SALES

SALE Article 1464

Article 1458 Sale of Undivided Share of a Specific Mass
By the contract of sale one of the contracting parties obligates Effect of Sale:
himself to transfer the ownership of and to deliver a determinate 1. The buyer becomes co-owner of the whole mass in
thing, and the other to pay therefor a price certain money or its proportion of the share brought
equivalent. A contract of sale may be absolute or conditional. 2. If later on it was discovered that the goods are less than what
was bought, the buyer becomes the owner of the whole
Kinds of Contract of SALE
mass. The seller is bound to deliver the deficiency.
1. Absolute
2. Conditional Article 1465
Sale Subject to Resolutory Condition
Essential Elements of a Contract of SALE
Effect of Sale:
1. Consent
• When the condition is fulfilled, the obligation is extinguished
2. Object or Subject matter
• The parties shall return to each other what they have
3. Cause or Consideration
received.
Characteristics of a Contract of SALE
Article 1466
• Consensual – Perfected by mere consent
Sale vs. Agency
• Bilateral – Reciprocal obligation
Sale Agency
• Onerous – Conveyed in consideration of a price
The buyer pays for the price The agent does not pay for
• Commutative – Thing is sold for its equivalent price/value of the goods/property the price. He merely accounts
• Nominate – Special name is given to a particular transaction purchased for the proceeds of the sale
• Principal – The contract of sale can stand on its own The buyer becomes the The agent does not become
owner of the foods/property the owner of the
Natural and Accidental Elements of SALE
purchased goods/property delivered to
1. Natural Elements him for sale
Those which are deemed to exist in certain contracts, Buyer as a general rule The agent returns the
ex. Warranty cannot return the goods/property if he was not
2. Accidental Element goods/property sold able to sell the same.
Those which may be agreed upon by parties, The seller warrants the The agent does not make any
ex. Interest, penalty, terms goods/property sold warranty as long as he acts
within his authority and in
Article 1459 the name of the principal
The thing must be licit and the vendor must have a right to The seller has full freedom to The agent must follow the
transfer the ownership thereof at the time it is delivered enter into any terms or instructions of the principal
conditions on the contract of
Requisites concerning Object sale
The thing must be:
1. Determinate – It must be specific Article 1467
2. Lawful – It must not be contrary to public laws, morals, etc. Contract for a piece of work
3. Not impossible – It should be within the commerce of man Contract for a piece of work Contract of Sale
The thing transferred is one The thing transferred is one
Article 1462
not in existence and which which would have existed
Goods as Subject Matter of Contract
never would have existed but and would have been the
Kinds of Goods for the order of the party subject of sale to some other
1. Existing goods desiring to acquire it. person, even if the order had
2. Future goods not been given
The services dominate the The primary objective of the
Article 1463
contract even tough there is a contract is a sale of the
Sale of Undivided Interest in a Thing
sale of goods involved manufacture item; it is a sale
1. Sale by Sole Owner of goods even though the
To make the buyer co-owner of the thing sold. item is manufactured by
2. Sale by Co-owner labor furnished by the seller
Co-owner may sell his interest limited only up to his portion. and upon previous order of
the customer.
Article 1468 Article 1476
Sale vs. Barter RULES GOVERNING AUCTION SALE
Sale Barter 1. Sales of separate lots by auction are separate sales
A thing is given in exchange A thing is given in exchange 2. Sale perfected by the fall of the hammer
for money or its equivalent for another thing 3. Right of Seller to bid in the auction
Governed by law on sales
If consideration consists part In money and partly by thing Article 1477&1478
– look at manifest intention DELIVERY OF THING SOLD
If intention is not clear: value If intention is not clear: value General Rule:
of thing is equal or less than of thing is more than amount Ownership is transferred upon delivery of the thing sold.
amount of money – sale of money – barter
Exception:
If there is a stipulation that ownership shall not be transferred
Article 1469
until the purchaser has full paid the price.
Price Considered Certain
1. No sale if price is not certain or ascertainable Article 1479
2. Cases when price is considered certain: KINDS OF PROMISE TO BUY OR TO SELL
o The parties have fixed the price or agreed upon a 1. An accepted unilateral promise to sell in which the acceptor
definite amount elects to buy
o It can be ascertained with reference to another 2. An accepted unilateral promise to buy in which the acceptor
thing certain elects to sell
o The determination of the price is left to the 3. A bilateral promise to buy and sell reciprocally accepted in
judgment of a 3rd person which either of the parties chooses to exact fulfillment
Article 1470 OPTION
EFFECT OF GROSS INADEQUACY OF PRICE A privilege to which a person has paid a consideration which
Mere inadequacy of the price does not affect the validity of the gives him the right to buy or to sell a certain specified property
sale, except at any time within the agreed period at a fixed price.
1. When there is fraud, mistake, or undue influence
2. When it shows that the parties really intended a donation or Article 1480
some other act or contract. RISK OF LOSS
1. If the thing is lost before perfection, the seller bears the loss
Article 1471 2. If the thing is lost at the time of the perfection, the contract
EFFECT WHERE PRICE IS SIMULATED is void or inexistent
1. The act may be shown to have been in reality a donation, or 3. If the thing is lost after perfection but before delivery, the
some other act or contract risk of loss is shifted to the buyer
2. If not and neither party had any intention whatsoever that 4. If the thing is lost after delivery, the buyer bears the risk of
the amount will be paid (absolutely simulated): the sale is loss
void
3. If there is a real price but what is stated in the contract is not 1164 rights of the fruits of the thing obligation to deliver arises
the one intended to be paid (only relatively simulated): the 1165 delivery of a determinant thing
contract of sale is valid but subject to reformation (amend
Article 1481
the contract)
1. Sale of Goods by Description
Article 1474 2. Sale of Goods by Sample
EFFECT OF FAILURE TO DETERMINE PRICE 3. Sale by Description and Sample
1. In executory contract – the contract is without effect
Article 1482
2. Where delivery has been made – the buyer must pay a
EARNEST MONEY
reasonable price.
• Money given by the buyer to the seller to bind the bargain
Article 1475 • Part of the price and as proof of the perfection of the
PERFECTION OF CONTRACT OF SALE contract
Perfected at the moment there is meeting of the minds upon the
thing and price.

