Questions and Answers
What is the minimum price of a sale that requires a written instrument under the Statute of Frauds?
P500
What is the consequence of a contract that violates the Statute of Frauds?
The contract is valid but unenforceable
What is a condition for a contracting party to compel the other to observe a specific form, as stated in Art. 1357?
The contract is valid and enforceable
What is the right of a contracting party under Art. 1357?
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What is the requirement for a contract to be enforceable under the Statute of Frauds?
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What is the consequence of a contract that does not violate the Statute of Frauds?
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What is the general rule on the amount that can be successfully demanded by the seller?
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What is the effect of exercising one of the alternative remedies?
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What is the minimum number of default installments required for the seller to exact fulfillment of the obligation?
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What happens if there is a deficiency in the amount collected at the levy on execution?
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What is the purpose of a chattel mortgage?
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What happens when the seller forecloses the mortgage but the sum obtained is less than what the buyer still owes?
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What happens to the contract if the third person or persons are unable or unwilling to fix the price?
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In what circumstance may the courts fix the price?
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What is the consequence if a party is prevented from fixing the price or terms due to the fault of the other party?
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What does gross inadequacy of price not affect in a contract of sale?
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What is the rule regarding absolutely simulated contracts?
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What can be inferred from the example of the Igorot selling a mining claim for a ridiculously low sum?
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Study Notes
Contract Execution
- A party to a contract can compel the other party to observe the required form, such as a public instrument, once the contract is perfected (Art. 1357).
- This right can be exercised simultaneously with the action upon the contract.
Statute of Frauds
- The Statute of Frauds applies if the price of the sale is P500 or more, and the sale must be in writing (Art. 1403, No. 2).
- If the price is less than P500, an oral sale is enforceable.
Alternative Remedies
- Remedies are alternative, and exercising one remedy waives the right to resort to others.
- If one remedy is fully exercised, another remedy can still be availed of.
Installment Plan and Chattel Mortgage
- The seller has the right to exact fulfillment of the obligation to pay if the buyer defaults on an installment payment (Art. 1484(1)).
- The seller can recover the defaulted installments, and if there is a deficiency, it can still be collected.
- Foreclosure of a chattel mortgage is not required for the seller to exact fulfillment of the obligation.
Uncertain Price
- If the price is uncertain, the contract is inefficacious, unless the parties subsequently agree upon the price.
- If a third person or persons are unable to fix the price, the court may fix the price.
Gross Inadequacy of Price
- Gross inadequacy of price does not affect a contract of sale, except as it may indicate a defect in the consent or that the parties intended a donation or some other act or contract (Art. 1470).
- A contract is not void or voidable simply because the price is inadequate.
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