Warranties and Conditions - Last Part of Sales

• Warranties


  Statements or representations made by the seller of goods that have reference to the character, quality or title of the goods, and are issued to promise or undertake to insure that certain facts are or shall be as the seller represents them
• Conditions


  Where the obligation of either party to a contract of sale is subject to any condition which is not performed, such party may refuse to proceed with the contract or waive performance of the condition
• Conditions


  1. Refuse to proceed with the contract

  2. Waive performance of the condition
• If the other party has promised that the condition should happen or be performed

  The non-performance of the condition may be treated as a breach of warranty
• Where the ownership in the things has not passed, the buyer may treat the fulfillment by the seller of his obligation to deliver the same as described and as warranted expressly or by implication in the contract of sale as a condition of the obligation of the buyer to perform his promise to accept and pay for the thing
• Express warranties


  Any affirmation of fact or any promise by the seller relating to the thing if the natural tendency of such affirmation or promise is to induce the buyer to purchase the same, and if the buyer purchase the thing relying thereon
• No affirmation of the value of the thing, nor any statement purporting to be a statement of the seller's opinion only, shall be construed as a warranty, unless the seller made such affirmation or statement as an expert and it was relied upon by the buyer
• A warranty is not necessarily written. It may be oral as long as it is not given as a mere opinion or judgment
• Implied warranties of the seller

  • Warranty against eviction
  • Warranty against Hidden Defects
  • Warranty of quality or fitness (in sale of goods)
• Requisites for the enforcement of warranty in case of eviction


  1. The vendee has been evicted

  2. The eviction was by virtue of final judgment

  3. The eviction was based on the ground on a right prior to the sale or an act imputable to the vendor

  4. The vendor must be summoned in the suit for eviction at the instance of the vendee
• Waiver of warranty in case of eviction

  • Conciente - when vendee made the waiver WITHOUT knowledge of the risks of eviction, the vendor shall only pay the value which the thing sold had at the time of the eviction
  • Intencionada - when the vendee made the waiver with knowledge of the risks of eviction and assumed its consequences, vendor is NOT liable
• Liabilities of vendor in case of breach of warranty against eviction


  • Return of the value which the thing sold had at the time of the eviction
  • Income or fruits, if he has been ordered to deliver them to the party who won the suit against him
  • Costs of the suit which caused the eviction, and, in a proper case, those of the suit brought against the vendor for the warranty
  • Expenses of the contract, if the vendee has paid them
  • Damages and interests, and ornamental expenses, if the sale was made in bad faith
• Alternative remedies for the vendee within 1 year from execution of deed


  1. Bring the action for rescission

  2. Sue for damages
• Alternative remedies for the vendee after 1 year

  Bring an action for damages within an equal period, to be counted from the date on which he discovered the burden or servitude
• Requirements for enforcement of warranty against hidden defects

  • The defect must be important or grave
  • The defect must be hidden
  • The defect must be present at the time of the execution of the sale
  • There is no waiver of the warranty against hidden defects
  • The action for rescission or reduction of the price must be filed within the prescriptive period
• Defect must be important or grave


  Renders the thing sold unfit for the use for which it is intended or diminishes its fitness for the use intended, to such extent that the vendee would not have acquired if he had been aware thereof, or would have given a lower price for it
• Defect must be hidden

  Cannot be discovered by an ordinary inspection or examination, no warranty in patent or visible effect, and is unknown to the vendee or could not have been known
• Defect present at the time of the execution of the sale

  If the defect appeared only after the sale and for cause or causes not traceable to any cause existing at the time of the perfection of the contract, the vendor is free from liability
• Remedies in case of breach of warranty against hidden defects

  Within prescriptive period of 6 months from the delivery, the vendee may elect between withdrawing from the contract (Accion Redhibitoria) with damages or demanding a proportionate reduction of the price (Recoupment) with damages (Accion Quanti Minores or Estimatoria)
• Redhibitory defects of animals

  • The sale of animals suffering from contagious diseases shall be void
  • A contract of sale of animals shall also be void if the use or service for which they are acquired has been stated in the contract, and they are found to be unfit thereof
  • If a veterinarian, through ignorance or bad faith should fail to discover or disclose it, the veterinarian shall be liable for damages
• Prescriptive period for redhibitory action on animals

  The redhibitory action, based on the faults or defects of animals, must be brought within 40 days from the date of their delivery to the vendee
• If the animal should die within 3 days after its purchase, the vendor shall be liable if the disease which cause the death existed at the time of the contract
• Consequences of loss of thing sold due to hidden defects or faults

  • In bad faith: Vendor bears the loss, returns the price paid, refunds expenses of the contract, liable for damages
  • In good faith: Vendor bears the loss, returns the price paid with interest, reimburses expenses of the contract paid by the vendee, no liability for damages
• Caveat venditor


  Let the seller beware - the vendor is liable to the vendee for any hidden faults or defects in the thing sold, even though he was not aware thereof
• Caveat emptor


  Let the buyer beware - the purchaser is required to be aware of the supposed title of the vendor.
• Transactions where caveat emptor applies

  • Sales of animals
  • Double sales
  • Sheriff's sales
  • Tax sales
• Warranties under the Consumer Act (RA 7394)


  • Set forth the terms of warranty in clear and readily understandable language and clearly identify himself as the warrantor
  • Identify the party to whom the warranty is extended
  • State the products or parts covered
  • State what the warrantor will do in the event of a defect, malfunction of failure to conform to the written warranty and at whose expense
  • State what the consumer must do to avail of the rights which accrue to the warranty
  • Stipulate the period within which, after notice of defect, malfunction or failure to conform to the warranty, the warrantor will perform any obligation under the warranty
• Minimum standards for warranties under the Consumer Act (RA 7394)

  • Remedy such consumer product within a reasonable time and without charge in case of a defect, malfunction or failure to conform to such written warranty
  • Permit the consumer to elect whether to ask for a refund or replacement without charge of such product or part, as the case may be, where after reasonable number of attempts to remedy the defect or malfunction, the product continues to have the defect or to malfunction
• All written warranties or guarantees shall be operative from the moment of sale (Art. 68 (b), RA 7394)
• Any other implied warranty shall endure not less than 60 days nor more than one year following the sale of new consumer products (Art. 1576)
• Obligations of the vendee

  • To accept delivery
  • To pay the price of the thing sold at the time and place stipulated in the contract
• The delivery of the thing and the payment of the price are simultaneous acts, except if the parties have agreed otherwise, e.g. sale by installments
• Remedies of the vendor in case of refusal by the vendee to accept delivery

  1. Enforce compliance

  2. Rescind the contract (applies only if the vendee has no lawful excuse in so refusing)
• The failure of the vendee to pay the price after delivery, if ownership had been transferred already does not, in law, cause the ownership to revert in the seller until and unless the bilateral contract of sale is first rescinded pursuant to Art. 1191
• Purchase of goods delivered separately

  • General rule: delivery of goods is full or total
  • Exception: Parties agreed on a delivery by installment
• Partial rescission in case of purchase of goods delivered separately


  Accept those which he received with satisfaction and reject those defective portion
• If the fault on the part of the vendor or vendee, as the case may be, is not substantial, the other party cannot withdraw from the contract
• To justify the injured party in refusing to proceed with the sale, the breach must be so material
• When the breach is severable, the injured party can seek damages or compensation but not to rescind the whole contract
• If there is partial delivery and he accepted the same, he cannot later on question the partial delivery. If he accepted the goods despite the delay, he cannot later on seek damages for the delay. He is estopped