Price and Delivery

What are the rules regarding the price?

Price certain in money:

  • When the parties have fixed it
  • When it is certain with reference to another certain thing
  • When the determination of the price is left to the judgment of a specified person or persons
  1. Gross inadequacy of price does not affect a contract of sale except as it may indicate a defect in the consent or that the parties really intended a donation or some other contract.
  1. If the price is simulated or pretended the sale is void but the act may be shown to have been in reality a donation or some other contract.
  1. The fixing of the price cannot be left to the will of one of the parties unless it is accepted by the other.
  1. There will be no contract of sale if the price cannot be fixed which will give no obligations to the parties.

 

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What constitutes delivery in a sale?

Delivery of the thing together with the payment of the price, marks the consummation of the contract and sale. The act of delivery must be coupled with the intention of delivering the thing and putting the buyer under control. Without the intention, the act is insufficient. Such effect is supported by this provision in the New Civil Code:

Art. 1496. The ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in Articles 1497 to 1501, or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee. (n)

  1. What are the kinds of delivery?Actual or Real delivery happens when the thing sold falls under the control and possession of the buyer. This can be done through passing of the movable thing hand to hand. The law evidenced such definition by this provision:

Art. 1497. The thing sold shall be understood as delivered, when it is placed in the control and possession of the vendee. (1462a)

2. Legal or Constructive is understood as those acts which are taken as equivalent of delivery despite lack of non-physical possession of the thing itself and considered as having the same effects to that of a real or actual delivery. This kind of delivery may be affected in certain ways as laid down in following provisions:

Art. 1498. When the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred.

*The mere execution of the public instrument gives the presumptive delivery of the property such as when a deed is notarized or the sale of registered land, the title is transferred. The possession of the documents also means possession of the whole property.

With regard to movable property, its delivery may also be made by the delivery of the keys of the place or depository where it is stored or kept. (1463a)

*This type of constructive delivery is called symbolic tradition. To effect delivery, a token, object or part of the property may be given to constitute delivery of the whole. Like when even just a key is delivered, it may mean to deliver the entire house or car that the key represents.

Art. 1499. The delivery of movable property may likewise be made by the mere consent or agreement of the contracting parties, if the thing sold cannot be transferred to the possession of the vendee at the time of the sale, or if the latter already had it in his possession for any other reason. (1463a)

*The first part of this provision refer to a kind of constructive delivery called tradition longa manu (long hand delivery). This takes place by the mere consent or agreement of the parties that when the seller points or directs the buyer to the property, it may already mean that he is placing it under the buyer’s control and possession. Another type is traditio brevi manu (short hand delivery) where delivery is effected by the buyer already possessing the thing sold by virtue of another title. For example, when the buyer is possessing the property as a lessee but buys it and attains control and possession by the complete turnover to him by the seller.

Art. 1500. There may also be tradition constitutum possessorium. (n)

*This type is the opposite of tradio brevi manu since the delivery happens when the seller continues in possession of the property already sold not as the owner but in another capacity. The delivery of the buyer already takes place by mere agreement of the parties. Such as when the seller remains a tenant of the buyer.

Art. 1501. With respect to incorporeal property, the provisions of the first paragraph of article 1498 shall govern. In any other case wherein said provisions are not applicable, the placing of the titles of ownership in the possession of the vendee or the use by the vendee of his rights, with the vendor’s consent, shall be understood as a delivery. (1464)

*This type is called quadi-tradio and can only be made with respect to corporeal things. Those incorporeal things may only be delivered by execution of a public document and when this is inapplicable, by placing the titles of ownership in the possession of the vendee or by allowing the buyer to use his rights as new owner with the seller’s consent.

References

De Leon, H. (2010). Comments and Cases on Sales. Quezon City: Rex Printing Company, Inc.

Marella V. Teyes and Paterno, 12 Phil 1, 1908

New Civil Code of the Philippines

Soler V. Chelsey, 43 Phil 529, 1922

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