Conditions AND Warranties: Obligations of The Vendor

CONDITIONS
AND
WARRANTIES
OBLIGATIONS OF THE VENDOR
CONDITION -V- WARRANTY
Future or uncertain event which may or A statement or representation made by the
may not happen vendor as part of the contract of sale and
by which he promises or undertakes to
insure that certain facts are or shall be as
he then represents
Must be stipulated by the parties; Parties need not stipulate; deemed embedded
accidental element in the contract in the contract. With regard to IMPLIED
WARRANTIES, it is a natural element of a
contract
Attached to the obligation of the vendor Attached to the subject matter itself
or the parties therein
KINDS 1. EXPRESS: Any affirmation of fact or any

promise by the seller relating to the thing if
OF the natural tendency of such affirmation or
promise isto induce the buyer to purchase
WARRANTIES the same and if the buyer purchases the
thing relying thereon.
2. IMPLIED: Warranties deemed included in the
contract of sale by operation of law.
Warranty that seller has the right to sell

Warranty against eviction IMPLIED
Warranty against non-apparent burden or servitude
Warranty against hidden defects WARRANTIES
REQUISITES:
WARRANTY 1. Defect is important or serious;
2. Defect is hidden;
AGAINST 3. Defect exists at the time of the sale;
EVICTION 4. Buyer gives notice of the defect to
REQUISITES: the vendor within a reasonable time;
1. Final judgment; 5. Action for rescission or reduction of
2. Buyer is ejected in whole or in part the price is brought within the
from the subject matter of the sale; proper period (6 mos. from delivery
3. Basis of conviction is a right prior of thing sold or within 40 days in the
to the sale or act imputable to case of animals)
seller; 6. There must be no waiver of warranty on
4. Seller has been summoned in the the part of the buyer
suit for eviction or made a 3rd
party defendant;
WARRANTY
5. No waiver on the part of the buyer. AGAINST
HIDDEN DEFECTS
EFFECT OF NON-FULFILLMENT/BREACH
CONDITION -V- WARRANTY
IF IMPOSED ON THE PERFECTION OF THE IN CASE OF BREACH, THE BUYER MAY:
CONTRACT, it will prevent the juridical relation 1. Refuse to proceed with the contract; or
itself from coming into existence. 2. Proceed with the contract and waive
the condition.
THE OTHER PARTY MAY:

1. Refuse to proceed with the contract; or NOTE: If the condition is in the nature of a
2. Proceed with the contract, but WAIVE the promise that it should happen or be
performance of the condition performed, the non-performance may be
treated as a breach of warranty.
REMEDIES IN CASE OF BREACH

Accept goods and set up breach of Refuse to accept goods and maintain
warranty by way of recoupment in action against seller for damages; or
diminution or extinction or the price; Rescind contract of sale and refuse
Accept goods and maintain action to receive goods/return them when
against seller for damages; already received.
CONVENTIONAL
VERSUS
LEGAL
REDEMPTION
a mode of extinguishment wherein the
seller has the right to redeem or
repurchase the thing sold upon return of
the price paid
Takes place when the The right to be subrogated

vendor RESERVES the right upon the same terms and
to repurchase the thing sold conditions stipulated in the
with the obligation to contract, in the place of one
return: who acquires the thing by
the price of the sale purchase or by dation en
the expenses of the contract pago or by other transaction
any other legitimate whereby ownership is
payments transmitted by onerous title.
necessary and useful
expenses.
May be exercised within Shall not be exercised

FOUR (4) YEARS from date except within THIRTY (30)
of contract. DAYS from the notice in
writing by the prospective
seller, or seller, as the case
may be.
Does not have to be

Can only be constituted by
expressly reserved (being a
express reservation in a
right granted by law) and
contract of sale at time of
covers sales and other
perfection.
onerous transfers of title.
The exercise of the right Although the exercise of

extinguishes the the right extinguishes the
underlying contract of sale original sale, it actually
as though there was never constitutes a new sale in
any contract at all. substitution of the roginal
sale.
ASSIGNMENT OF CREDITS
AND OTHER INCORPOREAL RIGHTS
WHAT?
An agreement by virtue of which the owner of a credit,
known as the assignor, by a legal cause (ie: sale, dation
in payment, exchange, donation), and without the
consent of the debtor, transfers his credit and accessory
roghts to another, known as the assignee.
HOW PERFECTED?
A consensual contract perfected
by mere consent.
EFFECT?
The transfer of the credit or right does not
extinguish or modify the obligation. The transferee
becomes the new creditor for the same obligation.
BARTER
A.K.A. "EXCHANGE"
WHAT?
By the contract of barter or exchange, one of the
parties binds himself to give one thing in
consideration of the other's promise to give
another thing.
WHEN IS IT *NOT* BARTER?

When you exchange foreign currency
with Philippine currency, it is not
barter.
Can only be constituted by

expressRULES IF CONSIDERATION
reservation in a IS PARTLY
contract ofIN THING
sale AND
at time of PARTLY IN MONEY
perfection.
AMOUNT OF MONEY > THING =
Determine intention first. If it cannot be
determined, it is SALE.
AMOUNT OF THING > MONEY =
BARTER.
AMOUNT OF MONEY = THING =
Determine intention first. If it cannot be
determined, it is SALE.
NOTE: It is only if there is a doubt as to the

intention that the following rules will appy.
HELPS CHI
BULK SALES
LAW RA 3952
A SALE IS CONSIDERED
IN BULK WHEN:
1. There is a sale, transfer, mortgage or
assignment of stock other than in the
ordinary course of business;
2. All or substantially all of the trade or
business is sold, transferred or mortgaged;
or
3. All or substantially all of the fixtures and
equipment of the business are sold.
PURPOSE OF THE LAW

To prevent the defrauding of creditors by
secret sale or disposal in bulk of all or
substantially all of the merchant's stock or
goods. "Substantially" means 80%. It doesn't
only apply to creditors whose claims are
already due at the time of the sale, but also to
those whose claims aren't due but are already
existing at the time of the sale.
WHEN NOT APPLICABLE:

1. Sales/transfers in the ordinary course of
trade or business;
2. There is a written waiver from the
creditors;
3. If the sale is made by an executor,
administrator, receiver or assignee in
insolvency proceedings or a public officer
acting under judicial process
PENALTIES
Violations of the bulk sales law makes the
sale valid between the parties but void for
the affected creditors. The buyer will hold
the property in trust for the seller and is
liable to the seller's creditors for properties
forming part of the bulk and already
disposed by him.
Also, the seller can be punished with a
prison term of 6 months to 5 years and/or a
fine of up to Php5,000.00.

Conditions AND Warranties: Obligations of The Vendor

Uploaded by

Copyright:

Available Formats

Conditions AND Warranties: Obligations of The Vendor

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Conditions AND Warranties: Obligations of The Vendor

Uploaded by

Copyright:

Available Formats

CONDITIONS

KINDS 1. EXPRESS: Any affirmation of fact or any

Warranty that seller has the right to sell

THE OTHER PARTY MAY:

performance of the condition performed, the non-performance may be

treated as a breach of warranty.

REMEDIES IN CASE OF BREACH

Takes place when the The right to be subrogated

May be exercised within Shall not be exercised

Does not have to be

The exercise of the right Although the exercise of

WHEN IS IT NOT BARTER?

Can only be constituted by

NOTE: It is only if there is a doubt as to the

PURPOSE OF THE LAW

WHEN NOT APPLICABLE:

You might also like