Effect: Parties may reciprocally demand performance

Earnest Money vs. Option Money Article 1486
Earnest Money Option Money Forfeiture of Installments or Rents Paid
It is part of the purchase price It is a given as a distinct a. The parties may stipulate that installments paid or rents
consideration for an option paid are not to be returned
contract which gives the b. Such stipulation should not be unconscionable under the
buyer a specific period within circumstances
which to purchase the thing c. The court has the power to order the return of a portion of
It is given only when there is It is given at a time when the the total amount paid in installments or rents.
already a perfected sale sale had not yet been
perfected. What had been Article 1847
perfected only is the option Expenses for Execution and Registration
contract a. Vendor has the duty to pay expenses for execution of the
When it is given, the buyer is Even if option money is paid sale and registration, unless stipulated otherwise
bound to pay the balance of by the would-be-buyer he is b. Expenses subsequent to the transfer of title shall be borne
the agreed purchase price not bound to buy the thing
by the buyer.
If the sale does not If the buyer decides not to
materialize, the earnest buy the thing, he cannot Article 1488
money paid must be recover the option money he Expropriation of Property for Public Use
returned, unless a contrary paid as consideration for the Constitutional Provision under Bill of Rights
agreement had been contract of option 1. That private property shall not be taken for public use
stipulated
without just compensation
2. That no personal shall be deprived if his/her life, liberty, or
Article 1483
property without due process of law.
FORM OF SALES
I. When Form is not important in validity of sale RA 6552 – Realty Installment Buyer Act
a. Sale being consensual, may be oral or written, The law involves the sale of immovables on installment
perfected by mere consent as to price and subject 1. Coverage: Residential Real Estate
matter 2. Exclude:
b. If particular form is required under the statute of a. Industrial lots
frauds – valid and binding between parties but not b. Commercial buildings and lots
binding to 3rd persons c. Sale to tenants under agrarian laws
II. When form is important for validity
Rights Granted to Buyers of Realty by Installment
a. Power to sell a piece of land granted to an agent
1. Buyer paid at least 2 years installment
b. Sale of land or real property
a. Pay without interest the unpaid installments due
III. When form is important for enforceability (STATUTE
within grace period of 1 month for every year of
OF FRAUDS Article 1403 (2))
installment payment. Grace period to be exercised
a. A sale agreement which by items is not to be
one every 5 years.
performed within a year from the making thereof;
b. When no payment – cancelled; buyer entitled to
b. An agreement for the sale of goods, chattels or
50% of what he has paid + 5% for every year but not
things in action, at a price not less than P500.00;
exceeding 90% of payments made
c. A sale of real property or of an interest therein.
2. Buyer paid less than 2 years installment
Article 1484 a. Grace period is not less than 60 days from due date
SALE of PERSONAL PROPERTY in INSTALLMENTS b. Cancellation if failure too pay w/in 60 days grace
Remedies of Vendor: c. 30 days notice before final cancellation
1. Elect fulfillment upon the vendee’s failure to pay
PD 957 Subdivision and Condominium Buyer’s Protective
2. Cancel the sale, if the vendee failed to pay two or more
Decree
installments
Aim to protect the buyers of condominium projects and
3. Foreclose the chattel mortgage, if any, if the vendee failed to
subdivision developments against misrepresentations and
pay two or more installments
fraudulent activities of developers, sellers and operators

Sec 9 – Revocation of Registration Certificate and License to Sell

Buyer may file a verified valid complaint based on satisfactory
evidences against the property developers or operators, of the
following grounds:
• Is insolvent; or • Project in excess of 50 years, obsolete and uneconomical to
• Has violated any of the provisions of this decree or any repair-owners holding over 50% interest in common areas
applicable rule or regulation of the authority, or any opposed to repair
undertaking of his/its performance bond; or • Project is condemned or expropriated, no longer viable –
• Has been or is engaged or is about to engage in fraudulent owners of 70% interest in common areas are opposed to the
transactions; or continuation after condemnation or expropriation of a
• Has made any misrepresentation in any prospectus, material part of project
brochure, circular or other literature about the subdivision • That conditions for such partition are set forth in the
project or condominium project that has been distributed to Declaration of Restrictions duly registered.
prospective buyers; or
• Is or bad business repute; or
• Does not conduct his business in accordance with law or
sound business principles

Section 23 – Delayed Turn-over

The buyer can do two (2) things:
1. Desist from further payment after due notice to the owner or
developer of the project and clearance from the Board
(HLURB) as mandate din the 2009 revised implementing
rules and regulations for the decree.
2. Demand to be reimbursed the total amount paid including
amortization interests but excluding delinquency interests,
with interest thereon at the legal rate.

RA 4726 – The Condominium Act

• Provides the rights of the owner and the extent of his
influence in the property where he has purchased the unit.
• It serves to protect the rights of buyers to ensure that they
are not being misled by property owners or developers.
• It allows foreigner to purchase condos in the Philippines,
given that they do not own the land on which is built.

- The ultimate consideration is your purpose for buying one

- It offers a kind of flexibility that can’t find in owning a house
or land

Rights of Condominium Owner

• Absolute ownership of his unit
• Co-ownership of land and common areas
• Exclusive easement of the space of his unit
• Non-exclusive easement to common areas for ingress or
egress
• Right to sell, lease, or mortgage his unit
• Right to repair, paint, decorate the interior surface of his unit
• Right to participate and vote in condominium corporation
meetings

