108 Questions
What does it mean when goods are identified and agreed upon at the time a contract of sale is made?
Specific goods
Which term includes all chattels personal but not things in action or money of legal tender in the Philippines?
Goods
What does 'document of title of goods' refer to?
Document of negotiable instrument
In legal terms, what is an assignment of credit?
Assignment of rights
In legal redemption, the right of redemption of co-owners excludes that of adjoining owners.
False
If the purchaser retains for himself a part of the purchase price, this is known as:
Equitable mortgage
In case of doubt, courts are generally inclined to construe a transaction purporting to be a sale as an equitable mortgage. Which of the following statements is true?
Both are true
Which is the correct term for being subrogated in place of one who acquires a thing by purchase or other transaction?
Legal redemption
What term is used to include all chattels personal but not things in action or money of legal tender?
Goods
What happens when the buyer's refusal to accept goods is without just cause?
Implied acceptance
Which of the following may not be the object of a contract of sale?
The sale of a vain hope or expectancy.
The following are the rules in innominate contract, except:
The rules governing the most analogous nominate contracts.
Which of the following is correct when one party offers to sell his house for P1M and the other party requests if they would accept P995,000?
Y's response is a counter-offer because it is not absolute.
Match the following terms with their definitions:
Onerous = Each party aspires to procure benefit through equivalent. Unilateral = One party proposes to give a benefit without compensation. Bilateral = Give rise to reciprocal obligations for both parties. Gratuitous = Offer for benefit with no equivalent.
One of the parties delivers to another, either something not consumable so that the latter may use the same for a certain time and return it. This is a:
contract of commodatum
Means not only the delivery of money but also the performance, in any other manner, of an obligation. This is:
payment
In a situation where X paid the debt of D without D's knowledge and G is the guarantor, X cannot compel G to pay. This is an example of:
X cannot compel G to pay him.
The following debts cannot be compensated, except:
contract arising from contract of mutuum
In relation to the acquisition and transfer of ownership, it should be noted that sale is not a mode, but merely a title.
True
The parties need not agree on the manner of payment of the price of the property to give rise to a binding and enforceable contract of sale or contract to sell.
False
If the consideration of the contract consists partly in money, and partly in another thing, the transaction shall be?
Only I is true
It shall be considered as part of the price and as proof of the perfection of the contract.
Earnest money
Which of the following are the requisites of a valid dation in payment?
There must be a meeting of the minds between the parties
A contract of sale is classified as a consensual contract, which means that the sale is perfected by mere consent.
False
In the context of enforcing and reforming instruments embodying contracts, what is true?
Both statements are true.
In a contract of mortgage mistakenly documented as a contract of sale with a right of repurchase due to a clerk's fault, what should be done?
The instrument may be reformed because it does not express the true agreement of the parties.
Which of the following is considered a sale of the right to purchase?
Option
Which of the following is not a stage of a contract of sale?
Counter-offer
Which statement is true regarding the reformation of instruments due to drafting errors or misrepresentation?
When the instrument does not express the true intention, the court may order reformation.
Sale by itself does not transfer or affect ownership; the most that sale does is to create the obligation to transfer ownership.
True
In the context of contracts, what is not an example of an essential requisite for validity?
Contracts must have the specified form to be valid and enforceable.
Two or more buyers who are at odds over the rightful ownership of the object must pertain exactly to the same object?
False
In determining the place of delivery when there is no agreement or usage of trade, where does the responsibility fall to?
Buyer's place of business
When goods are delivered to the buyer on approval, when does the ownership of the goods pass to the buyer?
I, II, III are true
In a case of double sale of immovable property, who does the property belong to?
Person with the oldest transfer certificate of title in good faith
Who can negotiate a negotiable document of title?
All of the above
What are the exceptions to the general rule that ownership of the thing sold is acquired upon delivery?
Sale or return
In case of eviction, what right does the vendee not have the right to demand from the vendor?
Expenses of the contract if paid by the vendor
In a sale where the price is fixed based on the price at W's store in La Trinidad Public Market, the price is:
Certain because it has got reference to another thing which is certain.
When A delivers his parcel of land to B in exchange for a car and cash, what type of contract is this?
Sale
What is the term for being deprived of a whole or part of a purchased item due to a prior right or act?
Eviction
Which of the following is not included as an example of relative incapacity?
Demented persons
In a contract of sale, which act involves one party parting with title and possession while the other acquires them?
Delivery
In an oral sale where a ring was sold with delivery and payment terms later, when is the contract perfected?
On the date of agreement on object and price
What is the opposite of constitutum possessorium in a contract?
Traditio brevi manu
Which of the following is not included as an example of relative incapacity?
