ARTICLES 1342 1542

CONTRACTS
Absentee: One who has left, either temporarily or permanently, his or her domicile or usual place of residence or business. A person beyond the geographical borders of a state who has not authorized an agent to represent him or her in legal proceedings that may be commenced against him or her within the state. Accion Pauliana: It is the action to rescind contracts made in fraud of creditors. The requisites before it can be brought are the following: ( ! there must be a creditor who became such prior to the contract sought to be rescinded" (#! there must be an alienation made subsequent to such credit" ($! the party alienating must be in bad faith" and (%! there must be no other remedy for the pre&udiced creditor. Accion Subrogatoria: It is an accion brought by one who see's to be subrogatred to all the rights and actions of the debtor sa(e those which are inherent in his person. Acknowledgment: It is an action or a process the purpose of which is to remedy a deficiency of proof. Agenc b Esto!!el: It is similar to the doctrine of apparent authority which requires proof of reliance upon the representations, and that, in turn, needs proof that the representations predated the action ta'en in reliance. )or it to e*ist, the following must be established: ( ! the principal manifested a representation of the agent+s authority or 'nowingly allowed the agent to assume such authority" or (#! the third person, in good faith, relied upon such representation" or ($! relying upon said representation, a third person has changed his position to his detriment. Al"en#t"on: It is the transfer of title to real property, (oluntarily and completely. To alienate includes to dispose of, to di(est oneself of an item of property. Ann$lment o% # Cont&#ct: It is an action to in(alidate or cancel a contract. '#dges o% (&#$d: These are circumstances indicating that a certain alienation has been made in fraud of creditors. ,ome of these circumstances are the following: ( ! the fact that the consideration of the con(eyance is fictitious or inadequate" (#! a transfer made by a debtor after suit has been begun and while it is pending against him" ($! a sale upon credit by an insol(ent debtor" (%! the transfer of all or nearly all of his property by a debtor, especially when he is insol(ent or greatly embarrassed financially" (-!

e(idence of large indebtedness or complete insol(ency" (.! the fact that the transfer is made between father and son" and (/! the failure of the (endee to ta'e e*clusi(e possession of all the property. C#$se o% Cont&#cts: It is the essential and impelling reason why a party assumes an obligation. C")"l Obl"g#t"ons: These are obligations which gi(e a right of action to compel their performance. Coll#te&#l Esto!!el: It is sometimes 'nown as estoppel by &udgment, and it pre(ents the re0argument of a factual or legal issue that has already been determined by a (alid &udgment in a prior case in(ol(ing the same parties. Con%"&m#t"on: It is a process or an action of curing a defect in a (oidable contract. C$stom o& *s#ge: It is the established pattern of beha(ior that can be ob&ecti(ely (erified within a particular social setting. +e%ect")e Cont&#cts: These are contracts with no legal sufficiency because it is incomplete or incorrect. It is not enforceable. The four 'inds of defecti(e contracts are rescissible, (oidable, unenforceable and (oid contracts. Dolo Causante o& C#$s#l (&#$d: It is basically a deception used by one party prior to or simultaneous with the contract, in order to secure the consent of the other. It determines or is the essential cause of the consent. The effects of dolo causante are the nullity of the contract and indemnification of damages. Dolo Incidente o& Inc"dent#l (&#$d: It is only some particular or accident of the obligation, or that which is not serious in character and without which the other party would ha(e entered into the contract anyway. Dolo incidente obliges the person employing it to pay damages. +om"c"le: It is the status or attribution of being a permanent resident in a particular &urisdiction. It is the place where a person has his1her permanent principal home to which he1she returns or intends to return. Esto!!el: A legal principle that bars a party from denying or alleging a certain fact owing to that party2s pre(ious conduct, allegation, or denial.

