of t e sale5 (3) 0 e inco"e or fruits4 if e as 'een or.ere. to .eliver t e" to t e party w o won t e suit against i"5 ($) 0 e costs of t e suit w ic cause. t e eviction4 an.4 in a proper case4 t ose of t e suit 'roug t against t e ven.or for t e warranty5 (4) 0 e e;penses of t e contract4 if t e ven.ee as pai. t e"5 (5) 0 e .a"ages an. interests4 an. orna"ental e;penses4 if t e sale was "a.e in 'a. fait . (14)8) #rt. ()):. S oul. t e ven.ee lose4 'y reason of t e eviction4 a part of t e t ing sol. of suc i"portance4 in relation to t e w ole4 t at e woul. not ave 'oug t it wit out sai. part4 e "ay .e"an. t e rescission of t e contract5 'ut wit t e o'ligation to return t e t ing wit out ot er encu"'rances t at t ose w ic it a. w en e ac7uire. it. He "ay e;ercise t is rig t of action4 instea. of enforcing t e ven.orQs lia'ility for eviction. 0 e sa"e rule s all 'e o'serve. w en two or "ore t ings ave 'een (ointly sol. for a lu"p su"4 or for a separate price for eac of t e"4 if it s oul. clearly appear t at t e ven.ee woul. not ave purc ase. one wit out t e ot er. (14)%a) * waiver of warranty in case of eviction5 ?in.s5 effect5 presu"ption (Arts. 15484 155$4 1554) #rt. ()78. !viction s all ta?e place w enever 'y a final (u.g"ent 'ase. on a rig t prior to t e sale or an act i"puta'le to t e ven.or4 t e ven.ee is .eprive. of t e w ole or of a part of t e t ing purc ase.. 0 e ven.or s all answer for t e eviction even t oug not ing as 'een sai. in t e contract on t e su'(ect. 0 e contracting parties4 owever4 "ay increase4 .i"inis 4 or suppress t is legal o'ligation of t e ven.or. (14)5a) #rt. ())<. Any stipulation e;e"pting t e ven.or fro" t e o'ligation to answer for eviction s all 'e voi.4 if e acte. in 'a. fait . (14):) #rt. ())7. 9f t e ven.ee as renounce. t e rig t to warranty in case of eviction4 an. eviction s oul. ta?e place4 t e ven.or s all only pay t e value w ic t e t ing sol. a. at t e ti"e of t e eviction. S oul. t e ven.ee ave "a.e t e waiver wit ?nowle.ge of t e ris?s of eviction an. assu"e. its conse7uences4 t e ven.or s all not 'e lia'le. (14))) * eviction for nonpay"ent of ta;es (Art. 1551) #rt. ())(. 9f t e property is sol. for nonpay"ent of ta;es .ue an. not "a.e ?nown to t e ven.ee 'efore t e sale4 t e ven.or is lia'le for eviction. (n) * (u.icial sales (Art. 1553) #rt. ())-. 0 e (u.g"ent .e'tor is also responsi'le for eviction in (u.icial sales4 unless it is ot erwise .ecree. in t e (u.g"ent. (n) * encu"'rance wit non*apparent 'ur.en (Art. 15:+) #rt. ():*. 9f t e i""ova'le sol. s oul. 'e encu"'ere. wit any non*apparent 'ur.en or servitu.e4 not "entione. in t e agree"ent4 of suc a nature t at it "ust 'e presu"e. t at t e ven.ee woul. not ave ac7uire. it a. e 'een aware t ereof4 e "ay as? for t e rescission of t e contract4 unless e s oul. prefer t e appropriate in.e"nity. Feit er rig t can 'e e;ercise. if t e non*apparent 'ur.en or servitu.e is recor.e. in t e 1egistry of /roperty4 unless t ere is an e;press warranty t at t e t ing is free fro" all 'ur.ens an. encu"'rances. Ait in one year4 to 'e co"pute. fro" t e e;ecution of t e .ee.4 t e ven.ee "ay 'ring t e action for rescission4 or sue for .a"ages. &ne year aving elapse.4 e "ay only 'ring an action for .a"ages wit in an e7ual perio.4 to 'e counte. fro" t e .ate on w ic e .iscovere. t e 'ur.en or servitu.e. (148$a) ') i"plie. warranty against i..en encu"'rances an. .efects (Art. 154)(')4 15:14 15::4 15)3*1581) #rt. ()7+. 9n a contract of sale4 unless a contrary intention appears4 t ere is# (1) An i"plie. warranty on t e part of t e seller t at e as a rig t to sell t e t ing at t e ti"e w en t e owners ip is to pass4 an. t at t e 'uyer s all fro" t at ti"e ave an. en(oy t e legal an. peaceful possession of t e t ing5 (3) An i"plie. warranty t at t e t ing s all 'e free fro" any i..en faults or .efects4 or any c arge or encu"'rance not .eclare. or ?nown to t e 'uyer. 0 is Article s all not4 owever4 'e el. to ren.er lia'le a s eriff4 auctioneer4 "ortgagee4 ple.gee4 or ot er person professing to sell 'y virtue of aut ority in fact or law4 for t e sale of a t ing in w ic a t ir. person as a legal or e7uita'le interest. (n) #rt. ():(. 0 e ven.or s all 'e responsi'le for warranty against t e i..en .efects w ic t e t ing sol. "ay ave4 s oul. t ey ren.er it unfit for t e use for w ic it is inten.e.4 or s oul. t ey .i"inis its fitness for suc use to suc an e;tent t at4 a. t e ven.ee 'een aware t ereof4 e woul. not ave ac7uire. it or woul. ave given a lower price for it5 'ut sai. ven.or s all not 'e answera'le for patent .efects or t ose w ic "ay 'e visi'le4 or for t ose w ic are not visi'le if t e ven.ee is an e;pert w o4 'y reason of is tra.e or profession4 s oul. ave ?nown t e". (1484a) $8

#rt. ()::. 0 e ven.or is responsi'le to t e ven.ee for any i..en faults or .efects in t e t ing sol.4 even t oug e was not aware t ereof. 0 is provision s all not apply if t e contrary as 'een stipulate.4 an. t e ven.or was not aware of t e i..en faults or .efects in t e t ing sol.. (1485) #rt. ()+-. 9f two or "ore ani"als are sol. toget er4 w et er for a lu"p su" or for a separate price for eac of t e"4 t e re. i'itory .efect of one s all only give rise to its re. i'ition4 an. not t at of t e ot ers5 unless it s oul. appear t at t e ven.ee woul. not ave purc ase. t e soun. ani"al or ani"als wit out t e .efective one. 0 e latter case s all 'e presu"e. w en a tea"4 yo?e pair4 or set is 'oug t4 even if a separate price as 'een fi;e. for eac one of t e ani"als co"posing t e sa"e. (14%1) #rt. ()+<. 0 e provisions of t e prece.ing article wit respect to t e sale of ani"als s all in li?e "anner 'e applica'le to t e sale of ot er t ings. (14%3) #rt. ()+7. 0 ere is no warranty against i..en .efects of ani"als sol. at fairs or at pu'lic auctions4 or of live stoc? sol. as con.e"ne.. (14%$a) #rt. ()+). 0 e sale of ani"als suffering fro" contagious .iseases s all 'e voi.. A contract of sale of ani"als s all also 'e voi. if t e use or service for w ic t ey are ac7uire. as 'een state. in t e contract4 an. t ey are foun. to 'e unfit t erefor. (14%4a) #rt. ()+:. 9f t e i..en .efect of ani"als4 even in case a professional inspection as 'een "a.e4 s oul. 'e of suc a nature t at e;pert ?nowle.ge is not sufficient to .iscover it4 t e .efect s all 'e consi.ere. as re. i'itory. But if t e veterinarian4 t roug ignorance or 'a. fait s oul. fail to .iscover or .isclose it4 e s all 'e lia'le for .a"ages. (14%5) #rt. ()++. 0 e re. i'itory action4 'ase. on t e faults or .efects of ani"als4 "ust 'e 'roug t wit in forty .ays fro" t e .ate of t eir .elivery to t e ven.ee. 0 is action can only 'e e;ercise. wit respect to faults an. .efects w ic are .eter"ine. 'y law or 'y local custo"s. (14%:a) #rt. ()+8. 9f t e ani"al s oul. .ie wit in t ree .ays after its purc ase4 t e ven.or s all 'e lia'le if t e .isease w ic cause t e .eat e;iste. at t e ti"e of t e contract. (14%)a) #rt. ()+9. 9f t e sale 'e rescin.e.4 t e ani"al s all 'e returne. in t e con.ition in w ic it was sol. an. .elivere.4 t e ven.ee 'eing answera'le for any in(ury .ue to is negligence4 an. not arising fro" t e re. i'itory fault or .efect. (14%8) #rt. ()8*. 9n t e sale of ani"als wit re. i'itory .efects4 t e ven.ee s all also en(oy t e rig t "entione. in article 15:)5 'ut e "ust "a?e use t ereof wit in t e sa"e perio. w ic as 'een fi;e. for t e e;ercise of t e re. i'itory action. (14%%) #rt. ()8(. 0 e for" of sale of large cattle s all 'e governe. 'y special laws. (n) * re7uisites for warranty against i..en .efects (Arts. 15:14 15::) #rt. ():(. 0 e ven.or s all 'e responsi'le for warranty against t e i..en .efects w ic t e t ing sol. "ay ave4 s oul. t ey ren.er it unfit for t e use for w ic it is inten.e.4 or s oul. t ey .i"inis its fitness for suc use to suc an e;tent t at4 a. t e ven.ee 'een aware t ereof4 e woul. not ave ac7uire. it or woul. ave given a lower price for it5 'ut sai. ven.or s all not 'e answera'le for patent .efects or t ose w ic "ay 'e visi'le4 or for t ose w ic are not visi'le if t e ven.ee is an e;pert w o4 'y reason of is tra.e or profession4 s oul. ave ?nown t e". (1484a) #rt. ()::. 0 e ven.or is responsi'le to t e ven.ee for any i..en faults or .efects in t e t ing sol.4 even t oug e was not aware t ereof. 0 is provision s all not apply if t e contrary as 'een stipulate.4 an. t e ven.or was not aware of t e i..en faults or .efects in t e t ing sol.. (1485) * re"e.ies# accion re. i'itoria4 accion 7uanti "inoris (Arts. 15:)4 15)+) #rt. ():+. 9n t e cases of Articles 15:14 15:34 15:44 15:5 an. 15::4 t e ven.ee "ay elect 'etween wit .rawing fro" t e contract an. .e"an.ing a proportionate re.uction of t e price4 wit .a"ages in eit er case. (148:a) #rt. ()+*. 0 e prece.ing articles of t is Su'section s all 'e applica'le to (u.icial sales4 e;cept t at t e (u.g"ent .e'tor s all not 'e lia'le for .a"ages. (148%a) * warranty in sales of ani"als (Arts. 15)3* 1581) #rt. ()+-. 9f two or "ore ani"als are sol. toget er4 w et er for a lu"p su" or for a separate price for eac of t e"4 t e re. i'itory .efect of one s all only give rise to its re. i'ition4 an. not t at of t e ot ers5 unless it s oul. appear t at t e ven.ee woul. not ave purc ase. t e soun. ani"al or ani"als wit out t e .efective one. 0 e latter case s all 'e presu"e. w en a tea"4 yo?e pair4 or set is 'oug t4 even if a separate price as 'een fi;e. for eac one of t e ani"als co"posing t e sa"e. (14%1) #rt. ()+<. 0 e provisions of t e prece.ing article wit respect to t e sale of ani"als s all in li?e "anner 'e applica'le to t e sale of ot er t ings. (14%3) #rt. ()+7. 0 ere is no warranty against i..en .efects of ani"als sol. at fairs or at pu'lic auctions4 or of live stoc? sol. as con.e"ne.. (14%$a) #rt. ()+). 0 e sale of ani"als suffering fro" contagious .iseases s all 'e voi.. A contract of sale of ani"als s all also 'e voi. if t e use or service for w ic t ey are ac7uire. as 'een state. in t e contract4 an. t ey are foun. to 'e unfit t erefor. (14%4a) #rt. ()+:. 9f t e i..en .efect of ani"als4 even in case a professional inspection as 'een "a.e4 s oul. 'e of suc a nature t at e;pert ?nowle.ge is not sufficient to .iscover it4 t e .efect s all 'e consi.ere. as re. i'itory. But if t e veterinarian4 t roug ignorance or 'a. fait s oul. fail to .iscover or .isclose it4 e s all 'e lia'le for .a"ages. (14%5) #rt. ()++. 0 e re. i'itory action4 'ase. on t e faults or .efects of ani"als4 "ust 'e 'roug t wit in forty .ays fro" t e .ate of t eir .elivery to t e ven.ee. 0 is action can only 'e e;ercise. wit respect to faults an. .efects w ic are .eter"ine. 'y law or 'y local custo"s. (14%:a) #rt. ()+8. 9f t e ani"al s oul. .ie wit in t ree .ays after its purc ase4 t e ven.or s all 'e lia'le if t e .isease w ic cause t e .eat e;iste. at t e ti"e of t e contract. (14%)a) #rt. ()+9. 9f t e sale 'e rescin.e.4 t e ani"al s all 'e returne. in t e con.ition in w ic it was sol. an. .elivere.4 t e ven.ee 'eing answera'le for any in(ury .ue to is negligence4 an. not arising fro" t e re. i'itory fault or .efect. (14%8) #rt. ()8*. 9n t e sale of ani"als wit re. i'itory .efects4 t e ven.ee s all also en(oy t e rig t "entione. in article 15:)5 'ut e "ust "a?e use t ereof wit in t e sa"e perio. w ic as 'een fi;e. for t e e;ercise of t e re. i'itory action. (14%%) #rt. ()8(. 0 e for" of sale of large cattle s all 'e governe. 'y special laws. (n) * (u.icial sales (Art. 15)+) #rt. ()+*. 0 e prece.ing articles of t is Su'section s all 'e applica'le c) i"plie. warranty as to fitness or "erc anta'ility or "erc anta'le 7uality (Art. 15:34 15:$4 15:44 15:54 15)+) #rt. ():-. 9n a sale of goo.s4 t ere is an i"plie. warranty or con.ition as to t e 7uality or fitness of t e goo.s4 as follows# (1) A ere t e 'uyer4 e;pressly or 'y i"plication4 "a?es ?nown to t e seller t e particular purpose for w ic t e goo.s are ac7uire.4 an. it appears t at t e 'uyer relies on t e sellerQs s?ill or (u.g"ent (w et er e 'e t e grower or "anufacturer or not)4 t ere is an i"plie. warranty t at t e goo.s s all 'e reasona'ly fit for suc purpose5 (3) A ere t e goo.s are 'roug t 'y .escription fro" a seller w o .eals in goo.s of t at .escription (w et er e 'e t e grower or "anufacturer or not)4 t ere is an i"plie. warranty t at t e goo.s s all 'e of "erc anta'le 7uality. (n) #rt. ():<. 9n t e case of contract of sale of a specifie. article un.er its patent or ot er tra.e na"e4 t ere is no warranty as to its fitness for any particular purpose4 unless t ere is a stipulation to t e contrary. (n) $%

