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Questions and Answers
What is the primary purpose of the Recto Law?
Which of the following is NOT covered by the Recto Law?
Which remedy allows a seller to recover property in case of a default?
What are the possible penalties for violations of the Recto Law?
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Who is primarily protected under the Recto Law?
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Which transaction would fall under the Recto Law?
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What action can a seller take if a buyer defaults on an installment sale covered under the Recto Law?
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Which of the following terms is related to a penalty for contractual violations under the Recto Law?
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Study Notes
Recto Law Overview
- Formal name: Act 4122, enacted in the Philippines in 1933.
- Aims to protect buyers of personal property purchased on an installment basis.
- Establishes balance between the rights of sellers and buyers to prevent exploitation.
Purpose of Recto Law
- Addresses power imbalance favoring sellers in installment sales.
- Aims to avert sellers from taking advantage of buyers.
- Encourages fair and equitable business practices.
Applicability of Recto Law
- Covers individuals or entities engaging in installment sales contracts for personal property only.
- Excludes real estate transactions.
Examples of Covered Transactions
- Purchases include cars on installment plans.
- Household appliances bought through installment agreements.
- Furniture acquired via monthly payment plans.
Remedies for Sellers in Case of Default
- Exact Fulfillment of Obligation: Sellers can demand payment of the remaining balance.
- Rescind or Cancel the Sale: Sellers can cancel the contract and reclaim property.
- Foreclosure on Chattel Mortgage: If applicable, sellers can foreclose the mortgage executed on the purchased item.
Penalties for Violations
- Damages: Compensation for losses incurred.
- Specific Performance: Legal enforcement of contract terms.
- Rescission of Contract: Nullification of the contract upon violation.
- Injunction: Court orders to refrain from certain actions.
- Administrative Sanctions: Regulatory penalties against violators.
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Description
Test your knowledge of the Recto Law, Act 4122, and its impact on buyer protection in installment sales. This quiz covers the regulatory framework and legal issues relating to personal property transactions in the Philippines. Ensure you understand the balance of rights between buyers and sellers.
