SALES

Module 6. Obligations of the Vendor

CANTA-ARAGON, Anna Katharina C. | JD 2A

MODULE 6 - Week 7
CHAPTER 4. OBLIGATIONS OF THE VENDOR
INSTRUCTOR: Atty. Jinky Fianza

CONTENT
1. SECTION 3. - Conditions and Warranties
a. Conditions (Art. 1545)
b. Warranties (Arts. 1546-1547)
i. Warranty in Case of Eviction (Arts. 1548-1560)
1. Bignay vs. Union Bank of the Philippines GR 171590, February 12,
2014
ii. Warranty against Hidden Defects (Arts. 1561-1567)
iii. Warranties under RA 7394

SECTION 3. - Conditions and Warranties

Conditions
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
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)

❖ Condition - an uncertain event or contingency on the happening of which the obligation

of the contract depends. In such a case, the obligation of the contract does not attach
until the condition is performed.
➢ If the obligation of either party is subject to any condition and such condition is
not fulfilled, such party may either:
i. Refuse to proceed with the contract
ii. Proceed with the contract, waiving the performance of the condition
➢ If 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

Warranties

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Module 6. Obligations of the Vendor
CANTA-ARAGON, Anna Katharina C. | JD 2A

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 purchase 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. (n)

Warranty - any representation made by the seller of thing ith respect to its character, quality,
or ownership, by which he induces the buyer to purchase the same relying on said
representation.

❖ 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 does purchase the same
❖ A warranty is part of the contract of sale.
❖ Whether seller did not know that it was false or true is immaterial.
❖ No intent is necessary to make the seller liable for his warranty.

Art. 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. (n)

❖ Implied warranty - that which the law derives by implication or inference 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.
➢ NOT expressed in words
➢ Implied warranty as to seller’s title
➢ Implied warranty against hidden defects or unknown encumbrances
➢ Implied warranty as to fitness or merchantability
❖ When not applicable:
➢ “As is and where is” sale
➢ Sale of second-hand articles
➢ Sale by virtue of authority in fact or law
❖ CAVEAT EMPTOR (buyer beware) - applies to execution sales since the sheriff does not
warrant the title to real property sold by him as sheriff and it is not incumbent upon him
to place the purchaser in possession of such property

SUBSECTION 1. - Warranty in Case of Eviction

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Module 6. Obligations of the Vendor
CANTA-ARAGON, Anna Katharina C. | JD 2A

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. (1475a)

Eviction - the judicial process whereby the vendee is deprived of the whole or part of the
thing purchased by virtue of a final judgment based on a right prior to the sale or an act
imputable to the vendor.

❖ Essential elements of eviction:

➢ Vendee is deprived in whole or in part of the thing purchased
➢ Vendee is so deprived by virtue of a final judgment;
➢ The judgment is based on a right prior to the sale or an act imputable to the
vendor;
➢ The vendor was summoned in the suit for eviction at the instance of the vendee;
➢ There is no waiver on the part of the vendee
❖ In the absence of any of these requisites, a breach of warranty against eviction under Art.
1547 cannot be declared.

Warranty against eviction refers to trespass in law, not trespass in fact. 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.

Vendor’s liability is waivable. Warranty is not an essential element of a contract of sale.

❖ Note: Any stipulation exempting the vendor from the obligation to answer for eviction
shall be void if he acted in bad faith. (Art. 1553)

Art. 1549. The vendee need not appeal from the decision in order that the vendor may
become liable for eviction. (n)

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. (n)

Effect of prescription

1. Completed before sale. Vendee may lose the thing purchased to a third person who has
acquired title thereto by prescription.
a. Example: S sold to B a parcel of land which is claimed by C who has been in
possession of the property in the concept of owner publicly and continuously for
30 years. Under the law, C is deemed to have acquired ownership over the land
by prescription without need of title or of good faith. S shall be liable to B in case
of eviction.

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Module 6. Obligations of the Vendor
CANTA-ARAGON, Anna Katharina C. | JD 2A

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. Vendee could
easily interrupt the running of the prescriptive period by bringing the necessary action.
a. HOWEVER, if the property sold is land registered under the Torrens system, Art.
1550 will have no application. Under the Torrens system, ownership of land is not
subject to prescription.
b. Example: If in the same example, C was in adverse possession of the land for only
25 years at the time of sale, and the prescription period is completed after the
sale, S shall not be liable to B in case of eviction as B could have brought action
against C during the remaining five-year period to recover the property.

