Article 1458: Definition of a Contract of Sale

Article 1458. By the contract of sale one of the contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or
its equivalent.

A contract of sale may be absolute or conditional.

Definition

A contract of sale is a contract where one party obligates himself to deliver a determinate thing to
another part, who in turn, obligates himself to the other to pay a sum of money or its equivalent.

Essential Requisites

The contract of sale, being a contract, has the same requisites, namely, consent, object, and cause.

1. Consent - Also called meeting of the minds. mutual agreement, or consensus ad idem. It essentially
refers to a situation where the two parties of the contract has a mutual understanding in the formation
of the contract of sale. This essentially means that there is consent in the part of the seller to transfer
ownership of the determinate thing and in the part of the buyer to pay the equivalent price.

Note that both of the parties must have the legal capacity to give their consent.

2. Object - This is the subject matter of the contract. It must be determinate or capable of being
determinate.

3. Cause - This refers the the price, in terms of money or its equivalent.

Kinds of Contract of Sale

1. Absolute - This refers to a contract of sale that is not subject to any condition or does not require any
condition for the transfer of ownership.

2. Conditional - This refers to a contract of sale that contemplates contingency, or is subject to a

condition. It follows then that the delivery of the determinate thing does not necessarily transfer
ownership, unless the contingency or condition is fulfilled

Article 1459: Requisites on Object of the Contract of Sale

Article 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof
at the time it is delivered.

Requisites for the object of the Contract of Sale

The thing or the object of the contract of sale must be determinate or capable of being determinate. It
also needs to be licit or lawful, that is, it should not be contrary to law, morals, good customs, public
order, and public policy. Third, it should not be impossible. The object of the contract must be within the
commerce of men, which means that it is legal and its ownership is transferable.

Rights that are transmissible or personal may also be the object of the contract of sale. Examples of this
is the right of usufruct.

It should be noted that services (or obligations to do) cannot be the object of a contract of sale, even if
they can be the object of a contract. (Contract for a piece of work)

Licit vs. Illicit things

Article 1459 of the Philippine Civil Code requires that the object of the contract of sale must be licit or
lawful. Illicit things are therefore things that are unlawful or illegal. Things can be illicit per se or per
accidens.

Per se is a Latin phrase which means "in itself". Things that are illicit or illegal per se are things that are
inherently unlawful. An example of this is the selling of rotten food for consumption, since it may be the
cause of food poisoning.

Per accidens is a Latin phrase which means "by chance". Things that are illicit per accidens then are
things that are illegal because of a provision that declares it unlawful. An example of this would be the
selling of jueteng tickets.

Right to transfer ownership

One can only sell what he owns. In order for the sale to be valid, the vendor must be the owner of the
object of the contract of sale (or authorized by the owner to sell the object) in order to transfer the
ownership of the thing being sold.

It should be noted however that if at the time of delivery the right to transfer the ownership exists, then
the contract is valid. This means that it is not necessary that the seller has the ownership of the object of
the contract of sale during the formation or perfection of the contract for as long as the ownership exists
during the time of delivery.

This is of course to give way for future goods or goods that depend on contingency to be the object of
the contract of sale.

Article 1460: Definition of a Determinate thing

Article 1460. A thing is determinate when it is particularly designated or physically segregated from all
others of the same class.
The requisites that a thing be determinate is satisfied if at the time the contract is entered into, the thing
is capable of being made determinate without the necessity of a new or further agreement between the
parties.

Determinate thing

A thing is determinate or specific when it is distinct from all others of the same class. A determinate
thing is distinct because of its individuality. Examples of a determinate thing are: the laptop you are
viewing this website on, your car (if you own only one), the lot on 443 Sto. Cristo, Guagua, Pampanga.

As noted on the preceding articles, it is not necessary that the thing is not determinate during the
perfection of the contract, for as long as it is determinable or capable of being determinate during the
delivery of the object, without the necessity of a new or further agreement from the parties. Also, it is
not necessary that the object is seen during the formation of the contract.