Esto!!el b L#c,es: It precludes a party from bringing an action when the party 'nowingly failed to claim or enforce a legal right at the proper time. Esto!!el "n Pais o& E-$"t#ble Esto!!el: It is estoppel which protects one party from being harmed by another party2s (oluntary conduct. 3oluntary conduct may be an action, silence, acquiescence, or concealment of material facts. E.!&ess R#t"%"c#t"on: 4atification which is either oral or written. It is one which is definite, or declared in terms or set forth in words. (&#$d: It refers to all 'inds of deception 5 whether through insidious machination, manipulation, concealment or misrepresentation 5 that would lead an ordinarily prudent person into error after ta'ing the circumstances into account. (o&m#l Cont&#cts o& Solemn Cont&#cts: These are contracts that require a certain specified form, in addition to consent, sub&ect matter, and cause. /&#t$"to$s Cont&#ct: A contract where the cause is the mere liability of the benefactor. /$#&#nt : It is an underta'ing or promise that is collateral to the primary or principal obligation and that binds the guarantor to performance in the e(ent of nonperformance by the principal obligor. /$#&d"#ns,"!: It is a legal relationship created when a person or institution is named in a will or assigned by the court to ta'e care of minor children or incompetent adults. Illeg#l Cont&#ct: 6ontract whose formation, ob&ect, or performance is so iniquitous, against the law of the land, or contrary to public policy, that no court will entertain or enforce it. Illeg#l Per Se Cont&#cts: These are contracts which are forbidden because of public interest. Indemn"%"c#t"on: It is an act of compensation for actual loss or damage or for trouble and annoyance. It is a sum of money paid in compensation for loss or in&ury. In Pari Delicto (In equal Fault): A descripti(e phrase that indicates that parties in(ol(ed in an action are equally culpable for a wrong. 7hen the parties to a legal contro(ersy are in pari delicto, neither can obtain affirmati(e relief from the court, since both are at equal fault or of equal guilt. They will remain in the same situation they were in prior to the commencement of the action.

Insol)enc : An incapacity to pay debts upon the date when they become due in the ordinary course of business" the condition of an indi(idual whose property and assets are inadequate to discharge the person2s debts. 0$d"c"#l Esto!!el: It binds a party to his or her &udicial declarations, such as allegations contained in a lawsuit complaint or testimony gi(en under oath at a pre(ious trial. 8udicial estoppel protects courts from litigants2 using opposing theories in the attempt to pre(ail twice. L#c,es: A defense to an equitable action that bars reco(ery by the plaintiff because of the plaintiff2s undue delay in see'ing relief. Leg#l Esto!!el: It consists of estoppel by deed and estoppel by record. 9nder the doctrine of estoppel by deed, a party to a property deed is precluded from asserting, as against another party to the deed, any right or title in derogation of the deed, or from denying the truth of any material fact asserted in the deed. The doctrine of estoppel by record precludes a party from denying the issues ad&udicated by a court of competent &urisdiction (collateral estoppel! or any matter spelled out in a &udicial record (&udicial estoppel!. Les"on: In ci(il law, this term is used to signify the in&ury suffered, in consequence of inequality of situation, by one who does not recei(e a full equi(alent for what he gi(es in a commutati(e contract. As used in Art. $-- of the 6i(il 6ode, it means inadequacy of cause, li'e an insufficient price for a thing sold. 1e&el 2&o,"b"ted Cont&#cts: These are contracts which are forbidden because of pri(ate interests. 4eco(ery is permitted in these contracts pro(ided that: (a! the contract is not illegal per se" (b! the prohibition is designed for the protection of the plaintiff" and (c! public policy would be enhanced by allowing the reco(ery. 1"s&e!&esent#t"on: An assertion or manifestation by words or conduct that is not in accord with the facts. It also refers to a false statement of fact made by one party to another party, which has the effect of inducing that party into the contract. A misrepresentation in a contract can gi(e a party the right to rescind the contract. 1o&#l Obl"g#t"on: A duty which one owes, and which he ought to perform, but which he is not legally bound to fulfill. 1ot")e: An idea, belief, or emotion that impels a person to act in accordance with that state of mind. It is the cause that mo(es people to induce a certain action.

N#t$&#l Obl"g#t"ons: These are obligations which, not being based on positi(e law but on equity and natural law, do not grant a right of action to enforce their performance, but after (oluntary fulfillment by the obligor, they authorize the retention of what has been deli(ered or rendered by reason thereof. Ob3ect 4S$b3ect 1#tte&5 o% # Cont&#ct: The ob&ect of a contract is really to create or to end obligations which, in turn, may in(ol(e things or ser(ices. :ence, elliptically, it may be said that the ob&ect of a contract is a thing or a ser(ice. One&o$s Cont&#ct: A contract where the cause is, for each contracting party, the prestation or promise of a thing or ser(ice by the other. 2os"t")e L#w: These are laws that ha(e been duly enacted by a properly instituted and popularly recognized branch of go(ernment. 2&esc&"!t"on: It is the effect of the lapse of time in creating and destroying rights. It is either acquisiti(e, in that an indi(idual is allowed, after a specified period of time, to acquire title, or e*tincti(e where an indi(idual is barred after a period of time to bring court actions. 2&om"sso& Esto!!el: It occurs when a party reasonably relies on the promise of another party, and because of the reliance is in&ured or damaged. R#t"%"c#t"on: It is an action or a process of curing the defect of lac' of authority in an authorized contract. 9nder the ;ew 6i(il 6ode of the <hilippines, this action together with confirmation and ac'nowledgment are now uniformly called ratification. 4atification may be e*press or tacit. Re#l Cont&#cts: These are contracts that require deli(ery to be (alid as a real contract e(en as between the parties, in addition to consent, sub&ect matter, and cause. Rec"!&oc#l Obl"g#t"on: It is a duty owed by one indi(idual to another and (ice (ersa. It is a type of agreement or contract that bears upon or binds two parties in an equal manner. A reciprocal contract is one in which the parties enter into mutual agreements. Re%o&m#t"on: It is that remedy in equity by means of which a written instrument is made or construed so as to e*press or conform to the real intention of the parties when some error or mista'e has been committed.

