PIODO, Mary Grace Anne

BSA-202

1. Distinguish between option money and earnest money.

a) Option money is the money given by the optionee/buyer as a distinct consideration of the
contract in which gives the buyer a specific period of time when will he/she purchase the property.
Option money does not form part in the purchased price, while the earnest money is given to the
seller by the prospective buyer to show that he/she is interested to buy the property. Earnest money
is already in the purchased price.
b)Option money applies when there is no stipulation or the sale is not perfected yet, while the
earnest money given only when there is a stipulation or the sale is already perfected.
c)Option money when it is given the buyer is not required to buy the property and the seller cannot
rush the buyer to buy the property unless it is stated on the terms of option, while in earnest money
at the time of the buyer gives the earnest money he/she is required to buy the property and pay the
balance (earnest money minus the purchased price).

2. Is a sale of future property valid? Explain.

Yes, even if the property is not yet exist in the time of contract as long the property has the
potential or possibility to come into existence. The sale is valid. (Art. 1461)

3. Is a sale of undivided interest valid? Explain.

Yes, in the sale of undivided interest the sole owner of the thing can sell the entire thing or
only a specific portion of what seller and buyer are agreed on. Selling of an undivided interest is
valid. (Art. 1463)

4. Discuss traditio.
Traditio/Delivery is the transfer of possession to the receiver. By agreement if it is stipulated
the delivery of the thing is not subject to ownership.
Quasi Traditio- The delivery of rights from one to another.
Traditio Brevi Manu- The buyer already has the possession of the thing even before the
purchase.
Traditio constitutum possessorium- the owner changed as possession.
Traditio Longa Manu- by mere consent or agreement.

5. Is the execution of public instrument necessary for the validity of the sale of real
property?
Yes, For the real property it must be in public instruments in order to register it to the Register
of Deeds whenever the property is located. It is to avoid the fraud.

6. Discuss the effects of insufficiency of consideration in the contract of sale.

In Insufficiency of consideration or lack of consideration one of the party is not obliged in
any way. The contract of sale is will be null because of the absolute absence of the price and
if there is a price agreed but it is stimulated.
7. Discuss the remedy of the buyer in the event the seller cannot deliver.
The buyer can sue the seller for not delivering the things if in case the seller didn’t want to
deliver the things and also the buyer has the right to recover the price of the if the thing is
already been paid.

8. Buyer acquired a house and lot from the Seller. The latter used his land as the collateral
for worth 10 million with the agreement of 10-times installment basis. The Buyer failed to pay
2 consecutive times of installment, then the Seller demanded the full payment to the Buyer
but the Buyer raised his defense that in Obligations and Contracts, Term or Period benefits
both the debtor and creditor. Is the defense of the Buyer correct?

No, because the buyer didn’t follow what is on the contract the benefit does not include the
failed of payment because even if the two of them benefited the buyer didn’t follow what is in
the agreement. 2 consecutive payments in the installment can lead to cancellation or foreclose
of the sale but the seller cannot demand for the full payment to the buyer.

9. Distinguish between inadequacy of price and simulated price in the contract of sale.
a) Inadequacy of price does not affect the contract of sale, while when the price is simulated in
the contract therefore the sale is void.
b) Inadequacy of price the price is too low or too high depends on the agreement as to be
shocking by the conscience, while the simulated price there is no price to support the contract
of sale.

10. Seller sold his Mercedes-Benz car to the the Buyer amounting to 26 million from Luzon
to Mindanao, FOB Destination. In transit, lightning strike car died. Is the obligation
extinguished? What are the rights of the Buyer and the Seller?
Yes, obligation extinguished because it is a determinate thing and fortuitous event happen and if
there is no delay. The seller is in good faith because the happening is not his intention it is merely
unexpected and unpredicted. The seller will not bear the responsibilities. The buyer cannot sue or
demand for the damages. (Art. 1262)