WARRANTY (IN RELATION TO CONSUMER LAWS)

Warranty is any representation made by the seller of the thing with respect to its
character, quality, or ownership, by which he induces the buyer to purchase the same
relying on said representation.

Kinds of warranty.
1. Express warranty.
Art. 1546. 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 purchases the thing relying thereon. No
affirmation of the value of the thing, nor any statement purporting to be a statement of
the seller's opinion only, shall be construed as a warranty unless the seller made such
affirmation or statement as an expert and it was relied upon by the buyer.

The seller is liable for his express warranties. (Art. 1546)

2. Implied warranty.
Art. 1547. In a contract of sale, unless a contrary intention appears, there is:
(1) An implied warranty on the part of the seller that he has a right to sell the thing at the
time when the ownership is to pass, and that the buyer shall from that time have and
enjoy the legal and peaceful possession of the thing;
(2) An implied warranty that the thing shall be free from any hidden faults or defects, or
any charge or encumbrance not declared or known to the buyer.

The seller is liable for:

1. Implied warranties. Art. 1547.
2. Absence of hidden defects.
Art. 1566. The vendor is responsible to the vendee for any hidden defaults or defects in
the thing sold, even though he was not aware thereof.
The doctrine of “caveat emptor.” - Caveat emptor is a Latin phrase that means that
buyers are responsible for making sure that a product works to their satisfaction before
buying it. They must be confident about the product because the seller will be under no
obligation to provide a refund for it. These days, caveat emptor isn't applied very often to
other types of transactions. That's due to regulations that are intended to provide
consumers with more information and protection.
3. Fitness or merchantability. Art. 1562.
Art. 1562. In a sale of goods, there is an implied warranty or condition as to the quality
or fitness of the goods, as follows:
(1) Where 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 seller's skill or judgment (whether he be the grower or manufacturer or not), there
is an implied warranty that the goods shall be reasonably fit for such purpose;

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(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 shall be of merchantable quality. (n)
4. Description or by Sample.
Art. 1565. Art. 1565. 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.
As a general rule, all the buyer is entitled to, in case of a sale or contract to sell by
sample, is that the goods be like the sample.
Art. 1481. In the contract of sale of goods by description or by sample, the contract may
be rescinded if the bulk of the goods delivered do not correspond with the description or
the sample, and if the contract be by sample as well as description, it is not sufficient
that the bulk of goods correspond with the sample if they do not also correspond with
the description.

The buyer shall have a reasonable opportunity to compare the bulk with the description
or the sample.

Q: What is the primary law governing all contracts of sale with conditions and
warranties?
A: The provisions of the New Civil Code on conditions and warranties shall govern all
contracts of sales with conditions and warranties.
Q: What are the responsibilities of a seller/vendor under the New Civil Code in cases of
express warranties?

Warranty Against Hidden Defects.

A: Under Article 1561, a vendor or a seller has the responsibility to ensure that the
items he or she sells have no hidden defects.
Art. 1561. The vendor shall be responsible for warranty against the hidden defects
which the thing sold may have, should they render it unfit for the use for which it is
intended, or should 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; but said vendor shall not be 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.

Requisites for warranty against hidden defects.

1. The defect must be important or serious;
2. It must be hidden. The defect is hidden (or latent) if it was not known and could not
have been known to the vendee. Hence, there is no warranty if the defect is patent
(obvious) or visible.
3. It must exist at the time of the sale;
4. The vendee must give notice of the defect to the vendor within a reasonable time.

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Art. 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.
5. The actions for rescission or reduction of the price must be brought within the proper
period – six (6) months from the delivery of the thing sold (Art. 1571.) or within forty (40)
days from the date of the delivery in case of animals (Art. 1577, par. 1.); and

