OBLIGATIONS

OF THE VENDEE
Articles 1582 - 1593
 ARTICLE 1582

THE VENDEE IS BOUND TO ACCEPT THE DELIVERY

AND PAY THE PRICE OF THE GOOD/THING
STIPULATED IN THE CONTRACT.

SESPENE
 ACCEPT PAY THE
Principal Obligations DELIVERY PRICE
of the Vendee
BEAR THE
EXPENSES
 PERTINENT RULES

In the contract of sale,

The vendor is not required to
The vendee is bound to
deliver the thing sold and the
accept delivery.
vendee is not required to pay the
price
WORD SCRAMBLE
 PEEBSEETSR ATPVRCEYLIE
What are obligations AHNEX ECD
of the Vendee?
ETPYCHPREIA
 BEAR THE
EXPENSES

ACCEPT
PEEBSEETSR DELIVERY
What are obligations AHNEX
of the Vendee? PAY THE PRICE

ATPVRCEYLIE
ECD

ETPYCHPREIA
ARTICLE 1583

BUYER IS NOT BOUND TO RECEIVE GOODS

IN INSTALLMENTS UNLESS STIPULATED IN
THE CONTRACT.
 Seperate price is fixed for each installment

MAY BE
DELIVERABLE BREACH AFFECTS
THE WHOLE
BREACH IS
DIVISIBLE
CONTRACT
IN INSTALLMENTS
IF:
 Seperate Price was not fixed for each
MAY BE installments
DELIVERABLE
IN INSTALLMENTS
IF:
 A AND B HAD AN AGREEMENT WHEREIN A HAS TO
DELIVER 2 GALLONS OF WATER EVERY MONTH TO B,
FOR ONE YEAR. HOWEVER, UPON THE DATE OF THE
DELIVERY, A REFUSED TO DO SO UNDER THE
CONTRACT AS THEY HAVE CHANGED THEIR MIND

BREACH AFFECTS
Can B sue A for a breach in contract? THE WHOLE
CONTRACT
 ARTICLE 1584
BUYER HAVE THE RIGHT TO
EXAMINE GOODS BEFORE
ACCEPTING THEM UNLESS
THERE IS A STIPULATION
CONTRARY.
 Acceptance
To become an owner over the specific
goods when delivered.
 Right of Inspection
Fair opportunity to inspect or examine
a good if it conforms to the contract.
 Actual Delivery
Contemplated
Ownership of the goods shall be
transferred only upon delivery of the
actual subject with reasonable
opportunity to examine them.
 Goods Delivery on
C.O.D or Not C.O.D
Buyer has the right to examine goods
before paying if they are sent via
C.O.D.
RIGHT OF EXAMINATION IS NOT
ABSOLUTE
THE RIGHT OF EXAMINATION MAY BE
GIVEN UP BY THE BUYER BY
STIPULATION
Rejection of Goods
Buyer is not bound to return them
and it is sufficient if he notifies the
seller about his refusal to accept it

Notice of rejection must be given

in a reasonable time unless
stipulated in the contract.

receipt of goods under the contract

can be considered as acceptance if
it was not rejected within
reasonable time.
IDENTIFY THE WORD
 ?
To become an owner over the specific
goods when delivered.
 ARTICLE 1585

ACCEPTANCE OF GOODS.
MANIFESTING ACCEPTANCE Implie
Accep d
tance

There are two modes that can

be manifested.
Expressed
Acceptance
Example of Example of
Express Implied
Acceptance: Acceptance:

A makes an offer in person

orally to B for buying his house
A buys some products in
for 500,000. B sends an email to the supermarket.
A giving his acceptance.
DELIVERY AND ACCEPTANCE ARE NOT THE
SAME

They are seperate acts from different parties

Delivery - Seller/Vendor
Acceptance - Buyer/Vendee
 TRUE OR FALSE
The retention of the goods is a strong evidence that the buyer
has accepted the ownership of the goods.
 ARTICLE 1586
In the absence of express or implied agreement of the parties, acceptance of the goods
by the buyer shall not discharge the seller from liability in damages or other legal
remedy for breach of any promise or warranty in the contract of sale. But, if, after
acceptance of the goods, the buyer fails to give notice to the seller of the breach in any
promise of warranty within a reasonable time after the buyer knows, or ought to know of
such breach, the seller shall not be liable therefor.
EVEN IF BUYER ACCEPTS, SELLER CAN STILL BE LIABLE

PURPOSE OF NOTICE:
To insulate the seller from belated claims of defects and
to allow him to make urgent investigation on the validity
of claims.
EXAMPLE
Company S, a seller of electronic goods, enters into a contract of sale with
Company B, the buyer. The contract includes a promise or warranty from
Company A that the electronic goods will be free from defects and will
function as advertised for a period of one year from the date of purchase.

