CHAPTER 1 NATURE AND FORMS OF THE CONTRACT
Article 1458. A contract of sale is a contract whereby (seller/vendor) one party obligates himself to deliver
a thing to the (buyer/vendee) other whom are bound to pay a sum of money or its equivalent also known as
price. A sale can may be either absolute or conditional. A contract of sale is consensual, bilateral, onerous,
commutative, nominate and principal. Like every contract, a sale must have the following requites: (1)
consent or meeting of the minds, (2) object or subject matter, and (3) cause or consideration. Without the
presence of all the essential elements of a contract of sale, no sale can validly exist.
Article 1459. In a contract of sale, the subject matter should be determinate, licit or lawful, and not be
impossible. Additionally, rights that are not intransmissible or personal can be a subject matter of a sale.
However, services cannot be an object of a contract of sale.
Article 1460. The subject matter of a sale is must be determinate. It must be particularly designated or
physically segregated from all others of the same class. Additionally, the object of the sale must be capable
of being made determinate without the necessity of further agreement among parties.
Article 1461. A thing can be an object of sale provided that it has a potential existence. A sale of hope or
expectancy is valid even if the thing hoped or expected does not come into existence. This is because the
object of the contract of sale is the hope itself. On the other hand, a sale of vain hope or expectancy is
deemed void.
Article 1462. A sale of future goods is valid only as an executory contract to be fulfilled by the acquisition
and delivery of the good specified.
Article 1463. A sole owner can sell the entire thing, or only a specific portion, or the undivided share or
interest. In effect to the sale of undivided interest, the buyer may become a co-owner of the thing sold. He
can have the right to sell his part without the consent of the other co-owners.
Article 1464. In cases that the object of the sale are fungible goods, wherein the intent of the vendor is to
sell and the buyer to buy a definite mass, the buyer becomes the co-owner of the goods with proportion to
his share. However, if discovered later on that the mass of the fungible goods contains less than the mass
agreed, the buyer shall be the owner of the entire mass. Furthermore, the seller is bound to supply the
lacking mass of goods of the same kind and quality, unless there is a stipulation to contrary.
Article 1465. A sale wherein the thing is subject to a resolutory condition, the resolutory conditions may
cancel by rescission or continue specific performance.
Article 1466. A contract of sale is different from a contract of agency to sell. By a contract of agency to
sell, a person or agency binds himself to render a service in representation with the consent of the owner.
In a contract of agency to sell,(1) the agent receives goods as the goods of principal;(2) the agent
has to simply account for the proceeds of sale;(3) the agent can return the object in case he is not able to
sell the object to the third person;(4) the agent makes no warranty for which he assumes personal liability
as long as he acted within his authority and in the name of the seller; and (5)the agent must deal with the
thing received in accordance to the instructions of the principal owner.
On the contrary, in a contract of sale, (1) the buyer receives the goods as the owner; (2) the buyer
has to pay the price; (3) the buyer cannot return the object sold; (4) the seller warrants the thing sold, and
(5) the buyer can deal with the thing sold as he pleases.
Article 1467. A contract of sale is also different from a contract for a piece of work. A contract for a piece
of work, the contractor binds himself to execute a piece of work especially for the employer in consideration
of certain price or compensation. On the other hand, a contract of sale, the vendor sells what is in the
ordinary course of his business.
Article 1468. A contract of sale is also dissimilar to a contract of barter. A contract wherein one party binds
himself to give one thing in consideration of the other’s promise to give another thing is deemed a barter.
Whereas, when one party gives one thing in consideration for a price in money, it is a contract of sale.
However, there are cases when the thing given in exchange consist partly in money and partly in another
thing. In such cases, the contract shall be characterized by the manifest intention of the parties. If the
intention is not characterized, it is deemed to be a sale when the value of the thing given exceeds the amount
of money or its equivalent.
