Encoded Notes.docx

Statute of Frauds -

Needs to be in writing

Donation -

Needs to be in writing You do not pay the donor (gratuitous, as opposed to being onerous) If with a burden: o Burden is lower than donation – still a donation o Burden is higher than donation – onerous donation under the law on sales, because the essence of a sale is an obligation to transfer ownership and consideration for it (even though the essential elements are not necessarily met)

Substance over form -

The title of a particular agreement is not binding Read the essential provisions

Gross inadequacy -

In real life, the difference between the fair value and the purchase price is construed as donation and applied with donor’s tax Theoretically, mere gross inadequacy of price does not affect the validity of a contract

Contract of sale vs contract for a piece of work -

If it depends on the seller’s craftsmanship, it is a piece of work If the subject matter is purely about the thing itself (no consideration as to the craftsmanship or mastery of the maker), it is a sale

Dation en pago / Dation in payment -

-

Objective novation o Novation Changes the parties (subjective) or substitutes the subject matter (objective Mode of extinguishment of an obligation

Contract to sell -

Expressly reserving the right to transfer ownership upon fulfillment of conditions The fulfillment of condition does not automatically transfer ownership The fulfillment of condition creates an obligation to transfer ownership The obligation of the seller is not to deliver, but to enter into a contract of sale In case of non-payment, there is no cancellation because seller has no obligation to transfer something

Issues on consent

-

-

Vitiation o Voidable if consent is vitiated (through mistake, fraud, undue influence, intimidation, etc.) o Remedy is ratification (can be express or implied) Capacity to give consent

Rule on spouses -

-

Reasons: o Protection of third persons o Conjugal property (no logic in selling to one another) o Intimidation and undue influence Restriction also applicable to common-law spouses Subject to exceptions

Contract of agency -

A broker is not an agent Principal and agent do not have 1 juridical personality (separate)

Importance of determining the subject matter -

It goes into the heart of your case (when you go after the seller, you will go after the subject matter)

Sale of a lotto ticket -

The object is the lotto ticket itself (can be also construed as the hope itself but it can give rise to many complications)

Requisites for a subject matter 1. 2. 3. -

Licit (Art. 1347, 1459, 1575, 1409) Possible Determinable (Art. 1460) Only relevant for generic goods Reckoning point: perfection of the contract

Sale of personal property -

What you’re not buying is the metes and bounds, what you’re buying is what you see in the ocular inspection

Quantity of subject matter (Art. 1349, 1246) -

Necessary for a valid contract and a subject matter to be determinate May refer to a formula to become determinable If not specifically provided, seller cannot give inferior goods and buyer cannot demand specific goods

Fungible goods

-

One unit is equivalent to every unit of its kind

Buying/selling an undivided interest -

You can sell a part of it (specific) You can sell a portion (not specified) o You’ll only know your portion at the termination of the co-ownership

Emptio spei -

Not a future thing, sale of the hope itself

Hope -

Should not be vain, otherwise it will be void

Price certain -

Specified amounts in money

Ascertainability -

Rule: if ascertainable, valid o Agreed by the parties o Set by a third party  If third party is unwilling and unable, sale is inefficacious (can be fixed by agreement between the parties)  If through bad faith or mistake, the courts may fix the price  If cannot ascertain due to fault of either buyer or seller, one who’s not in fault can demand fulfillment or rescission with damages o With regard to another thing certain

Price can be set by third parties but subject matter cannot be -

Price is fungible (generic) while subject matter should be determinate/determinable (Specific) Third party may assign a subject matter that a seller will not be able to give

Price is unascertainable -

Sale is inefficacious unless already appropriated If there is delivery and appropriation without agreeing on the price, there is no sale but seller should be paid because of equity

Price is simulated -

Sale is void but it may be shown to be another contract in essence, such as a contract of donation or equitable mortgage

Void -

As if nothing happened between the parties If already delivered, the buyer has to give the item back

Impari delicto -

If both are at fault, courts will leave them as they are to absorb their damages If one it not at fault, they can recover

False price -

Sale is valid, subject to reformation

Inadequacy of price -

Sale is valid, unless there is a defect in the consent due to mistake, fraud, undue influence, violence, and intimidation or there is another contract in mind such as donation

Expectation of profits -

Valid price

Non-payment of purchase price -

Does not affect validity of contract

Manner of payment -

Should not be requisite to the perfection of the contract but there are exceptions from SC decisions For the purposes of the boards, manner of payment is essential

Art. 1353 vs Relatively simulated sale -

Art. 1353 is about the meeting (or lack thereof) of the minds and is void because there is no certain cause In relatively simulated sale, the meeting of the minds is present but the instrument/paper just does not reflect the true intention (agreed price) of the parties

Offers -

Option

The following can be fixed by the offeror: o Price o Place o Time o Manner of acceptance Qualified acceptance is merely a counter-offer Acceptance by letter is only binding from the time the acceptance comes to the offeror’s knowledge The offer is presumed to made where the contract has been entered into So long as the intention is to accept, even if there are some requests, the acceptance is valid

-

If there is no consideration, there is a valid offer (continuing offer)

Withdrawal of offer -

General rule: during the period, before acceptance, you can withdraw (except if there is consideration)

Rule for specific performance on a written contract -

Prescribes after 10 years

Option contract with contract of lease, period expired and contract is renewed -

Option to buy is extinguished

Breached option contract -

Still no clear answer if specific performance is applicable

Right of first refusal -

Preparatory contract, accessory contract/stipulation Right to have option to refuse first in case the seller ultimately decides to sell the property Obliges seller to negotiate any sale to the promisee first Need not be a complete offer Does not need separate compensation Usually found in lease contracts Remedy if breached: rescission (if the third party buyer knew about the right), damages (if third party buyer is innocent) Seller should offer the changed terms to the promisee first if every they change their minds about the original terms (or seller should not change the original terms offered to the promisee) Extinguished upon renewal of lease since only an accessory to the principal contract Not under the statute of frauds

Rule on forms -

Statute of frauds o Some contracts need to be in writing to be enforceable Sale of immovables o Valid but does not bind third parties if not in a public instrument

Notarization -

Presumption of regularity Parties should appear personally to state that they sign a document with their free and voluntary will

Failure to object to parole evidence -

Ratifies voidable contracts

If both parties are incapable of giving consent

-

Contract is unenforceable

One party is incapable of giving consent -

Contract is voidable

Can a third party invoke unenforceability? -

No, unless they’re assignees