CH.

12and
Warranties
Conditions

Negotiati
on

Perfecti
on
Conditio
n

Consummati
on
Warranti
es

Definitions
Condition

A past unknown event to the parties or a future event which an

obligation is made to depend

Warranty

A
statement
or
representation
made
by
the
seller
contemporaneously and as part of the contract of sale, having
reference to the character, quality, or title of the goods, and by
which he promises or undertakes to ensure that certain facts are
or shall be has he represents them.

Differentiation
Effect of NonHappening
Affects

Necessity to
Stipulate
Where it attaches or
it relates to

CONDITION
Breach

WARRANTIES
Breach

Existence of
obligation

Performance of
obligation or an
obligation itself
Need not

Must

Obligation of Buyer Subject Matter itself

or Seller
or Sellers Obligation

2 Alternative Remedies in Art.

1545
Remedies of a seller or buyer where the obligation of the
other party is subject to any condition is not performed:
(a)refuse to proceed with the contract or
(b)waive performance of the condition
*Remedies apply only to conditions affecting effectivity of contract
condition imposed on the performance of the obligation
Example. the contract shall become effective only upon approval of
the CFI of Negros Occidental. + intent to contract Heirs of Pedro
Escanlar v. Court of Appeals

Application (Conditions)
Ruling in Laforteza v.
Machuca

In this case, the 6-month period merely delayed the

demandability of the contract of sale and did not determine
perfection for after the expiration of the 6-month period, there
was absolute obligation on the part of Lafortezas and Machuca to
comply with the terms of the sale

Doctrine
Failure to comply with condition
imposed upon perfection of the
contract results in failure of a
contract, while the failure to comply
with a condition imposed on the
performance of an obligation only
gives the other party the option
either to refuse to proceed with sale
or waive the condition.

Application (Condition vs
Warranties)
Power Commercial and Industrial Corp vs CA

Power Commercial Corp entered into a contract of sale with the

Quiambao spouses.

ISSUE: W/N there was a breach of warranty on the part of the

spouses that it would evict the lessees.

A Deed of Absolute Sale with Assumption of Mortgage was

executed.

Power Commercial Corp failed to settle the mortgage debt

contracted by the spouses = could not evict lessees thereon

NO. Such condition that the Quiambao spouses would have to

evict the lessees was not stipulated in the contract. Thus, it
cannot be considered a condition imposed upon its perfection.

EXPRESS
Warranties
(Art. 1546)

Requisites:
(a) It must be an affirmation of
fact or any promise by the
seller relating to the subject
matter of the sale;
(b) The natural tendency of such
affirmation or promise is to
induce the buyer to purchase
the thing; and
(c) The buyer purchases the thing
relying on such affirmation or
promise thereon.

Application (Express Warranties)

Ruling in Guinhawa vs
People
A van got into an accident, got
damaged and eventually repaired.

Same

van was placed in a

showroom deceiving public it was
brand new.

On their testimony, they vehemently

deny that van figured in an accident
nor was it repaired.

Doctrine

If, in a contract of sale, the vendor knowingly allowed the vendee

to be deceived as to the thing sold in a material matter by failing
to disclose an intrinsic circumstance that it vital to the contract,
knowing that the vendee is acting upon the presumption that no
such fact exists, deceit is accomplished by the suppression of the
truth.

2 Alternative Remedies in Art.

1545
Remedies of a seller or buyer where the obligation of the
other party is subject to any condition is not performed:
(a)refuse to proceed with the contract or
(b)waive performance of the condition
*Remedies apply only to conditions affecting effectivity of contract
condition imposed on the performance of the obligation
Example. the contract shall become effective only upon approval of
the CFI of Negros Occidental. + intent to contract Heirs of Pedro
Escanlar v. Court of Appeals

IMPLIED
Warranties

Seller has a Right to Sell (A. 1547)

