Obligations of the Buyer

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Acceptance of delivery and payment of purchase price – The buyer is obligated to accept delivery and to pay the price of the thing sold at the time and place[1] stipulated in the contract.”[2] Except as otherwise agreed upon, the buyer is not required to accept delivery by installments.[3]

Same; Reasonable opportunity to examine – If the buyer has not yet previously examined goods delivered to him, he is deemed not to have accepted themunless 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.[4] If the seller physically tenders delivery of the goods to the buyer, the seller is required, upon request of the buyer, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.[5]

Same; Goods delivered to a carrier – If the seller delivers the goods to a carrier pursuant to an agreement or order from the buyer, upon the terms that the goods are not to 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, in the absence of agreement or usage of trade permitting such examination.[6]

Same; Implied acceptance – The buyer is deemed to have accepted the goods in any of the following situations:

  • If he intimates to the seller that he has accepted them; [7] 
  • If 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; [8] or
  • If, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them.[9]

Same; Non-discharge of seller from liability – Unless otherwise stipulated or by implied agreement, the buyers’ acceptance of the goods does not discharge the seller from liability in damages or other legal remedy for breach of any promise or warranty in the sales contract.[10] However, the buyer is required to give notice to the seller of the breach in any of the warranty within a reasonable period of time after the buyer knows or ought to know of such breach; otherwise, the seller will not be held be liable for such breach.[11]

Same; Buyer not obligated to return goods despite refusal to accept – Except as otherwise agreed upon, if 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.[12] Ife he voluntarily constitutes himself a depositary thereof, he will be liable as such.[13]

Buyer owes interest from delivery to payment – The buyer is required to pay interest for the period between the delivery of the thing and the payment of the price, in the following three cases: (a) should it have been so stipulated; (b) should the thing sold and delivered produce fruits or income; or (c) should he be in default, from the time of judicial or extrajudicial demand for the payment of the price.[14]

Right to suspend payment – The buyer may suspend payment of the price until the seller has caused to stop the disturbance or danger in cases where the buyer is disturbed in the possession or ownership of the thing acquired, or if he has reasonable grounds to fear such disturbance, by a vindicatory action or a foreclosure of mortgage.[15] Such right of suspension will not apply if the seller has given security for the return of the price in a proper case, or it has been stipulated that, notwithstanding any such contingency, the vendee is bound to make the payment.[16] The right of suspension does not cover a mere act of trespass.[17]

Rescission of sale for fear of loss of immovable property sold and price – The seller may initiate an action for rescission of the sale if he has reasonable grounds to fear the loss of immovable property sold and its price.[18]

Payment after expiration of period in a sale of immovable property – In a sale of immovable property with a stipulation that failure to pay the price at the agreed time rescission will take place by right, the buyer may still pay, even after the expiration of the period, as long as no demand for rescission of the contract has been made upon him either judicially or by a notarial act.[19]

Rescission of sale of movable in favor of seller – The rescission of the sale will take place by right in the interest of the seller in case the buyer upon the expiration of the period fixed for the delivery of the thing, should not have appeared to receive it, or, having appeared, he should not have tendered the price at the same time, unless a longer period has been stipulated for its payment.[20]

Actions for breach of sales contract of goods

Actions for price of goods by seller – In case of breach of sales contract of goods, the seller may have the following actions against the buyer for the price of goods if:

  • The ownership of the goods has passed to the buyer and he wrongfully neglects or refuses to pay for the goods according to the terms of the sales contract;[21] or
  • The price is payable on a certain day, irrespective of delivery or of transfer of title and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price although the ownership[22] in the goods has not passed.[23]

Action for damages by seller due to non-acceptance by the buyer – The seller may initiate an action against the buyer for damages[24] arising from non-acceptance of the goods if the buyer wrongfully neglects or refuses to accept and pay for the goods.[25]

Rescission by seller – The seller may totally rescind the sales contract after due notice thereof to the buyer if the goods have not been delivered to the buyer, and the buyer has repudiated the sales contract, or has manifested his inability to perform his obligations thereunder, or has committed a breach thereof.”[26]

Specific performance by buyer – If the seller has breached the contract to deliver specific or ascertained goods, the buyer may initiate an action for specific performance with a competent court[27] for the purpose of obtaining an order which would direct that the contract is to be performed specifically, without giving the seller the option of retaining the goods on payment of damages.[28]

For breach of warranty by seller, buyer may initiate various actions – If the seller is guilty of breach of warranty, the buyer may, at his election:

  • Accept or keep the goods and set up against the seller, the breach of warranty by way of recoupment in diminution or extinction of the price;[29]
  • Accept or keep the goods and maintain an action against the seller for damages for the breach of warranty;[30]
  • Refuse to accept the goods, and maintain an action against the seller for damages for the breach of warranty;[31]
  • Rescind the sales contract and refuse to receive the goods or if the goods have already been received, return them or offer to return them to the seller and recover the price or any part thereof which has been paid;[32]
  • In the case of breach of warranty of quality, such loss, in the absence of special circumstances showing proximate damage of a greater amount, is the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty.[33]

[1] “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, Civil Code).

