Notes on Sales
Section 3: Conditions and warranties
I. Conditions 1545
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 non-
performance of the condition as a breach of warranty.
Where the ownership in the thing 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.
Meaning of condition
A condition means an uncertain event or contingency on the happening of which the
obligation (or right) of the contract depends. In such a case, the obligation of the contract does
not attach until the condition is performed.
Effect of non-fulfillment of condition
A contract of sale may be absolute or conditional. (Art. 1458.)
(1) If the obligation1 of either party is subject to any condition and such condition is not fulfilled,
such party may either:
(a) refuse to proceed with the contract; or
(b) proceed with the contract, waiving the performance of the condition.
(2) If the condition is in the nature of a promise that it should happen, the non-performance of
such condition may be treated by the other party as a breach of warranty.
***NOTE: A distinction must be made between a condition imposed on the perfection of a
contract and a condition imposed merely on the performance of an obligation. The failure to
comply with the first condition would prevent the juridical relation itself from coming into
existence, while failure to comply with the second merely gives the option either to refuse or
proceed with the sale or to waive the condition.
II. Warranties (1546-1547)
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.
Notes on Sales
ART. 1547. In a contract of a sale, unless a contrary intention appears, there is: (1) 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; (2) 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.
This article shall not, however, be held to render liable a sheriff, auctioneer, mortgagee,
pledgee, or other person professing to sell by virtue of authority in fact or law, for the sale of a
thing in which a third person has a legal or equitable interest.
Meaning of warranty
A warranty is a statement or representation made by the seller of goods, contemporaneously and
as a 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 insure that certain facts are or shall be as he then
represents them.
Kinds of Warranty
EXPRESS IMPLIED
Any affirmation of fact or any promise by the That which the law derives by implication or
seller relating to the thing if the natural inference from the nature of the transaction or
tendency of such affirmation or promise is to the relative situation or circumstances of the
induce the buyer to purchase the same and if parties, irrespective of any intention of the
the buyer purchases the thing relying thereon seller to create it.
a. Warranty against eviction
b. Warranty against hidden defects
c. Warranty as to Fitness and Merchantability
NOTE: A mere expression of opinion, no NOTE: An implied warranty is a natural, not
matter how positively asserted, does not import an essential element of a contract, and is
a warranty unless the seller is an expert and his deemed incorporated in the contract of sale. It
opinion was relied upon by the buyer. may however, be waived or modified by
express stipulation.
There is no implied warranty as to the
condition, adaptation, fitness or suitability or
the quality of an article sold as a second-hand
article. But such articles might be sold under
such circumstances as to raise an implied
warranty.
Effect of express warranty
A warranty being a part of the contract of sale, it is immaterial whether the seller did not
know that it was true or false. No intent is necessary to make the seller liable for his warranty. It
is the natural consequences of what the seller says and the reliance thereon by the buyer that
alone are important.
Notes on Sales
Nature of implied warranty
An implied warranty is a natural, not an essential, element of a contract, because it is
presumed to exist even though nothing has been said in the contract on the subject. It is,
therefore, deemed as incorporated in the contract of sale.
An implied warranty may, however, be waived or modified by express stipulation.
III. Warranty in case of Eviction (1548-1560)
ART. 1548. Eviction shall take place whenever by a final judgment based on a right prior to
the sale or an act imputable to the vendor, the vendee is deprived of the whole or of a part of
the thing purchased.
The vendor shall answer for the eviction even though nothing has been said in the contract on
the subject.
The contracting parties, however, may increase, diminish, or suppress this legal obligation of
the vendor.
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.
ART. 1554. If the vendee has renounced the right to warranty in case of eviction, and eviction
should take place, the vendor shall only pay the value which the thing sold had at the time of
the eviction. Should the vendee have made the waiver with knowledge of the risks of eviction
and assumed its consequences, the vendor shall not be liable.
ART. 1555. When the warranty has been agreed upon or nothing has been stipulated on this
point, in case eviction occurs, the vendee shall have the right to demand of the vendor:
(1) The return of the value which the thing sold had at the time of the eviction, be it greater or
less than the price of the sale;
(2) The income or fruits, if he has been ordered to deliver them to the party who won the suit
against him;
(3) The costs of the suit which caused the eviction and, in a proper case, those of the suit
brought against the vendor for the warranty;
Notes on Sales
(4) The expenses of the contract, if the vendee has paid them;
(5) The damages and interests and ornamental expenses, if the sale was made in bad faith.