Article 1469. By a contract of sale, the price should be certain. In order that a price is certain, it should be
capable of being ascertained in money or its equivalent or the determination of the price is left to the
judgement of a third person. If the price was fixed by a third person who acted in bad faith or by mistake,
the courts may fix the price. If the third person selected to fix the price refuses or cannot fix it, the contract
is ineffective, unless the parties subsequently agreed to a price. If the third person is prevented from fixing
the price by the fault of the seller or the buyer, the party not in fault may obtain remedies against the party
in fault such as recession or fulfillment.
Article 1470. In cases where there is a gross inadequacy of a price, the contract of sale is not affected
unless there is a defect in the consent or the intention of the contract is a donation. The contract may be
annulled if the inadequacy of the price indicates a fraud, mistake, or undue influence is present. The contract
will be set aside when then the inadequacy of the price is as to be “shocking to the conscience”.
Article 1471. If the price of the subject matter is being simulated, the contract of sale is deemed void but it
is valid as a donation. This is because the seller or vendor intended to transfer the thing gratuitously. If the
contract does not appear to be a donation and the ownership of the thing is not transferred, it is void and
inexistent.
Article 1472. The price of thing is considered certain if capable of being determined in reference to the
other thing where price is certain. When an amount is fixed above or below the price on a given day or in
a particular exchange or market, the said amount must be certain, otherwise, the sale is inefficacious because
the price cannot be determined.
Article 1473. The determination of price of the object of contract of sale can never be left to the discretion
of one of the contracting parties. But the owner of the thing has the right to quote his own price, reasonable
or unreasonable. It is only up to the buyer if he accepts or rejects the offer of the owner or the seller.
Nevertheless, if the priced fixed is accepted by the other party, the contract is deemed perfected. Moreover,
the price can be fixed impartially by both contracting parties or be left to the judgement of the third person.
Article 1474. For instances that the price is not determined, the contract is ineffective and the seller is not
obligated to deliver the thing as well as the buyer to pay a price. But if the price is not determined and the
thing is already delivered and accepted by the buyer, the latter must pay a reasonable price. The reasonable
price is generally the market price at the time and placed fixed by the contract or by law.
Article 1475. An essential requisite of a contract of sale is the consent or meeting of the minds of both
contracting parties. At the time where both the contracting parties agreed to the object of sale and the price
of the object, the contract is perfected. Therefore, both contracting parties can reciprocally demand
performance.
Article 1476. In an event where sale is by auction, the owner is not allowed to participate in the auction
unless there is a notice given and the seller is not prohibited by the law or stipulation. By an auction sale,
goods that are auctioned in lots are subjected to a separate contract of sale. The sale by auction are perfected
through the fall of the hammer.
Article 1477. The ownership of the thing sold is transferred upon the delivery of the thing to the buyer.
Article 1478. The contracting parties my stipulate that the ownership may only be transferred upon the full
payment of the price.
Article 1479. When a promise is bilateral, it has the same effect as a perfected contract of sale and is
reciprocally demandable. On the other hand, when a promise is unilateral, it does not bind the promisor
even if accepted and may be withdrawn at any time. However, if it is supported with a consideration other
than the payment of the price, the acceptance will give rise to the perfection of the contract.
Article 1480. The rules below is applicable only where the thing is determinate as well as to the fungible
goods where price is not fixed in relation to weight, number, or measure. However, if the fungible goods
sold for a priced fixed in relation to weight, number, or measure, the vendee or buyer shall not bear the risk
of loss unless he has incurred in delay of receiving the goods.
The rules regarding the risk of loss or deterioration of the subject matter:
1. If the thing is lost before perfection – the seller bears the loss
2. If the thing is lost at the time of perfection – the contract is deemed void or inexistent
3. If the thing is lost after perfection but before its delivery – the loss is shifted to the buyer
4. If the thing is lost after delivery – the buyer bears the risk
Article 1481. In sale of goods by description or by sample, it can be rescinded if the bulk of the goods
delivered do not correspond with the description or the sample. In the sale of good by description and
sample, the bulk of goods delivered must satisfy both the description and sample.
Article 1482. In a contract of sale wherein earnest money is given by the buyer to the seller, the earnest
money shall form part of the price and is considered a proof of the perfection of the contract. The earnest
money will be deducted to the total price of the subject matter.