#rt. ():7. An i"plie. warranty or con.ition as to t e 7uality or fitness for a particular purpose "ay 'e anne;e. 'y t e usage of tra.e. (n) #rt. ():). 9n t e case of a contract of sale 'y sa"ple4 if t e seller is a .ealer in goo.s of t at ?in.4 t ere is an i"plie. warranty t at t e goo.s s all 'e free fro" any .efect ren.ering t e" un"erc anta'le w ic woul. not 'e apparent on reasona'le e;a"ination of t e sa"ple. (n) #rt. ()+*. 0 e prece.ing articles of t is Su'section s all 'e applica'le * i"plie. warranty of 7uality8fitness > particular purpose of goo.s4 test4 sale un.er tra.e na"e4 usage of tra.e4 sale 'y sa"ple4 re"e.ies (Art. 15:3*15:44 15:5) #rt. ():-. 9n a sale of goo.s4 t ere is an i"plie. warranty or con.ition as to t e 7uality or fitness of t e goo.s4 as follows# (1) A ere t e 'uyer4 e;pressly or 'y i"plication4 "a?es ?nown to t e seller t e particular purpose for w ic t e goo.s are ac7uire.4 an. it appears t at t e 'uyer relies on t e sellerQs s?ill or (u.g"ent (w et er e 'e t e grower or "anufacturer or not)4 t ere is an i"plie. warranty t at t e goo.s s all 'e reasona'ly fit for suc purpose5 (3) A ere t e goo.s are 'roug t 'y .escription fro" a seller w o .eals in goo.s of t at .escription (w et er e 'e t e grower or "anufacturer or not)4 t ere is an i"plie. warranty t at t e goo.s s all 'e of "erc anta'le 7uality. (n) #rt. ():<. 9n t e case of contract of sale of a specifie. article un.er its patent or ot er tra.e na"e4 t ere is no warranty as to its fitness for any particular purpose4 unless t ere is a stipulation to t e contrary. (n) #rt. ():7. An i"plie. warranty or con.ition as to t e 7uality or fitness for a particular purpose "ay 'e anne;e. 'y t e usage of tra.e. (n) #rt. ():). 9n t e case of a contract of sale 'y sa"ple4 if t e seller is a .ealer in goo.s of t at ?in.4 t ere is an i"plie. warranty t at t e goo.s s all 'e free fro" any .efect ren.ering t e" un"erc anta'le w ic woul. not 'e apparent on reasona'le e;a"ination of t e sa"ple. (n) * i"plie. warranty of "erc anta'ility8"erc anta'le 7uality (Art. 15:3) #rt. ():-. 9n a sale of goo.s4 t ere is an i"plie. warranty or con.ition as to t e 7uality or fitness of t e goo.s4 as follows# (1) A ere t e 'uyer4 e;pressly or 'y i"plication4 "a?es ?nown to t e seller t e particular purpose for w ic t e goo.s are ac7uire.4 an. it appears t at t e 'uyer relies on t e sellerQs s?ill or (u.g"ent (w et er e 'e t e grower or "anufacturer or not)4 t ere is an i"plie. warranty t at t e goo.s s all 'e reasona'ly fit for suc purpose5 (3) A ere t e goo.s are 'roug t 'y .escription fro" a seller w o .eals in goo.s of t at .escription (w et er e 'e t e grower or "anufacturer or not)4 t ere is an i"plie. warranty t at t e goo.s s all 'e of "erc anta'le 7uality. (n) * re"e.ies# accion re. i'itoria4 accion 7uanti "inoris (Arts. 15:)4 15)+) #rt. ():+. 9n t e cases of Articles 15:14 15:34 15:44 15:5 an. 15::4 t e ven.ee "ay elect 'etween wit .rawing fro" t e contract an. .e"an.ing a proportionate re.uction of t e price4 wit .a"ages in eit er case. (148:a) #rt. ()+*. 0 e prece.ing articles of t is Su'section s all 'e applica'le to (u.icial sales4 e;cept t at t e (u.g"ent .e'tor s all not 'e lia'le for .a"ages. (148%a) B. Representations of t+e buyer F. <ractice notes: representations of t+e seller and t+e buyer i. 0ypical contractual representations of t e seller# (a) corporate e;istence4 power an. aut ority4 (') consents4 no violation5 (c) financial state"ents4 no un.isclose. lia'ility5 (.) "aterial a.verse c ange5 (e) title5 (f) litigation5 (g) ot ers ii. 0ypical contractual representations of t e 'uyer iii. A en representations "a.e (e.g.4 ti"e of e;ecution4 ti"e of closing4 etc.) iv. Bring*.own representations > concept4 w y re7uire. v. Survival of representations X. ules on ris" of loss and deterioration A. 0 eories of ris?s of loss i. 0 eory of tra.ition vs. t eory of perfection ii. 0 eory followe. 'y t e Spanis Civil Co.e an. t e / ilippine Civil Co.e B. /rinciple of res perit domino C. 1ules on ris? of loss an. .eterioration i. /rior to perfection of contract ii. At ti"e of perfection (Arts. 14+%($)4 14%$4 14%4) #rt. (7*9. 0 e following contracts are ine;istent an. voi. fro" t e 'eginning# ($) 0 ose w ose cause or ob@ect did not e%ist at the time of t e transaction5 #rt. (79<. 9f at t e ti"e t e contract of sale is perfecte.4 t e t ing w ic is t e o'(ect of t e contract as 'een entirely lostA t e contract s all 'e !ithout any effect. But if t e t ing s oul. ave 'een lost in part only4 t e ven.ee "ay c oose 'etween !ithdra!ing fro" t e contract an. demanding the remaining part4 paying its price in proportion to t e total su" agree. upon. (14:+a) #rt. (797. A ere t e parties purport a sale of specific goo.s4 an. t e goo.s wit out t e ?nowle.ge of t e seller ave perished in part or ave w olly or in a "aterial part so deteriorated in ;uality as to 'e su'stantially c ange. in c aracter4 t e 'uyer "ay at is option treat t e sale# (1) As avoided5 or (3) As valid in all of t e e-isting goods &1 in so "uc t ereof as ave not deteriorated4 an. as binding t e 'uyer to pay t e agree. price for t e goo.s in w ic t e owners ip will pass4 if t e sale was divisible. (n) 24T$S: G!F!1AB 1EB!# 9f at t e ti"e t e sale of a specific t ing is perfecte.4 t e t ing a. 'een entirely lost4 t e contract s all 'e ineffective. (Fo o'(ect4 no contract) 0 e loss "ust ave occurre. 'efore t e contract was entere. into4 wit out t e ?nowle.ge of 'ot parties. 9f /A109AB B&SS# Cen.ee as option of wit .rawing fro" t e contract or 'uying t e re"ain.er at a proportionate price. 9f ,!0!19&1A0!, 2A0!19ABBL 9F MEAB90L# Cen.ee as sa"e option 0 ese rules presuppose t at t e ris? of loss or .eterioration a. not yet passe. to t e 'uyer. iii. After perfection of contract 'ut 'efore .elivery * Fortuitous event (Art. 148+4 11:$*11:54 13:3*13:$4 13:%4 15+44 15$)*15$84 118%<14$=) #rt. (78*. Any in@ury to or benefit fro" t e t ing sol.4 A60!1 t e contract as 'een perfecte.4 fro" t e "o"ent of t e /!16!C09&F of t e contract to t e ti"e of ,!B9C!1L4 s all 'e governe. by #rticles ((:< to ((:)A and (-:-. 0 is rule s all apply to t e sale of fungible things4 "a.e in.epen.ently an. for a single price4 or wit out consi.eration of t eir weig t4 nu"'er4 or "easure. 4+

S oul. fungi'le t ings 'e sol. for a price fi%ed according to !eightA numberA or measure 4 t e 19S- s all F&0 'e i"pute. to t e ven.ee EF09B t ey ave 'een weig e.4 counte.4 or "easure. an. .elivere.4 EFB!SS t e latter as incurre. in .elay. #rt. ((:<. !very person o'lige. to give so"et ing is also obliged to ta"e care of it wit t e proper diligence of a good father of a family4 EFB!SS t e law or t e stipulation of t e parties re7uires anot er stan.ar. of care. (1+%4a) #rt. ((:7. 0 e C1!,90&1 as a rig t to t e fruits of the thing fro" t e ti"e t e o'ligation to ,!B9C!1 it arises. However4 e s all ac7uire F& 1!AB 19GH0 over it EF09B t e sa"e as 'een ,!B9C!1!, to i". (1+%5) #rt. ((:). A en w at is to 'e .elivere. is a &$T$ 3I2#T$ thing4 t e cre.itor4 in a..ition to t e rig t grante. i" 'y #rticle ((+*4 2AL C&2/!B t e ,!B0&1 to "a?e t e .elivery. 9f t e t ing is I2&$T$ 3I2#T$ 4 1$2$ IC4 e "ay as? t at t e o'ligation 'e C&2/B9!, wit at the e%pense of the debtor. 9f t e o'ligor ,!BALS4 or as pro"ise. to ,!B9C!1 0H! SA2! 0H9FG to two or "ore persons w o .o not ave t e sa"e interest4 e s all 'e responsible for any fortuitous event EF09B e as effecte. t e .elivery. (1+%:) #rt. (-:-. An o'ligation w ic consists in t e .elivery of a ,!0!129FA0! t ing s all 'e $XTI215ISB$& if it s oul. 'e B&S0 &1 ,!S01&L!, !ithout the fault of t e .e'tor4 an. B!6&1! e as incurre. in delay. A en 'y law or stipulation4 t e o'ligor is B9ABB! even for fortuitous events4 t e B&SS of t e t ing does not e%tinguish t e o'ligation4 an. e s all 'e responsi'le for damages. 0 e sa"e rule applies w en t e nature of t e o'ligation re7uires t e assu"ption of ris?. (1183a) #rt. (-:<. 9n an o'ligation to .eliver a G!F!19C t ing4 t e B&SS or ,!S01EC09&F of anyt ing of t e SA2! -9F, .oes not e%tinguish t e o'ligation. (n) #rt. (-:9. 0 e o'ligation aving 'een e%tinguished by the loss of t e t ing4 t e cre.itor s all ave all t e rights of action !hich the debtor may have against third persons 'y reason of t e loss. (118:) #rt. ()*7. EFB!SS ot erwise agree.4 t e goo.s re"ain at t e sellerHs ris" EF09B t e o!nership therein is transferred to t e 'uyer4 'ut w en t e o,ners+ip t+erein is transferred to t+e buyer t e goo.s are at t e buyerHs ris" w et er actual .elivery as 'een "a.e or not4 !OC!/0 t at# (1) A ere .elivery of t e goo.s as 'een "a.e to t e 'uyer or to a 'ailee for t e 'uyer4 in pursuance of t e contract an. t e owners ip in t e goo.s as 'een retained by the seller merely to secure performance 'y t e 'uyer of is o'ligations un.er t e contract4 t e goo.s are at t e 'uyerQs ris? fro" t e ti"e of suc .elivery5 (3) A ere actual delivery has been delayed t roug t e fault of eit er t e 'uyer or seller t e goo.s are at t e ris? of t e party in fault. (n) #rt. ()<+. 0 e ven.or is 'oun. to .eliver t e 0H9FG sol. an. its ACC!SS9&FS AF, ACC!SS&19!S in t e condition in !hich they !ere upon the perfection of t e contract. All t e 61E90S s all pertain to t e ven.ee fro" t e .ay on w ic t e contract !as perfected. (14:8a) #rt. ()<8. 9n case of lossA deterioration or improvement of t e t ing B!6&1! its .elivery4 t e rules in #rticle ((89 s all 'e o'serve.4 t e ven.or 'eing consi.ere. t e .e'tor. (n) #rt. ((89. A en t e con.itions ave 'een i"pose. wit t e intention of suspending the efficacy of an obligation to give4 t e following rules s all 'e o'serve. in case of t e improvementA loss or deterioration of t e t ing .uring t e pen.ency of t e con.ition# (1) 9f t e t ing is B&S0 wit out t e fault of t e .e'tor4 t e o'ligation s all 'e !O09FGE9SH!,5 ($) A en t e t ing ,!0!19&1A0!S wit out t e fault of t e .e'tor4 t e impairment is to be borne by the creditor5 24T$S: G!F!1AB 1EB!# &wner 'ears t e ris? of loss4 in t e a'sence of stipulation to t e contrary. ,elivery is re7uire. to transfer owners ip to t e 'uyer. 0 erefore4 'uyer .oes not 'ear t e ris? of loss EF09B ,!B9C!1L. 9nas"uc as t e contract gave rise to reciprocal o'ligations4 t e e;tinguis "ent of t e o'ligation to .eliver 'y virtue of a fortuitous event4 necessarily carrie. wit it t e e;tinguis "ent of t e o'ligation of t e ven.ee to pay t e price 'y virtue of Art. 118%. Alt oug t is article refers to con.itions i"pose. wit t e intention of suspen.ing t e efficacy of t e o'ligation to give4 it was "a.e applica'le to sales 'y Art. 15$8.

* SellerJs fault (Arts. 148+4 11:54 13:3*13:$4 15+4<3=4 15$84 118%) #rt. (78*. Any in(ury to or 'enefit fro" t e t ing sol.4 after t e contract as 'een perfecte.4 fro" t e "o"ent of t e perfection of t e contract to t e ti"e of .elivery4 s all 'e governe. 'y Articles 11:$ to 11:54 an. 13:3. 0 is rule s all apply to t e sale of fungi'le t ings4 "a.e in.epen.ently an. for a single price4 or wit out consi.eration of t eir weig t4 nu"'er4 or "easure. S oul. fungi'le t ings 'e sol. for a price fi;e. accor.ing to weig t4 nu"'er4 or "easure4 t e ris? s all not 'e i"pute. to t e ven.ee until t ey ave 'een weig e.4 counte.4 or "easure. an. .elivere.4 unless t e latter as incurre. in .elay. (1453a) #rt. ((:). A en w at is to 'e .elivere. is a .eter"inate t ing4 t e cre.itor4 in a..ition to t e rig t grante. i" 'y Article 11)+4 "ay co"pel t e .e'tor to "a?e t e .elivery. 9f t e t ing is in.eter"inate or generic4 e "ay as? t at t e o'ligation 'e co"plie. wit at t e e;pense of t e .e'tor. 9f t e o'ligor .elays4 or as pro"ise. to .eliver t e sa"e t ing to two or "ore persons w o .o not ave t e sa"e interest4 e s all 'e responsi'le for any fortuitous event until e as effecte. t e .elivery. (1+%:) #rt. (-:-. An o'ligation w ic consists in t e .elivery of a .eter"inate t ing s all 'e e;tinguis e. if it s oul. 'e lost or .estroye. wit out t e fault of t e .e'tor4 an. 'efore e as incurre. in .elay. A en 'y law or stipulation4 t e o'ligor is lia'le even for fortuitous events4 t e loss of t e t ing .oes not e;tinguis t e o'ligation4 an. e s all 'e responsi'le for .a"ages. 0 e sa"e rule applies w en t e nature of t e o'ligation re7uires t e assu"ption of ris?. (1183a) #rt. (-:<. 9n an o'ligation to .eliver a generic t ing4 t e loss or .estruction of anyt ing of t e sa"e ?in. .oes not e;tinguis t e o'ligation. (n) #rt. ()*7. 0nless ot+er,ise agreed4 t e goo.s re"ain at t e sellerQs ris? until the o!nership therein is transferred to the buyer 4 'ut w en t e o!nership therein is transferred to the buyer t e goo.s are at t e 'uyerQs ris? w et er actual .elivery as 'een "a.e or not4 e%cept t at# (3) A ere actual .elivery as 'een ,!BAL!, t roug t e fault of eit er t e 'uyer or seller t e goo.s are at t e ris" of the party in fault. (n) #rt. ()<8. 9n case of loss4 .eterioration or i"prove"ent of t e t ing 'efore its .elivery4 t e rules in Article 118% s all 'e o'serve.4 t e ven.or 'eing consi.ere. t e .e'tor. (n) #rt. ((89. A en t e con.itions ave 'een i"pose. wit t e intention of suspen.ing t e efficacy of an o'ligation to give4 t e following rules s all 'e o'serve. in case of t e i"prove"ent4 loss or .eterioration of t e t ing .uring t e pen.ency of t e con.ition# (1) 9f t e t ing is lost wit out t e fault of t e .e'tor4 t e o'ligation s all 'e e;tinguis e.5 (3) 9f t e t ing is lost t roug t e fault of t e .e'tor4 e s all 'e o'lige. to pay .a"ages5 it is un.erstoo. t at t e t ing is lost w en it peris es4 or goes out of co""erce4 or .isappears in suc a way t at its e;istence is un?nown or it cannot 'e recovere.5 '<. =hen the thing deteriorates !ithout the fault of the debtorA the impairment is to be borne by the creditor 5 (4) 9f it .eteriorates t roug t e fault of t e .e'tor4 t e cre.itor "ay c oose 'etween t e rescission of t e o'ligation an. its fulfill"ent4 wit in.e"nity for .a"ages in eit er case5 (5) 9f t e t ing is i"prove. 'y its nature4 or 'y ti"e4 t e i"prove"ent s all inure to t e 'enefit of t e cre.itor5 (:) 9f it is i"prove. at t e e;pense of t e .e'tor4 e s all ave no ot er rig t t an t at grante. to t e usufructuary. (1133) 41

