Barter vs Sale

By the contract of barter or exchange, one of the parties binds himself to give one thing in consideration of the other's promise to give another thing (Art. 1638); whereas, by the contract of sale, one of the parties binds himself to deliver a thing in consideration of the other's undertaking to pay the price in money or its equivalent. (Art. 1458).

● Barter is similar to a sale with the only difference that instead of paying a price in money, another thing is given in lieu of the purchase price. 

● The distinction is not always adequate to distinguish one from the other. Hence, Art. 1468 of the Civil Code provides the rule to determine whether a contract is sale or barter, especially when the consideration is partly in money and partly in another thing.


Rules to determine whether contract is sale or barter

Art. 1468. If the consideration of the contract consists partly in money, and partly in another thing, the transaction shall be characterized by the manifest intention of the parties. If such intention does not clearly appear, it shall be considered a barter if the value of the thing given as a part of the consideration exceeds the amount of the money or its equivalent; otherwise, it is a sale.

  1. Manifest intention of the parties 

    2. Even if the acquisition of a thing is paid for by another object of greater value than the money component, it may still be a sale and not a barter when such was the intention of the parties. Such intention may be ascertained by taking into account the contemporaneous and subsequent acts of the parties (Art. 1371)

  2. When the intention does not appear and the consideration consists partly in money and partly in another thing:

    3. a) It is a barter, where the value of the thing given as part of the consideration exceeds the amount of money given or its equivalent.

    b) It is a sale, where the value of the thing given as part of the consideration equals or less than the amount of money given. 

References: 
Hector S. De Leon, Comments and Cases on Sales
Cesar L. Villanueva, Law on Sales