Article 1483. A contract of sale may be made in writing, word of mouth, or partly in writing and partly in
word of mouth, however, subject to the provisions of the Statue of Frauds and other applicable statute.
Under the Statue of Frauds, Contracts of sale that must be in writing to be enforceable by court action
are the following:
1. Sale of personal property at a price not less than P500
2. Sale of real property or an interest therein regardless of the price involved
3. Sale of property not to be performed within a year from the date thereof regardless of the nature of
the property and the price involved
Article 1484. The vendor of personal property payable in installments may exercise the one following
remedies and waives the other remedies. The remedies are (1) Elect fulfilment - the vendor may ask a
specific performance of the obligation upon the vendee’s failure to pay; (2) Cancellation/ Rescission – the
vendor can choose cancellation or rescission upon the vendee’s failure to pay two or more instalments; (3)
Foreclosure – in foreclosure of chattel mortgage, the vendor shall have no further action against the vendee.
Article 1485. Leases of personal property with option to buy is in reality a sale of personal property payable
in installments. Thus, the rules provided in Article 1484 are equally applicable to the leases of personal
property.
Article 1486. In a sale of personal property payable in installments and leases of personal property with
option to buy, both parties may stipulate that the installments or rent paid are not to be returned to the
vendee or lessee. The stipulation shall be valid insofar as the same may be acceptable under the
circumstances.
Article 1487. The expenses incurred in execution and registration of the sales are assumed by the seller or
vendor unless there is an agreement between contracting parties. However, if the expenses are incurred
after the transfer of title, the buyer or vendee has the duty to pay unless the fault is caused by the seller or
vendor.
Article 1488.The government can exercise the power of eminent domain wherein properties are used for
the public’s necessity. Such expropriation of the property must be decreed by the authority and the owner
shall receive a just compensation.
CHAPTER 2 CAPACITY TO BUY OR SELL
Article 1489. All persons having the capacity to enter into a contract can be a valid party to sale. However,
as a general rule, contracts entered into by a minor and other incapacitated person such as insane, demented
persons or deaf-mutes are voidable. In cases necessaries are sold and delivered to them, the contract is valid
but they must pay a reasonable price.
Article 1490. Spouses are prohibited to enter a contract of sales between each other, as such, the contract
is inexistent and void from the beginning. However, if there has been a separation of property agreed upon
in the marriage settlement or there has been a judicial separation of property, the husband and wife are
capacitated to enter a contract of sales between each other.
Article 1491. This article prevents frauds on the part of the persons enumerated therein and minimize
temptation to the exertion of undue and improper influence. Other persons who are not allowed to acquire
property either directly and indirectly are: (1) A guardian cannot purchase a property under his
guardianship; (2) An agent cannot purchase a property entrusted to him to be sold unless with the consent
of the principal owner; (3) Executor/administrator with regards to the estate of the deceased; (4) Public
officers with regards to the property of the estate; (5) Officers and employees of the courts cannot purchase
property and rights in litigation; (6) persons especially disqualified by law.
Transactions pertaining to guardians, agents, and executor/administrator are voidable and can be
ratified. Transactions pertaining to the public officers and court officers and employees are null and void.
Article 1492. The prohibitions in Articles 1490-1491 extends to sales in legal redemption, compromises,
and renunciation.
Compromise – is a contract whereby the parties, by reciprocal concessions, avoid a litigation or put
an end to one already commenced.
Renunciation – a creditor gratuitously abandons his right against his creditor.
CHAPTER 3 EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS BEEN
LOST
Article 1493. In an event when the subject matter of the sale is entirely lost at the time of perfection, the
contract is inexistent and void. However, if the thing is partially lost, the buyer may either withdraw to the
contract or may demand for the remaining part paying its proportionate price or the market price in its
damaged state.
Article 1494. In a contract of sale wherein the subject matter consists of a mass of specific goods and is
partially or wholly lost or deteriorated, the buyer may demand for the delivery of the remaining goods
paying the proportionate price or withdraw to the contract in both divisible and indivisible sale.