iv. After .elivery (Arts. 15+44 15:84 15:%) #rt. ()*7. Enless ot erwise agree.4 t e goo.s re"ain at t e sellerHs ris" until t+e o,ners+ip t+erein is transferred to t+e buyer, 'ut w en t e o,ners+ip t+erein is transferred to t+e buyer t e goo.s are at t e buyerHs ris" w et er actual .elivery as 'een "a.e or not4 e%cept t at# (1) A ere .elivery of t e goo.s as 'een "a.e to t e 'uyer or to a 'ailee for t e 'uyer4 in pursuance of t e contract an. t e owners ip in t e goo.s as 'een retaine. 'y t e seller merely to secure performance by the buyer of is o'ligations un.er t e contract4 t e goo.s are at t e 'uyerQs ris? fro" t e ti"e of suc .elivery5 (3) A ere actual .elivery as 'een .elaye. t roug t e fault of either the buyer or seller t e goo.s are at t e ris? of t e party in fault. (n) #rt. ():8. 9f t e t ing sol. s oul. 'e B&S0 in conse7uence of t e hidden faults4 an. t e C!F,&1 AAS AAA1! of t e"4 he shall bear the loss4 an. s all 'e o'lige. to return the price an. refund the e%penses of t e contract4 wit damages. 9f e was F&0 AAA1! of t e"4 e s all only return the price and interest t ereon4 an. reimburse the e%penses of t e contract w ic t e ven.ee "ig t ave pai.. (148)a) #rt. ():9. 9f t e t ing sol. a. any H9,,!F 6AEB0 at t e ti"e of t e sale4 an. s oul. t ereafter 'e lost by a fortuitous event or t roug t e fault of the vendee4 t e latter "ay .e"an. of t e ven.or t e price w ic e pai.4 B!SS t e value w ic t e t ing a. w en it was lost. 9f t e ven.or acte. in BA, 6A90H4 e s all pay damages to t e ven.ee. (1488a) 24T$S: G!F!1AB 1EB!# 1is? of loss of t e goo.s s all 'e 'orne 'y t e owner4 EFB!SS t e contrary is agree. upon. 9nas"uc as .elivery transfers owners ip4 t e ris? of loss s all 'e 'orne 'y t e 'uyer &FBL A60!1 t e goo.s ave 'een .elivere. to i" or is 'ailee. !OC!/09&FS# Stipulation to t e contrary o Fot wit stan.ing t at title re"aine. wit seller4 it can 'e vali.ly agree. t at t e ris? of loss s all 'e 'orne 'y t e 'uyer Security title o 9f title retaine. 'y seller only to secure pay"ent of t e price4 t e ris? of loss is on t e 'uyer fro" t e ti"e of suc .elivery4 as t e 'eneficial owner o Ai"e. at con.itional sales w ere t e goo.s were .elivere. to t e 'uyer an. use. 'y i"4 'ut title was retaine. 'y seller4 instea. of accepting a "ortgage on t e goo.s sol.. o B!F!69C9AB 9F0!1!S0 is in t e 'uyer an. t e ris? s oul. 'e on i" ,elay o 9f actual .elivery is ,!BAL!, t roug t e fault of 'uyer or seller4 t e goo.s are at t e ris? of t e party in fault. ,. /ractice notes# ris? of loss an. .eterioration * .rafting notes to a..ress issues of loss an. .eterioration XI. #ctions and remedies for breach of agreement A. 9n general (Art. 15%4) #rt. ()97. Actions for 'reac of t e contract of sale of goo.s s all 'e governe. particularly 'y t e provisions of this Chapter4 an. as to "atters not specifically provi.e. for erein4 'y ot er applica'le provisions of t is 0itle. (n) i. Actions availa'le to S!BB!1 a) payment of price (Art. 15%5) #rt. ()9). A ere4 un.er a contract of sale4 t e owners ip of t e goo.s as passe. to t e 'uyer an. e wrongfully neglects or refuses to pay for t e goo.s accor.ing to t e ter"s of t e contract of sale4 t e seller "ay "aintain an action against i" for t e price of t e goo.s. A ere4 un.er a contract of sale4 t e price is paya'le on a certain .ay4 irrespective of .elivery or of transfer of title an. t e 'uyer wrongfully neglects or refuses to pay suc price4 t e seller "ay "aintain an action for t e price alt oug t e owners ip in t e goo.s as not passe.. But it s all 'e a .efense to suc an action t at t e seller at any ti"e 'efore t e (u.g"ent in suc action as "anifeste. an ina'ility to perfor" t e contract of sale on is part or an intention not to perfor" it. Alt oug t e owners ip in t e goo.s as not passe.4 if t ey cannot rea.ily 'e resol. for a reasona'le price4 an. if t e provisions of article 15%:4 fourt paragrap 4 are not applica'le4 t e seller "ay offer to .eliver t e goo.s to t e 'uyer4 an.4 if t e 'uyer refuses to receive t e"4 "ay notify t e 'uyer t at t e goo.s are t ereafter el. 'y t e seller as 'ailee for t e 'uyer. 0 ereafter t e seller "ay treat t e goo.s as t e 'uyerQs an. "ay "aintain an action for t e price. (n) ') damages (Arts. 15%:) #rt. ()9:. A ere t e 'uyer wrongfully neglects or refuses to accept an. pay for t e goo.s4 t e seller "ay "aintain an action against i" for .a"ages for nonacceptance. 0 e "easure of .a"ages is t e esti"ate. loss .irectly an. naturally resulting in t e or.inary course of events fro" t e 'uyerQs 'reac of contract. A ere t ere is an availa'le "ar?et for t e goo.s in 7uestion4 t e "easure of .a"ages is4 in t e a'sence of special circu"stances s owing pro;i"ate .a"age of a .ifferent a"ount4 t e .ifference 'etween t e contract price an. t e "ar?et or current price at t e ti"e or ti"es w en t e goo.s oug t to ave 'een accepte.4 or4 if no ti"e was fi;e. for acceptance4 t en at t e ti"e of t e refusal to accept. 9f4 w ile la'or or e;pense of "aterial a"ount is necessary on t e part of t e seller to ena'le i" to fulfill is o'ligations un.er t e contract of sale4 t e 'uyer repu.iates t e contract or notifies t e seller to procee. no furt er t erewit 4 t e 'uyer s all 'e lia'le to t e seller for la'or perfor"e. or e;penses "a.e 'efore receiving notice of t e 'uyerQs repu.iation or counter"an.. 0 e profit t e seller woul. ave "a.e if t e contract or t e sale a. 'een fully perfor"e. s all 'e consi.ere. in awar.ing t e .a"ages. (n) c) rescission of contract (Art. 15%)) #rt. ()9+. A ere t e goo.s ave not 'een .elivere. to t e 'uyer4 an. t e 'uyer as repu.iate. t e contract of sale4 or as "anifeste. is ina'ility to perfor" is o'ligations t ereun.er4 or as co""itte. a 'reac t ereof4 t e seller "ay totally rescin. t e contract of sale 'y giving notice of is election so to .o to t e 'uyer. (n) ii. Actions availa'le to t e BEL!1 a) specific performance (Art. 15%8) #rt. ()98. A ere t e seller as 'ro?en a contract to .eliver specific or ascertaine. goo.s4 a court "ay4 on t e application of t e 'uyer4 .irect t at t e contract s all 'e perfor"e. specifically4 wit out giving t e seller t e option of retaining t e goo.s on pay"ent of 43

.a"ages. 0 e (u.g"ent or .ecree "ay 'e uncon.itional4 or upon suc ter"s an. con.itions as to .a"ages4 pay"ent of t e price an. ot erwise4 as t e court "ay .ee" (ust. (n) ') damages (Art. 15%%) #rt. ()99. A ere t ere is a 'reac of warranty 'y t e seller4 t e 'uyer "ay4 at is election# (1) Accept or ?eep t e goo.s an. set up against t e seller4 t e 'reac of warranty 'y way of recoup"ent in .i"inution or e;tinction of t e price5 (3) Accept or ?eep t e goo.s an. "aintain an action against t e seller for .a"ages for t e 'reac of warranty5 ($) 1efuse to accept t e goo.s4 an. "aintain an action against t e seller for .a"ages for t e 'reac of warranty5 (4) 1escin. t e contract of sale an. refuse to receive t e goo.s or if t e goo.s ave alrea.y 'een receive.4 return t e" or offer to return t e" to t e seller an. recover t e price or any part t ereof w ic as 'een pai.. A en t e 'uyer as clai"e. an. 'een grante. a re"e.y in anyone of t ese ways4 no ot er re"e.y can t ereafter 'e grante.4 wit out pre(u.ice to t e provisions of t e secon. paragrap of Article 11%1. A ere t e goo.s ave 'een .elivere. to t e 'uyer4 e cannot rescin. t e sale if e ?new of t e 'reac of warranty w en e accepte. t e goo.s wit out protest4 or if e fails to notify t e seller wit in a reasona'le ti"e of t e election to rescin.4 or if e fails to return or to offer to return t e goo.s to t e seller in su'stantially as goo. con.ition as t ey were in at t e ti"e t e owners ip was transferre. to t e 'uyer. But if .eterioration or in(ury of t e goo.s is .ue to t e 'reac or warranty4 suc .eterioration or in(ury s all not prevent t e 'uyer fro" returning or offering to return t e goo.s to t e seller an. rescin.ing t e sale. A ere t e 'uyer is entitle. to rescin. t e sale an. elects to .o so4 e s all cease to 'e lia'le for t e price upon returning or offering to return t e goo.s. 9f t e price or any part t ereof as alrea.y 'een pai.4 t e seller s all 'e lia'le to repay so "uc t ereof as as 'een pai.4 concurrently wit t e return of t e goo.s4 or i""e.iately after an offer to return t e goo.s in e;c ange for repay"ent of t e price. A ere t e 'uyer is entitle. to rescin. t e sale an. elects to .o so4 if t e seller refuses to accept an offer of t e 'uyer to return t e goo.s4 t e 'uyer s all t ereafter 'e .ee"e. to ol. t e goo.s as 'ailee for t e seller4 'ut su'(ect to a lien to secure pay"ent of any portion of t e price w ic as 'een pai.4 an. wit t e re"e.ies for t e enforce"ent of suc lien allowe. to an unpai. seller 'y Article 153:. (5) 9n t e case of 'reac of warranty of 7uality4 suc loss4 in t e a'sence of special circu"stances s owing pro;i"ate .a"age of a greater a"ount4 is t e .ifference 'etween t e value of t e goo.s at t e ti"e of .elivery to t e 'uyer an. t e value t ey woul. ave a. if t ey a. answere. to t e warranty. (n) B. 1e"e.ies availa'le i. 1e"e.ies availa'le to t e S!BB!1 a) lien on the goods (Arts. 1535*153%4 15$5) #rt. ()-). 0 e seller of goo.s is .ee"e. to 'e an unpai. seller wit in t e "eaning of t is 0itle# (1) A en t e w ole of t e price as not 'een pai. or ten.ere.5 (3) A en a 'ill of e;c ange or ot er negotia'le instru"ent as 'een receive. as con.itional pay"ent4 an. t e con.ition on w ic it was receive. as 'een 'ro?en 'y reason of t e .is onor of t e instru"ent4 t e insolvency of t e 'uyer4 or ot erwise. 9n Articles 1535 to 15$5 t e ter" RsellerR inclu.es an agent of t e seller to w o" t e 'ill of la.ing as 'een in.orse.4 or a consignor or agent w o as i"self pai.4 or is .irectly responsi'le for t e price4 or any ot er person w o is in t e position of a seller. (n) #rt. ()-:. Su'(ect to t e provisions of t is 0itle4 notwit stan.ing t at t e owners ip in t e goo.s "ay ave passe. to t e 'uyer4 t e unpai. seller of goo.s4 as suc 4 as# (1) A lien on t e goo.s or rig t to retain t e" for t e price w ile e is in possession of t e"5 (3) 9n case of t e insolvency of t e 'uyer4 a rig t of stopping t e goo.s in transitu after e as parte. wit t e possession of t e"5 ($) A rig t of resale as li"ite. 'y t is 0itle5 (4) A rig t to rescin. t e sale as li?ewise li"ite. 'y t is 0itle. A ere t e owners ip in t e goo.s as not passe. to t e 'uyer4 t e unpai. seller as4 in a..ition to is ot er re"e.ies a rig t of wit ol.ing .elivery si"ilar to an. coe;tensive wit is rig ts of lien an. stoppage in transitu w ere t e owners ip as passe. to t e 'uyer. (n) #rt. ()-+. Su'(ect to t e provisions of t is 0itle4 t e unpai. seller of goo.s w o is in possession of t e" is entitle. to retain possession of t e" until pay"ent or ten.er of t e price in t e following cases4 na"ely# (1) A ere t e goo.s ave 'een sol. wit out any stipulation as to cre.it5 (3) A ere t e goo.s ave 'een sol. on cre.it4 'ut t e ter" of cre.it as e;pire.5 ($) A ere t e 'uyer 'eco"es insolvent. 0 e seller "ay e;ercise is rig t of lien notwit stan.ing t at e is in possession of t e goo.s as agent or 'ailee for t e 'uyer. (n) #rt. ()-8. A ere an unpai. seller as "a.e part .elivery of t e goo.s4 e "ay e;ercise is rig t of lien on t e re"ain.er4 unless suc part .elivery as 'een "a.e un.er suc circu"stances as to s ow an intent to waive t e lien or rig t of retention. (n) #rt. ()-9. 0 e unpai. seller of goo.s loses is lien t ereon# (1) A en e .elivers t e goo.s to a carrier or ot er 'ailee for t e purpose of trans"ission to t e 'uyer wit out reserving t e owners ip in t e goo.s or t e rig t to t e possession t ereof5 (3) A en t e 'uyer or is agent lawfully o'tains possession of t e goo.s5 ($) By waiver t ereof. 0 e unpai. seller of goo.s4 aving a lien t ereon4 .oes not lose is lien 'y reason only t at e as o'taine. (u.g"ent or .ecree for t e price of t e goo.s. (n) #rt. ()<). Su'(ect to t e provisions of t is 0itle4 t e unpai. sellerQs rig t of lien or stoppage in transitu is not affecte. 'y any sale4 or ot er .isposition of t e goo.s w ic t e 'uyer "ay ave "a.e4 unless t e seller as assente. t ereto. 9f4 owever4 a negotia'le .ocu"ent of title as 'een issue. for goo.s4 no sellerQs lien or rig t of stoppage in transitu s all .efeat t e rig t of any purc aser for value in goo. fait to w o" suc .ocu"ent as 'een negotiate.4 w et er suc negotiation 'e prior or su'se7uent to t e notification to t e carrier4 or ot er 'ailee w o issue. suc .ocu"ent4 of t e sellerQs clai" to a lien or rig t of stoppage in transitu. (n) ') right of stoppage of goods in transitu (Art. 15$+*15$34 15$5) #rt. ()<*. Su'(ect to t e provisions of t is 0itle4 w en t e 'uyer of goo.s is or 'eco"es insolvent4 t e unpai. seller w o as parte. wit t e possession of t e goo.s as t e rig t of stopping t e" in transitu4 t at is to say4 e "ay resu"e possession of t e goo.s at any ti"e w ile t ey are in transit4 an. e will t en 'eco"e entitle. to t e sa"e rig ts in regar. to t e goo.s as e woul. ave a. if e a. never parte. wit t e possession. (n) #rt. ()<(. Goo.s are in transit wit in t e "eaning of t e prece.ing article# (1) 6ro" t e ti"e w en t ey are .elivere. to a carrier 'y lan.4 water4 or air4 or ot er 'ailee for t e purpose of trans"ission to t e 'uyer4 until t e 'uyer4 or is agent in t at 'e alf4 ta?es .elivery of t e" fro" suc carrier or ot er 'ailee5 (3) 9f t e goo.s are re(ecte. 'y t e 'uyer4 an. t e carrier or ot er 'ailee continues in possession of t e"4 even if t e seller as refuse. to receive t e" 'ac?. Goo.s are no longer in transit wit in t e "eaning of t e prece.ing article# (1) 9f t e 'uyer4 or is agent in t at 'e alf4 o'tains .elivery of t e goo.s 'efore t eir arrival at t e appointe. .estination5

4$

(3) 9f4 after t e arrival of t e goo.s at t e appointe. .estination4 t e carrier or ot er 'ailee ac?nowle.ges to t e 'uyer or is agent t at e ol.s t e goo.s on is 'e alf an. continues in possession of t e" as 'ailee for t e 'uyer or is agent5 an. it is i""aterial t at furt er .estination for t e goo.s "ay ave 'een in.icate. 'y t e 'uyer5 ($) 9f t e carrier or ot er 'ailee wrongfully refuses to .eliver t e goo.s to t e 'uyer or is agent in t at 'e alf. 9f t e goo.s are .elivere. to a s ip4 freig t train4 truc?4 or airplane c artere. 'y t e 'uyer4 it is a 7uestion .epen.ing on t e circu"stances of t e particular case4 w et er t ey are in t e possession of t e carrier as suc or as agent of t e 'uyer. 9f part .elivery of t e goo.s as 'een "a.e to t e 'uyer4 or is agent in t at 'e alf4 t e re"ain.er of t e goo.s "ay 'e stoppe. in transitu4 unless suc part .elivery as 'een un.er suc circu"stances as to s ow an agree"ent wit t e 'uyer to give up possession of t e w ole of t e goo.s. (n) #rt. ()<-. 0 e unpai. seller "ay e;ercise is rig t of stoppage in transitu eit er 'y o'taining actual possession of t e goo.s or 'y giving notice of is clai" to t e carrier or ot er 'ailee in w ose possession t e goo.s are. Suc notice "ay 'e given eit er to t e person in actual possession of t e goo.s or to is principal. 9n t e latter case t e notice4 to 'e effectual4 "ust 'e given at suc ti"e an. un.er suc circu"stances t at t e principal4 'y t e e;ercise of reasona'le .iligence4 "ay prevent a .elivery to t e 'uyer. A en notice of stoppage in transitu is given 'y t e seller to t e carrier4 or ot er 'ailee in possession of t e goo.s4 e "ust re.eliver t e goo.s to4 or accor.ing to t e .irections of4 t e seller. 0 e e;penses of suc .elivery "ust 'e 'orne 'y t e seller. 9f4 owever4 a negotia'le .ocu"ent of title representing t e goo.s as 'een issue. 'y t e carrier or ot er 'ailee4 e s all not o'lige. to .eliver or (ustifie. in .elivering t e goo.s to t e seller unless suc .ocu"ent is first surren.ere. for cancellation. (n) #rt. ()<). Su'(ect to t e provisions of t is 0itle4 t e unpai. sellerQs rig t of lien or stoppage in transitu is not affecte. 'y any sale4 or ot er .isposition of t e goo.s w ic t e 'uyer "ay ave "a.e4 unless t e seller as assente. t ereto. 9f4 owever4 a negotia'le .ocu"ent of title as 'een issue. for goo.s4 no sellerQs lien or rig t of stoppage in transitu s all .efeat t e rig t of any purc aser for value in goo. fait to w o" suc .ocu"ent as 'een negotiate.4 w et er suc negotiation 'e prior or su'se7uent to t e notification to t e carrier4 or ot er 'ailee w o issue. suc .ocu"ent4 of t e sellerQs clai" to a lien or rig t of stoppage in transitu. (n) c) right of resale (Art. 15$$) #rt. ()<<. A ere t e goo.s are of peris a'le nature4 or w ere t e seller e;pressly reserves t e rig t of resale in case t e 'uyer s oul. "a?e .efault4 or w ere t e 'uyer as 'een in .efault in t e pay"ent of t e price for an unreasona'le ti"e4 an unpai. seller aving a rig t of lien or aving stoppe. t e goo.s in transitu "ay resell t e goo.s. He s all not t ereafter 'e lia'le to t e original 'uyer upon t e contract of sale or for any profit "a.e 'y suc resale4 'ut "ay recover fro" t e 'uyer .a"ages for any loss occasione. 'y t e 'reac of t e contract of sale. A ere a resale is "a.e4 as aut ori@e. in t is article4 t e 'uyer ac7uires a goo. title as against t e original 'uyer. 9t is not essential to t e vali.ity of resale t at notice of an intention to resell t e goo.s 'e given 'y t e seller to t e original 'uyer. But w ere t e rig t to resell is not 'ase. on t e peris a'le nature of t e goo.s or upon an e;press provision of t e contract of sale4 t e giving or failure to give suc notice s all 'e relevant in any issue involving t e 7uestion w et er t e 'uyer a. 'een in .efault for an unreasona'le ti"e 'efore t e resale was "a.e. 9t is not essential to t e vali.ity of a resale t at notice of t e ti"e an. place of suc resale s oul. 'e given 'y t e seller to t e original 'uyer. 0 e seller is 'oun. to e;ercise reasona'le care an. (u.g"ent in "a?ing a resale4 an. su'(ect to t is re7uire"ent "ay "a?e a resale eit er 'y pu'lic or private sale. He cannot4 owever4 .irectly or in.irectly 'uy t e goo.s. (n) .) right of rescission (Art. 15$4) #rt. ()<7. An unpai. seller aving t e rig t of lien or aving stoppe. t e goo.s in transitu4 "ay rescin. t e transfer of title an. resu"e t e owners ip in t e goo.s4 w ere e e;pressly reserve. t e rig t to .o so in case t e 'uyer s oul. "a?e .efault4 or w ere t e 'uyer as 'een in .efault in t e pay"ent of t e price for an unreasona'le ti"e. 0 e seller s all not t ereafter 'e lia'le to t e 'uyer upon t e contract of sale4 'ut "ay recover fro" t e 'uyer .a"ages for any loss occasione. 'y t e 'reac of t e contract. 0 e transfer of title s all not 'e el. to ave 'een rescin.e. 'y an unpai. seller until e as "anifeste. 'y notice to t e 'uyer or 'y so"e ot er overt act an intention to rescin.. 9t is not necessary t at suc overt act s oul. 'e co""unicate. to t e 'uyer4 'ut t e giving or failure to give notice to t e 'uyer of t e intention to rescin. s all 'e relevant in any issue involving t e 7uestion w et er t e 'uyer a. 'een in .efault for an unreasona'le ti"e 'efore t e rig t of rescission was asserte.. (n) e) rescission in case of loss of immovable property (Art. 15%1) #rt. ()9(. S oul. t e ven.or ave reasona'le groun.s to fear t e loss of i""ova'le property sol. an. its price4 e "ay i""e.iately sue for t e rescission of t e sale. S oul. suc groun. not e;ist4 t e provisions of Article 11%1 s all 'e o'serve.. (15+$) f) rescission in case of sale of movable property (Art. 15%$) #rt. ()9<. Ait respect to "ova'le property4 t e rescission of t e sale s all of rig t ta?e place in t e interest of t e ven.or4 if t e ven.ee4 upon t e e;piration of t e perio. fi;e. for t e .elivery of t e t ing4 s oul. not ave appeare. to receive it4 or4 aving appeare.4 e s oul. not ave ten.ere. t e price at t e sa"e ti"e4 unless a longer perio. as 'een stipulate. for its pay"ent. (15+5) ii. 1e"e.ies availa'le to BEL!1 a) remedies in sale of goods by description and0or sample (Art. 1481) #rt. (78(. 9n t e contract of sale of goo.s 'y .escription or 'y sa"ple4 t e contract "ay 'e rescin.e. if t e 'ul? of t e goo.s .elivere. .o not correspon. wit t e .escription or t e sa"ple4 an. if t e contract 'e 'y sa"ple as well as .escription4 it is not sufficient t at t e 'ul? of goo.s correspon. wit t e sa"ple if t ey .o not also correspon. wit t e .escription. 0 e 'uyer s all ave a reasona'le opportunity of co"paring t e 'ul? wit t e .escription or t e sa"ple. (n) ') remedies in case of loss of specific goods (Art. 14%4) #rt. (797. A ere t e parties purport a sale of specific goo.s4 an. t e goo.s wit out t e ?nowle.ge of t e seller ave peris e. in part or ave w olly or in a "aterial part so .eteriorate. in 7uality as to 'e su'stantially c ange. in c aracter4 t e 'uyer "ay at is option treat t e sale# (1) As avoi.e.5 or (3) As vali. in all of t e e;isting goo.s or in so "uc t ereof as ave not .eteriorate.4 an. as 'in.ing t e 'uyer to pay t e agree. price for t e goo.s in w ic t e owners ip will pass4 if t e sale was .ivisi'le. (n) c) remedies in case of delivery of goods less than the ;uantity contracted (Art. 1533) #rt. ()--. A ere t e seller .elivers to t e 'uyer a 7uantity of goo.s less t an e contracte. to sell4 t e 'uyer "ay re(ect t e"4 'ut if t e 'uyer accepts or retains t e goo.s so .elivere.4 ?nowing t at t e seller is not going to perfor" t e contract in full4 e "ust pay for t e" at t e contract rate. 9f4 owever4 t e 'uyer as use. or .ispose. of t e goo.s .elivere. 'efore e ?nows t at t e seller is not going to perfor" is contract in full4 t e 'uyer s all not 'e lia'le for "ore t an t e fair value to i" of t e goo.s so receive.. A ere t e seller .elivers to t e 'uyer a 7uantity of goo.s larger t an e contracte. to sell4 t e 'uyer "ay accept t e goo.s inclu.e. in t e contract an. re(ect t e rest. 9f t e 'uyer accepts t e w ole of t e goo.s so .elivere. e "ust pay for t e" at t e contract rate. 44

