Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Failure to Deliver
Kinds of Delivery
Actual or real
d.
e.
f.
Constitutum Possessorium
Art. 1500. There may also be tradition constitutum possessorium.
Quasi Traditio
Art. 1501. With respect to incorporeal property, the provisions of
the first paragraph of article 1498 shall govern. In any other case
wherein said provisions are not applicable, the placing of the
titles of ownership in the possession of the vendee or the use by
the vendee of his rights, with the vendor's consent, shall be
understood as a delivery.
GROUP 4A&4B
Sale or Return
Art. 1502. When goods are delivered to the buyer "on sale or
return" to give the buyer an option to return the goods instead of
paying the price, the ownership passes to the buyer of delivery,
but he may revest the ownership in the seller by returning or
tendering the goods within the time fixed in the contract, or, if no
time has been fixed, within a reasonable time.
Sale on Trial
Art. 1502 When goods are delivered to the buyer on approval or
on trial or on satisfaction, or other similar terms, the ownership
therein passes to the buyer:
Sale by description
Occurs where a seller sells things as being of a particular/certain kind,
the buyer not knowing whether the sellers representations are true or
false, relying on them as true
purchaser has not seen the article sold but relies on the
description given him by the vendor, or has seen the goods
but the want of identity is not apparent on inspection
bulk of goods do not correspond with the description:
contract may be rescinded
Sale by Sample
Parties contracted solely with reference to the sample, with the
understanding that the bulk was like it
exhibition of the sample by the seller was an inducement of
the sale or formed the sole basis thereof; thus, seller
warrants that the thing sold and to be delivered shall
conform with the sample kind, character and quality
bulk of goods do not correspond with the sample: contract
may be rescinded
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3
value, the bill of lading, or goods from the buyer will obtain the
ownership in the goods, although the bill of exchange has not
been honored, provided that such purchaser has received
delivery of the bill of lading indorsed by the consignee named
therein, or of the goods, without notice of the facts making the
transfer wrongful.
Reservation of Ownership
Documents of Title
What it includes:
Any bill of lading
Dock warrant
Quedan
Warehouse Receipt or order
Any document used as proof of possession or as authority to
transfer the goods represented in the document
A.
By Express stipulation
1.
2.
3.
4.
5.
B.
1.
C.
D.
Buyer or his agent is the consignee but seller retains the bill
of lading
Although the bill of lading states that the goods are
to be delivered to buyer or his agent, it is kept by
the seller or his agent
Seller retains right to the possession of the goods,
Buyer is unable to obtain the goods without the bill
When the Bill of exchange drawn on the buyer for the price,
is transmitted together with the bill of lading to the buyer to
secure payment of the BE but does not honor the BE
Ownership is retained by the seller until the BE is
paid
Other Obligations of the vendor
Forms
1. Negotiable
a)
b)
even if the face of the instrument says NONNEGOTIABLE, it is still NEGOTIABLE; limiting
words does not destroy negotiability
if the document of title is an order instrument and
no endorsement was made it is merely equivalent
to assignment
2. Non-negotiable
1.
2.
3.
Important considerations
Negotiation gives better right than assignment
Assignee takes document with defects of the assignor
Obligation of bailee bailee is immediately bound by the
document
Warranties in negotiation
1.
2.
3.
Rules on attachment
If document is negotiable and the goods are in possession of the
bailee:
GR No attachment or levy except
a. If the document is surrendered to the bailee
b. Negotiation of the document is enjoined
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4
c. It is impounded by the courts
- Purchaser in good faith and for value will not be affected by infirmity
of negotiation
1.
2.
3.
Place of Delivery
If there is an agreement, express or implied, then follow the
agreement
No agreement, get the usage of trade
No agreement or prevalent usage, buyer must get them at
the sellers business place or residence
Exception: specific goods were in some place other than where the
parties were at the time of the perfection of the contract
1. In any other case: sellers residence
1.
2.
