Bought a Defective Item? Warranty Against Hidden Defects

It is a promise the law reads into a sale, even if nobody said it out loud. Article 1547 says that in a contract of sale, unless a contrary intention appears, there is:

The seller can also give an express warranty. Under Article 1546, a statement of fact or promise about the thing is an express warranty if it tends to make the buyer buy and the buyer relies on it. But a statement of "the seller's opinion only" is not a warranty, unless the seller spoke as an expert and the buyer relied on it.

Article 1561 says the seller answers for hidden defects that make the thing unfit for its intended use, or that reduce its fitness so much that the buyer would not have bought it, or would have paid less, had he known.

In Nutrimix Feeds v. Court of Appeals (2004), the Supreme Court said: "A hidden defect is one which is unknown or could not have been known to the vendee." It listed what the buyer must show:

1. the defect is hidden;
2. it existed at the time of the sale;
3. it would ordinarily have been excluded from the contract;
4. it is important, meaning it makes the thing unfit or considerably reduces its fitness; and
5. the case is filed within the time allowed by law.

Yes, as a general rule. Article 1566 is clear:

There is one exception, in the second paragraph: the rule "shall not apply if the contrary has been stipulated, and the vendor was not aware of the hidden faults or defects in the thing sold." Both conditions are needed. A clause like "sold as is, no warranty" can protect a seller who honestly did not know. It does not protect a seller who knew about the hidden defect.

Article 1567 gives the buyer a choice:

Nutrimix used the traditional names: withdrawing from the contract is "accion redhibitoria", and asking for a lower price is "accion quanti minoris". In practice:

• Withdraw from the sale: return the item and get the price back, plus damages.
• Keep the item at a lower price: get part of the price back in proportion to the defect, plus damages.

Article 1562 also has implied warranties for goods: that they are reasonably fit for a particular purpose when the buyer relied on the seller's skill or judgment, and of merchantable quality when bought by description from a seller who deals in such goods.

Six months from delivery:

Count from the day the item was delivered to you, not from the day you discovered the defect. For other time limits in civil cases, see the table of prescription of civil actions.

The buyer carries the burden. In Nutrimix, a couple who raised broilers and hogs bought animal feeds from Nutrimix on credit. They left part of the price unpaid and claimed that the feeds had killed their animals. The Court said the buyer has "the burden of proving that the seller of the product breached its warranty." It found their expert evidence too weak to prove that the feeds caused the deaths, reinstated the trial court's decision and held them liable for the unpaid feeds.

In practice, proof decides these cases: the item itself, the receipt, and evidence of when and how the defect showed up. A defect that did not exist yet at the time of the sale, for example one caused by how the item was used afterwards, is not covered by this warranty.

Other laws, such as laws on consumer products, may give buyers other remedies. This page covers only the Civil Code rules on sales.

These are made-up examples to show how the rules work. They are not advice for any real case.

Gina bought a second-hand refrigerator. Two weeks later it stopped cooling because of a cracked internal pipe that no one could see. If she can prove the crack was already there at the sale, she may return it and get her money back, or ask for a lower price, with damages (Articles 1561 and 1567). She must file within six months from delivery (Article 1571).

Arnel bought a motorcycle with a dented fuel tank that anyone could see. A visible defect is not covered by the warranty against hidden defects (Article 1561).

Celia bought a used laptop "as is, no warranty". The seller truly did not know the battery was failing. Under Article 1566, the seller is not liable for that hidden defect. If Celia can prove the seller knew about the hidden defect, the "as is" clause does not protect him under that article.

Rodel, a mechanic, bought a used engine. He did not check a defect that a person in his trade should have noticed. Under Article 1561, the seller may not be answerable for defects an expert buyer should have known.

Talk to a lawyer if the item is expensive, such as a car or machinery, if the seller refuses to take it back, or if the six-month period is about to end. Proving that a defect existed at the time of the sale often needs expert evidence. If you cannot afford a lawyer, see Free legal help in the Philippines.