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Section 3 – Conditions and Warranties
ARTICLE 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.
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. (n)
See page 131 for examples
“Condition” - an uncertain event or
contingency on the happening of which the
obligation of the contract depends; obligation
of the contract does not attach until conditions
is performed
Effect of non-fulfillment of condition
1. If the obligation 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, waiving the
performance of the condition
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.
ARTICLE 1546. Any affirmation of fact or any
promise by the seller relating to thething 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.
See page 132-133 for examples
“Warranty” : any representation made by the
seller of the thing with respect to its character,
quality, or ownership, by which he induces the
buyer to purchase the same on relying said
representation
Kinds of warranty
Seller is liable for his express warranties and
for the implied warranties of title, absence of
hidden defects, fitness or merchantability,
description and sample
Effect of express warranty
“Express warranty” : any affirmation of fact
or any promise by the seller relating to the thing,
the natural tendency of which is to induce the
buyer to purchase the thing, and the buyer thus
induced to purchase the same
NOTE:
 Warranty is part of a contract of sale
 Immaterial whether the seller did not
know that it was false or true
 No intent is necessary to make the
seller liable for his warranty
Effect of expression of opinion
 Does not import warranty unless the seller
is an expert and the opinion was relied
upon by the buyer
ARTICLE 1547. In a contract of 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.
“Implied warranty”: the law derives by
implication or interference from the nature of the
transaction or the relative situation or
circumstances of the parties, irrespective of any
intention of the seller to create it.
Implied warranties in sale
a. As to seller’s title: seller guarantees that
he has a right to sell the thing sold and to
transfer ownership to the buyer who shall
not be disturbed on his legal and peaceful
possession thereof
b. Against hidden defects or unknown
encumbrances: seller guarantees that the
thing sold is free from any hidden faults or
defects or any charge or encumbrances not
declared or known to the buyer
c. Fitness or merchantability: seller
guarantees that the thing sold is
reasonably fit for the known particular
purpose for which it was acquired by the
buyer or where it was bought by
description, that it is, merchantable quality
When implied warranty not applicable
a. “As is and where is” sale (adopted from
dispositions of army surplus property) :
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means nothing more than that the vendor
makes no warranty as to the quality or
workable condition of the goods and that
the vendee takes them in the conditions in
which they are found and from the place
where they are located; does not extend to
liens and encumbrances unknown to the
vendee and could not be disclosed by a
physical examination of the goods sold.
b. Sale of secondhand articles
c. Sale by virtue of authority in fact or law:
does not apply to sheriff, auctioneer,
mortgagee, pledgee, or other person
professing to sell
SUBSECTION 1 Warranty in Case of Eviction
ARTICLE 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. (1475a)
See page 137 for examples
“Eviction”: the judicial process whereby vendee
is deprived of the whole or part of the thing
purchased by virtue of a final judgment based on
a right prior to sale or an act imputable to the
vendor.
Essential elements of eviction:
a. Vendee is deprived in whole or in part of
the thing purchased
b. He is so deprived by virtue of a final
judgment
c. Judgment is based on a right prior to the
sale or an act imputable to the vendor

d. Vendor was summoned in the suit for
eviction at the instance of the vendee
e. There is no waiver on the part of the
vendee
Note: Absence of any of these requisites, a breach
of warranty against eviction under Article 1547
cannot be declared.
Warranty against eviction refers to trespass in law
 Trespass in fact does not give rise to the
application of the doctrine of the eviction
 There is a mere act of trespass when the
trespasser claims no right whatever. The
vendor is not liable therefor. In such case,
the vendee has a direct action against
trespasser in the same way as the lessee
has such right
 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 giving reasons. If final
judgment is rendered depriving the vendee
of the thing sold or any part thereof, the
doctrine of eviction becomes applicable.
ARTICLE 1549. The vendee need not appeal from
the decision in order that the vendor may become
liable for eviction.
 With a judgment becoming final
whatever be the cause of finality, the
requirement of the law is deemed
satisfied.
ARTICLE 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.
See page 139 for examples
By prescription, one acquires ownership and
other real rights through the lapse of time in the
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manner and under the conditions prescribed by
law. In the same way, rights and actions are lost
by prescription.
1. Completed before sale –
 The vendee may lose the thing
purchased to a third person who has
acquired title thereto by prescription
 When prescription has commenced
to run against the vendor and was
already completed before the sale,
the vendee can enforce the warranty
against eviction
 In this case, the deprivation is based
on a right prior to the sale and an act
imputable to the vendor
2. Completed after sale
 Even if prescription has started
before the sale but has reached the
limit prescribed by law after the
sale, the vendor is not liable for
eviction
 Reason: Vendee could easily
interrupt the running of the
prescriptive period by bringing
necessary action
 Note: If the property sold, is land
registered under Torrens system
(ownership of land is not subject to
prescription) then Art 1550 will
have no application.
ARTICLE 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.
Note: It is required that at the time of sale, the
nonpayment of taxes was not known to the vendee.
ARTICLE 1552. The judgment debtor is also
responsible for eviction in judicial sales, unless it
is otherwise decreed in the judgment. (n)

