Page 1 of 144
SALES AGENCY AND CREDIT TRANSACTIONS
QUESTIONS1 AND ANSWERS2
IN
S ALES AG EN C Y AN D
C REDIT TR AN S AC TIO NS
( F or Bu s in ess Law Stud en t s )
B Y:
AT T Y. C H R I S T O P H E R R . H E R N A N D E Z
Instructorof Business Law
Polytechnic University of the Philipp
ines/Pamantasan ng Cabuyao
Copyright 2013
Atty. Christopher R. Hernandez
(Strictly for the eyes of the Students of Atty. Christopher R. Hernandez only OR upon his
approval. Thus, bearer is hereby enjoined from distributing this notes without the
consent of Atty. Hernandez)
1
Questions came from the Book of Atty. Fidelito Soriano on Sales Agency and Credit
Transactions.
2
Initial Answers were prepared by the following students of the undersigned namely: Paolo
, Page 2 of 144
SALES AGENCY AND CREDIT TRANSACTIONS
LAW ON SALES
1. A contract whereby one of the contracting parties obligates himself to
transfer the ownership of and to deliver a determinate thing and the
other to pay therefore a price certain in money or its equivalent is a
contract of:
a. barter
b. sale
c. dacion en pago
d. mortgage
Answer: B. sale
It is expressly stated in Article 1458 of the Civil Code that by the contract
of sale one of the contracting party obligates himself to transfer the
ownership of to deliver a determinate thing, and other to pay therefor a
price certain in money or its equivalent.
2. The following are the essential elements of a contract of sale, except:
a. consent of the contracting parties
b. subject matter which should be determinate
c. price which is certain money or its equivalent
d. warranty against eviction and against hidden defects
Answer: D. warranty against eviction and against hidden defects
Also, it is expressly stated in the article 1458 of the Civil Code of the
Philippines wherein the three are to be found within the first paragraph.
Warranty against eviction and hidden defects is not an essential element
of a Contract of Sale but merely a natural elements of a contract of sale.
3. The following are the characteristics of a contract of sale, except:
a. principal, which means a contract of sale can stand by itself
b. real, which requires the delivery of the object of the contract of
sale for its perfection
c. onerous, where rights are acquired in exchange of a valuable
consideration
d. bilateral, which means that both parties are bound reciprocally to each
other
Answer: B. real, which requires the delivery of the object of the contract of
sale for its perfection
It is because a contract of sale can be perfected even though without the
delivery of the object. It is a CONSENSUAL CONTRACT.
4. One of the following characteristics of dacion en pago is also a
characteristic of a contract of sale. Which is it?
a. There is a pre-existing credit.
b. Obligations are extinguished.
c. There is less freedom in fixing price.
d. Ownership of the object is transferred to the other party.
, Page 3 of 144
SALES AGENCY AND CREDIT TRANSACTIONS
It is because dacion en pago is also known as dation of payment wherein
the property of the debtor is alienated by the creditor for the
satisfaction of the credit.
, Page 4 of 144
SALES AGENCY AND CREDIT TRANSACTIONS
And from there we can conclude that there is also a transfer of ownership
in dacion en pago.
5. The following are characteristics of a contract of sale except for one
which refers to payment by cession. Which characteristic refers to
payment by cession?
a. There is no pre-existing credit.
b. The cause or consideration is the price.
c. There is more freedom in fixing the price.
d. Assignee of the property acquires the right to sell the thing but not
the owner thereof.
Answer: D. Assignee of the property acquires the right to sell the thing but not
the owner thereof.
In payment of cession, the creditors do not become the owners of the
property assigned to them but are merely given the right to sell such
property and apply the proceeds to their claims.
6. The following items pertain to either a contract of sale or contract to sell.
I. Ownership of the thing sold is transferred upon delivery.
II. Ownership of the thing is transferred to the buyer at some future time.
III. The risk of loss is on the buyer.
IV. The risk of loss in on the seller.
Based on the above data, which of the following is correct?
a. Items I and III pertain to a contract to sell.
b. Items II and III pertain to a contract to sell.
c. Items II and IV pertain to a contract of sale.
d. Items I and III pertain to a contract of sale.
Answer: D. Items I and III pertain to a contract of sale.
It is due to the reason that generally speaking the seller bears the loss
and the ownership of the object of the contract transfers upon delivery.
Statement I pertains to a contract of sale because it is stated in Article
1477 that ownership of thing sold is transferred upon the actual or
constructive delivery thereof.
7. One of the following is not a requisite of the object of a contract of sale.
Which is it?
a. It must be within the commerce of men.
b. It must be licit.
c. It must be determinate or determinable.
d. Vendor must have the right to transfer the ownership of the thing at
the time of sale.
Answer: D. Vendor must have the right to transfer the ownership of the thing
at the time of sale.
Because it is not mentioned within the articles concerning the object of a
contract of sale which are articles 1459 – 1465. Even if the Vendor is not
the owner of the propertyat the time of the perfection, the sale is still
valid as long as he is the owner at the time of the delivery.