Rem$ne&#to& Cont&#ct: A contract where the cause is a past ser(ice or benefit which by itself is a reco(erable debt. Re!#&#t"on: It is compensation for an in&ury" redress for a wrong inflicted. Re!$d"#t"on: It is the re&ection or refusal of a duty, relation, right, or pri(ilege. 4epudiation of a contract means a refusal to perform the duty or obligation owed to the other party. Resc"ss"ble Cont&#cts: These are contracts where all the essential requisites of a contract e*ist and the contract is (alid, but by reason of in&ury or damage to third persons, such as creditors, the contract may be rescinded. In these contracts, there is a sort of e*trinsic defect consisting of an economic damage or lesion. Resc"ss"on: It is a process designated to render inefficacious a contract (alidly entered into and normally binding, by reason of e*ternal conditions, causing an economic pre&udice to a party or to his creditors. It is also a remedy granted by law to both the contracting parties and to third persons in order to secure reparation of damages caused them by a contract, e(en if the contract be (alid, by means of the restoration of things to their condition prior to the celebration of said contract. It is also a relief to protect one of the parties or a third person from all in&ury and damages which the contract may cause, to protect some preferential right. Rest"t$t"on: It is the act of compensating for loss or in&ury by re(erting as far as possible to the position before such in&ury occurred. It is the restoration of a party in&ured by a breach of contract to the position that party occupied before she or he entered the contract. S"m$l#t"on o% # Cont&#ct: It is the process of intentionally decei(ing others by producing the appearance of a contract that really does not e*ist (absolute simulation! or which is different from the true agreement (relati(e simulation!. St#t$te o% (&#$ds: These are set of rules the purpose of which is to pre(ent fraud, and not to encourage the same. 9nder the ,tatute of )rauds, certain agreements are requires to be in writing so that they may be enforced. S!ec"#l 2&om"se: It refers to a subsidiary or collateral promise to pay, li'e a contract of guaranty. S$ccesso& "n Inte&est: This means a successor to another+s interest in property. It is one who follows another in ownership or control of a property.

S$%%"c"ent 1emo&#nd$m o& Note: It is any document or writing under the contract or for another purpose, which complies with all the statutory requirements of the ,tatute of )rauds as to contents and signature. T#c"t R#t"%"c#t"on: 4atification which occurs when, with 'nowledge of the reason which renders the contract (oidable and such reason ha(ing ceased, the person who has a right to in(o'e it should e*ecute an act which necessarily implies an intention to wai(e his right. Tec,n"c#l Esto!!el o& Esto!!el b +eed: It is a bar which precludes a party to a deed and his pri(ies from asserting as against the other and his pri(ies any right or title in derogation of the deed, or from denying the truth of any material fact asserted in it. This may be: ( ! estoppel by deed proper or those in a written instrument or in the form of a bond or a mortgage" or (#! estoppel by &udgment as a court record which happens when there could ha(e been res &udicata. T,"ngs "n Act"on: These are incorporated or intangible personal property, li'e credit. *n#$t,o&"6ed Cont&#cts: These are contracts which are entered into in the name of another person by one who has been gi(en no authority or legal representation, or who has acted beyond his powers. *nen%o&ce#ble Cont&#cts: These are contracts which cannot be sued upon or enforced, unless it is ratified. In a way, it may be considered as a (alidable transaction, that is, it has no effect now, but it may be effecti(e upon ratification. Vigilanti Prospiciunt Jura 4T,e l#w !&otects ,"m w,o "s w#tc,%$l o% ,"s &"g,ts5: =octrine or concept connected with laches which states that undue delay in the enforcement of a right is strongly persuasi(e of a lac' of merit in the claim, since it is human nature for a person to assert his rights most strongly when they are threatened or in(aded. >aches or unreasonable delay on the part of a plaintiff in see'ing to enforce a right is not only persuasi(e of a want of merit but may, according to the circumstances, be destructi(e of the right itself. 7"t"#ted Consent: It is a defecti(e or ineffecti(e consent of a party to a contract. It occurs when the consent of one of the parties to a contract is impaired or per(erted by mista'e, intimidation, (iolence, undue influence or fraud. 7o"d ab initio 47o"d %&om t,e beg"nn"ng5: A contract or an agreement which at no time had any legal (alidity.

