Conditions and warranties in sale on seller
Sales contract with suspensive condition
If the sales contract is under a suspensive condition which is not met, the innocent party may refuse to proceed with the contract or he may waive performance of the condition.
Breach of warranty
In addition to the above rule, the innocent party may also consider the non-performance of the condition as a breach of warranty if the other party has promised that the condition should happen or be performed.
Condition precedent to ownership
Prior to performing his promise to accept and pay for the thing, 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 sales contract as a condition precedent so long as the ownership has not passed.
What constitutes an express warranty
A seller’s express warranty is any affirmation of fact or any promise by the seller relating to the thing “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.”
Best Legal Practices:
Clearly stipulate on express warranty – A seller’s express warranty is discretionary. Such warranty is sometimes given in order to boost sales. If such warranty is made, the terms and conditions thereof should be clearly stipulated.
Limit seller’s express warranty – In order avoid liablility for incidents not contemplated by the seller’s express warranty, the same should be limited by stating the parameters and/or listing down the coverage.
A seller’s affirmation of the value of the thing or any statement purporting to be a statement of the seller’s opinion is not a warranty, except if the seller has made such affirmation or statement as an expert and it was relied upon by the buyer.
Songco v. Sellner
G.R. No. L-11513, 04 December 1917
Songco sold his sugar cane to Sellner. Songco exaggerated the amount of mill that may be derived from the canes. Hence, Sellner refused to pay the 3rd promissory note upon learning of the disparity.
HELD: The sale was valid. Although Songco did claim a higher yield, such was an opinion. In fact, Sellner wasn’t induced by such since he had a different motive – i.e., to get an easement to pass on the property of Songco. “Misrepresentation, as a matter of opinion, is not actionable.”
“It is not every false representation relating to the subject matter of a contract which will render it void. It must be as to matters of fact substantially affecting the buyer’s interest, not as to matters of opinion, judgment, probability, or expectation… When the purchaser undertakes to make an investigation of his own, and the seller does nothing to prevent this investigation from being as full as he chooses to make it, the purchaser cannot afterwards allege that the seller made misrepresentations…”
Gochangco v. Dean
G.R. No. L-23109, 20 March 1925
Santiago Gochangco and R.L. Dean executed a contract of exchange involving their lands. Dean incorrectly gave the number of coconut plants in his property when he informed Gochiangco that his land had around 6,000 coconut trees. Gochiangco initiated a Complaint seeking to nullify the sale on the ground that that Dean made false and fraudulent misrepresentations.
HELD: The sale was valid. Dean merely expressed his belief. There was no deliberate intent on his part to deceive Gochangco.
“The plaintiffs allege that defendant made them false and fraudulent representations as to the existence of 6,000 coconut trees on his lands in Masbate offered for exchange. This was not proven. It does not appear in the record that the defendant deliberately violated the truth in stating his belief that there were such a number of coconut trees on said lands. Furthermore, it was shown that the plaintiff viewed the lands and himself estimated that there were there more than six thousand coconut trees.”
Best Legal Practices:
Refrain from relying on the seller’s opinion – A seller’s opinion is not a warranty. Thus, it is best not to rely on such opinion unless he does so as an expert.
Same; Tolerated fraud – In some cases, the seller may sweet talk a buyer into buying a product. For instance, a car salesman may convince a buyer to purchase a sports car in order for the latter to gain social status. This manner of persuasion is referred to and allowed by law as tolerated fraud. Such kind of fraud is not actionable.
What constitutes an implied warranty
Except when the contrary intention appears, there is 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 is from that time to have and enjoy the legal and peaceful possession of the thing; or
- That the thing is to be free from any hidden faults or defects, or any charge or encumbrance not declared or known to the buyer.
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 Ibid. Paragraph 1, Article 1545.
 Ibid. Paragraph 1, Article 1545.
 Ibid. Paragraph 2, Article 1545.
 Ibid. Article 1546. The rules on warranty are primarily governed by the Civil Code. There are additional rules in the Consumeer Code (see Chapter VIII on Consumer Laws).
 CIVIL CODE. Article 1547 (1).
 Ibid. Article 1547 (2). “This article shall not, however, be held to render liable 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” (Paragraph 2, Ibid.).