Right to Partition by Sale of Entire Project

Requirements:
• Three (3) years after damage or destruction, no rebuilding or
repair has been made to a material part rendered unfit for
use
• More than ½ of project rendered untenantable – owners of
more than 30% interest in the common areas are opposed
to repair
CAPACITY TO BUY or SELL Principal Obligation of the Vendor
General Rule: All parties with capacity to contract can enter into a Article 1495
valid contract of sale – 1. Transfer ownership of determinate thing
1. Natural person 2. Deliver the thing
2. Judicial – corporation/ partnership/ associations/ 3. Warrant against eviction and hidden defects
cooperatives 4. Preserve thing from perfection to delivery
5. Pay for the execution and registration of the sale unless there
Exception: Incapacitated Persons
is a contrary agreement
Kinds of Incapacity
Ways of Effecting Delivery
• Absolute incapacity
Article 1496
• Relative incapacity
1. By actual or real delivery
Minors 2. By constructive or legal delivery
• Status of contract: voidable only, maybe ratified 3. By delivery in other manner signifying transfer to the vendee
• Remedy is action for annulment (with partial restitution in so Ways of Effecting Constructive Delivery
far as the minor is benefitted) a. Legal Formalities (1498)
Sale By and Between Spouses is prohibited, Except – b. Symbolical Tradition (1498 par 2)
• When a separation of property was agreed upon in the c. Traditio Longa Manu (1499)
marriage settlements; or d. Traditio Brevi Manu (1499)
• When there has been a judicial separation of property e. Traditio constitutum possessorium (1500)
f. Quasi-Tradition (1501)
Other Persons Relatively Incapacitated to Buy
1. Guardian – there would be a conflict of interest Contract of Sale or Return
2. Agents – to prevent fraud, undue influence Property is sold but the buyer has the option to return the same
3. Executors and administrators – not allowed to buy property instead of paying the price.
on the estate Contract of Sale on Trial or Approval
4. Public Officers and employees – property of the government Option to purchase if the goods prove satisfactory. The approval
should not be bought by them of the buyer is a condition precedent to the contract of sale.
5. Justices, Judges, Prosecuting Attorneys, Clerks and
Employees of Court Sale or Return Sale on Trial or Approval
6. Others disqualified by law – foreigners cannot buy land Subject to resolutory Subject to suspensive
condition condition
Prohibitions extends to Sales in Legal Redemption, Depends on the will of the Depends on the character or
Compromises and Renunciations buyer quality of the goods
1. Legal Redemption – redemption of property within 1 year by Ownership of the goods Ownership remains with the
the borrower/buyer passes to the buyer on seller until the buyer
2. Compromise – amicable settlement of obligations to avoid delivery, and reverts back to signifies his approval or
court litigation the seller when the goods acceptance
3. Renunciation – Waiver of right. Gratuitous abandonment of are returned
right. Risk of loss rests upon the Risks of loss rests upon the
buyer seller
Effect of Loss of Thing at the Time of Sale
Article 1493 (Specific Thing) Transfer of Ownership
1. Thing is entirely lost at the time of perfection of the contract General Rule: Ownership of goods passes to the buyer upon
- Inexistent and void delivery
2. Thing is only partially lost
Exceptions:
- Vendee may withdraw from the contract; or
1. If seller reserves the right of possession or ownership in the
- Demand the remaining part, paying its price in proportion
goods until certain conditions are fulfilled
to the total sum agreed upon
2. If seller deliver the goods to carrier but failed to enter on
Effect of Loss in Case of Specific Goods behalf of buyer such contract as maybe reasonable to prevent
1. Buyer may avoid the sale (cancellation); or lost or damage to the goods.
2. May treat sale as valid with respect to the existing goods 3. If the seller fails to give notice to the buyer regarding the
necessity to insure the goods.
4. If the goods are deliverable to the seller or his agent or the
order of the seller as indicated in the bill of lading.
5. If goods are shipped to the buyer but the seller retains Function of Documents of Title
possession of the bill of lading. It serves as evidence of:
6. If the buyer transmit to the seller the bill of exchange together 1. Transfer of title
with the bill of lading but does not honor the bill of exchange 2. Transfer of possession
(negotiable instruments, way of paying) 3. Contract between parties who are bound by its terms

Risk of Loss by Fortuitous Event Most Common Forms of Documents of Title

General Rule: If the thing is lost by fortuitous event, the risk is (Valuable Goods)
borne by the owner of the thing at the time of the loss Bill of Lading
Contract or receipt for the transport of goods and their delivery to
Exceptions:
the person named therein, to order, or to bearer
1. If goods are delivered to the buyer but seller retains ownership
merely to secure performance by the buyer of his obligation Dock Warrant
under the contract; Instrument given by the dock owner to an importer or goods
2. If actual delivery has been delayed through the fault of either warehoused on the dock recognizing the importer’s title to the
the buyer or the seller, the goods are at the risk of the party in said goods
default
Warehouse Receipt
Sale by a Person Not the Owner Contract or receipt for goods deposited with a warehouseman
General Rule: If the seller has no authority or consent from the containing the latter’s undertaking to hold and deliver the said
owner, the buyer acquires no better right or title to the goods than goods to a specified person, to order, or to bearer.
the seller
Negotiation of Negotiable Document by Indorsement
Fundamental doctrine: 1. If indorsed in blank or to bearer
• No one can give what he has not - The document becomes negotiable by delivery
• No one can sell what he does not own 2. If indorsed to a specified person
- It may again be negotiated by the indorsement of such
Exceptions:
person in blank, to bearer, or to another specified person
1. If the owner of the goods is, by his conduct, precluded from
denying the seller’s authority to sell Person Who May Negotiate A Negotiable Document
2. If the law enables the apparent owner to dispose of the goods 1. The owner thereof; or
as if he were the true owner thereof 2. Any person to whom the possession or custody thereof has
3. If the sale is sanctioned statutory or judicial authority been entrusted by the owner:
4. If the sale is made at merchant’s store, fairs, or markets a. If the term of document is to deliver the goods to the
5. If the seller has voidable title which has not been avoided at order of the person in possession thereof, or to bearer, or
the time of sale b. If the document is in such form that it may be negotiated
6. If the seller subsequently acquires the title to the goods by delivery.

