CONDITIONS AND WARRANTIES
CONDITIONS: where the obligation of either party to a contract of sale is subject to any
condition which is not performed, such party may:
1. Refuse to proceed with the contract; or
2. Waive the performance of the condition; or
3. Treat the non-performance as a breach of warranty and ask for damages.
WARRANTIES: 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.
Opinion of the seller: is not understood to be a warranty unless the seller made such affirmation
or statement as an expert and
it was relied upon by the buyer.
Express Warranty: is an affirmation of fact or promise by the seller relating to the thing which
would induce the buyer to buy
the same. However, those relating to opinions of the seller are not considered warranties unless
they are made by experts and
the buyer relies upon them.
Implied Warranties:
1. Warranty against eviction – that the seller has a right to sell the thing at the time when
ownership is to pass, and that
the buyer shall from that time have and enjoy legal and peaceful possession of the thing;
Eviction requisites:
a. The vendee is deprived of the whole or of a part of the thing purchased;
b. By virtue of a final judgment
c. The vendor is summoned in the suit for eviction at the instance of the vendee.
d. Such judgment is based on:
i. A right prior to the sale or
ii. An act imputable to the vendor
Rules Applicable:
a. The warranty applies even if there is no agreement to such effect;
b. The vendee need not appeal from the decision in order that the vendor may become liable for
eviction.
c. When the 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.
d. If the property is sold for non-payment of taxes due and not made known to the vendee
before the sale, the vendor is
liable for eviction.
e. The judgment debtor is also responsible for eviction in judicial sales, unless it is otherwise
decreed in the judgment.
f. 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.
Extent of Liability: First, it will depend whether the seller is in bad faith:
a. If the seller is in bad faith, he shall be liable for:
i. Value of the thing sold at the time of eviction;
ii. Income or fruits, if he has been ordered to deliver them to the party who won the suit against
him;
iii. Costs of the suit which caused the eviction, and, in a proper case, those of the suit bought
against the vendor for
the warranty;
iv. Expenses of the contract, if the vendee has paid them;
v. Damages and interests and ornamental expenses.
b. If the seller is in good faith, the liability of the vendor shall depend whether there is a waiver
executed by the buyer:
i. If there is no waiver, the seller is liable for VICE above except Damages.
ii. If there is a waiver, the liability of the vendor shall depend whether the buyer is aware of the
risk of eviction:
1) Consciente – the buyer is not aware of the risk, or without knowledge of the defect in the title
of the seller:
seller is still liable but only for the VALUE of the thing at the time of eviction;
2) Intencionada – the buyer was aware of the risk of eviction or of the defect in the title of the
seller, the seller
is no longer liable for anything.
Partial Loss: should the vendee lose only a part of the thing sold but the same is 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, instead of enforcing
the vendor’s liability for eviction.
Two or more things sold: the same rules as to partial loss shall apply:
a. If they have been jointly sold for a lumpsum; or
b. Even if they were sold for a separate price for each of them if it should appear that the
vendee would not have purchased
one without the other.
2. Warranty against hidden defects or of quality - the thing shall be free from any hidden faults
or defects.
Hidden Defects: it would render the thing unfit for its intended use; or diminish its fitness for
such use to such extent
that, had the vendee been aware thereof, he would not have acquired it or would have given a
lower price for it.
Vendor not liable: in case:
a. The defects are patent or those which may be visible; or
b. Even if not visible, the vendee who is an expert, by reason of his trade or profession, should
have known.
Warranty of Fitness of Goods: there is an implied warranty that the goods shall be reasonably fit
for such purpose;
a. The buyer, expressly or by implication, makes known to the seller the particular purpose
for which the goods are
acquired, and
b. It appears that the buyer relies on the seller's skill or judgment (whether he be the grower or
manufacturer or not),
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.
Warranty of Merchantable Quality: there is an implied warranty that the goods shall be of
merchantable quality
a. Where the goods are bought by description
b. From a seller who deals in goods of that description (whether he be the grower or
manufacturer or not),
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 them unmerchantable which would not
be apparent on reasonable
examination of the sample.
Other rules on warranty against hidden defects or of quality:
a. The vendor is responsible to the vendee for any hidden faults or defects in the thing sold,
even though he was not
aware thereof, unless there is contrary stipulation.
b. An implied warranty or condition as to the quality or fitness for a particular purpose may be
annexed by the usage of
trade.
Remedies of the vendee:
a. Withdraw from the contract plus damages;
b. Accion quanti minoris or demand a proportionate reduction of the price plus damages.
Loss of the thing with hidden defect; liability of the seller:
a. If the cause was the defect itself: the seller shall be liable for:
i. Price
ii. Expenses of the contract
iii. Interest (if in good faith)
iv. Damages (if in bad faith)
b. If the cause of the loss is a fortuitous event or through the fault of the vendee, the seller shall
be liable to refund the
price less the value at the time of loss, plus damages (if he was aware).
Judicial sales: the above rules likewise apply to judicial sales, except the judgment detor shall
not be liable for damages.
Prescriptive period for the remedies: is 6 months from delivery.
REDHIBITORY DEFECTS IN ANIMALS
Redhibitory Defect is the hidden defect on animals that, even in case a professional inspection
has been made, should be
of such nature that expert knowledge is not sufficient to discover it.
But if the veterinarian, through ignorance or bad faith shall fail to discover or disclose it, he shall
be liable for damages.
Sale of more than 1 animal: General Rule: The redhibitory defect of one shall only give rise to its
redhibition, and not of the
others; Except: if the vendee would not have purchased the sound animal or animals without the
defective one, which is
presumed when a team, yoke pair, or set is bought, even if a separate price has been fixed for
each one of the animals
composing the same.
No warranty: There is no warranty against hidden defects of animals sold at fairs or at public
auctions, or of live stock sold
as condemned.
Void sale of animals:
a. The sale of animals suffering from contagious diseases shall be void.
b. If the use or service for which they are acquired has been stated in the contract, and they are
found to be unfit therefor.
Remedies and Prescriptive Period: Remedies of the vendee in case of sale of animals with
redhibitory defects are similar
to the remedies for breach of warranty against hidden defects; but he must make use thereof
within the same period
which has been fixed for the exercise of the redhibitory action or 40 days.
Other Rules:
a. If the animal should die within three days after its purchase, the vendor shall be liable if the
disease which cause the
death existed at the time of the contract.
b. If the sale be rescinded, the animal shall be returned in the condition in which it was sold and
delivered, the vendee
being answerable for any injury due to his negligence, and not arising from the redhibitory fault
or defect.
c. Sale of large cattle is governed by special laws.
3. Warranty against non-apparent encumbrances: an encumbrance (or an easement or
servitude) is a burden imposed
upon an immovable for the benefit of another immovable belonging to a different owner. It is
non-apparent, when there
are no external indications of their existence.
The warranty against non-apparent encumbrances arises when the same is:
a. Not mentioned in the agreement; or
b. Not recorded in the Registry of Property (now Registry of Deeds).
In which case, the buyer has the following remedies, within 1 year, counted from:
a. Ask for the rescission of the contract – from execution of the deed;
b. Ask for damages – from discovery.
Not applicable to: the implied warranties are not applicable to 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.