Note:
 Judgment debtor is responsible for
eviction and hidden defects, even in
judicial sales, unless otherwise decreed in
judgment
 Based on the general principle that a
person may not enrich himself at the
expense of another
 If the purchaser of real property sold on
execution be evicted therefrom because
the judgment debtor had no right to the
property sold, the purchaser is entitled to
recover the price paid with interest.
 If the sale was effected by the judgment
creditor, the latter should not be permitted
to retain proceeds of the sale, at the
expense of the purchaser.
ARTICLE 1553. Any stipulation exempting the
vendor from the obligation to answer for eviction
shall be void, if he acted in bad faith. (1476)
1. Effect of vendor’s bad faith – consists of
knowing beforehand at the tome of sale of
the presence of the fact giving rise to
eviction; if the vendor after selling his
property sold it again to another purchaser,
he cannot, even by stipulation be exempt
from warranty against eviction.
2. Effect of vendee’s bad faith – proceeded
with the sale with the assumption of the risk
of eviction and therefore, is not entitled to
warranty against eviction nor to right to
recover damages.
ARTICLE 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.
Two kinds of waiver:
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1. Consciente – waiver is voluntarily made
by the vendee without the knowledge and
assumption of the risks of eviction
2. Intencionada – waiver is made by the
vendee with knowledge of the risk of
eviction and assumption of its
consequences.
ARTICLE 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;
(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.
Note:
 The above article specify in detail the
rights and liabilities of the vendor and the
vendee in the event of eviction takes place
“when the warranty has been agreed upon
or nothing has been stipulated, that is, in
the absence of waiver of eviction by the
vendee.
ARTICLE 1556. Should the vendee lose, by
reason of the eviction, a part of the 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 that 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.
See page 145 for example
Note:
 This article contemplates of partial
eviction while Article 1554 treats of total
eviction.
 It states that if there is partial eviction, the
vendee has the option either to enforce the
vendor’s liability for eviction (Art 1555)
or to demand recession of the contract
 In case the vendee is totally evicted from
the thing sold, he cannot avail the remedy
of recession because this remedy
contemplates that the one demanding it is
able to return whatever he has received
under the contract.
 The above rule is applicable:
1. When the vendee is deprived of a part
of the thing sold if such part is of such
importance to the whole that he would
not have bought the thing without said
part
2. When two or more things are jointly
sold whether for a lump sum or for a
separate price for each, and the
vendee would not have purchased one
without the other.
ARTICLE 1557. The warranty cannot be enforced
until a final judgment has been rendered, whereby
the vendee loses the thing acquired or a part
thereof.
Essential elements for the enforcement of
warranty in case of eviction:
1. Deprivation in whole or in part of the thing
sold
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2. Existence of final judgment
ARTICLE 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.
 Another essential requisite before a
vendor may be legally liable for eviction
is that he should be summoned in the suit
for eviction at the instance of the vendee.
 To give him an opportunity to show that
the action interposed against the vendee is
unjust and to defend his title that he has
transferred
 Absence of such summons, the vendor is
not bound his warranty.
ARTICLE 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.
 Notification required by this article refers
to case where the vendee is the defendant
in a suit instituted to deprive him of the
thing purchased.
ARTICLE 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. (1483a)
Note:
 The vendee may still rescind the contract
and ask for indemnity, if the thing sold
should be encumbered with any non-
apparent burden or servitude not
mentioned in the agreement of such nature
that the vendee would not have acquired it
had he been aware thereof.
 Servitude/Easement: an encumbrance
imposed upon an immovable for the
benefit of another immovable belonging
to a different owner.
 Lack of knowledge on the part of the
vendor is not a defense. Contract can still
be invalidated on the ground of mistake.
 Art 1560 cannot be exercised in the ff:
1. If the burden or servitude is apparent,
that is, “made known and is
continually kept in view by external
signs that reveal the use and
enjoyment of the same
2. If the non-apparent burden or
servitude is registered
3. If the vendee had knowledge of the
encumbrance whether it is registered
or not.
 Registration of the non-apparent burden or
servitude in the Registry of Property
operates as a constructive notice to the
vendee. Hence, vendor is relieved from
liability unless there is an express warranty
that the immovable is free from any such
burden or encumbrance.
 If burden is known to vendee, there is no
warranty.
 When action must be brought
a) Action for rescission or damages
must be brought 1 year from the
execution of the deed of sale.
b) If period has already elapsed, the
vendee may only bring an action for
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damages within 1 year from the
date if the discovery of the non-
apparent burden or servitude.
SUBSECTION 2
Warranty Against Hidden Defects of or
Encumbrances Upon the Thing Sold
ARTICLE 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.
See page 150 for example
Requisites for warranty against hidden defects:
a) Defect must be important or serious
b) Must be hidden
c) Must exist at the time of the sale
d) Vendee must give notice of the defect to
the vendor within reasonable time
e) Actions for rescission of the price must be
brought within the proper period- 6
months from the delivery sold of the thing
sold or within 40 days from the date of the
delivery in case of animals
f) Must be no waiver of warranty on the part
of the vendee
Note:
 Defect is important if: it renders the thing
sold unfit for the use for which it is
intended or if it diminishes its fitness for
such use to such an extent that the vendee
would not have acquired it had he been
aware thereof or would have given a lower
price for it

