OBLIGATIONS OF THE VENDEE

PRINCIPAL OBLIGATIONS OF THE VENDEE

1. To accept delivery
2. To pay the price of the thing sold
- As a rule, it must be in legal tender
- UNLESS another mode has been agreed upon

Meaning of Acceptance

Acceptance means an offeree’s assent, either by express act or by

implication from conduct, to the terms of an offer in a manner authorized or
requested by the offeror, so that a binding contract is formed. If an
acceptance modifies the terms or adds new ones, it generally operates as a
counteroffer.

Note: Acceptance and delivery are separate acts. Acceptance is the

buyer’s obligation while delivery is the vendor’s obligation.

Note: Unless otherwise agreed upon, acceptance by the buyer does

not discharge the seller from liability for damages or other legal
remedy like for breach of any promise or warranty.

Note: The seller must comply with the obligation to deliver although
there is no acceptance yet by the buyer.

Modes of acceptance:

1. Express Acceptance – when the buyer, after delivery of the goods,

intimates to the seller, verbally or in writing, that he has accepted them.
2. Implied Acceptance –
a. When the buyer performs acts of ownership;
b. Failure to return goods after reasonable lapse of time (Art. 1585).

Note: The buyer must notify the seller within a reasonable time after
the buyer knows or ought to know the breach; otherwise, the seller
will be released from liability. (Art. 1586, last par.)

Reasonable Time:
 The time needed to dow hat a contract requires to be done, based on
subjective circumstances

OTHER OBLIGATIONS

1. To take care of the goods without the obligation to return where the goods
are delivered to the buyer and he rightfully refuses to accept (Ar. 1587)

The buyer in such a case is in the position of a bailee who has goods thrust
upon him without his assent. He has the obligation to take reasonable care of
the goods but nothing more can be demanded of him.

The goods in the buyer’s possession are at the seller’s risk.

2. To be liable as a depositary if he voluntarily constituted himself as such

(Art. 1587)

3. To pay the interest for the period between delivery of the thing and the
payment of the price in the following cases (Art. 1589):

a. Interest is stipulated.
b. Fruits or income are received by vendee from the thing sold.
c. Vendee is guilty of Default.
o Please take not of Art. 11691

TIME AND PLACE OF DELIVERY

1. If stipulated, the vendee is bound to accept delivery and to pay the price at
the time and place designated (Art. 1582);
2. If there is no stipulation as to the time and place for payment of delivery, the
payment must be made at the time and place of the delivery of the thing
sold.

1
Article 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their obligation. 
However, the demand by the creditor shall not be necessary in order that delay may exist: 
(1) When the obligation or the law expressly so declare; or 
(2) When from the nature and the circumstances of the obligation it appears that the designation of the time
when the thing is to be delivered or the service is to be rendered was a controlling motive for the
establishment of the contract; or 
(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.
RIGHTS OF THE BUYER

1. Not bound to accept delivery of goods by installments (Art. 1583);

2. Reasonable opportunity to examine the goods upon delivery to ascertain
whether they are in conformity with the contract before accepting the same
(Art. 1584)

Exceptions:

1. If there is a stipulation to the contrary; or

2. In case of C.O.D. (collect on delivery) – the buyer is not entitled to
examine until payment is made; EXCEPT:
a. There is an agreement permitting examination
b. The usage of trade permits the examination
3. Acceptance of the goods shall not discharge the seller from liability for
breach of any promise or warranty BUT the buyer must give the seller
notice of the breach of promise or warranty within a reasonable time after
the buyer knows or ought to know of such breach, otherwise the seller
shall not be liable therefor (Art. 1586).
4. Reject delivery of a wrong quantity of goods or of goods of a different
description not included in the contract which are mixed with the goods
sold (Art. 1522).
5. If he refuses to accept the goods, having the right to do so, he is not
bound to return them to the seller; it being sufficient that he notifies the
seller of his refusal to accept.

If he voluntarily constitutes himself a depositary thereof, he shall be

liable as such. (Art. 1587)

EFFECT OF REFUSAL TO ACCEPT GOODS WITHOUT JUST CAUSE:

Title to the goods passes to the buyer from the moment they are placed at his
disposal. (Art. 1588)

Exception: If the ownership has been reserved by the seller.

PAYMENT
(Please review payment as a mode of extinguishing an obligation under obligations
and contracts)
 Non-payment does not prove simulation; at most, it gives the seller the right
to sue for collection. Payment of the price is a resolutory condition and the
remedy of the seller is to exact fulfillment or, in case of substantial breach to
rescind the contract under Art. 1191.