Against Eviction (Arts. 1548-1560)
Against Non-apparent Servitudes (A.
1560)
Against Hidden Defects (Arts. 1561;

Codal

1566-1580)
Redhibitory Defects of Animals (Art.
1572-1580)

Implied Warranties in Sale of Goods

(Art. 1561-1571)

IMPLIED
Warranties
In Sale of Goods

Warranty as to Fitness or

Quality
Sale of Goods by Sample and/or
by Description
Buyers option in case of breach
of Warranty
Waiver of Remedies by Buyer
Obligation of Buyer on the Price
Refusal of Seller to Accept
Return of Goods

A.
1547

Warranty That Seller Has Right to Sell

Unless a contrary intention appears, there is implied
warranty on part of the seller
(1) that he has a right to sell the thing; and
(2) that the buyer shall from that time have and enjoy the
legal and peaceful possession of the thing;
shall not render liable: a sheriff, auctioneer, mortgagee,
pledgee, or other person professing to sell by virtue of
authority in fact or law

In general
the actions based on the implied warranties prescribe in 10 years since these obligations
are imposed by law

Warranty Against Eviction

When there is breach of warranty against eviction
Essential Elements:
Purchaser has been deprived of, or evicted from, the whole or part
of the thing sold;
Eviction is by final judgment (Art. 1557);
Basis thereof is by virtue of a right prior to the sale made by the
seller; and
Seller has been summoned & made co-defendant in the suit for
eviction at the instance of the buyer (Art. 1558)
The vendor shall answer for the eviction even though nothing has been said
on the contract (Art. 1548)

Vendees Rights in Case of Eviction

Art. 1555

Art. 1556

TOTAL EVICTION

PARTIAL EVICTION

V value of the thing at the time of

eviction

I income or fruits
C costs of the suit
E expenses of the contract; and
D damages (& interests and ornamental expenses) if seller was in
BF

VICED, or

Recission if he would not have bought it w/o said part; but with
the obligation to return the thing w/o other encumbrances than
those which it had when he acquired it

Waiver of Warranty and Effects Thereof

Contracting parties may increase, diminish or suppress
this legal obligation of the vendor (Art. 1548)
the effect of waiver depends on the nature of such waiver,
whether general or
the part of the seller

specific & whether done in GF or BF on

Seller BF any stipulation exempting the seller from

the obligation to answer for eviction shall be VOID (Art.
1553)
Should the buyer have made the waiver w/ knowledge of
the risks of eviction & assumed its consequence seller
not liable (Art. 1554)

Note:
When the buyer cannot show that he is a buyer in GF not entitled to the warranty against
eviction

Related Articles
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.
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.
1552. The judgment debtor is also responsible for eviction
in judicial sales, unless it is otherwise decreed in the
judgment.

Warranty Against Non-apparent

servitudes
Not mentioned in the agreement; and
The nature of the servitude (presumed that they buyer
would not have acquired it had he been aware thereof)
Does not apply when:
The Servitude is mentioned in the agreement
The servitude is recorded in the Registry of Deeds, unless
there is an express warranty that the thing is free from all
burdens and encumbrances.

Remedies and Prescriptive Period:

Rescission or Sue for damages within 1 year from the execution of the Deed

Warranty Against Hidden

Defects
Renders the subject matter unfit for the use for which it
is intended; or
Should diminish its fitness for such use to such an
extent that, had the buyer been aware thereof, he would
not have acquired it or would have given a lower price.
The seller is not answerable for patent defects or
those which are visible, or even for those which are not
visible if the buyer is an expert who, by reason of his
trade or profession, should have known them.

Requisites for Breach of Warranty

Nutrimix Feeds Corp. v. CA
1. Defect must be hidden
2. Defect must exist at the time of the sale was made
3. Defect must ordinarily have been excluded from the
contract
4. Defect must be important
5. Action must be instituted within the Statute of Limitations
Remedies and Prescriptive Period:
Withdraw from the contract or to demand a proportionate reduction of the price, with
damages in either case, within 6 months from the delivery of the thing sold.
A choice of remedies is available to the buyer only when the thing
has not been lost.