SALES AGENCY AND CREDIT TRANSACTIONS
QUESTIONS1 AND ANSWERS2
IN
S ALES AG EN C Y AN D
C REDIT TR AN S AC TIO NS
( F or Bu s in ess Law Stud en t s )
B Y:
AT T Y. C H R I S T O P H E R R . H E R N A N D E Z
Instructorof Business Law
Polytechnic University of the Philipp
ines/Pamantasan ng Cabuyao
Copyright 2013
Atty. Christopher R. Hernandez
(Strictly for the eyes of the Students of Atty. Christopher R. Hernandez only OR upon his
approval. Thus, bearer is hereby enjoined from distributing this notes without the
consent of Atty. Hernandez)
1
Questions came from the Book of Atty. Fidelito Soriano on Sales Agency and Credit
Transactions.
2
Initial Answers were prepared by the following students of the undersigned namely: Paolo
, Page 2 of 144
SALES AGENCY AND CREDIT TRANSACTIONS
LAW ON SALES
1. A contract whereby one of the contracting parties obligates himself to
transfer the ownership of and to deliver a determinate thing and the
other to pay therefore a price certain in money or its equivalent is a
contract of:
a. barter
b. sale
c. dacion en pago
d. mortgage
Answer: B. sale
It is expressly stated in Article 1458 of the Civil Code that by the contract
of sale one of the contracting party obligates himself to transfer the
ownership of to deliver a determinate thing, and other to pay therefor a
price certain in money or its equivalent.
2. The following are the essential elements of a contract of sale, except:
a. consent of the contracting parties
b. subject matter which should be determinate
c. price which is certain money or its equivalent
d. warranty against eviction and against hidden defects
Answer: D. warranty against eviction and against hidden defects
Also, it is expressly stated in the article 1458 of the Civil Code of the
Philippines wherein the three are to be found within the first paragraph.
Warranty against eviction and hidden defects is not an essential element
of a Contract of Sale but merely a natural elements of a contract of sale.
3. The following are the characteristics of a contract of sale, except:
a. principal, which means a contract of sale can stand by itself
b. real, which requires the delivery of the object of the contract of
sale for its perfection
c. onerous, where rights are acquired in exchange of a valuable
consideration
d. bilateral, which means that both parties are bound reciprocally to each
other
Answer: B. real, which requires the delivery of the object of the contract of
sale for its perfection
It is because a contract of sale can be perfected even though without the
delivery of the object. It is a CONSENSUAL CONTRACT.
4. One of the following characteristics of dacion en pago is also a
characteristic of a contract of sale. Which is it?
a. There is a pre-existing credit.
b. Obligations are extinguished.
c. There is less freedom in fixing price.
d. Ownership of the object is transferred to the other party.
, Page 3 of 144
SALES AGENCY AND CREDIT TRANSACTIONS
It is because dacion en pago is also known as dation of payment wherein
the property of the debtor is alienated by the creditor for the
satisfaction of the credit.
, Page 4 of 144
SALES AGENCY AND CREDIT TRANSACTIONS
And from there we can conclude that there is also a transfer of ownership
in dacion en pago.
5. The following are characteristics of a contract of sale except for one
which refers to payment by cession. Which characteristic refers to
payment by cession?
a. There is no pre-existing credit.
b. The cause or consideration is the price.
c. There is more freedom in fixing the price.
d. Assignee of the property acquires the right to sell the thing but not
the owner thereof.
Answer: D. Assignee of the property acquires the right to sell the thing but not
the owner thereof.
In payment of cession, the creditors do not become the owners of the
property assigned to them but are merely given the right to sell such
property and apply the proceeds to their claims.
6. The following items pertain to either a contract of sale or contract to sell.
I. Ownership of the thing sold is transferred upon delivery.
II. Ownership of the thing is transferred to the buyer at some future time.
III. The risk of loss is on the buyer.
IV. The risk of loss in on the seller.
Based on the above data, which of the following is correct?
a. Items I and III pertain to a contract to sell.
b. Items II and III pertain to a contract to sell.
c. Items II and IV pertain to a contract of sale.
d. Items I and III pertain to a contract of sale.
Answer: D. Items I and III pertain to a contract of sale.
It is due to the reason that generally speaking the seller bears the loss
and the ownership of the object of the contract transfers upon delivery.
Statement I pertains to a contract of sale because it is stated in Article
1477 that ownership of thing sold is transferred upon the actual or
constructive delivery thereof.
7. One of the following is not a requisite of the object of a contract of sale.
Which is it?
a. It must be within the commerce of men.
b. It must be licit.
c. It must be determinate or determinable.
d. Vendor must have the right to transfer the ownership of the thing at
the time of sale.
Answer: D. Vendor must have the right to transfer the ownership of the thing
at the time of sale.
Because it is not mentioned within the articles concerning the object of a
contract of sale which are articles 1459 – 1465. Even if the Vendor is not
the owner of the propertyat the time of the perfection, the sale is still
valid as long as he is the owner at the time of the delivery.
