Law on Sales Overview

Study Notes

Law on Sales

Sale is a contract perfected by mere consent
Parties involved are the vendor (seller) and vendee (buyer)
Vendor's obligation: deliver and transfer ownership
Vendee's obligation: pay the price
Contract of sale is consensual
Essential elements:
- Consent (meeting of the minds): agreement to transfer ownership in exchange for the price
- Determinate subject matter (Object): clearly defined item being sold
- Price certain in money or its equivalent (Consideration): agreed-upon price
Sale can be absolute or conditional
Sales contract can be in writing or orally
Sale of real property (land, building) and movable property above 500 pesos must be in writing to be enforceable
Sale of immovable property through an agent requires written authorization. Otherwise, the sale is void.
Ownership transfers upon actual or constructive delivery
Absolute sale: ownership transfers to the vendee upon delivery of the property, regardless of payment
Conditional sale: ownership remains with the vendor until full payment of the purchase price
Two Kinds of Sale
- Absolute sale: title transfers upon delivery, no conditions on payment date
- Conditional sale: ownership remains with vendor until full payment, title transfer condition
Ownership transfer in sales (Article 1477): ownership of the item sold is transferred when the item is delivered
Sales made by those not possessing ownership:
- Seller without ownership has no better title
- Valid sale if based on owner's consent or authority
Sale under statutory power or court order: a seller without ownership can transfer ownership when ordered by a court
Sale in a merchant's store, fair, or market: sale valid
Remedies under the Recto Law (applicable to personal property):
- Vendor (seller) may seek payment
- Cancel if multiple installments are missed (seller can cancel the sale)
- Foreclose a chattel mortgage (if one was constituted)
Remedies are alternative, not cumulative.
The Recto Law protects installment buyers of real estate
Realty Installment Buyer Act (Maceda Law): buyer's rights when paying installments:
- Buyer with 2 years of payments
  - Grace period for missed payments (one month grace period per year of payment)
  - Right to pay full amount and avoid cancellation if missed payments
  - Right to surrender property or payments; seller must refund; 50% of payments if less than two years
  - If the buyer is in default after two years of payments the seller can cancel
- If less than 2 years in installments:
  - 60 days grace period
Buyers can sell or assign their rights prior to cancellation or foreclosures
Vendor obligations: transfer ownership, deliver the item, warrant the item, take care of the item, pay costs of execution and registration unless otherwise stated