binding-contract-948442_1920

Obligations of the Parties

What are the Obligations of the vendor?

1)         To transfer the ownership of the thing sold to the buyer

2)         To deliver the thing

3)         To warrant the thing sold

 

What are the Obligations of the vendee?

1.) To accept delivery;

2.) To pay the price of the thing; and

3.) To bear the expenses for the execution and registration and putting the goods in a deliverable state, if such is the stipulation.

In an ordinary contract for the sale of goods, the buyer has no right to pay the price in installments. Neither can he be required to make partial payments. The buyer is also obliged to pay interest for the period between delivery of the subject matter of the sale and the purchase price or in case the subject property produce fruits or income and in cases of default from the buyer, from the time of judicial or extra-judicial demand for payment of the price.

 

What are the rules on transfer of ownership?

General rule:

  • Only the owner of the property can pass ownership to it.
  • But the seller is not required to have ownership at the time of the perfection of the sale. It is sufficient that he has ownership at the time of the thing sold I delivered because it is delivery that transfers ownership.
  • Where goods are sold by a person who is not the owner thereof and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller’s authority.

Exceptions:

  • Where the owner by his conduct is precluded from denying the seller’s authority or estopped
  • Where the sale is made under the provisions of any factor’s acts, recording laws or any provision of the law enabling the apparent owner of goods to dispose of them as if he was the true owner thereof such as sale by an agent
  • Where the sale is made under a statutory power of sale or under the order of the court of competent jurisdiction
  • Where the purchase is made in a merchant’s store, fairs or markets
  • Where the seller of goods has a voidable title thereto, but his title has not been avoided at the time of the sale, the buyer acquires a good title to the goods, provided he buys them in good faith, for value and without notice of the seller’s defects.

 

What are the obligations regarding delivery of the thing?

The ownership of the thing sold is transferred to the vendee upon the actual or constructive delivery thereof. The thing sold shall be understood as delivered when it is placed in the control and possession of the vendee.

 

What are the kinds of delivery?

The law on sales admits four kinds of delivery/ tradition (tradicio):

  1. Real Tradition- from hand to hand by certain material or possessory acts by the vendee done in the presence with the consent of the vendor
  2. Legal or Constructive- when the delivery is not actual but represented by other signs or acts indicative of delivery
  • Legal- sale made through a public instrument
  • Symbolic- delivery of keys to the place when goods are stored
  • Traditio longa manu
  • Traditio brevi manu
  • Traditio constitutum possessorium
  1. Quasi tradition- which is used to indicate the transfer of rights or incorporeal property and may be defined as the exercise of the right by the grantee with the acquiescence of the vendor or the placing of the title of the ownership in the possession of the vendee.
  2. Tradition by operation of law- which covers all other cases not already enumerated and in which the delivery is effected solely by virtue of an express provision of the law

Where the parties have stipulated that ownership in the things shall not pass until full purchase price is paid.

 

What are the rules on delivery in cases of sale of real estate?

  1. The seller is bound to deliver what is in the contract.
  2. If the sale is made with a statement of its area, at the rate of a certain price per unit of measure or number and the seller cannot deliver all the area stated in the contract, the buyer has the right to proportionately reduce the price or rescind the contract provided the lack in the area is at least 1/10 or more of the area contracted.
  3. If the sale was made with a statement of the area at the rate of a certain price for a unit of measure or number and a portion of the land delivered is of an inferior quality that that agreed upon in the contract through the land measures exactly the are upon, the buyer has the right to proportionately reduce the price or rescind the contract provided the lack in the area is at least 1/10 or more of the area contracted.
  4. If the buyer could not prove that he would not have brought the land had he known of the smaller area or its inferior quality, he may still rescind the contract even though the lack in area is less that 1/10 of the area agreed upon, or the inferior value of the property sold does not exceed 1/10 of the price agreed upon.
  5. If the sale was made with a statement of the area and at the rate of a certain price for a unit of measure or number and the land delivered was greater in area or number than that stated in the contract, the buyer may accept the area included in the contract and reject the rest. If he accepts the whole are, he must pay for the same at the contract price.
  6. If the sale is for lump sum and not at the rate of a certain sum for a unit of a measure or number, there shall be no increase or decrease in the price, although there be a greater or less area or number than that stated in the contract.
  7. When two or more real estate are sold for a single price, the rule is the same as when the real estate is sold for a lump sum. There shall be no increase or decrease in the price irrespective of any difference in the area actually delivered and the area in the contract.

The right of the buyer to a proportionate reduction if the price or rescission of the contract of sale must be exercised within 6 months from delivery date.

 

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