Sales Codal 15 to 16

7/17/2019 Sales Codal 15 to 16

http://slidepdf.com/reader/full/sales-codal-15-to-16 1/8

((Warranties))

(Express waranties) v condition

Art. 1545. Where the obligation of either party to a contract of sale is subect to any conditionwhich is not perfor!ed" such party !ay refuse to proceed with the contract or he !ay waive

perfor!ance of the condition. #f the other party has pro!ised that the condition should happenor be perfor!ed" such first !entioned party !ay also treat the nonperfor!ance of thecondition as a breach of warranty.

Where the ownership in the thing has not passed" the buyer !ay treat the fulfill!ent by theseller of his obligation to deliver the sa!e as described and as warranted expressly or byi!plication in the contract of sale as a condition of the obligation of the buyer to perfor! hispro!ise to accept and pay for the thing. (n)

Art. 154$. Any affir!ation of fact or any pro!ise by the seller relating to the thing is anexpress warranty if the natural tendency of such affir!ation or pro!ise is to induce the buyerto purchase the sa!e" and if the buyer purchase the thing relying thereon. %o affir!ation ofthe value of the thing" nor any state!ent purporting to be a state!ent of the seller&s opiniononly" shall be construed as a warranty" unless the seller !ade such affir!ation or state!entas an expert and it was relied upon by the buyer. (n)

's false representation

(#!plied warranties)

Art. 154. #n a contract of sale" unless a contrary intention appears" there is

(1) An i!plied warranty on the part of the seller that he has a right to sell the thing atthe ti!e when the ownership is to pass" and that the buyer shall fro! that ti!e haveand enoy the legal and peaceful possession of the thing*

(+) An i!plied warranty that the thing shall be free fro! any hidden faults or defects"or any charge or encu!brance not declared or ,nown to the buyer.

-his Article shall not" however" be held to render liable a sheriff" auctioneer" !ortgagee"pledgee" or other person professing to sell by virtue of authority in fact or law" for the sale of athing in which a third person has a legal or euitable interest. (n)

/eller has right to sell

Warranty against eviction

Art. 1540. Eviction shall ta,e place whenever by a final udg!ent based on a right prior to thesale or an act i!putable to the vendor" the vendee is deprived of the whole or of a part of thething purchased.

-he vendor shall answer for the eviction even though nothing has been said in the contract onthe subect.

-he contracting parties" however" !ay increase" di!inish" or suppress this legal obligation of

the vendor. (145a)



Art. 154. -he vendee need not appeal fro! the decision in order that the vendor !aybeco!e liable for eviction. (n)

Art. 1552. When adverse possession had been co!!enced before the sale but theprescriptive period is co!pleted after the transfer" the vendor shall not be liable for eviction.(n)

Art. 1551. #f the property is sold for nonpay!ent of taxes due and not !ade ,nown to thevendee before the sale" the vendor is liable for eviction. (n)

Art. 155+. -he udg!ent debtor is also responsible for eviction in udicial sales" unless it isotherwise decreed in the udg!ent. (n)

Art. 1553. Any stipulation exe!pting the vendor fro! the obligation to answer for eviction shallbe void" if he acted in bad faith. (14$)

Art. 1554. #f the vendee has renounced the right to warranty in case of eviction" and evictionshould ta,e place" the vendor shall only pay the value which the thing sold had at the ti!e of

the eviction. /hould the vendee have !ade the waiver with ,nowledge of the ris,s of evictionand assu!ed its conseuences" the vendor shall not be liable. (14)

Art. 1555. When the warranty has been agreed upon or nothing has been stipulated on thispoint" in case eviction occurs" the vendee shall have the right to de!and of the vendor

(1) -he return of the value which the thing sold had at the ti!e of the eviction" be itgreater or less than the price of the sale*

(+) -he inco!e or fruits" if he has been ordered to deliver the! to the party who wonthe suit against hi!*

(3) -he costs of the suit which caused the eviction" and" in a proper case" those of thesuit brought against the vendor for the warranty*

(4) -he expenses of the contract" if the vendee has paid the!*

(5) -he da!ages and interests" and orna!ental expenses" if the sale was !ade inbad faith. (140)

Art. 155$. /hould the vendee lose" by reason of the eviction" a part of the thing sold of suchi!portance" in relation to the whole" that he would not have bought it without said part" he!ay de!and the rescission of the contract* but with the obligation to return the thing withoutother encu!brances that those which it had when he acuired it.

e !ay exercise this right of action" instead of enforcing the vendor&s liability for eviction.