Upon delivery, Company B accepts the electronic goods without raising any
immediate concerns. However, a few months later, some of the goods start
malfunctioning, displaying the defects that were covered under the
warranty. Despite being aware of these issues, Company B does not inform
Company A within a reasonable time after becoming aware of the breach.
EXAMPLE

The acceptance of the goods by Company B does not discharge

Company S from liability for the breaches of the promises or
warranties outlined in the contract. Company S is responsible for
any damages or legal remedies resulting from the breach.

As Company B failed to give notice to Company S within a

reasonable time after discovering the breach, Company S may not
be held liable for the damages or any legal consequences related
to the breach.
 ARTICLE 1586

EVEN IF BUYER ACCEPTS,

SELLER CAN STILL BE LIABLE
 ARTICLE 1587

EFFECT IF BUYER JUSTIFIABLY REFUSES TO

ACCEPT THE DELIVERY
 ARTICLE 1587
Where buyer’s refusal to accept justified.

(1) Duty of buyer to take care of goods without obligation to return. — If the goods have been sent to the
buyer and he rightfully refuses to accept them, as in the case where the goods are of not the kind and quality
agreed upon, he is in the position of a bailee who has had goods thrust upon him without his assent.
Doubtless, he has the obligation to take reasonable care of the goods, but nothing more can be demanded of
him. Accordingly, he is under no obligation to return the goods to the seller.

(2) Duty of seller to take delivery of goods. — After notice that the goods have not been and will not be
accepted, the seller must have the burden of taking delivery of said goods
EXAMPLE
Duty of Buyer
Company B orders a batch of specialized computer equipment from
Company S. Upon delivery, the buyer discovers that the equipment does not
meet the specifications outlined in the purchase agreement, rendering it
unusable for the intended purpose.

In this case, the buyer rightfully refuses the goods and informs the seller of
the issue. The buyer is then responsible for ensuring the reasonable care of
the equipment, such as safeguarding it from damage or theft while it
remains in their possession.
EXAMPLE

Duty of Seller
Upon informing Company S of the issue and their decision not to accept the
equipment, the responsibility falls on Company S to arrange the retrieval of
the equipment. Company S must make arrangements to collect the
equipment from Company B's facility. This duty exists to ensure that
Company S, as the seller, can assess the situation, potentially rectify any
manufacturing discrepancies, and minimize any potential losses or disputes
related to the transaction.
 ARTICLE 1587
Where buyer’s refusal to accept justified.

(3) Seller’s risk of loss of goods. — While the goods remain in the buyer’s possession under these
circumstances, they are, of course, at the seller’s risk. But the buyer is not deemed and is not liable as a
depositary, unless he voluntarily constitutes himself as such.

(4) Right of buyer to resell goods. — Should the seller, when notified to take delivery of the goods fails to do
so, the buyer may resell the goods. The provisions governing resale by the seller when the buyer is in
default, it seems, will generally apply. (see Art. 1533.)
 ARTICLE 1588

EFFECT IF BUYER UNJUSTIFI ABLY REFUSES

TO ACCEPT THE DELIVERY
 ARTICLE 1588

Generally, the buyer becomes the owner. Exception — when

there is a contrary stipulation or when the seller reserves the
ownership as a sort of security for the payment of the price. (See
Arts. 1523 and 1503, Civil Code).
EXAMPLE
Company A is a furniture manufacturer and Company B is a retailer.
Company B places an order for a set of custom-made chairs from Company
A. The contract specifies that the delivery of the chairs will be made to
Company B's warehouse.

If Company B's refusal is without just cause, the title to the chairs would
pass to Company B as soon as they are made available at the warehouse, as
stated in Article 1504. Consequently, the risk of any damage or loss
associated with the chairs would be borne by Company B. This means that if
the chairs were to get damaged or lost after being placed at Company B's
disposal, Company B would be responsible for the loss.
 ARTICLE 1589

LIABILITY OF VENDEE FOR INTEREST

WHERE PAYMENT IS MADE AFTER
 A. Interest expresly stipulated

B. Fruits or income received by the

vendee from thing sold

C. Vendee guilty of default

 QUESTION
JENNIE SOLD A 3-DOOR APARTMENT TO
ROSE WHO PAID THE PURCHASE PRICE
ONLY AFTER ONE (1) YEAR FROM THE
DATE AGREED UPON.

