SUBJECT MATTER OF SALE

TO BE A VALID & BINDING SUBJECT MATTER, THE FOLLOWING MUST CONCUR:

1. Existing, Future & Contingent

2. Licit

3. Determinate or determinable

EXISTING, FUTURE, CONTINGENT

• Refers to subject matter that are existing & not existing but capable of existence (pursuant to present technology)

1. if this is present, status of contract: VALID

2. if absent : NO CONTRACT SITUATION, THEREFORE NO CAUSE OF ACTION

3. if mere pipe dream : VOID

a. SALE OF THINGS HAVING POTENTIAL EXISTENCE (Emptio Rei Speratae)

• Sale of future things; no physical existence yet

• A resolutory condition that thing will come into existence

• Non happening of condition: RESULUTORY: EXTINGUISH THE CONTRACT

• Remedy: can recover what has been paid

b. SALE OF HOPE (Emptio Spei)

• Every sale of future thing is subject to condition that they will come into existence

• If hope does not come true – NO RECOVERY OF PAYMENT/NO RESCISSION

• Aleatory character but valid

LICIT & VENDOR MUST HAVE A RIGHT TO TRANSFER SUBJECT MATTER

1. LICIT – must be within the commerce of men

• VOID SUBJECT MATTER:

a. Contrary to law
b. Simulated/fictitious
c. Did not exist at the time of transaction
d. Outside commerce of men
e. Impossible service
f. Intention can not be ascertained
g. By provision of law

2. SELLER MUST BE OWNER – only at time of consummation since tradition transfers ownership but to have a perfected contract of sale, vendor need not be owner of thing; can be validated/ratified by subsequent acquisition of title by seller

DETERMINATE & DETERMINABLE

• Absence: VOID;

• there is subject matter but intention regarding subject matter cannot be ascertained – VOID

• Kinds of subject matter:

1. Specific - Determinate

• Particularly designated or segregated from all others of the same class

2. Generic - Determinable

• Test: reach a point of description where both minds concur

• At the time the contract is entered into, the thing is capable of being made determinate without the necessity of a new or further agreement between parties

• Exact quantity not essential

• Sale of generic things – VALID; still executory

• There can only be contract of sale when subject is finally chosen for delivery – already segregated or designated; but before designation, valid contract of sale already exists

3. Undivided interest (BUYER becomes co-owner)

4. Undivided share in mass of fungible goods (BUYER becomes co-owner)