Deaf-mutes who do not know how to write
When is the seller of goods deemed to be an unpaid seller?
When a bill of exchange received is dishonored
Who among the following cannot acquire by purchase at an auction, even indirectly?
Brothers and sisters
Certain persons under certain circumstances cannot buy certain property. What type of incapacity does this describe?
Relative incapacity
What conditions allow an unpaid seller to rescind a transfer of title and resume ownership of the goods?
Buyer has been in default in payment
When does an unpaid seller lose his lien over goods?
None of the above
In a sale where the price was fixed later and agreed upon, was the sale perfected?
Yes, because the price fixed by one of the parties was accepted by the other.
A contract of sale is normally commutative but not onerous.
False
What is the prescriptive period for actions based on a breach of express warranty if no period is specified in the contract?
4 years
When is a thing considered lost?
It is fully depreciated
For the cause to be valid, it must be lawful such that it is not contrary to law, morals, good customs, public order, or public policy.
True
What is the term for the sale of a thing with potential existence?
Emptio rei speratae
When a thing is lost in part at the time of the sale, what options does the buyer have?
Both are false
What must the object of every contract be?
Determinable as to its kind
What happens if the object of a sales contract is entirely lost at the time of sale?
The contract is without effect
Which statement is true comparing a contract of sale and a contract for a piece of work?
If the thing is manufactured for the general market, it is a contract for a piece of work.
How can a buyer treat a sale when goods have perished substantially at the time of sale?
Both are true
When should a buyer choose between withdrawing from a sales contract or seeking damages in part loss of the object?
Withdraw from the contract
In a sale where a cat gave birth before delivery, who is entitled to the kitten?
Buyer is entitled to the kitten which was born after the sale was agreed upon.
Who has absolute incapacity to enter into a contract of sale?
Guardians holding property
What is the test in determining whether it is a 'contract of sale or a mere option'?
Whether or not the agreement could be specifically enforced.
What is the legal capacity requirement for entering into a contract of sale?
Ability to bind oneself
In contrast to sell, the seller agrees to fulfill the promise to sell the subject property when the entire amount of the purchase price is delivered to him.
True
What is the term for an advance payment that must be deducted from the total price?
Earnest money
What are the limitations placed on lawyers regarding acquiring property or rights involved in litigation?
Prohibited during pendency of the suit
In dation in payment, the undertaking really partakes in one sense of the nature of ____.
barter
In a scenario where more goods are delivered than agreed upon in the sale, what is the status of the contract?
Sale is valid for agreed-upon quantity
Are spouses allowed to sell property to one another?
Both are true
A contract of sale is a consensual contract and is perfected by delivery.
False
Which element is not essential in a contract of sale?
Written contract
What type of incapacity leads to a defective contract of sale?
Absolute incapacity
What are expenses considered indispensable for sustenance, clothing, education, etc.?
Necessaries
The fixing of the price can never be left to the decision of one of the contracting parties.
False
One of the contracting parties obligates himself to transfer the ownership of a determined thing for a price certain. Is this a contract of ____?
Sale
Things having a potential existence may be the object of the contract of sale.
True
A contract to sell may not be considered as a contract of sale if the second essential element is lacking.
True
In the case of fungible goods, there may be a sale of an undivided share of a specific mass even if the quantity is undetermined. Additionally, things subject to a resolutory condition can be the object of a contract of sale. Are both these statements true?
Both statements are true.
The perfection of a contract of sale should not be confused with its consummation.
True
What is the term for a special mode of payment where the debtor offers another thing to the creditor?
Dation in payment
In a sale of immovable by the unit, what happens if the vendor delivers less than the area agreed upon?
The vendee may oblige the vendor to deliver all that may be stated in the contract or demand the proportionate reduction of the purchase price if delivery is not possible
What happens in a sale of immovable if the vendor delivers more area than stated in the contract?
The vendee has the option to accept only the amount agreed upon or to accept the whole area by paying for the additional area at the contract rate
What is the definition of implied warranty?
Implied warranty
What is 'Tradition constitutum possessorium' in terms of legal delivery?
Traditio longa manu
What is the opposite of 'traditio brevi manu'?
Traditio constitutum possessorium
Who is a purchaser in good faith?
Purchaser in good faith
Under what circumstances can a vendor's liability for eviction not be enforced?
The purchaser has been deprived of only the whole of the thing sold
What is the obligation of S as a vendor when selling his only car to B?
To wait for the buyer to pay the price before delivering
What is an express warranty?
Express warranty
What are the obligations of the vendor?
To pay for the expenses for the execution and registration of the contract of sale only if stipulated
When is the sale considered to be made through public instrument?
