D. Obligations of vendor

1. TO PAY PRICE OF THE THING SOLD

The buyer is bound to pay the price of the thing sold at the time and place stipulated in the contract. (Article 1582, Ibid.)

2. TO ACCEPT DELIVERY

At time and place stipulated.The buyer is bound to accept delivery at the time and place stipulated in the contract.(Article 1582, Ibid.)

If the time and place should not have been stipulated, the payment must be made at the time and place of the delivery of the thing sold. (Paragraph 2, Article 1582, Ibid.)

No delivery by installments. –

General Rule: The buyer of goods is not bound to accept delivery thereof by installments. (Article 1583, Ibid.)
Exception: Unless otherwise agreed… (Ibid.)
If delivery by installments is stipulated. Where there is a contract of sale of goods to be delivered by stated installments, which are to be separately paid for, and the seller makes defective deliveries in respect of one or more instalments, or the buyer neglects or refuses without just cause to take delivery of or pay for one more instalments, it depends in each case on the terms of the contract and the circumstances of the case, whether the breach of contract is so material as to justify the injured party in refusing to proceed further and suing for damages for breach of the entire contract, or whether the breach is severable, giving rise to a claim for compensation but not to a right to treat the whole contract as broken. (Paragraph 2, Article 1583, Ibid.)

Reasonable opportunity to examine.Where goods are delivered to the buyer, which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract if there is no stipulation to the contrary. (Article 1584, Ibid.)

General Rule: … when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract. (Paragraph 2, Article 1584, Ibid.)
Exception: Unless otherwise agreed… (Ibid.)

Collect upon delivery (a.k.a. payment upon delivery). –

General Rule: Where goods are delivered to a carrier by the seller, in accordance with an order from or agreement with the buyer, upon the terms that the goods shall not be delivered by the carrier to the buyer until he has paid the price, whether such terms are indicated by marking the goods with the words “collect on delivery,” or otherwise, the buyer is not entitled to examine the goods before the payment of the price. (Paragraph 3, Article 1584, Ibid.)
Exception: … in the absence of agreement or usage of trade permitting such examination. (Ibid.)

When buyer is deemed to have accepted the goods. –

The buyer is deemed to have accepted the goods:
1) When he intimates to the seller that he has accepted them;
2) When the goods have been delivered to him, and he does any act in relation to them which is inconsistent with the ownership of the seller; or
3) When, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them. (Article 1585, Ibid.)

Acceptance by buyer has no effect on seller’s promise or warranty. –

General Rule: … 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.
Exceptions:
1) In the absence of express or implied agreement of the parties;
2) 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. (Article 1586, Ibid.)

When buyer has right to refuse acceptance. –

General Rule: …. where goods are delivered to the buyer, and he refuses to accept them, having the right so to do, he is not bound to return them to the seller, but it is sufficient if he notifies the seller that he refuses to accept them. If he voluntarily constitutes himself a depositary thereof, he shall be liable as such. (Article 1587, Ibid.)  
Exception: Unless otherwise agreed… (Ibid.)

When buyer’s refusal is unjustified. If there is no stipulation as specified in the first paragraph of article 1523, when the buyer’s refusal to accept the goods is without just cause, the title thereto passes to him from the moment they are placed at his disposal.(Article 1588, Ibid.)

Cross-referenced article/s
Where, in pursuance of a contract of sale, the seller is authorized or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer is deemed to be a delivery of the goods to the buyer, except in the case provided for in Article 1503, first, second and third paragraphs, or unless a contrary intent appears.(Article 1523, Ibid.)
When there is a contract of sale of specific goods, the seller may, by the terms of the contract, reserve the right of possession or ownership in the goods until certain conditions have been fulfilled. The right of possession or ownership may be thus reserved notwithstanding the delivery of the goods to the buyer or to a carrier or other bailee for the purpose of transmission to the buyer.(Article 1503, Ibid.)
Where goods are shipped, and by the bill of lading the goods are deliverable to the seller or his agent, or to the order of the seller or of his agent, the seller thereby reserves the ownership in the goods. But, if except for the form of the bill of lading, the ownership would have passed to the buyer on shipment of the goods, the seller’s property in the goods shall be deemed to be only for the purpose of securing performance by the buyer of his obligations under the contract. (Paragraph 2, Article 1503, Ibid.)
Where goods are shipped, and by the bill of lading the goods are deliverable to order of the buyer or of his agent, but possession of the bill of lading is retained by the seller or his agent, the seller thereby reserves a right to the possession of the goods as against the buyer. (Paragraph 3, Article 1503, Ibid.)

3. TO PAY INTEREST

The buyer shall owe interest for the period between the delivery of the thing and the payment of the price, in the following three cases:
1) Should it have been so stipulated;
2) Should the thing sold and delivered produce fruits or income;
3) Should he be in default, from the time of judicial or extrajudicial demand for the payment of the price. (Article 1589, Ibid.)

4. TO WARRANT OBJECT OF THE SALE

The seller is bound to warrant the thing which is the object of the sale. (Ibid.)

Warranties. A warranty is a statement or representation made by the seller of goods – contemporaneously and as part of the contract of sale – that has reference to the character, quality or title of the goods; and is issued to promise or undertake to insure that ce1iain facts are or shall be as the seller represents them. (Philippine Steel Coating Corp. v. Quinones, G.R. No. 194533, 19 April 2017)

A warranty is not necessarily written. It may be oral as long as it is not given as a mere opinion or judgment. Rather, it is a positive affirmation of a fact that buyers rely upon, and that influences or induces them to purchase the product. (Ibid.)

Conditions; Non-performance of condition. –

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 performance of the condition. (Article 1545, Ibid.)

If only one party promised the condition. If the other party has promised that the condition should happen or be performed, the first party may also treat the non-performance of the condition as a breach of warranty. (Article 1545, Ibid.)

When seller’s obligation to deliver treated as a condition on the buyer’s obligation. Where the ownership in the thing has not passed, the buyer may treat the fulfillment by the seller of his obligation to deliver the same as described and as warranted expressly or by implication in the contract of sale as a condition of the obligation of the buyer to perform his promise to accept and pay for the thing. (Paragraph 2, Article 1545, Ibid.)

Disclaimer: All information herein is for educational and general information only intended for those preparing for the bar exam. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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