Short answer. Two undertakings. One party binds himself to transfer ownership of and deliver a determinate thing, and the other to pay a price certain in money or its equivalent. If either element is absent — no determinate thing, or no price in money — the agreement is some other contract, not a sale.

What the law says

By the contract of sale one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. A contract of sale may be absolute or conditional.

Civil Code, Article 1458 — Contract of Sale Defined. Read the full provision →

The seller's obligation is twofold

Article 1458 of the Civil Code says the seller obligates himself to transfer the ownership and to deliver a determinate thing. Those are two duties, not one, and they can come apart. Handing over possession is not the same as transferring ownership, which is why a buyer who has occupied a house for years may still not own it. The thing must also be determinate — identified, or identifiable from the contract itself without a further agreement between the parties. A promise to sell an unspecified lot from a larger holding does not yet describe a thing that can be sold.

The price must be in money, and it must be certain

The buyer's side is to pay therefor a price certain in money or its equivalent. Two things follow. First, an exchange of one thing for another thing is barter rather than sale, and different rules apply to it. Second, the price must be certain: fixed by the contract, ascertainable by reference to something the contract points to, or left to a third person the parties have designated. A price still to be negotiated is not a price certain, and an agreement resting on one is an agreement to agree — it does not yet bind either side to a sale.

A sale is perfected by consent, not by payment or delivery

Article 1475 provides that the contract of sale is perfected the moment there is a meeting of minds upon the thing and upon the price, and from then on the parties may demand performance of each other. So the sale exists before any money changes hands and before the property is turned over. Delivery and payment are the performance of a contract already made, not the making of it. A seller who has agreed on the thing and the price and then accepts a better offer from someone else is breaching a contract, not merely withdrawing from talks.

Absolute or conditional, and why the label on the deed misleads

The article ends by allowing that A contract of sale may be absolute or conditional. In an absolute sale ownership passes on delivery; in a conditional sale it passes only when the stated condition is met. This is where a great deal of confusion sits, because documents titled "contract to sell" often operate quite differently from a sale, reserving ownership in the seller until the price is fully paid. The title on the first page settles nothing. Read the clauses on when ownership passes, what happens on default, and who bears loss of the property — those decide what the agreement really is.

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.

Related provisions

Note. Statute text quoted on this page is reproduced from the official enactment and is linked to the full provision. The explanation around it is general legal information from Vivas & Nobles Law Office, not legal advice. Whether it applies to your situation depends on facts only a lawyer reviewing them can assess.