Q: What kind of defects of the item sold shall make the vendor or seller liable?
A: If the defects should render the item sold totally unfit for the use for which it is
intended, the seller or the vendor shall be liable for such defects. Second, if the defect
should diminish or decrease its fitness or its use to the extent that if the buyer was
aware of such defect he would not have bought the product or would have demanded a
lower price for it.
Q: What are the instances where a vendor or seller may not be held liable in case of
defects?
A: A vendor or seller may not be held liable in cases of patent defects pr those which
are clearly visible upon inspection of the product bought. In case the defects are not
visible, and the buyer is an expert, who by reason of his trade or profession should have
known the defects, then the vendor or seller may not be held liable.
Q: What are the responsibilities of the seller or vendor as to the quality or fitness of the
product sold in case there is no express warranty given to him?
A: The seller or vendor is liable to the buyer in an implied warranty, if such buyer make
known to the seller expressly or impliedly, the particular purpose for which the goods
are acquired. The vendor, by implication, warrants the general fitness or quality of the
product sold to the buyer. Second, the seller or vendor is liable to the buyer if such
buyer relies on the seller’s skill or judgment.
Q: Aside from the provisions of the New Civil Code, what are other laws that may apply
in cases of express warranties?
A: In addition to the New Civil Code provisions on sale with warranties, the provisions of
Title III, Chapter III of the Consumer Act of the Philippines shall govern the sale of
consumer products with warranty.
Q: What are the minimum terms of express warranty under the Consumer Act that shall
be given by a seller or manufacturer?
A: The following shall be stated in an express warranty:
the terms of warranty, written in a clear and readily understandable language; the
warrantor’s identity; the party’s identity to whom the warranty is extended;
the products or parts covered; the warrantor’s action plan in the event of a defect,
malfunction, or failure to conform to the written warranty; the directive to the consumer
to avail of the right which accrues to the warranty; the period within which, after notice of

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defect, malfunction, or failure to conform to the warranty, the warrantor will perform any
obligation under the warranty.
Q: What is the difference between a Full warranty and a Limited warranty (express)?
A: There is a Full Warranty if the warranty conforms with the minimum standards for
warranties. To conform with the requirements, the following should be found in a full
warranty: First, there should be a remedy or relief offered to a consumer within a
reasonable time and without charge in case of defect, malfunction, or failure to conform
with such written warranty. Second, the warranty should give the consumer an option to
either ask for a refund or replacement without charge of such product or part, as the
case may be, where after a reasonable number of attempts to remedy the defect or
malfunction, the product continues to have the defect or to malfunction. A Limited
Warranty, on the other hand, is when the written warranty does not meet the
abovementioned minimum requirements.
Q: When shall the retailer be subsidiarily liable under the express warranty?
A: The retailer may be subsidiarily held liable attaches in the following instance:
In case where both the manufacturer and the distributor failed to honor the warranty the
retailer shoulder the expenses and costs necessary to honor the warranty but the
retailer is not prevented from pursuing actions against the distributor and manufacturer.
Q: What are the documents to be presented to the seller or vendor in case the
consumer opts to have the defective product repaired, replaced, or refunded under an
express warranty?
A: The consumer should present a copy of the warranty card or documents and the
official receipt of the product sold or bought.
Q: What is the minimum duration or period of an express or implied warranty?
A: The duration of a warranty shall be reckoned with the following circumstances:
If there is a stipulation of the period agreed between the seller and the consumer within
which the express warranty shall be enforceable; If the implied warranty on
merchantability accompanies an express warranty, both will be of equal duration; Any
other implied warranty: not less than 60 days nor more than one year following the sale
of a new consumer product.
Q: What are the options given to a consumer in case of a breach of an express
warranty?
A: First, the consumer can have the goods repaired. Warranty work must be made
within 30 days. Such a period may be extended by conditions beyond the control of the
warrantor or his representatives.
Second, the product or its parts may be replaced.
Third, the consumer may ask for a refund from the warrantor. The amount directly
attributable to the use of the consumer prior to the discovery of the non-conformity shall
be deducted.
Q: What are the options given to a consumer in case of a breach of an implied
warranty?

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A: The consumer may retain the goods and recover damages, or reject the goods,
cancel the contract, and refund the amount paid for the product, including damages.
Q: Are secondhand consumer products covered by a warranty?
A: Generally, there is no implied warranty in the sale of secondhand articles, except
when the goods are sold as to raise an implied warranty, i.e. if such buyer makes known
to the seller, the particular purpose for which the goods are acquired. Doing so warrants
the general fitness or quality of the product sold to the buyer. Second, the seller or
vendor is also liable under a warranty in the sale of secondhand products if the seller
has given an express written warranty.
Q: What is the jurisdiction of the DTI in the sale of secondhand consumer products?
A: DTI takes jurisdiction of complaints regarding secondhand products if such
secondhand/surplus products are sold by persons engaged in the business of selling
products and they have, in effect, power to enforce the warranty provided for such
products. On the other hand, the complaint shall be filed with the appropriate regular
courts if the person who sold the secondhand product is not engaged in the business of
selling products, commodities, merchandise, and goods.

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