Alenor G.
Maitum
BSA 2-2A
Activity 2
1. Identify the mode of extinguishment of the contract of sale.
The modes or causes of extinguishing the contract of sale may be classified into:
(1) Common or those causes which are also the means of extinguishing all other
contracts like payment, loss of the thing, condonation, etc. (see Art. 1231.);
(2) Special or those causes which are recognized by the law on sales (such as those
covered by Articles 1484, 1532, 1539, 1540, 1542, 1556, 1560, 1567, and 1591.); and
(3) Extra-special or those causes which are given special discussion by the Civil Code
and these are conventional redemption and legal redemption.
2. Distinguish legal redemption from conventional redemption.
Legal redemption and conventional are both modes of extinguishment in the
contract of sale. However, these two differ in many aspects. Conventional redemption
is the right reserved by the vendor to reacquire the property sold provided he returns to
the vendee the price of the sale, the contract expenses, any other legitimate payments
made therefor, and the necessary and useful expenses made on the thing sold, as well
as fulfilling any other stipulations that may have been agreed upon. Legal redemption,
on the other hand, is the right to be subrogated in the place of one who obtains an item
by purchase or dation in payment, or by any other transaction in which ownership is
conveyed by onerous title, under the same terms and circumstances provided in the
contract. Hence, the nature of conventional and legal rights of redemption is identical,
except for the source of the right. While conventional redemption is the result of the
parties' voluntary agreement, legal redemption is the result of the law.
3. Explain the concept of assignment of credit.
Assignment of credit is defined as a contract by which the owner (assignor/
creditor) of credit and other incorporeal rights transfers, either onerously or
gratuitously, to another (assignee)his rights and actions against a third person (the
debtor). It is the process of transferring the assignor's right to the assignee, who is then
permitted to continue against the debtor for the enforcement or fulfillment of the credit
to the same degree as the assignor. In terms of its nature, the Assignment of credit is a
consensual, bilateral, onerous, and commutative or aleatory contract. Second, the
assignment does not include the transfer of ownership, but rather the transfer of rights
that the assignor holds at the moment to the assignee. As a result, the assignee act as
the original creditor which is the assignor as a subrogee of the latter. Lastly, It can be
done for free (i.e., as a contribution) or for a fee. Whatever the legal reason, if done
onerously (i.e., exchange, dacion en pago), it is a sale. Thus, the subject matter is the
assigned credit or right; the consideration is the amount paid for the credit or right; and
the consent is the parties' agreement to assign the credit or right at the agreed price. In
addition, the contract for the assignment or transfer of credit and other incorporeal
rights is complete when the parties agree on the credit or right assigned as well as the
price, even if neither has been delivered.
4. Elucidate the concept of barter. Is the rule on sale applicable in barter? Explain your
answer.
The contract of barter or exchange binds one of the parties to offer something
in return for the other's promise to give something else. In regards to its perfection, the
contract of barter is perfected from the moment there is a meeting of minds upon the
things promised by each party in consideration of the other. While on its
consummation, it is consummated from the time of mutual delivery by the contracting
parties of things they promised. If you ask me whether barter is applicable to the rule
of sale, I will say yes. First, let me cite the requisites of a contract of sale. To make it
valid, one must have a.) consent wherein there is a meeting of the minds in both
parties. b.) Subject matter which should be determinate and c.) price where should be
certain money or its equivalent. An absence from one of these makes the contract of
sale null and void. In barter, we can see that all of these essential requisites can be
present. What makes barter unusual from other types of sale was the “price”. Wherein
barter, the price is a certain thing equivalent to its subject matter. Hence, Barter is a
form of mutual selling. Every party is both a seller and a vendee. As a result, the laws
on sales also apply to barter.
5. What is Bulk Sales Law?
A sale and transfer in bulk under the Bulk Sales Law is any sale: (1) of a stock
of goods, wares, merchandise, provisions, or materials otherwise than in the ordinary
course of trade and the regular prosecution of the business; or (2) of all or substantially
all, of the business or trade; or(3) of all or substantially all, of the fixtures and
equipment used in the business of the vendor, mortgagor transferor, or assignor. In
regards to its purpose, The Bulk Sales Law is designed to prevent the defrauding of
creditors by the secret sale or disposal or mortgage in the bulk of all or substantially all
of a merchant’s stock of goods. In addition, the general scheme of the law is to declare
such bulk sales fraudulent and void as to creditors of the vendor, or presumptively so,
unless specified formalities are observed, such as the demanding and the giving of a
list of creditors, the giving of actual or constructive notice to such creditors, by record
or otherwise, and the making of an inventory.