Sale by One Having a Voidable Title Rights of Person To Whom Document has been Negotiated
The buyer acquires title to the goods provided the following 1) The title of the person negotiating the document, over the
requisites are present: goods covered by the document;
1. He buys them before the title of the seller has been avoided; 2) The title of the person (depositor or owner) to whose order by
2. He buys them in good faith and for value; and the terms of the document the goods were to be delivered,
3. Without notice of the seller’s defect of title. over such goods;
3) The direct obligation of the bailee (one whose taking care of
CLASSES OF DOCUMENTS OF TITLE
goods; warehouse owner) to hold possession of the goods for
Negotiable Document of Title
him, as if the bailee had contracted to him directly.
A document of title in which it is stated that the goods referred to
therein will be delivered to the bearer, or to the order of any person Rights of Person To Whom Document has been Transferred
named in such document. 1) Title to the goods as against the transferor
2) Right to notify the bailee of the transfer
Non-negotiable Document of Title
3) Right to acquire the obligation of the bailee to hold the goods
A document by the term of which the goods covered are
for him
deliverable to a specified person.
Transfer of Negotiable Document Without Indorsement
Right of Transferee:
1. Right to the goods as against the transferor;
2. Right to compel the transferor to indorse the document
Warranties on Sale of Documents UNPAID SELLER
1. That the document is genuine; 1. When the whole of the price has not been paid;
2. That he has legal right to negotiate or transfer it 2. When a bill of exchange or other negotiable instrument has
3. That he has no knowledge which would impair the validity or been received as conditional payment, AND the condition on
worth of the document; and which it was received has been broken by reason of the
4. That he has the right to transfer title to the goods, and the dishonor of the instrument, insolvency of the buyer otherwise.
same are merchantable or fit for a particular purpose
REMEDIES OF UNPAID SELLER
Place and Time of Delivery of Goods 1. Possessory lien over the goods
Rules: 2. Right of stoppage in transit after he has parted with the
1. Place and time of delivery agreed upon; possession of the goods and the buyer becomes insolvent
2. If no agreement, place of delivery is determined by usage of 3. Right of resale
trade; 4. Right to rescind the sale
3. If no agreement or prevalent usage, place of delivery is seller’s
RIGHT OF UNPAID SELLER TO POSSESSORY LIEN
place of business;
May be exercised when:
4. In any other case, place of delivery is seller’s residence; and
1. The goods have been sold without any stipulation as to credit
5. In case of specific goods, where it is located, in the absence of
2. The goods have been sold on credit, but the term of credit has
any agreement or prevalent usage.
expired
RULES WHEN QUANTITY IS LESS THAN AGREED UPON 3. The buyer becomes insolvent
Article 1522
WHEN SELLER LOSSES POSSESSORY LIEN
1. Buyer may reject the goods delivered; or
1. Delivery of the goods to a carrier or bailee for the purpose of
2. Buyer may accept what has been delivered, at the contract
transmission to the buyer without reserving ownership or
rate
right of possession
RULES WHEN QUANTITY IS MORE THAN AGREED UPON 2. When the buyer lawfully obtains possession of the goods
1. Buyer may reject all; or 3. By waiver of the lien
2. Buyer may accept the goods agreed upon and reject the rest;
RIGHT OF STOPPAGE IN TRANSITU
or
Requisites:
3. Buyer may accept all and must pay for them at the contract
1. Seller must be unpaid
rate
2. Buyer must be insolvent
RULES WHEN GOODS MIXED WITH GOODS OF DIFFERENT 3. Goods must be in transit
DESCRIPTION 4. Seller must either:
General Rule: Buyer may accept the goods which are in a. Actually take possession of the goods sold, or
accordance with the contract and reject the rest. b. Give notice of his claim to the carrier or other person
in possession
Delivery to Carrier
5. Seller must surrender the negotiable document of title, if any,
General Rule: Where seller is authorized or required to send the
issued by the carrier or bailee
goods to the buyer, delivery to the carrier is delivery to the buyer.
6. Seller must bear the expenses of delivery of the goods after
Exceptions: the exercise of the right
1. When a contrary intention appears
WHEN GOODS ARE CONSIDERED IN TRANSITU
2. Implied reservation of ownership under pars. 1,2,3 of Art. 1503
1. After delivery to a carrier or other bailee and before the buyer
Seller’s Duty After Delivery To Carrier or his agent takes delivery of them; and
1. To enter on behalf of buyer into such contract reasonable 2. If the goods are rejected by the buyer, and the carrier or other
under the circumstances bailee continues in possession of them
2. To give notice to buyer regarding necessity of insuring the
WHEN GOODS ARE NO LONGER IN TRANSIT
goods
1. After delivery to the buyer or his agent in that behalf;
PAYMENT OF THE PURCHASE PRICE 2. If the buyer or his agent obtains possession of the goods at a
General Rule: The seller is not bound to deliver the thing sold point before the destination originally fixed;
unless the purchase price has been paid 3. If the carrier or the bailee acknowledges to hold the goods on
behalf of the buyer; and
Exception: The seller is bound to deliver even if the price has not 4. If the carrier or bailee wrongfully refuses to deliver the goods
been paid, if a period of payment has been fixed. to the buyer.
Effects When the Right to Stoppage is Exercised Loss, Deterioration, or Improvement Before Delivery
1. The goods are no longer in transit. Rules:
2. The contract of carriage ends; instead the carrier now 1. If the thing is lost without the fault of the debtor, the
becomes a mere bailee, and will be liable as such. obligation shall be extinguished;
3. The carrier should not deliver anymore to the buyer or the 2. If the thing is lost through the fault if the debtor, he shall be
latter’s agent; otherwise he will clearly be liable for damages. obliged to pay damages;
4. The carrier must redeliver to, or according to the directions of 3. If the thing deteriorates without the fault of the debtor, the
the seller. impairment is to be borne by the creditor;
4. If it deteriorates through the fault of the debtor, the creditor
RIGHT OF RESALE
may choose between rescission and fulfillment with damages
May be exercised only when
in either case;
1. The unpaid seller has either a right of lien; or
5. If the thing improved by its nature, or by time, it shall inure to
2. Has stopped the goods in transit; and
the benefit of the creditor;
3. Under ANY of the following conditions
6. If it improved at the expense of the debtor, he shall no further
a. Where the goods are perishable in nature
right than that granted to the usufructuary
b. Where the right to resell is expressly reserved in case
the buyer should make a default
c. Where the buyer delays in the payment of the price
Next topic: Article 1544 – 1637
for an unreasonable time
*All remaining sales topics
EFFECT OF RESALE
1. The seller may recover from the original buyer damages for
any loss occasioned by the breach of the contract of sale.
2. The seller is not liable for any profit made by such resale;

RIGHT TO RESCIND
1. If the seller has either the right of lien; or
2. A right to stop the goods in transit; and
3. Under either of the 2 situations:
a. Where the right to rescind on default has been expressly
reserved
b. Where the buyer has been in default for an unreasonable
time

Effect of Sale of Goods subject to Lien or Stoppage in Transitu

1. The seller’s right is not affected by any disposition of the
goods made by the buyer, unless he has assent thereto
2. If goods are covered by negotiable document of title, the
seller’s right cannot prevail over the rights of a purchaser for
value in good faith to whom the document has been indorsed.

