Northwestern University ONLINE INSTRUCTIONS
College of Law Pros. MFAC
Module 002___Sales
LAW ON SALES
PART I. MODIFIED TRUE or FALSE. Explain why your answer is FALSE.
1. If the possessory lien is lost, the vendor loses the lien on the consideration
2. Goods are no longer in transit if the buyer obtains delivery of the goods after their
arrival at the appointed destination.
3. The right of stoppage in transitu is available after the arrival of the goods at its
destination and the carrier acts as a bailee for the buyer.
4. The unpaid seller’s right of lien remains if the buyer has bartered the goods.
5. On sale on approval and satisfaction, title remains to the seller.
6. A negotiable document of title is negotiated can be negotiated by mere delivery.
7. Traditio longa manu is the opposite of tradition brevi manu.
8. Warranty of the goods sold is an essential element in a contract of sale.
9. Ownership may still can be reserved despite the transfer of the object to the buyer.
10. In Sales, ownership is transferred by the perfection of the contract.
11. Dation in payment is only applicable if the debtor is insolvent.
12. A contract of sale by itself transfers real rights and is one of the modes of acquiring
ownership.
13. If there is a defect in the consent of the one of the contracting parties, the contract of
sale is deemed to be voidable.
14. If Bruno purchased 100 sacks of rice from Ryan and the latter was not able to produce
the quantity from his harvest, Ryan will still be liable for the balance.
15. When contract is thru a mere text message, there is still perfection once the offeror is
aware of the acceptance of the offeree.
PART II. Make your answer brief and concise.
I
Karen was interested in Asialuck’s (a credit agency) latest car loan promo. Asialuck’s
management then instructed Karen to proceed to its business partner, Nizan Corp. to ask for
the issuance of a sales invoice on her chosen car and have it registered under Karen’s name.
Nizan Corp. then gave the required documents to Karen, after which, she proceeded to
Asialuck for the processing of her application. While the papers were being processed Ditas,
the best friend of Karen went to Nizan Corp. to claim the car without the knowledge of
Karen. When Karen asked for the car she applied for, Nizan Co. told her that the company
already released it to Ditas on account that the sales invoice has been completed and there
was already registration under the name of Karen. Karen went then to see Ditas who
admitted taking the car but was sorry to inform Karen that the car has been taken away by
Dita’s boyfriend who broke off with her on the same day of the taking.
1. If goods are lost while in the possession of the seller, who shall bear the lost? (8 pts)
2. Are there exceptions to your answer in No. 1? If your answer is in the affirmative,
state the exceptions. (8 pts)
3. In the given problem,is Karen still liable under the loan agreement with Asialuck?
Why? (8 pts)
4. Enumerate and explain briefly at least five (5) kinds of constructive delivery. (10 pts)
II
Sophie executed a Deed of Assignment in favor of Atty. Kat over a property under
litigation. The opposing party questioned the Deed claiming that the transaction is
prohibited. Atty. Kat explained that what the law prohibits is a sale of properties under
litigation and what has been executed is merely a Deed of Assignment.
1. Is Atty. Kat’s contentions correct? Why? (8 pts)
2. Suppose the contract between the lawyer and his client is a contingent one, is the
prohibition applicable? Why? (8 pts)
III
When Aileen introduced her boyfriend, Dennis, to her father Frank for the first time,
the Rolex on the wrist of Dennis, immediately caught the attention of Frank and he was
certain that it was the same missing Rolex he bought during his last tourist trip in Dubai.
Frank confronted Dennis on how the latter was able to have a Rolex. Dennis merely stared at
Aileen whose eyes were locked on the floor.
1. Can Frank compel Dennis to return the watch to him? Why? (6 pts)
2. Can Frank compel the return of the watch:
A. If Dennis bought the watch from a merchant store? Why? (6 pts)
B. If Dennis claims that he bought the watch in an auction sale? Why? (6 pts)
IV
Spouses Rudy and Lorna entered into a contract of sale over a parcel of land in 1990.
Alma, an amiga of Rudy, the seller of the land to his wife, loaned an amount to Rudy in
1995. Alma learned about the sale and now questions the validity of the same since Rudy
and Alma are husband and wife hence cannot be the same parties to a contract of sale.
Moreover, the disposal of the property prejudices her rights as a creditor. Will the
complaint prosper? Why? (8pts)
V
On the height of the insurgencies in the south Abu, the owner of a farm lot, sold the
same to Bakar in cash but the document was not registered. A year later, Abu sold it again in
a 5 year installment basis to Carim. Even before the purchase price was not yet paid in full,
Carim received the blessings of Abu for the transfer and managed to register the document
and obtained a title over the same.
1. Between Bakar and Carim, who has a better right over the real property? Why? (8
pts)
2. Will your answer be the same if Carim had knowledge of the prior sale? Why? (8 pts)
3. In cases of double sale:
A. Who enjoys preference over the personal property acquired? (8 pts)
B. What is the order of preference over the personal property acquired? (8 pts)
VI
1. Who is an unpaid seller? (5 pts)
2. Enumerate at least four rights of an unpaid seller? (5 pts)
VII.
GLUTTY’s variety store was able to legally register its business last January, 2020.
The store is engaged in the sale of some grocery items like evaporated milk, laundry soap,
coffee and various canned goods. On April 1, 2020, the owner, adapted her own marketing
tool by having a 11% mark-up based on prevailing DTI prices for each item in order for her
to speed-up her return on investment. A customer was able to purchase from the store which
had the total purchase price of P750.00. The corresponding official receipt was issued to the
customer. 5 each
a) Was there a valid sale?
b) What are the violations, if any, did GLUTTY commit? Explain
c) Supposed, GLUTTY made homemade alcohol and sold it the public through recycled
but clean mineral water bottles, will the sale be valid? Why? Was there any violation?
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