Holy Angel University

Angeles City

WARRANTY ON HIDDEN DEFECTS

(Articles 1561-1581)

Clemente, Princess Yvonne Khryz G.

David, Mara Czarina
De Ocampo, Criezel S.
Del Rosario, Aljon T.
Gomez, Schentely Anne D.
Malit, Arjane S.
Mendoza, Cristelle
Naguit, Alex M.
Oraye, Esther Kim Hyun
Tornato, Joshua P.

Atty. Edmond V. Dantes

XMERCANLO Professor
 Hidden defects
The seller is responsible for warranty against the hidden defects which the thing sold
may have, if they render it unfit for the use for which it is intended, or if they diminish
its fitness for such use to such an extent that, had the vendee been aware thereof, he
would not have acquired it or would have given a lower price for it.[1] The said vendor is
not answerable for patent defects or those which may be visible, or for those which are
not visible if the vendee is an expert who, by reason of his trade or profession, should
have known them.[2]

Implied warranty
There is an implied warranty or condition as to the quality or fineness in the sale of
goods: Article 1562.

1. If the buyer, expressly or by implication, makes known to the seller the particular
purpose for which the goods are acquired, and it appears that the buyer relies on the
sellers skill or judgment (whether he be the grower or manufacturer or not), there is an
implied warranty that the goods is to be reasonably fit for such purpose; Article
1562(1). or

2. Where the goods are brought by description from a seller who deals in goods of
that description (whether he be the grower or manufacturer or not), there is an implied
warranty that the goods are of merchantable quality. Article 1562(2).

Sale under patent or other trade

name
There is no warranty as to the fitness for any particular purpose in the sale of a specified
article under its patent or other trade name, except as otherwise stipulated. Article
1563. However, the implied warranty or condition as to the quality or fineness for a
particular purpose may be annexed by the usage of trade. Article 1564.

Sale by sample of seller who is dealer

in goods of that kind
If a seller is a dealer in goods sold by sample, there is an implied warranty that the goods
are free from any defect rendering them unmerchantable which would not be apparent
on reasonable examination of the sample. Article 1565.
Hidden faults or defects in thing sold
where seller is aware
The seller is liable to the buyer for any hidden faults or defects in the thing sold even
though he was not aware thereof. Paragraph 1, Article 1566. The latter rule is not
applicable if there is a contrary stipulation and the seller was not aware of the hidden
faults or defects in the thing sold. Paragraph 2, Article 1566.

Where seller is unaware

If the seller was aware of the hidden faults of a thing and the same was lost as a
consequence of the said defects, he will bear the loss and he will be obliged to return the
price and refund the expenses of the contract, with damages. Article 1568. On the other
hand, the seller who is unaware of the hidden faults will only be required to return the
price and interest thereon, and reimburse the expenses of the contract which the vendee
might have paid.

When buyer may demand

reimbursement for purchase price
The buyer may demand from the seller the purchase price less the value of the thing
with hidden fault at the time of the sale and the same was subsequently lost by a
fortuitous even or through the fault of the seller. Paragraph 1, Article 1569. If the seller
is in bad faith, he may also be required to pay damages to the buyer. Paragraph 2,
Article 1569.

Sale of animals, rule on redhibition

In a sale of two or more animals together regardless of whether it was for a lump sum or
for a separate price for each one, the redhibitory defect of one only gives rise to its
redhibition, and not that of the others; unless it should appear that the vendee would
not have purchased the sound animal or animals without the defective one. Paragraph
1, Article 1572. The form of sale of large cattle shall be governed by special laws
(Article 1581, Civil Code). The rule on redhibition is also applicable to the sale of other
things. Article 1573.
Presumption
There is a presumption for the latter situation mentioned above 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. Paragraph 2, Article 1572.

40-day prescription
The redhibitory action based on either faults or defects of animals must be brought
within 40 days from date of delivery by the seller. Paragraph 1, Article 1577. The buyer
may choose between withdrawing from the contract and demanding a proportionate
reduction of the price, with damages in either case. Article 1580 cf. 1567. The said action
may only be exercised with respect to faults and defects which are determined by law or
by local customs. Paragraph 2, Article 1577.

