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Sales Week 4 - Subject Matter of the Sale - Coggle Diagram

- - - - Must be Determinate or Determinable
        
        NCC 1349,1460
        
        Determinate - if it is possible to ascertain its identity, quality and or quantity. A thing becomes determinate when it is particularly designated.
        
        Art. 1460. A thing is determinate when it is
        particularly designated or physical segregated from all other of the same class.
        The requisite 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
        
        Tests:
        Capacity to Segregate - if subject matter is capable of being made determinate.
        No Further Agreement - without the necessity of a new or further agreement between the parties.
        
        Determinable - If it can be made determinate at a future point in time without the necessity of a new or further agreement between the parties.
        
        Proviso here because a valid and perfected contract of sale requires that it is a determinate thing or, determinable without need to enter into a new contract. If it wasn't determinate at the time of the sale, then there was no perfected contract of sale.
      - NCC 1347,1459,1575
        
        Licit - if it is not outside the commerce of men AND does not cover intransmissible rihgts.
        
        Art. 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered.
        Art. 1575. The sale of animals suffering from contagious diseases shall be void. A contract of sale of animals shall also be void if the use or service for which they are acquired has been stated in the contract, and they are found to be unfit therefor.
    - - Art. 1348. Impossible things or services cannot be the object of contracts.
        
        Art. 1462. The goods which form the subject of a
        contract of sale may be either existing goods, owned or possessed by the seller, or goods to be
        manufactured, raised, or acquired by the seller after the perfection of the contract of sale, in this Title called "future goods."
        There may be a contract of sale of goods, whose acquisition by the seller depends upon a contingency which may or may not happen.
        
        Future Goods - Goods not yet existing at the time of the perfection of the sale. Here, future thing is certain.
        
        Contingent Goods - Future and uncertain event. Perfection of sale dependent on a future and uncertain event.
        
        Future Goods - Can be a valid contract of sale so long as the thing exists at the time of the delivery. Because 1458 only requires meeting of the minds over a price certain in money or its equivalent and the determinate thing.
        
        Ownership only relevant at the time of delivery.
        
        E.g. sale over future goods: Sale of apple in December
        Contingent Goods - Sale of apple if the harvest is good.
    - - Subject to a Resolutory Condition (1465 & 1608)
        
        Contract - whereby if resolutory condition happens then rights acquired and obligations accrued are terminated. As applied to sales, the happening of the condition terminates the sale.
        
        Art. 1465. Things subject to a resolutory condition may be the object of the contract of sale.
        Art. 1608. The vendor may bring his action against every possessor whose right is derived from the vendee, even if in the second contract no mention should have been made of the right to repurchase, without prejudice to the provisions of the Mortgage Law and the Land Registration Law with respect to third persons.
        
        If resolutory condition extinguishes the thing that is the subject of the contract of sale - NCC 1190 applies - duty to return what each has received.
        
        Here, the THING is subject to a resolutory condition. This covers two transactions
        (1) Sale With a right to repurchase - Pacto de retro - ownership of the buyer subject to repurchase rights
        (2) Things in litigation - resolutory condition is the final judgment of the court.
        
        Resolutory Condition – an uncertain event upon the happening of which the obligation (or right) subject to it is extinguished
      - Emptio Rei Speratae - contracts over future things - subject to a suspensive condition that object will come into existence. Necessarily refers to contracts over determinate things. Because if generic, no need. If object doesnt come into existence, then no obligation to pay because suspensive condition. Sale over FUTURE Good
        
        Emptio Spei - refers to contracts over the hope or expectancy that the thing will come into existence. If this fails, buyer will still pay the price. Sale over the HOPE not the future good.
        
        Art. 1461. Things having a potential existence may be the object of the contract of sale.
        The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that the thing will come into existence.
        The sale of a vain hope or expectancy is void.
    - - Generic Things
        
        Future Goods
        
        Undivided Interest/Share
        
        Things in litigation
        
        Things subject to Conditions
        
        Art. 1465 - Things subject to a resolutory condition may be the object of the contract of sale.
        
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        NCC 1381 (4) - The following contracts are rescissible: (4) Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority;
        
        Because constructive notice to prospective buyers lis pendens. This serves to protect the interest of the person invoking lis pendens so that buyers in good faith won't bar them from recovery.
        
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        Article 1463. The sole owner of a thing may sell an undivided interest therein. (n)
        
        Generally - sole owner of a thing can sell: (1) Entire thing; (2) A specific portion; (3) An undivided interest therein.
        Such interest may be designated as an aliquot part of the whole. (aliquot is portion of the whole)
        
        If an undivided interest is sold, the purchaser becomes a co-owner. Undivided share is the inchoate share.
        
        Article 1464. In the case of fungible goods, there may be a sale of an undivided share of a specific mass, though the seller purports to sell and the buyer to buy a definite number, weight or measure of the goods in the mass, and though the number, weight or measure of the goods in the mass, and though the number, weight or measure of the goods in the mass is undetermined.
        By such a sale the buyer becomes owner in common of such a share of the mass as the number, weight or measure bought bears to the number, weight or measure of the mass. If the mass contains less than the number, weight or measure bought, the buyer becomes the owner of the whole mass and the seller is bound to make good the deficiency from goods of the same kind and quality, unless a contrary intent appears. (n)
        
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        Article 1461 - Things having a potential existence may be the object of the contract of sale.
        The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that the thing will come into existence.
        The sale of a vain hope or expectancy is void. (n)
        
        Article 1462. - The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the seller after the perfection of the contract of sale, in this Title called "future goods."
        There may be a contract of sale of goods, whose acquisition by the seller depends upon a contingency which may or may not happen. (n)
        
        A contract of sale cannot cover generic things. They must be made determinate in order to perfect the contract of sale. Otherwise at most the the contract is a contract to sell. (Yu Tek v. Gonzales)
        
        Things that cannot be determined with particularity.
        
        In sales, a perfected contract of sale requires that the subject matter must be determinate or determinable at the time of perfection.
      - Reformation of Instrument - when needed - when the instrument does not reflect the true intent of the parties but there is a meeting of the minds.
        
        Annulment of contract - when there is no meeting of the minds as to the subject matter of the contract.
        
        For example, if sale for a parcel of land, but parties think of different parcels of land then annulment. But if parties intend one parcel of land but mistake in the contract then reformation.
  - - - Ban on illicit subjects, transmissible rights or future inheritance.
        
        Services - Similarly, services cannot be a valid object of a contract of sale. (1458;1467)
        
        Piece of Work - If the goods to be manufactured are not within the ordinary business of the seller, it is not a contract of sale but instead a service contract.
      - Prerequisite that the seller must be able to transfer ownership. Either as the owner or as agent of the owner.
        
        However, a contract of sale may be perfected even before the seller has right to transfer ownership. So long as they can transfer by the time it is needed.