Legal formalities
Under what circumstances can an unpaid seller resell goods?
The seller expressly reserves the right of resale in case the buyer should default in payment
What is the prescriptive period for actions based on breach of implied warranty?
6 months from the date of delivery
When can a negotiable document of title be negotiated by delivery?
Both are true
What is another term for 'sale on acceptance'?
Sale on approval
What is the proper remedy for B if S sells the same land to C after selling it to B?
Institute an action for damages against S for breach of contract
Did A acquire good title to the shoes bought from a store?
Yes, because it was bought from a store in good faith and for value
What is quasi-delivery?
Issuance of delivery receipt
Which action indicates that goods are no longer 'in transit'?
If the carrier acknowledges to the seller that he holds the goods on his behalf after the arrival at the destination
Under what circumstances does an unpaid seller not have possessory lien?
Where the buyer becomes solvent
What are the warranties on negotiation of a document of title?
None of the above
Who becomes the owner in a case where S sells his land to both B and C?
C is the owner for registering the sale in good faith
In a scenario where S sells his land to B, who then sells it to D before S, who is the rightful owner?
B is the owner because the owner is his seller
What may B claim from S in case S sold his car to B but later sold it to C who took immediate possession?
B may claim damages from S for breach of the contract of sale
Study Notes
Insolvency and Bankruptcy
- A person who has ceased to pay debts in the ordinary course of business or cannot pay debts as they become due is considered insolvent.
- A bankrupt is a person who has been declared insolvent by a court.
Types of Goods
- Specific goods are goods identified and agreed upon at the time a contract of sale is made.
- Goods include all chattels personal, but not things in action or money of legal tender in the Philippines.
- Goods also include growing fruits or crops.
Assignment of Credits
- Assignment of credits is an agreement where the owner of a credit, known as the assignor, transfers his credit and accessory rights to another, known as the assignee, without the consent of the debtor.
- The assignee acquires the power to enforce the credit to the same extent as the assignor could enforce it against the debtor.
- The vendor in good faith is responsible for the existence and legality of the credit at the time of the sale, unless it was sold as doubtful.
- The vendor in good faith is not responsible for the solvency of the debtor, unless it was so expressly stipulated or unless the insolvency was prior to the sale and of common knowledge.
Redemption
- Conventional redemption is a right to repurchase reserved by the vendor in a deed of sale, with the obligation to return to the vendee the price of the sale, the expenses of the contract, and the necessary and useful expenses made on the thing sold.
- Legal redemption is a right to redeem granted by law to co-owners, adjoining owners, or creditors.
- In conventional redemption, if there is no period of redemption agreed upon, it shall last for one year only from the time of the assignment.
- In legal redemption, the right of redemption of co-owners excludes that of adjoining owners.
Documents of Title
- A document of title of goods is a document that proves the possession or control of goods, or authorizes the possessor of the document to transfer or receive the goods.
Warranty of Assignor
- The assignor warrants the existence of the credit at the time of assignment, and its legality, unless the assignor sold it as doubtful.
- The assignor also warrants the solvency of the debtor, unless it was so expressly stipulated or unless the insolvency was prior to the sale and of common knowledge.
Effects of Breach of Warranty
- The buyer may accept or keep the goods and set up against the seller the breach of warranty by way of recoupment in diminution or extinction of the price.
- The buyer may refuse to accept the goods and maintain an action against the seller for damages for the breach of warranty.
Acceptance of Goods
- The buyer is bound to accept delivery and to pay the price of the thing sold at the time and place stipulated in the contract.
- The buyer has a reasonable opportunity to examine the goods upon delivery to ascertain whether they are in conformity with the contract before accepting the same.
- Acceptance of the goods by the buyer shall discharge the seller from liability in damages for breach of any warranty in the contract of sale.
Implied and Express Acceptance
- Implied acceptance occurs when the buyer does any act in relation to the goods which is inconsistent with the ownership of the seller.
- Express acceptance occurs when the buyer intimates to the seller that he has accepted the goods.
- Implied acceptance also occurs when, after the lapse of a reasonable time, the buyer retains the goods without intimating to the seller that he has rejected them.### Delivery of Goods
- Traditio brevi manu is a mode of delivery where the buyer already has possession of the object but under another title (e.g., lessee in a contract of lease).
- Actual delivery occurs when the thing sold is placed under the control and possession of the vendee.
- Symbolical tradition involves the use of a symbol to represent the thing delivered.
- Traditio constitutum possessorium is a mode of delivery where the buyer already has possession of the object but under another capacity.