IS ROSE LIABLE TO PAY JENNIE’S

INTEREST WHICH WAS NOT
STIPULATED BY THEM?
 ANSWER

NO, ROSE IS NOT LIABLE. ARTICLE 1589 STATES THAT THE

VENDEE SHALL OWE INTEREST FOR THE PERIOD
BETWEEN THE DELIVERY OF THE THING AND THE
PAYMENT OF THE PRICE
 ARTICLE 1590

WHEN BUYER MAY SUSPEND

THE PAYMENT OF THE PRICE
 THE BUYER HAS THE
RIGHT TO SUSPEND THE
PAYMENT OF THE PRICE A. If he is disturbed in the possession or
IF: ownership of the thing bought.

B. If the vendor gives security for the return

of the price in a proper case
 A. If the vendor gives security for the return of
THE BUYER HAS NO the price in a proper case.
RIGHT TO SUSPEND B. If it has been stipulated that not withstanding
PAYMENTS any such contingency, the vendee must make a
payment
C. If the vendor has caused the disturbance or
danger to cease.
D. If the disturbance is a mere act of trespass
 QUESTION
JENNIE SOLD AND DELIVERED TO ROSE A
PARCEL OF LAND FOR P2,000,000 PAYABLE
WITHIN 30 DAYS FROM THE DATE OF THE
CONTRACT. SOON AFTER THE SALE, LISA
CLAIMS OWNERSHIP OVER THE LAND BY
VIRTUE OF A PRESCRIPTIVE TITLE. MAY
ROSE SUSPEND THE PAYMENT OF PRICE?
 ANSWER

YES, ROSE MAY SUSPEND THE PAYMENT OF THE PRICE

BECAUSE OF A REASONABLE FEAR THAT AN ACTION
REIVINDICATORIA WILL BE BROUGHT AGAINST JENNIE.
IT IS NOT NECESSARY THAT THE VINDICATORY ACTION
HAS ALREADY BEEN BROUGHT: REASONABLE FEAR
THEREOF IS SUFFI IENT.
ARTICLE 1591

WHEN VENDOR MAY

RESCIND SALE OF
IMMOVABLE PROPERTY
 a) LOSS of the immovable
THE SELLER MUST HAVE property sold, and
REASONABLE GROUNDS
TO FEAR:

b)LOSS of the price.

 ARTICLE 1592
IN THE SALE OF IMMOVABLE PROPERTY, EVEN THOUGH
IT MAY HAVE BEEN STIPULATED THAT UPON THE
FAILURE TO PAY THE PRICE AT THE TIME AGREED UPON
THE RESCISSION IF THE CONTRACT SHALL OF RIGHT
TAKE PLACE, THE VENDEE MAY PAY, EVEN AFTER THE
EXPIRATION OF THE PERIOD, AS LONG AS NO DEMAND
FOR RESCISSION OF THE CONTRACT HAS BEEN MADE
UPON HIM EITHER JUDICIALLY OR BY NOTARIAL ACT.
AFTER THE DEMAND, THE COURT MAY NOT GRANT HIM
A NEW TERM."
 Right to rescind is not absolute.
Article 1592 does not apply
1.) To sales on installments of real property in which the parties have laid
down the procedure to be followed in the event the vendee failed to fulfill his
obligation.
2.) To a mere promise to sell where the title remains with the vendor until full
payment of the price.
 Quiz time

PROBLEM: S sold to B a specific parcel of land at a price of P100,000 to be paid after

30 days. The contract provides that the sale shall be automatically rescinded if B failed
to pay the price on due date. B failed to pay on due date, but tendered payment three
days after. S, however, refused to accept the payment asserting that their contract was
automatically rescinded according to their stipulation when B defaulted on due date. Is
S correct?
ANSWER: No, S is not correct. Their agreement is a Pactum
commissorium.

