Law on Sales, Agency, and Credit Transactions PDF

Law on Sales, Agency, and Credit Transactions Chapter 1 - Nature and Form of the Contract Article 1458: By the contract of sale on of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefore a...

Law on Sales, Agency, and Credit Transactions Chapter 1 - Nature and Form of the Contract Article 1458: By the contract of sale on of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefore a price certain in money or its equivalent. Concept of contract sale The contract of sale is a contract whereby one of the parties obligates himself to deliver something to the other Characteristics of a contract of sale 1. Consensual - perfected by mere consent 2. Bilateral - both contracting parties are bound to fulfill obligations reciprocally towards each other 3. Onerous - conveyed in consideration of the price 4. Commutative - Sold is considered the equivalent of the price paid 5. Nominate - it is given a special name or designation namely sale 6. Principal - it does not depend on its existence Essiential Requisites of a contract of sale 1. Consent or meeting of minds - Consent on the part of the seller or vendor to transfer and deliver and on the part of buyer or vendee to pay (Art. 1475) - Parties must have legal capacities to give consent and to obligate themselves (Art. 1489, 1490, 1491) 2. Object or Subject Matter - Refers to determinate thing which is the object of the contract. The thing mus be determinate or at least capable of being made determinate. 3. Cause or Consideration - Refers to the price certain in money - Such as check or a promissory note Natural and Accidental Elements 1. Natural Elements - Those which are deemed to exist in certain contracts, in the absence of any contrary stipulations like warranty against eviction. 2. Accidental Element - Those which may be present or absent depending on stipulations to the parties like interest, penalty and time or place of payment. Two Kinds of contract of sale 1. Absolute - Where the sale is not subject to any condition whatsoever and where the title or ownership passes to the buyer upon delivery of the thing or sold 2. Conditional - Where the sale completes a contingency and in general where the contract is subject to certain conditions usually in full payment of the purchase price Article 1459 states that the thing must be licit and the vendor have a right to transfer the ownership thereof at the time it is delivered. Requisites concerning object 1. Things - Aside from being determinate, the law requires that the subject matter must be licit or lawful. - Should not be contrary to law, morals and good customs and public order 2. Rights - All rights which are not transmissible or personal may also be the object of sale like the right of usufruct Kinds of Illicit Things 1. Decayed food unit 2. Lottery Tickets 3. Prohibited Drugs 4. Land sold to an alien Right of Vendor to transfer ownership 1. One can sell only what he owns - Must be the owner to sell something 2. Sufficient if right exists at time of delivery - It is sufficient if he has the right to sell the ownership Article 1460. A thing is determinate when it is particularly designated or physically segregated from all others of the same class.