OBLIGATIONS OF THE VENDEE

1. To accept delivery of the thing sold (Article 1582)

a. When buyer deemed to have accepted the goods

1. When he intimates to the seller that he is accepting them. (Expressed)

2. When he does any act in relation to the goods which is inconsistent with the ownership of the
seller. Thus, the buyer is deemed to have accepted the goods if he begins to consume them or
give them to others, or if he has performed additional work on them. (Implied)

3. When he retains the goods after the lapse of a reasonable time without intimating to the seller
that he has rejected them. (Implied)

b. Delivery of goods in installments

As a general rule, the buyer is not bound to accept delivery of the goods in installments, unless
it is otherwise agreed by the contracting parties (Article 1583). This is consistent with the rule
that payment or performance must be complete.

If there is a stipulation and the seller makes defective deliveries in respect to one or more
installments, or the buyer neglects or refuses without just cause to take delivery of or pay one or
more installments, the injured party may, depending upon the circumstances of the case:

1. Refuse to proceed further with the contract and sue for damages for breach of the entire
contract.

2. Claim compensation but not damages, if the breach is severable. (Article 1583)

c. Right of buyer to examine goods before accepting them

General Rule: The buyer has the right to examine the goods before accepting them.

Exception: Such right is not available in the following cases:

a. When there is an agreement to that effect.

b. When there is a stipulation that the goods shall not be delivered to the buyer until he has paid
the price such as when the goods are marked with the words “Collect on Delivery” commonly
known as COD – unless there is an agreement or the usage of trade permitting such
examination.
d. Effect of acceptance of goods on seller’s liability for breach of warranty

General Rule: The seller is not discharged from liability in damages or other remedy for breach
of warranty by the acceptance of the goods.

Exception: The seller is discharged from liability if:

a. If there is an agreement whether such agreement is expressed or implied.

2. If the buyer fails to give notice to the seller of any breach of warranty within a reasonable time
after the buyer knows or ought to know of such breach

e. Effect when buyer refuses to accept delivery

1. If refusal to accept delivery is justified (such as when the quantity is not complete or the
goods being delivered are different from those stipulated)

a. The buyer has no duty to return the goods to the seller unless otherwise agreed. (Article
1587)

b. Title of the goods does not pass on to him. (Article 1588)

c. He shall not be obliged to pay the price.

d. If he constitutes himself as depositary of the goods, he shall be liable as such (Article 1587)

If refusal of the buyer is just, what is his or her obligation?

Answer: It is sufficient that the buyer notifies the seller that he refuses to accept the goods
(Article 1587) so that the seller can take action on them.

2. If refusal to accept delivery not justified

a. Title to the goods passes to the buyer from the moment the goods are placed at his disposal
(Article 1588) except in the following:

1. When there is a stipulation to the contrary. (Article 1588)

2. When the seller has reserved the ownership of the goods as a security for the payment of the
price.

b. He shall be obliged to pay the price.

2. To pay the price of the thing. (Article 1582)

a. Time and place of payment of the price

1. At the time and place stipulated.

2. Time and place of delivery of the thing, in the absence of any stipulation. (Article 1582)

b. When interest will be paid on the price

The buyer shall pay interest for the period between the delivery of the thing and payment of the
price, in the following cases:

1. If there is stipulation.

If interest was stipulated but the rate was not indicated, the rate that would apply would be the
legal interest rate which is at 6%.

2. If the thing sold produces fruits or income.

3. If he is in default, from the time of judicial or extrajudicial demand for the payment of the
price. (Article 1589)

c. Suspension of payment of the price by the vendee

1. Grounds

a. Disturbances in the vendees possession or ownership of the thing purchased.

Thus, the vendee may suspend payment if a complaint for eviction was brought against him.

b. Reasonable grounds to fear such disturbance, by a vindicatory action or foreclosure of

mortgage. (Article 1590)

Thus, the vendee may suspend payment if he receives a demand letter which threatens the
filing of a complaint for the recovery of the thing sold or for foreclosure of the monrtgage
constituted on the thing.

2. Duration of suspension of payment

Until the vendor has caused the disturbance or danger to cease.

3. When right to suspend payment is not available.

a. If the vendor gives security for the return of the price.

b. If it has been stipulated that the vendee shall pay the price notwithstanding the existence of
the aforementioned disturbance or danger.

c. If the disturbance is a mere act of trespass. (Article 1590)

Thus, the mere entry and presence of squatters will not justify suspension of the payment of the
price by the buyer.

d. Rescission by vendor

1. Immovables (Real Property)

a. When vendor is entitled to sue for immediate rescission

The vendor may immediately sue for rescission of the sale if there are reasonable grounds to
fear:

1. The loss of the immovable property sold.

2. Its price (Article 1591)

Example: S sold his lot to B for P50,000.00. While the lot had been delivered to B, B was to pay
the price after 2 months. If the lot is in danger of being eroded because B was cutting all the
trees planted thereon and B was squandering his money on gambling, S may sue for the
immediate rescission of the sale.

If one or both grounds do not exist, the vendor may choose between:

a. fulfillment of the contract with damages

b. rescission of the contract with damages

b. Pactum commisorium

This is an agreement between the vendor and the vendee in the sale of an immovable that
rescission of the contract shall of right take place if the vendee fails to pay the price at the time
agreed upon. (Article 1592)

The agreement is not valid. Accordingly, the vendee may pay even after the expiration of the
period as long as no demand for rescission has been made upon him either judicially or by
notarial act. After the demand, the court may not grant him a new term. (Article 1592)

2. Movables (Personal Property)

a. Grounds for immediate rescission

Rescission of the sale of a movable shall of right take place in the interest of the vendor (at his
option). If at the time fixed for the delivery of the thing, the vendee:

1. Does not appear to receive the thing

2. Having appeared, does not pay the price, unless a longer period is stipulated for its payment.
(Article 1593)