Published — April 2, 2021
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: WHO BEARS THE RISK OF LOSS IN A CONTRACT OF SALE?
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In a contract of sale, the vendor is bound to deliver the thing that is the object of the sale
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The vendor is responsible for warranty against the hidden defects
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A complaint for breach of implied warranty must be timely filed
May the duration of the implied warranty be subject to agreement between the seller and the buyer?
For a better understanding, let us take the case of Carlos B. De Guzman vs. Toyota Cubao, Inc., G.R. No. 141480, November 29, 2006.
In this case, Carlos purchased from Toyota Cubao (Toyota) a brand-new white Toyota Hi-Lux on November 27, 1997. Carlos made a down payment leaving the balance payable in 36 months with 54% interest. The vehicle was eventually delivered to Carlos two days later. On December 18, 1998, Carlos demanded replacement of the engine of the vehicle because it developed a crack after traversing Marcos Highway during a heavy rain. Carlos asserted that Toyota should replace the engine with a new one based on an implied warranty. Toyota responded that the allege damage on the engine was not covered by a warranty.
The refusal of Toyota to replace the engine with a new one constrained Carlos to file a complaint for damages against Toyota.
Is the damage on the engine covered by a warranty?
The Supreme Court said:
No.
In a contract of sale, the seller is bound to transfer the ownership of and to deliver the thing that is the object of sale. The seller is responsible for warranty against the hidden defects which the thing sold may have, should they render it unfit for the use for which it is intended, or should they diminish its fitness for such use to such an extent that, had the buyer been aware of the same, he would not have acquired it or would have given a lower price for it. This is called implied warranty.
However, the seller is not answerable for patent defects or those which may be visible, or for those which are not visible if the buyer is an expert who, by reason of his trade and profession, should have known the defects.
The law says:
In a contract of sale, an implied warranty on the part of the seller that he has a right to sell the thing at the time when the ownership is to pass, and that the buyer shall from that time have enjoy the legal and possession of the thing.
Also, there is an implied warranty that the thing shall be free from any hidden faults or defects, or any change or encumbrance not declared or known to the buyer.
Will the complaint of Carlos prosper?
The Supreme Court said:
No.
While the issue of Carlos falls within the definition or concept of implied warranty, his act of filing the complaint is not within the prescriptive period. In other words, his complaint was filed out of time.
The law says:
The duration of the implied warranty which is not accompanied by express warranty shall endure not less than sixty (60) days nor more than one (1) year following the sale of new consumer products. If there is a breach of the implied warranty, any complaint must be brought within time which the implied warranty is in effect if there is no agreement between the seller and the buyer of a longer duration.
In this case, Carlos filed a case after the lapse of the period during which the implied warranty was in effect.
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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