Sales 2: Elements [Consent (Capacity), Object (Rights/Things), Consideration (Price)]

Summary

This video script provides an in-depth explanation of the essential elements required for a valid contract of sale, focusing on consent, capacity, subject matter, and price. It emphasizes the importance of a real, certain, or ascertainable price that is in money or its equivalent and outlines scenarios where the price may be determined by a third party or based on specific market conditions. The script also discusses the consequences when the price cannot be determined and highlights the need for an agreed-upon manner of payment to ensure a perfected contract.

Takeaways

• 😀 The price in a contract of sale must be certain or ascertainable for the contract to be valid.
• 😀 If a third person is supposed to determine the price but is unwilling or unable, the contract may be deemed ineffective unless the parties agree on a price later.
• 😀 If a third person is prevented from determining the price by either party, the innocent party may request specific performance, and the courts can fix the price or award damages.
• 😀 For certain items like securities, grains, or liquids, the price can be based on the price at a specific exchange or market on a certain day.
• 😀 If no price is determined, the default rule is that the contract will be ineffective. However, if the buyer has already taken possession of the goods, they must pay a reasonable price.
• 😀 The price must be in money or its equivalent (such as goods with agreed value) to fulfill the requirements of a valid contract.
• 😀 An example of a price equivalent to money is '100 pesos worth of Lucky Me pancit canton.'
• 😀 The manner of payment must be agreed upon by both parties, whether through a lump sum or installment payments.
• 😀 If the manner of payment is not specified, the contract will be considered invalid due to defective consent.
• 😀 The requisites of price in a contract of sale are that it should be real, certain, ascertainable, and in money or its equivalent, with an agreed-upon manner of payment.

Q & A

What is the effect if a third party is unable or unwilling to determine the price in a contract of sale?

If a third party is unable or unwilling to fix the price, the contract becomes inefficacious, meaning it has no effect. The contract will only become valid if the parties later agree on a price.

What happens if one party prevents the third party from determining the price in a contract of sale?

If one party prevents the third party from determining the price, the innocent party can request specific performance. In this case, the court will determine the price or provide a remedy with damages.

How can the price of certain goods like securities be determined in a contract of sale?

The price of certain goods such as securities, grains, or liquids can be determined by referring to a specific date or a particular exchange or market. For example, the price could be set based on the price of similar shares of stock on a certain day or in a specific stock exchange.

What happens if the price cannot be determined through the usual means in a contract of sale?

If the price cannot be determined through the usual means, the contract is considered inefficacious. However, if the buyer has already received or taken the goods, they must pay a reasonable price based on the circumstances.

Why does the law require the buyer to pay a reasonable price when the goods have been delivered or taken?

The law requires the buyer to pay a reasonable price when goods have been delivered or taken to prevent unjust enrichment. The buyer should not be allowed to benefit from the seller's goods without compensating them fairly.

What is meant by a 'reasonable price' in the context of a contract of sale?

A 'reasonable price' is determined based on the specific circumstances of the case. It is not a fixed amount but one that is fair considering the situation, the goods, and other relevant factors.

What are the key requisites for the price in a contract of sale?

The key requisites for the price in a contract of sale are that it must be real, certain or ascertainable, in money or its equivalent, and the manner of payment must be agreed upon.

What does it mean for the price to be 'certain or ascertainable' in a contract of sale?

For the price to be 'certain or ascertainable,' it means that the price should either be clearly stated or should be capable of being determined through agreed-upon means or references, such as a market price or a third party's determination.

Can a non-monetary payment be considered valid in a contract of sale?

Yes, non-monetary payments can be considered valid in a contract of sale if they are deemed equivalent to money. For example, goods or services with a similar value to money can be used as payment.

What happens if the manner of payment is not agreed upon in a contract of sale?

If the manner of payment is not agreed upon, the contract is not perfected due to defective consent. The contract will be considered invalid because the parties did not come to an agreement on how the payment should be made.