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CONDITION
WHAT IS THE DIFFERENCE
LEGAL FRAMEWORK BETWEEN WARRANTY AND ■ Refers to an uncertain event or contingency upon
the happening of which the obligation or right of the
Warranties
Obligations of the Vendee
Actions for Breach of Contract of Sale
CONDITION? contract depends. In such case, the obligation of the
contract does not attach until the condition is
Causes of Extinguishment of Sale performed.
Assignment of Credits

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EFFECTS OF NON-FULFILLMENT OF WARRANTY 2 KINDS OF WARRANTIES:

CONDITION ■ Refers to a statement or representation made by the
seller of goods, contemporaneously and as part of the 1. Express
1. The other party may:
a. Refuse to proceed with the contract; or contract of sale, having reference to the character, 2. Implied
b. Proceed with the contract, waiving performance of the quality or title of the goods, and by which he promises or
condition. undertakes to ensure that certain facts are or shall be
2. If the other party has promised that the condition as he then represents.
should happen or to be performed, such first-mentioned Ex:
party may also treat the nonperformance of the condition
as a breach of warranty. ■ A bought a laptop from B, with a stipulation that the laptop
will be repaired for free if it will break within the first year.

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EXPRESS WARRANTIES: IMPLIED WARRANTIES: In a contract of sale, there is:

- Prom ise by the seller relating to the thing in w hich the natural tendency of 1. An implied warranty on the part of the seller that he
such prom ise is to induce the buyer to purchase the sam e, and the buyer
purchases the thing relying thereon
has the right to sell the thing at the time when the
ownership is to pass.
- The seller explicitly guarantees the quality of the goods or service being sold
- They are the warranties deemed included 2. An implied warranty that the thing shall be free from
Ex: in all contracts of sale by operation of law any hidden faults or defects, or any charge or
100% cotton
encumbrance not declared or known to the buyer
(warranty against hidden defect).
M ade in the USA
18k gold
3. The goods must be reasonably fit for the purpose in
which it was acquired; and
Organic orange juice
Honey from N ew Zealand 4. The goods must be merchantable in quality.

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OBLIGATIONS OF THE VENDEE

1. To accept the delivery of the thing sold;
OBLIGATIONS OF THE 2. To pay the price of the thing sold at the
time and place stipulated in the contract; ACTIONS FOR BREACH
and
VENDEE 3. To bear the expenses for the execution and OF CONTRACT OF SALE
registration of the sale and putting the
goods in a deliverable state, if such is the
stipulation.

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ACTIONS FOR BREACH OF CONTRACT OF ACTIONS FOR BREACH OF CONTRACT OF ACTIONS FOR BREACH OF CONTRACT OF
SALE SALE: ACTIONS BY THE SELLER SALE: ACTIONS BY THE BUYER
It can be categorized between: 1. Maintain an action for the price of the goods if the
1. Actions by the Seller buyer wrongfully neglects or refuses to pay. 1. Bring an action for specific
2. Maintains an action for damages if the buyer performance if the seller has
2. Actions by the Buyer wrongfully neglects or refuses to accept any and
pay for the goods. broken the contract to deliver
3. Rescind the contract if the buyer has repudiated
the sale, or manifested his inability to perform his
specific goods.
obligation, or has committed a breach of contract,
where the goods have not been delivered to the
buyer.
(Note: Repudiate – refused to accept)

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ACTIONS FOR BREACH OF CONTRACT OF SALES ARE EXTINGUISHED:

SALE: ACTIONS BY THE BUYER 1. By the same causes as all other obligations:
a. Payment or performance of the obligation

EXTINGUISHMENT OF
2. In case of breach of warranty by the seller, the buyer m ay, at his election: b. Loss of the thing due

a. Accept or keep the goods and set up against the seller, the breach of c. Condonation or remission of debt’
warrant by way of recoupm ent or dim inution or extinction of the price; d. Confusion or merger of rights
b. Accept or keep the goods and m aintain an action against the seller for
dam ages for breach of warranty;
SALE e.
f.
Compensation
Prescription
c. Refuse to accept the goods and m aintain an action against the seller for g. Annulment
dam ages for breach of warranty; and
h. Rescission
d. Rescind the sale and refuse to receive the goods; or if the goods have i. Fulfillment of resolutory condition
already been received, return them or offer to return them to the seller j. Novation
and recover the price or any party thereof w hich has been paid.
2. By redemption, whether conventional or legal redemption

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WHAT IS THE DIFFERENCE
BETWEEN LEGAL AND
CONVENTIONAL
REDEMPTION?
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PERIOD OF REDEMPTION
1. When the right of redemption has been agreed upon and no period is
fixed within which the right shall be exercised, the prescriptive period
shall be 4 years from the date of the contract.
2. When a period is fixed by the parties, or when the period agreed upon is
indefinite, such as when the repurchase may be made ”at any time”, the
right of redemption must be exercised within 10 years from the date of
the contract. This is the maximum prescriptive period, and any
stipulation as to the excess shall be null and void.
3. In case a final judgment in a civil action has been rendered by the court
declaring the contract to be pacto de retro sale of immovable property,
the vendor a retro may still exercise the right within 30 days from the
rendition of final judgment.
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EXAMPLES OF LEGAL REDEMPTION
■ 1. Sale of a co--owner of his share to a third person (Art.
1620)
■ 2. When a credit or other incorporeal right in litigation is
sold (Art. 1634)
■ 3. Sale of an heir of his hereditary rights to a third party (Art.
1088)
■ 4. Sale of adjacent rural lands not exceeding 1 hectare (Art.
1621)
■ 5. Sale of adjacent small urban lands bought merely for
speculation (Art. 1622)
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CONVENTIONAL REDEMPTION CONVENTIONAL REDEMPTION
- It occurs when the vendor reserves the right to repurchase NOTE:
the thing sold, with the obligation to return to the vendee:
a. Price of the sale
There can be no conventional redemption unless it has been
stipulated upon in the contract of sale.
b. Expenses of the contract
c. Necessary and useful expenses made on the thing sold,
and
The right to redeem must be reserved by the seller through a
stipulation to that effect in the contract.
d. Any other legitimate payments made because of the sale.
* This is applicable in the contract of pacto de retro sale or sale with a
right to repurchase. In this kind of sale, the vendee is subrogated to the
rights and actions of the vendor.
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LEGAL REDEMPTION PURPOSE OF LEGAL REDEMPTION
The right to be subrogated, upon the same terms and 1. To enable the debtor to pay less than the value of the
credit;
conditions stipulated in the contract, in the place of
one who acquires a thing by purchase or dation in 2. To prevent speculation on the part of the assignee; and
payment, or by any other transaction whereby 3. To put an end to the ligitation.
ownership is transmitted by onerous title
* Subrogation – the substitution of one person or group by
another in respect of a debt or insurance claim, accompanied
by the transfer of any associated rights and duties.
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