ART. 1556. Should the vendee lose, by reason of the eviction, a part of thing sold of such
importance, in relation to the whole, that he would not have bought it without said part, he
may demand the rescission of the contract; but with the obligation to return the thing without
other encumbrances than those which it had when he acquired it.
He may exercise this right of action, instead of enforcing the vendor’s liability for eviction.
The same rule shall be observed when two or more things have been jointly sold for a lump
sum, or for a separate price for each of them, if it should clearly appear that the vendee would
not have purchased one without the other.
ART. 1557. The warranty cannot be enforced until a final judgment has been rendered,
whereby the vendee loses the thing acquired or a part thereof.
ART. 1558. The vendor shall not be obliged to make good the proper warranty, unless he is
summoned in the suit for eviction at the instance of the vendee.
ART. 1559. The defendant vendee shall ask, within the time fixed in the Rules of Court for
answering the complaint, that the vendor be made a co-defendant.
ART. 1560. If the immovable sold should be encumbered with any non-apparent burden or
servitude, not mentioned in the agreement, of such a nature that it must be presumed that the
vendee would not have acquired it had he been aware thereof, he may ask for the rescission of
the contract, unless he should prefer the appropriate indemnity. Neither right can be exercised
if the non-apparent burden or servitude is recorded in the Registry of Property, unless there is
an express warranty that the thing is free from all burdens and encumbrances.
Within one year, to be computed from the execution of the deed, the vendee may bring the
action for rescission, or sue for damages.
One year having elapsed, he may only bring an action for damages within an equal period, to
be counted from the date on which he discovered the burden or servitude.
Warranty against eviction
Warranty in which the seller guarantees that he has the right to sell the thing sold and to transfer
ownership to the buyer who shall not be disturbed in his legal and peaceful possession thereof.
Elements:
1. Vendee is deprived, in whole or in part, of the thing purchased;
2. The deprivation is by virtue of a final judgment;
3. The judgment is based on a prior right to the sale or an act imputable to the vendor;
4. The vendor was summoned in the suit for eviction at the instance of the vendee; AND
5. No waiver of warranty by the vendee.
Notes on Sales
Vendor's liability shall consist of:
1. Total eviction: (a) Value of the thing at the time of eviction; (b)Income or fruits if he has been
ordered to deliver them to the party who won the suit; (c) Costs of the suit; (d) Expenses of the
contract; AND (e) Damages and interests if the sale was in bad faith.
2. Partial eviction: (a) to enforce vendor’s liability for eviction; OR (b) to demand rescission of
contract.
Question: Why is rescission not a remedy in case of total eviction?
Answer: Rescission contemplates that the one demanding it is able to return whatever he has
received under the contract. Since the vendee can no longer restore the subject-matter of the sale
to the vendor, rescission cannot be carried out.
*** The suit for the breach can be directed only against the immediate seller, not sellers of the
seller unless such sellers had promised to warrant in favor of later buyers or unless the immediate
seller has expressly assigned to the buyer his own right to sue his own seller.
***NOTE: The disturbance referred to in the case of eviction is a disturbance in law which
requires that a person go to the courts of justice claiming the thing sold, or part thereof and
invoking reasons. Mere trespass in fact does not give rise to the application of the doctrine of
eviction.
Vendor’s liability is waivable but any stipulation exempting the vendor from the obligation to
answer for eviction shall be void if he acted in bad faith.
Kinds of Waiver:
a. Consciente – voluntarily made by the vendee without the knowledge and assumption of the
risks of eviction
***NOTE: Vendor shall pay only the value which the thing sold had at the time of eviction
b. Intencionada – Made by the vendee with knowledge of the risks of eviction and assumption
of its consequences
EFFECT: Vendor not liable
***NOTE: Every waiver is presumed to be consciente. To consider it intencionada, it must be
accompanied by some circumstance which reveals the vendor’s knowledge of the risks of
eviction and his intention to submit to such consequences.