A ere t e seller .elivers to t e 'uyer t e goo.s e contracte. to sell "i;e. wit goo.s of a .ifferent .escription not inclu.e. in t e contract4 t e 'uyer "ay accept t e goo.s w ic are in accor.ance wit t e contract an. re(ect t e rest. 9n t e prece.ing two paragrap s4 if t e su'(ect "atter is in.ivisi'le4 t e 'uyer "ay re(ect t e w ole of t e goo.s. 0 e provisions of t is article are su'(ect to any usage of tra.e4 special agree"ent4 or course of .ealing 'etween t e parties. (n) .) remedies in case of a sale of real property by unit of measure (Arts. 15$%4 154+4 15414 154$) #rt. ()<9. 0 e o'ligation to .eliver t e t ing sol. inclu.es t at of placing in t e control of t e ven.ee all t at is "entione. in t e contract4 in confor"ity wit t e following rules# 9f t e sale of real estate s oul. 'e "a.e wit a state"ent of its area4 at t e rate of a certain price for a unit of "easure or nu"'er4 t e ven.or s all 'e o'lige. to .eliver to t e ven.ee4 if t e latter s oul. .e"an. it4 all t at "ay ave 'een state. in t e contract5 'ut4 s oul. t is 'e not possi'le4 t e ven.ee "ay c oose 'etween a proportional re.uction of t e price an. t e rescission of t e contract4 provi.e. t at4 in t e latter case4 t e lac? in t e area 'e not less t an one*tent of t at state.. 0 e sa"e s all 'e .one4 even w en t e area is t e sa"e4 if any part of t e i""ova'le is not of t e 7uality specifie. in t e contract. 0 e rescission4 in t is case4 s all only ta?e place at t e will of t e ven.ee4 w en t e inferior value of t e t ing sol. e;cee.s one*tent of t e price agree. upon. Fevert eless4 if t e ven.ee woul. not ave 'oug t t e i""ova'le a. e ?nown of its s"aller area of inferior 7uality4 e "ay rescin. t e sale. (14:%a) #rt. ()7*. 9f4 in t e case of t e prece.ing article4 t ere is a greater area or nu"'er in t e i""ova'le t an t at state. in t e contract4 t e ven.ee "ay accept t e area inclu.e. in t e contract an. re(ect t e rest. 9f e accepts t e w ole area4 e "ust pay for t e sa"e at t e contract rate. (14)+a) #rt. ()7(. 0 e provisions of t e two prece.ing articles s all apply to (u.icial sales. (n) #rt. ()7<. 0 e actions arising fro" Articles 15$% an. 1543 s all prescri'e in si; "ont s4 counte. fro" t e .ay of .elivery. (14)3a) .) remedies in case of sale of real property made of a lump sum (Arts. 15434 154$) #rt. ()7-. 9n t e sale of real estate4 "a.e for a lu"p su" an. not at t e rate of a certain su" for a unit of "easure or nu"'er4 t ere s all 'e no increase or .ecrease of t e price4 alt oug t ere 'e a greater or less area or nu"'er t an t at state. in t e contract. 0 e sa"e rule s all 'e applie. w en two or "ore i""ova'les as sol. for a single price5 'ut if4 'esi.es "entioning t e 'oun.aries4 w ic is in.ispensa'le in every conveyance of real estate4 its area or nu"'er s oul. 'e .esignate. in t e contract4 t e ven.or s all 'e 'oun. to .eliver all t at is inclu.e. wit in sai. 'oun.aries4 even w en it e;cee.s t e area or nu"'er specifie. in t e contract5 an.4 s oul. e not 'e a'le to .o so4 e s all suffer a re.uction in t e price4 in proportion to w at is lac?ing in t e area or nu"'er4 unless t e contract is rescin.e. 'ecause t e ven.ee .oes not acce.e to t e failure to .eliver w at as 'een stipulate.. (14)1) #rt. ()7<. 0 e actions arising fro" Articles 15$% an. 1543 s all prescri'e in si; "ont s4 counte. fro" t e .ay of .elivery. (14)3a) f) suspension of payments (Art. 15%+) #rt. ()9*. S oul. t e ven.ee 'e .istur'e. in t e possession or owners ip of t e t ing ac7uire.4 or s oul. e ave reasona'le groun.s to fear suc .istur'ance4 'y a vin.icatory action or a foreclosure of "ortgage4 e "ay suspen. t e pay"ent of t e price until t e ven.or as cause. t e .istur'ance or .anger to cease4 unless t e latter gives security for t e return of t e price in a proper case4 or it as 'een stipulate. t at4 notwit stan.ing any suc contingency4 t e ven.ee s all 'e 'oun. to "a?e t e pay"ent. A "ere act of trespass s all not aut ori@e t e suspension of t e pay"ent of t e price. (15+3a) g) remedies in sale of immovable property (Art. 15%3) #rt. ()9-. 9n t e sale of i""ova'le property4 even t oug it "ay ave 'een stipulate. t at upon failure to pay t e price at t e ti"e agree. upon t e rescission of t e contract s all of rig t ta?e place4 t e ven.ee "ay pay4 even after t e e;piration of t e perio.4 as long as no .e"an. for rescission of t e contract as 'een "a.e upon i" eit er (u.icially or 'y a notarial act. After t e .e"an.4 t e court "ay not grant i" a new ter". (15+4a) C. Special Baws i. 0 e 1ecto Baw (Arts. 1484*148:) re sale of personal property paya'le in install"ents #rt. (787. 9n a contract of sale of personal property t e price of w ic is paya'le in install"ents4 t e ven.or "ay e;ercise any of t e following re"e.ies# (1) !;act fulfill"ent of t e o'ligation4 s oul. t e ven.ee fail to pay5 (3) Cancel t e sale4 s oul. t e ven.eeQs failure to pay cover two or "ore install"ents5 ($) 6oreclose t e c attel "ortgage on t e t ing sol.4 if one as 'een constitute.4 s oul. t e ven.eeQs failure to pay cover two or "ore install"ents. 9n t is case4 e s all ave no furt er action against t e purc aser to recover any unpai. 'alance of t e price. Any agree"ent to t e contrary s all 'e voi.. (1454*A*a) #rt. (78). 0 e prece.ing article s all 'e applie. to contracts purporting to 'e leases of personal property wit option to 'uy4 w en t e lessor as .eprive. t e lessee of t e possession or en(oy"ent of t e t ing. (1454*A*a) #rt. (78:. 9n t e case referre. to in two prece.ing articles4 a stipulation t at t e install"ents or rents pai. s all not 'e returne. to t e ven.ee or lessee s all 'e vali. insofar as t e sa"e "ay not 'e unconsciona'le un.er t e circu"stances. (n) a) 0ransactions covere. an. not covere. ') /urpose of t e law c) 1e"e.ies availa'le to t e ven.or .) !lection of re"e.ies ii. 0 e 2ace.a Baw ( .#. 2o. :))-) a) 0ransactions covere. an. not covere. (Sec. $) Section <. 9n all transactions or contracts involving t e sale or financing of real estate on install"ent pay"ents4 inclu.ing resi.ential con.o"iniu" apart"ents 'ut e;clu.ing in.ustrial lots4 co""ercial 'uil.ings an. sales to tenants un.er 1epu'lic Act Fu"'ere. 0 irty* eig t un.re. forty*four4 as a"en.e. 'y 1epu'lic Act Fu"'ere. Si;ty*t ree un.re. eig ty*nine4 w ere t e 'uyer as pai. at least two years of install"ents4 t e 'uyer is entitle. to t e following rig ts in case e .efaults in t e pay"ent of succee.ing install"ents# (a) 0o pay4 wit out a..itional interest4 t e unpai. install"ents .ue wit in t e total grace perio. earne. 'y i" w ic is ere'y fi;e. at t e rate of one "ont grace perio. for every one year of install"ent pay"ents "a.e# /rovi.e.4 0 at t is rig t s all 'e e;ercise. 'y t e 'uyer only once in every five years of t e life of t e contract an. its e;tensions4 if any. (') 9f t e contract is cancele.4 t e seller s all refun. to t e 'uyer t e cas surren.er value of t e pay"ents on t e property e7uivalent to fifty per cent of t e total pay"ents "a.e4 an.4 after five years of install"ents4 an a..itional five per cent every year 'ut not to e;cee. ninety per cent of t e total pay"ents "a.e# /rovi.e.4 0 at t e actual cancellation of t e contract s all ta?e place after t irty .ays fro" receipt 'y t e 'uyer of t e notice of cancellation or t e .e"an. for rescission of t e contract 'y a notarial act an. upon full pay"ent of t e cas surren.er value to t e 'uyer. ,own pay"ents4 .eposits or options on t e contract s all 'e inclu.e. in t e co"putation of t e total nu"'er of install"ent pay"ents "a.e. ') /urpose of t e law (Sec. 3) Section -. 9t is ere'y .eclare. a pu'lic policy to protect 'uyers of real estate on install"ent pay"ents against onerous an. oppressive con.itions. c) 1ig ts grante. to t e 'uyer 45

* at least two years of install"ents (Sec. $) Section <. 9n all transactions or contracts involving t e sale or financing of real estate on install"ent pay"ents4 inclu.ing resi.ential con.o"iniu" apart"ents 'ut e;clu.ing in.ustrial lots4 co""ercial 'uil.ings an. sales to tenants un.er 1epu'lic Act Fu"'ere. 0 irty* eig t un.re. forty*four4 as a"en.e. 'y 1epu'lic Act Fu"'ere. Si;ty*t ree un.re. eig ty*nine4 w ere t e 'uyer as pai. at least two years of install"ents4 t e 'uyer is entitle. to t e following rig ts in case e .efaults in t e pay"ent of succee.ing install"ents# (a) 0o pay4 wit out a..itional interest4 t e unpai. install"ents .ue wit in t e total grace perio. earne. 'y i" w ic is ere'y fi;e. at t e rate of one "ont grace perio. for every one year of install"ent pay"ents "a.e# /rovi.e.4 0 at t is rig t s all 'e e;ercise. 'y t e 'uyer only once in every five years of t e life of t e contract an. its e;tensions4 if any. (') 9f t e contract is cancele.4 t e seller s all refun. to t e 'uyer t e cas surren.er value of t e pay"ents on t e property e7uivalent to fifty per cent of t e total pay"ents "a.e4 an.4 after five years of install"ents4 an a..itional five per cent every year 'ut not to e;cee. ninety per cent of t e total pay"ents "a.e# /rovi.e.4 0 at t e actual cancellation of t e contract s all ta?e place after t irty .ays fro" receipt 'y t e 'uyer of t e notice of cancellation or t e .e"an. for rescission of t e contract 'y a notarial act an. upon full pay"ent of t e cas surren.er value to t e 'uyer. ,own pay"ents4 .eposits or options on t e contract s all 'e inclu.e. in t e co"putation of t e total nu"'er of install"ent pay"ents "a.e. * less t an two years of install"ents (Sec. 4) Section 7. 9n case w ere less t an two years of install"ents were pai.4 t e seller s all give t e 'uyer a grace perio. of not less t an si;ty .ays fro" t e .ate t e install"ent 'eca"e .ue. 9f t e 'uyer fails to pay t e install"ents .ue at t e e;piration of t e grace perio.4 t e seller "ay cancel t e contract after t irty .ays fro" receipt 'y t e 'uyer of t e notice of cancellation or t e .e"an. for rescission of t e contract 'y a notarial act. * ot er rig ts of t e 'uyer (Secs. 54 :) Section ). En.er Section $ an. 44 t e 'uyer s all ave t e rig t to sell is rig ts or assign t e sa"e to anot er person or to reinstate t e contract 'y up.ating t e account .uring t e grace perio. an. 'efore actual cancellation of t e contract. 0 e .ee. of sale or assign"ent s all 'e .one 'y notarial act. Section :. 0 e 'uyer s all ave t e rig t to pay in a.vance any install"ent or t e full unpai. 'alance of t e purc ase price any ti"e wit out interest an. to ave suc full pay"ent of t e purc ase price annotate. in t e certificate of title covering t e property. .) Cancellation of sale 'y t e seller * re7uire"ents * perio. e) Calculation of install"ent pay"ents f) Stipulation to t e contrary (Sec. )) Section +. Any stipulation in any contract ereafter entere. into contrary to t e provisions of Sections $4 44 5 an. :4 s all 'e null an. voi.. ,. /ractice notes# actions an. re"e.ies i. 0ypical contractual stipulations in case of 'reac ii. Breac of covenant iii. Breac of warranty XII. $%tinguishment of sale A. 9n general B. Causes of e;tinguis "ent (Art. 1:++) #rt. (:**. Sales are e;tinguis e. 'y t e sa"e causes as all ot er o'ligations4 'y t ose state. in t e prece.ing articles of t is 0itle4 an. 'y conventional or legal re.e"ption. (15+:) C. Conventional re.e"ption i. Concept of conventional re.e"ption (Art. 1:+1) #rt. (:*(. Conventional re.e"ption s all ta?e place w en t e ven.or reserves t e rig t to repurc ase t e t ing sol.4 wit t e o'ligation to co"ply wit t e provisions of Article 1:1: an. ot er stipulations w ic "ay ave 'een agree. upon. (15+)) ii. Su'(ect "atter of conventional re.e"ption iii. ,istinguis e. fro" option to 'uy iv. /erio. to re.ee" (Art. 1:+:) #rt. (:*:. 0 e rig t referre. to in Article 1:+14 in t e a'sence of an e;press agree"ent4 s all last four years fro" t e .ate of t e contract. S oul. t ere 'e an agree"ent4 t e perio. cannot e;cee. ten years. However4 t e ven.or "ay still e;ercise t e rig t to repurc ase wit in t irty .ays fro" t e ti"e final (u.g"ent was ren.ere. in a civil action on t e 'asis t at t e contract was a true sale wit rig t to repurc ase. (15+8a) a) e;press agree"ent ') no e;press agree"ent c) court (u.g"ent# true sale wit rig t to repurc ase iv. !;ercise of rig t to re.ee" a) ow rig t e;ercise. (Art. 1:1:) #rt. (:(:. 0 e ven.or cannot avail i"self of t e rig t of repurc ase wit out returning to t e ven.ee t e price of t e sale4 an. in a..ition# (1) 0 e e;penses of t e contract4 an. any ot er legiti"ate pay"ents "a.e 'y reason of t e sale5 (3) 0 e necessary an. useful e;penses "a.e on t e t ing sol.. (1518) * "anner of e;ercise * a"ounts t at s oul. 'e pai. * re7uire"ent of ten.er of pay"ent an. consignation ') w o e;ercises rig t * ven.or4 is assigns an. eirs * ven.orDs cre.itor (Art. 1:1+) #rt. (:(*. 0 e cre.itors of t e ven.or cannot "a?e use of t e rig t of re.e"ption against t e ven.ee4 until after t ey ave e; auste. t e property of t e ven.or. (1513) * co*owners an. co* eirs (Arts. 1:134 1:1$4 1:14) #rt. (:(-. 9f several persons4 (ointly an. in t e sa"e contract4 s oul. sell an un.ivi.e. i""ova'le wit a rig t of repurc ase4 none of t e" "ay e;ercise t is rig t for "ore t an is respective s are. 0 e sa"e rule s all apply if t e person w o sol. an i""ova'le alone as left several eirs4 in w ic case eac of t e latter "ay only re.ee" t e part w ic e "ay ave ac7uire.. (1514) 4:

