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 do what 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 note of Art. 11691

TIME AND PLACE OF PAYMENT

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.

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

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

c. Refuse to accept the goods, and maintain an action against the seller
for damages for the breach of warranty;

d. 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.

2Article 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.
Measure of damages

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.