It is an agreement between the vendor and the vendee in the

sale of an immovable that rescission of the contract shall of
right take the place if the vendee fails to pay the price at the
time agreed upon. (Art. 1592)
 ARTICLE 1593
RESCISSION OF SALE OF PERSONAL PROPERTY

With respect to movable property, the rescission of the sale shall of

right take place in the interest of the vendor, if the vendee, upon the
expiration of the period fixed for the delivery of the thing, should not
have appeared to receive it, or, having appeared, he should not have
tendered the price at the same time, unless a longer period has been
stipulated for its payment.

FERMOCIL
 Where automatic rescission of sale of movable property stipulated

Does not accept the delivery

Conditions for Applicability:

Does not pay the price unless

credit period for its payment has
been stipulated
 EXAMPLE:
The seller and the buyer agreed that
payment and delivery would be made on
December 15. The buyer does not accept the
delivery or pay the price without lawful
cause.

What will happened?

Sale/ contract can be considered as
automatically rescinded
 actions for breach of
contract of sale of goods

Articles 1594 - 1599

 ARTICLE 1594
ACTIONS FOR BREACH OF CONTRACT OF SALE OF GOODS

Actions for breach of the contract of sale of goods

shall be governed particularly by the provisions of
this Chapter, and as to matters not specifically
provided for herein, by other applicable provisions
of this Title.
.
Actions available to vendor

(1) action by the seller for payment of the price (Art.

1595.) Provisions governing breach
of contract of sale of goods.
(2) action by the seller for damages for non-acceptance
of the goods (Art. 1596.)
“Goods” include all chattels
personal but not things in
(3) action by the seller for rescission of the contract for
action or money of legal
breach thereof (Art. 1597.)
tender in the Philippines.
The term includes growing
Actions available to vendee fruits or crops.

(4) action by the buyer for specific performance (Art.

1598.)

(5) action by the buyer for rescission or damages for

breach of warranty. (Art. 1599.)
 ARTICLE 1594
ACTIONS FOR BREACH OF CONTRACT OF SALE OF GOODS

What are the 3 actions available for

vendor in case of breach of contract or
buyer wrongfully refuses to accept?
 ACTION AVAILABLE FOR VENDORS

PAYMENT OF THE PRICE

RESCISSION OF THE DAMAGE FOR NON

CONTRACT ACCEPTANCE OF GOODS
 ARTICLE 1595
ACTION FOR THE PRICE OF GOODS

If ownership has passed to the buyer

If ownership has not passed

If goods cannot readily be sold for a reasonable price –

even if ownership has passed.
SELLER RIGHT OF ACTION FOR PRICE

1) When the ownership of the goods has passed to the buyer and
he wrongfully neglects

2.) When the price is payable on a certain day and the buyer
wrongfully neglects

3) When the goods cannot readily be resold for a

reasonable price and the buyer wrongfully refuses to accept
them even before the ownership in the goods
has passed

.
QUESTION GAME

1. John purchases a laptop from an online retailer. After receiving the laptop, he realizes that the
price charged is significantly higher than the advertised price. John decides to take legal action
to seek a refund or a price adjustment.

2. Sarah orders a custom-made dress from a local boutique. The boutique delivers the dress, but it
does not meet the agreed-upon specifications. Sarah contacts the boutique to resolve the issue, and
they provide a refund or make any adjustments to the price but Sarah is not in mood and decides to
initiate legal proceedings to seek compensation for the discrepancy.

3. Mark purchases a used car from a dealership. After a few days, the car starts experiencing mechanical
issues that were not disclosed during the sale. Mark tries to negotiate with the dealership for a refund or
repair, but they refuse to cooperate. Mark decides to take legal action to recover the price paid for the
faulty vehicle.
.
 ANSWER:

1. John purchases a laptop from an online retailer. After receiving the laptop, he realizes that the
price charged is significantly higher than the advertised price. John decides to take legal action
to seek a refund or a price adjustment.

2. Sarah orders a custom-made dress from a local boutique. The boutique delivers the dress, but it
does not meet the agreed-upon specifications. Sarah contacts the boutique to resolve the issue, and
they provide a refund or make any adjustments to the price but Sarah decides to initiate legal
proceedings to seek compensation for the discrepancy.