#rt. (:(<. 9n t e case of t e prece.ing article4 t e ven.ee "ay .e"an. of all t e ven.ors or co* eirs t at t ey co"e to an agree"ent upon t e purc ase of t e w ole t ing sol.5 an. s oul. t ey fail to .o so4 t e ven.ee cannot 'e co"pelle. to consent to a partial re.e"ption. (1515) #rt. (:(7. !ac one of t e co*owners of an un.ivi.e. i""ova'le w o "ay ave sol. is s are separately4 "ay in.epen.ently e;ercise t e rig t of repurc ase as regar.s is own s are4 an. t e ven.ee cannot co"pel i" to re.ee" t e w ole property. (151:) c) fro" w o" to re.ee" (Arts. 1:+84 1:15) * ven.ee * ven.eeDs assigns (Art. 1:+8) #rt. (:*8. 0 e ven.or "ay 'ring is action against every possessor w ose rig t is .erive. fro" t e ven.ee4 even if in t e secon. contract no "ention s oul. ave 'een "a.e of t e rig t to repurc ase4 wit out pre(u.ice to t e provisions of t e 2ortgage Baw an. t e Ban. 1egistration Baw wit respect to t ir. persons. (151+) * ven.eeDs eirs (Art. 1:15) #rt. (:(). 9f t e ven.ee s oul. leave several eirs4 t e action for re.e"ption cannot 'e 'roug t against eac of t e" e;cept for is own s are4 w et er t e t ing 'e un.ivi.e.4 or it as 'een partitione. a"ong t e". But if t e in eritance as 'een .ivi.e.4 an. t e t ing sol. as 'een awar.e. to one of t e eirs4 t e action for re.e"ption "ay 'e institute. against i" for t e w ole. (151)) v. !ffect of re.e"ption an. non*re.e"ption (Art. 1:1)4 1:184 1:+)4 1:+%4 1:11) * consoli.ation of owners ip (Art. 1:+)) #rt. (:*+. 9n case of real property4 t e consoli.ation of owners ip in t e ven.ee 'y virtue of t e failure of t e ven.or to co"ply wit t e provisions of article 1:1: s all not 'e recor.e. in t e 1egistry of /roperty wit out a (u.icial or.er4 after t e ven.or as 'een .uly ear.. (n) * su'rogation of ven.ee (Art. 1:+%) #rt. (:*9. 0 e ven.ee is su'rogate. to t e ven.orQs rig ts an. actions. (1511) * re.e"ption of entire property (Art. 1:11) #rt. (:((. 9n a sale wit a rig t to repurc ase4 t e ven.ee of a part of an un.ivi.e. i""ova'le w o ac7uires t e w ole t ereof in t e case of article 4%84 "ay co"pel t e ven.or to re.ee" t e w ole property4 if t e latter wis es to "a?e use of t e rig t of re.e"ption. (151$) * .istri'ution of fruits (Art. 1:1)) #rt. (:(+. 9f at t e ti"e of t e e;ecution of t e sale t ere s oul. 'e on t e lan.4 visi'le or growing fruits4 t ere s all 'e no rei"'urse"ent for or prorating of t ose e;isting at t e ti"e of re.e"ption4 if no in.e"nity was pai. 'y t e purc aser w en t e sale was e;ecute.. S oul. t ere ave 'een no fruits at t e ti"e of t e sale an. so"e e;ist at t e ti"e of re.e"ption4 t ey s all 'e prorate. 'etween t e re.e"ptioner an. t e ven.ee4 giving t e latter t e part correspon.ing to t e ti"e e possesse. t e lan. in t e last year4 counte. fro" t e anniversary of t e .ate of t e sale. (151%a) * return free fro" liens an. encu"'rances (Art. 1:18) #rt. (:(8. 0 e ven.or w o recovers t e t ing sol. s all receive it free fro" all c arges or "ortgages constitute. 'y t e ven.ee4 'ut e s all respect t e leases w ic t e latter "ay ave e;ecute. in goo. fait 4 an. in accor.ance wit t e custo" of t e place w ere t e lan. is situate.. (153+) ,. Begal re.e"ption i. Concept ii. A en applica'le a) Co*owners (Art. 1:3+) #rt. (:-*. A co*owner of a t ing "ay e;ercise t e rig t of re.e"ption in case t e s ares of all t e ot er co*owners or of any of t e"4 are sol. to a t ir. person. 9f t e price of t e alienation is grossly e;cessive4 t e re.e"ptioner s all pay only a reasona'le one. S oul. two or "ore co*owners .esire to e;ercise t e rig t of re.e"ption4 t ey "ay only .o so in proportion to t e s are t ey "ay respectively ave in t e t ing owne. in co""on. (1533a) ') A.(oining lan.*owners of rural lan. (Art. 1:31) #rt. (:-(. 0 e owners of a.(oining lan.s s all also ave t e rig t of re.e"ption w en a piece of rural lan.4 t e area of w ic .oes not e;cee. one ectare4 is alienate.4 unless t e grantee .oes not own any rural lan.. 0 is rig t is not applica'le to a.(acent lan.s w ic are separate. 'y 'roo?s4 .rains4 ravines4 roa.s an. ot er apparent servitu.es for t e 'enefit of ot er estates. 9f two or "ore a.(oining owners .esire to e;ercise t e rig t of re.e"ption at t e sa"e ti"e4 t e owner of t e a.(oining lan. of s"aller area s all 'e preferre.5 an. s oul. 'ot lan.s ave t e sa"e area4 t e one w o first re7ueste. t e re.e"ption. (153$a) c) A.(oining lan.*owners of ur'an lan. (Art. 1:33) #rt. (:--. A enever a piece of ur'an lan. w ic is so s"all an. so situate. t at a "a(or portion t ereof cannot 'e use. for any practical purpose wit in a reasona'le ti"e4 aving 'een 'oug t "erely for speculation4 is a'out to 'e re*sol.4 t e owner of any a.(oining lan. as a rig t of pre*e"ption at a reasona'le price. 9f t e re*sale as 'een perfecte.4 t e owner of t e a.(oining lan. s all ave a rig t of re.e"ption4 also at a reasona'le price. A en two or "ore owners of a.(oining lan.s wis to e;ercise t e rig t of pre*e"ption or re.e"ption4 t e owner w ose inten.e. use of t e lan. in 7uestion appears 'est (ustifie. s all 'e preferre.. (n) iii. /erio. to re.ee" (Art. 1:3$) #rt. (:-<. 0 e rig t of legal pre*e"ption or re.e"ption s all not 'e e;ercise. e;cept wit in t irty .ays fro" t e notice in writing 'y t e prospective ven.or4 or 'y t e ven.or4 as t e case "ay 'e. 0 e .ee. of sale s all not 'e recor.e. in t e 1egistry of /roperty4 unless acco"panie. 'y an affi.avit of t e ven.or t at e as given written notice t ereof to all possi'le re.e"ptioners. 0 e rig t of re.e"ption of co*owners e;clu.es t at of a.(oining owners. (1534a) iv. !;ercise of rig t to re.ee" (Art. 1:3$) #rt. (:-<. 0 e rig t of legal pre*e"ption or re.e"ption s all not 'e e;ercise. e;cept wit in t irty .ays fro" t e notice in writing 'y t e prospective ven.or4 or 'y t e ven.or4 as t e case "ay 'e. 0 e .ee. of sale s all not 'e recor.e. in t e 1egistry of /roperty4 unless acco"panie. 'y an affi.avit of t e ven.or t at e as given written notice t ereof to all possi'le re.e"ptioners. 0 e rig t of re.e"ption of co*owners e;clu.es t at of a.(oining owners. (1534a) v. 1e.e"ption8pre*e"ption un.er special laws a) lan. ac7uire. un.er free patent or o"estea. (C.A. Fo. 1414 sec. 11%) Sec. ((9. !very conveyance of lan. ac7uire. un.er t e free patent or o"estea. provisions4 w en proper4 s all 'e su'(ect to repurc ase 'y t e applicant4 is wi.ow4 or legal eirs4 wit in a perio. of five years fro" t e .ate of t e conveyance. ') e;tra*(u.icial foreclosure of "ortgage (Act Fo. $1$54 sec. :) 4)

Sec. :. 9n all cases in w ic an e;tra(u.icial sale is "a.e un.er t e special power erein 'efore referre. to4 t e .e'tor4 is successors in interest or any (u.icial cre.itor or (u.g"ent cre.itor of sai. .e'tor4 or any person aving a lien on t e property su'se7uent to t e "ortgage or .ee. of trust un.er w ic t e property is sol.4 "ay re.ee" t e sa"e at any ti"e wit in t e ter" of one year fro" an. after t e .ate of t e sale5 an. suc re.e"ption s all 'e governe. 'y t e provisions of Sections 4:4 to 4::4 inclusive of t e Co.e of Civil /roce.ure4 in so far as t ese are not inconsistent wit t e provisions of t is Act. c) agricultural lan. (1.A. Fo. $8444 sec. 13) Section (-. BesseeQs 1ig t of 1e.e"ption * 9n case t e lan. ol.ing is sol. to a t ir. person wit out t e ?nowle.ge of t e agricultural lessee4 t e latter s all ave t e rig t to re.ee" t e sa"e at a reasona'le price an. consi.eration# /rovi.e.4 0 at t e entire lan. ol.ing sol. "ust 'e re.ee"e.# /rovi.e.4 furt er4 0 at w ere t ese are two or "ore agricultural lessees4 eac s all 'e entitle. to sai. rig t of re.e"ption only to t e e;tent of t e area actually cultivate. 'y i". 0 e rig t of re.e"ption un.er t is Section "ay 'e e;ercise. wit in two years fro" t e registration of t e sale4 an. s all ave priority over any ot er rig t of legal re.e"ption. !. /ractice notes# ter"ination of contract of sale i. Groun.s for ter"ination ii. 2anner of ter"ination XIII. Special problems in sales 7) ;ale by non-o,ner >7rts. 55$, 15!5, 1&%&) #rt. ))9. 0 e possession of "ova'le property ac;uired in good faith is e;uivalent to a title. Fevert eless4 one w o as lost any "ova'le or as 'een unla,fully deprived t ereof may recover it from the person in possession of the same. 9f t e possessor of a "ova'le lost or w ic t e owner as 'een unla!fully deprivedA as ac7uire. it in good faith at a pu'lic sale4 t e owner cannot o'tain its return wit out reimbursing t e price pai. t erefor. (4:4a) #rt. ()*). Su'(ect to t e provisions of t is 0itle4 w ere goods are sold by a person !ho is not the o!ner t ereof4 an. w o .oes not sell them under authority or !ith the consent of t e owner4 t e buyer ac;uires no better title to the goods than the seller a.4 EFB!SS t e owner of t e goo.s is by his conduct preclu.e. fro" .enying t e sellerQs aut ority to sell. 2othing in t is 0itle4 owever4 s all affect: (1) 0 e provisions of any factorsQ act4 recor.ing laws4 or any ot er provision of law ena'ling t e apparent owner of goo.s to .ispose of t e" as if e were t e true owner t ereof5 (3) 0 e vali.ity of any contract of sale un.er statutory power of sale or un.er t e or.er of a court of co"petent (uris.iction5 ($) /urc ases "a.e in a "erc antQs store4 or in fairs4 or "ar?ets4 in accor.ance wit t e Co.e of Co""erce an. special laws. (n) #rt. (7<7. A en a person w o is not t e owner of a t ing sells or alienates an. .elivers it4 an. later t e seller or grantor ac;uires title t ereto4 such title passes by operation of la! to the buyer or grantee. i. w en owners ip re7uire. a) perfection ') consu""ation ii. rule on ac7uisition of owners ip 'y t e 'uyer5 principle 'e in. t e rule (ne"o .at 7uo. non a'et) 1$2$ #/ 5/$: Fo one can transfer a 'etter title t an w at e as over t e property sol.5 &nly owner of goo.s or one aut ori@e. 'y owner to sell can transfer title t ereto to t e 'uyer (15+5) *S !ven owner of a lost "ova'le or of w ic e as 'een unlawfully .eprive.4 "ay recover it even fro" a purc aser in goo. fait (55%) *S A .erivative rig t cannot e;ist ig er t an its source B4=$V$ : 9f e s oul. su'se7uently ac7uire owners ip t ereof4 is conveyance is .ee"e. vali. an. is title passes 'y operation of law to is 'uyer (14$4) P I2CIP/$: !stoppel 'y ,ee. iii. e;ceptions to t e rule (1) !S0&//!B (=+ere o,ner , by +is conduct, precluded from denying) *S 9f o!ner is precluded by his conduct fro" .enying t e sellerDs aut ority to sell4 t e 'uyer "ay ac7uire a 'etter title4 alt oug t e seller a. neit er t e title nor t e aut ority to sell t e goo.s (15+54 31:) *S A ere true owner of property ol.s out anot er or allows anot er to appear as t e owner or one wit full aut ority to .ispose of t e property an. innocent t ir. parties are "isle. into .ealing wit suc apparent owner or agent4 suc $ r. parties will 'e protecte.. e;. A en e ?nowingly per"its is property to sol. at (u.icial sale as property of (u.ge"ent .e'tor wit out asserting is title (3) 6AC0&1S AC04 1!C&1,9FG BAAS ( =+ere la, enables t+e apparent o,ner to dispose of t+e goods as if +e ,ere t+e true o,ner t+ereof) *S Fo law as 6actorDs Act. Baw referre. ere are foun. in Civil Co.e on Agency# &ne .eals wit an agency at is own ris? *S 0a?en fro" Enifor" Sales Act a. 6actors Acts are .esigne. to protect t ir. persons w o .eal wit an agent 'elieving i" to 'e owner of goo.s '. 1ecor.ing laws are laws relating to goo.s w ic woul. ena'le t e registere. owner to .ispose of t e" as if e were t e true owner. !;a"ples of recor.ing laws w ic "ay ave a 'earing on t e vali.ity of a sale "a.e 'y a person w o is not t e owner or agent of t e owner# /, 153% (/roperty 1egistration ,ecree)4 1A 41$: (Ban. 0ransportation an. 0raffic Co.e)4 1evise. A."in. Co.e as to sale of large cattle an. vessels. c. HAny ot er provision of lawG# Act 3+$1 (Fegotia'le 9nstru"ents Baw)4 Act 31$) (Aare ouse 1eceipts Baw) .. 9e. stolen car 'oug t 'y a person t en i"poun.e.. Ban. 0ransportation Co""ission as not rig t to i"poun. suc as only t at for proper enforce"ent of lien upon "otor ve icles of unpai. fees for registration4 re*registration is proper e. 9e. 1eal property# A forge. .ocu"ent of sale "ay 'eco"e root of vali. title if certificate of title as alrea.y 'een transferre. fro" na"e of true owner to forger f. 1!2!,L# ,a"ages ($) Iu.icial /ower an. Statutory Sale (CAB9,90L &6 SAB! EF,!1 S0A0E0&1L /&A!1 &1 &6 C&E10 &1,!1 0& S!BB ) *S CAB9,# Sale of s eriff4 pu'lic officer aut ori@e. 'y law of goo.s un.er e;ecution or foreclosure *S H&A!C!1# See 55%5 All t e fruits s all pertain to t e ven.ee fro" t e .ay on w ic t e contract was perfected. (14:8a) 9t .oes not follow t at if goo.s sol. .i. not 'elong to t e (u.ge"ent .e'tor or ple.gor or "ortgagor t at t e innocent purc aser at suc sale ac7uire. a 'etter title4 for e steps "erely into t e s oes of t e (u.ge"ent .e'tor4 ple.gor or "ortagor. 0 e owner can recover fro" t e purc aser 'y rei"'ursing i" t e price pai. t erefor &r.inary e;ecution sale Iu.icial foreclosure sale !;tra(u.icial foreclosure sale 48