7o"d Cont&#cts: These are contracts which ha(e no effect at all and which cannot be ratified or (alidated. 7o"d#ble Cont&#cts: These are defecti(e contracts where the defect is more or less intrinsic, as in the case of (itiated consent. These are contracts where consent is (itiated, such as by (iolence or intimidation, is not (oid ab initio but only (oidable, and is binding upon the parties unless annulled by proper action in court. 7ol$nt#& ($l%"llment: It means that the debtor complied with his obligation e(en if he 'new that he could not ha(e been legally forced to do so.

TITLE 7 TR*STS
'ene%"c"#& o& Cestui Que Trust: :e is the person for whose benefit the trust has been created. Const&$ct")e T&$st: A 'ind of implied trust where there is no intention to create a trust but a trust is ne(ertheless created by law to pre(ent un&ust enrichment or oppression. C&e#t")e T&$st: It is a trust created by way of equity to pre(ent un&ust enrichment arising against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold. E-$"t#ble T"tle: It is the beneficial interest of a person whom equity regards as the real owner but the legal right (ests with another. E.!&ess T&$st: This is a trust created by the parties, or by the intention of the trustor. ("d$c"#& Rel#t"ons,"!: It is a relationship where one person places complete confidence in another in regard to a particular transaction or one2s general affairs or business. The relationship is not necessarily formally or legally established as in a declaration of trust, but can be one of moral or personal responsibility, due to the superior 'nowledge and training of the fiduciary as compared to the one whose affairs the fiduciary is handling. Im!l"ed T&$st: This is a trust created by operation of law. It has two 'inds ? a resulting trust and a constructi(e trust.

Leg#l T"tle: Ownership of property that is cognizable or enforceable in a court of law, or one that is complete and perfect in terms of the apparent right of ownership and possession, but that, unli'e equitable title, carries no beneficial interest in the property. Res$lt"ng T&$st: This is also called as bare or passi(e trust. In this 'ind of implied trust, there is an intent to create a trust but it is not effecti(e as an e*press trust. T&$st: It is the right to the beneficial en&oyment of property, the legal title to which is (ested in another. It is a fiduciary relationship concerning property which obliges the person holding it to deal with the property for the benefit of another. T&$stee: :e is the person who holds the property in trust for the benefit of another. T&$sto& o& Settle&: :e is the person who establishes the trust. T&$st 2&o!e&t o& T&$st Est#te: This is the sub&ect matter of a trust. T&$st Rece"!t: It is a security transaction intended to aid in financing importers and retail dealers who do not ha(e sufficient funds or resources to finance the importation or purchase of merchandise, and who may not be able to acquire credit e*cept thru utilization, as collateral, of the merchandise imported or purchased. As a contract, a trust receipt parta'es of the nature of a conditional sale the importer becoming the absolute owner of the imported merchandise as soon as he has paid its price" until the owner or the person who ad(anced payment has been paid in full, or if the merchandise has already been sold, the proceeds turned o(er to him, the ownership continues to be (ested in such person. *n3$st En&"c,ment: A general equitable principle that no person should be allowed to profit at another2s e*pense without ma'ing restitution for the reasonable (alue of any property, ser(ices, or other benefits that ha(e been unfairly recei(ed and retained.

TITLE 7I SALES
Absol$te Cont&#ct o% S#le: A contract of sale where the sale is not sub&ect to any condition whatsoe(er and where title or ownership passes to the buyer upon deli(ery of the thing sold.

Absol$te Inc#!#c"t : Incapacity is absolute in the case of persons who cannot bind themsel(es. Access"ons: These are the fruits of a thing, or additions to or impro(ements upon a thing. Accesso&"es: These are things attached to a principal thing for its completion, ornament, or better use. Acc"dent#l Elements: Those which may be present or absent depending on the stipulations of the parties, li'e conditions, interest, penalty, time or place of payment. Act$#l +el")e& : There is actual deli(ery when the thing sold is placed in the control and possession of the (endee. This in(ol(es the physical deli(ery of the thing and is usually done by the passing of a mo(able thing from hand to hand. Ale#to& Cont&#ct: A contract whereby one of the parties or both reciprocally bind themsel(es to gi(e or to do something in consideration of what the other shall gi(e or do upon the happening of an e(ent which is uncertain or which is to occur at an indeterminate time. Att#c,ment: It is the process whereby the property of a defendant is placed in the custody of the law to await final determination of a suit. Atto&nment b t,e '#"lee: It is the ac'nowledgment of the bailee to the buyer that the former holds the goods on behalf of the latter. A$ct"on S#le: A sale by auction is a public sale where (arious intending buyers offer bids for the goods and try to outbid each other. 9ltimately, the goods are sold to the highest bidder. An auction sale is complete when the auctioneer announces its completion by the fall of the hammer or in other customary manner. The property in the goods thus passes on the fall of the hammer" until the fall of the hammer the bidder has the right to re(o'e his1her bid. The auctioneer is, generally not the seller but, the agent of the real owner of the goods. Auctioneer is engaged to conduct the auction and his1her relationship with the seller is go(erned by the law of agency. '#"lee: One to whom personal property is entrusted for a particular purpose by another, the bailor, according to the terms of an e*press or implied agreement.

