Contract Of Sale vs. Contract To Sell - sc.judiciary.gov.ph/jurisprudence/2012/july2012/194785.pdf

sc.judiciary.gov.ph/jurisprudence/2012/july2012/194785.pdf

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The elements of a contract of sale are, to wit: a) Consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; b) Determinate subject matter; and c)  Price certain in money or its equivalent.

 It is the absence of the first element which distinguishes a contract of sale from that of a contract to sell. In a contract to sell, the prospective seller explicitly reserves the transfer of title to the prospective buyer, meaning, the prospective seller does not as yet agree or consent to transfer ownership of the property subject of the contract to sell until the happening of an event, such as, in most cases, the full payment of the purchase price. What the seller agrees or obliges
himself to do is to fulfill his promise to sell the subject property when the entire amount of the purchase price is delivered to him. In other words, the full payment of the purchase price partakes of a suspensive condition, the non-fulfillment of which prevents the  obligation to sell from arising and,
thus, ownership is retained by the prospective seller without further remedies by the prospective buyer.

In a contract of sale, on the other hand, the title to the property passes to the vendee upon the delivery of the thing sold. Unlike in a contract to sell, the first element of consent is present, although it is conditioned upon the happening of a contingent event which may or may not occur. If the
suspensive condition is not fulfilled, the perfection of the contract of sale is completely abated. However, if the  suspensive condition is fulfilled, the contract of sale  is thereby perfected, such that if there had already been previous delivery of the property subject of the sale to the buyer, ownership
thereto automatically transfers to the buyer by operation of law without any further act having to be performed by the seller. The vendor loses ownership over the property and cannot recover it until and unless the contract is resolved or rescinded.


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