CHAPTER 4 OBLIGATIONS OF THE VENDOR
Article1495. The seller or vendor is the party who is obligated to transfer the ownership and to deliver the
subject matter of the sale.
Article 1496. The ownership of the thing sold is transferred upon the delivery of the thing to the buyer or
in any manner signifying an agreement that the possession is being transferred to the buyer.
Article 1497. There is actual delivery when the object of the sale is placed in control and in the possession
of the vendee or buyer. However, this does not mean that the ownership of the thing sold is already
transferred to the buyer. The contracting parties may stipulate when will be the ownership is passed.
Article 1498. A constructive delivery of the thing sold through a public instrument, shall be equivalent to
the actual delivery of the thing sold unless it appears in the document that the parties did not intend to make
the delivery.
Article 1499. Delivery of the thing sold can be made through Traditio longa manu wherein the delivery
was made by mere consent or agreement of the contracting parties when the thing sold cannot be transferred
in the possession to the vendee or buyer; and Tradition brevi manu wherein the subject matter of the sale is
already in the possession of the vendee or buyer for any other reason.
Article 1500. The delivery of the thing sold can also be made through Tradition constitutum possessorium
wherein the vendor continues to have the possession of the object of the sale not as the owner but in some
other capacity.
Article 1501. In an event wherein the object of the sale is an intangible property, the subject matter cannot
be delivered physically because of its form. Hence, its sale will be made through a public instrument by the
placing of the titles of ownership in the possession of the vendee, or by allowing the vendee to use his rights
as new owner with the consent of the vendor.
Article 1502. In a contract of “sale or return”, the buyer may revest the ownership of the property sold to
the seller upon returning the property to the seller. In a contract of “sale on trial or approval”, the ownership
of the subject matter remain to the seller until the approval of buyer to purchase the goods or upon the
failure to give notice of dissatisfaction or returning the goods. In returning the goods, both contracts are
bound within a reasonable time if no time has been fixed.
Article 1503. In case of sale of specific goods, this article deals with the instances where reservation of
ownership is made despite delivery.
Article 1504. As a general rule, if the thing is lost due to fortuitous event, the risk is borne by the owner
of the thing at the time of the loss. Thus, in a contract of sale, the risk of loss is borne by the seller or vendor
until ownership is transferred. However, if the goods are delivered to the buyer but the ownership is retained
to the seller, the risk is borne by the buyer from the time of delivery. Additionally, if there has been a delay
of actual delivery through the fault of either parties, the risk are borne at the party in fault.
Article 1505. In a sale by which the owner is not the seller, the seller has the better rights to the title of
goods than the buyer, unless the owner of the goods did not authorize such sale. However, if sale takes
place by virtue of an order of a court of competent jurisdiction, the sale is valid even if the owner did not
consent such sale.
Article 1506. In an event where the seller has a voidable title, the buyer obtains the good title of the thing
sold provided he purchase the goods in good faith for value and without notice of the seller’s defect of title
and before the title of the seller has been avoided. Thus, if the seller is not the owner of the thing sold and
who acquired such thing in bad faith, the owner may recover the property from the buyer without paying
indemnity unless the buyer acquired the thing through public auction.
Article 1507. The negotiable document of title states that the goods referred in the contract will be
delivered to the bearer or the order of a specified person. However, mere typographical or grammatical
error does not destroy the negotiability of a document.
Article 1508. This article provides two ways of negotiating a negotiable document title by delivery such as
negotiating by merely delivery and by indorsement coupled with delivery.
Article 1509. The negotiable document may be negotiated only through indorsement of the person
specified in the document of title. If indorsed in blank or to bearer, the document becomes negotiable by
delivery. If indorsed to a specified person, it may be again negotiated by the indorsement of such person in
blank, to bearer, or to another specified person. Delivery alone is not sufficient.
Article 1510. The words “non-negotiable” or “not negotiable” or other similar word placed upon a
document of title which is actually a negotiable document will not affect the negotiability of the document.
