Covenants - Obligations of Buyer Flashcards

1
Q

Who bears the expenses for the execution and registration of the sale?

A

Art. 1487. The expenses for the execution and registration of the sale shall be borne by the vendor, unless there is a stipulation to the contrary.

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2
Q

Where are the goods delivered?

A

Art. 1521. Whether it is for the buyer to take possession of the goods or for the seller to send them to the buyer is a question depending in each case on the contract, express or implied, between the parties. Apart from any such contract, express or implied or usage of trade to the contrary, the place of delivery is the seller’s place of business if he has one, and if not his residence; but in case of a contract of sale of specific goods, which to the knowledge of the parties when the contract or the sale was made were in some other place, then that place is the place of delivery.

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3
Q

What is the period allotted to the seller to deliver the goods?

A

Art. 1521. par. 2. Where by a contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time.

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4
Q

When will the goods be deemed delivered if at the time of sale, they are in the possession of third persons?

A

Art. 1521. par. 3. Where the goods at the time of sale are in the possession of a third person, the seller has not fulfilled his obligation to deliver to the buyer unless and until such third person acknowledges to the buyer that he holds the goods on the buyer’s behalf.

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5
Q

Art. 1521. par. 4. Demand or tender of delivery may be treated as ineffectual unless […]. What is a […] is a question of fact.

A

Art. 1521. par. 4. Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour. What is a reasonable hour is a question of fact.

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6
Q

Art. 1521. par. 5. Unless […], the expenses of an incidental to putting the goods into a deliverable state must be borne by […].

A

Art. 1521. par. 5. Unless otherwise agreed, the expenses of an incidental to putting the goods into a deliverable state must be borne by the seller.

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7
Q

Art. 1582. The vendee is bound […] and […] at […].

If the time and place should not have been stipulated, the payment […].

A

Art. 1582. The vendee is bound to accept delivery and to pay the price of the thing sold at the time and place stipulated in the contract.

If the time and place should not have been stipulated, the payment must be made at the time and place of the delivery of the thing sold.

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8
Q

May the buyer of the goods be bound to accept delivery of the things by installments?

A

Art. 1583. par. 1. Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by installments.

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9
Q

What is the effect when the seller makes defective deliveries with respect to one or more installments in a contract of sale of goods to be delivered by stated installments? or if the buyer refuses to take the delivery or pay for one or more installments without just cause?

A

Art. 1583. par. 2. Where there is a contract of sale of goods to be delivered by stated installments, which are to be separately paid for, and the seller makes defective deliveries in respect of one or more installments, or the buyer neglects or refuses without just cause to take delivery of or pay for one or more installments, it depends in each case on the terms of the contract and the circumstances of the case, whether the breach of contract is so material as to justify the injured party in refusing to proceed further and suing for damages for breach of the entire contract, or whether the breach is severable, giving rise to a claim for compensation but not to a right to treat the whole contract as broken.

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10
Q

Does the buyer have the right to examine the goods upon delivery?

A

Art. 1584. par. 1. Where goods are delivered to the buyer, which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract if there is no stipulation to the contrary.

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11
Q

Is the seller obliged to give the buyer time to examine the goods?

A

Yes. Art. 1584. par. 2. Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.

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12
Q

If the goods are delivered to a carrier and they are marked “collect on delivery,” can the buyer examine the goods even without paying for the price yet?

A

No. The buyer has to pay the price first. Art. 1584. par. 2. Where goods are delivered to a carrier by the seller, in accordance with an order from or agreement with the buyer, upon the terms that the goods shall not be delivered by the carrier to the buyer until he has paid the price, whether such terms are indicated by marking the goods with the words “collect on delivery,” or otherwise, the buyer is not entitled to examine the goods before the payment of the price, in the absence of agreement or usage of trade permitting such examination.

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13
Q

When are the goods formally accepted by the buyer?

A

Art. 1585. The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him, and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them.

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14
Q

Is the seller discharged of all liability once the buyer accepts the goods?

A

No. Art. 1586. In the absence of express or implied agreement of the parties, acceptance of the goods by the buyer shall not discharge the seller from liability in damages or other legal remedy for breach of any promise or warranty in the contract of sale. But, if, after acceptance of the goods, the buyer fails to give notice to the seller of the breach in any promise of warranty within a reasonable time after the buyer knows, or ought to know of such breach, the seller shall not be liable therefor.

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15
Q

If the buyer, who has the right to refuse the goods upon delivery, is he obliged to return the goods to the seller if he refuses to accept them?

A

Art. 1587. Unless otherwise agreed, where goods are delivered to the buyer, and he refuses to accept them, having the right so to do, he is not bound to return them to the seller, but it is sufficient if he notifies the seller that he refuses to accept them. If he voluntarily constitutes himself a depository thereof, he shall be liable as such.

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16
Q

What is the effect on the buyer if he refuses to accept the goods without just cause?

A

Art. 1588. If there is no stipulation as specified in the first paragraph of Article 1523, when the buyer’s refusal to accept the goods is without just cause, the title thereto passes to him from the moment they are placed at his disposal.

17
Q

Art. 1589. The vendee shall owe interest for the period […], in the following three cases:

(1) Should it have […];
(2) Should the thing sold and delivered […];
(3) Should he be […], from the time of […] for the payment of the price.

