LAW ON SALES, AGENCY, AND CREDIT TRANSACTIONS
CHAPTER 1
NATURE AND FORM OF THE CONTRACT
(ARTS. 1458-1637)
CONCEPT OF CONTRACT OF SALE
-contract of sale is a contract whereby one of the contracting parties (SELLER) obligates himself to transfer the
ownership and to deliver a determinate thing, and the other party (BUYER) obligates himself to pay a sum of
money or its equivalent (PRICE)
CHARACTERISTICS OF A CONTRACT OF SALE
1.
2.
3.
4.
5.
6.
CONSENSUAL- it is perfected by mere consent of the parties.
BILATERAL- the parties are bound by reciprocal obligations
 SELLER- to deliver and transfer ownership of the thing sold
 BUYER- to pay the price
ONEROUS- the thing sold is conveyed in consideration of the price.
COMMUTATIVE- the thing sold is considered the equivalent of the price paid
(the contract may be ALEATORY- depending on an uncertain event or contingency)
NOMINATE- it has a special name given to it by law namely “SALE”
PRINCIPAL- it can exist by itself without being dependent upon another contract
ELEMENTS OF A CONTRACT OF SALE
1. ESSENTIAL ELEMENTS/ REQUISITES
A. CONSENT OR MEETING OF THE MINDS
- It refers to the consent on the part of the SELLER to transfer and deliver and on the part of the
buyer to pay the price.
- The parties must have legal capacity to give consent and to obligate themselves.
- when there is an offer of one party, without the acceptance of the other, THERE IS NO CONSENT
B. OBJECT OR SUBJECT MATTER
- It refers to the determinate thing which is the object of the contract.
- If the seller and the buyer differ in regard to the thing sold, there is no meeting of the minds
therefore, there is no sale
C. CAUSE OR CONSIDERATION
- It refers to the “price certain in money or its equivalent”
2. NATURAL ELEMENTS- those inherent in a contract of sale, which in the absence of stipulation excluding them,
are deemed to exist.
Such as: warranty against eviction, warranty against hidden defects and encumbrances
3. ACCIDENTAL ELEMENTS- it refers to the stipulation of the parties such as terms, place and time of payment,
and other conditions agreed upon
TWO KINDS OF CONTRACT OF SALE
1.
2.
ABSOLUTE- the sale is not subject to any conditions and where title or ownership passes to the buyer upon
the delivery of the thing sold.
CONDITIONAL-where the contract is subject to certain conditions usually the full payment of the purchase
price. The delivery of the thing sold does not transfer ownership until the CONDITION is fulfilled
ARTICLE 1459