[2] CIVIL CODE. Paragraph 1, Article 1582.

[3] Ibid. Paragraph 1, Article 1583. “Where there is a sales contract of goods to be delivered by stated instalments, 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 or 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, Civil Code).

[4] Ibid. Paragraph 1, Article 1584.

[5] Ibid. Paragraph 2, Article 1584.

[6] Ibid. Paragraph 3, Article 1584.

[7] Ibid. Article 1585.

[8] Ibid.

[9] Ibid.

[10] CIVIL CODE. Article 1586.

[11] Ibid.

[12] CIVIL CODE. Article 1587.

[13] Ibid.

[14] CIVIL CODE. Article 1589.

[15] Ibid. Article 1590.

[16] Ibid.

[17] Ibid.

[18] CIVIL CODE. Paragraph 1, Article 1591. Should such ground not exist, the provisions of article 1191 shall be observed (Paragraph 2, Article 1591, Civil Code).

[19] Ibid. Article 1592. “After the demand, the court may not grant him a new term” (Ibid.).

[20] Ibid. Article 1593.

[21] Ibid. Paragraph 1, Article 1595.

[22] Although the ownership in the goods has not passed, if they cannot readily be resold for a reasonable price, and if the provisions of article 1596, fourth paragraph, are not applicable, the seller may offer to deliver the goods to the buyer, and, if the buyer refuses to receive them, may notify the buyer that the goods are thereafter held by the seller as bailee for the buyer. Thereafter the seller may treat the goods as the buyer’s and may maintain an action for the price (Paragraph 3, Article 1596, Civil Code).

[23] CIVIL CODE. Paragraph 2, Article 1595. “But it shall be a defense to such an action that the seller at any time before the judgment in such action has manifested an inability to perform the sales contract on his part or an intention not to perform it.” (Ibid.)

[24] “The measure of damages is the estimated loss directly and naturally resulting in the ordinary course of events from the buyer’s breach of contract” (Paragraph 2, Article 1596, Civil Code). On the other hand, if “there is an available market for the goods in question, the measure of damages is, in the absence of special circumstances showing proximate damage of a different amount, the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted, or, if no time was fixed for acceptance, then at the time of the refusal to accept” (Paragraph 3, Article 1596, Civil Code). In addition, “If, while labor or expense of material amount is necessary on the part of the seller to enable him to fulfill his obligations under the sales contract, the buyer repudiates the contract or notifies the seller to proceed no further therewith, the buyer shall be liable to the seller for labor performed or expenses made before receiving notice of the buyer’s repudiation or countermand. The profit the seller would have made if the contract or the sale had been fully performed shall be considered in awarding the damages“(Paragraph 4, Article 1596, Civil Code).

[25] CIVIL CODE. Paragraph 1, Article 1596.

[26] Ibid. Article 1597.

[27] “The judgment or decree may be unconditional, or upon such terms and conditions as to damages, payment of the price and otherwise, as the court may deem just” (Article 1598, Civil Code).

[28] Ibid. Article 1598.

[29] Ibid. Article 1591 (1).

[30] Ibid. Article 1591 (2).

[31] Ibid. Article 1591 (3).

[32] Ibid. Article 1591 (4). “When the buyer has claimed and been granted a remedy in anyone of these ways, no other remedy can thereafter be granted, without prejudice to the provisions of the second paragraph of article 1191… Where the goods have been delivered to the buyer, he cannot rescind the sale if he knew of the breach of warranty when he accepted the goods without protest, or if he fails to notify the seller within a reasonable time of the election to rescind, or if he fails to return or to offer to return the goods to the seller in substantially as good condition as they were in at the time the ownership was transferred to the buyer. But if deterioration or injury of the goods is due to the breach or warranty, such deterioration or injury shall not prevent the buyer from returning or offering to return the goods to the seller and rescinding the sale… Where the buyer is entitled to rescind the sale and elects to do so, he shall cease to be liable for the price upon returning or offering to return the goods. If the price or any part thereof has already been paid, the seller shall be liable to repay so much thereof as has been paid, concurrently with the return of the goods, or immediately after an offer to return the goods in exchange for repayment of the price… Where the buyer is entitled to rescind the sale and elects to do so, if the seller refuses to accept an offer of the buyer to return the goods, the buyer shall thereafter be deemed to hold the goods as bailee for the seller, but subject to a lien to secure the payment of any portion of the price which has been paid, and with the remedies for the enforcement of such lien allowed to an unpaid seller by article 1526.” (Ibid.)

[33] Ibid. Article 1591 (5).

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