Govern"ent4 owever4 .oes not warrant tile to properties sol. 'y t e s eriff at pu'lic auction or (u.icial sales. ((u.g"ent .e'tor s all not 'e lia'le for .a"ages)

(4) /E1CHAS! A0 2!1CHAF0DS S0&1!4 2A1-!0 &1 6A91 *S 9"perfect or voi. title ripening into a vali. one as a result of so"e intervening .ue causes *S Buyer cannot 'e reasona'ly e;pecte. to loo? 'e in. t e title of every article w en e 'uys at a store *S 0a?en 'y Co.e Co""ission fro" Spanis Co.e of Co""erce an. a..e. to Enifor" Sales Act (5) SAB! BL &AF!1 A90H C&9,ABB! 090B! F&0 AC&9,!, (15+:) (:) S!BB!1 SEBS!ME!F0BL ACME91!S 090B! *S Su'se7uent ac7uisition vali.ates previous conveyance *S Seller ac7uires title upon .elivery5 Fonpay"ent "ay not transfer title only if stipulate. iv. Su'se7uent ac7uisition of title (Art. 14$4)5 #rt. (7<7. A en a person w o is not t e owner of a t ing sells or alienates an. .elivers it4 an. later t e seller or grantor ac;uires title t ereto4 such title passes by operation of la! to the buyer or grantee. iv. 1ule wit respect to i""ova'le property v. Status of contract .) ;ale by o,ner ,it+ voidable title non-o,ner >7rts. 55$, 15!') * rule on ac7uisition 'y owners ip 'y t e 'uyer5 principle 'e in. t e rule #rt. ()*:. A ere t e seller of goo.s as a voi.a'le title t ereto4 'ut is title as not 'een avoi.e. at t e ti"e of t e sale4 t e 'uyer ac7uires a goo. title to t e goo.s4 provi.e. e 'uys t e" in goo. fait 4 for value4 an. wit out notice of t e sellerQs .efect of title. (n) #rt. ))9. 0 e possession of "ova'le property ac;uired in good faith is e;uivalent to a title. Fevert eless4 one w o as lost any "ova'le or as 'een unla,fully deprived t ereof may recover it from the person in possession of the same. 9f t e possessor of a "ova'le lost or w ic t e owner as 'een unla!fully deprivedA as ac7uire. it in good faith at a pu'lic sale4 t e owner cannot o'tain its return wit out reimbursing t e price pai. t erefor. (4:4a) 24T$S: S So long as still wit first 'uyer wit voi.a'le title4 original seller can recover BE0 F&0 if sol. to an innocent purc aser for value $D5ISIT$S F4 ?5C$ T4 #CD5I $ TIT/$ He 'uys t e" 'efore t e title of t e seller as 'een avoi.e. 9n goo. fait for value Ait out notice of t e sellerDs .efect of title $#S42: A ere loss as appene. w ic "ust fall on one of 3 innocent persons4 it s oul. 'e 'orne 'y i" w o is t e occasion of t e loss 0 e a.vantage to tra.e an. sta'ility of title (ustifies t e .i"inution of t e privilege of infants an. lunatics i. rule on ac7uisition 'y owners ip 'y t e 'uyer5 principle 'e in. t e rule ii. Art. 55% in relation to Arts. 15+5 an. 15+: 6) Double sales >7rt. 15&&) #rt. ()77. 9f t e sa"e t ing s oul. ave 'een sol. to .ifferent ven.ees4 t e owners ip s all 'e transferre. to t e person w o "ay ave first ta?en possession t ereof in goo. fait 4 if it s oul. 'e "ova'le property. S oul. it 'e i""ova'le property4 t e owners ip s all 'elong to t e person ac7uiring it w o in goo. fait first recor.e. it in t e 1egistry of /roperty. S oul. t ere 'e no inscription4 t e owners ip s all pertain to t e person w o in goo. fait was first in t e possession5 an.4 in t e a'sence t ereof4 to t e person w o presents t e ol.est title4 provi.e. t ere is goo. fait . (14)$) i. re7uisites for applica'ility of Article 1544 ii. rules un.er Article 1544 a) "ova'les * GpossessionG5 ow ac7uire. (see Art. 55%) #rt. ))9. 0 e possession of "ova'le property ac;uired in good faith is e;uivalent to a title . Fevert eless4 one w o as lost any "ova'le or as 'een unla,fully deprived t ereof may recover it from the person in possession of the same. 9f t e possessor of a "ova'le lost or w ic t e owner as 'een unla!fully deprivedA as ac7uire. it in good faith at a pu'lic sale4 t e owner cannot o'tain its return wit out reimbursing t e price pai. t erefor. (4:4a) ') i""ova'les * "eaning of HregistrationG * re7uire"ent of Ggoo. fait G * "eaning of HpossessionG * "eaning of Hol.est titleG iii. applica'ility of Art. 1544 to unregistere. lan.s iv. Article 1544 an. e;ecution sales

XIV. Sale contract distinguished from other contracts 7. Dacion en pago >7rt. 1#&5)( #rt. (-7). ,ation in pay"ent4 w ere'y property is alienate. to t e cre.itor in satisfaction of a .e't in "oney4 s all 'e governe. 'y t e law of sales. (n) i. concept ii. .istinguis e. fro" a contract of sale .. 6ontract to sell5contract of conditional sale i. concept ii. .istinguis e. fro" a contract of sale 4%

6. 7gency to buy and sell >7rt. 1&'') #rt. (7::. 9n construing a contract containing provisions c aracteristic of 'ot t e contract of sale an. of t e contract of agency to sell4 t e essential clauses of t e w ole instru"ent s all 'e consi.ere.. (n) i. concept ii. .istinguis e. fro" a contract of sale D. 6ontract for a piece of ,or2 >7rt. 1&' ) #rt. (7:+. A contract for t e .elivery at a certain price of an article w ic t e ven.or in t e or.inary course of is 'usiness "anufactures or procures for t e general "ar?et4 w et er t e sa"e is on an. at t e ti"e or not4 is a contract of sale4 'ut if t e goo.s are to 'e "anufacture. specially for t e custo"er an. upon is special or.er4 an. not for t e general "ar?et4 it is a contract for a piece of wor?. (n) i. concept ii. .istinguis e. fro" a contract of sale :. .arter and e-c+ange >7rts. 1'%8-1'&1, 1&'8) #rt. (:<8. By t e contract of 'arter or e;c ange one of t e parties 'in.s i"self to give one t ing in consi.eration of t e ot erQs pro"ise to give anot er t ing. (15$8a) #rt. (:<9. 9f one of t e contracting parties4 aving receive. t e t ing pro"ise. i" in 'arter4 s oul. prove t at it .i. not 'elong to t e person w o gave it4 e cannot 'e co"pelle. to .eliver t at w ic e offere. in e;c ange4 'ut e s all 'e entitle. to .a"ages. (15$%a) #rt. (:7*. &ne w o loses 'y eviction t e t ing receive. in 'arter "ay recover t at w ic e gave in e;c ange wit a rig t to .a"ages4 or e "ay only .e"an. an in.e"nity for .a"ages. However4 e can only "a?e use of t e rig t to recover t e t ing w ic e as .elivere. w ile t e sa"e re"ains in t e possession of t e ot er party4 an. wit out pre(u.ice to t e rig ts ac7uire. in goo. fait in t e "eanti"e 'y a t ir. person. (154+a) #rt. (:7(. As to all "atters not specifically provi.e. for in t is 0itle4 'arter s all 'e governe. 'y t e provisions of t e prece.ing 0itle relating to sales. (1541a) #rt. (7:8. 9f t e consi.eration of t e contract consists partly in "oney4 an. partly in anot er t ing4 t e transaction s all 'e c aracteri@e. 'y t e "anifest intention of t e parties. 9f suc intention .oes not clearly appear4 it s all 'e consi.ere. a 'arter if t e value of t e t ing given as a part of t e consi.eration e;cee.s t e a"ount of t e "oney or its e7uivalent5 ot erwise4 it is a sale. (144:a) i. concept (Art. 1:$8) #rt. (:<8. By t e contract of 'arter or e;c ange one of t e parties 'in.s i"self to give one t ing in consi.eration of t e ot erQs pro"ise to give anot er t ing. (15$8a) ii. w en perfecte. an. consu""ate. iii. effect if giver not t e lawful owner of t ing .elivere. (Art. 1:$%) #rt. (:<9. 9f one of t e contracting parties4 aving receive. t e t ing pro"ise. i" in 'arter4 s oul. prove t at it .i. not 'elong to t e person w o gave it4 e cannot 'e co"pelle. to .eliver t at w ic e offere. in e;c ange4 'ut e s all 'e entitle. to .a"ages. (15$%a) iv. effect of eviction (Art. 1:4+) #rt. (:7*. &ne w o loses 'y eviction t e t ing receive. in 'arter "ay recover t at w ic e gave in e;c ange wit a rig t to .a"ages4 or e "ay only .e"an. an in.e"nity for .a"ages. However4 e can only "a?e use of t e rig t to recover t e t ing w ic e as .elivere. w ile t e sa"e re"ains in t e possession of t e ot er party4 an. wit out pre(u.ice to t e rig ts ac7uire. in goo. fait in t e "eanti"e 'y a t ir. person. (154+a) v. test for .eter"ining w et er transaction is sale or 'arter (Art. 14:8) #rt. (7:8. 9f t e consi.eration of t e contract consists partly in "oney4 an. partly in anot er t ing4 t e transaction s all 'e c aracteri@e. 'y t e "anifest intention of t e parties. 9f suc intention .oes not clearly appear4 it s all 'e consi.ere. a 'arter if t e value of t e t ing given as a part of t e consi.eration e;cee.s t e a"ount of t e "oney or its e7uivalent5 ot erwise4 it is a sale. (144:a) B. :8uitable mortgage >7rts. 1'!#-1'!5) #rt. (:*-. 0 e contract s all 'e presu"e. to 'e an e7uita'le "ortgage4 in any of t e following cases# (1) A en t e price of a sale wit rig t to repurc ase is unusually ina.e7uate5 (3) A en t e ven.or re"ains in possession as lessee or ot erwise5 ($) A en upon or after t e e;piration of t e rig t to repurc ase anot er instru"ent e;ten.ing t e perio. of re.e"ption or granting a new perio. is e;ecute.5 (4) A en t e purc aser retains for i"self a part of t e purc ase price5 (5) A en t e ven.or 'in.s i"self to pay t e ta;es on t e t ing sol.5 (:) 9n any ot er case w ere it "ay 'e fairly inferre. t at t e real intention of t e parties is t at t e transaction s all secure t e pay"ent of a .e't or t e perfor"ance of any ot er o'ligation. 9n any of t e foregoing cases4 any "oney4 fruits4 or ot er 'enefit to 'e receive. 'y t e ven.ee as rent or ot erwise s all 'e consi.ere. as interest w ic s all 'e su'(ect to t e usury laws. (n) #rt. (:*<. 9n case of .ou't4 a contract purporting to 'e a sale wit rig t to repurc ase s all 'e construe. as an e7uita'le "ortgage. (n) #rt. (:*7. 0 e provisions of Article 1:+3 s all also apply to a contract purporting to 'e an a'solute sale. (n) #rt. (:*). 9n t e cases referre. to in Articles 1:+3 an. 1:+44 t e apparent ven.or "ay as? for t e refor"ation of t e instru"ent. (n) i. concept ii. pacto .e retro vs. "ortgage .istinguis e. iii. re7uisites for presu"ption t at t e transaction is an e7uita'le "ortgage (Arts. 1:+34 1:+4) #rt. (:*-. 0 e contract s all 'e presu"e. to 'e an e7uita'le "ortgage4 in any of t e following cases# (1) A en t e price of a sale wit rig t to repurc ase is unusually ina.e7uate5 (3) A en t e ven.or re"ains in possession as lessee or ot erwise5 ($) A en upon or after t e e;piration of t e rig t to repurc ase anot er instru"ent e;ten.ing t e perio. of re.e"ption or granting a new perio. is e;ecute.5 (4) A en t e purc aser retains for i"self a part of t e purc ase price5 (5) A en t e ven.or 'in.s i"self to pay t e ta;es on t e t ing sol.5 (:) 9n any ot er case w ere it "ay 'e fairly inferre. t at t e real intention of t e parties is t at t e transaction s all secure t e pay"ent of a .e't or t e perfor"ance of any ot er o'ligation. 9n any of t e foregoing cases4 any "oney4 fruits4 or ot er 'enefit to 'e receive. 'y t e ven.ee as rent or ot erwise s all 'e consi.ere. as interest w ic s all 'e su'(ect to t e usury laws. (n) #rt. (:*7. 0 e provisions of Article 1:+3 s all also apply to a contract purporting to 'e an a'solute sale. (n) iv. 'a.ges of e7uita'le "ortgage (Art. 1:+$) #rt. (:*<. 9n case of .ou't4 a contract purporting to 'e a sale wit rig t to repurc ase s all 'e construe. as an e7uita'le "ortgage. (n) v. effect if contract is an e7uita'le "ortgage 5+

vi. re"e.y of refor"ation (Art. 1:+5) #rt. (:*). 9n t e cases referre. to in Articles 1:+3 an. 1:+44 t e apparent ven.or "ay as? for t e refor"ation of t e instru"ent. (n) C. Donation >7rts. #5, 1& 1) #rt. +-). ,onation is an act of li'erality w ere'y a person .isposes gratuitously of a t ing or rig t in favor of anot er4 w o accepts it. (:18a) #rt. (7+(. 9f t e price is si"ulate.4 t e sale is voi.4 'ut t e act "ay 'e s own to ave 'een in reality a .onation4 or so"e ot er act or contract. (n) i. concept ii. .istinguis e. fro" a contract of sale 1. Lease >7rt. 1'&%) #rt. (:7<. 9n t e lease of t ings4 one of t e parties 'in.s i"self to give to anot er t e en(oy"ent or use of a t ing for a price certain4 an. for a perio. w ic "ay 'e .efinite or in.efinite. However4 no lease for "ore t an ninety*nine years s all 'e vali.. (154$a) i. concept ii. .istinguis e. fro" a contract of sale G. 7ssignment of credits and incorporeal rig+ts >7rts. 1'#&-1'% ) #rt. (:-7. An assign"ent of cre.itors an. ot er incorporeal rig ts s all 'e perfecte. in accor.ance wit t e provisions of Article 14)5. (n) #rt. (:-). An assign"ent of a cre.it4 rig t or action s all pro.uce no effect as against t ir. person4 unless it appears in a pu'lic instru"ent4 or t e instru"ent is recor.e. in t e 1egistry of /roperty in case t e assign"ent involves real property. (153:) #rt. (:-:. 0 e .e'tor w o4 'efore aving ?nowle.ge of t e assign"ent4 pays is cre.itor s all 'e release. fro" t e o'ligation. (153)) #rt. (:-+. 0 e assign"ent of a cre.it inclu.es all t e accessory rig ts4 suc as a guaranty4 "ortgage4 ple.ge or preference. (1538) #rt. (:-8. 0 e ven.or in goo. fait s all 'e responsi'le for t e e;istence an. legality of t e cre.it at t e ti"e of t e sale4 unless it s oul. ave 'een sol. as .ou'tful5 'ut not for t e solvency of t e .e'tor4 unless it as 'een so e;pressly stipulate. or unless t e insolvency was prior to t e sale an. of co""on ?nowle.ge. !ven in t ese cases e s all only 'e lia'le for t e price receive. an. for t e e;penses specifie. in Fo. 1 of Article 1:1:. 0 e ven.or in 'a. fait s all always 'e answera'le for t e pay"ent of all e;penses4 an. for .a"ages. (153%) #rt. (:-9. 9n case t e assignor in goo. fait s oul. ave "a.e i"self responsi'le for t e solvency of t e .e'tor4 an. t e contracting parties s oul. not ave agree. upon t e .uration of t e lia'ility4 it s all last for one year only4 fro" t e ti"e of t e assign"ent if t e perio. a. alrea.y e;pire.. 9f t e cre.it s oul. 'e paya'le wit in a ter" or perio. w ic as not yet e;pire.4 t e lia'ility s all cease one year after t e "aturity. (15$+a) #rt. (:<*. &ne w o sells an in eritance wit out enu"erating t e t ings of w ic it is co"pose.4 s all only 'e answera'le for is c aracter as an eir. (15$1) #rt. (:<(. &ne w o sells for a lu"p su" t e w ole of certain rig ts4 rents4 or pro.ucts4 s all co"ply 'y answering for t e legiti"acy of t e w ole in general5 'ut e s all not 'e o'lige. to warrant eac of t e various parts of w ic it "ay 'e co"pose.4 e;cept in t e case of eviction fro" t e w ole or t e part of greater value. (15$3a) #rt. (:<-. S oul. t e ven.or ave profite. 'y so"e of t e fruits or receive. anyt ing fro" t e in eritance sol.4 e s all pay t e ven.ee t ereof4 if t e contrary as not 'een stipulate.. (15$$) #rt. (:<<. 0 e ven.ee s all4 on is part4 rei"'urse t e ven.or for all t at t e latter "ay ave pai. for t e .e'ts of an. c arges on t e estate an. satisfy t e cre.its e "ay ave against t e sa"e4 unless t ere is an agree"ent to t e contrary. (15$4) #rt. (:<7. A en a cre.it or ot er incorporeal rig t in litigation is sol.4 t e .e'tor s all ave a rig t to e;tinguis it 'y rei"'ursing t e assignee for t e price t e latter pai. t erefor4 t e (u.icial costs incurre. 'y i"4 an. t e interest on t e price fro" t e .ay on w ic t e sa"e was pai.. A cre.it or ot er incorporeal rig t s all 'e consi.ere. in litigation fro" t e ti"e t e co"plaint concerning t e sa"e is answere.. 0 e .e'tor "ay e;ercise is rig t wit in t irty .ays fro" t e .ate t e assignee .e"an.s pay"ent fro" i". (15$5) #rt. (:<). 6ro" t e provisions of t e prece.ing article s all 'e e;cepte. t e assign"ents or sales "a.e# (1) 0o a co* eir or co*owner of t e rig t assigne.5 (3) 0o a cre.itor in pay"ent of is cre.it5 ($) 0o t e possessor of a tene"ent or piece of lan. w ic is su'(ect to t e rig t in litigation assigne.. (15$:) #rt. (:<:. 9n t e prece.ing articles in t is 0itle governing t e sale of goo.s4 unless t e conte;t or su'(ect "atter ot erwise re7uires# (1) R,ocu"ent of title to goo.sR inclu.es any 'ill of la.ing4 .oc? warrant4 R7ue.an4R or ware ouse receipt or or.er for t e .elivery of goo.s4 or any ot er .ocu"ent use. in t e or.inary course of 'usiness in t e sale or transfer of goo.s4 as proof of t e possession or control of t e goo.s4 or aut ori@ing or purporting to aut ori@e t e possessor of t e .ocu"ent to transfer or receive4 eit er 'y en.orse"ent or 'y .elivery4 goo.s represente. 'y suc .ocu"ent. RGoo.sR inclu.es all c attels personal 'ut not t ings in action or "oney of legal ten.er in t e / ilippines. 0 e ter" inclu.es growing fruits or crops. R&r.erR relating to .ocu"ents of title "eans an or.er 'y en.orse"ent on t e .ocu"ents. RMuality of goo.sR inclu.es t eir state or con.ition. RSpecific goo.sR "eans goo.s i.entifie. an. agree. upon at t e ti"e a contract of sale is "a.e. An antece.ent or pre*e;isting clai"4 w et er for "oney or not4 constitutes RvalueR w ere goo.s or .ocu"ents of title are ta?en eit er in satisfaction t ereof or as security t erefor. (3) A person is insolvent wit in t e "eaning of t is 0itle w o eit er as cease. to pay is .e'ts in t e or.inary course of 'usiness or cannot pay is .e'ts as t ey 'eco"e .ue4 w et er insolvency procee.ings ave 'een co""ence. or not. ($) Goo.s are in a R.elivera'le stateR wit in t e "eaning of t is 0itle w en t ey are in suc a state t at t e 'uyer woul.4 un.er t e contract4 'e 'oun. to ta?e .elivery of t e". (n) #rt. (:<+. 0 e provisions of t is 0itle are su'(ect to t e rules lai. .own 'y t e 2ortgage Baw an. t e Ban. 1egistration Baw wit regar. to i""ova'le property. (15$)a) i. concept ii. perfection (Art. 1:34) #rt. (:-7. An assign"ent of cre.itors an. ot er incorporeal rig ts s all 'e perfecte. in accor.ance wit t e provisions of Article 14)5. (n) iii. 'in.ing effect (Art. 1:3:) #rt. (:-:. 0 e .e'tor w o4 'efore aving ?nowle.ge of t e assign"ent4 pays is cre.itor s all 'e release. fro" t e o'ligation. (153)) iii. nee. for .e'torDs consent5 effect of pay"ent 'y .e'tor 'efore an. after notice (Art. 1:3:) #rt. (:-:. 0 e .e'tor w o4 'efore aving ?nowle.ge of t e assign"ent4 pays is cre.itor s all 'e release. fro" t e o'ligation. (153)) iv. effect of assign"ent of cre.it on accessory rig ts (Art. 1:3))5 fruits an. e;penses (Arts. 1:$34 1:$$) 51

