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Sales Quiz 4

The document discusses various remedies available to buyers and sellers in cases of breach of contract for sale of goods. It outlines remedies for buyers when the seller defaults such as seeking specific performance or damages. It also discusses remedies available to unpaid sellers such as lien on goods, stopping goods in transit, special right of resale, and right to rescind the contract. Finally, it discusses the differences between a pacto de retro sale and equitable mortgage.

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127 views

Sales Quiz 4

The document discusses various remedies available to buyers and sellers in cases of breach of contract for sale of goods. It outlines remedies for buyers when the seller defaults such as seeking specific performance or damages. It also discusses remedies available to unpaid sellers such as lien on goods, stopping goods in transit, special right of resale, and right to rescind the contract. Finally, it discusses the differences between a pacto de retro sale and equitable mortgage.

Uploaded by

bantucin davoo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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BERNARDINO, VINCE DAVE A.

SALES

1. Under the law, when the seller is in default, the buyer may seek
action for specific performance to direct that the contract shall
be performed specifically, without giving the seller the option of
retaining the goods on payment of damages.

The other remedies of the buyer are:

a. In case of breach of seller’s warranty, the buyer may:


i. Accept or keep the goods and set up against the
seller
ii. Accept the goods and maintain an action against
the seller for damages for such breach
iii. Refuse to accept the goods
iv. Rescind the sale and refuse to receive the goods,
or when the goods are received, to return them to
the seller and recover the price of all or a part.

b. In case of disturbance in the property and condominium


projects, the buyer may:
i. Suspend the payment if the buyer gets disturbed in
the possession and ownership of the property.
ii. With respect to condominiums, may desist from
paying further provided he gives due notice to the
seller. The buyer may also be reimbursed.
With respect to the breach of contract, the buyer cannot
rescind if he is knowledgeable of such breach and still accepted
the goods without protest, or fail to notify the seller within a
reasonable time, or fails to return the goods in good condition.

2. When the buyer breaches the contract or is in failure of


complying with his obligations, the buyer has remedies in case
of this with respect to the sale. This would include: a.) Possessory
Lien, b.) Stoppage in transit, c.) Special right of resale, and d.)
Special right to rescind.

Possessory lien would mean that if the seller is unpaid,


notwithstanding that the ownership in the goods may have
transferred to the buyer, the unpaid seller has a lien on the goods
or right to retain them for the price while he is still in possession of
them.

Stoppage in transit would mean that if the buyer fails to comply


with his obligations with respect to the payment of the price, the
seller has the right of stopping the goods in transit after he has
parted with the possession of such, notwithstanding the fact that
the ownership in the goods may have already passed to the
buyer by way of tradition.

A special right of resale may be exercised by the unpaid seller,


even if it is deemed that the ownership of the goods may have
passed to the buyer, but only under the conditions provided by
law. This means that he may resell the object of the sale to
another person or subsequent buyer. This right may be exercised
only when the unpaid seller has exercised and exhausted his
right to possessory lien and stoppage in transit. In addition, he
may only exercise this when the goods are:
a. Perishable
b. Where the right to resell has been expressly reserved in
case the buyer should make default, or
c. When the buyer delays in the payment of the price for
an unreasonable time.
The effect of such resale would give the subsequent buyer a god
title as against the original buyer.
Lastly, the special right to rescind means that an unpaid seller
may rescind the contract extrajudicially. This right is exercised
when un unpaid seller after having exercised the right of lien or
stoppage in transit, he may resume the ownership in the goods,
where:
a. The seller has expressly reserved the right in case the
buyer be in default; or
b. The buyer has not paid or in default of payment for an
unreasonable time.
The effect of such right is that the seller shall not be liable to the
buyer upon the sale, but may recover damages from the buyer.
3. A pacto de retro sale refers to the sale wherein the seller has the
right to repurchase the subject matter of the sale or the property
being sold. Its essence is that the title and ownership of the
property sold is immediately vested in the vendee a retro,
subject to the condition of repurchase by the vendor.

Equitable mortgage, on the other hand, is that which, although


lacks formality, but shows the intention of the parties to make the
property subject of the contract as security for a debt.

A pacto de retro may be deemed an equitable mortgage


when:

a. The price under a sale a retro is unusually inadequate;


b. The seller remains in possession as lessee or otherwise;
c. The period of redemption is extended or renewed in
another instrument;
d. the buyer retains part of the purchase price;
e. the seller binds himself on the thing sold or continues to
pay taxes thereon;
f. the real intention of the parties is that the transaction
shall secure the payment of a debt or the performance
of any other obligation.

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