Example:

Apollo obligates himself to sell all of the cattle in a particular farm to Artemis for a specific sum of
money. If at the formation of the contract Apollo did not specify the farm, or if he owns several farms,
then the object of the contract is not determinate. The contract therefore is null and void.

The subject matter of the sale is valid and binding only if the following requisites are present during the
perfection of the sale/when the consent to sell is given:

1.) It must be existing or have potential existence. It can also have potential existence. It can even be a
future thing (with exceptions, of course,) a contingent one or even subject to a resolutory condition. In
other words, it must be a "possible" subject matter.

2.) It must be legal.

3.) It must be determinate or determinable at least

The goods of the sale can be either existing goods or future ones. Future goods includes those that are
manufactured or acquired by the seller after the contract is perfected. A sale of future goods is perfected
when the goods themselves are acquired and delivered. Future inheritance, however, can't be sold; and
future property can't be donated.

If any of the requisites are lacking, the sale is non-existent (read: void.) Neither party can ask for specific
performance, nor hold the other liable for a breach of contract. If, under Art. 1411 of the Civil Code, the
contract is void because the object is illegal and the act itself is a criminal offense, one of the following
things will happen: if both parties are in pari delicto (equally guilty,) neither party can have a cause of
action against the other; if only one party is guilty, the innocent party can take back what he has given
and won't be bound to comply with his promise.

If, however, under Art. 1412, where the act isn't a criminal offense, the following rules will apply:

1.) If both parties are at fault, neither can recover from the other or demand performance.

2.) If only one party is at fault, he can't recover what he has given and the innocent party can take back
what he gave and won't be bound by his promise.

Emptio Rei Speratae vs. Emptio Spei

Emptio rei speratae is a contract of sale of future things which must be determinate or specific; it won't
apply to things that are generic because generic things aren't lost under legal fiction. Such a thing
becomes enforceable when the thing in question appears. If it doesn't appear, the contract either is
extinguished when the time limit expires or it becomes obvious the event won't happen. The uncertainty
is with regard to the quality and quantity of the thing.

Emptio spei, on the other hand, is the sale of a mere hope (like buying a lottery ticket.) The sale is
effective even if the thing doesn't appear unless it's a vain hope. The object is a present thing which is
the hope or expectancy and the uncertainty is with regard to its existence.
In case of doubt, emptio rei speratae is presumed.

The Civil Code recognizes the sale of things not actually owned by the seller in the following instances:

1.) Sale of a thing having potential existence (Art. 1461.)

2.) Sale of future goods (Art 1462.)

3.) Contract for delivery at a certain price of an article which the seller in the normal course of business
manufactures or produces for the general market, whether or not it is in the seller's hands at the time or
not (Art. 1467.)

Art. 1461: EMPTIO REI SPERATAE

Sale of things with potential existence

- maybe the object of the contract of sale.

There maybe a valid sale of a thing, which though not yet in existence, is reasonably certain to come into
existence as the natural increment or usual incident of something already in existence , & then belonging
to the vendor , & the title will vest in the buyer the moment the thing comes into existence.

Ex:

1.) Wine is expected to be produced by a vineyard.

2.) The future wool grown on a sheep.

3.) Milk & butter to be produced in the future from cows.

4.) The good will of trade.

EMPTIO SPEI

Sale of hope or expectancy

- neither the thing nor its quantity & quality are certain to exist.

Ex: Sale of sweepstakes or raffle ticket that is yet to be drawn.

If sale of the ticket is for a sweepstake or raffle that has already been drawn & the object of the sale is a
losing ticket , the sale is void as it involves the sale of vain hope or expectancy.

THE SALE OF VAIN HOPE OR EXPECTANCY IS VOID.

Emptio rei speratae vs. Emptio spei

Eptio rei speratae - sale of future thing

- is subject to the condition that the thing must come into existence , so that if it does not , the sale will
not be effective for not having an object.

Emptio spei - sale of present thing , the hope itself.

- is effective even if the thing hoped for does not come into existence.