Time of Delivery
If there is an agreement, then follow the agreement
No agreement, within reasonable time
reasonable time depends upon the circumstances attending
the transaction such as
o
character of the goods
o
purpose intended
o
ability of the seller to produce the goods
o
transportation facilities
o
distance thru which the goods must be carried
o
usual course of business in a particular trade
Goods in the possession of third person
in order for there to be delivery (constructive), the third
person must acknowledge that he holds the goods on behalf
of the buyerotherwise: seller shall not have complied with
his duty to deliver yet
applies only to existing goods in the hands of a third person,
not to goods to be manufactured
demand or tender of delivery to be effectual must be made
at a reasonable hour of the day
seller bears the expenses to place the thing in a deliverable
condition
Delivery to Carrier
Art. 1523. Where, in pursuance of a contract of sale, the
seller is authorized or required to send the goods to the
buyer, delivery of the goods to a carrier, whether named
by the buyer or not, for the purpose of transmission to
the buyer is deemed to be a delivery of the goods to the
buyer, except in the case provided for in Article 1503,
first, second and third paragraphs, or unless a contrary
intent appears.
Unless otherwise authorized by the buyer, the seller
must make such contract with the carrier on behalf of
the buyer as may be reasonable, having regard to the
nature of the goods and the other circumstances of the
case. If the seller omits to do so, and the goods are lost
or damaged in the course of transit, the buyer may
decline to treat the delivery to the carrier as a delivery to
himself, or may hold the seller responsible in damages.
Price covers not only the price of goods but the expenses of
freight and insurance
Either:
Unpaid Seller
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5
o
o
Where the ownership in the goods has not passed to the buyer,
the unpaid seller has, in addition to his other remedies a right of
withholding delivery similar to and coextensive with his rights of
lien and stoppage in transitu where the ownership has passed to
the buyer.
1.
2.
3.
4.
Art. 1527. Subject to the provisions of this Title, the unpaid seller
of goods who is in possession of them is entitled to retain
possession of them until payment or tender of the price in the
following cases, namely:
Where the goods have been sold on credit, but the term
of credit has expired;
By waiver thereof.
The unpaid seller of goods, having a lien thereon, does not lose
his lien by reason only that he has obtained judgment or decree
for the price of the goods.
Only possessory lien is lost; seller still has a lien on the price
Waiver
1.
2.
3.
4.
5.
6.
GROUP 4A&4B
1.
2.
3.
4.
Requisites
1. seller is unpaid
2. has either a right of possessory lien or stoppage in transitu
3. can be exercised only under any of the following cases:
o
goods are perishable (of a nature that they
deteriorate rapidly)
o
parties have stipulated the right of resale in case
buyer defaults (legal delay) in payment
o
buyer in default for unreasonable time
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what should be done in order to rescind the transfer of title:
o
notice to the buyer
o
overt act showing an intention to rescind
Double Sale
Art. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith, if it should
be movable property.
1.
2.
3.
4.
Requisites
exactly same subject matter
exactly same immediate seller
buyers represent conflicting interest
both sales are valid
Conditions
Art. 1545. 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 he may waive
performance of the condition. If the other party has promised that
the condition should happen or be performed, such first
mentioned party may also treat the nonperformance of the
condition as a breach of warranty.
Express Warranty
Art. 1546. Any affirmation of fact or any promise by the seller
relating to the thing is an express warranty if the natural tendency
of such affirmation or promise is to induce the buyer to purchase
the same, and if the buyer purchases 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.
Requisites
1. it must be an affirmation of fact or any promise by seller
relating to the subject matter of sale
2. natural tendency of affirmation or promise is to induce buyer
to purchase subject matter
3. buyer purchases the subject matter relying thereon
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Art. 1547. In a contract of sale, unless a contrary intention
appears, there is:
o
An implied warranty on the part of the seller
that he has a right to sell the thing at the time
when the ownership is to pass, and that the
buyer shall from that time have and enjoy the
legal and peaceful possession of the thing;
o
An implied warranty that the thing shall be free
from any hidden faults or defects, or any
charge or encumbrance not declared or known
to the buyer.
prescribes in 10 years
1.
2.
3.
4.
Kinds
warranty that seller has a right to sell/warranty as to sellers
title
warranty against eviction (1548)
warranty against hidden defects or unknown encumbrances
(1561)
warranty as to fitness or merchantability (1562)
Essential Elements
1.
2.
3.
4.
5.
Some rules
Art. 1549. The vendee need not appeal from the decision in
order that the vendor may become liable for eviction.
Art. 1550. When adverse possession had been commenced
before the sale but the prescriptive period is completed after
the transfer, the vendor shall not be liable for eviction.
Art. 1551. If the property is sold for nonpayment of taxes due
and not made known to the vendee before the sale, the
vendor is liable for eviction.
