Remedies of Unpaid Seller Quiz

Contract of Sale: Parties and Capacity

• A vendor must be legally capacitated to enter into a contract of sale, and if a corporation, the contract must be executed by the board of directors or a duly authorized corporate agent.
• The vendor must have the right to transfer ownership at the time of delivery.

Parties Who May Not Enter into a Contract of Sale

• Absolute incapacity: minors, insane, demented, mute, deaf, and prodigals, as they cannot bind themselves and can only enter into a contract through their legal representatives.
• Contracts of sale with such persons are voidable, but the purchase of necessities is valid, and they must pay a reasonable price.

Relative Incapacity

• Relative incapacity occurs when a person cannot buy certain property under certain circumstances.
• Examples: husband and wife cannot enter into a contract of sale with each other.

Obligations of the Vendor

• Deliver goods in accordance with the contract.
• Transfer ownership of the goods.

Obligations of the Vendee

• Accept delivery.
• Pay the price.
• Bear the expenses for the execution and registration of the sale.
• Take care of the goods without the obligation to return.
• Pay interest for the period between delivery and payment of the price.

Remedies of the Buyer

• If the seller delivers goods mixed with goods of a different description, the buyer can:
• Accept the goods that conform to the contract and reject the rest.
• Reject the whole of the goods if the subject matter is indivisible.

Remedies of the Unpaid Seller

• Stoppage in transit: the seller can stop the goods in transit if the buyer is insolvent, the seller has surrendered the negotiable document of title, and the seller has borne the expenses of delivery.
• Right to resale: the seller can resale the goods if the title has already passed to the buyer, and the buyer is in default for an unreasonable time.
• Right to recover damages: the seller can recover damages from the buyer for any loss occasioned by the breach of the contract of sale.

Extinguishment of Sale

• Causes of extinguishment of sale:
• Same causes as all other obligations (payment, loss of the thing due, condonation or remission of debt, confusion or merger of rights, compensation, novation, or others).
• Conventional redemption.
• Legal redemption.

Sale of Real Property

• If the sale of real estate is made with a statement of its area, the vendor must deliver the entire area agreed upon.
• If the entire area cannot be delivered, the buyer is entitled to rescind the contract or enforce it with a corresponding decrease in price.
• The immovable must be of the quality specified in the contract, and if it is not, the buyer can rescind the contract or enforce it with a corresponding decrease in price.