-he sa!e rule shall be observed when two or !ore things have been ointly sold for a lu!psu!" or for a separate price for each of the!" if it should clearly appear that the vendee wouldnot have purchased one without the other. (14a)

Art. 155. -he warranty cannot be enforced until a final udg!ent has been rendered"whereby the vendee loses the thing acuired or a part thereof. (1402)

Art. 1550. -he vendor shall not be obliged to !a,e good the proper warranty" unless he issu!!oned in the suit for eviction at the instance of the vendee. (1401a)



Art. 155. -he defendant vendee shall as," within the ti!e fixed in the ules of 6ourt for answering the co!plaint" that the vendor be !ade a co7defendant. (140+a)

Art. 15$2. #f the i!!ovable sold should be encu!bered with any non7apparent burden or servitude" not !entioned in the agree!ent" of such a nature that it !ust be presu!ed that thevendee would not have acuired it had he been aware thereof" he !ay as, for the rescission

of the contract" unless he should prefer the appropriate inde!nity. %either right can beexercised if the non7apparent burden or servitude is recorded in the egistry of 8roperty"unless there is an express warranty that the thing is free fro! all burdens and encu!brances.

Within one year" to be co!puted fro! the execution of the deed" the vendee !ay bring theaction for rescission" or sue for da!ages.

9ne year having elapsed" he !ay only bring an action for da!ages within an eual period" tobe counted fro! the date on which he discovered the burden or servitude. (1403a)

Warranty against non apparent servitudes

/ee 15$2

Warranty against hidden defects

Art. 15$1. -he vendor shall be responsible for warranty against the hidden defects which thething sold !ay have" should they render it unfit for the use for which it is intended" or shouldthey di!inish its fitness for such use to such an extent that" had the vendee been awarethereof" he would not have acuired it or would have given a lower price for it* but said vendor shall not be answerable for patent defects or those which !ay be visible" or for those whichare not visible if the vendee is an expert who" by reason of his trade or profession" shouldhave ,nown the!. (1404a)

Art. 15$+. #n a sale of goods" there is an i!plied warranty or condition as to the uality or

fitness of the goods" as follows

(1) Where the buyer" expressly or by i!plication" !a,es ,nown to the seller theparticular purpose for which the goods are acuired" and it appears that the buyer relies on the seller&s s,ill or udg!ent (whether he be the grower or !anufacturer or not)" there is an i!plied warranty that the goods shall be reasonably fit for suchpurpose*

(+) Where the goods are brought by description fro! a seller who deals in goods of that description (whether he be the grower or !anufacturer or not)" there is an i!pliedwarranty that the goods shall be of !erchantable uality. (n)

Art. 15$3. #n the case of contract of sale of a specified article under its patent or other tradena!e" there is no warranty as to its fitness for any particular purpose" unless there is astipulation to the contrary. (n)

Art. 15$4. An i!plied warranty or condition as to the uality or fitness for a particular purpose!ay be annexed by the usage of trade. (n)

Art. 15$5. #n the case of a contract of sale by sa!ple" if the seller is a dealer in goods of that,ind" there is an i!plied warranty that the goods shall be free fro! any defect rendering the!un!erchantable which would not be apparent on reasonable exa!ination of the sa!ple. (n)

Art. 15$$. -he vendor is responsible to the vendee for any hidden faults or defects in the thing

sold" even though he was not aware thereof.



-his provision shall not apply if the contrary has been stipulated" and the vendor was notaware of the hidden faults or defects in the thing sold. (1405)

Art. 15$. #n the cases of Articles 15$1" 15$+" 15$4" 15$5 and 15$$" the vendee !ay electbetween withdrawing fro! the contract and de!anding a proportionate reduction of the price"with da!ages in either case. (140$a)

Art. 15$0. #f the thing sold should be lost in conseuence of the hidden faults" and the vendor was aware of the!" he shall bear the loss" and shall be obliged to return the price and refundthe expenses of the contract" with da!ages. #f he was not aware of the!" he shall only returnthe price and interest thereon" and rei!burse the expenses of the contract which the vendee!ight have paid. (140a)

Art. 15$. #f the thing sold had any hidden fault at the ti!e of the sale" and should thereafter be lost by a fortuitous event or through the fault of the vendee" the latter !ay de!and of thevendor the price which he paid" less the value which the thing had when it was lost.

