2016 (Civil Law) Bar Exam Questions: Question 15

[Answer/discuss the question below, or see 2016 bar exam Civil Law Instructions; 2016 Labor Law Questions:   12345678910111213141516171819 and 20; See also 2016 Bar Exam: Information, Discussions, Tips, Questions and Results]

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Peter and Paul entered into a Contract to Sell whereby Peter, the lot owner, agreed to sell to Paul his lot on November 6, 2016 for the price ofPl,000,000.00 to be paid at the residence of Peter in Makati City at 1:00 p.m. If the full price is paid in cash at the specified time and place, then Peter will execute a Deed ofAbsolute Sale and deliver the title to Paul.

On November 6, 2016, Paul did not show up and was not heard of from that date on. In view of the nonperformance by Paul of his obligation, Peter sent a letter to Paul that he is expressly and extra-judicially declaring the Contract to Sell rescinded and ofno legal and binding effect. Peter further stated that failure on the part of Paul to contest the rescission within thirty (30) days from receipt of said letter shall mean that the latter agreed to the rescission.

Paul did not reply to this letter for five (5) years. Thus, Peter decided to sell his lot to Henry in 2021. After hearing that Henry bought the lot, Paul now questions the sale of the lot to Henry and files a complaint for nullification of the sale.

[a] Is the exercise by Peter of his power to rescind extra-judicially the Contract to Sell the proper and legal way of rescinding said contract? Explain. (2.5%)

[b] In case Paul made a downpayment pursuant to a stipulation in the Contract to Sell, what is the legal remedy ofPeter? (2.5%)

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