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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.
AT A GLANCE:
A manufacturer, producer and any importer shall be liable for damages caused to consumers by defects resulting from design, manufacture, construction, assembly and erection among others, as well as for insufficient or inadequate information on the use and hazards thereof. (Article 97, Chapter V, Title II, R.A. No. 7394)
Republic Act No. 7394 or the Consumer Act of the Philippines defines a manufacturer as any person who manufactures, assembles or processes consumer products, except that if the goods are manufactured, assembled or processed for another person who attaches his own brand name to the consumer products, the latter shall be deemed the manufacturer. In case of imported products, the manufacturer’s representatives or, in his absence, the importer, shall be deemed the manufacturer. (Article 4, par. as, Title I, R.A. No. 7394)
A supplier, on the other hand, is defined under the law as any person, other than a consumer, who in the course of his business, solicits, offers, advertises, or promotes the disposition or supply of a consumer product or who other than the consumer engages in, enforces, or otherwise participates in a consumer transaction, whether or not any privity of contract actually exists between that person and the consumer, and includes the successor to, or assignee of, any right or obligation of the supplier. (Article 4, par. bu, Title I, R.A. No. 7394)
The Consumer Act provides that any Filipino or foreign manufacturer, producer, and any importer shall be liable for redress, independently of fault, for damages caused to consumers by defects resulting from design, manufacture, construction, assembly and erection, formulas and handling and making up, presentation or packing of their products, as well as for the insufficient or inadequate information on the use and hazards thereof. (Article 97, Chapter V, Title II, R.A. No. 7394)
The law further says:
A product is defective when it does not offer the safety rightfully expected of it, taking relevant circumstances into consideration, including but not limited to:
- presentation of product;
- use and hazards reasonably expected of it;
- the time it was put into circulation.
A product is not considered defective because another better quality product has been placed in the market.
The manufacturer, builder, producer or importer shall not be held liable when it evidences:
- that it did not place the product on the market;
- that although it did place the product on the market such product has no defect;
- that the consumer or a third party is solely at fault. (Article 97, Chapter V, Title II, R.A. No. 7394)
Article 100 of the Consumer Act provides for the liability for product and service imperfections, to wit:
“The suppliers of durable or non-durable consumer products are jointly liable for imperfections in quality that render the products unfit or inadequate for consumption for which they are designed or decrease their value, and for those resulting from inconsistency with the information provided on the container, packaging, labels or publicity messages/advertisement, with due regard to the variations resulting from their nature, the consumer being able to demand replacement to the imperfect parts.
If the imperfection is not corrected within thirty (30) days, the consumer may alternatively demand at his [or her] option:
- the replacement of the product by another of the same kind, in a perfect state of use;
- the immediate reimbursement of the amount paid, with monetary updating, without prejudice to any losses and damages;
- a proportionate price reduction.
The parties may agree to reduce or increase the term specified in the immediately preceding paragraph; but such shall not be less than seven (7) nor more than one hundred and eighty (180) days.
The consumer may make immediate use of the alternatives under the second paragraph of this Article when by virtue of the extent of the imperfection, the replacement of the imperfect parts may jeopardize the product quality or characteristics, thus decreasing its value.
If the consumer opts for the alternative under sub-paragraph (a) of the second paragraph of this Article, and replacement of the product is not possible, it may be replaced by another of a different kind, mark or model: Provided, That any difference in price may result thereof shall be supplemented or reimbursed by the party which caused the damage, without prejudice to the provisions of the second, third and fourth paragraphs of this Article.” (Article 100, R.A. No. 7394 or the Consumer Act of the Philippines)
DTI Department Administrative Order No. 02-1993
Department Administrative Order No. 2, series of 1993 or the Implementing Rules and Regulations of the Consumer Act provides that a product shall be considered defective when it does not offer the safety that may rightfully be expected of it.
The following considerations shall be taken into account in determining whether a product is defective:
- The presentation of the product in terms of packaging, labelling, or advertising; or
- The nature of the use and hazards that may be reasonably expected of the product; or
- The time the product was put in circulation; or
- The level of research and technology obtainable by the manufacturer, builder, producer or importer when it placed the product in the market. (Section 3, Rule II, Chapter V, DTI Department Administrative Order No. 2, Series of 1993)
The law further says:
“Suppliers shall be jointly liable for imperfections in quality of consumer products.” (Section 1, Rule III, Chapter V, DTI Department Administrative Order No. 2, Series of 1993)
Jurisprudence says:
“The car dealer is solidarily liable with the manufacturer for the imperfections in quality that rendered the product unfit or inadequate for its intended use.” (Toyota Motors Philippines v. Esmeralda Aguilar and Toyota Fairview, Inc., G.R. No. 257084, November 15, 2021)
When is there product imperfection?
The law says:
“With due regard to variations resulting from their nature, the following shall constitute product imperfection:
- Those that render the product unfit or inadequate for the purpose, use or consumption for which they are designed or intended;
- Those that shall jeopardize the quality and characteristics of the product resulting to a decrease in its value;
- Those that shall result from inconsistent or insufficient information provided on the container, labels or labeling, package or packaging or in advertisements or publicity messages for the product.” (Section 2, Rule III, Chapter V, DTI Department Administrative Order No. 2, Series of 1993)
Jurisprudence says:
“A supplier is liable for product imperfections that it cannot resolve within the warranty period. Moreover, the two-year prescriptive period for actions arising from the Consumer Act only runs from the expiration of the warranty period agreed upon by the parties.” (Mazda Quezon Avenue v. Alexander Caruncho, G.R. No. 236688, April 26, 2021)
Philippine Lemon Law
It is a declared policy of the Republic Act No. 10642 or the Philippine Lemon Law is to promote the full protection of the rights and welfare of consumers in the sale of motor vehicles against business and trade practices which are deceptive, unfair or unfavorable to consumers and their interests.
According the RA, the Philippine Lemon Law covers brand new motor vehicles purchased in the Philippines that are reported by a consumer to be in nonconformity with the standards or specifications of the vehicle’s manufacturer or distributor within twelve (12) months from the date of original delivery to the consumer, or up to twenty thousand (20,000) kilometers of operation after such delivery, whichever comes first.
The law says:
“Section 5. Repair Attempts. – At any time within the Lemon Law rights period, and after at least four (4) separate repair attempts by the same manufacturer, distributor, authorized dealer or retailer for the same complaint, and the nonconformity issue remains unresolved, the consumer may invoke his or her rights under this Act.
The repair may include replacement of parts components, or assemblies.
“Section 6. Notice of Availment of Lemon Law Rights. – Before availing of any remedy under this Act and subject to compliance with the provisions of Section 5 hereof, the consumer shall, in writing, notify the manufacturer, distributor, authorized dealer or retailer of the unresolved complaint, and the consumer’s intention to invoke his or her rights under this Act within the Lemon Law rights period.
The warranty booklet issued by the manufacturer, distributor, authorized dealer or retailer shall clearly state the manner and form of such notice to constitute a valid and legal notice to the manufacturer, distributor, authorized dealer or retailer. It shall also clearly state the responsibility of the consumer under this section.
“Section 7. Availment of Lemon Law Rights. – Subsequent to filing the notice of availment referred to in the preceding section, the consumer shall bring the vehicle to the manufacturer, distributor, authorized dealer or retailer from where the vehicle was purchased for a final attempt to address the complaint of the consumer to his or her satisfaction.
It shall be the duty of the manufacturer, distributor, authorized dealer or retailer, upon receipt of the motor vehicle and the notice of nonconformity required under Section 6 hereof, to attend to the complaints of the consumer including, as may be necessary, making the repairs and undertaking such actions to make the vehicle conform to the standards or specifications of the manufacturer, distributor, authorized dealer or retailer for such vehicle.
In case the nonconformity issue remains unresolved despite the manufacturer, distributor, authorized dealer or retailer’s efforts to repair the vehicle, pursuant to the consumer’s availment of his or her Lemon Law rights, the consumer may file a complaint before the DTI as provided for under this Act: Provided, however, That if the vehicle is not returned for repair, based on the same complaint, within thirty (30) calendar days from the date of notice of release of the motor vehicle to the consumer following this repair attempt within the Lemon Law rights period, the repair is deemed successful: Provided, finally, That, in the event that the nonconformity issue still exists or persists after the thirty (30)-day period but still within the Lemon Law rights period, the consumer may be allowed to avail of the same remedies under Sections 5 and 6 hereof.
To compensate for the non-usage of vehicle while under repair and during the period of availment of lemon law rights, the consumer shall be provided a reasonable daily transportation allowance, an amount which covers the transportation of the consumer from his or her residence to his or her regular workplace or destination and vice versa, equivalent to air-conditioned taxi fare, as evidenced by official receipt, or in such amount to be agreed upon by the parties, or a service vehicle at the option of the manufacturer, distributor, authorized dealer or retailer. Any disagreement on this matter shall be resolved by the DTI.
Nothing herein shall be construed to limit or impair the rights and remedies of a consumer under any other law.” (Sections 5-7, Philippine Lemon Law)
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