PRICE – signifies the sum stipulated as equivalent of the thing sold

PRICE – signifies the sum stipulated as equivalent of the thing sold

CHARACTERISTICS OF VALID PRICE

1. Must be real

2. Must be in money or its equivalent

3. Must be certain or ascertainable at the time of the perfection of the contract

4. Manner of payment provided for

REAL

1. When price stated is one intended by the parties

• If fictitious: no intention with respect to price - VOID

• If False/simulated: what appears in contract is not the true price

a. VALID if there is true consideration

b. VOID but if none (because it is fictitious)

2. Valuable

• When not valuable – VOID

• When contract is onerous, presumed to have valuable consideration

• Nominal consideration w/c is common law concept does not apply (P1.00)

• Gross inadequacy of price in ordinary sale does not render contract void unless it is shocking to conscience of man.

Except:
a. Judicial sale
• Shocking to conscience of man
• Higher price can be obtained at re-sale

b. Rescissible contracts due to lesion

c. Sales with right to repurchase (raises presumption of equitable mortgage) – Remedy is reformation

CERTAIN OR ASCERTAINABLE

CERTAIN

1. Sufficient that it is fixed with reference to another thing certain

• That thing will have on a definite day, or in a particular exchange or market, or when an amount is fixed above or below the price on such day, or in such exchange or market provided said amount be certain

2. Determination be left to judgment of specified person/s

• If contract states that price is to be determined by 3rd party, contract is already perfected (there is just a suspensive condition – actual fixing of price)

• 3rd party fixes price in bad faith or mistake – court remedy can be made

• 3rd party is unable or unwilling to fix price – parties have no cause of action

• Reason:

a. suspensive condition does not happen yet – courts have no jurisdiction

b. enforceable contract has not yet arisen – court with no jurisdiction to create contract between parties

• Result: INEFFICACIOUS

• When price can not be determined in accordance with any of the preceding rules, contract of sale in INEFFICACIOUS

• However, when SM delivered, BUYER must pay reasonable price therefore – court can fix price

MANNER OF PAYMENT MUST BE AGREED UPON

• Deemed to be an essential requisite because it is part of the presentation of the contract

• Integral part of concept of price

• If there is failure to meet minds as regards term of payment: CASH BASIS

• Must be certain or at least ascertainable

• Effect is absent: NO CONTRACT SITUATION