Short answer. Yes. Article 1462 of the Civil Code recognises the sale of "future goods" - goods to be manufactured, raised, or acquired by the seller after the perfection of the contract. You may validly sell goods you do not yet have, and even goods whose acquisition depends on a contingency that may or may not happen.
What the law says
The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the seller after the perfection of the contract of sale, in this Title called "future goods."
Civil Code, Article 1462 — Existing and Future Goods. Read the full provision →
Future goods are a lawful subject of sale
Commerce could hardly function if a seller had to own everything before agreeing to sell it. Article 1462 makes clear he does not. The goods in a sale may be either existing goods, owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the seller after the perfection of the contract of sale, in this Title called "future goods." A manufacturer selling items still to be produced, a trader selling stock he will buy in, a farmer selling produce still to be raised, each is making a valid contract. The obligation to deliver simply falls due later, once the goods are made, raised or acquired.
Even goods dependent on a contingency
The article goes a step further. It adds that there may be a contract of sale of goods, whose acquisition by the seller depends upon a contingency which may or may not happen. So a sale is not invalid merely because the seller's ability to obtain the goods hinges on some uncertain event, a supplier coming through, a shipment arriving, a source becoming available. The uncertainty affects performance and risk, not the basic validity of the contract. The parties are free to contract against that contingency, allocating between them what happens if the goods cannot be acquired.
Selling future goods is not the same as owning them
A promise to sell goods you do not yet have does not, by itself, pass ownership of anything, there is nothing yet to own. What you create is a binding obligation to deliver conforming goods when the time comes. If you then fail to manufacture or acquire them, you have not merely lost a sale; you may be answerable to the buyer for the breach, including damages flowing from non-delivery. Selling forward is a real commitment, not a costless option. The seller carries the risk of being able to source or produce what he undertook to deliver.
Protect yourself in the terms
Because performance lies in the future, the contract terms carry the weight. Sensible forward sales spell out the specifications and quantity of the goods, the delivery date, the price, and what happens if a genuine contingency prevents acquisition, whether that excuses performance or merely postpones it. Clarity here prevents the buyer from expecting the impossible and protects the seller from an open-ended liability. Selling goods you have not yet made or acquired is entirely lawful; the discipline is in agreeing, up front, on how the risks between perfection and delivery are shared.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Cavite Devt. Bank et al. vs. Spouses Lim & Court of Appeals, G.R. No. 131679, February 1, 2000 — read the decision on LawPhil →