WHERE IMMOVABLE SOLD ENCUMBERED WITH NON-APPARENT BURDEN
1. Right of vendee
a) Recission, or
b) Indemnity
2. When right cannot be exercised:
a) If the burden or servitude is apparent
b) If the non-apparent burden or servitude is registered
c) If vendee had knowledge of the encumbrance, whether it is registered or not
3. When action must be brought - within ONE YEAR from the execution of the deed of sale
Notes on Sales
Bignay Ex-Im Philippines, Inc vs. Union Bank of the Philippines
GR 171590, February 12, 2014, 716 SCRA 21
FACTS: In 1984, Alfonso de Leon (Alfonso) mortgaged in favor of Union Bank of the
Philippines (Union Bank) real property situated at Esteban Abada, Loyola Heights, Quezon City,
which was registered in his and his wife Rosarios name and covered by Transfer Certificate of
Title (TCT) No. 286130 (TCT 286130). The property was foreclosed and sold at auction to
Union Bank. After the redemption period expired, the bank consolidated its ownership,
whereupon TCT 362405 was issued in its name in 1987. In 1988, Rosario filed against Alfonso
and Union Bank, Civil Case No. Q-52702 for annulment of the 1984 mortgage, claiming that
Alfonso mortgaged the property without her consent, and for reconveyance.
In a September 6, 1989 Letter-Proposal, Bignay Ex-Im Philippines, Inc. (Bignay), through its
President, Milagros Ong Siy (Siy), offered to purchase the property. The written offer stated,
among others, that The property is the subject of a pending litigation between Rosario de Leon
and Union Bank for nullification of the foreclosure before the Regional Trial Court of Quezon
City. Should this offer be approved by your management, we suggest that instead of the usual
conditional sale, a deed of absolute sale be executed to document the transaction in our favor
subject to a mortgage in favor of the bank to secure the balance. This documentation is intended
to isolate the property from any lis pendens that the former owner may annotate on the title and
to allow immediate reconstitution thereof since the original Torrens title was burned in 1988
when the City Hall housing the Register of Deeds of Quezon City was gutted by fire.
On December 20, 1989, a Deed of Absolute Sale was executed by and between Union Bank and
Bignay whereby the property was conveyed to Bignay for P4 million. The deed of sale was
executed by the parties through Bignay's Siy and Union Banks Senior Vice President Anthony
Robles (Robles). On December 27, 1989, Bignay mortgaged the property to Union Bank,
presumably to secure a loan obtained from the latter.
A Decision was rendered in Civil Case No. Q-52702, finding that defendant Alfonso de Leon, Jr.
had alone executed the mortgage on their conjugal property upon a forged signature of his wife
plaintiff Rosario T. de Leon. Further, the Court declares plaintiff Rosario T. de Leon the owner
still of the undivided ONE HALF (1/2) of the subject property. The writ of possession granted in
favor of Union Bank was set aside and quashed.
Alfonso was ordered to pay his co-defendant Union Bank of the Philippines the sum of hisP1M
loan with interest from the time the same was extended to him. Union Bank appealed the above
Decision with the CA. The CA appeal was dismissed for failure to file appellants brief; the
ensuing Petition for Review with this Court was similarly denied for late filing and payment of
legal fees.
Bignay filed a Petition for annulment of the Decision. The CA dismissed the Petition. Bignay's
resultant Petition for Certiorari with this Court suffered the same fate. Bignay was evicted from
the property; by then, it had demolished the existing structure on the lot and begun construction
of a new building. Bignay filed a case for breach of warranty against eviction under Articles
1547 and 1548 of the Civil Code, with damages, against Union Bank and Robles.
Notes on Sales
Union Bank interposed a Motion to Dismiss grounded on lack of or failure to state a cause of
action, claiming that it made no warranties in favor of Bignay when it sold the property to the
latter on December 20, 1989. The trial court deferred the resolution of the motion on finding that
the ground relied upon did not appear to be indubitable. Union Bank thus filed its Answer Ad
Cautelam,where it alleged that Bignay was not an innocent purchaser for value, knowing the
condition of the property as evidenced by Siys September 6, 1989 letter-proposal to purchase the
same. It interposed a counterclaim as well, grounded on two promissory notes signed by Siy in
favor of the bank.
The trial court thus declared that Union Bank, through Robles, acted in bad faith in selling the
subject property to Bignay; for this reason, the stipulation in the December 20, 1989 deed of sale
limiting Union Banks liability in case of eviction cannot apply, because under Article 1553 of the
Civil Code, "any stipulation exempting the vendor from the obligation to answer for eviction
shall be void, if he acted in bad faith."
