Sales - Midterms

I.

Harold and Kumar are friends. Harold has always been interested in getting a game console similar to Kumar's limited edition game console. On Harold's 22nd birthday, Kumar proposed that Harold buy his game console at a very low price of P800. According to Kumar, the difference of the price shall be his birthday gift to Harold. So, as suggested, Harold bought Kumar's game console for P800. Later, Kumar's younger brother Suresh, protested and claimed that the sale was void because the price was grossly inadequate compared to the game console's actual price of P18,000. Is the sale valid? Support your answer. (10 pts.)

II.

Bruce Wayne bought the penthouse in the latest condominium project constructed by Ayala Land in Makati City. For the price of P50 million, Bruce Wayne only gave P10 million. Then, Ayala Land issued an instrument denominated as "Deed of Conditional Sale." Bruce Wayne immediately occupied the unit and used it as one of his hideaways. Later, when Ayala Land demanded for the balance of the price, and Bruce Wayne refused to pay, Ayala Land filed a case for a sum of money against Bruce Wayne. 

a. Under the facts, is the sale absolute or conditional? (5 pts.)

b. Distinguish between a conditional contract of sale and a contract to sell? (5 pts.)

III.

The Deed of Sale dated June 10, 2008 between Harry Potter (vendor) and Hermione Granger (vendee) states that:

For and in consideration of the amount of PhP 200,000.00 paid in hand by the VENDEE to the VENDOR, the VENDOR does hereby SELL, TRANSFER and CONVEY unto the said VENDEE, her successors and assigns, a motor vehicle described as:

2003 Chevrolet Optra sedan, with Motor Number 1000456, Chassis Number 763890 and License Plate Number WQY-543

which the VENDOR is to acquire from his brother on June 20, 2008 and which shall be delivered by the VENDOR to the VENDEE only on June 30, 2008.

a. Is the sale valid? Explain. (5 pts.)

b. Distinguish between sale of thing expected and a sale of hope. (5 pts.)

IV.

Tony Spark was approached by the spouses Jack and Rose, Canadian nationals, to invest in "futures." Tony Spark was convinced. As investor, Tony Spark would supposedly be buying and selling commodities in foreign commodities markets. These commodities include rice, corn and petrol. At a certain call time, Tony Spark will decide how much he is willing to bid and if the price turns out to be higher, Tony Spark loses his money. But if the price turns out to be lower, then the compamy of Spouses Jack and Rose will pay Tony Spark the difference. Later, the investment failed and Tony Spark wanted to recoup his money. The Spouses Jack and Rose opposed the claim and said that there was a valid contract of sale of future goods, under Article 1462 of the Civil Code. How similar or different is the sale of "futures" to a sale of future goods under Art. 1462 of the Civil Code? (10 pts.)

V.

Upon learning that Jimmy Olsen was selling his high-tech camera, Clark Kent told Jimmy Olsen not to sell the camera to anyone until Saturday noon-time. Then, Clark Kent gave Jimmy Olsen P500. On Saturday, at noon-time, Clark Kent went to Jimmy Olsen and told the latter that he changed his mind and will no longer buy the camera. Clark Kent asked for the P500 back. But, Jimmy Olsen refused to return the money. Is the refusal valid? Why? (10 pts.)

VI.

Carrie Bradshaw is a fan of Jimmy Chu and Manolo Blanik shoes. One weekend, while looking at an online catalog, she decided to buy five (5) pairs from each brand. She transacted with the website, paid through her credit card an was issued an electronic invoice. The shoes were scheduled to be delivered the next day. On the next day, however, the package was lost and never arrived. When Carrie Bradshaw complained to the 24-hour customer service hotline, she was told that the risk of loss was on her, that when she was issued the electronic invoice, she was already the owner of the shoes.

a. Was there a perfected contract of sale? (5 pts.)

b. Is the customer service correct in saying that Carrie Bradshaw bears the risk of loss? (5 pts.)

VII.

Bruce Banner purchased on installment a motorcycle from Hulk Trading. Hulk Trading required Bruce to execute a chattel mortgage over the motorcycle in favor of Hulk Trading. The payment term was ten months at P7,500 per month. When Bruce failed to pay the sixth monthly installment, Hulk Trading sued him for the rescission of the contract. After six months of court proceedings, Hulk Trading won and the motorcycle was taken from Bruce Banner. Bruce Banner requested that his payments be returned to him but Hulk Trading refused the request.

a. May the installment payments be forfeited? Explain your answer. (5 pts.)

b. In case the complaint for rescission was accompanied by a preliminary attachment on Bruce Banner's cash deposits in the amount of P37,500, and the said cash deposits were garnished, will this be a violation of the law which provides that a seller cannot avail of two or more remedies at the same time? Explain. (5 pts.)

VIII.

Diana Prince bought under a Contract to Sell dated July 4, 2006 a subdivision lot in Filinvest Homes in Antipolo City. The price stipulated was P3 million with downpayment of P800,000 and the balance of P2,200,000  to be paid in 36 equal monthly amortizations of P61,112. Diana Prince, however was only able to pay 18 monthly amortizations. Thus, Filinvest Land, the owner of Filinvest Homes, sent Diana Prince a letter cancelling the contract to sell. Diana Prince then approached you for advice. What are her rights as a buyer and how can she protect her rights? (10 pts.)