 Defect is hidden or latent if it was not
known and could not have been known to
the vendee.
 Vendor’s liability for warranty cannot be
enforced although defect is hidden if
vendee is an expert, who by reason of his
trade or profession should have known it.
ARTICLE 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 or 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 brought 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. (n)
Note:
 Quality of goods includes their state or
condition
 Purpose of holding the seller on his
implied warranties is to promote high
standard in business and to discourage
unfair dealings.
 Implied warranty of fitness: a.) buyer
expressly or by implication, manifests to
the seller the particular purpose for which
the goods are acquired and b.) buyer relies
upon the seller’s skill or judgment whether
he be the grower or manufacturer of not –
there is an implied warranty that the goods
are reasonably fit for such purpose
 Implied warrant of merchantability:
Where goods are bought by description,
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the seller impliedly warrants that the
goods are merchantable quality.
 Warranty of merchantability: a warranty
that goods are reasonably fit for the
general purpose for which they are sold
 Warranty of fitness: warranty that the
goods are suitable for the special purpose
of the buyer which will not be satisfied by
mere fitness for general purposes.
ARTICLE 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.
See page 152 for example
Note:
 Under Art 1562(1) the buyer makes
known to the seller the particular
purpose for which the goods are desired.
Article 1563 limits the application of
Article 1562
 There is an implied warranty of fitness
for a particular purpose where the buyer
relied upon the seller’s judgment rather
than the patent or trade name.
ARTICLE 1564. An implied warranty or condition
as to the quality or fitness for a particular purpose
may be annexed by the usage of trade.
 A warranty as to the quality or fitness for
a particular purpose may be attached to a
contract containing no express provision
in regard to warranty, though in the
absence of usage, no warranty would be
implied. The usage is relied on for the
purpose of showing the intention of the
parties.
 If there is no usage, the parties would
naturally express their intention.
ARTICLE 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.
Merchantability of goods sold by sample:
 GR: All the buyer is entitled to, in case of
a sale or contract to sell by sample, is that
the goods be like the sample. So he has no
right to have the goods merchantable if the
sample which he has inspected is not.
 Where the defect in the goods is such a
character that inspection will not reveal it,
so in the case of a sale by sample, if the
sample is subject to a latent defect, and the
buyer reasonably relies in the seller’s skill
or judgment, the buyer is entitled not
simply to goods like the sample, but to
goods like those which the sample seems
to represent, that is, merchantable goods
of that kind and character.
ARTICLE 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.
Note:
 Ignorance of the vendor does not relieve
him from liability to the vendee for any
hidden faults or defects in the thing sold.
In other words, good faith cannot be
availed of as a defense by the vendor
 However, parties may provide otherwise
in their contract provided the vendor acted
in good faith, that is, he was unaware if the
existence of the hidden fault or defect.
ARTICLE 1567. In the cases of articles 1561,
1562, 1564, 1565 and 1566, the vendee may elect
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between withdrawing from the contract and
demanding a proportionate reduction of the price,
with damages in either case.
 Vendee has the option either:
o To withdraw from the contract
(known as accion redhibitoria); or
o Demand proportionate reduction
of the price, with a right to
damages in either case (known as
accion quanti minoris)
 Same right is given to the vendee in the
sale of animals with redhibitory defects.
ARTICLE 1568. If the thing sold should be lost in
consequence of the hidden faults, and the vendor
was aware of them, he shall bear the loss, and
shall be obliged to return the price and refund the
expenses of the contract, with damages. If he was
not aware of them, he shall only return the price
and interest thereon, and reimburse the expenses
of the contract which the vendee might have paid.
a) Vendor is aware of the hidden defects –
vendee has the right to recover: price paid,
expenses of the contract, and damages.
b) Vendor not aware of hidden defects – shall
be obliged only to return: price, interest
thereon, and expenses of the contract if
paid by the vendee. Not liable for damages
because he is not guilty of bad faith.
ARTICLE 1569. If the thing sold had any hidden
fault at the time of the sale, and should thereafter
be lost by a fortuitous event or through the fault
of the vendee, the latter may demand of the vendor
the price which he paid, less the value which the
thing had when it was lost.
If the vendor acted in bad faith, he shall
pay damages to the vendee.
See page 156 for examples
Note:
 Under this article, the vendor is still made
liable on his warranty