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. (n)

Art. 1552. The judgment debtor is also responsible for eviction in judicial sales, unless it is
otherwise decreed in the judgment. (n)

❖ Based on the general principle that a person may not enrich himself at the expense of
another. Thus, 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, from the judgment debtor.
❖ When sale is effected by judgment creditor. JC should not be permitted to retain the
proceeds of the sale, at the expense of the purchaser. (Bonzon v. Standard, Bill Co. &
Osorio)

Art. 1553. Any stipulation exempting the vendor from the obligation to answer for eviction
shall be void, if he acted in bad faith. (1476)

Stipulation waiving warranty

1. Effect of vendor’s bad faith. Vendor is not exempt from warranty against eviction.
2. Effect of vendee’s bad faith. It is a requisite that the vendee is not himself guilty of bad
faith in the execution of the sale. If he knew the defect of title at the time of sale, he
cannot claim that the vendor was warranted his legal and peaceful possession of the
property sold. Not entitled to warranty against eviction nor to right to recover damages.

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. (1477)

Kinds of waiver of eviction

1. Consciente. Waiver that is voluntarily made by the vendee without the knowledge and
assumption of the risks of eviction
a. Effect: Vendor shall only pay the value which the thing sold had at the time of
eviction.
2. Intencionada. Waiver made by the vendee with knowledge of the risk of eviction and
assumption of its consequences
a. Effect: Vendor is exempted from the obligation to answer for eviction provided
he did not act in bad faith.

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Module 6. Obligations of the Vendor
CANTA-ARAGON, Anna Katharina C. | JD 2A

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;

(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.
(1478)

Bignay Ex-Im Philippines, Inc. vs. Union Bank of the Philippines

GR No. 171590
February 12, 2014

Facts:

Alfonso de Leon mortgaged in favor of Union Bank of the Philippines real property situated
in Quezon City, which was registered in his and his wife Rosario’s name. 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.

Rosario filed against Alfonso and Union Bank for annulment of the mortgage, claiming that
Alfonso mortgaged the property without her consent, and for reconveyance.

In a Letter-Proposal, Bignay Ex-Im Philippines, Inc. , through its President, Milagros Ong 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 RTC 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.

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Module 6. Obligations of the Vendor
CANTA-ARAGON, Anna Katharina C. | JD 2A

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. Bignay,
then, mortgaged the property to Union Bank, presumably to secure a loan obtained from the
latter.

A Decision was rendered 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.

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.

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. 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 Siy’s 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 deed of sale limiting Union
Banks liability in case of eviction cannot apply, because under Article 1553 of the Civil Code,
"[a]ny 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.

Issue: Whether or not petitioner is entitled to the warranties against eviction under Art. 1555.

Held: YES.

The Court held that 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 against the claims of third persons resulting in the buyer’s eviction

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Module 6. Obligations of the Vendor
CANTA-ARAGON, Anna Katharina C. | JD 2A

from the property, amounts to bad faith, and the buyer is entitled to the remedies afforded
under Article 1555 of the Civil Code.

The record reveals that Union Bank was grossly negligent in the handling and prosecution of
Civil Case. As a consequence, Bignay was evicted from the property. Such negligence in the
handling of the case is far from coincidental; it is decidedly glaring, and amounts to bad faith.
“Negligence may be occasionally so gross as to amount to malice [or bad faith].” Indeed, in
culpa contractual or breach of contract, gross negligence of a party amounting to bad faith is
a ground for the recovery of damages by the injured party.

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.

Art. 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. (1479a)

Illustration:

S sells to B a parcel of land, represented by S as containing 500 sqm, at the rate of

P1,000/sqm. B needs a lot of at least 500sqm on which to build a factory. B is evicted from a
20sqm portion of the land. B would not have bought the land had he known of its smaller
area.

Under the facts, B can either sue for damages for breach of warranty or demand rescission of
the contract. He can also exercise his alternative rights if there were two parcels of land sold
and he should lose one of them by reason of eviction.