Article 1511. A non-negotiable document can be transferred or assigned to another but it cannot be
negotiated. The endorsement of a non-negotiable document gives the transferee no additional right except
the rights mentioned in Article 1514.
Article 1512. The negotiable document of title can be negotiated by the owner thereof or any person to
whom the possession or custody of the document has been entrusted by the owner.
Article 1513. The person to whom negotiable document is negotiated acquires the title to the goods and
the direct obligation of the bailee to hold possession of the goods for him, as if such bailee had contracted
directed with him.
Article 1514. A mere transferee acquires the title to the goods as against the transferor subject to any
agreement with the transferor. The transferee does not acquire directly the obligation of the bailee to hold
the goods for him. To acquire the direct obligation of the bailee, the transferee or transferor must notify the
bailee.
Article 1515. If indorsement is needed for negotiation, the transferee may compel the transferor to indorse
such document provided that he pays the value for the document or no contrary intention appears.
Article 1516. This article provides the warranties of a negotiation or transfers such as (1) that the document
is genuine; (2) that the person negotiating or transferring has a legal right to negotiate or transfer; (3) That
the transferor has knowledge of no fact which would impair the validity or worth of the document; and (4)
That the person negotiating or transferring has a right to transfer the title to the goods and that the goods
are merchantable.
Article 1517. The indorser of a document of title shall not be liable to the holder for any failure on the part
of the bailee or the previous indorsers to comply their obligations.
Article 1518. The validity of the negotiation was not impaired by fraud, mistake, accident, duress, or
conversion provided that the buyer paid in good faith without the notice of the seller’s defect of title.
Article 1519. The bailee has the direct obligation to hold the possession of the goods, thus, the goods in
possession to him cannot be attached or levied under an execution unless the document be first surrendered
to him or its negotiation is prohibited by the court. Similarly, the bailee cannot be compelled to deliver such
goods until the document is surrendered to him or the document is impounded by the court.
Article 1520. Creditor are protected when the document is negotiable. Thus, in an event where the debtor
is the owner of the negotiable document, the creditor are entitled to such aid from courts by a restraining
order and otherwise in attaching such document.
Article 1521. Presumably, the place of delivery is the seller’s place of business or his residence unless
stipulated by the contracting parties. The time of delivery of the goods sold shall be determined by the
agreement of the contracting parties or by the usage of trade. Thus, if there is no stipulation as to the time
of delivery, the seller is bound to deliver the good within a reasonable time. For circumstances that the
goods are in the possession of the third person at the time of sale, the third person must acknowledge being
the bailee for the buyer before the seller is discharged from the obligation to deliver the goods. The expenses
incurred for putting the goods in a deliverable state shall be borne to the seller unless stipulated by the
contracting parties.
Article 1522. This article provides rules when the quantity of goods delivered is less or more than what is
agreed as well as when the quality delivered is different from what is agreed.
Article 1523. As the general rule, the delivery of the goods to the carrier is deemed to be a delivery of
goods to the buyer. With this, the seller must make a contract to the carrier on behalf of the buyer as may
be reasonable. If the seller fails to do such, the buyer may reject the delivery of the goods to him or may
held the seller liable to the damage or loss of goods during transit. Also, the seller must give notice to the
buyer regarding the necessity to insure the goods during the transit. If he fails to do such, the risk of loss or
damage will be borne by him. But if the buyer had all the information necessary to insure, the seller is not
liable for the loss and damage.
Article 1524. The obligations of the contracting parties of a sale is reciprocal. Through this, in the absence
of period for payment of the price and the buyer has not yet paid the consideration of the contract, the seller
is not compelled to deliver the goods. However, if there has a fixed period for payment of the price, the
seller is bound to deliver such goods even the buyer has not yet paid the price provided the term credit has
not expired.
Article 1525. Whether the title has passed or not, the seller is deemed to be an unpaid seller if only a part
of the price has been paid or the bill of exchange or the negotiable instrument has been dishonored.
