Actions for breach of sales contract of goods

Actions for price of goods by seller

In case of breach of sales contract of goods, the seller may have the following actions against the buyer for the price of goods if:

  1. The ownership of the goods has passed to the buyer and he wrongfully neglects or refuses to pay for the goods according to the terms of the sales contract;[1] or
  2. The price is payable on a certain day, irrespective of delivery or of transfer of title and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price although the ownership[2] in the goods has not passed.[3]

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Rights and Obligations of the Buyer in Sales Transactions

Acceptance of delivery and payment of purchase price

The buyer is obligated to accept delivery and to pay the price of the thing sold at the time and place[1] stipulated in the contract.”[2] Except as otherwise agreed upon, the buyer is not required to accept delivery by installments.[3]

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Payment or Performance

Payment refers to either the delivery of money and/or the performance, in any other manner, of an obligation. The currency stipulated by the parties is the basis of the payment for debts in money. If it is not possible to do so, then the debt is to be paid in the currency which is legal tender in the Philippines. For obligations to give, a payment is only valid if the person making payment has free disposal of the thing due and capacity to alienate it.

As a general rule for obligations to give, a debt is only considered paid if the thing or service in which the obligation consists has been completely delivered or rendered. However, there is no valid payment to the creditor by the debtor who had been judicially ordered to retain the debt. By way of exception to the general rule, the debtor who has substantially performed in good faith its obligations has the right to recover (or demand performance against the creditor) as if there had been a strict and complete fulfillment less damages that the creditor may have been suffered. This is the rule on substantial compliance.

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