SPECIAL CONTRACTS

I. SALE
DEFINITION OF A CONTRACT OF SALE
Contract of sale is a contract
whereby one 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. (Art. 1458, NCC)

ESSENTIAL ELEMENTS OF A
CONTRACT OF SALE
The essential elements of a contract of
sale are as follows:
CODE: C-S-C
C consent
S subject matter
C- cause

1. Consent or meeting of the minds the vendor

agrees to sell and transfer ownership of his
property to the vendee in return for the price
the latter agrees to pay the vendor.
2. Subject matter the subject matter of the
contract must be specific. If the parties have
not agreed on the subject matter of their
transaction, they have no meeting of the minds
3. Cause or consideration the price may be in
the form of money or its equivalent, as stated
in the last sentence of Art. 1458. therefore, a
contract of sale may either be oral or in writing.

FORM OF A CONTRACT OF SALE

The following articles of the New Civil
Code provide as follows:
Art. 1874. when a sale of a piece of
land or any interest therein is through
an agent, authority of the latter shall
be in writing; otherwise, the sale shall
be void.

Art. 1403. the following contracts are

unenforceable, unless they are ratified:
1. Those entered into the name of another
person by who has been given no
authority or legal presentation, or who
has acted beyond his powers;
2. Those that do not comply with the Statute
Frauds as set forth in this number. In the
following cases, an agreement hereafter
made shall be unenforceable by action,
unless the same, or some not or
memorandum thereof,

be in writing, and subscribed by the

party charged, or by his agent;
evidence therefore, of the agreement
cannot be received without the writing,
or a secondary evidence of its courts.
a) An agreement that by its terms is not
to be performed within a year from the
making thereof;
b) A special promise to answer for the
debt, default or miscarriage of another;
c) An agreement made in consideration of
marriage, other rhat a mutual promise

d) An agreement for the sale of goods,

chattels or things in action, at a price not
less than five hundred pesos (P500.00),
unless the buyer accept and receive part of
such goods and chattels, or the evidences,
or some of them, of such things in action,
or pay at the time some part of the
purchase money; but when the sale is
made by auction or entry is made by the
auctioneer in his sales book, at the time of
the sale, of the amount and kind of
property sold, terms of the sale, price,
names of the purchasers and person
whose account the sale is made, its

e) An agreement for the leasing for a

longer period than one (1) year, or for
the sale of real property or of an
interest therein;
f) A presentation as to credit of a third
person.

3. Those where both parties are

incapable of giving consent to a
contract.

OBLIGATIONS OF THE SELLER

The principal obligations of the seller are as
follows:
1. To deliver the determinate object of
contract;
2. To transfer its ownership;
3. To warrant (against eviction and against
hidden defects);
4. To pay for the expenses of the deed of sale;
5. To preserve the thing from the moment of
perfection up to the time of delivery.

OBLIGATIONS OF THE SELLER

The principal obligations of the buyer
are as follows:
1. To accept the delivery; and
2. To pay the price at the time and
place stipulated in the contract.

II. AGENCY
Article 1868 of the New Civil Code
defines agency as a contract whereby
a person binds himself to render some
service or to do something in
representation of or in behalf of
another with the consent or authority
of the latter.

In Rallos vs. Go Chan & Sons Realty

Corporation, et al., G.R. No. L-24332,
January 31, 1978, agency was defined
as a relationship between two parties
whereby one party called the principal,
authorizes another, called the agent,
to act for and in his behalf in
transactions with third persons.

Article 1868 gives the impression that

the agent must always expressly
represent the principal. This, of course,
is not necessarily true for the cases
when the agent acts in behalf of
himself and yet the principal would still
bound such as when the contract
involves things belonging to the
principal.

WHEN IS A CONTRACT OF AGENCY

PERFECTED?
Agency is perfected by the meeting
of the offer and acceptance upon the
thing and the cause which are to
constitute the contract. (Art. 1319,
NCC)
Acceptance must be made expressly
or impliedly. It may be implied from the
acts of the agent, from his silence and
from his inaction according to the
circumstances. (Art. 1870, NCC)

ACCEPTANCE OR AGENCY BETWEEN PERSONS WHO

ARE PRESENT AND BETWEEN PERSONS WHO ARE
ABSENT

1. Between person who are present the

acceptance of a person may be implied
if the principal delivers his power of
attorney to the agent and the latter
receives it without any objections.

2. Between persons who are absent the

acceptance of agency cannot be implied
from the silence of the agent, except:
a) When the principal transmits his power of
attorney to the agent, who receives it without
any objection;
b) When the principal entrusts to him by letter
of telegram a pwer of attorney with respect
to the business in which he is habitually
engaged as an agent to the business in which
he is habitually engaged as an agent, and he
did not reply to the letter or telegram.

BASIC PRINCIPLE OF AGENCY

1. It has the following characteristics:
a) It is consensual, bilateral, nominate,
principal, and preparatory to contract;
b) It is consensual because it is perfected
by mere consent except when it
involves the sale of land or any interest
therein. It is bilateral because the
principal and the agent have reciprocal
obligations. It is nominate because a
contract of agency is preparatory to a
subsequent contract.

2. The appointment of an agent by the

principal is based on trust.
Therefore, the agent is expected to
act within the scope of his authority
and to act in behalf of his principal.
3. As already explained above, a
situation may arise when the agent
is authorized by the principal but he
acts in behalf of himself.it is also
possible that the agent is not
authorized but he acts in behalf of
his principal. Because of these

a) The agent acts with authority and in

behalf of the principal the transaction
is valid and the principal is bound by
the acts of the agent. The agent
assumes no personal liability unless he
deliberately bound himself.
b) The agent is authorized by the principal
but he acts in behalf of himself, not in
behalf of the principal as a rule, the
principal is not bound by the acts of the
agent except if it involves things
belonging to the principal.

d) The agent acts without the authority

and in his own behalf the transaction
is valid, whether or not the subject
matters belongs to the principal
provided that the agent can legally
transfer the ownership of the thing at
the time of delivery. Otherwise, he will
be held liable for eviction.