Manner Of Payment Is Essential In The Validity Of Sale

Before a valid and binding contract of sale can exist, the manner of payment of the purchase price must first be established, as such stands as essential to the validity of the sale. After all, such agreement on the terms of payment is integral to the element of a price certain, such that a disagreement on the manner of payment is tantamount to a failure to agree on the price. (Sps. Edrada vs. Sps. Ramos, G.R. No. 154413, August 31, 2005 citing Swedish Match, AB vs. CA, G.R. No. 128120, October 20, 2004, 441 SCRA 1).

In Boston Bank of the Phils. vs. Manalo, et al., G.R. No. 158149, February 9, 2006, it was once again said that for a perfected contract of sale or contract to sell to exist in law, there must be an agreement of the parties, not only on the price of the property sold, but also on the manner the price is to be paid by the vendee.

A definite agreement as to the price is an essential element of a binding agreement to sell personal or real property because it seriously affects the rights and obligations of the parties. Price is an essential element in the formation of a binding and enforceable contract of sale. The fixing of the price can never be left to the decision of one of the contracting parties. But a price fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected sale.

It is not enough for the parties to agree on the price of the property. The parties must also agree on the manner of payment of the price of the property to give rise to a binding and enforceable contract of sale or contract to sell. This is so because the agreement as to the manner of payment goes into the price, such that a disagreement on the manner of payment is tantamount to a failure to agree on the price. (Boston Bank of the Phils. vs. Manalo, et al., G.R. No. 158149, February 9, 2006).