Published — October 21, 2017
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Read also: Unfair and Unconscionable Sales Acts and Practices
In a sale transaction, the seller has the obligation not only to deliver the thing sold, but also to warrant that the item sold to the buyer is free from any hidden defects. Providing warranty is a way of protecting the consumers by ensuring that the products they are buying are really of good quality, and to provide peace of mind by reducing the perceived risks of buying it. This is something that businesses owners have to consider, because warranties can make a difference in closing deals.
The seller shall be responsible for warranty against the hidden defects which the thing sold may have, should the defect render it unfit for its intended use, or if the defect diminishes its fitness for such use to such an extent that, had the buyer been aware of such defect, he would have purchased it for a lower price, or not have purchased it at all [Art. 1561, Civil Code]. The seller shall be liable for his warranty even though he himself is unaware of the hidden defect of the thing sold [Art. 1566]. The seller, however, shall not be answerable for patent or visible defects, or those that may be readily perceived [Art. 1561].
1. Warranties are not inherent in every sale
Though it may be desirable for consumers to have their purchases be warranted from hidden defects, the seller is allowed not to assume any warranty over the items he is selling. That is the reason why some sellers are announcing that their products are being sold on an “as is, where is” basis, where the thing sold shall not be guaranteed. The seller, however, must signify his intention not to assume any warranty before the sale takes place, otherwise he shall be bound by the implied warranty against hidden defects.
2. Warranties may be implied or express
Even when the seller does not mention that he is warranting the thing he is selling, he is still responsible to the buyer for the thing sold, because the warranty against hidden defects is implied in sale transactions, unless the seller signifies a contrary intention.
However, once the seller expressly assumes to warrant the things that he sells, our Consumer Act (R.A. No. 7394) requires him to state the following matters:
- Terms of warranty (in clear and readily understandable language); the seller is likewise required to identify himself as the warrantor.
- The party to whom the warranty is extended.
- The products or parts covered.
- What the warrantor will do in the event of a defect, malfunction or failure to conform to the written warranty and at whose expense.
- What the consumer must do to avail of his rights under the warranty.
- The period within which the warrantor will perform any obligation that he assumes under the warranty, after notice of defect, malfunction or failure to conform to the terms being guaranteed [Art. 68(a)].
3. Breach of warranty
In case of breach of express warranty, the consumer has an option either to have the goods repaired, or its purchase price refunded by the warrantor.
- In case the repair of the product in whole or in part is chosen, the work must be made within 30 days. The said 30-day period, however, may be extended by conditions which are beyond the control of the warrantor.
- In case the consumer chooses for the refund of the purchase price, the amount directly attributable to the use of the consumer prior to the discovery of the defect shall be deducted [Art. 68(f)(1)].
In case of breach of implied warranty, the consumer may retain the goods and recover damages, or reject the goods, cancel the sale and recover from the seller so much of the purchase price as has been paid, including damages [Art. 68(f)(2)].
If, however, the warrantor does not make good of his obligation, the warranty may then be enforced by submitting a complaint with the Department of Trade and Industry, Fair Trade Enforcement Bureau (“FTEB”), containing the following information:
- Complete name, address and contact number of both complainant and respondent;
- Narration of facts;
- Demand; and
- Scanned copy of proof of transaction, and any government-issued ID of the complainant.
4. Warranty is also applicable in supply of services
In every contract for the supply of services to a consumer in the course of a business, there is an implied warranty that the service will be rendered with due care and skill and that any material supplied in connection with such services will be reasonably fit for the purpose for which it is supplied [Art. 69(a)]. Under the Consumer Act, service firms guarantee workmanship and replacement of spare parts for a period not less than 90 days, which shall be indicated in the pertinent invoices [Art. 71].
The rule on warranty in supply of services, however, shall not apply to professional services of certified public accountants, architects, engineers, lawyers, veterinarians, optometrists, pharmacists, nurses, nutritionists, dietitians, physical therapists, salesmen, medical and dental practitioners and other professionals engaged in their respective professional endeavors [Art. 70]. The practice of various professions is regulated separately by the Professional Regulation Commission, and in case of the legal profession, by the Supreme Court of the Philippines.
Since warranties can make or break a seller’s chances of closing sales, it has become necessary to strike a balance between the consumer’s interest in getting a quality product or service, and the risk that the supplier would assume under the terms of his guarantee. Though it is lawful for sellers to sell without warranty, this is not a license for businesses to renege on their quality standards, to the detriment of the consuming public. After all, poor products and/or services normally do not result to more closed deals, especially when peace of mind is not delivered to the consumer due to the absence or insufficiency of warranty for his purchase.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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