Article 1526. The unpaid seller may exercise the rights of possessory lien, stoppage in transitu, special
right of re-sale, and special right to rescind even if the ownership of the goods is already transferred to the
buyer.
Article 1527. The unpaid seller may exercise his rights of lien, in the absence of any stipulation of credit,
until the tender or payment of the price; if the term of credit has expired and the buyer fails to exercise his
right; or when the buyer becomes insolvent.
Article 1528. The unpaid sellers retains a possessory lien even after a partial delivery upon the remainder.
However, the lien is waived if the part delivery of goods is intended as symbolic delivery of the whole.
Article 1529. The unpaid seller loses his lien when he has delivered the goods to a carrier or the bailee of
the buyer without reserving ownership of the goods, when the buyer or his agent lawfully possesses the
good, or the seller expressly surrendered his lien,
Article 1530. The seller may exercise his rights of stoppage in transitu in an event when the buyer of goods
becomes insolvent.
Article 1531. The goods are in transit after the delivery to a carrier or the other bailee and if the carrier of
other bailee continues the possession of goods after being rejected by the buyer. The goods are no longer
in transit if the buyer or his agent obtains the delivery of goods even before the arrival, if the carrier or other
bailee acknowledges to the buyer or his agent the he holds the goods on his behalf and continues possession
of goods after the arrival of good, or if the carrier or other bailee wrongfully refuses to deliver the goods to
the buyer or his agent.
Article 1532. This article provides way of exercising the rights of stoppage in transitu of the unpaid seller
by either taking actual possession of the goods or giving notice of his claim to the carrier or bailee at such
time the principal may communicate to his agents to prevent the delivery to the buyer.
Article 1533. The unpaid seller can exercise the right to resale when he has a right of lien or a right of
stoppage in transit and when the goods are perishable in nature, the right to resell is expressly stipulated,
and the buyer made an unreasonable default. With this, the seller is not liable for any profit to the original
buyer upon resale, but the seller may recover damages for any loss from the original buyer.
Article 1534. The unpaid seller may exercise his right to rescind the sale if it is expressly stipulated and the
buyer made an unreasonable default. The seller may recover damages for the breach of contract. In order
to rescind the sale, there must be a notice to the buyer or there must be an overt act showing an intention to
rescind.
Article 1535. Generally, the unpaid seller’s right of lien or stoppage in transit is not affected if the buyer
already sold the goods unless the unpaid seller has consented the sale or the purchaser is a purchaser for
value in good faith of a negotiable document of title.
Article 1536. The vendor is not compelled to deliver the thing sold when the vendee has become insolvent,
he does not furnished the guarantee or securities he promised, by his own acts he has impaired said
guaranties or securities after their establishment, when he violates any undertaking, or when he attempts to
abscond.
Article 1537. The seller is obliged to deliver the thing sold and its accession and accessories to the buyer
upon the perfection of the contract of sale unless there is a stipulation agreed by the contracting parties.
Article 1538. This article provides the effect of loss, deterioration or improvements before delivery. (1) If
lost without fault of vendor: obligation shall be extinguished; (2) If lost through fault of vendor: he shall be
obliged to pay damages; (3) When the thing deteriorates without fault of vendor: impairment is to be borne
by buyer; (4) When the thing deteriorates through fault of vendor: buyer may choose between the rescission
of the obligation and its fulfillment, with indemnity for damages in either case; (5) if the thing is improved
by nature or by time, the improvement shall inure to the benefit of the buyer; and (6) if it is improved at
the expense of the debtor, he shall have no other right than that granted to the usufructuary.
Article 1539. In sale of real property by unit of measure, the vendor must deliver the entire area agreed
upon. However, if the entire area is not delivered, the buyer may rescind or enforce the contract with
corresponding decrease in price. A rescission will be available at will of the buyer if the lack of area is at
least 1/10 than the agreed, if the deficiency in the quality exceeds 1//10 of the price agreed upon, or if
vendee would not have bought immovable had he known of its smaller area or inferior quality.
