9403 Sales Answer Key Lecture Notes

Dacion en Pago vs. Contract of Sale

• Dacion en Pago
  • Greater freedom in fixing the price.
  • Obligations are created.
  • Ownership of the object is transferred to the other party.
  • A pre-existing credit is extinguished.

Contracts of Sale

• Void Contracts:

  • Between a minor and a deaf mute who cannot write.
  • Between two insane persons not acting during a lucid interval.
  • Between first-degree cousins.
  • Between husband and wife.

• Correct Statements:

  • Things subject to a resolutory condition may be the object of a sale.
  • Things with potential existence may be objects of sale.
  • The sole owner may sell an undivided interest.

Specific Scenarios

• Order and Contract Types

  • Size 10 shoes for A and custom size 8 shoes for B.
  • First is a contract of sale, second is a contract for a piece of work.

• Offer and Acceptance

  • A offered P12,000,000 for property, later wants P15,000,000.
  • B cannot compel A to accept the initial offer if A changes terms within the period.

• Contracts Involving Minors

  • A sold a necklace while a minor, resale issues with voidable titles.

Goods in Transit

• Deemed in Transit

  • From seller to buyer's possession.
  • Interception by buyer prior to destination.

• No Longer in Transit

  • Rejected goods by buyer remain with the carrier.

Oral Contracts and Statute of Frauds

• Land Sale Example

  • Oral sale of land, payment due later.
  • Executed contract may still require written evidence.

• Destruction of Subject Matter

  • Loss of house pre-delivery affects contractual obligations.

Ownership and Transfer

• Immovable and Movable Property

  • Ownership based on possession, record, or payment.

• Traditio Forms

  • Longa Manu: Delivery by pointing.
  • Brevi Manu: No need for delivery if already in possession.
  • Constitutum Possessorium: Seller retains possession as a tenant.
  • Symbolica: Indicating the object of sale.

Specific Legal Rules

• Contracts for a Piece of Work vs. Sale

  • Based on value of materials vs. labor.
  • New York rule typically observed in the Philippines.

• Warranty Against Defects

  • Considered a natural element of contracts.

Real Estate and Installment Sales

• Protection Acts:

  • Realty Installment Buyer Protection Act excludes certain sales.

• Remedies for Non-payment:

  • Fulfillment, cancellation, foreclosure.

Stoppage in Transit

• Seller's right to stop goods if buyer lacks funds.

Dual Sale and Ownership Disputes

• Priority Rights in Sales

  • Based on possession, registration, or payment history.

• Waiver Types

  • Waiver consciente: Buyer aware, limits seller's liability.

Key Concepts in Sales

• Barter vs. Sale

  • Determined by the value of consideration in money vs. goods.

• Effect of Price Inadequacy

  • Can render a sale void.

• Contract Perfection

  • Ownership and obligations arise upon contract agreement.

• Option Money and Earnest Money

  • Applies to perfected sales, indicates commitment.