#rt. (:<-. S oul. t e ven.or ave profite. 'y so"e of t e fruits or receive. anyt ing fro" t e in eritance sol.4 e s all pay t e ven.ee t ereof4 if t e contrary as not 'een stipulate.. (15$$) #rt. (:<<. 0 e ven.ee s all4 on is part4 rei"'urse t e ven.or for all t at t e latter "ay ave pai. for t e .e'ts of an. c arges on t e estate an. satisfy t e cre.its e "ay ave against t e sa"e4 unless t ere is an agree"ent to t e contrary. (15$4) v. warranties of t e assignor of t e cre.it a) in general (art. 1:38) #rt. (:-8. 0 e ven.or in goo. fait s all 'e responsi'le for t e e;istence an. legality of t e cre.it at t e ti"e of t e sale4 unless it s oul. ave 'een sol. as .ou'tful5 'ut not for t e solvency of t e .e'tor4 unless it as 'een so e;pressly stipulate. or unless t e insolvency was prior to t e sale an. of co""on ?nowle.ge. !ven in t ese cases e s all only 'e lia'le for t e price receive. an. for t e e;penses specifie. in Fo. 1 of Article 1:1:. 0 e ven.or in 'a. fait s all always 'e answera'le for t e pay"ent of all e;penses4 an. for .a"ages. (153%) ') w ere .e'torDs insolvency guarantee. (Art. 1:3%) #rt. (:-9. 9n case t e assignor in goo. fait s oul. ave "a.e i"self responsi'le for t e solvency of t e .e'tor4 an. t e contracting parties s oul. not ave agree. upon t e .uration of t e lia'ility4 it s all last for one year only4 fro" t e ti"e of t e assign"ent if t e perio. a. alrea.y e;pire.. 9f t e cre.it s oul. 'e paya'le wit in a ter" or perio. w ic as not yet e;pire.4 t e lia'ility s all cease one year after t e "aturity. (15$+a) c) sale of ere.itary rig t (Art. 1:$+) #rt. (:<*. &ne w o sells an in eritance wit out enu"erating t e t ings of w ic it is co"pose.4 s all only 'e answera'le for is c aracter as an eir. (15$1) .) sale of w ole of certain rig ts4 rents or pro.ucts (Art. 1:$1) #rt. (:<(. &ne w o sells for a lu"p su" t e w ole of certain rig ts4 rents4 or pro.ucts4 s all co"ply 'y answering for t e legiti"acy of t e w ole in general5 'ut e s all not 'e o'lige. to warrant eac of t e various parts of w ic it "ay 'e co"pose.4 e;cept in t e case of eviction fro" t e w ole or t e part of greater value. (15$3a) vi. legal re.e"ption in t e sale of cre.it in litigation (Arts. 1:$44 1:$5) #rt. (:<7. A en a cre.it or ot er incorporeal rig t in litigation is sol.4 t e .e'tor s all ave a rig t to e;tinguis it 'y rei"'ursing t e assignee for t e price t e latter pai. t erefor4 t e (u.icial costs incurre. 'y i"4 an. t e interest on t e price fro" t e .ay on w ic t e sa"e was pai.. A cre.it or ot er incorporeal rig t s all 'e consi.ere. in litigation fro" t e ti"e t e co"plaint concerning t e sa"e is answere.. 0 e .e'tor "ay e;ercise is rig t wit in t irty .ays fro" t e .ate t e assignee .e"an.s pay"ent fro" i". (15$5) #rt. (:<). 6ro" t e provisions of t e prece.ing article s all 'e e;cepte. t e assign"ents or sales "a.e# (1) 0o a co* eir or co*owner of t e rig t assigne.5 (3) 0o a cre.itor in pay"ent of is cre.it5 ($) 0o t e possessor of a tene"ent or piece of lan. w ic is su'(ect to t e rig t in litigation assigne.. (15$:) XV. &ocuments of title '#rt. ()*+,()-*. A. Concept (Art. 15+)) #rt. ()*+. A .ocu"ent of title in w ic it is state. t at t e goo.s referre. to t erein will 'e .elivere. to t e 'earer4 or to t e or.er of any person na"e. in suc .ocu"ent is a negotia'le .ocu"ent of title. (n) B. 6unction of .ocu"ents of title C. !;a"ples of .ocu"ents of title ,. Classes of .ocu"ents of title !. Fegotia'le .ocu"ents of title i. w o negotiates (Art. 1513) #rt. ()(-. A negotia'le .ocu"ent of title "ay 'e negotiate.# (1) By t e owner t erefor5 or (3) By any person to w o" t e possession or custo.y of t e .ocu"ent as 'een entruste. 'y t e owner4 if4 'y t e ter"s of t e .ocu"ent t e 'ailee issuing t e .ocu"ent un.erta?es to .eliver t e goo.s to t e or.er of t e person to w o" t e possession or custo.y of t e .ocu"ent as 'een entruste.4 or if at t e ti"e of suc entrusting t e .ocu"ent is in suc for" t at it "ay 'e negotiate. 'y .elivery. (n) ii. ow negotiate. a) 'y .elivery (Art. 15+8) #rt. ()*8. A negotia'le .ocu"ent of title "ay 'e negotiate. 'y .elivery# (1) A ere 'y t e ter"s of t e .ocu"ent t e carrier4 ware ouse"an or ot er 'ailee issuing t e sa"e un.erta?es to .eliver t e goo.s to t e 'earer5 or (3) A ere 'y t e ter"s of t e .ocu"ent t e carrier4 ware ouse"an or ot er 'ailee issuing t e sa"e un.erta?es to .eliver t e goo.s to t e or.er of a specifie. person4 an. suc person or a su'se7uent en.orsee of t e .ocu"ent as in.orse. it in 'lan? or to t e 'earer. A ere 'y t e ter"s of a negotia'le .ocu"ent of title t e goo.s are .elivera'le to 'earer or w ere a negotia'le .ocu"ent of title as 'een in.orse. in 'lan? or to 'earer4 any ol.er "ay in.orse t e sa"e to i"self or to any specifie. person4 an. in suc case t e .ocu"ent s all t ereafter 'e negotiate. only 'y t e en.orse"ent of suc en.orsee. (n) ') 'y in.orse"ent an. .elivery (Art. 15+%) #rt. ()*9. A negotia'le .ocu"ent of title "ay 'e negotiate. 'y t e en.orse"ent of t e person to w ose or.er t e goo.s are 'y t e ter"s of t e .ocu"ent .elivera'le. Suc en.orse"ent "ay 'e in 'lan?4 to 'earer or to a specifie. person. 9f in.orse. to a specifie. person4 it "ay 'e again negotiate. 'y t e en.orse"ent of suc person in 'lan?4 to 'earer or to anot er specifie. person. Su'se7uent negotiations "ay 'e "a.e in li?e "anner. (n) iii. effect of negotia'le .ocu"ents of title "ar?e. Hnon*negotia'leG (Art. 151+) #rt. ()(*. 9f a .ocu"ent of title w ic contains an un.erta?ing 'y a carrier4 ware ouse"an or ot er 'ailee to .eliver t e goo.s to 'earer4 to a specifie. person or or.er of a specifie. person or w ic contains wor.s of li?e i"port4 as place. upon it t e wor.s Rnot negotia'le4R Rnon*negotia'leR or t e li?e4 suc .ocu"ent "ay nevert eless 'e negotiate. 'y t e ol.er an. is a negotia'le .ocu"ent of title wit in t e "eaning of t is 0itle. But not ing in t is 0itle containe. s all 'e construe. as li"iting or .efining t e effect upon t e o'ligations of t e carrier4 ware ouse"an4 or ot er 'ailee issuing a .ocu"ent of title or placing t ereon t e wor.s Rnot negotia'le4R Rnon*negotia'le4R or t e li?e. (n) iv. effect of negotiation (Art. 151$) #rt. ()(<. A person to w o" a negotia'le .ocu"ent of title as 'een .uly negotiate. ac7uires t ere'y# (1) Suc title to t e goo.s as t e person negotiating t e .ocu"ent to i" a. or a. a'ility to convey to a purc aser in goo. fait for value an. also suc title to t e goo.s as t e person to w ose or.er t e goo.s were to 'e .elivere. 'y t e ter"s of t e .ocu"ent a. or a. a'ility to convey to a purc aser in goo. fait for value5 an. 53

(3) 0 e .irect o'ligation of t e 'ailee issuing t e .ocu"ent to ol. possession of t e goo.s for i" accor.ing to t e ter"s of .ocu"ent as fully as if suc 'ailee a. contracte. .irectly wit i". (n) a) rig ts ac7uire. 'y t e 'uyer of t e negotia'le .ocu"ent of title w en properly negotiate. (Art. 151$) #rt. ()(<. A person to w o" a negotia'le .ocu"ent of title as 'een .uly negotiate. ac7uires t ere'y# (1) Suc title to t e goo.s as t e person negotiating t e .ocu"ent to i" a. or a. a'ility to convey to a purc aser in goo. fait value an. also suc title to t e goo.s as t e person to w ose or.er t e goo.s were to 'e .elivere. 'y t e ter"s of t e .ocu"ent or a. a'ility to convey to a purc aser in goo. fait for value5 an. (3) 0 e .irect o'ligation of t e 'ailee issuing t e .ocu"ent to ol. possession of t e goo.s for i" accor.ing to t e ter"s of .ocu"ent as fully as if suc 'ailee a. contracte. .irectly wit i". (n)

t e

for a. t e

') effect w ere negotiation i"paire. 'y 'reac of .uty4 etc. (Art. 1518) #rt. ()(8. 0 e vali.ity of t e negotiation of a negotia'le .ocu"ent of title is not i"paire. 'y t e fact t at t e negotiation was a 'reac of .uty on t e part of t e person "a?ing t e negotiation4 or 'y t e fact t at t e owner of t e .ocu"ent was .eprive. of t e possession of t e sa"e 'y loss4 t eft4 frau.4 acci.ent4 "ista?e4 .uress4 or conversion4 if t e person to w o" t e .ocu"ent was negotiate. or a person to w o" t e .ocu"ent was su'se7uently negotiate. pai. value t erefor in goo. fait wit out notice of t e 'reac of .uty4 or loss4 t eft4 frau.4 acci.ent4 "ista?e4 .uress or conversion. (n) c) effect w ere .ocu"ent of title not properly negotiate. (Art. 15144 1st par.4 Art. 1515) #rt. ()(7. A person to w o" a .ocu"ent of title as 'een transferre.4 'ut not negotiate.4 ac7uires t ere'y4 as against t e transferor4 t e title to t e goo.s4 su'(ect to t e ter"s of any agree"ent wit t e transferor. 9f t e .ocu"ent is non*negotia'le4 suc person also ac7uires t e rig t to notify t e 'ailee w o issue. t e .ocu"ent of t e transfer t ereof4 an. t ere'y to ac7uire t e .irect o'ligation of suc 'ailee to ol. possession of t e goo.s for i" accor.ing to t e ter"s of t e .ocu"ent. /rior to t e notification to suc 'ailee 'y t e transferor or transferee of a non*negotia'le .ocu"ent of title4 t e title of t e transferee to t e goo.s an. t e rig t to ac7uire t e o'ligation of suc 'ailee "ay 'e .efeate. 'y t e levy of an attac "ent of e;ecution upon t e goo.s 'y a cre.itor of t e transferor4 or 'y a notification to suc 'ailee 'y t e transferor or a su'se7uent purc aser fro" t e transfer of a su'se7uent sale of t e goo.s 'y t e transferor. (n) #rt. ()(). A ere a negotia'le .ocu"ent of title is transferre. for value 'y .elivery4 an. t e en.orse"ent of t e transferor is essential for negotiation4 t e transferee ac7uires a rig t against t e transferor to co"pel i" to en.orse t e .ocu"ent unless a contrary intention appears. 0 e negotiation s all ta?e effect as of t e ti"e w en t e en.orse"ent is actually "a.e. (n) v. warranties 'y seller of t e .ocu"ents of title (Art. 151:*151)) #rt. ()(:. A person w o for value negotiates or transfers a .ocu"ent of title 'y en.orse"ent or .elivery4 inclu.ing one w o assigns for value a clai" secure. 'y a .ocu"ent of title unless a contrary intention appears4 warrants# (1) 0 at t e .ocu"ent is genuine5 (3) 0 at e as a legal rig t to negotiate or transfer it5 ($) 0 at e as ?nowle.ge of no fact w ic woul. i"pair t e vali.ity or wort of t e .ocu"ent5 an. (4) 0 at e as a rig t to transfer t e title to t e goo.s an. t at t e goo.s are "erc anta'le or fit for a particular purpose4 w enever suc warranties woul. ave 'een i"plie. if t e contract of t e parties a. 'een to transfer wit out a .ocu"ent of title t e goo.s represente. t ere'y. (n) #rt. ()(+. 0 e en.orse"ent of a .ocu"ent of title s all not "a?e t e en.orser lia'le for any failure on t e part of t e 'ailee w o issue. t e .ocu"ent or previous en.orsers t ereof to fulfill t eir respective o'ligations. (n) vi. rig ts of cre.itors against t e goo.s (Arts. 151%*153+) #rt. ()(9. 9f goo.s are .elivere. to a 'ailee 'y t e owner or 'y a person w ose act in conveying t e title to t e" to a purc aser in goo. fait for value woul. 'in. t e owner an. a negotia'le .ocu"ent of title is issue. for t e" t ey cannot t ereafter4 w ile in possession of suc 'ailee4 'e attac e. 'y garnis "ent or ot erwise or 'e levie. un.er an e;ecution unless t e .ocu"ent 'e first surren.ere. to t e 'ailee or its negotiation en(oine.. 0 e 'ailee s all in no case 'e co"pelle. to .eliver up t e actual possession of t e goo.s until t e .ocu"ent is surren.ere. to i" or i"poun.e. 'y t e court. (n) #rt. ()-*. A cre.itor w ose .e'tor is t e owner of a negotia'le .ocu"ent of title s all 'e entitle. to suc ai. fro" courts of appropriate (uris.iction 'y in(unction an. ot erwise in attac ing suc .ocu"ent or in satisfying t e clai" 'y "eans t ereof as is allowe. at law or in e7uity in regar. to property w ic cannot rea.ily 'e attac e. or levie. upon 'y or.inary legal process. (n) 6. Fon*negotia'le i. ow transferre. (Art. 1511) #rt. ()((. A .ocu"ent of title w ic is not in suc for" t at it can 'e negotiate. 'y .elivery "ay 'e transferre. 'y t e ol.er 'y .elivery to a purc aser or .onee. A non*negotia'le .ocu"ent cannot 'e negotiate. an. t e en.orse"ent of suc a .ocu"ent gives t e transferee no a..itional rig t. (n) ii. effect of transfer (Art. 1514) #rt. ()(7. A person to w o" a .ocu"ent of title as 'een transferre.4 'ut not negotiate.4 ac7uires t ere'y4 as against t e transferor4 t e title to t e goo.s4 su'(ect to t e ter"s of any agree"ent wit t e transferor. 9f t e .ocu"ent is non*negotia'le4 suc person also ac7uires t e rig t to notify t e 'ailee w o issue. t e .ocu"ent of t e transfer t ereof4 an. t ere'y to ac7uire t e .irect o'ligation of suc 'ailee to ol. possession of t e goo.s for i" accor.ing to t e ter"s of t e .ocu"ent. /rior to t e notification to suc 'ailee 'y t e transferor or transferee of a non*negotia'le .ocu"ent of title4 t e title of t e transferee to t e goo.s an. t e rig t to ac7uire t e o'ligation of suc 'ailee "ay 'e .efeate. 'y t e levy of an attac "ent of e;ecution upon t e goo.s 'y a cre.itor of t e transferor4 or 'y a notification to suc 'ailee 'y t e transferor or a su'se7uent purc aser fro" t e transfer of a su'se7uent sale of t e goo.s 'y t e transferor. (n) XVI. Special /a!s 7. <residential Decree 3o. $5 , secs. #%-#& /1!S9,!F09AB ,!C1!! Fo. %5) Iuly 134 1%):# H1!GEBA09FG 0H! SAB! &6 SEB,9C9S9&F B&0S AF, C&F,&29F9E2S4 /1&C9,9FG /!FAB09!S 6&1 C9&BA09&FS 0H!1!&6G Section -<. Fon*6orfeiture of /ay"ents. Fo install"ent pay"ent "a.e 'y a 'uyer in a su'.ivision or con.o"iniu" pro(ect for t e lot or unit e contracte. to 'uy s all 'e forfeite. in favor of t e owner or .eveloper w en t e 'uyer4 after .ue notice to t e owner or .eveloper4 .esists fro" furt er pay"ent .ue to t e failure of t e owner or .eveloper to .evelop t e su'.ivision or con.o"iniu" pro(ect accor.ing to t e approve. plans an. wit in t e ti"e li"it for co"plying wit t e sa"e. Suc 'uyer "ay4 at is option4 'e rei"'urse. t e total a"ount pai. inclu.ing a"orti@ation interests 'ut e;clu.ing .elin7uency interests4 wit interest t ereon at t e legal rate. Section -7. 6ailure to pay install"ents. 0 e rig ts of t e 'uyer in t e event of t is failure to pay t e install"ents .ue for reasons ot er t an t e failure of t e owner or .eveloper to .evelop t e pro(ect s all 'e governe. 'y 1epu'lic Act Fo. :553.