'"l#te&#l: It means that both contracting parties are bound to fulfill obligations reciprocally towards each other ? the seller to deli(er and transfer ownership of the thing sold and the buyer to pay the price. '"ll o% E.c,#nge: A three0party negotiable instrument in which the first party, the drawer, presents an order for the payment of a sum certain on a second party, the drawee, for payment to a third party, the payee, on demand or at a fi*ed future date. '"ll o% L#d"ng: A document signed by a carrier (a transporter of goods! or the carrier2s representati(e and issued to a consignor (the shipper of goods! that e(idences the receipt of goods for shipment to a specified designation and person. It is a contract or receipt for the transport of goods and their deli(ery to the person named therein, to order or to bearer. It usually in(ol(es three persons: the carrier, the shipper, and the consignee. The shipper and the consignee may be one and the same person. '$lk o% t,e /oods: As used in Article %@ of the 6i(il 6ode, it denotes the goods themsel(es, not merely the greater portion of the goods, as distinguished from the sample and1or description with which they must correspond. C#!#c"t : The ability, capability, or fitness to do something" a legal right, power, or competency to perform some act. An ability to comprehend both the nature and consequences of one2s acts. C#$se o& Cons"de&#t"on: This refers to the price certain in money or its equi(alent such as a chec' or a promissory note, or the assumption by the buyer of the mortgage debt of the seller, which is the consideration for the thing sold. Collect on +el")e& 4C8O8+85: If the goods are mar'ed 6.O.=., the carrier acts for the seller in collecting the purchase price. The buyer must pay for the goods before he can obtain possession. 6.O.=. terms do not pre(ent title from passing to the buyer on deli(ery t. the carrier where they are solely intended as security for the purchase price. Comm$t#t")e: It is the characteristic of a contract of sale which means that the thing sold is considered the equi(alent of the price paid and (ice (ersa. Com!&om"se: It is a contract whereby the parties, by reciprocal concessions, a(oid a litigation or put an end to one already commenced. It is the amicable settlement of a contro(ersy.

Cond"t"on#l S#le: A contract of sale where the sale contemplates a contingency, and in general, where the contract is sub&ect to certain conditions, usually the full payment of the purchase price. Consens$#l: It means that a contract is perfected by mere consent without any further act. It is one of the characteristics of a contract of sale. Consent o& 1eet"ng o% t,e 1"nds: This refers to the consent on the part of the seller or (endor to transfer and deli(er and on the part of the buyer or (endee to pay. Const&$ct")e o& Leg#l +el")e& : It is a deli(ery equi(alent to an actual deli(ery. It may be effected in any of the following ways: ( ! by the e*ecution of a public instrument" (#! by symbolical tradition" ($! by traditio longa manu; (%! by tradition brevi manu; (-! by tradition constitutum possessorium; or (.! by quasi0deli(ery. Cont&#ct %o& # 2"ece o% 9o&k: A contract whereby the contractor binds himself to e*ecute a piece of wor' for the employer, in consideration of a certain price or compensation. The goods here are to be manufactured specially for the customer and upon his special order and not for the general mar'et. Cont&#ct o% Agenc : A contract whereby a person binds himself to render some ser(ice or to do something in representation or on behalf of another, with the consent or authority of the latter. Cont&#ct o% '#&te& o& E.c,#nge: A contract whereby one of the parties binds himself to gi(e one thing in consideration of the other+s promise to gi(e another thing. Cont&#ct o% S#le: A contract whereby one of the parties, called the seller or (endor, obligates himself to deli(er something to the other, called the buyer or purchaser or (endee, who, on his part, binds himself to pay therefor a sum of money or its equi(alent, 'nown as the price. Cont&#ct to Sell: A bilateral contract whereby the prospecti(e seller, while e*pressly reser(ing the ownership of the sub&ect property despite deli(ery thereof to the prospecti(e buyer, binds himself to sell the said property e*clusi(ely to the prospecti(e buyer upon fulfillment of the condition agreed upon, that is, the full payment of the purchase price. Co&!o&e#l 2&o!e&t : 4eal estate or personal property ha(ing a tangible form and structure, such as a building, equipment, or (ehicle. It is a thing or property which affects the senses, and may be seen and handled by the body.