Rights of Vendor to Withhold Delivery in Sale on Credit

1. When the vendee becomes insolvent
2. When vendee failed to give the promised guaranty or security
3. Impairment of the guaranty or security by the vendee’s act, or
it disappears through fortuitous event, unless he gives new
ones equally satisfactory
4. Violation of the undertaking in consideration of which the
vendor agreed to the period
5. When the vendee attempts to abscond

Rights of Vendee to Fruits, Accessions & Accessories

1. Right to fruits & accessions/accessories accrue from time sale
is perfected
2. No real right over it until it is delivered
DOUBLE SALE IMPLIED WARRANTIES
Requisites: 1. Warranty that seller has a right to sell
1. Exactly same subject matter 2. The thing is free from any hidden defects, or any charge
2. Exactly same immediate seller or encumbrance
3. The buyers represent conflicting interest
NON-APPLICABILITY OF IMPLIED WARRANTY
4. Both sales are valid
1. “As is and where is” sale
Rules of Preference: 2. Sale of second hand articles
1. Personal Property 3. Sale by virtue of authority in fact or law
- First possessor in good faith
WARRANTY AGAINST EVICTION
2. Real Property
Warranty in which the seller guarantees that he has the right
a. First registrant in good faith
to sell the thing sold and to transfer ownership to the buyer
b. First possessor in good faith
who shall not be disturbed in his legal and peaceful
c. Person with oldest title in good faith
possession thereof.
CONDITION
ESSENTIAL ELEMENTS OF THE WARRANTY AGAINST
• An uncertain event or contingency on the happening of
EVICTION
which the contract depends.
1. Buyer is evicted in whole or in part from the subject
• The happening of the contract does not attach until the
matter of sale
condition is performed.
2. There is a final judgement
EFFECT OF NON-FULFILLMENT OF CONDITION 3. Basis of eviction is a right prior to sale or an act
1. If the obligation of either party is subject to any imputable to vendor
condition and such condition is not fulfilled, such party 4. Seller has been summoned in the suit for eviction at the
may either: instance of buyer
a. Refuse to proceed with the contract 5. There is no waiver on the part of the buyer
b. Proceed with the contract, waiving the performance
PRESCRIPTION
of the condition.
By Prescription – one acquires ownership and other real
2. If the condition is in the nature of a promise that is
rights through the lapse of time in the manner and under the
should happen, the non-performance of such condition
conditions prescribed by law. (Art. 1106)
may be treated by the other party as breach of warranty.
Effect of Prescription
WARRANTY 1. Completed before sale – vendor will be liable for eviction
Any representation made by the seller of the thing with 2. Completed after sale – vendor is not liable for eviction
respect to its character, quality, or ownership, by which he
EFFECT OF BAD FAITH
induces the buyer to purchase the same relying on said
1. As to Vendor – cannot be exempted from warranty
representation.
against eviction.
KINDS OF WARRANTY 2. As to Vendee – not entitled to warranty against eviction
1. Express Warranty or right to recover damages.
2. Implied Warranty
KINDS OF WAIVER OF EVICTION
REQUISITES OF EXPRESS WARRANTY 1. Consciente – voluntarily made by the vendee without
- It must be an affirmation of fact or any promise by seller knowledge and assumption of the risk of eviction; and
relating to the subject matter of sale 2. Intencionada – waiver is made with knowledge of the
- Natural tendency of affirmation or promise is to induce risk of eviction and assumption of risk.
buyer to purchase subject matter
LIABILITY IN CASE OF EVICTION
- Buyer purchases the subject matter relying thereon –
1. Return the value of the thing
when breached, seller is liable for damages
2. Liable for income or fruit of the thing
3. Cost of the suit
4. Expenses of the contract
5. Damages and interest, and ornamental expenses
ACTION IN CASE OF PARTIAL EVICTION WARRANTY OF MERCHANTABILITY
1. Enforce vendor’s liability for eviction - Where the goods were brought by description, that they
2. Rescission are reasonably fit for the general purpose for which they
are sold
IMMOVABLE SOLD ENCUMBERED WITH NON-APPARENT
- If requires identity between what is described in the
BURDEN
contact AND what is tendered, in the sense that the
Rights of Vendee:
latter is of such quality to have some value
a) Rescission, or
b) Indemnity REMEDIES OF BUYER AGAINST HIDDEN DEFECTS
1. Buyer may elect between withdrawing from the
When right cannot be exercised:
contract; or
a) If the burden or servitude is apparent
2. Demand proportionate reduction of price with damages
b) If the non-apparent burden or servitude is registered
in either case.
c) If vendee had knowledge of the encumbrance, whether
is it not registered or not EFFECT OF LOSS OF THING ON ACCOUNT OF HIDDEN
DEFECTS
When action must be brought:
1. If vendor was aware of hidden defects, he shall bear the
- Within ONE YEAR from the execution of the deed of sale
loss and vendee shall have the right to recover:
- File for rescission or
a. The price paid
- Action for damages
b. Expenses of the contract
- After one year
c. Damages
- Action for damages only
2. If the vendor was not aware, he shall be obliged to
REQUISITES FOR WARRANTY AGAINST HIDDEN DEFECTS return:
1. Defect must be serious or important; a. Price paid
2. It must be hidden; b. Interest thereon
3. It must exist at the time of sale; c. Expenses of the contract if paid by the vendee
4. Vendee must give notice of the defect to the vendor
Effect of Loss of Thing Not on Account of Hidden Defects
within a reasonable time;
Effect if the cause of loss was not the hidden defect
5. Action for rescission or reduction or price must be
• If the thing sold had any hidden fault at the time of the
brought within the proper Period (within 6 mos. from
sale, and should thereafter be lost by a
delivery of the thing or 40 days from date of delivery in
(1) Fortuitious event OR
case of animals); and
(2) Through the fault of the vendee
6. No Waiver of the warranty by vendee
• The vendee may demand of the vendor the price which
IMPLIED WARRANTIES OF QUALITY he paid less the value of the thing at the time of its loss.
1. Warranty of fitness or quality
RULES IN CASE OF SALE OF ANIMALS
2. Warranty of merchantability
1. When two or more animals sold at the same time:
WARRANTY OF FITNESS • Redhibitory defect of one will not affect the other
