Conditional Sales Contract for Philippines

Conditional Sales Contract Template for Philippines

A Conditional Sales Contract under Philippine law is a legally binding agreement where the buyer takes possession of goods or property while making installment payments, but the seller retains title until the full purchase price is paid. This document is governed by Philippine civil law, particularly the Civil Code of the Philippines and relevant consumer protection legislation. It includes detailed terms for payment schedules, title retention, buyer obligations, default provisions, and remedies available to both parties. The contract must comply with local requirements including the Truth in Lending Act for transparency in credit terms and, where applicable, the Maceda Law for real estate transactions.

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What is a Conditional Sales Contract?

The Conditional Sales Contract is a crucial document in Philippine commerce, particularly used in transactions involving significant purchases paid through installments. This contract type is specifically designed to protect both seller and buyer interests in transactions where immediate full payment is not feasible. Under Philippine law, this agreement must comply with various regulations including the Civil Code, Consumer Act, and when applicable, the Maceda Law and Truth in Lending Act. The document typically includes comprehensive details about the property being sold, payment terms, title retention clauses, buyer's obligations during the payment period, and specific conditions that must be met before title transfer. It's commonly used in various sectors from real estate to equipment sales, providing a structured framework for installment-based purchases while ensuring legal protection for all parties involved.

What sections should be included in a Conditional Sales Contract?

1. Parties: Identification of the Seller and Buyer with complete legal names and addresses

2. Background: Context of the transaction and brief description of the parties' intentions

3. Definitions: Definitions of key terms used throughout the agreement

4. Subject Matter: Detailed description of the property or goods being sold

5. Purchase Price: Total purchase price, downpayment, and installment payment structure

6. Payment Terms: Schedule of payments, interest rates, and payment methods

7. Title Retention: Clause specifying that title remains with seller until full payment

8. Delivery and Acceptance: Terms of delivery and acceptance of the property

9. Buyer's Obligations: Maintenance, insurance, and other obligations of the buyer during the payment period

10. Seller's Representations: Warranties and representations regarding the property

11. Default and Remedies: Consequences of default and available remedies for both parties

12. Insurance: Requirements for insurance coverage of the property

13. Termination: Grounds and procedures for contract termination

14. Governing Law: Specification of Philippine law as governing law

15. Dispute Resolution: Procedures for resolving disputes between parties

16. Execution: Signature blocks and execution requirements

What sections are optional to include in a Conditional Sales Contract?

1. Third-Party Guarantor: Terms involving a guarantor, used when buyer requires additional security

2. Special Delivery Requirements: For cases requiring specific delivery arrangements or installations

3. Assignment: Terms regarding the ability to assign rights under the contract, if permitted

4. Force Majeure: Provisions for unforeseen circumstances, particularly relevant for long-term contracts

5. Return Policy: Terms for return or exchange if applicable to the type of goods

6. Intellectual Property: For sales involving products with intellectual property components

7. Maintenance Services: When ongoing maintenance is part of the sale agreement

8. Training and Support: For sales of technical equipment requiring user training

What schedules should be included in a Conditional Sales Contract?

1. Schedule A - Property Description: Detailed technical specifications or description of the property

2. Schedule B - Payment Schedule: Detailed breakdown of installment payments, dates, and amounts

3. Schedule C - Delivery Timeline: Specific dates and requirements for delivery or installation

4. Schedule D - Warranty Terms: Detailed warranty conditions and coverage

5. Schedule E - Maintenance Requirements: Specific maintenance obligations of the buyer

6. Appendix 1 - Required Insurance Coverage: Details of required insurance types and coverage amounts

7. Appendix 2 - Form of Transfer Documents: Template documents for final transfer of title

8. Appendix 3 - Inspection Checklist: Checklist for property inspection and acceptance

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Retail

Automotive

Real Estate

Industrial Equipment

Manufacturing

Construction

Agriculture

Technology

Consumer Goods

Heavy Machinery

Medical Equipment

Transportation

Relevant Teams

Legal

Finance

Sales

Compliance

Risk Management

Operations

Commercial

Credit

Business Development

Procurement

Contract Administration

Relevant Roles

Sales Manager

Contract Administrator

Legal Counsel

Finance Manager

Credit Officer

Business Development Manager

Commercial Director

Risk Manager

Compliance Officer

Operations Manager

Procurement Manager

Chief Financial Officer

General Counsel

Sales Representative

Account Executive

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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