When professional inspection made

Even if a professional inspection has been made such that the nature of the hidden
defect of the animal is of such a nature that expert knowledge is not sufficient to
discover it, the defect is considered redhibitory. Paragraph 1, Article 1576. However, the
veterinarian is liable for damages if through ignorance or bad faith he fails to discover or
disclose it. Paragraph 2, Article 1576.

When animals sold at fairs or public auctions, or

live stock sold as condemned
The sale of animals at fairs or public auctions, as well as live stock sold as condemned,
does not come with warranty against hidden defects.

Sale of animals with contagious diseases and unfit

for purpose they were acquired
A contract for the sale of animals suffering from contagious diseases is void. Paragraph
1, Article 1575. A sales contract of animals is likewise void if the use or service for which
they are acquired has been stated in the contract, and they are found to be unfit
therefore. Paragraph 2, Article 1575.
Seller liable if animal dies within 3 days from
purchase
The seller is liable if the animal sold dies within three days from the purchase thereof by
the buyer if the disease which caused the death existed at the time of the contract.
Article 1578.

Consequences when rescission made

If the sales contract is rescinded, the buyer is required to return the animal in the
condition that it was sold and delivered. Ibid. Article 1579. The buyer is only responsible
for any injury due to his negligence, and not arising from the redhibitory fault or defect.

[1] CIVIL CODE. Article 1561. Warranty for hidden defects is applicable to judicial sales,
except that the judgment debtor shall not be liable for damages (Article 1570, Civil
Code). There is a 6-months prescription for actions arising from Articles 1561 to 1570 of
the Civil Code (Article 1571, Ibid.). For Articles 1561, 1562, 1564, 1565 and 1566, the
seller may choose between withdrawing from the contract and demanding a
proportionate reduction of the price, with damages in either case (Article 1567, Ibid.).

[2] CIVIL CODE. Article 1561. Warranty for hidden defects is applicable to judicial sales,
except that the judgment debtor shall not be liable for damages (Article 1570, Civil
Code). There is a 6-months prescription for actions arising from Articles 1561 to 1570 of
the Civil Code (Article 1571, Ibid.). For Articles 1561, 1562, 1564, 1565 and 1566, the
seller may choose between withdrawing from the contract and demanding a
proportionate reduction of the price, with damages in either case (Article 1567, Ibid.).
Warranty on Hidden Defects
Articles 1561, 1566, 1567, 1568, 1569 and 1570

When can the seller be held liable for warranty against the hidden
defects?
General Rule:
The thing sold may or should render the subject matter unfit for the
use for which it is intended (Art. 1561)
Should they 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. (Art. 1561)

Exemptions:
If there are patent defects or those which may be visible (Art. 1561)
Those which are not visible if the vendee is an expert who, by reason
of his trade or profession, should have known them (Art. 1561)
Stipulation between parties; provided, the vendor was not aware of the
hidden faults or defects in the thing sold.

What are the requisites for breach of warranty?

Defect must be hidden;
Defect must exist at the time the sale was made;
Defect must ordinarily have been excluded from the contract;
Defect must be important (render the thing unfit or considerably
decreases fitness); and
Action must be instituted within the statute of limitations

What are the remedies of the vendee for breach of warranty?

Accion redhibitoria with damages withdrawal from the contract
Accion quanti minoris with damages demand of proportionate
reduction of the price
Article 1599

What are the obligations of the vendor for breach of warranty?

Articles 1568 & 1569

Applicability to Judicial Sales

General Rule:
The warranty against hidden defects shall be applicable to judicial sales
Exemption:
Judgment debtor shall not be liable for damages
Loss of Thing Sold due to Hidden Defects (1568)

Vendor in Bad Faith Vendor in Good Faith

Bears the loss Does not bear the loss
Must return the price Must return the price with interest
Must refund expenses of the contract Must refund expenses of the contract
Pay damages Not obliged to pay damages

Loss of Thing Sold w/ Hidden defects through fortuitous event or vendees fault (1569)
* Vendee may demand price paid less value of the thing at the time of loss plus damages if
vendor acted in bad faith.