Art. 1555. When the warranty has been agreed upon or nothing has been stipulated on this point,
in case eviction occurs, the vendee shall have the right to demand of the vendor:
(1) The return of the value which the thing sold had at the time of the eviction, be it greater or
less than the price of the sale; xxx.
Thus, it held that Bignay was entitled to the return of the value of the property (P4 million), as
well as the cost of the building erected thereon (P20 million), since Union Bank acted in bad
faith. At the same time, the trial court held that the banks counterclaim was not at all connected
with Bignays Complaint, which makes it a permissive counterclaim for which the docket fees
should accordingly be paid. Since the bank did not pay the docket fees, the trial court held that it
did not acquire jurisdiction over its counterclaim; thus, it dismissed the same.
Union Bank appealed to the CA. On the Counterclaim, judgment is rendered ordering plaintiff-
appellee to pay defendant-appellant the principal amount ofP1,500,000.00 and P2,000,000.00
under two Promissory Notes. Regarding the banks counterclaim, the CA held that Union Bank
timely paid the docket fees therefor amounting to P32,940.00 at the time it filed its Answer Ad
Cautelam.
Bignay filed its Motion for Partial Reconsideration questioning the appellate courts ruling on
Union Banks counterclaim. On the other hand, Union Bank in its Motion for Reconsideration
took exception to the CAs application of Articles 1548 and 1549 of the Civil Code, as well as its
finding that the bank was negligent in the handling and prosecution of Civil Case No. Q-52702.
The CA issued the second assailed Resolution denying the parties respective motions for
reconsideration.
ISSUE: Is Petitioner entitled to the warranties against Eviction under Article 1555 of the Civil
Code?
HELD: The gross negligence of the seller in defending its title to the property subject matter of
the sale - thereby contravening the express undertaking under the deed of sale to protect its title
Notes on Sales
against the claims of third persons resulting in the buyer's eviction from the property - amounts
to bad faith, and the buyer is entitled to the remedies afforded under Article 1555 of the Civil
Code.
Eviction shall take place whenever by a final judgment based on a right prior to the sale or an act
imputable to the vendor, the vendee is deprived of the whole or of a part of the thing purchased.
In case eviction occurs, the vendee shall have the right to demand of the vendor, among others,
the return of the value which the thing sold had at the time of the eviction, be it greater or less
than the price of the sale; the expenses of the contract, if the vendee has paid them; and the
damages and interests, and ornamental expenses, if the sale was made in bad faith.
It adds that since Union Bank is guilty of negligence and bad faith in transacting with Bignay, it
should be penalized through the proper dismissal of its counterclaim; the Court should instead
require Union Bank to prosecute its claims in a separate action.
IV. Warranty against Hidden Defects (1561-1567)
ART. 1561. The vendor shall be responsible for warranty against the hidden defects which the
thing sold may have, should they render it unfit for the use for which it is intended, or should
they diminish its fitness for such use to such an extent that, had the vendee been aware
thereof, he would not have acquired it or would have given a lower price for it; but said
vendor shall not be answerable for patent defects or those which may be visible, or for those
which are not visible if the vendee is an expert who, by reason of his trade or profession,
should have known them.
ART. 1562. In a sale of goods, there is an implied warranty or condition as to the quality or
fitness of the goods, as follows:
(1) Where the buyer, expressly or by implication, makes known to the seller the particular
purpose for which the goods are acquired, and it appears that the buyer relies on the seller’s
skill of judgment (whether he be the grower or manufacturer or not), there is an implied
warranty that the goods shall be reasonably fit for such purpose.
(2) Where the goods are bought by description from a seller who deals in goods of that
description (whether he be the grower or manufacturer or not), there is an implied warranty
that the goods shall be of merchantable quality.
ART. 1563. In the case of contract of sale of a specified article under its patent or other trade
name, there is no warranty as to its fitness for any particular purpose, unless there is a
stipulation to the contrary.
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.
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.
Notes on Sales
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.
This provision shall not apply if the contrary has been stipulated, and the vendor was not
aware of the hidden faults or defects in the thing sold.
ART. 1567. In the cases of articles 1561, 1562, 1564, 1565, and 1566, the vendee may elect
between withdrawing from the contract and demanding a proportionate reduction of the price,
with damages in either case.
Warranty against hidden defects
Warranty in which the seller guarantees that the thing sold is free from any hidden faults
or defects or any charge or encumbrance not declared or known to the buyer.