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. (1480)

Two essential elements for the enforcement of warranty in case of eviction

1. Deprivation in whole or in part of the thing sold

2. Existence of a final judgment

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. (1481a)

Formal summons to vendor essential before a vendor may be legally liable for eviction.

❖ To give an opportunity to show that the action interposed against the vendee is unjust

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❖ To defend his title that he has transferred

❖ IN THE ABSENCE OF SUCH SUMMONS, vendor is not bound to his warranty.

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. (1482a)

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. (1483a)

Servitude (or easement). An encumbrance imposed upon an immovable for the benefit of
another immovable belonging to a different owner.

❖ Example:
➢ Apparent servitude: a right of way establishing a permanent passage which is
continually kept in view by external sign.
➢ Non-apparent servitude: a party wall which has no exterior sign.
❖ When rights of vendee cannot be exercised:
➢ If 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”
➢ If the non-apparent burden or servitude is registered;
➢ If the vendee had knowledge of the encumbrance whether it is registered or not

SUBSECTION 2. Warranty Against Hidden Defects

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

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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. (1484a)

Requisites for warranty against hidden defects

1. The defect must be important or serious - if it (1) renders the thing sold unfit for the use
for which it is intended, or (2) 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
2. It must be hidden
3. It must exist at the time of the sale
4. The vendee must give notice of the defect to the vendor within a reasonable time
5. The actions for rescission or reduction of the price must be brought within the proper
period:
a. 6 months from the delivery of the thing sold, or
b. Within 40 days from the date of the delivery in case of animals
6. There must be no waiver of warranty on the part of the vende

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 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)

Quality of goods. Includes their state or condition.

1. Implied warranty of fitness

a. Where the buyer, expressly or by implication, manifests to the seller the particular
purpose for which the goods are acquired, and
b. Where the buyer relies upon the seller’s skill or judgment whether he be the
grower or manufacturer or not
2. Implied warranty of merchantability - warranty that goods are reasonably fit for the
general purpose for which they are sold

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. (n)

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. (n)

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

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them unmerchantable which would not be apparent on reasonable examination of the

sample. (n)

Merchantability of goods sold by sample

1. Where sample not merchantable - all the buyer is entitled to, in case of sale or contract
to sell by sample, is that the goods be like the sample.
2. Where sample subject to latent defect - where the defect in the goods is of such a
character that inspection will not reveal it. If the sample is subject to a latent defect, and
the buyer reasonably relies on the seller’s skill or judgment, the buyer is entitled not
simply to goods like the sample, but no goods like those which the sample seems to
represent, that is, merchantable goods of that kind and character.

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. (1485)

❖ Good faith cannot be availed of as a defense by the vendor.

Caveat Venditor. “The vendor is liable to the vendee for any hidden faults or defects in the
thing sold, even though he was not aware thereof. This doctrine is based on the principle that
a sound price warrants a sound article.

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. (1486a)

Alternative remedy of the buyer to enforce warranty

1. Accion redhibitoria. To withdraw from the contract

2. Accion quanti minoris. To demand a proportionate reduction of the price, with a right to
damages in either case.

Warranties under the Consumer Act of the Philippines (Republic Act No. 7394)

Chapter III. Consumer Product and Service Warranties

Art. 67. Applicable Law on Warranties. — The provisions of the Civil Code on conditions and
warranties shall govern all contracts of sale with conditions and warranties.

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CANTA-ARAGON, Anna Katharina C. | JD 2A