Article 1540. In sale of real property by unit of measure, the vendor must deliver the entire area agreed
upon. However, if the area delivered is greater than what is agreed upon, the buyer may either reject the
rest or accept the entire area paying the price of the same at the contract rate.
Article 1541. The rules provide in Article 1539 and 1540 shall be applicable to judicial sales unless
modified by the contracting parties.
Article 1542. In a sale made for a lump sum, there shall be no increase or decrease of the price whether
there be a greater or lesser area than what is agreed upon. The seller must deliver to the vendee all that is
included in the boundaries in terms of conflict between the boundaries and areas included. If the seller did
not deliver all that is included in the boundary, the buyer may rescind the contract or pay a reduced
proportional price. On the contrary, the buyer cannot rescind the contract or he is not entitled to pay a
reduced price if the area included in the boundary happens to be lesser that what is stipulated.
Article 1543. The actions based on Article 1539 and 1542 for either rescission or proportionate reduction
of the price shall be brought within in six months counted from the day of delivery.
Article 1544. This article provides rules if the same property is sold to different buyers. If the thing sold
is a movable property, the ownership shall be acquired by the buyer who first takes possession of the
property in good fight. If the thing sold is an immovable property, the ownership shall be acquired by the
buyer who first registers the sale in the Registry of Deeds, who takes first possession of the property in the
absence of registry, or who presents the oldest title in the absence of both registry and possession provided
is it all acted on good faith.
Article 1545. In a conditional sales, the obligations of the contract depends on the happening of the
obligation. If the condition is not fulfilled, the party may refused to proceed to the contract or proceed to
the contract and waived the performance of the conditions. If the condition is a promise that it will happen,
the non-performance of the condition may be treated as a breach of warranty by the other party.
Article 1546. An express warranty is any affirmations of fact or any promise by the seller relating to the
thing, the natural tendency of which is to persuade the buyer to purchase the thing resulting the buyer to
purchase the same. A mere expression of opinion does not import a warranty unless the seller is an expert
and the opinion was relied by the buyer.
Article 1547. There is an implied warranty as the seller guarantees that he has the right to sell and to transfer
the ownership of the thing sold; the seller guarantees that the object of sale is free from hidden defects, and
the seller guarantees that the thing sold is reasonably fit, unless a contrary intention appears.
Article 1548. Eviction is the judicial process whereby the vendee is deprives of the whole or part of the
thing purchases by virtue of a final judgement based on a right prior to the sale or an act imputable to the
vendor.
Article 1549. The vendee has no duty to appeal from judgement in order that the vendor may become
liable for eviction. With this, the vendee’s right against the vendor is not lost because he did not appeal.
Article 1550. 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.
Article 1551. If the vendee is deprived from the knowledge that the property is sold for non-payment of
taxes due before the sale, the vendor is liable for eviction.
Article 1552. Judgment debtor is responsible for eviction in judicial sales and hidden defects, unless
otherwise decreed in the judgment. - A purchaser in good faith at a judicial sale is entitled to recover the
purchase money from the officer if the funds are still in his hands or from the judgment debtor.
Article 1553. This article provides the effect of stipulation waiving the liability for eviction. If the seller
acted in good faith, the exemption is valid. If the seller acted in bad faith, the stipulation is void.
Article 1554. This article speaks for two kinds of waiver made by the buyer namely: Consciente and
Intencionada. If the buyer voluntarily made the waiver without the knowledge of risks of eviction
(Consciente), the vendor shall only pay the value which the thing sold has at the time of eviction. If the
buyer made the waiver with knowledge to the risk of eviction (Intencionada), the vendor is exempted from
the obligation to answer for eviction provided he acted in good faith
Article 1555. This article provides the rights of the vendee to demand of the vendor in case of eviction.
The vendee shall demand the return of the value of the thing sold had at the time of the eviction; the income
or fruits; the cost of suit which caused the viction; the expenses of the contract paid by him; as well as
damages, interests, and ornamental expenses if the sale was made in bad faith.
Article 1556. This article contemplates a partial eviction. If there is a partial eviction, the vendee has the
option either to enforce the vendor’s liability for eviction or to demand rescission of the contract.