Obligations of the Vendor
- The vendor's obligations include:
- To deliver the thing sold
- To warrant the object sold against eviction and hidden defects
- To take care of the object sold pending delivery
- To transfer ownership of the thing sold at the time of meeting of the minds
Warranty Against Hidden Defects
- A warranty is a statement or representation made by the seller relating to the character, quality, or title of the goods.
- Express warranty is a statement or representation made by the seller contemporaneously and as part of the contract of sale.
- Implied warranty is a warranty that arises from the nature of the transaction or the relative situation or circumstances of the parties.
Liability of the Vendor
- The vendor is liable for eviction if the buyer is deprived of the whole of the thing sold.
- The vendor's liability for eviction can be enforced if the buyer has been deprived of the whole of the thing sold and the vendor has been summoned and made a co-defendant in the suit for eviction.
Unpaid Seller's Rights
- An unpaid seller has a right of lien or a right to retain the goods for the price while he is in possession of them.
- An unpaid seller can stop the goods in transit if the buyer has become insolvent.
- An unpaid seller can resell the goods if the buyer has been in default in the payment of the price for a reasonable time.
Negotiable Documents of Title
- A negotiable document of title is a document that can be negotiated by delivery.
- Examples of documents of title to goods include negotiable instruments, bills of lading, dock warrants, and warehouse receipts.
- A negotiable document of title can be negotiated by delivery, and the buyer acquires good title to the goods.
Sale of Immovable Property
- In the sale of immovable property, the buyer acquires good title to the property if he is a purchaser in good faith.
- The first registrant in good faith acquires good title to the property.
Breach of Warranty
- The prescriptive period for actions based on breach of implied warranty is 6 months from the date of delivery.
- The prescriptive period for actions based on breach of warranty against eviction is 6 months from the date of delivery.
Other Key Points
- A buyer acquires good title to the goods if he buys from a store in good faith and for value.
- Quasi-delivery is the delivery of rights, credits, or incorporeal property.
- An action for breach of contract of sale can be filed if the seller sells the same goods to another buyer.
- The seller has the obligation to execute a public instrument if the contract of sale is enforceable.### Sale and Return
- In a sale or return transaction, the vendee (buyer) has no right to demand the return of the value of the thing sold if it is greater or less than the price of the sale.
- The vendee is also not entitled to the income or fruits of the thing sold, or the costs of the suit which caused the eviction.
Implied Reservation of Ownership
- Implied reservation of ownership is a correct answer, indicating that the seller retains ownership of the goods until the buyer has paid the full price.
Eviction
- Eviction occurs when the vendee is deprived of the whole or part of the thing purchased due to a final judgment based on a right prior to the sale or an act imputable to the vendor.
Delivery
- Delivery is the act by which one party parts with the title to and the possession of the property, and the other acquires the right to and the possession of the same.
Traditio Brevi Manu
- Traditio brevi manu is the opposite of constitutum possessorium, which means the transfer of possession of a movable thing.
Unpaid Seller
- An unpaid seller is deemed to be such when the whole or part of the purchase price has not been paid or tendered.
- An unpaid seller having the right of lien or having stopped the goods in transitu, may rescind the transfer of title and resume the ownership in the goods.
Lien
- The unpaid seller of goods loses their lien under certain circumstances, except when the buyer or their agent lawfully obtains possession of the goods.
Breach of Express Warranty
- The prescriptive period for instituting actions based on a breach of express warranty is 4 years.
Loss of Thing
- A thing is lost when it perishes, goes out of commerce, or disappears in such a way that its existence is unknown or it cannot be recovered.
Contract of Sale
- If the thing which is the object of the contract has been entirely lost at the time of perfection of the sale, the contract shall be without any effect.
- If the thing should have been lost in part only, the vendee may choose between withdrawing from the contract or specific performance.
Incapacity
- Absolute incapacity includes minors, insane, or demented persons.
- Relative incapacity includes guardians, public officers, and agents, among others.
- Necessaries include everything indispensable for sustenance, dwelling, clothing, medical attendance, education, and transportation.
Price
- The price must be certain in money or its equivalent, and must not be left to the discretion of one of the contracting parties.
- The price fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected sale.
Contract to Sell
- In a contract to sell, the seller agrees to fulfill the promise to sell the subject property when the entire amount of the purchase price is delivered to them.
Earnest Money
- Earnest money is given by the buyer to the seller to bind the bargain, and constitutes an advance payment that must be deducted from the total price.
Option
- An option is a contract by which the owner of property agrees with another person that he shall have the right to buy his property at a fixed price within a certain time.
Dation in Payment
- Dation in payment is a special mode of payment where the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt.
This quiz is about the rules and regulations related to the sale of immovable property, specifically when the sale is made by the unit area. It covers the vendor's obligations and the vendee's options in case of discrepancies in the area agreed upon.
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