Kiko leased a parcel of land to Jackie from January to December 2024 or for a period of one year. In July 2024, Kiko sent to Jackie a letter which reads: “I am giving you the first opportunity to buy the leased property for PHP 1,000,000.00. You have until the expiration of the lease contract within which to decide.” Immediately, Jackie informed Kiko that she will buy the leased property for PHP 800,000.00. Kiko did not reply to Jackie. In August 2024, Jackie learned that Kiko sold the leased property to Bogs for PHP 800,000.00. Aggrieved, Jackie filed an action against Kiko and Bogs to rescind their contract of sale. Jackie claimed that the sale transaction violated her right of first refusal, and that she must be allowed to buy the property at a similar price of PHP 800,000.00. Can Jackie rescind the contract of sale between Kiko and Bogs for the alleged violation of her right of first refusal? Explain.
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No, Jackie cannot rescind the contract of sale between Kiko and Bogs. Under Article 1319 of the Civil Code, acceptance must be absolute; a qualified acceptance constitutes a counter-offer that rejects the original offer. While a
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Quick check
Under Article 1319 of the Civil Code, what kind of acceptance is required to perfect a contract?
Article 1319 mandates that acceptance must be absolute to manifest valid contractual consent.
What is the legal effect when an offeree responds to a sales offer with a lower purchase price?
A proposal to buy at a lower price is a qualified acceptance constituting a counter-offer that rejects the original offer.
Under Philippine law, when is a lessor permitted to sell leased property to a third party without violating a lessee's right of first refusal?
A lessor may sell to a third party after the lessee rejects the initial offer or makes a counter-offer.
What happens to an original offer once the offeree makes a counter-offer?
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Why was Jackie unable to rescind the contract of sale between Kiko and Bogs?
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Learn more about these topics
1. Offer and Acceptance
Under Article 1319 of the Civil Code, consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. To create a binding contract, the offer must be certain and the acceptance absolute. An acceptance that is not absolute, or one that introduces new conditions or terms, does not bind the offeror. Until an absolute acceptance is communicated to the offeror, no meeting of minds occurs, and no perfected contract of sale comes into existence between the parties.
2. Counter-Offer Effect
Under Philippine contract law, a qualified acceptance constitutes a counter-offer, which operates as a complete rejection of the original offer. When an offeree responds to an offer to sell real property by proposing a lower purchase price, the original offer is instantly extinguished. The offeror is under no legal obligation to accept the counter-offer or reply to it. Once the original offer is rejected by a counter-offer, the offeree can no longer subsequently accept the original offer unless the offeror renews it.
3. Right of Refusal
While a contract of sale executed in violation of a right of first refusal is rescissible, the right is not infringed if the lessor-grantor first offers the property to the lessee under reasonable terms. When the lessee rejects the offer or responds with a counter-offer, the lessor is fully entitled to sell the property to a third person. A subsequent sale to a third party at the counter-offered price does not violate the right of first refusal or entitle the lessee to rescind the sale.