5$

A ere t e transaction or contract was entere. into prior to t e effectivity of 1epu'lic Act Fo. :553 on August 3:4 1%)34 t e .efaulting 'uyer s all 'e entitle. to t e correspon.ing refun. 'ase. on t e install"ents pai. after t e effectivity of t e law in t e a'sence of any provision in t e contract to t e contrary. .. .ul2 ;ales La, >7ct 3o. %$5#) AF AC0 0& 1!GEBA0! 0H! SAB!4 01AFS6!14 2&10GAG! &1 ASS9GF2!F0 &6 G&&,S4 AA1!S4 2!1CHAF,9S!4 /1&C9S9&FS &1 2A0!19ABS4 9F BEB-4 AF, /1!SC19B9FG /!FAB09!S 6&1 0H! C9&BA09&F &6 0H! /1&C9S9&FS 0H!1!&6 Approve.# +1 ,ece"'er 1%)3 Section (. 0 is Act s all 'e ?nown as R0 e Bul? Sales Baw.R Sec. -. Sale an. transfer in 'ul?. Y Any sale4 transfer4 "ortgage or assign"ent of a stoc? of goo.s4 wares4 "erc an.ise4 provisions4 or "aterials ot erwise t an in t e or.inary course of tra.e an. t e regular prosecution of t e 'usiness of t e ven.or4 "ortgagor4 transferor4 or assignor4 or sale4 transfer4 "ortgage or assign"ent of all4 or su'stantially all4 of t e 'usiness or tra.e t eretofore con.ucte. 'y t e ven.or4 "ortgagor4 transferor4 or assignor4 or of all4 or su'stantially all4 of t e fi;tures an. e7uip"ent use. in an. a'out t e 'usiness of t e ven.or4 "ortgagor4 transferor4 or assignor4 s all 'e .ee"e. to 'e a sale an. transfer in 'ul?4 in conte"plation of t is Act# /rovi.e.4 owever4 0 at if suc ven.or4 "ortgagor4 transferor or assignor4 pro.uces an. .elivers a written waiver of t e provisions of t is Act fro" is cre.itors as s own 'y verifie. state"ents4 t en4 an. in t at case4 t e provisions of t is section s all not apply. Sec. <. State"ent of cre.itors. Y 9t s all 'e t e .uty of every person w o s all sell4 "ortgage4 transfer4 or assign any stoc? of goo.s4 wares4 "erc an.ise4 provisions or "aterials in 'ul?4 for cas or on cre.it4 'efore receiving fro" t e ven.ee4 "ortgagee4 or is4 or its agent or representative any part of t e purc ase price t ereof4 or any pro"issory note4 "e"oran.u"4 or ot er evi.ence t erefor4 to .eliver to suc ven.ee4 "ortgagee4 or agent4 or if t e ven.ee4 "ortgagee4 or agent 'e a corporation4 t en to t e presi.ent4 vice* presi.ent4 treasurer4 secretary or "anager of sai. corporation4 or4 if suc ven.ee or "ortgagee 'e a partners ip fir"4 t en to a "e"'er t ereof4 a written state"ent4 sworn to su'stantially as ereinafter provi.e.4 of t e na"es an. a..resses of all cre.itors to w o" sai. ven.or or "ortgagor "ay 'e in.e'te.4 toget er wit t e a"ount of in.e'te.ness .ue or owing4 or to 'eco"e .ue or owing 'y sai. ven.or or "ortgagor to eac of sai. cre.itors4 w ic state"ent s all 'e verifie. 'y an oat to t e following effect# /H9B9//9F! 9SBAF,S /1&C9FC! &1 C90L &6 PPPPPPPPPPPPPPPPPZ Before "e4 t e un.ersigne. aut ority4 personally appeare. PPPPPPPPPPPPPPPPPP (ven.or4 "ortgagor4 agent or representative4 as t e case "ay 'e)4 'earing ce.ula Fo. PPPPPPPPPPPP issue. at PPPPPPPPPPP on t e .ay of PPPPPPPPPPPPP w o4 'y "e 'eing first .uly sworn4 upon is oat 4 .eposes an. states t at t e foregoing state"ent contains t e na"es of all of t e cre.itors of PPPPPPPPPPPPPPPP (ven.or4 or "ortgagor) toget er wit t eir a..resses4 an. t at t e a"ount set opposite eac of sai. respective na"es4 is t e a"ount now .ue an. owing4 an. w ic s all 'eco"e .ue an. owing 'y PPPPPPPPPPPPP (ven.or or "ortgagor) to suc cre.itors4 an. t at t ere are no cre.itors ol.ing clai"s .ue or w ic s all 'eco"e .ue4 for or on account of goo.s4 wares4 "erc an.ise4 provisions or "aterials purc ase. upon cre.it or on account of "oney 'orrowe.4 to carry on t e 'usiness of w ic sai. goo.s4 wares4 "erc an.ise4 provisions or "aterials are a part4 ot er t an as set fort in sai. state"ent. Su'scri'e. an. sworn to 'efore "e t is PPPPPPP .ay of PPPPPP4 1%PPP4 at PPPPPPPP Sec. 7. 6rau.ulent an. voi. sale4 transfer or "ortgage. Y A enever any person s all sell4 "ortgage4 transfer4 or assign any stoc? of goo.s4 wares4 "erc an.ise4 provisions or "aterials4 in 'ul?4 for cas or on cre.it4 an. s all receive any part of t e purc ase price4 or any pro"issory note4 or ot er evi.ence of in.e'te.ness for sai. purc ase price or a.vance upon "ortgage4 wit out aving first .elivere. to t e ven.ee or "ortgagee or to is or its agent or representative4 t e sworn state"ent provi.e. for in section t ree ereof4 an. wit out applying t e purc ase or "ortgage "oney of t e sai. property to t e pro rata pay"ent of t e 'ona fi.e clai" or clai"s of t e cre.itors of t e ven.or or "ortgagor4 as s own upon suc sworn state"ent4 e s all 'e .ee"e. to ave violate. t is Act4 an. any suc sale4 transfer or "ortgage s all 'e frau.ulent an. voi.. Sec. ). 9nventory. Y 9t s all 'e t e .uty of every ven.or4 transferor4 "ortgagor4 or assignor4 at least ten .ays 'efore t e sale4 transfer or e;ecution of a "ortgage upon any stoc? of goo.s4 wares4 "erc an.ise4 provisions or "aterials4 in 'ul?4 to "a?e a full .etaile. inventory t ereof an. to preserve t e sa"e s owing t e 7uantity an.4 so far as is possi'le wit t e e;ercise of reasona'le .iligence4 t e cost price to t e ven.or4 transferor4 "ortgagor or assignor of eac article to 'e inclu.e. in t e sale4 transfer or "ortgage4 an. notify every cre.itor w ose na"e an. a..ress is set fort in t e verifie. state"ent of t e ven.or4 transferor4 "ortgagor4 or assignor4 at least ten .ays 'efore transferring possession t ereof4 personally or 'y registere. "ail4 of t e price4 ter"s con.itions of t e sale4 transfer4 "ortgage4 or assign"ent. Sec. :. Any ven.or4 transferor4 "ortgagor or assignor of any stoc? of goo.s4 wares4 "erc an.ise4 provisions or "aterials4 in 'ul?4 or any person acting for4 or on 'e alf of any suc ven.or4 transferor4 "ortgagor4 or assignor4 w o s all ?nowingly or willfully "a?e4 or .eliver or cause to 'e "a.e or .elivere.4 a state"ent4 as provi.e. for in section t ree ereof4 w ic s all not inclu.e t e na"es of all suc cre.itors4 wit t e correct a"ount .ue an. to 'eco"e .ue to eac of t e"4 or s all contain any false or untrue state"ent4 s all 'e .ee"e. to ave violate. t e provisions of t is Act. Sec. +. 9t s all 'e unlawful for any person4 fir" or corporation4 as owner of any stoc? of goo.s4 wares4 "erc an.ise4 provisions or "aterials4 in 'ul?4 to transfer title to t e sa"e wit out consi.eration or for a no"inal consi.eration only. Sec. 8. Fot ing in t is Act containe. s all apply to e;ecutors4 a."inistrators4 receivers4 assignees in insolvency4 or pu'lic officers4 acting un.er (u.icial process. Sec. 9. 0 e sworn state"ent containing t e na"es an. a..resses of all cre.itors of t e ven.or or "ortgagor provi.e. for in section t ree of t is Act4 s all 'e registere. in t e Bureau of Co""erce. 6or t e registration of eac suc sworn state"ent a fee of five pesos s all 'e c arge. to t e ven.or or "ortgagor of t e stoc? of goo.s4 wares4 "erc an.ise4 provisions or "aterials4 in 'ul?. Sec. (*. 0 e provisions of t is Act s all 'e a."inistere. 'y t e ,irector of t e Bureau of Co""erce an. 9n.ustry4 w o is ere'y e"powere.4 wit t e approval of t e ,epart"ent Hea.4 to prescri'e an. a.opt fro" ti"e to ti"e suc rules an. regulations as "ay 'e .ee"e. necessary for t e proper an. efficient enforce"ent of t e provisions of t is Act. Sec. ((. Any person violating any provision of t is Act s all4 upon conviction t ereof4 'e punis e. 'y i"prison"ent not less t an si; "ont s4 nor "ore t an five years4 or fine. in su" not e;cee.ing five t ousan. pesos4 or 'ot suc i"prison"ent an. fine4 in t e .iscretion of t e court. Sec. (-. 0 is Act s all ta?e effect on its approval. 6. Retail *rade Liberali@ation 7ct >Republic 7ct 3o. 8 '#), sec. % and 5 AF AC0 B9B!1AB9T9FG 0H! 1!0A9B 01A,! BES9F!SS4 1!/!AB9FG 6&1 0H! /E1/&S! 1!AB9FG 6&1 0H! /E1/&S! 1!/EBB9C AC0 F&. 118+4 AS A2!F,!,4 AF, 6&1 &0H!1 /E1/&S!S Section <. ,efinition. * As use. in t is Act. (1) R1etail tra.eR s all "ean any act4 occupation or calling of a'itually selling .irect to t e general pu'lic "erc an.ise4 co""o.ities or goo. for consu"ption4 'ut t e restriction of t is law s all not apply to t e following# (a) Sales 'y "anufacturer4 processor4 la'orer4 or wor?er4 to t e general pu'lic t e pro.ucts "anufacture.4 processe. or pro.ucts 'y i" if is capital .ose not e;cee. &ne un.re. t ousan. pesos(1++4+++.++)5 (') Sales 'y a far"er or agriculturist selling t e pro.ucts of is far"5 54

(c) Sales in restaurant operations 'y a otel owner or inn*?eeper irrespective of t e a"ount capital# provi.e.4 t at t e restaurant is inci.ental to t e otel 'usiness5 an. (.) Sales w ic are li"ite. only to pro.ucts "anufacture.4 processe. or asse"'le. 'y a "anufacture.4 processe. or asse"'le. 'y a "anufacturer t oug a single outlet4 irrespective of capitali@ation. (3) RHig *en. or lu;ury goo.sR s all refer to goo.s w ic are not necessary for life "aintenance an. w ose .e"an. is generate. in large part 'y t e ig er inco"e groups. Bu;ury goo.s s all inclu.e4 'ut are not li"ite. to pro.ucts suc as5 (ewelry4 'ran.e. or .esigner clot ing an. footwear4 wearing apparel4 leisure an. sporting goo.s4 electronics an. ot er personal effects. Section ). 6oreign !7uity /articipation. * 6oreign*owne. partners ips4 associations an. corporation for"e. an. organi@e. un.er t e laws of t e / ilippines "ay4 upon registration wit t e Securities an. !;c ange Co""ission (S!C) an. t e ,epart"ent of 0ra.e an. 9n.ustry (,09)4 or in case of foreign owne. single proprietors ips4 wit t e ,094 !ngage or invest in t e retail tra.e 'usiness4 su'(ect to t e following categories. Category A > !nterprises wit pai.*up capital of t e e7uivalent in / ilippine /eso of t e t an 0wo "illion five un.re. t ousan. ES .ollars (ES[345++4+++.++) s all 'e reserve. e;clusively for 6ilipino citi@ens an. corporations w olly owne. 'y 6ilipino citi@ens. Category B > !nterprises wit a "ini"u" pai.*up capital of t e e7uivalent in / ilippine /esos of two "illion five un.re. t ousan. ES .ollar (ES[345++4+++.++) 'ut less t an Seven "illion five un.re. t ousan. ES .ollars (ES[)45++4+++.++) "ay 'e w olly owne. 'y foreigners e;cept for t e first two (3) years after t e effectivity of t is Act w erein foreign participation s all 'e li"ite. to not "ore t an si;ty percent (:+\) of total e7uity. Category C > !nterprises wit a pai.*up capital of t e e7uivalent in / ilippine /esos of Seven "illion five un.re. t ousan. ES .ollars (ES[)45++4+++.++)4 or "ore "ay 'e w olly owne. 'y foreigners# /rovi.e.4 owever4 0 at in no case s all t e invest"ents for esta'lis ing a store in vest"ents for esta'lis ing a store in Categories B an. C 'e less t an t e e7uivalent in / ilippine pesos of !ig t un.re. t irty t ousan. ES .ollars (ES[8$+4+++.++). Category , > !nterprises speciali@ing in ig *en. or lu;ury pro.ucts wit a pai.*up capital of t e e7uivalent in / ilippine /esos of 0wo un.re. fifty t ousan. ES .ollars (ES[35+4+++.++) per store "ay 'e w olly owne. 'y foreigners. 0 e foreign investor s all 'e re7uire. to "aintain in t e / ilippines t e full a"ount of t e prescri'e. "ini"u" capital unless t e foreign investor as notifie. t e S!C an. t e ,09 of its intention to repatriate its capital an. cease operations in t e / ilippines. 0 e actual use in / ilippine operations of t e inwar.ly re"itte. "ini"u" capital re7uire"ent s all 'e "onitore. 'y t e S!C. 6ailure to "aintain t e full a"ount of t e prescri'e. "ini"u" capital prior to notification of t e S!C an. t e ,094 s all su'(ect t e foreign investor to penalties or restrictions on any future tra.ing activities8'usiness in t e / ilippines. 6oreign retail stores s all secure a certification fro" t e Bang?o Sentral ng /ilipinas (BS/) an. t e ,094 w ic will verify or confir" inwar. re"ittance of t e "ini"u" re7uire. capital invest"ents. XVII. Practice notes: overvie! of the typical sale transaction0contract A. A at appens in a typical sale transaction i. ,ue .iligence ii. Fegotiation an. .rafting of contract iii. !;ecution of contract iv. Co"pliance wit (or waivers of) con.itions prece.ent v. Closing vi. /erfor"ance of post*closing covenants B. &verview# ow a typical sale an. purc ase agree"ent loo?s li?e i. /arties ii. 1ecitals iii. &perative provisions on sale iv. Con.itions for closing v. Covenants vi. 1epresentations an. warranties vii. 0er"ination viii. 2iscellaneous provisions i;. Signature page ;. Fotari@ation

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