BREACH OF WARRANTY
against Hidden Defects
Remedy
Accion Redhibitoria
Withdraw from Contract + Damages
Accion Quanti Minoris
Proportionate reduction of Price +
Damages

Prescriptive
Period

w/in 6mos from

delivery of thing
sold

CHOICE OF REMEDIES
available to the BUYER only when the thing has not been lost.

LOSS OF THING
HIDDEN LOST
Sellers AWARE
Seller to bear loss
Obligation:
Return price + Damages
Refund expenses of contract +
Damages
Seller NOT AWARE
Obligation:
Return price + Interest
Reimburse expenses of contract
Buyer paid

FORTUITOUS EVENT OR THRU

FAULT
Sellers NOT Aware of Hidden
Defects
Buyer may demand from Seller
Price paid less value of thing when
lost

Seller acted in Bad Faith

Buyer may demand from Seller
Price paid less value of thing when
lost
+ Damages

Waiver of Warranty
If the seller was not aware of the hidden defects, the loss
of the thing by virtue of such defect will not make the
seller liable at all to the buyer; or
If the seller was fully aware of such defect, such waiver
is in bad faith, and the seller would still be liable for the
warranty.

Warranty also applies to Judicial Sales,

XNP: when judgement debtor shall not be liable for damages.

Rule on Redhibitory Defect on

Animals

Applica
ble
to Sale
of
Other
Things

DEFINITION: a defect that even a professional inspection is not

sufficient to discover it.
SALE of TEAM Scenario
If 2 or more animals are sold together whether for lump sum
or for a separate price for each
GR: Defect of one shall only give rise to that which has a
defect
XPN: All to be deemed defective
Condition: buyer would not have purchased the bunch w/o
the defective
one
If Vet, through
ignorance
or bad faith, failed to discover or disclose it VET
LIABLE for Damages

Other Rules on Sale of Animals

NO WARRANTY against Hidden Defects
Applies to Animals sold at:
Fairs
Public Auctions
Live Stock
VOID Sale
Sale of Animals with Contagious Diseases
Animals acquired are unfit for the use or service for
which they were purchased

Prescription
Cause
Based on Faults or Defects of
Animals

Period to File Action

w/in 40 days from date of delivery
to buyer
Animal dies w/in 3 days after
Vendor to be liable IF disease
purchase
that caused death existed at time
of contract
Withdrawal
from return
the contract
be and
made
w/in 6mos. from
Buyers
Obligation:
in conditionShould
it was sold
delivered.
under
1567
delivery
of thing
sold
+ if injury
was Art.
incurred
by animal due to buyers
negligence
not
arising
from redhibitory fault or defect

Remedies
Cause
Sale
of
Animals
Redhibitory Defects

Remedies
with a. Withdraw from contract or
b. Demand
of
proportional
reduction of price
+ Damages in either case

Must be exercised w/in 40 days from date of delivery to buyer

A.
Implied Warranties in Sale of Goods 1562

FITNESS OR QUALITY OF GOODS

Scenario
Buyer relays (expressly or by
implication) to Seller purpose of
purchase + Buyer relies on Sellers
skill
Goods are brought by description by a
WA
R R A who
N T Y sells
N O T goods
T O A Pof
P LY:
Seller
that
description
w h e n p u r c h a s e o f a s p e c i fi e d a r t i c l e

WARRANTY
Goods shall reasonably
fit such purpose

Goods are of
merchantable quality
under its patent or

other trade name

XP N to X PN: There s a stipula tion to the contrary

A.
Implied Warranties in Sale of Goods 1562

FITNESS OR QUALITY OF GOODS

Nutrimix Feeds Corp. v. CA

Must establish:
a. The buyer sustained injury because of the product;
b. The injury occurred because the product was
defective or unreasonably unsafe; and
c. Defect existed when the product left the hands of
the petitioner