General Rule: There is no implied warranty as to the quality without it;
or fitness for any particular purpose of goods under a • Exception: when it appears that purchase of team will
contract of sale not be done without the defective one
2. Sale of animals at fair or public auction
Exceptions:
• No warranty against hidden defects
1. Where the buyer, expressly or by implication manifests
3. Sale of animals shall be void when:
to the seller the particular purpose for which the goods
• Animals sold are suffering from contagious disease
are required
• If the use or service for which they are acquired has been
2. Where the buyer relies upon the seller’s skill or judgment
stated in the contract, and they are found to be unfit
therefor.
OBLIGATIONS OF THE VENDEE MODES OF MANIFESTING ACCEPTANCE
Principal Obligation 1. Express acceptance
1. To accept delivery - Verbal or in writing
2. To the price of the thing sold in legal tender unless 2. Implied acceptance
another mode has been agreed upon - The buyer does any act inconsistent with seller’s
3. To bear the expenses for the execution and registration ownership
of the sale and putting the goods in a deliverable state, - Retains the goods after the lapsed of reasonable time
if such is the stipulation
BREACH OF PROMISE OR WARRANTY
PERTINENT RULES 1. Buyer should give notice to seller of any such breach
1. The vendor is not required to deliver the thing sold until within reasonable time
the price is paid nor the vendee to pay the price before 2. Failure to give notice to the seller within reasonable time
the thing is delivered in the absence of an agreement to shall discharge the seller of his liability
the contrary (Article 1524).
EFFECT OF REFUSAL TO ACCEPT DELIVERY
2. If stipulated, the vendee is bound to accept delivery and
Valid refusal:
to pay the price at the time and place designated
1. Buyer should notify the seller of his refusal to accept the
3. If there is no stipulation as to the time and place of
goods
payment and delivery, the vendee is bound to pay at the
2. Buyer has the obligation to take reasonable care of the
time and place of delivery
goods
4. In the absence of stipulation as to the place of delivery,
3. Seller has the duty to take delivery of the goods
it shall be made wherever the thing might be at the
4. Risk of loss is on the seller. Buyer will be liable if he
moment the contract was perfected
voluntarily constitute himself as depository of the goods
5. If only the time for delivery has been fixed in the
5. Buyer may resell the goods if the seller was notified but
contract, the vendee is required to pay even before the
failed to take delivery of the goods.
thing is delivered to him; if only the time for payment has
been fixed, the vendee is entitled to delivery even before Wrongful refusal:
the price is paid by him. 1. Title passes to the buyer
2. Risk of loss is borne by the buyer
RULES GOVERNING DELIVERY IN INSTALLMENT
1. The buyer of goods is not bound to accept delivery by LIABILITY OF THE VENDEE FOR INTEREST
installment, unless stipulated Vendee is liable for the interest from the time of delivery to
2. Where separate price has been fixed for each the payment of the price –
installment, the buyer may reject the succeeding 1. If interest is stipulated
installment in case of defective deliveries, and sue for 2. If the thing sold and delivered produce fruits or income
breach of contract; or 3. If vendee is in default from the time of demand for
3. Where the buyer unjustly refuse to accept delivery or to payment of the price
pay one or more installments, seller may sue for breach
Rights of Vendee to Suspend Payment
of contract if the breach is so material as to affect the
1. If vendee is disturbed in the possession or ownership of
whole contract
the thing bought; and
4. Where breach is severable, it will give rise to claim for
2. If the vendee has well grounded fear that his possession
compensation for the particular breach but will not
would be disturbed by a vindicatory action or
affect the whole contract
foreclosure of mortgage
BUYER’S RIGHT TO EXAMINE THE GOODS
Cases when Vendee may not Suspend Payment
Arises
1. If the vendor gives security for the return of the price in
1. In actual delivery of goods
a proper case
2. In goods delivered COD / Not COD, if stipulated or if
2. If it has been stipulated that notwithstanding any such
permitted under usage of trade
contingency, the vendee must make payment
3. If the vendor has caused the disturbance or danger to
cease
4. If the disturbance is a mere act of trespass
Rule on Rescission of Sale of Real Property ACTION OF THE SELLER FOR RESCISSION
General Rule: 1. When the buyer has repudiated the contract of sale
The vendor may sue for rescission of the contract should the 2. When the buyer has manifested his inability to perform
vendee fail to pay the agreed price his obligation thereunder
3. When the buyer has committed a breach of the contract
Exceptions:
of sale
1. If there is a stipulation to the contrary
2. If the vendee pay even after the stipulated time but ACTION OF BUYER FOR SPECIFIC PERFORMANCE
before demand for rescission has been made by the 1. Where the seller has broken the contract to deliver
vendor specific or ascertained goods
2. The judgment or decree may be unconditional, or upon
Rescission of Sale of Movable Property
such terms and conditions as to damages, payment of
Cases when vendor may rescind contract of sale:
the price and otherwise as the court may deem just
1. Failure of the vendee to appear to receive delivery, or
2. Having appeared, failed to tender the price at the same ACTION OF BUYER FOR RESCISSION OR DAMAGES FOR
time, unless, a longer period for its payment has been BREACH OF WARRANTY
stipulated. 1. Recoupment – accept the goods and set up the seller’s
breach to reduce or extinguish the price
Remedies of the Seller for Breach of Contract of Sale
2. Action for damages – accept the goods and maintain an
1. Action for payment of the price (Art. 1595)
action for damages for breach of warranty
2. Action for damages for non-acceptance of the goods
3. Counterclaim for damages 0 refuse to accept the goods
(Art. 1596)
and maintain an action for damages for breach of
3. Action for rescission (Art. 1597)
warranty
Remedies of the Buyer for Breach of Contract of Sale 4. Rescission – rescind the contract by returning or offering
1. Action for specific performance (Art. 1598) the return of the goods, and recover the price already
2. Action for rescission or damages for breach of warranty paid
(Art. 1599)