Cost Ins$&#nce #nd (&e"g,t 4C8I8(85: It signifies that the price fi*ed co(ers not only the cost of the goods, but the e*penses of freight and insurance to be paid by the seller up to the point especially named. +el")e& o& T&#d"t"on: It is a deri(ati(e mode of acquiring ownership by (irtue of which one who has the right and intention to alienate a corporeal thing, transmits it by (irtue of a &ust title to one who accepts the same. It is the transfer of possession of real property or personal property from one person to another. It is the filial and absolute transfer of a deed, properly e*ecuted, to the grantee, or to some person for his use, in such manner that it cannot be recalled by the grantor. It may be actual or constructi(e. +em#nd: It is a peremptory allegation or assertion of a legal right. A demand is an emphatic claim, which presumes that no doubt e*ists regarding its legal force and effect. It is a request made with authority. +ete&m"n#te T,"ng: A thing is determinate when it is particularly designated or physically segregated from all others of the same class. +ock 9#&&#nt: It is an instrument gi(en by doc' owners to an importer of goods warehoused on the doc' recognizing the importer+s title to the said goods. +oc$ment o% T"tle: Any written instrument, such as a bill of lading, a warehouse receipt, or an order for the deli(ery of goods, that in the usual course of business or financing is considered sufficient proof that the person who possesses it is entitled to recei(e, hold, and dispose of the instrument and the goods that it co(ers. E#&nest 1one : It is the money gi(en by the buyer to the seller to bind the bargain. It is actually a partial payment of the purchase price and is considered as proof of the perfection of the contract. It must be deducted from the purchase price. !ptio "ei Speratae: A purchase in the hope of an uncertain future profit" the purchase of a thing not yet ine*istence or not yet in the possession of the seller, and the price of which is to depend on the actual gain. !ptio Spei: It is the sale of hope. In this 'ind of sale, the price is fi*ed and not sub&ect to fluctuation, but is to be paid whether the gain be greater or less. E."st"ng /oods: Aoods owned or possessed by the seller.

E.!ected T,"ng: A thing which is not yet in e*istence but will e(entually come into e*istence. E.ec$t"on: It is a remedy for the enforcement of a final &udgment of a court. E.ec$to& Cont&#cts: These are contracts where no performance, i.e. deli(ery and payment, has yet been made by both parties. E.!&o!&"#t"on: It is the process or procedure by which the ,tate e*ercises its power of eminent domain or the ta'ing of pri(ate property for public use and upon payment of &ust compensation. (#"& 7#l$e: It is the amount for which real property or personal property would be sold in a (oluntary transaction between a buyer and seller, neither of whom is under any obligation to buy or sell. (o&eclos$&e o% 1o&tg#ge: It is a procedure by which the holder of a mortgage sells the property upon the failure of the debtor to pay the mortgage debt and, thereby, terminates his or her rights in the property. (&ee On 'o#&d 4(8O8'85: It means that the goods are to be deli(ered free of e*pense to the buyer to the point where they are ).O.B. In general, the point of ).O.B., either the point of shipment or the point of destination, determines when the ownership passes. ($ng"ble /oods: It means goods of which any unit is, from its nature or by mercantile usage, treated as the equi(alent of any other unit such as grain, oil, wine or gasoline. ($t$&e /oods: Aoods to be manufactured, raised, or acquired by the seller after the perfection of the contract of sale. ($t$&e T,"ng: A thing which is not e*isting at the time the contract is entered into. A future thing may be the ob&ect of sale pro(ided it has a potential or possible e*istence, that is, it is reasonably certain to come into e*istence as the natural increment or usual incident of something in e*istence already belonging to the seller, and the title will (est in the buyer the moment the thing comes into e*istence. /oods "n transitu: Aoods are considered in transitu after they are deli(ered to a carrier or other bailee and before the buyer or his agent ta'es deli(ery of them" or if the goods are re&ected by the buyer, and the carrier or other bailee continues in possession of them.