Elements:
1. Defect must be Serious or important;
2. It must be hidden;
3. It must exist at the time of the sale;
4. Vendee must give Notice of the defect to the vendor within a reasonable time;
5. Action for rescission or reduction of price must be brought within the proper Period (within 6
mos. from delivery of the thing or 40 days from date of delivery in case of animals); and
6. No Waiver of the warranty.
Remedies of the Vendee:
a. Accion redhibitoria (rescission)
b. Accion quanti minoris (reduction of the price)
***NOTE:
Hidden faults or defects pertain only to those that make the object unfit for the use for
which it was intended at the time of the sale.
Effect of loss of thing on account of hidden defects
1. If vendor was aware of hidden defects, he a. The price paid
shall bear the loss and vendee shall have the b. Expenses of the contract
right to recover: (PED) c. Damages
2. If vendor was not aware, he shall be obliged a. Price paid
to return: (PIE) b. Interest thereon
c. Expenses of the contract if paid by the
vendee
Effect if the cause of loss was not the hidden defect
If the thing sold had any hidden fault at the time of the sale, and should thereafter be lost
by a:
(1) Fortuitous event; OR
(2) Through the fault of the vendee:
The vendee may demand of the vendor the price which he paid less the value of the thing
at the time of its loss.
Notes on Sales
NOTE: The difference between the price paid and the value of the thing at the time of its loss
represents the damage suffered by the vendee and the amount which the vendor enriched himself
at the expense of the vendee
>If the vendor acted in bad faith:
>Vendor shall pay damages to the vendee
Implied Warranties of Quality
Warranty of Fitness - Warranty in which the seller guarantees that the thing sold is reasonably
fit for the known particular purpose for which it was acquired by the buyer.
GENERAL RULE: There is no implied warranty as to the quality or fitness for any particular
purpose of goods under a contract of sale
EXCEPTIONS:
1. Where the buyer, expressly or by implication manifests to the seller the particular purpose for
which the goods are required
2. Where the buyer relies upon the seller’s skill or judgment
Warranty of Merchantability
>Warranty in which the seller guarantees, where the goods were bought by description, that they
are reasonably fit for the general purpose for which they are sold
>It requires identity between what is described in the contract AND what is tendered, in the
sense that the latter is of such quality to have some value
Instances where implied warranties are inapplicable:
1. As is and where is sale – vendor makes no warranty as to the quality or workable condition of
the goods, and that the vendee takes them in the condition in which they are found and from the
place where they are located.
2. Sale of second-hand articles
3. Sale by virtue of authority in fact or law
***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”): requires the purchaser to be aware of the
supposed title of the vendor and one who buys without checking the vendor’s title takes all the
risks and losses consequent to such failure.
RULES IN CASE OF SALE OF ANIMALS
1. When two or more animals have been sold at the same time and the redhibitory defect is in
one, or some of them but not in all, the general rule is that the redhibition will not affect the
others without it. It is immaterial whether the price has been fixed for a lump sum for all the
animals or for a separate price for each.
Notes on Sales
2. No warranty against hidden defects of animals sold at fairs or at public auctions, or of
livestock sold as condemned. This is based on the assumption that the defects must have been
clearly known to the buyer.
3. Sale of animals shall be void when:
a) Animals sold are suffering from contagious disease
b) If the use or service for which they are acquired has been stated in the contract, and they are
found to be unfit therefor
4. Limitation of the action: 40 days from the date of their delivery to the vendee
5. Vendor shall be liable if the animal should die within 3 days after its purchase if the disease
which caused the death existed at the time of the contract
V. Warranties under RA 7394
Product Warranty under the Consumers Act of the Philippines (RA No.7394)
1. What is the primary law governing all contract of sales with conditions and warranties?
The provisions of the New Civil Code on conditions and warranties shall govern all
contracts of sales with conditions and warranties.
2. What are the responsibilities of a seller / vendor under the New Civil Code in cases of express
warranties?
Under Article 1561, a vendor or a seller has the responsibility to ensure that the items he
or she sells has no hidden defects.
3. What kind of defects of the item sold shall make the vendor or seller liable?
If the defects should render the item sold totally unfit for the use for which it is intended,
the seller or the vendor shall be liable for such defects. Second, if the defect should diminish or
decrease its fitness or its use to the extent that if the buyer was aware of such defect he would not
have bought the product or would have demanded a lower price for it.