Art. 1552. The judgment debtor is also responsible for
eviction in judicial sales, unless it is otherwise decreed in
the judgment.
Art. 1553. Any stipulation exempting the vendor from the
obligation to answer for eviction shall be void, if he acted in
bad faith.
1.
2.
3.
4.
5.
Requisites
Defect must be hidden
o
Not known and could not have been known
Must exist at the time the sale was made
Defect must be important/serious
o
Renders the thing unfit or considerably decreases
fitness
o
unfit for the use: use must have been stated in
the contract or can be inferred from the nature of
the object or occupation of the buyer
Vendee must give notice of defect to the vendor within
reasonable time
Action must be instituted within the statute of limitations
o
Art. 1571. Actions arising from the provisions of
the preceding ten articles shall be barred after six
GROUP 4A&4B
Important considerations
SELLER does not warrant patent defect; caveat emptor
When defect is visible or even if not visible but buyer is an
expert by reason of his trade or profession, seller is not liable
Subject matter may be movable or immovable
Had the buyer been aware, he would not have acquired it or
would have given a lower price
obligation of seller for breach depends on whether he has
knowledge of such defect or not
o
seller is aware seller should return price &
refund expenses of contract with damages
o
seller is not aware - seller should return price and
interest & refund expenses ( no damages )
buyer may elect between withdrawing from contract or
demanding proportionate reduction of price with damages in
either case
applicable to judicial sale except that judgment debtor not
liable for damages
Knowledge of Defect
Art. 1566. The vendor is responsible to the vendee for any hidden
faults or defects in the thing sold, even though he was not aware
thereof.
goods are suitable for the special purpose of the buyer which
will not be satisfied by mere fitness for general purpose
Quality of goods - state or condition
Purpose for holding seller liable: promote high standard of
business and discourage unfair dealings
Implied Warranty of Merchantability
Usage of Trade
Art. 1564. An implied warranty or condition as to the quality or
fitness for a particular purpose may be annexed by the usage of
trade.
Usage of trade
A trade practice that is so common in a particular region or
vocation that an expectation of its being followed in a given
transaction is justified; a usual and customary practice or set
of practices connected with a particular type of business or
trade; for example, in mortgage loan transactions it is
customary for the borrower to pay for an appraisal of the
value of the property
Reason: parties are presumed to be acquainted with the usages of
trade
Sale by Sample
Art. 1565. In the case of a contract of sale by sample, if the seller
is a dealer in goods of that kind, there is an implied warranty that
the goods shall be free from any defect rendering them
unmerchantable which would not be apparent on reasonable
examination of the sample.
Defects in Animals
Redhibitory Defect
Art. 1572. If two or more animals are sold together, whether for a
lump sum or for a separate price for each of them, the redhibitory
defect of one shall only give rise to its redhibition, and not that of
the others; unless it should appear that the vendee would not
have purchased the sound animal or animals without the
defective one.
The latter case shall be presumed when a team, yoke pair, or set
is bought, even if a separate price has been fixed for each one of
the animals composing the same.
Art. 1576. If the hidden defect of animals, even in case a
professional inspection has been made, should be of such a
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nature that expert knowledge is not sufficient to discover it, the
defect shall be considered as redhibitory.
But if the veterinarian, through ignorance or bad faith should fail
to discover or disclose it, he shall be liable for damages.
Art. 1574. There is no warranty against hidden defects of animals
sold at fairs or at public auctions, or of live stock sold as
condemned.
Art. 1575. 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 therefor.
Art. 1577. The redhibitory action, based on the faults or defects of
animals, must be brought within forty days from the date of their
delivery to the vendee.
This action can only be exercised with respect to faults and
defects which are determined by law or by local customs.
Art. 1578. If the animal should die within three days after its
purchase, the vendor shall be liable if the disease which cause
the death existed at the time of the contract.
Art. 1579. If the sale be rescinded, the animal shall be returned in
the condition in which it was sold and delivered, the vendee being
answerable for any injury due to his negligence, and not arising
from the redhibitory fault or defect.
Art. 1580. In the sale of animals with redhibitory defects, the
vendee shall also enjoy the right mentioned in article 1567; but he
must make use thereof within the same period which has been
fixed for the exercise of the redhibitory action.
GROUP 4A&4B