A

Art. 1589. The vendee shall owe interest for the period between the delivery of the thing and the payment of the price, in the following three cases:

(1) Should it have been so stipulated;
(2) Should the thing sold and delivered produce fruits or income;
(3) Should he be in default, from the time of judicial or extrajudicial demand for the payment of the price.

18
Q

What is the recourse of the buyer if he is disturbed in the possession or ownership of the thing acquired, or should he have reasonable grounds to fear such disturbance, by a vindicatory action or a foreclosure of mortgage?

A

Art. 1590. Should the vendee be disturbed in the possession or ownership of the thing acquired, or should he have reasonable grounds to fear such disturbance, by a vindicatory action or a foreclosure of mortgage, he may suspend the payment of the price until the vendor has caused the disturbance or danger to cease, unless the latter gives security for the return of the price in a proper case, or it has been stipulated that, notwithstanding any such contingency, the vendee shall be bound to make the payment. A mere act of trespass shall not authorize the suspension of the payment of the price.

19
Q

To whom shall the payment be made?

A

Payment shall be made to the person in whose favor the obligation has been constituted or his successor in interest, or any person authorized to receive.

20
Q

Where shall payment be made?

A

Payment shall be made [hierarchy]:

  1. Place stipulated in the contract;
  2. Place of delivery;
  3. Wherever the thing might be upon perfection of contract
21
Q

When shall payment be made?

A

Payment shall be made on [hierarchy]:

  1. Time stipulated in the contract;
  2. Time of delivery. [Art. 1582]
22
Q

When is the buyer liable to pay interest?

A

General rule: Buyer is not bound to pay interest. However, under the following circumstances, buyer is liable:

  1. If there is stipulation requiring interests; or
  2. If the thing delivered produces fruits or income; or
  3. If the buyer incurs in default from the time of judicial or extrajudicial demand for payment.
23
Q

When may the buyer suspend payment of the price? What are the exceptions?

A

Right to suspend:

  1. When he is disturbed in the possession or ownership of the thing bought; or
  2. If he has a well-grounded fear that his possession or ownership would be disturbed by a vindicatory action or a foreclosure of mortgage. [NCC 1590];

Exceptions:

  1. If the vendor gives security for the return of the price in a proper case;
  2. If it has been stipulated that notwithstanding any such contingency, the vendee must make payment;
  3. If the vendor has caused the disturbance or danger to cease;
  4. If the disturbance is a mere act of trespass (when the third person claims no right whatsoever); or
  5. If the vendee has already fully paid the price.
24
Q

What is the effect of a failure to pay the price?

A

Effect of failure to pay price:

  1. Seller is not bound to deliver the thing sold unless and until the buyer has paid the purchase price (sale being a reciprocal contract);
  2. Failure to pay does not cancel a sale for there is still consideration; however, it affects the consummation of the contract of sale. (Penalosa v. Santos);
  3. Non-payment is a negative resolutory condition, a mere breach, which affects the contract of sale
  4. The remedy of an unpaid seller in a contract of sale is either specific performance or rescission. (Heirs of Pedro Escanlar v. CA);
  5. When failure to pay constitutes mere delay, the buyer may also be liable for interest and penalties. (Sps. Mahusay v. B.E. San Diego);
  6. When buyer fails to pay the price and the seller has already delivered the thing, then the law grants the seller certain rights of action for the price.
25
Q

What are the seller’s rights of action in case of buyer’s failure to pay the price (or failure to accept without just cause)?

A

Seller’s rights of action:

  1. Right to demand specific performance;
  2. Right of lien – to retain the goods while still in his possession;
  3. Right to withhold delivery;
  4. Right to stop goods in transit – in cases of insolvency of the buyer after he has parted with the possession of them;
  5. Right of resale as limited;
  6. Right to rescind the sale – e.g. unreasonable length of delay of buyer
26
Q

What is the concept of acceptance?

A

Concept of Acceptance

  1. Acceptance is the assent to become owner of the specific goods when delivery is offered to the buyer;
  2. Acceptance and delivery are two separate acts and do not imply each other. As such, either of the two can happen without the other;
  3. The acceptance of the item is not a requisite to complete the delivery of the item;
  4. Acceptance is the full obligation of the buyer, while the seller has nothing to do with it.
27
Q

What are the modes of manifesting acceptance?

A

The buyer is deemed to have accepted the goods:

  1. Express: when he intimates to the seller that he has accepted them, (may be verbal or in writing); or
  2. Implied by appropriation: when the goods have been delivered to him, and he does any act in relation to them which is inconsistent with the ownership of the seller (buyer acts as if he owns the item); or
  3. Implied by prescription: when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them (buyer fails to reject and retains the item after a reasonable time)

see NCC 1585

28
Q

When is refusal to accept justified?

A
  1. If the article or commodity does not correspond in kind, quality, condition, or amount to that which he contracted for, the buyer may reject it;
  2. The option to reject must be exercised and notice of rejection given to the seller within a reasonable time unless a definite period is fixed by the contract
29
Q

What happens when buyer is justified in refusing to accept?

A
  1. Buyer has the obligation to take reasonable care of it but nothing more can be demanded of him;
  2. After notice that it will not be accepted, seller must have the burden of taking delivery of it;
  3. Seller assumes the risk of loss of goods. Buyer is not liable as a depositary unless he voluntarily constitutes himself as such;
  4. Buyer may resell it should the seller fail to take delivery after being notified.