 Difference between the price paid for the
thing and the value at the time of the loss,
represents the damage suffered by its
vendee and is at the same time the
amount to which the vendor enriched
himself at the expense of the vendee. If
the vendor acted in bad faith, shall also
be liable for damages.
ARTICLE 1570. The preceding articles of this
Subsection shall be applicable to judicial sales,
except that the judgment debtor shall not be liable
for damages.
ARTICLE 1571. Actions arising from the
provisions of the preceding ten articles shall be
barred after six months, from the delivery of the
thing sold.
 Action for recession of the contract or
reduction of the purchase price prescribes
6 months form the date of delivery that
means action shall be barred unless
brought within the said period.
ARTICLE 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.
See page 158 for example
ARTICLE 1573. The provisions of the preceding
article with respect to the sale of animals shall in
like manner be applicable to the sale of other
things.
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ARTICLE 1574. There is no warranty against
hidden defects of animals sold at fairs or at public
auctions, or of live stock sold as condemned.
ARTICLE 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.
ARTICLE 1576. If the hidden defect of animals,
even in case a professional inspection has been
made, should be of such a 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. (1495)
 Redhibitory vice or defect: a defect in the
article sold against which defect the seller
is bound to warrant
 To be considered redhibitory, the defect
must not only be hidden. It must be of
such nature that expert that expert
knowledge is not sufficient to discover it.
 However, if the veterinarian failed to
discover it through his ignorance, or
failed to disclose it to the vendee through
bad faith, he shall be liable for damages.
ARTICLE 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.
ARTICLE 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.

Note:
 If the animal sold is suffering form any
disease at the time of sale, the vendor is
liable should it die of said disease within 3
days from the date of the sale (not date of
delivery).
 If death occurs after 3 days, he is not liable
 If loss is caused by a fortuitous event or by
the fault of the vendee, and the animal has
vices art 1567 should be applied.
ARTICLE 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.
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 Vendee has the same right to bring at
his option, either redhibitory action or an
action quanti minoris.
 The action must be brought within 40
days from the date of the delivery of the
animals to the vendee.
ARTICLE 1581. The form of sale of large cattle
shall be governed by special laws.
 Special law governing sale of large cattle
is Act No. 4117, now found in Sections 51
to 536 of the Revised Administrative
Code, as amended, providing for the
registration, branding, conveyance and
slaughter of large cattle
 Sale must appear in a public document.

Note:
 If the vendee avails himself of the
remedies granted by article 1567, the
vendee must return the animal in condition
in which it was sold and delivered
 In case of injury due to his negligence, the
vendee shall be responsible but this would
be no obstacle to the rescission of the
contract due to redhibitory defect or fault
of the animal.
 Under art 1556, the buyer may not ask for
rescission where he has created new
encumbrances upon the thing sold.

ARTICLE 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.

Note: