Course Title : COMLAW Professor : ATTY. JOSE T.
YAYEN
Section : BA46
Chapter IV Section 3
Learning Module No. 1
Conditions and Warranties
I. Introduction / Overview
This learning activity shall focus on conditions and warranties, to wit: warranty in case of eviction and warranty
against hidden defects or encumbrances upon the thing sold; where at the end it will touch on the redhibitory
defect of animals.
II. Learning Goals and Objectives
To explain the effects of warranties in sale and comparing with the principle of “caveat emptor”.
III. Lecture Notes
If the obligations of party is subject to a condition which is not fulfilled, the other party may choose to do any of
the following: a) refuse to proceed with the contract (breach of warranty); b) waive the performance of the
condition.
KINDS OF WARRANTIES:
EXPRESS WARRANTY refers to any affirmation of fact or any promise o by the seller relating to the thing whose
natural tendency is to induce the buyer to purchase the same, and if the buyer purchases the thing relaying on
such affirmation or promise.
IMPLIED WARRANTIES are those that are inherent in contracts of sale and accompany them unless they are
suppressed by the parties: which are: (1) warranty against eviction; and (2) Warranty against hidden defects.
WARRANTY AGAINST EVICTION. This refers to the implied warranty on the part of the seller that he has the right to
sell the thing at the time when ownership is to pass, and that the buyer shall from that time have and enjoy the
legal and peaceful possession of the thing.
REQUISITES:
1) The purchaser has been deprived of the whole or part of the thing sold;
2) The eviction is by final judgment;
3) The deprivation is based on a right prior to the sale or an act imputable to the vendor;
4) The vendor must have been notified of the suit for eviction at the instance of the vendee.
WARRANTY AGAINST HIDDEN DEFECTS. This refers to the implied warranty that the ring shall be free from any
hidden faults or defects or any charge or encumbrance not declared or known to the buyer.
VENDOR’S LIABILITY IN CASE OF EVICTION
A) IF there is a stipulation exempting the vendor from the obligation to answer for eviction:
1) VENDOR acted in bad faith:
a) Value of the thing at the time of eviction;
b) Income or fruits;
c) Cost of the suit;
d) Expenses of the contract if the vendee has paid them;
e) Damages and interests.
2) VENDOR acted in good faith:
a) If the vendee made the waiver without knowledge of the risks of eviction; The value of the thing at
the time of eviction;
b) If the vendee made the waiver with knowledge of the risks of eviction and assumed the
consequences, the vendor shall not be liable.
B) WHERE NO WARRANTY HAS BEEN AGREED upon or there was stipulation exempting the vendor from liability:
1) VENDOR acted in bad faith: same as (a) to (e) above;
2) VENDOR acted in good faith: same as (a) to (d) above.
RULES ON EASEMENT OR SERVITUDE:
EASEMENT OR SERVITUDE: is an encumbrance imposed upon an immovable belonging to a different owner.
REQUISITES for vendor’s liability should the immovable sold be encumbered with easement or servitude:
a) The easement must be non-apparent;
b) It must not have mentioned in the agreement;
c) It must be of such nature that it must be presumed that the vendee would not have acquired the
immovable had he been aware thereof.
VENDEE’S remedies should the immovable sold be encumbered with any non-apparent easement or servitude:
1) Within one year from the execution of the deed of sale; the vendee may ask for:
a) Rescission; b) damages.
2) After one year from the execution of the deed of sale, the vendee may ask for damages within a period of
one year from the discovery of the easement or servitude.
WHEN VENDFOR NOT liable for easement or servitude:
a) When the easement is apparent;
b) When the non-apparent easement or servitude is recorded in the Registry of Property, unless there is an
express warranty that the thing I free from all burdens and encumbrances.
c) When the vendee had knowledge at the time of the same of the existence off the easement or servitude,
though it was non-apparent.
WARRANTY AGAINST HIDEEN DEFECTS
1. Requisites for enforcement of vendor’s liability against hidden defects.
a. The defect must exist at the time of sale. (Art. 1561)
b. The defect must be hidden, i.e., not patent or visible. (Art. 1561)
The vendor, however, shall not be liable for defects that are not visible, if the vendee is an expert who, by
reason of his trade or profession, should have known them. (Art. 1561)
c. The defect must render the thing unfit for the use for which it is intended or diminishes its fitness for such
use to such an extent, that had the vendee been aware thereof, he would not had the vendee been
aware thereof, he would not have acquired it or would have been given a lower price for it. (Art. 1561)
d. The action to enforce it must be made within the period provided by law.
2. Warranties included
a. Implied warranty of fitness for a particular purpose
1) Requisites
a) The buyer makes known to the seller the particular purpose for which the goods are
acquired.
b) The buyer has relied upon the seller’s skill or judgment. (Art. 1562)
2) Sale of goods under their patent or trade name
There is no warranty as to the fitness of such goods for a particular purpose, unless
otherwise stipulated. (Art. 1563)
3) Usage of trade
An implied warranty or condition as to the quality or fitness for a particular purpose may be
annexed by the usage of trade. (Art. 1564)
b. Implied warranty of merchantable quality
This is an implied warranty that the goods are fit for the general purpose of the thing, and not
necessarily for the purpose of the buyer. This warranty is present when the goods are bought by
description from a seller who deals in goods of such description (whether he is the grower or not.)
(Art. 1562)
c. Implied warranty of merchantability
In 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 ay defect rendering them unmerchantable which would not be
apparent upon reasonable examination of the sample. (Art. 1565)
3. Responsibility for hidden defects
General rule: The vendor shall be liable to the vendee for any hidden faults or defects in the
thing sold, even though he was not aware thereof.
Exception: The vendor shall not be liable if there is a stipulation exempting him from such
defects and he was not aware thereof. (Art. 1566)
4. Remedies of vendee in case of breach (in the warranties under Arts. 1561, 1562, 1564, 1565 and 1566)
The buyer may choose between:
a. Withdrawing from the contract or rescission ( accion redhibitoria), and
b. Demanding a proportionate reduction in the price (accion quanti minoris), with damages in either
case. (Art. 1567)
Period of filing action. The action to withdraw from the contract (accion redhibitoria) or reduction of the
price with damages (accion quanti minoris); and all other actions to enforce the seller’s liability for hidden
defects when the thing is lost and in judicial sales is SIX (6) MONTHS from the delivery of the thing sold.
RULES IN SALE OF ANIMALS WITH DEFECTS OR DISEASE
1. Sale of animals with redhibitory defects
a. Redhibitory defect is a defect of such nature that expert knowledge, even after a professional inspection
has been made, is not sufficient to discover it.
If the veterinarian though ignorance or bad faith should fail to discover or disclose it, he shall be liable for
damages.
b. Remedies of vendee in case of sale of animals with redhibitory defects:
General Rule: if two or more animals are sold together, whether for lump sum or for a separate price for
each of them, the redhibitory defect of one shall only give rise to its redhibition. Accordingly the vendee
may only ask for: (1) the rescission of the sale of the defective animal (acccion redhibitoria), or, (2) ask for
a proportionate reductiuon in its price (accion quanti minoris). EXCEPTION: THE redhibitory defect of one
shall give rise to the redhibition of all the animals sold, including the sound ones, if the vendee would not
have bought the sound animals without the defective one. This intention of the vendee is presumed
when a team , yoke, pair or set of is bought even if a separate price has been fixed for each one of the
animals composing the same. The vendee may ask for the rescission of the whole contract.
c. When must redhibitory action be filed?
The redhibitory action must be filed within FORTY (40) days from the date of the delivery to the vendee.
This action can only be exercised with respect to faults and defects which are determined by law or local
customs.
d. Effect of the rescission of the sale of an animal with redhibitory defect.
The animal shall be returned in the condition in which it was sold and delivered, the vendee being
answerable for any injury due to the negligence, and not rising form the redhibitory fault or defect.
2. When sale of animals is void.
a) When the animals are suffering from contagious diseases;
b) When the animals are found to be unfit for the use or service for which they were acquired as stated
in the contract.
3. Vendor’s liability in case the animal sold dies of a disease. REQUIREMENTS:
a) The disease existed at the time of sale;
b) The disease is the cause of death of the animal;
c) The animal dies within three (3) days from the time of purchase.
4. Sale without warranty against hidden defects of animals sold at fairs or public auction or of livestock sold
as condemned.
RA NO. 7394 “CONSUMER ACT”, April 13, 1992.
Consumer product warranties under R. A. No. 7394, otherwise known as the “Consumer Act” approved on April
13, 1992 and published in the Official Gazette on June 15, 1992
In addition to the Civil Code provisions on sale with warranties, the following provisions shall govern the
sale of consumer products with warranty:
1. Terms of express warranty- Any seller or manufacturer who gives an express warranty shall:
a. Set forth the terms of warranty in clear and readily understandable language and clearly identify
himself as the warrantor;
b. Identify the party to whom the warranty is extended;
c. State the products covered;
d. State what the warrantor will do in the event of a defect, malfunction or failure to the written
warranty and at whose expense;
e. State what the consumer must do to avail (himself) of the rights which accrue to the warranty; and
f. 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. [Sec. 68 (a)]
2. When express warranty operative
All written warranties or guarantees issued by a manufacturer, producer, or importer shall be
operative from the moment of sale. [Sec. 68 (b)]
3. Persons liable
a. Manufacturer.
b. Distributor.
c. Retailer.
The retailer shall be liable only subsidiarily, i.e., when the manufacturer and distributor fail to
honor the warranty. In such case, the retailer shall shoulder the expenses and costs necessary to honor
the warranty. He may, however, proceed against the manufacturer and distributor. [Sec. 68 (b) (3)]
4. Minimum standards for warranties
For the warrantor of a consumer product to meet the minimum standards for warranty, he shall:
a. Remedy such consumer product within a reasonable time and without charge in case of defect,
malfunction or failure to conform to such written warranty.
b. 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. [Sec. 68 (d)]
5. When warrantor not required to perform warranty
The warrantor will not be required to perform the duties mentioned in No. 4 above, if he can
show that the defect, malfunction or failure to conform to a written warranty was caused by damage due
to unreasonable use thereof. [Sec. 68 (d)]
6. Duration of warranty
a) Period stipulated by the seller and consumer when the express warranty shall be enforceable. If the
implied warranty on merchantability accompanies an express warranty, both will be of equal
duration.
b) Any other warranty shall endure not less than sixty (60) days nor more than one (1) year following
the sale. (Sec. 68, e)
7. Remedies for breach of warranty (Sec. 68, f)
a) Express Warranty:
The consumer may elect either of the following:
1) REPAIR of the product, in whole or in part. The warranty work must be made to conform to the
express warranty within thirty (30) days, which may be extended by conditions beyond the
control of the warrantor or his representative.
2) REFUND of the purchase price. The amount directly attributable to the use of the consumer prior
to discovery of the non-conformity shall be deducted.
b) Implied warranty
The consumer may:
1) RETAIN in the goods and recover damages; or
2) REJECT the goods, CANCEL the contract and recover from the seller so much of the purchase
price as has been paid, including damages.
IV. Focus Questions
A. Definition: Define the following:
1. Redhibitory defect;
2. Implied warranty or fitness;
3. Eviction; and
4. Caveat Emptor
B. Discussion:
1) Discuss the rights of the consumer as enunciated by the Consumer Act.
C. PROBLEM:
1. B bought a bottle of medicine from a drugstore. Its label say that it provides a “very effective relief
from asthma.” However, B continues to suffer from asthma attacks. Has B the right complain for
misrepresentation against the drug manufacturer? Why? (5pts)
V. Exercises / Learning Activities
1) Problem:
Knowing that the car had hidden crack in the engine, X sold it to Y without informing the latter about it. In any
event the deed of sale expressly stipulated that S was not liable for hidden defects. Does Y have the right to
demand from X the reimbursement of what he spent for repair the engine plus damages? Why? (5pts)
2) Case Analysis: First United Contractors Corp. v. Bayanihan Automotive Corp., G.R. No. 164985, January 15,
2014. (10pts)
VII. Assessments / Evaluations
Quiz shall follow after the given period to study the module.
VIII. Related Readings
RCBC Savings Bank v. Odrada, G.R. No. 219037, October 19, 2016.
Republic Act No. 7394.
Department of Trade and Industry on the Rules for Complaints and Grievance