4. What are the instances where a vendor or seller may not be held liable in case of defects?
A vendor or seller may not be held liable in cases of patent defects pr those which are
clearly visible upon inspection of the product bought. In case the defects are not visible, and the
buyer is an expert, who by reason of his trade or profession should have known the defects, then
the vendor or seller may not be held liable.
5. What are the responsibilities of the seller or vendor as to the quality or fitness of the product
sold in case there is no express warranty given to him?
The seller or vendor is liable to the buyer in an implied warranty, if such buyer make
known to the seller expressly or impliedly, the particular purpose for which the goods are
acquired. The vendor, by implication, warrants the general fitness or quality of the product sold
to the buyer. Second, the seller or vendor is liable to the buyer if such buyer relies on the seller’s
skill or judgment.
6. Aside from the provisions of the New Civil Code, what are other laws that may apply in cases
of express warranties?
Notes on Sales
In addition to the New Civil Code provisions on sale with warranties, the provisions of
Title III, Chapter III of the Consumer Act of the Philippines shall govern the sale of consumer
products with warranty.
7. What are the minimum terms of express warranty under the Consumer Act that shall be given
by a seller or manufacturer?
The following shall be stated in an express warranty: - the terms of warranty, written in
clear and readily understandable language; - the warrantor’s identity; - the party’s identity to
whom the warranty is extended; - the products or parts covered; - the warrantor’s action plan in
the event of a defect, malfunction or failure to conform to the written warranty; - the directive to
the consumer to avail of the right which accrue to the warranty; - 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.
8. What is the difference between a Full warranty and Limited warranty (express)
There is Full Warranty if the warranty conforms with the minimum standards for
warranties. To conform with the requirements, the following should be found in a full warranty:
First, there should be a remedy or relief offered to a consumer within the reasonable time and
without charge in case of defect, malfunction, or failure to conform with such written warranty.
Second, the warranty should give the consumer an option to either 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. A Limited Warranty, on the other hand, is when the written warranty does not
meet the abovementioned minimum requirements.
9. When shall the retailer be subsidiarily liable under the express warranty?
The retailer may be subsidiarily held liable attaches in the following instance: - In case
where both the manufacturer and the distributor failed to honor the warranty the retailer shoulder
the expenses and costs necessary to honor the warranty but the retailer is not prevented from
pursuing actions against the distributor and manufacturer.
10. What are the documents to be presented to the seller or vendor in case the consumer opts to
have the defective product repaired, replaced, or refunded under an express warranty?
The consumer should present a copy of the warranty card or documents and the official
receipt of the product sold or bought.
11. What is the minimum duration or period of an express or implied warranty?
The duration of a warranty shall be reckoned with the following circumstances: - If there
is a stipulation of the period agreed between the seller and the consumer within which the
express warranty shall be enforceable; - If the implied warranty on merchantability accompanies
an express warranty, both will be of equal duration; - Any other implied warranty: not less than
60 days nor more than one year following the sale of a new consumer product.
12. What are the options given to a consumer in case of a breach of an express warranty?
First, the consumer can have the goods repaired. Warranty work must be made within 30
days. Such period may be extended by conditions beyond the control of the warrantor or his
Notes on Sales
representatives. Second, the product or its parts may be replaced. Third, the consumer may ask
for a refund from the warrantor. The amount directly attributable to the use of consumer prior to
the discovery of the non-conformity shall be deducted.
13. What are the options given to a consumer in case of a breach of an implied warranty?
The consumer may retain the goods and recover damages, or reject the goods, cancel the
contract, and refund the amount paid for the product, including damages.
14. Are secondhand consumer products covered by a warranty?
Generally, there is no implied warranty in the sale of secondhand articles, except when
the goods are sold as to raise an implied warranty, i.e. if such buyer makes known to the seller,
the particular purpose for which the goods are acquired. Doing so warrants the general fitness or
quality of the product sold to the buyer. Second, the seller or vendor is also liable under a
warranty in the sale of secondhand products if the seller has given an express written warranty.
15. What is the jurisdiction of the DTI in the sale of secondhand consumer products?
DTI takes jurisdiction of complaints regarding secondhand products if such secondhand /
surplus products are sold by persons engaged in the business of selling products and they have,
in effect, power to enforce the warranty provided for such products. On the other hand, the
complaint shall be filed with the appropriate regular courts if the person who sold the
secondhand product is not engaged in the business of selling products, commodities,
merchandise, and goods.