ACTION OF THE SELLER FOR PAYMENT OF THE PRICE

1. When ownership of the goods has passed to the buyer
and he wrongfully neglects or refuses to pay for the price
2. When the price is payable on a certain day and he
wrongfully neglects or refuses to pay such price
irrespective of delivery or transfer of title
3. When the goods cannot readily be resold for the
reasonable price and the buyer wrongfully refuses to
accept them even before the ownership in the goods has
passed

ACTION OF THE SELLER FOR DAMAGES FOR NON-

ACCEPTANCE OF THE GOODS
1. In case of wrongful neglect or refusal by the buyer to
accept or pay for the thing sold (Art. 1596 par. 1)
2. In an executory contract, where the ownership in the
goods has not passed, and the seller cannot maintain an
action to recover the price (Art. 1595)
3. If the goods are not yet identified at the time of the
contract or subsequently
Remedies of the Seller for Breach of Contract of Sale 2. Action for damages – accept the goods and
1. Action for payment of the price (Art. 1595) maintain an action for damages for breach of
2. Action for damages for non-acceptance of the warranty
goods (Art. 1596) 3. Counterclaim for damages 0 refuse to accept the
3. Action for rescission (Art. 1597) goods and maintain an action for damages for
breach of warranty
ACTION OF THE SELLER FOR PAYMENT OF THE PRICE
4. Rescission – rescind the contract by returning or
1. When ownership of the goods has passed to the
offering the return of the goods, and recover the
buyer and he wrongfully neglects or refuses to pay
price already paid
for the price
2. When the price is payable on a certain day and he INSTANCES WHEN RESCISSION BY BUYER ARE NOT
wrongfully neglects or refuses to pay such price ALLOWED
irrespective of delivery or transfer of title
1. If the buyer accepted the goods knowing of the
3. When the goods cannot readily be resold for the
breach of warranty without protest
reasonable price and the buyer wrongfully refuses
2. If he fails to notify the seller within a reasonable
to accept them even before the ownership in the
time of his election to rescind
goods has passed
3. If he fails to return or offer to return the goods in
ACTION OF THE SELLER FOR DAMAGES FOR NON- substantially as good condition as they were in at
ACCEPTANCE OF THE GOODS the time of the transfer of ownership to him
1. In case of wrongful neglect or refusal by the buyer
RIGHTS AND OBLIGATIONS OF THE BUYER IN CASE OF
to accept or pay for the thing sold (Art. 1596 par. 1)
RESCISSION
2. In an executory contract, where the ownership in
the goods has not passed, and the seller cannot 1. The buyer cease to be liable for the price, his
maintain an action to recover the price (Art. 1595) obligation is to return the goods
3. If the goods are not yet identified at the time of the 2. The buyer may recover the price he has paid
contract or subsequently 3. The buyer has the right to hold the goods as bailee
should the seller refuse to accept the return of the
ACTION OF THE SELLER FOR RESCISSION
goods
1. When the buyer has repudiated the contract of sale
4. The buyer may have lien on the goods for any
2. When the buyer has manifested his inability to
portion of the price already paid
perform his obligation thereunder
3. When the buyer has committed a breach of the Modes of Extinguishment of Sale
contract of sale
1. Those causes which are also the means of
Remedies of the Buyer for Breach of Contract of Sale extinguishing all other contracts
1. Action for specific performance (Art. 1598) 2. Conventional Redemption
2. Action for rescission or damages for breach of 3. Legal Redemption
warranty (Art. 1599)
CONVENTIONAL REDEMPTION
ACTION OF BUYER FOR SPECIFIC PERFORMANCE
1. Where the seller has broken the contract to deliver 1. Seller reserved the right to repurchase thing sold
specific or ascertained goods 2. Coupled with obligation to return price of the sale,
2. The judgment or decree may be unconditional, or expenses of contract and other legitimate
upon such terms and conditions as to damages, payments and the necessary and useful expenses
payment of the price and otherwise as the court mad on the thing sold
may deem just 3. Right must be recognized in the deed of sale
INSTANCES OF EQUITABLE MORTGAGE
1. Price of sale with right to repurchase is unusually
ACTION OF BUYER FOR RESCISSION OR DAMAGES inadequate
FOR BREACH OF WARRANTY 2. Seller remains in possession as a lessee or
1. Recoupment – accept the goods and set up the otherwise
seller’s breach to reduce or extinguish the price
3. Upon/after expiration of right to repurchase, 3. When rights of co-owners over an undivided thing
another instrument extending the period of is sold as regards to their own share- vendee a
redemption is executed retro cannot compel one to redeem the whole
4. Buyer retains for himself a part of the purchase property; (Art 1614)
price
REDEMPTION AGAINST HEIR OF VENDEE
5. Seller binds himself to pay taxes on thing sold
Rule:
6. Real intention of parties is to secure the payment of
a debt or performance of other obligation 1. The vender a retro can exercise the right to redeem
against the heirs of the vendee a retro with respect
PERIOD OF REDEMPTION
only to their respective share;
1. No period agreed upon- 4 years from date of 2. If the property has been divided and the thing sold
contract has been awarded to one of their heirs, the vendor
2. When there is agreement- should not exceed 10 can exercise the right to redeem against such heir
years; if it exceeded, valid only for the first 10years
EFFECTS OF RIGHT OF REDEMPTION
3. When period to redeem has expired and there has
Vendor a retro must return first the following:
been a previous suit on the nature of the contract-
seller still has 30 days from final judgement on the 1. The price of the thing sold
basis that contract was a sale with pacto de retro 2. Expenses of the contract and other legitimate
payments made by reason of the sale
EFFECT OF FAILURE TO EXERCISE RIGHT OF
3. Necessary and useful expensed made on the thing
REDEMPTION
sold
1. Buyer a retro automatically acquires full
RIGHT OF PARTIES AS TO FRUITS OF LAND
ownership
2. There must be judicial order before ownership of Rules:
real property is consolidate in the buyer a retro (Art
1607) 1. If there were fruits at the time of sale and the
vendee paid for them, he must be reimbursed at
RIGHTS OF VENDEE A RETRO the time of redemption
2. If no indemnity was paid, there shall be no
1. To be subrogated to the vendor’s right and actions
reimbursement at the time of redemption
(Art 1609); and
3. If the property has no fruit at the time of sale and
2. Right against creditor of the vendor not to exercise
there are some at the time of redemption, the
the right of redemption until after they have
vendee shall received a prorated portion
exhausted the property of the vendor (Art 1610)
corresponding to the last year he possessed the
3. To compel the vendor of a part of undivided
property.
immovable to redeem the whole property in case
the vendee a retro of such part acquires the entire
immovable (Art 1611)
LEGAL REDEMPTION
Is the right to be subrogated upon the same terms and
conditions stipulated in the contract, in the place of
one who acquires the thing by purchase or by dation in
REDEMPTION IN JOINT SALE BY CO-OWNERS/CO-
payment or by other transaction whereby ownership is
HEIRS
transmitted by onerous titles
Rule:
RIGHT OF LEGAL REDEMPTION OF CO-OWNER
1. When an undivided thing is sold by co-owners/co-
Requisites:
heirs, vendors a retro may only exercise his right
over his respective share; (Art 1612) 1. There must be a co-ownership
2. Vendee a retro may demand that they must come 2. There must be alienation of all or of any of the
to an agreement first and may not be compelled to shares of the other co-owners
consent to a partial redemption; (Art 1613) 3. The sale must be to a 3rd person
4. The sale must be before partition EFFECTS OF ASSIGNMENT
5. The right must be exercised within 30 days from
1. Transfers the right to collect the full value of the
the notice in writing by the vendor
credit, even if he paid a price less than such value
6. The vendee must be reimbursed for the price of
2. Transfers all the accessory rights
the sale
3. Debtor can set up against the assignee all the
RIGHT OF LEGAL REDEMPTION defense
1. Any co-owner may exercise right of redemption by EFFECT OF PAYMENT BY THE DEBTOR AFTER
paying reasonable price of property to the buyer ASSIGNMENT OF CREDIT
2. If 2 or more co-owners desire to exercise right of
1. Before Notice of the assignment
redemption, they may only do so in proportion to
- Payment to the original creditor is valid and
the share they may respectively have in the thing
debtor shall be released from his obligation
owned in common
2. After notice
RIGHT OF LEGAL REDEMPTION OF ADJACENT - Payment to the original creditor is not valid as
OWNERS OF RURAL LANDS against the assignee
- He can be made to pay again by the assignee
1. Both the land of the one exercising the right of
redemption and the land sought to be redeemed WARRANTIES OF THE ASSIGNOR OF CREDIT
must be rural;
A. He warrants, the existence of the credit
2. The land must be adjacent;
B. He warrants, the legality of the credit at the
3. There must be an alienation;
perfection of the contract
4. The rural land must not exceed 1 hectare
5. The vendee must also own some rural land LIABILITIES OF THE ASSIGNOR OF CREDIT FOR
6. The rural land must not be separated by brooks, VIOLATION OF HIS WARRANTIES
drains, ravines, roads, and other apparent
servitudes from the adjoining land 1. Assignor in good faith
- Liability is limited only to the price received
PRE-EMPTION VS. REDEMPTION and to the expenses of the contract, and any
other legitimate payments by reason of the
Pre-emption Redemption
assignment
1. Arises before sale 1. Arises after sale
2. No rescission 2. there can be rescission
2. Assignor in bad faith
because no sale as of the original sale
- Liable not only for the payment of the price
yet exists
and all the expenses but also for damages
3. The action is 3. action is directed against
directed against the the buyer LIABILITIES OF THE ASSIGNOR FOR DEBTOR’S
prospective seller INSOLVENCY
Solvency of debtor – no warranty, unless
PERIOD OF REDEMPTION
a. There is a stipulation
1. Right of legal pre-emption of redemption shall be b. Insolvency was prior to assignments and of
exercised within 3o days from notice by the buyer common knowledge
2. Deed of sale not to be recorded in Registry of - Shall only last for 1 year
Deeds unless accompanied by affidavit that buyer
LEGAL REDEMPTION IN SALE OF CREDIT OR OTHER
has given notice to redemptioners
RIGHT IN LITIGATION
ASSIGNMENT OF CREDIT
Requisites:
A contract by which the owner of a credit transfer to
1. There must be a sale or assignment of credit
another his rights and actions against a third person in
2. There must be a pending litigation at the time
consideration of a price certain in money or its
of the assignment
equivalent
3. The debtor must pay the assignee
 a. Price paid by him 3. If it is made by an executor, administrator,
b. Judicial cost incurred by him; and receiver, assignee in insolvency, or public
c. Interest on the price from the date of payment officer, acting under judicial process; and
4. The right must be exercised by the debtor 4. If it refers to properties exempt from
within 30 days from the date the assignee attachment or execution (Rules of Court, Rule
demands (judicially or extra-judicially) 39, Section 12)
payment from him.
PROTECTION ACCORDED TO CREDITORS BY BULK
BARTER SALES LAW
By the contract of barter or exchange one of the parties 1. It requires the vendor, mortgagor, transferor or
binds himself to give one thing in consideration of the assignor to deliver to the vendee, mortgagee, or
other’s promise to give another thing to his agent or representative a sworn written
statement of names and addresses of all
PERFECTION AND CONSUMMATION
creditors to whom said vendor, etc, may have
Perfected from the moment there is a meeting of the been indebted together with the amount due
minds upon the things promised by each party in or to be due
consideration of the other 2. If requires the vendor, mortgagor, transferor or
assignor, at least 10 days before the sale,
Consummated from the time of mutual delivery by the transfer, mortgage, assignment to make full
contracting parties of the things promised detailed inventory showing the quantity and
BULK SALES LAW the cost of price of goods, and to notify every
creditor of the price terms and conditions of the
Designed to prevent the defrauding of the creditors by sale, etc.
the secret sale in bulk of all or substantially all of a
merchant’s stock of goods

