Podcast
Questions and Answers
What is the primary purpose of the Recto Law?
What is the primary purpose of the Recto Law?
- To promote real estate sales.
- To enhance seller profits from transactions.
- To eliminate installment sales contracts.
- To address the imbalance of power between sellers and buyers. (correct)
Which of the following is NOT covered by the Recto Law?
Which of the following is NOT covered by the Recto Law?
- Purchase of real estate. (correct)
- Purchase of furniture on a monthly payment plan.
- Purchase of household appliances on installments.
- Purchase of a car on installment.
Which remedy allows a seller to recover property in case of a default?
Which remedy allows a seller to recover property in case of a default?
- Rescind the sale. (correct)
- Demand for damages.
- Specific performance.
- Issue an injunction.
What are the possible penalties for violations of the Recto Law?
What are the possible penalties for violations of the Recto Law?
Who is primarily protected under the Recto Law?
Who is primarily protected under the Recto Law?
Which transaction would fall under the Recto Law?
Which transaction would fall under the Recto Law?
What action can a seller take if a buyer defaults on an installment sale covered under the Recto Law?
What action can a seller take if a buyer defaults on an installment sale covered under the Recto Law?
Which of the following terms is related to a penalty for contractual violations under the Recto Law?
Which of the following terms is related to a penalty for contractual violations under the Recto Law?
Flashcards
Primary purpose of the Recto Law?
Primary purpose of the Recto Law?
To address the imbalance of power between sellers and buyers in installment sales of personal property.
What is NOT covered by the Recto Law?
What is NOT covered by the Recto Law?
The Recto Law specifically applies to sales of personal property payable in installments. Real estate purchases are NOT covered.
Seller's remedy to recover property?
Seller's remedy to recover property?
Allows the seller to cancel the sale and reclaim the property if the buyer fails to make payments as agreed.
Penalties for Recto Law violations?
Penalties for Recto Law violations?
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Who the Recto Law protects?
Who the Recto Law protects?
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Transaction under Recto Law?
Transaction under Recto Law?
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Seller action on buyer's default?
Seller action on buyer's default?
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Related to a penalty for violations?
Related to a penalty for violations?
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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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