Warranties against hidden defects, merchantability and fitness are applicable to judicial
sales but judgment debtor is not liable for damages, because the latter is only forced to
sell and therefore did not take part in the conduct of the sale and determination of price
which precludes possibility of bad faith (1570)
Prescription of Actions: 6 Months from delivery of thing (1571)

Warranty as to Fitness or Quality

Articles 1562, 1563, 1564 and 1565

Applicability: Goodsall chattel personal but not things in action or money of legal tender, this
includes growing fruits or crops

When can there be an implied warranty on the sale of goods?

General Rule:
Article 1562 (1)
Article 1562 (2)
Article 1564
Article 1565
Exception to the General Rule:
Article 1563
Exception to the Exception:
If there is stipulation to the contrary (Art. 1563)

Art. 1562Implied Warranty or Condition as to quality or fitness of goods

Applicability: Goodsall chattel personal but not things in action or money of legal
tender, this includes growing fruits or crops

1. IMPLIED WARRANTY OF FITNESS.

General Rule: there is no implied warranty of fitness
Exceptions:
a) Buyer expressly makes known the particular purpose or by implication;
b) Buyer relies upon the sellers skill or judgment
 2. IMPLIED WARRANTY OF MERCHANTABILITY. Applies when goods are bought by
description.
* Merchantabilityquality and condition of goods that a reasonable man would after a
full examination accept the same under the circumstances of the case, in the performance
of his offer to buy, whether for his own use or for resale.
--fitness for the general purpose for which they are sold.

There is no warranty as to fitness for particular purpose in a contract of sale of a

specified article under its patent or other trade name unless there is a contrary
stipulation. (1563)
A warranty as to quality or fitness for a particular purpose may be attached to a contract
by usage or trade in place of execution. (1564)
Merchantability of goods in sale by sample is implied. Defect should not be apparent on
reasonable examination of the sample for the vendor to be liable (1565)
Vendor is liable even though not aware of hidden defects, unless there is a contrary
stipulation and he is in good faith (1566)

What are the remedies of a buyer in case of breach of any

warranty?
Article 1599
Prescriptive Period
- Six (6) months (Art. 1571)

Warranty as to the Sale of Animals

Articles 1572, 1573, 1574, 1575, 1576, 1578, 1579, 1580, and 1581

Redhibitory Defects (Art. 1576)

A hidden defect of an animal of such a nature that expert knowledge is

not sufficient to discover it, even when a professional inspection has
been made.
But the veterinarian, who has failed to discover or disclose such defect
through ignorance or bad faith, shall be liable for damages.

Sale of Two or More Animals Together (Art. 1572-1573)

General Rule:
A defect in one should not affect the sale of the others. This is true whether the price was a lump
sum or separate rate for each animal.
Exception:
In a sale of team of animals
Other rules on sales of animals

Art. 1574
General Rule: No warranty against hidden defects of animals that are sold at fairs or at public
auctions or those livestock that are sold as condemned.
Exception: The fact that the livestock is condemned must be communicated to the buyer,
otherwise, the seller is still liable.

Art. 1575 - Two (2) kinds of void sales with respect to animals:
1 Sale of animals suffering from contagious diseases; and
2 If use or service for which they are acquired has been stated in the
contract and they are found to be unfit

Prescriptive period (Art. 1577-1578)

Redhibitory action - within forty (40) days from the date of their
delivery to the buyer.
Should the animal die within three (3) days after its purchase, the
vendor shall be liable if the disease which causes the death existed at
the time of the contract.
Withdrawing from the contract - six (6) months from the delivery of
the thing sold.

Obligation of the Buyer to Return (Art. 1579)

The animal shall be returned in the condition in which it was sold and
delivered if the sale be rescinded.
The buyer is shall be liable for any injury due to his negligence.

Remedies of Buyer of Animals with Redhibitory Defects (Art.

1580)
A buyer of animals with redhibitory defects has two (2) remedies (with damages in either case):

1. Accion Redhibitoriaaction seeking withdrawal from the contract

2. Accion quanti minores or estimatoriaaction for proportionate reduction in the price

Sale of Large Cattle (Art. 1581)

In cases of sale of large cattle, special laws govern the form of such
sale.