EFFECT OF FALSE STATEMENTS IN THE SCHEDULE OF

CREDITORS
WHEN SALE OF TRANSFER IN BULK
1. Without knowledge of buyer
Any sale, transfer, mortgage, or assignment • If the statement is fair upon its face and
the buyer has no knowledge of its
1. Of a stock of goods, wares, merchandise,
incorrectness and nothing to put him
provisions, or materials other than in the
on inquiry about it, he will be protected
ordinary course of trade and the regular
in its purchase
prosecution of business; or
• The remedy of the creditor is not
2. Of all or substantially all, of the business or
against the goods but to prosecute the
trade; or
seller criminally
3. Of all or substantially all, of the fixtures and
2. With knowledge or imputed knowledge of
equipment used in the business of the vendor,
buyer
mortgagor, transferor or assignor
• The vendee accepts it at his peril
SALE OR TRANSFER NOT COVERED BY BULK SALES • The sale is valid only as between the
LAW vendor and the vendee but void against
the creditors
1. If the sale or transfer is in the ordinary course of
3. With names of certain creditors without notice
trade and the regular prosecution of business of
are omitted from the list
the vendor
• The sale is void as to such creditors,
2. If it is made by one who produces and delivers
whether the omission was fraudulent or
a written waiver of the provisions of the Bulk
not
Sales Act from his creditors;
EFFECT OF VIOLATION OF LAW ON TRANSFER
 1. As between the parties
• The Bulk Sales Law does not in any way
affect the validity of the transfer as
between the intermediate parties
thereto
• A sale not in compliance with the Bulk
Sales Law is valid against all persons
other than the creditors
2. As against creditors
• A purchaser in violation of the law
acquires no right in the property
purchased as against the creditors of
the seller
• His status is that of a trustee or receiver
for the benefit of the creditors of the
seller; as such, he is responsible for the
disposition of the property
ACTS PUNISHED BY BULK SALES LAW
1. Knowingly or willfully making or delivering a
statement required by the act which does not
include the names of all the creditors of the
vendor, etc with the correct amount due or to
become due or which contains any false or
untrue statement; and
2. Transferring title to any stock of goods,
warehouse, merchandise, provisions or
materials sold in bulk, without consideration or
for nominal consideration