ESSENTIAL REQUISITES OF A CONTRACT OF SALE

1. Consentmeeting of minds to transfer ownership in exchange for the price

2. Determinate Subject Matter object certain, licit, determinate or capable of being determinate without the necessity of a new of further
agreement
3. Price for the seller: acquisition of the price certain in its money or equivalent. For the buyer: acquisition of the thing which is the object of
the contract

Natural elements inherent and are deemed to exist even in the absence of a contrary provision (ex. Warranties)
Accidental elements dependent on the parties stipulation (ex. Penalties, interest, time or place of payment)

Stages of a contract of Sale

1. Negotiation offer and acceptance
2. Perfection agreement or meeting of the offer and
3. Consummation performance (actual or constructive)

consummatio
negotiation perfection
n

CHARACTERISTICS OF A CONTRACT OF SALE

1. Nominate -Has a particular name and form as prescribed in law
Only a legal justification for performance
Only a title, not a proof of ownership
Not a mode of transferring ownership the most a sale does is create the obligation to transfer ownership
Title is not as significant as substance
2. Principal
It can stand on its own unlike an accessory contract
Note: sale is a title, not a mode of transferring ownership
It is delivery that transfers ownership
3. Consensual Art. 1475 founded upon and perfected by mere consent of the contracting parties; voluntarily given, agreement of the parties
to buy and sell
Intention of the parties is controlling; perfected by mere consent

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 Consequence: Actual delivery of the subject matter and payment of the price agreed upon are not necessary components to establish the
existence of a valid contract of dale. Non-performance does not void a sale but becomes legal basis for specific performance or rescission,
with damages in either case.
4. Bilateral and reciprocal-- Art. 1169 (2) and Art. 1191 (1)
It is a contract in which both the contracting parties are bound to fulfill the obligations reciprocally towards each other
Consequence: power to rescind is implied in bilateral contracts, doesnt have to be stipulates for the innocent party to invoke the remedy
5. Onerous
It imposes a valuable consideration, which is a price certain in money or its equivalent. Cf. Gratuitous contract
Consequence: Art. 1378 all doubts resolved in greater reciprocity of interests
6. Commutativecontract in which each of the contracting parties gives a thing of value and receives an equivalent. Equal value is exchanged
for equal value.
Test: so long as the party believes in all honesty that he is receiving equal value for what he gave up for, then it complies with the
commutative character of the sale, and would not be deemed a donation or aleatory contract
Commutative nature should not be pushed to absurdity
See: Art. 1355 and Art. 1470

SALE DISTINGUISHED FROM OTHER CONTRACTS

1. Donation Arts. 745 and 1471
Act of liberality
Price simulated = void, but if it is shown to be a donation or some other act or contract its valid
SALE
Onerous Contract
Perfected by mere consent
Property sold is replaced by
the equivalent monetary
consideration; no diminution
of the sellers estate
DONATION
Gratuitous contract
Requires consent and must
comply with the formalities
mandated by law for its
validity
Requires that there be
diminution of the estate of
one party and enrichment
for the other

2. Barter or Exchange Arts. 1468, 1638 to 1641

SALE BARTER
A thing is given in exchange A thing is given in exchange
for money or its equivalent for another thing
Apply law on sales Apply law on sales
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 If the consideration is partly in money and partly in another thing
1. The transaction is characterized by the manifest intention of the
parties
2. If there is no manifest intention
BARTER if value of thing > value of money
SALE if value of the thing = or < value of money
Rule on money exchange
If local currency is exchanged for foreign currency there is purchase and sale
If the local currency is exchanged with other denominations of the local currency there is barter
Rule is the same
3. Contract for Piece of Work Arts. 1467, 1713 to 1715
Labor or materials for a piece of work: the thing transferred is one not in existence and which would never have existed but for the order of
the party desiring to acquire it
In a contract of sale: the thing transferred is one which would have been the subject of sale to some other person, even if the order had not
been given
SALE CONTRACT FOR A PIECE OF WORK
The thing transferred is one The thing transferred is not
which would have existed in existence and would
and would have been the never have existed but for
subject of a sale to some the order of the party
other person desiring to acquire it
The primary objective is a The services dominate the
sale of the manufactured contract even though there
item it is a sale of goods is a sale of goods involved
even though the item is Not within the statute of
manufactured by labor frauds
furnished by the seller and
upon previous order of the
customer
Governed by the statute of
frauds

4. Agency to Buy or Sell Arts. 1466, 1868

SALE AGENCY TO BUY AND SELL
Essence is the transfer of Essence is the delivery to
title or agreement to transfer the agent of the goods not
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 it for the price paid or
performed
Not unilaterally revocable
The buyer himself pays for
the price of the object,
which constitutes his main
obligation
The buyer, after delivery,
becomes the owner of the
subject matter
Seller warrants
Contract of agency
5. Dacion en Pago Art. 1245
SALE
No pre-existing credit
Obligations are created
Consideration of the seller:
price
Buyer: acquisition of the
debt
6. Lease Arts. 1643
as the agents property but
of the principal who remains
the owner and has the right
to control
Revocable even in the
presence of an irrevocability
clause because of the
fiduciary relationship
Agent is not obliged to pay
the price, and is merely
obliged to deliver the price
The agent who effects the
sale assumes no personal
liability as long as he acts
within his authority and in
the name of the principal;
however, the agent can
voluntarily bind himself to
the warranties of the seller
DACION EN PAGO
Pre-existing credit
Obligations are
extinguished
Consideration of debtor:
extinguishment of debt
Creditor: acquisition of
object in lieu of the original
credit
Less freedom in
determining price
The payment is received by
the debtor before the
contract is perfected