1. Distinguish between emptio rei speratae from 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.
2. Are there any distinctions between an earnest money and option money?
Earnest money and option money are not the same but distinguished thus: (a) earnest money
is part of the purchase price, while option money is the money given as a distinct consideration
for an option contract; (b) earnest money is given only where there is already a sale, while
option money applies to a sale not yet perfected; and, (c) when earnest money is given, the
buyer is bound to pay the balance, while when the would-be buyer gives option money, he is
not required to buy, but may even forfeit it depending on the terms of the option.
3. Distinguish between assignment of credit and contract of sale.
4. Is there any distinction between a contract to sell and a conditional contract of sale as to their
effects, and why is there a need to distinguish one from the other? Explain.
It is important to distinguish between these two types of contracts because they differ in the
point of transfer of title and the effect of non-payment by the buyer.
In a contract to sell, title is retained by the vendor until the full payment of the purchase price.
Thus, the non-payment of the purchase price is an event which terminates the contract to sell.
Since title has not transferred, there is no need of judicial action to terminate the contract.
In a contract of sale, the seller conveys ownership over the property and cannot recover it until
and unless the contract is resolved or rescinded. If the contract is silent on the manner of
rescission, the seller must file an action for rescission in court. However, it is permissible to
stipulate in the contract of sale that default by the buyer shall result to automatic rescission
without need of judicial action. Thus, it is advisable to include an automatic rescission clause
in a contract of sale in order to avoid unnecessary litigation.
5. How would you distinguish a contract of sale from a contract of agency to sell?
In contract of sale, buyer pays for price of object, whereas in agency to sell, agent not obliged
to pay for price but merely obliged to deliver price received from buyer.
In contract of sale, buyer becomes owner of thing; in agency, principal remains owner even if
the object is delivered to agent.
In contract of sale, seller gives warranty against defect in the object of sale; in agency, the
agent assumes no risk or liability as long as it is within the authority given.
In contract of sale, the seller receives profit; in agency, the agent is not allowed to profit.
Agency is a personal contract; sale is a real contract (to give) rescission is not available in
agency
6. What are the elements of a contract of sale?
a) Consent or meeting of the minds, that is, consent to transfer ownership in
exchange for the price;
b) Determinate subject matter; and
c) Price certain in money or its equivalent.
7. What may be the objects of a 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)
8. How may a contract of sale be perfected?
A contract of sale is perfected at the moment there is a meeting of the minds upon the thing
which is the object of the contract and upon the price.
9. Give the concept of the right of first refusal in the law on sales.
It is a right of first priority, all things and condition being equal. There should be identity of the
terms and conditions offered to the optionee and all other prospective buyers, with the
optionee to enjoy the right of first priority.
In a right of first refusal, while the object might be made determinate, the exercise of the right,
however, would be dependent not only on the grantor's eventual intention to enter into a binding
juridical relation with another but also on terms, including the price, that obviously are yet to be later
firmed up.
10. Is there any distinction between earnest money and option money?
Earnest money and option money are not the same but distinguished thus: (a) earnest money
is part of the purchase price, while option money is the money given as a distinct consideration
for an option contract; (b) earnest money is given only where there is already a sale, while
option money applies to a sale not yet perfected; and, (c) when earnest money is given, the
buyer is bound to pay the balance, while when the would-be buyer gives option money, he is
not required to buy, but may even forfeit it depending on the terms of the option.
11. May a contract of sale be in any form and still be obligatory?
Yes. As a rule, sale is a consensual contract. No form is required for its validity. It can be in
writing, by word of mouth, partly in writing and partly by word of mouth, or it can be inferred
from the conduct of the parties.
12. What are the remedies of a seller of a movable payable on installment basis in case the buyer
defaults in the payment of his obligation?
The importance of the criticism is heightened in the light of Article 1484 of the new Civil Code
which provides for the remedies of an unpaid seller of movables on installment basis.
Article 1484. In a contract of sale of personal property the price of which is payable in
installments, the vendor may exercise any of the following remedies:
(1) Exact fulfillment of the obligation, should the vendee fail to pay;
(2) Cancel the sale, should the vendee's failure to pay cover two or more installments;
(3) Foreclose the chattel mortgage or the thing sold, if one has been constituted, should the
vendee's failure to pay cover two or more installments. In this case, he shall have no
further action against the purchaser to recover any unpaid balance of the price. Any
agreement to the contrary shall be void.
13. There was a sale on installment basis of a motor vehicle from Car Merchants, Inc. The buyers did
not pay the price, hence, the seller sued for the balance with a plea for a writ of replevin. It was
contended that when the seller prayed for replevin, it was not entitled to the balance as it
foreclosed the mortgage. Is the contention correct? Why?
The contention is correct. Article 1484, paragraph 3, provides that if the vendor has availed
himself of the right to foreclose the chattel mortgage, he shall have no further action against
the purchaser to recover any unpaid balance of the purchase price. Any agreement to the
contrary shall be void.

14. A purchased a car from ABC Corp. on installment basis. A security for the payment of his
obligation, he executed a chattel mortgage over the car and another chattel mortgage over
another car belonging to him. A failed to pay his obligation, hence, ABC Corp. foreclosed the
second mortgage. Was the foreclosure proper? Why?
NO. The right of foreclosure of ABC shall be limited only to the first mortgage constituted over
the car purchased on instalment basis. To allow ABC to foreclose on the second mortgage
would be to allow it to enrich itself at the expense of A, which is contrary to law.
15. The contract of sale provides that in case of non-payment of the purchase price, the payments
shall not be returned to the seller should the latter rescind the contract but the same shall be
treated as rentals. Downpayment and eight (8) installments were paid by the buyer amounting to
P5,672.00 out of the price of P7,333.20 per lot where there were 6 lots. Is the stipulation valid?
Why?
16. May the husband and wife sell to one another? Are there exceptions?
The law emphatically prohibits the spouses from selling property to each other subject to
certain exceptions.
ARTICLE 1490. The husband and wife cannot sell property to each other, except:
a) When a separation of property was agreed upon in the marriage settlements; or
b) When there has been a judicial separation of property under Article 191.
17. X and Y are negotiating for the sale of a car, but before the contract can be perfected, the car got
lost. Who shall bear the loss?
The loss shall be borne by the seller since the contract of sale was not perfected yet.
18. X stole the ring belonging to Y and sold it to Z. Suppose Y finds it in the possession of Z, can she
recover it from Z? Why?
Y can recover from Z.
ART. 1505. Subject to the provisions of this Title, where goods are sold by a person who is not
the owner thereof, and who does not sell them under authority or with 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 to sell.
19. What are the rights of an unpaid seller?
Under the law, he unpaid seller has the right either to demand specific performance or the
rescission of the contract.
20. A, the owner of a parcel of land, sold the same to B, but the document was not registered. One
year later, he sold it again to C who registered the document and obtained a title over the same.
Who has a better right over the parcel of land? Why?
!! C has the better right over the property. Under the Civil Code, one who registers the sale has
the better right of possession over the property.
!! B has the better title over the property. Under the law, a buyer of an unregistered land
acquires a better title than a subsequent buyer, even if the latter registered the sale in good
faith after the registration of the land by the seller because the second buyer merely steps into
the shoes of the seller who, at the time of the sale to him, is no longer the owner of the
property.