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Can Consumable Goods be Leased?

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Can Consumable Goods be Leased?
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Read also: LEASE OF PERSONAL PROPERTY WITH OPTION TO BUY

  • The essence of a lease of things is the enjoyment or use of the property with the obligation on the part of the lessee to return the same upon the expiration of the lease.
  • A thing is consumable is a movable which cannot be used in a manner appropriate to its nature without itself being consumed.
  • Hence, things which by their nature cannot be used without being consumed, cannot be the subject matter of lease.

In the lease of things, one of the parties binds himself to give to another the enjoyment or use of a thing for a price certain, and for a period which may be definite or indefinite. However, if the object is a consumable thing, can it be a subject of lease?

Yes, provided they are merely to be exhibited or they are accessory to an industrial establishment.

The law says:

“ART. 1645. Consumable goods cannot be the subject matter of a contract of lease, except when they are merely to be exhibited or when they are accessory to an industrial establishment.”

A consumable is a movable property which cannot be used in a manner appropriate to its nature without itself being consumed. For example, a cigarette cannot be used in a manner appropriate to its nature, i.e., for smoking, without itself being consumed.

Under the old Civil Code (Art. 1545), “fungible things which are consumed by use cannot be the subject matter of lease.’’ The movable is classified as fungible if, by the intention of the parties, it can be replaced by another of the same kind.

The rule is the same under Article 1645 with the qualification now that consumable goods may be the object of lease when they are merely to be exhibited or when they are accessory to an industrial establishment.

The essence of a lease of things is the enjoyment or use of the property (Art. 1643.) with the obligation on the part of the lessee to return the same upon the expiration of the lease. (Art. 1665.)

Ownership is not transferred to the lessee. Hence, things which by their nature cannot be used without being consumed, cannot be the subject matter of lease.

Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

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