Ill"c"t Per Accidens: Things which are unlawful or illegal because of some pro(isions of law declaring it illegal. Ill"c"t Per Se: Things which are unlawful or illicit by their nature as when they are shoc'ing to the conscience of men. Inco&!o&e#l 2&o!e&t : It is a property or a thing which cannot be seen or handled, and e*ists only in contemplation, such as intellectual property. Indo&sement: It is the act of writing on the bac' of a note, bill, or other written instrument. It is that signature which is written on the bac' of a note, bill, or other paper, as a name, an order for, or a receipt of, payment, or the return of an officer, etc. It is a writing, usually upon the bac', but sometimes on the face, of a negotiable instrument, by which the property therein is assigned and transferred. 0$d"c"#l o& E.ec$t"on S#le: It is a sale made by a court with respect to the property of a debtor for the satisfaction of his unpaid indebtedness. L"c"t o& L#w%$l: The sub&ect matter of a contract of sale must not be contrary to law, morals, good customs, public order, or public policy. Lost T,"ng: A thing is lost when it perishes or goes out of commerce or disappears in such a way that its e*istence is un'nown or it cannot be reco(ered. L$m! S$m: It is a single payment of money, as opposed to a series of payments made o(er time. It is a single sum of money that ser(es as complete payment. 1#&&"#ge Settlement: It is an agreement entered into by persons who are about to be united in marriage, and in consideration thereof for the purpose of fi*ing the property relations that would be followed by them for the duration of the marriage. N#t$&#l Elements: Those which are deemed to e*ist in certain contracts, in the absence of any contrary stipulations. Necess#&"es: Things which are needed for sustenance, dwelling, clothing and medical attendance, in 'eeping with the financial capacity of the family of the incapacitated person. Negot"#ble +oc$ments o% T"tle: Those by the terms of which the bailee underta'es to deli(er the goods to the bearer and those by the terms of which the bailee underta'es to deli(er the goods to the order of a specified person.

Negot"#t"on: It is the transfer of a chec', promissory note, bill of e*change or other negotiable instrument to another for money, goods, ser(ices or other benefit. Nom"n#te: It means that a contract is gi(en a special name or designation. Non:negot"#ble +oc$ments o% T"tle: Those by the terms of which the goods co(ered are deli(erable to a specified person. Ob3ect o& S$b3ect 1#tte&: This refers to the determinate thing which is the ob&ect of the contract. One&o$s: It means that the thing sold is con(eyed in consideration of the price and (ice (ersa. O!t"on o& O!t"on Cont&#ct: It is a pri(ilege e*isting in one person for which he has paid a consideration which gi(es him the right to buy or sell, for e*ample, certain merchandise or certain specified property, from or to another person, if he chooses, at any time within the agreed period at a fi*ed price, or under, or in compliance with certain terms and conditions. O!t"on 1one : It is the money gi(en as distinct consideration for the option contract. It applies to a sale not yet perfected. 7hen the would0be0buyer gi(es option money, he is not required to buy, but the option money may become earnest money if the parties so agree. Pactu! "eser#ati Do!inii: It is a stipulation that the ownership is retained by the (endor until the price is fully paid. It is also 'nown as contractual reser(ation of title, and is common in sales on the installment plan. 6ompliance with the stipulated payments is a suspensi(e condition. The failure of which pre(ents the obligation of the (endor to con(ey title from acquiring binding force. 2# ment: The fulfillment of a promise" the performance of an agreement. A deli(ery of money, or its equi(alent in either specific property or ser(ices, by a debtor to a creditor. Policitacion: It is a unilateral promise or offer to sell or to buy a thing which is not accepted. It creates no &uridical effect or legal bond. 2ossesso& L"en: One of the remedies of an unpaid seller where he has a lien on the goods or a right to retain them for the price while he is in possession of them.

2&"ce Ce&t#"n: The price is certain if the parties ha(e fi*ed or agreed upon a definite amount" or if it be certain with reference to another thing certain" or the determination of the price is left to the &udgment of a specified person or persons. 2&"nc"!#l: It means that a contract does not depend for its e*istence and (alidity upon another contract. 2$bl"c Inst&$ment: It is one which is ac'nowledged before a notary public or any official authorized to administer oath, by the person who e*ecuted the same. The party ma'ing the ac'nowledgment formally declares that the instrument is his free act and deed while the officer ta'ing the same attests and certifies that such party is 'nown to him and that he is the same person who e*ecuted the instrument and ac'nowledged that the instrument is his free act and deed. 2$%%"ng o& ' :b"dd"ng: An opinion or &udgment that is not made as a representation of fact. <uffing is generally an e*pression or e*aggeration made by a salesperson or found in an ad(ertisement that concerns the quality of goods offered for sale. It presents opinions rather than facts and is usually not considered a legally binding promise. Quasi$traditio: This is the mode of deli(ery of incorporeal things or rights. Thus, the deli(ery to a person of a negotiable document of title in which it is stated that the goods referred to therein will be deli(ered to the bearer amounts to deli(ery of the goods to such person. Rel#t")e Inc#!#c"t : This incapacity e*ists only with reference to certain persons or a certain class of property. Ren$nc"#t"on: It occurs when a creditor gratuitously abandons his right against his debtor. The other terms used by the law are condonation and remission. Resol$to& Cond"t"on: It is an uncertain e(ent upon the happening of which the obligation or right sub&ect to it is e*tinguished. "es Perit Do!ino 4T,e t,"ng "s lost to t,e owne&5: This phrase is used to e*press that when a thing is lost or destroyed, it is lost to the person who was the owner of it at the time. )or e*ample, an article is sold" if the seller ha(e perfected the title of the buyer so that it is his, and it be destroyed, it is the buyer2s loss" but if, on the contrary, something remains to be done before the title becomes (ested in the buyer, then the loss falls on the seller.