#f the vendor acted in bad faith" he shall pay da!ages to the vendee. (1400a)

Art. 152. -he preceding articles of this /ubsection shall be applicable to udicial sales"except that the udg!ent debtor shall not be liable for da!ages. (140a)

Art. 151. Actions arising fro! the provisions of the preceding ten articles shall be barred after six !onths" fro! the delivery of the thing sold. (142)

Art. 15+. #f two or !ore ani!als are sold together" whether for a lu!p su! or for a separateprice for each of the!" the redhibitory defect of one shall only give rise to its redhibition" andnot that of the others* unless it should appear that the vendee would not have purchased thesound ani!al or ani!als without the defective one.

-he latter case shall be presu!ed when a tea!" yo,e pair" or set is bought" even if a separateprice has been fixed for each one of the ani!als co!posing the sa!e. (141)

Art. 153. -he provisions of the preceding article with respect to the sale of ani!als shall inli,e !anner be applicable to the sale of other things. (14+)

Art. 154. -here is no warranty against hidden defects of ani!als sold at fairs or at publicauctions" or of live stoc, sold as conde!ned. (143a)

Art. 155. -he sale of ani!als suffering fro! contagious diseases shall be void.

A contract of sale of ani!als shall also be void if the use or service for which they are

acuired has been stated in the contract" and they are found to be unfit therefor. (144a)

Art. 15$. #f the hidden defect of ani!als" even in case a professional inspection has been!ade" should be of such a nature that expert ,nowledge is not sufficient to discover it" thedefect shall be considered as redhibitory.

:ut if the veterinarian" through ignorance or bad faith should fail to discover or disclose it" heshall be liable for da!ages. (145)

Art. 15. -he redhibitory action" based on the faults or defects of ani!als" !ust be broughtwithin forty days fro! the date of their delivery to the vendee.

-his action can only be exercised with respect to faults and defects which are deter!ined bylaw or by local custo!s. (14$a)



Art. 150. #f the ani!al should die within three days after its purchase" the vendor shall beliable if the disease which cause the death existed at the ti!e of the contract. (14a)

Art. 15. #f the sale be rescinded" the ani!al shall be returned in the condition in which itwas sold and delivered" the vendee being answerable for any inury due to his negligence"and not arising fro! the redhibitory fault or defect. (140)

Art. 1502. #n the sale of ani!als with redhibitory defects" the vendee shall also enoy the right!entioned in article 15$* but he !ust !a,e use thereof within the sa!e period which hasbeen fixed for the exercise of the redhibitory action. (14)

6aveat e!ptor

/ee 15$$

/ee 154 (reection of caveat e!ptor)

/ee 15$0

Additional warranties for consu!er products

A 34 consu!er act of the philippines

Art. $0. Additional Provisions on Warranties. 7 #n addition to the 6ivil 6ode provisions on salewith warranties" the following provisions shall govern the sale of consu!er products withwarranty

(a) Terms of express warranty . 7 Any seller or !anufacturer who gives an express warrantyshall

(1) set forth the ter!s of warranty in clear and readily understandable language andclearly identify hi!self as the warrantor*

(+) identify the party to who! the warranty is extended*

(3) state the products or parts covered*

(4) state what the warrantor will do in the event of a defect" !alfunction of failure toconfor! to the written warranty and at whose expense*

(5) state what the consu!er !ust do to avail of the rights which accrue to thewarranty* and

($) stipulate the period within which" after notice of defect" !alfunction or failure toconfor! to the warranty" the warrantor will perfor! any obligation under the warranty.

(b) Express warranty - operative from moment of sale. 7 All written warranties or guaranteesissued by a !anufacturer" producer" or i!porter shall be operative fro! the !o!ent of sale.

(1) Sales Report. 7 All sales !ade by distributors of products covered by this Article shall bereported to the !anufacturer" producer" or i!porter of the product sold within thirty (32) daysfro! date of purchase" unless otherwise agreed upon. -he report shall contain" a!ongothers" the date of purchase" !odel of the product bought" its serial nu!ber" na!e andaddress of the buyer. -he report !ade in accordance with this provision shall be euivalent toa warranty registration with the !anufacturer" producer" or i!porter. /uch registration issufficient to hold the !anufacturer" producer" or i!porter liable" in appropriate cases" under itswarranty.

