G.R. No. L-116650. May 23, 1995.
Toyota Shaw, Inc., petitioner, vs. Court of Appeals and Luna L. Sosa, respondents.

FACTS

Respondent Luna L. Sosa sought to purchase a Toyota Lite Ace. On June 14, 1989, Toyota Shaw sales representative Popong Bernardo assured Sosa a unit would be ready for pickup on June 17. Bernardo signed a document titled “Agreements,” stipulating the downpayment date and vehicle release on June 17 at 10 a.m. The next day, Sosa paid the P100,000 downpayment, and a Vehicle Sales Proposal (VSP) was signed, containing conditions that the sale was “subject to availability of unit” and price change. On June 17, Toyota failed to deliver the vehicle, claiming Sosa’s financing application was disapproved, and refunded his downpayment. Sosa filed a complaint for damages.

ISSUE

Whether the “Agreements” document signed by the sales representative constituted a perfected contract of sale binding upon Toyota Shaw, Inc.

RULING

No. The Supreme Court reversed the lower courts, ruling no perfected contract of sale existed. A contract of sale is perfected at the moment there is a meeting of minds upon the thing and the price. The “Agreements” document was merely a preliminary acknowledgment of the terms Sosa desired. The subsequent, more detailed Vehicle Sales Proposal (VSP) controlled, which explicitly stated the sale was “subject to availability of unit.” This condition meant the parties had not yet agreed on a specific, available object of sale, a fundamental requirement for a perfected contract. The VSP was merely a contractual offer or proposal, not a perfected sale. Since no contract was perfected, Toyota’s failure to deliver did not constitute a contractual breach. The refund of the downpayment was a proper consequence of the failed negotiations. Consequently, claims for moral and exemplary damages and attorney’s fees had no legal basis and were dismissed.