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Obq 7 - Clrii
Obq 7 - Clrii
A. You are the lawyer of Mars. What would your causes of action
be?
As the counsel of Mars, the proper cause of action to be invoked is that there
was a breach of contract of transportation and gross negligence for failure to
observe the due care that is expected of a common carrier. I would sue Cebu
Pacific in order to recover damages incurred for the missing documents.
In this case, a contract of necessary deposit existed between Mars and Cebu
Pacific. A deposit is considered necessary when it is made between
passengers and common carriers. As a common carrier, Cebu Pacific is
expected to observe extraordinary diligence in the vigilance over the goods
and the safety of the passengers transported by them as it is in the nature of
their business and for reasons of public policy as found under Article 1733 of
the New Civil Code
In this case, Mars can sue to recover the damages incurred for the lost
documents inside the bag, which he wouldn’t have lost if Cebu Pacific
exercised extraordinary diligence in making sure that the bag was loaded on
the correct plane.
B. You are the lawyer of Cebu Pacific. What would your defenses be?
Answer: As the counsel now for Cebu Pacific, I would raise good faith as a
defense as there was no proof indicative of the airline’s bad faith.
Bad faith means a breach of a known duty through some motive of interest
or ill will. It was the duty of Cebu Pacific to look for petitioner's luggage which
had been miscarried. PAL exerted due diligence in complying with such duty.
I would also raise the defense that there was absence of wrongful act or
omission or of fraud or bad faith which would entitle Mars to Moral Damages.
In addition, Mars is neither entitled to exemplary damages. In contracts, as
provided for in Article 2232 of the Civil Code, exemplary damages can be
granted if the defendant acted in a wanton, fraudulent, reckless, oppressive,
or malevolent manner, which has not been proven in this case.
A. You are the lawyer of Michael, what are your courses of action?
Michael can contend that his initial payment of the P10,000.00 can already
be considered as earnest money. An earnest money is a deposit made to a
seller that represents a buyer's good faith to purchase the object of the
contract, which in this case is a piece of land.
The main purpose of the earnest money is to bind the bargain. It is also
considered as part of the purchase price and will be deducted from the total
price. Once the earnest money is given to the seller, it will perfect the
contract of sale. A payment will only be considered earnest money if it
constitutes as part of the purchase price.
As can be seen from the case, the said initial payment is assumed to be part
of the purchase price, and as such, Michael can contend that there is now a
perfected contract due to the payment of earnest money.
There was no perfected contract as the minds of the parties did not meet “in
regard to the manner of payment.”
In the case of Velasco v CA, the Court ruled that a definite agreement on the
manner of payment of the purchase price is an essential element in the
formation of a binding and enforceable contract of sale.
The fact petitioner delivered to the respondent the sum of P10,000 as part
of the down-payment that they had to pay cannot be considered as sufficient
proof of the perfection of any purchase and sale agreement between the
parties as the terms of the contract had not been agreed upon by the
parties. Hence, no perfected contract between them.
No, the sale was not consummated. The manner of payment of purchase
price goes into as an essential element in the formation of a binding contract
of sale. As provided in the case of Velasco v. CA, the Court ruled that no
contract of sale was perfected because the meeting of the minds didnt meet
in regard to the manner of payment. Applying it in this case, as it can be
shown in the facts that there was no agreement made with regard to the
manner of payment, such defect goes into the element of price to support a
valid contract of sale. Thus, there was no consummated sale
2.) Whether or not Michael’s failure to complete the downpayment can
warrant the rescission of the contract by Jonathan
1.) No, the sale was not consummated. Article 1475. The contract of sale is
perfected at the moment there is a meeting of minds upon the thing which is
the object of the contract and upon the price.
2.) Yes, Jonathan has the right to rescind the contract as the inability to form
a concrete agreement on how the down payment should be paid is clear
proof that there was no perfected contract of sale between the parties. As
found under Art. 1475 of the New Civil Code states “The contract of sale is
perfected at the moment there is a meeting of minds upon the thing which is
the object of the contract and upon the price. From that moment, the parties
may reciprocally demand performance, subject to the provisions of the law
governing the form of contracts.”
In this case, Jonathan and Michael failed to reach a meeting of the minds
with regards to the manner of payment as shown by their conflicting claims
on how the initial P30,000.00 was going to be paid. Hence, Jonathan may still
rescind the contract as there was no perfected contract of sale entered by
the parties.