S#le b +esc&"!t"on: It occurs when a seller sells things as being of a particular 'ind, the buyer not 'nowing whether the seller+s representations are true or false, but relying on them as true" or, as otherwise stated, when the purchaser has not seen the article sold, or has seen the goods but the want of identity is not apparent on inspection. S#le b +esc&"!t"on #nd S#m!le: 7hen a sale is made both by sample and by description, the goods must satisfy all the warranties appropriate to either 'ind of sale, and it is not sufficient that the bul' of the goods correspond with the sample if they do not also correspond with the description and (ice (ersa. S#le b S#m!le: To constitute this type of sale, it must appear that the parties contracted solely with reference to the sample, with the understanding that the bul' was li'e it. It must appear that the e*hibition of the sample by the seller was an inducement of the sale or formed the sole basis thereof. S#le on T&"#l o& A!!&o)#l: It is a contract in the nature of an option to purchase if the goods pro(e satisfactory, the appro(al of the buyer being a condition precedent. In this 'ind of contract, the title shall continue in the seller until the sale has become absolute either by the buyer+s appro(al of the goods, or by his failing to comply with the e*press or implied conditions of the contract as to gi(ing notice of dissatisfaction or as to returning the goods. S#le o& Ret$&n: It is a contract by which property is sold but the buyer, who becomes the owner of the property on deli(ery, has the option to return the same to the seller instead of paying the price. 9nder this contract, the option to purchase or return the goods rests entirely on the buyer without reference to the quality of the goods. S!ec"%"c /oods: These are goods identified and agreed upon at the time a contract of sale is made. Sto!!#ge "n Transitu: One of the remedies of an unpaid seller where he can stop the goods which are in transit after he has parted with the possession of them in case of the insol(ency of the buyer. S mbol"c T&#d"t"on o& Traditio S%!bolica: =eli(ery is symbolic when, to effect deli(ery, the parties ma'e use of a to'en symbol to represent the thing deli(ered. Tende& o% +el")e& : It refers to an offer of goods by a seller to a buyer by putting or holding them at the disposition of the buyer and gi(ing the buyer some notification reasonably necessary for ta'ing deli(ery. Once the buyer ma'es a purchase, he has a rightful claim on the property. It is the duty of the seller to see to it that the buyer

recei(es the goods that he purchases from the seller. If the seller fails to deli(er the goods to the buyer, it may constitute a breach. If a seller can cite a lawful reason for the non0deli(ery he may be e*empted from the claim. The non0acceptance of the deli(ery made by the seller to the buyer shall also constitute a breach on the buyer+s part. Tende& o% 2# ment: An offer of money" the act by which one indi(idual offers someone who is holding a claim or demand against him or her the amount of money that the offeror regards and admits is due, in order to satisfy the claim or demand, in the absence of any contingency or stipulation attached to the offer. Traditio &re#i 'anu: This happens when the (endee has already the possession of the thing sold by (irtue of another title as when the lessor sells the thing leased to the lessee. Instead of the (endee turning o(er the thing to the (endor so that the latter may, in turn, deli(er it bac' to him, all these are considered done by fiction of law. Traditio Constitutu! Possessoriu!: This mode of deli(ery is the opposite of traditio brevi manu. It ta'es place when the (endor continues in possession of the property sold not as owner but in some other capacity, as for e*ample, when the (endor stays as a tenant of the (endee. Traditio (onga 'anu: It ta'es place by the mere consent or agreement of the contracting parties as when the (endor merely points to the thing sold which shall thereafter be at the control and disposal of the (endee. *n!#"d Selle&: A seller who has not been paid or tendered the whole price or who has recei(ed a bill of e*change or other negotiable instrument as conditional payment and the condition on which it was recei(ed has been bro'en by reason of the dishonor of the instrument. It includes an agent of the seller to whom the bill of lading has been indorsed, or a consignor or agent who has himself paid, or is directly responsible for the price, or any other person who is in the position of a seller. *s$%&$ct: It is the right to en&oy the property of another temporarily, including both the right to use and the right to the fruits or income thereof. 9#&e,o$sem#n: An indi(idual who is regularly engaged in the business of recei(ing and storing goods of others in e*change for compensation or profit. 9#&e,o$se Rece"!t: It is a contract or receipt for goods deposited with a warehouseman containing the latter+s underta'ing to hold and deli(er the said goods to a specified person, to order, or to bearer. Quedan is a warehouse receipt usually for sugar recei(ed by a warehouseman.