(+) Failure to make or send report. 7 ;ailure of the distributor to !a,e the report or send the!the for! reuired by the !anufacturer" producer" or i!porter shall relieve the latter of its



liability under the warranty Provided, owever, -hat the distributor who failed to co!ply withits obligation to send the sales reports shall be personally liable under the warranty. ;or thispurpose" the !anufacturer shall be obligated to !a,e good the warranty at the expense of thedistributor.

(3) Retail. 7 -he retailer shall be subsidiarily liable under the warranty in case of failure of both

the !anufacturer and distributor to honor the warranty. #n such case" the retailer shallshoulder the expenses and costs necessary to honor the warranty. %othing therein shallprevent the retailer fro! proceeding against the distributor or !anufacturer.

(4) Enfor!ement of warranty or "uarantee. 7 -he warranty rights can be enforced bypresent!ent of a clai!. -o this end" the purchaser needs only to present to the i!!ediateseller either the warranty card of the official receipt along with the product to be serviced or returned to the i!!ediate seller. %o other docu!entary reuire!ent shall be de!anded fro!the purchaser. #f the i!!ediate seller is the !anufacturer&s factory or showroo!" the warrantyshall i!!ediately be honored. #f the product was purchased fro! a distributor" the distributor shall li,ewise i!!ediately honor the warranty. #n the case of a retailer other than thedistributor" the for!er shall ta,e responsibility without cost to the buyer of presenting thewarranty clai! to the distributor in the consu!er&s behalf.

(5) Re!ord of pur!ases. 7 <istributors and retailers covered by this Article shall ,eep a recordof all purchases covered by a warranty or guarantee for such period of ti!e corresponding tothe lifeti!e of the product&s respective warranties or guarantees.

($) #ontrary stipulations$ null and void. 7 All covenants" stipulations or agree!ents contrary tothe provisions of this Article shall be without legal effect.

(c) <esignation of warranties. 7 A written warranty shall clearly and conspicuously designatesuch warranty as

(1) %Full warranty% if the written warranty !eets the !ini!u! reuire!ents set forth inparagraph (d)* or

(+) %&imited warranty% if the written warranty does not !eet such !ini!u!reuire!ents.

(d) 'inimum standards for warranties. 7 ;or the warrantor of a consu!er product to !eet the!ini!u! standards for warranty" he shall

(1) re!edy such consu!er product within a reasonable ti!e and without charge incase of a defect" !alfunction or failure to confor! to such written warranty*

(+) per!it the consu!er to elect whether to as, for a refund or replace!ent withoutcharge of such product or part" as the case !ay be" where after reasonable nu!ber of atte!pts to re!edy the defect or !alfunction" the product continues to have thedefect or to !alfunction.

-he warrantor will not be reuired to perfor! the above duties if he can show that the defect"!alfunction or failure to confor! to a written warranty was caused by da!age due to

unreasonable use thereof.

(e) (uration of warranty. 7 -he seller and the consu!er !ay stipulate the period within whichthe express warranty shall be enforceable. #f the i!plied warranty on !erchantabilityacco!panies an express warranty" both will be of eual duration. Any other i!plied warranty shall endure not less than sixty ($2) days nor !ore than one (1)year following the sale of new consu!er products.

(f) )rea! of warranties. 7 (1) #n case of breach of express warranty" the consu!er !ay electto have the goods repaired or its purchase price refunded by the warrantor. #n case the repair of the product in whole or in part is elected" the warranty wor, !ust be !ade to confor! tothe express warranty within thirty (32) days by either the warrantor or his representative. -hethirty7day period" however" !ay be extended by conditions which are beyond the control of

the warrantor or his representative. #n case the refund of the purchase price is elected" thea!ount directly attributable to the use of the consu!er prior to the discovery of the non7



confor!ity shall be deducted.

(+) #n case of breach of i!plied warranty" the consu!er !ay retain in the goods and recover da!ages" or reect the goods" cancel and contract and recover fro! the seller so !uch of thepurchase price as has been paid" including da!ages.

Art. 15. Where there is a breach of warranty by the seller" the buyer !ay" at his election

(1) Accept or ,eep the goods and set up against the seller" the breach of warranty byway of recoup!ent in di!inution or extinction of the price*

(+) Accept or ,eep the goods and !aintain an action against the seller for da!agesfor the breach of warranty*

(3) efuse to accept the goods" and !aintain an action against the seller for da!ages for the breach of warranty*

(4) escind the contract of sale and refuse to receive the goods or if the goods havealready been received" return the! or offer to return the! to the seller and recover the price or any part thereof which has been paid.