3. Mark purchases a used car from a dealership. After a few days, the car starts experiencing mechanical
issues that were not disclosed during the sale. Mark tries to negotiate with the dealership for a refund or
repair, but they refuse to cooperate. Mark decides to take legal action to recover the price paid for the
faulty vehicle.
.
 ARTICLE 1596: DAMAGES FOR NON -
ACCEPTANCE OF GOODS

Where the buyer wrongfully neglects or refuses to accept and pay for the
goods, the seller may maintain an action against him for damages for non-
acceptance.
Measure of damages:
1. As a rule: estimated loss directly and naturally resulting in
the ordinary course of events from the buyers breach( no *Repudiation of the contract or notice of
available market) stopping the contract. such as in the case of a
sale where goods are to be manufactured.
2. When there is available market: "difference between Buyer here shall be liable for the cost of:
contract price and market or current price at the time when 1. labor performed
the goods ought to have been accepted or if not time has 2. expenses for materials used before receiving
been fixed at the time of refusal (If there are special the notice of repudiation for stoppage
circumstances established proximate damages or a different 3. unrealized profits
amount than the "difference described then liability is based
on the proximate damages)
Proximate Damages - Refer to damages other non
unrealized profits
 ARTICLE 1597: WHEN SELLER MAY
RESCIND CONTRACT IN CASE THERE
IS NO DELIVERY YET
SHOULD THE SELLER HAVE REASONABLE GROUNDS TO
FEAR THE LOSS OF IMMOVABLE PROPERTY SOLD AND ITS
PRICE, HE MAY IMMEDIATELY SUE FOR THE RESCISSION
OF THE SALE.
ARTICLE 1597
SELLER’S RIGHT OF RESCISSION BEFORE DELIVERY

1. WHEN BUYER REPUDIATED THE CONTRACT

2. WHEN THE BUYER HAS MANIFESTED HIS INABILITY TO PERFORM

HIS OBLIGATIONS

3. WHEN THE BUYER HAS COMMITTED A BREACH OR THE

CONTRACT

* NOTICE MUST BE GIVEN TO THE BUYER TO TOTALLY RESCIND THE

CONTRACT
ARTICLE 1598: REMEDY OF BUYER IN
CONTRACT TO DELIVER SPECIFIC
GOODS
ARTICLE 1598
WHERE THE SELLER HAS BROKEN A CONTRACT TO DELIVER
SPECIFIC OR ASCERTAINED GOODS, A COURT MAY, ON THE
APPLICATION OF THE BUYER, DIRECT THAT THE CONTRACT
SHALL BE PERFORMED SPECIFICALLY, WITHOUT GIVING THE
SELLER THE OPTION OF RETAINING THE GOODS ON PAYMENT
OF DAMAGES.
THIS IS THE SPECIFIC PERFORMANCE WITH OR
WHITHOUT GIVING THE SELLER OPTION TO RETAIN
THE GOODS ON PAYMENT OF DAMAGES.
 ARTICLE 1599

WHERE THERE IS A BREACH OF WARRANTY

BY THE SELLER, THE BUYER MAY, AT HIS
ELECTION
 . WHERE THERE IS A BREACH OF WARRANTY BY THE SELLER, THE
BUYER MAY, AT HIS ELECTION

(1) Accept or keep the goods and set up against the

▫️RECOUPMENT seller, the breach of warranty by way of recoupment in
diminution or extinction of the price;
▫️DAMAGES (2) Accept or keep the goods and maintain an action
against the seller for damages for the breach of
warranty;
▫️ACTION (3) Refuse to accept the goods, and maintain an action
against the seller for damages for the breach of
warranty;
▫️RECISSION (4) Rescind the contract of sale by returning or offering
the return of the goods and recover the price.
Nature of Remedies.
🔶The above remedies are alternative.
🔶The only exception is when after the buyer
has chosen fulfillment, it should become
impossible
in which case he may also sue for recission.
Measure of damages:
(5) IN CASE THE BREACH OF WARRANTY
OF QUALITY, SUCH LOSS, IN THE
ABSENCE OF SPECIAL CIRCUMSTANCES
HOWING PROXIMATE DAMAGE OF A
GREATER AMOUNT IS DIFFERENCE
BETWEEN THE VALUE THEY WOULD
HAVE HAD IF THEY HAD ANSWERED TO
THE WARRANTY.
 view !
t's Re
Le
In general, what actions are
available to the buyer in case of
breach of warranty by the
seller of goods?
According to Article 1599 the actions that are available to the
buyer in case of breach of warranty by the seller of the goods
are:
1.) RECOUPMENT

2.) ACTION OR COUNTERCLAIM FOR DAMAGES

3.) RESCISSION