A.
Implied Warranties in Sale of Goods
1599(5
)
BREACH OF QUALITY
HOW TO DETERMINE DAMAGE:

Absence of special circumstances showing proximate

damage of greater amount:
Loss=
value of goods at time of delivery value of goods expected
based on warranty

A.
Implied Warranties in Sale of Goods 1565

BY SAMPLE OR BY DESCRIPTION
By Description:
Description = Actual
By Sample:
Sample shown = same as the bulk

Implied Warranties in Sale of Goods

A.
1599

REMEDY OF BUYER when theres Breach in

Warranty

(a) Accept or keep the goods + set up breach to recover lessened

price
(b) Accept or keep the goods + action for damages;
(c) Refuse to accept the goods + action for damages;
(d) Rescind contract + refuse to receive the goods
or
If received,
Return them or offer to return them to seller + recover the price
or any part thereof which has been paid.

Grant of a remedy in any of the following bars granting of other remedies

thereafter

A.
EFFECT AND PRESCRIPTION OF1599

WARRANTIES
EXPRESS WARRANTY
Based on period provided in
contract
Absence of such:
Period applied in implied
warranty

IMPLIED WARRANTY
Rescission of Contracts
4yrs
Actions based on Breach of
Implied Warranty
6mos from date of delivery

Additional Terms of Warranties for Consumer

Goods (Art 68. Consumer Code)
2. Enforcement of Warranty

1. Subsidiary Liability of
Retailer
Retailer shall be subsidarily
liable under the warranty in
case of failure of both the
manufacturer
and
distributor to honor the
warranty, and that in such
case
the
retailer
shall
shoulder the expenses and
costs necessary to honor the
warranty.

The warranty rights can be

enforced by presentment to
the immediate seller either
the warranty card or the
official receipt along with
the product to be serviced or
returned to the immediate
seller. No other documentary
requirement
shall
be
demanded
from
the
purchaser.

Additional Terms of Warranties for

Consumer Goods (Art 68. Consumer Code)
3. Duration of Warranty
The seller and the consumer may
stipulate the period within which the
express warranty shall be enforceable.
But if the implied warranty on
merchantability
accompanies
an
express warranty, both will be of equal
duration.
Any other implied warranty shall
endure not less than sixty (60) days nor
more than one (1) year following the
sale of new consumer products.

4. Breach of Warranties

In case of breach of express warranty, the consumer may elect to

have the goods repaired or its purchase price refunded by the
warrantor.

In case the repair of the product in whole or in part is elected, the

warranty work must be made to conform to the express warranty
within thirty (30) days by either the warrantor or his
representative.

Additional Terms of Warranties for

Consumer Goods (Art 68. Consumer Code)
1. Subsidiary Liability of
Retailer
Retailer = subsidarily liable
under the warranty in case of
failure
of
both
the
manufacturer and distributor
to honor the warranty,

Retailer

shall shoulder the

expenses and costs necessary
to honor the warranty.

2. Enforcement of Warranty

1. Presentment to the immediate

seller either the warranty card or
2. The official receipt along with
the product to be serviced or
returned to the immediate seller.

No

other
documentary
requirement shall be demanded
from the purchaser.

Additional Terms of Warranties for

Consumer Goods (Art 68. Consumer Code)
3. Duration of Warranty
The seller and the consumer may
stipulate the period within which the
express warranty shall be enforceable.
If
the
implied
warranty
on
merchantability accompanies an express
warranty = both of equal duration.
Any other implied warranty shall endure
not less than sixty (60) days nor more
than one (1) year following the sale of
new consumer products.

4. Breach of Warranties

In case of breach of express warranty

1. Repair
2. Refund of Purchase Price

In case the repair of the product in whole or in part is elected, the

warranty work must be made to conform to the express warranty
within thirty (30) days by either the warrantor or his
representative.