When Seller May Immediately Sue for the Rescission of the Sale
1. LOSS of the immovable property sold, and
2. LOSS of the price.

Note: The seller must have reasonable grounds to fear of loss.

Rights of the buyer

1. Suspension of payment (Art. 1590):
Contemplates a situation where the contract is not yet consummated

Applicable in the following cases:

a. Where the vendee is disturbed in possession of ownership of the thing
bought; or
b. Vendee has reasonable ground to fear that his possession or ownership
would be disturbed by:
i. vindicatory action; or
ii. a foreclosure of a mortgage.
 Example: When the vendee receives a demand letter which
threatens the filing of the thing sold or for foreclosure of the
mortgage constituted on the thing.

Note: In both instances (a and b), the vendee may retain only the price
that has not been paid to the vendor. He is not entitled to recover what
has already been paid.

Exceptions to Suspension of Payment (vendee has no right to

suspend):
a. Vendor gives security for the return of the price;
b. Stipulation that vendee must make payment notwithstanding
such contingency;
c. Cessation of disturbance or danger
d. Disturbance is a mere act of trespass
e. Vendee has paid the price in full
 2. In the sale of immovable property, to pay even after the expiration of the
period agreed upon, as long as no demand for rescission of the contract has
been made upon him either judicially or by a notarial act, even though it may
have been stipulated that rescission shall of right take place upon failure to
pay the price at the time agreed upon (Art. 1592)

Note: Art. 1592 does not apply to a contract to sell real property or
promise to sell real property.

Rescission of the sale of MOVABLE PROPERTY shall of right take place

(Art. 1593)

1. If the vendee, upon expiration of the period fixed for the delivery of the
thing, should not have appeared to receive it; or

2. Having appeared, he should not have tendered the price at the same time,
unless a longer period has been stipulated for its payment.

ACTIONS FOR BREACH OF CONTRACT

OF SALE OF GOODS

NOTE: Arts. 1594-1599 is not applicable to sale of real or immovable property.

ACTIONS/REMEDIES OF THE SELLER

1. Maintain an action for the price of the goods if the buyer wrongfully
neglects or refuses to pay. (Art. 1595)

2. Hold the goods as bailee for the buyer and bring an action for the price (Art.
1595, 3rd paragraph)

3. Maintain an action for damages if the buyer wrongfully neglects or refuses

to accept and pay for the goods. (Art. 1596)

4. Rescind the contract if the buyer has repudiated the sale, or manifested his
inability to perform his obligation, or has committed a breach of contract,
where the goods have not been delivered to the buyer. (Art. 1597)

ACTIONS/REMEDIES OF THE BUYER

 1. Bring an action for specific performance, if the seller has broken the contract
to deliver specific or ascertained goods. (Art. 1598)

2. In case of breach of warranty by the seller, the buyer may, at his election:
(Art. 1599)

a. 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; 
b.
c. Accept or keep the goods and maintain an action against the seller
for damages for the breach of warranty; 

d. Refuse to accept the goods, and maintain an action against the

seller for damages for the breach of warranty; 

e. Rescind the contract of sale 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.

Note: The remedies granted to the buyer are in the alternative.

When the buyer has claimed a remedy, no other remedy can
thereafter be granted. This is without prejudice to the provisions of
the second paragraph of Art. 11912.

Meaning of Damages

Money claimed by, or ordered to be paid, or ordered to be paid to, a person

as compensation for loss or injury.

Measure of damages

2
Article 1191. 
xxx
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become
impossible.
 It is the estimated loss directly and naturally resulting in the ordinary course
of events from the buyer’s breach of contract.

Measure of damages where there is an available market for the goods

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.

Countermand

A contradictory command that overrides or annuls a previous one. An action

that has the effect of voiding something previously ordered. A revocation.

When can the seller totally rescind the contract of sale? (See Art. 1597)

1. The buyer has repudiated the contract of sale;

2. The buyer has manifested his inability to perform his obligations thereunder;
or
3. The buyer has committed a breach of the contract of sale.

When can the buyer rescind the contract of sale? (Art. 1599)
- See discussion above.

The BUYER is not allowed to rescind where the goods have been delivered to
the buyer, he cannot rescind the sale if: (Art. 1599)

1. The buyer knew of the breach of warranty when he accepted the goods
without protest; or

2. The buyer fails to notify the seller within a reasonable time of the election to
rescind; or

3. The buyer 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.
Effect of rescission on buyer’s rights and obligations.

1. The buyer 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.

2. 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

Measure of Damages

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.