Art. 68. Additional Provisions on Warranties. — 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 or parts covered;
d. state what the warrantor will do in the event of a defect, malfunction of failure to
conform to the written warranty and at whose expense;
e. state what the consumer must do to avail 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.
2. Express warranty — operative from moment of sale. — All written warranties or
guarantees issued by a manufacturer, producer, or importer shall be operative from the
moment of sale.
a. Sales Report. — All sales made by distributors of products covered by this Article
shall be reported to the manufacturer, producer, or importer of the product sold
within thirty (30) days from date of purchase, unless otherwise agreed upon. The
report shall contain, among others, the date of purchase, model of the product
bought, its serial number, name and address of the buyer. The report made in
accordance with this provision shall be equivalent to a warranty registration with
the manufacturer, producer, or importer. Such registration is sufficient to hold the
manufacturer, producer, or importer liable, in appropriate cases, under its
warranty.
b. Failure to make or send report. — Failure of the distributor to make the report or
send them the form required by the manufacturer, producer, or importer shall
relieve the latter of its liability under the warranty: Provided, however, That the
distributor who failed to comply with its obligation to send the sales report shall
be personally liable under the warranty. For this purpose, the manufacturer shall
be obligated to make good the warranty at the expense of the distributor.
c. Retail. — The retailer shall be subsidiarily liable under the warranty in case of
failure of both the manufacturer and distributor to honor the warranty. In such
case, the retailer shall shoulder the expenses and costs necessary to honor the
warranty. Nothing therein shall prevent the retailer from proceeding against the
distributor or manufacturer.
d. Enforcement of warranty or guarantee. — The warranty rights can be enforced by
presentment of a claim. To this end, the purchaser needs only to present to the
immediate seller either the warranty card or the official receipt along with the
product to be serviced or returned to the immediate seller. No other documentary
requirement shall be demanded from the purchaser. If the immediate seller is the
manufacturer’s factory or showroom, the warranty shall immediately be honored.
If the product was purchased from a distributor, the distributor shall likewise
immediately honor the warranty. In the case of a retailer other than the

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distributor, the former shall take responsibility without cost to the buyer of
presenting the warranty claim to the distributor in the consumer’s behalf.
e. Record of purchases. — Distributors and retailers covered by this Article shall keep
a record of all purchases covered by a warranty or guarantee for such period of
time corresponding to the lifetime of the product’s respective warranties or
guarantees.
f. Contrary stipulations — null and void. — All covenants, stipulations or agreements
contrary to the provisions of this Article shall be without legal effect.
3. Designation of warranties. — A written warranty shall clearly and conspicuously
designate such warranty as:
a. “Full warranty” if the written warranty meets the minimum requirements set forth
in paragraph (d); or
b. “Limited warranty” if the written warranty does not meet such minimum
requirements.
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 a 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, the product continues
to have the defect or to malfunction.
The warrantor will not be required to perform the above duties 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.
5. Duration of warranty. — The seller and the consumer may stipulate the period within
which the express warranty shall be enforceable. If the implied warranty on
merchantability accompanies an express warranty, both will be of equal duration. Any
other implied warranty shall endure not less than sixty (60) days nor more than one (1)
year following the sale of new consumer products.
6. Breach of warranties. —
a. In case of breach of express warranty, the consumer may elect to have the goods
repaired or its purchase price refunded by the warrantor. In case the repair of the
product in whole or in part is elected, the warranty work must be made to
conform to the express warranty within thirty (30) days by either the warrantor or
his representative. The thirty-day period, however, may be extended by
conditions which are beyond the control of the warrantor or his representative. In
case the refund of the purchase price is elected, the amount directly attributable
to the use of the consumer prior to the discovery of the non-conformity shall be
deducted.
b. In case of breach of implied warranty, the consumer may retain in the goods and
recover damages, or reject the goods, cancel and contract and recover from the
seller so much of the purchase price as has been paid, including damages.

Art. 69. Warranties in Supply of Services. —

a) In every contract for the supply of services to a consumer made by a seller in the course of
a business, there is an implied warranty that the service will be rendered with due care and

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Module 6. Obligations of the Vendor
CANTA-ARAGON, Anna Katharina C. | JD 2A

skill and that any material supplied in connection with such services will be reasonably fit for
the purpose for which it is supplied.

b) Where a seller supplies consumer services in the course of a business and the consumer,
expressly or by implication, makes known to the seller the particular purpose for which the
services are required, there is an implied warranty that the services supplied under the
contract and any material supplied in connection therewith will be reasonably fit for that
purpose or are of such a nature or quality that they might reasonably be expected to achieve
that result, unless the circumstances show that the consumer does not rely or that it is
unreasonable for him to rely, on the seller’s skill or judgment.

Art. 72. Prohibited Acts. — The following acts are prohibited:

a) refusal without any valid legal cause by the total manufacturer or any person obligated
under the warranty or guarantee to honor a warranty or guarantee issued;
b) unreasonable delay by the local manufacturer or any person obligated under the
warranty or guarantee in honoring the warranty;
c) removal by any person of a product’s warranty card for the purpose of evading said
warranty obligation;
d) any false representation in an advertisement as to the existence of a warranty or
guarantee.

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