Article 1557. The essential element for the enforcement of warranty in case of eviction is deprivation in
whole or in part of the thing sold and existence of a final judgement.
Article 1558. A vendor may be legally liable for eviction is he was summoned in the suit for eviction at
the instance of the vendee. In the absence of such summons, the vendor is not bound to his warranty.
Article 1559. In case the vendee is a defendant in a suit instituted to deprive him of the thing purchase, he
can call the vendor as a co-defendant.
Article 1560. When immovable property is sold encumbered with non- apparent burden, the vendee is
entitled to the rights of rescission or indemnity. However, such rights cannot be exercised if the burden or
servitude is apparent, if the non-apparent burden or servitude is registered, or if the vendee had knowledge
of the encumbrances. The vendee must bring the action for rescission or sue for damages within one year.
If one year has elapsed, the vendee may only bring an action for damages within an actual period.
Article 1561. A warranty against defect is a warranty in which the vendor 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.
Article 1562. As a general rule, there is no implied warranty as to the quality or fitness of the good except,
implied warranty of fitness and implied warranty of merchantability. Warranty of fitness refers to the
warranty that the goods are suitable for the special purpose of the buyer while warranty for merchantability
refers to the warranty that the goods are reasonably for the general purpose.
Article 1563. If the buyer relies upon the seller’s judgement rather than the patent or trade name, there is
still an implied warranty of fitness for a particular purpose. However, there is no implied warranty of fitness
if the buyer exercised his own judgement.
Article 1564. A warranty as to the quality or fitness for a particular purpose is attached to the usage of
trade.
Article 1565. In a contract of sale by sample, there is an implied warranty of merchantability.
Article 1566. The ignorance of the vendor to any hidden faults or defects does not dismiss his liability or
responsibility thereof unless there is a stipulation to the contrary.
Article 1567. The effect of warranty against defect is the right of the vendee for rescission or demand a
proportionate reduction of the price with damages in either case.
Article 1568. When the thing is lost due to hidden faults, the vendor must return the price, refund the
expenses of the contract, and pay damages provided he is aware of the hidden defects. If the vendor is not
aware thereof, he shall only return the price with interest and refund the expenses if paid by the vendee
without damages.
Article 1569. If the thing is lost due to fortuitous event or by fault of the buyer, he may demand the paid
price less the value which the thing had at the time of lost to the seller. If the thing lost has no hidden
defects, the lost shall be borne by the buyer.
Article 1570. Warranties against hidden fault or defects, fitness and merchantability is applicable to judicial
sales but the judgment debtor is not liable for damages.
Article 1571. The actions for rescission or proportional reduction of price prescribed six months from the
delivery of the thing.
Article 1572. In a sale of two or more animals, the redhibitory defect of one shall not affect others unless,
if the buyer would not have purchased the sound ones without those which are defective.
Article 1573. The rules in Article 1572 shall be applicable to joint sale of two or more things.
Article 1574. The defects must have been clearly know to the buyer, thus, there is no warranty against
hidden defects of animals sold at fairs or at a public auction or of livestock.
Article 1575. The sale of animals shall be void if the animal suffers from a contagious disease and found
unfit for the use or service stated.
Article 1576. A redhibitory defect is the defect that in such nature expert knowledge is not sufficient to
discover it. However, the expert is liable for damages if he fails to discover the defect in bad faith or through
ignorance.
Article 1577. The prescription of redhibitory actions of defective animals is 40 days from the delivery.
Article 1578. The vendor is liable if the animal dies within 3 days after its purchase and the cause of death
existed at the time of sale.
Article 1579. If the vendee withdraws, he must return the animal in the condition which it was sold and
delivered. The vendee shall be responsible in case of injury due to his negligence.
Article 1580. The buyer is entitled to rescind the contract or demand proportionate reduction of price in
case of sale of animals with redhibitory defects. The actions must be brought within 40 days from the date
of delivery to the buyer.
Article 1581. Sale of large cattle is governed by special laws.