Sales Chapter 1: Nature and Form of the Contract

Questions and Answers

What is a contract of sale?

A contract where one party obligates himself to transfer ownership of and deliver a determinate thing, while the other party obligates himself to pay a certain price in money or its equivalent.

Under Roman Law, sale was termed 'venditio'.

True

Which of the following is an essential element of a contract of sale?

Ownership of the object at the time of sale

Meeting of the minds (correct)

A verbal agreement only

A generic object

What must a price in a contract of sale be?

Certain in money or its equivalent Signup and view all the answers

What is meant by 'bilateral reciprocal' in the context of a contract of sale?

Both parties are bound by obligations that are dependent upon each other. Signup and view all the answers

Which of the following is NOT an essential element of a valid sale?

Written contract Signup and view all the answers

What is 'warranty against eviction' in the context of a sale?

Protection from legal eviction from the property Signup and view all the answers

Study Notes

Nature and Form of the Contract

A contract of sale involves the seller transferring ownership of a determinate thing and the buyer paying a certain price in money or its equivalent.
Contracts may be onerous, requiring valuable consideration; commutative, with nearly equivalent values exchanged; or aleatory, where outcomes depend on uncertain events.
Examples of aleatory contracts include the sale of a genuine sweepstakes ticket.

Characteristics of Contracts

Principal contracts can stand alone, unlike accessory contracts that depend on other valid contracts (e.g., pledge and mortgage).
Nominate contracts are specifically named (e.g., contract of sale), while innominate contracts lack a designated name.

Essential Elements of the Contract of Sale

The vendor does not need to be the owner at the time of sale; ownership must be established by the time of delivery.
The fundamental aim of the contract is the transfer of ownership, not just a physical transfer of the item.
Essential elements include:
- Consent or meeting of minds regarding the transfer of ownership in exchange for a price.
- Determinate subject matter; a sale of generic goods is not valid, and differing views on the object prevent consensus.
- A price certain in money or its equivalent is necessary; the price does not have to be monetary.

Essential Characteristics

Consensual contracts become effective with mutual agreement.
Bilateral reciprocal contracts bind both parties to obligations reliant on one another.

Natural and Accidental Elements

Natural elements are inherent unless expressly stated otherwise, such as:
- Warranty against eviction to protect against loss of property.
- Warranty against hidden defects to ensure the item is free from undisclosed issues.
Accidental elements may or may not be included in the contract's stipulations.

Types of Objects

Objects of sale can be:
- Tangible (e.g., physical property or goods requiring possession).
- Intangible (e.g., rights, credits, copyrights, trademarks, or goodwill).