When the buyer has clai!ed and been granted a re!edy in anyone of these ways" noother re!edy can thereafter be granted" without preudice to the provisions of thesecond paragraph of Article 111.

Where the goods have been delivered to the buyer" he cannot rescind the sale if he,new of the breach of warranty when he accepted the goods without protest" or if hefails to notify the seller within a reasonable ti!e of the election to rescind" or if he failsto return or to offer to return the goods to the seller in substantially as good conditionas they were in at the ti!e the ownership was transferred to the buyer. :ut if deterioration or inury of the goods is due to the breach or warranty" such deteriorationor inury shall not prevent the buyer fro! returning or offering to return the goods tothe seller and rescinding the sale.

Where the buyer is entitled to rescind the sale and elects to do so" he shall cease tobe liable for the price upon returning or offering to return the goods. #f the price or anypart thereof has already been paid" the seller shall be liable to repay so !uch thereof as has been paid" concurrently with the return of the goods" or i!!ediately after anoffer to return the goods in exchange for repay!ent of the price.

Where the buyer is entitled to rescind the sale and elects to do so" if the seller refusesto accept an offer of the buyer to return the goods" the buyer shall thereafter be

dee!ed to hold the goods as bailee for the seller" but subect to a lien to securepay!ent of any portion of the price which has been paid" and with the re!edies for the enforce!ent of such lien allowed to an unpaid seller by Article 15+$.

(5) #n the case of breach of warranty of uality" such loss" in the absence of specialcircu!stances showing proxi!ate da!age of a greater a!ount" is the differencebetween the value of the goods at the ti!e of delivery to the buyer and the value theywould have had if they had answered to the warranty. (n)

((:reach of contracts))

(re!edies of the seller)

(sale of !ovables)



action for the price

Art. 155. Where" under a contract of sale" the ownership of the goods has passed to thebuyer and he wrongfully neglects or refuses to pay for the goods according to the ter!s of the

contract of sale" the seller !ay !aintain an action against hi! for the price of the goods.

Where" under a contract of sale" the price is payable on a certain day" irrespective of deliveryor of transfer of title and the buyer wrongfully neglects or refuses to pay such price" the seller !ay !aintain an action for the price although the ownership in the goods has not passed. :utit shall be a defense to such an action that the seller at any ti!e before the udg!ent in suchaction has !anifested an inability to perfor! the contract of sale on his part or an intention notto perfor! it.

Although the ownership in the goods has not passed" if they cannot readily be resold for areasonable price" and if the provisions of article 15$" fourth paragraph" are not applicable"the seller !ay offer to deliver the goods to the buyer" and" if the buyer refuses to receive

the!" !ay notify the buyer that the goods are thereafter held by the seller as bailee for thebuyer. -hereafter the seller !ay treat the goods as the buyer&s and !ay !aintain an action for the price. (n)

Action for da!ages

Art. 15$. Where the buyer wrongfully neglects or refuses to accept and pay for the goods"the seller !ay !aintain an action against hi! for da!ages for nonacceptance.

-he !easure of da!ages is the esti!ated loss directly and naturally resulting in the ordinarycourse of events fro! the buyer&s breach of contract.

Where there is an available !ar,et for the goods in uestion" the !easure of da!ages is" inthe absence of special circu!stances showing proxi!ate da!age of a different a!ount" thedifference between the contract price and the !ar,et or current price at the ti!e or ti!eswhen the goods ought to have been accepted" or" if no ti!e was fixed for acceptance" then atthe ti!e of the refusal to accept.

#f" while labor or expense of !aterial a!ount is necessary on the part of the seller to enablehi! to fulfill his obligations under the contract of sale" the buyer repudiates the contract or notifies the seller to proceed no further therewith" the buyer shall be liable to the seller for labor perfor!ed or expenses !ade before receiving notice of the buyer&s repudiation or counter!and. -he profit the seller would have !ade if the contract or the sale had been fully

perfor!ed shall be considered in awarding the da!ages. (n)

escission

Art. 15. Where the goods have not been delivered to the buyer" and the buyer hasrepudiated the contract of sale" or has !anifested his inability to perfor! his obligationsthereunder" or has co!!itted a breach thereof" the seller !ay totally rescind the contract ofsale by giving notice of his election so to do to the buyer. (n)

Sales Codal 15 to 16

Documents

Transcript of Sales Codal 15 to 16