MODULE 5

I. Key Terms.

Define or give the meaning of the following

1. Acceptance of goods

ANSWER: Under the provision of the Civil Code of the Philippines, acceptance of

goods was described as assent to become owner of the specific goods when

delivery of them is offered to the buyer. Acceptance of goods occurs when the

buyer take or retain the goods offered by the seller.

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2. Wrongful refusal of buyer to accept.

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ANSWER: Under the provision of the Civil Code of the Philippines when wrongful

refusal of buyer to accept the goods is without just cause, the title thereto passes
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to him from the moment they are placed at his disposal.

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II. Discussion.
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Discuss the following

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1. When is there implied acceptance by the vendee of the goods sold?

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ANSWER: According to Article 1585, implied acceptance by the vendee of the

goods sold will take place when the buyer, after delivery of goods, does any act
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inconsistent with the seller’s ownership, as when he sells or attempts to sell the

goods, or he uses or makes alteration in them in a manner proper only for an

owner and when the buyer, after the lapse of a reasonable time, retains the

goods without intimating his rejection

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 2. Give the cases when the vendee is given the right to suspend payment of the

purchase price.

ANSWER: Article 1590 provides cases when the vendee is given the right to

suspend payment of the purchase, accordingly when there is a well-grounded

fear (fundado temor) and the fear is because of a vindicatory action or action to

recover a foreclosure of mortgage.

III. Problems.

Explain or state briefly the rule or reason for your answer.

1. S sold to B a parcel of land with the stipulation that upon failure of B to pay the

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price within 30 days the sale shall be deemed automatically cancelled.
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a. May S refuse to accept payment from B after 30 days on the ground that the
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sale is already rescinded?
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ANSWER: No, S cannot refuse to accept the payment from B provided that
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there’s no demand for rescission of the contract yet has been made upon him
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either judicially or by a notarial act within that time. This was in accordance with
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Article 1592 that in the sale of immovable property, even though it may have
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been stipulated that upon failure to pay the price at the time agreed upon the
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rescission of the contract shall of right take place, the vendee may pay, even
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after the expiration of the period, as long as no demand for rescission of the
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contract has been made upon him either judicially or by a notarial act. Thus, S
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cannot refuse to accept the payment from B.

b. Suppose the property sold is movable. Will your answer be the same?

ANSWER: No, my answer will not be the same. According to Article 1593, with

respect to movable property, the rescission of the sale shall of right take place in

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 the interest of the vendor, if the vendee, upon the expiration of the period fixed

for the delivery of the thing. Thus, S can refuse to accept the payment from B.

2. S sold a 3-door apartment to B who paid the purchase price only after one (1)

year from the date agreed upon. Is B liable to pay S interest which was not

stipulated by them?

ANSWER: No, B is not liable to pay S interest for the reason that there was no

stipulation in the contract to begin with. According to Article 1589, the vendee

shall owe interest for the period between the delivery of the thing and the

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payment of the price if should it have been so stipulated; should the thing sold

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and delivered produce fruits or income; and should he be in default, from the time

of judicial or extrajudicial demand for the payment of the price. Since in the
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situation above, there was no stipulation of interest in the contract of the parties,
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B is not liable to pay for it.

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MODULE 6
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I. Key Terms.
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Define or give the meaning of the following:

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1. Goods

ANSWER: Under Article 1594, goods include all chattels personal but not things

in action or money of legal tender in the Philippines. This term also includes

growing fruits or crops

2. Recoupment

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 ANSWER: In accordance with Article 1599, recoupment is one of the remedies

allowed to the buyer when the seller has been guilty of a breach of promise or

warranty. Accordingly, the theory of recoupment is that the seller’s damages are

cut down to an amount which will compensate him for the value of what he has

given. By means of recoupment, the buyer is allowed to avoid the contract and

substitute in its stead a quasi-contractual obligation for the value of what he has

received.

II. Discussions.

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Discuss the following:

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1. In general, what actions are available to the buyer in case of breach of
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warranty be the seller of goods?
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ANSWER: According to Article 1599 the actions that are available to the buyer in
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case of breach of warranty by the seller of the goods are:

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 Recoupment:
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o Accept the goods and set up the seller’s breach to reduce or

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extinguish price
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 Action or counterclaim for damages:

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o Accept the goods and maintain an action for damages

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o Refuse to accept the goods and maintain an action for damages

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for the breach of the warranty

 Rescission:

o Rescind the contract of sale by returning or offering the return of the

goods and recover the price

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 2. When is the buyer not given the right to rescind although the seller committed

a breach of warranty?

ANSWER: From the provision of the Civil Code of the Philippines there are

three(3) cases where rescission by the buyer is not allowed although the seller

has committed a breach of warranty:

 If the buyer accepted the goods knowing of the breach of warranty without

protest

 If the buyer fails to notify the seller within a reasonable time of his election

to rescind

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 If the buyer fails to return or offer to return the goods in substantially as

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good condition as they were in at the time of the transfer of ownership to

him
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3. Give three (3) situations where the seller is given the right to bring an action
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for damages against the buyer.

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ANSWER: Enumerated below are the situations where the seller is given the
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right to bring an action for damages against the buyer

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 If the buyer, without lawful cause, neglects or refuses to accept and pay
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for the goods he agreed to buy (damages for non-acceptance)

 In an executory contract, where the ownership in the goods has not

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passed, and the seller cannot maintain an action to the price, seller’s

remedy will be also an action for damages

 If the goods are not yet identified at the time of the contract or

subsequently, the seller’s right is necessarily confined to an action for

damages

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 4. Give two (2) situations where the seller of specific goods is given the right to

be paid notwithstanding that delivery to the buyer has not been effected.

ANSWER: Situations where the seller of specific goods is given the right to be

paid notwithstanding that delivery to the buyer has not been effected:

 When the price is payable on a certain day, and the buyer wrongfully

neglects or refuses to pay such price, irrespective of delivery or transfer of

title

 When the buyer wrongfully refuses to accept delivery

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III. Problems.
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Explain or state briefly the rule or reason for your answer.
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1. S agreed to sell and delivery to B specific goods. B refused to accept the

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goods on the date designated. S was so infuriated that he was hospitalized for a
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mild stroke. May S hold B liable for his hospitalization expense? Why or why not?
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ANSWER: Yes, B can be held liable to S for his hospitalization expense.

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According to Article 1596 where the buyer wrongfully neglects or refuses to

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accept and pay for the goods, the seller may maintain an action against him for
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damages for nonacceptance. Since S was hospitalized because he/she was

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infuriated by B for he/she refused to accept the goods on the date designated
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this is considered as damages for nonacceptance. Thus, B can be held liable to

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pay for the expense of S.

2. Same example. The goods are not of the quality warranted by S. S informed B

to deliver the goods at a reduced price. B communicated his acceptance. May B

rescind the sale and require S to just pay damages?

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 ANSWER: No, B cannot rescind and ask for the damages from S. Under Article

1599, in the case of breach of warranty of quality, such loss, in the absence of

special circumstances showing proximate damage of a greater amount, is the

difference between the value of the goods at the time of delivery to the buyer and

the value they would have had if they had answered to the warranty. With that

said, since B communicated his acceptance of the goods at a reduced price then

he/she cannot rescind the contract and as for damages.

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