CHAPTER 6:
OBLIGATIONS OF THE VENDEE
Two (2) Obligations:
1. Accept delivery
2. Pay the purchase price
Obligation to Accept Delivery
Right to refuse delivery under ff. circumstances:
5 circumstances wherein buyer can refuse delivery:
1. Seller delivers less than in CTS
2. Seller delivers more than in CTS (can reject excess)
3. Seller delivers goods in CTS mixed with diff. goods not
in CTST
a. If DIVISIBLE:
- Right to refuse delivery of goods that do
not comply with the contract
b. If INDIVISIBLE:
- Right to refuse the whole of the goods
4. Delivery made in installments; no stipulation
5. Other cases where delivery is defective
Buyer’s Right of Inspection
- Correlative to buyer’s obligation to accept delivery
- Right to insect goods especially when they haven’t been
previously examined.
- But terms of contract can be so that goods shall not
be delivered to the buyer until he has properly paid for
the price BUT ACCEPTANCE THEREOF does not
mean he no longer has the right to inspect the goods
and determine whether they are according to what has
been agreed upon in the contract.
Acceptance by the Buyer
WHEN are the goods considered accepted?
1. When buyer discloses his acceptance
2. After delivery, actions by buyer inconsistent with
ownership of the seller
3. Lapse of a reasonable time
Effect of Acceptance by the Buyer
Generally, seller remains liable for breach of warranty
DESPITE acceptance by the buyer.
Two (2) Exceptions:
1. Express stipulation discharging seller from liability,
arising from breach of warranty and etc.
2. Buyer fails to give notice of breach of warranty within a
reasonable time
Buyer’s Refusal to Accept Delivery
- Either with or without cause
With Cause
1. Justified Refusal
- Buyer not bound to return goods to seller
- If buyer receives the goods
- Buyer = depositary = liable
2. Without just cause
- Ownership passes when goods are placed at his
disposal
Obligation to Pay the Price
- General rule, reciprocal nature of the obligations;
Simultaneously performed (payment and delivery)
Instances wherein buyer is bound to pay price + interest
1. Stipulation
2. Thing sold & delivered bears fruits & income
3. If buyer is in default
Where Buyer can Suspend Payment of Price
1. Buyer disturbed in possession/ownership
2. Reasonable grounds to fear such disturbance
Cases Wherein Buyer Cannot Suspend Payment of Price:
1. Vendor caused the disturbance to cease
2. Seller gives security for return of item
3. Stipulation
4. Threat caused by trespasser
Stipulation on Automatic Rescission of Sale of Immovable
- Takes place only when:
1. Seller has demanded its rescission judicially/notarial
act.
Automatic Rescission in Sale of Movable Property
1. Right of Lien
- Serves to guarantee an underlying obligation and if the
underlying obligation is not satisfied, creditor may seize
the asset that is the subject of the lien.
- Depends on whether seller permits property to go to the
buyer (LIEN IS LOST)
- Lien of the unpaid seller: possessory lien
When does seller lose his lien?
1. Delivered goods to carrier/bailee
2. Buyer/agent lawfully obtains possession
3. Waiver
ex. Partial delivery (retains right of lien to remaining goods
unless delivery shows waiver of his lien)
2. Right of Stoppage in Transitu
- Stop delivery of goods to buyer
- Repossess the goods
- Therefore reacquires his right of lien
- GOODS MUST BE INTRANSIT & BUYER MUST BE
INSOLVENT
When are goods said to be in transit?
- From time they are delivered to a carrier for purpose of
transmission to a buyer
- If goods are rejected by a buyer (bailee continues to
have the goods & even if seller doesn’t receive the
goods back)
How can the seller stop the goods in transit?
1. Obtain actual possession
2. Give notice of claim to carrier/bailee in possession of the
actual goods
Give notice of claim to carrier/bailee in possession of the goods
-> Notice given to principal or person in actual possession
Notice to person in actual possession -> Redeliver goods to
seller -> Delivery expenses should be shouldered by the seller
Notice to principal -> Notice given at such time and under such
circumstances that the principal (exercising reasonable
diligence) can tell the agent to not make the delivery to the buyer
Goods covered by negotiable bill of lading issued by the
carrier/other bailee: no obligation to return goods to seller
unless negotiable bill of lading is surrendered and cancelled.
Purpose: Protect carrier/bailee
Innocent purchaser for value of the negotiable bill of lading >
Unpaid Seller
When Goods are No Longer in Transit
 Buyer/agent obtains goods before arrival @ appointed
destination
 Upon arrival, carrier acknowledges goods are for the buyer
 Carrier wrongfully refuses to deliver
Seller loses his right of stoppage in transit
3. Right of Resale
When can the unpaid seller make a resale?
i. Goods are perishable
ii. Seller expressly reserves his right of resale
should the buyer default
iii. Buyer is in default for an unreasonable amount
of time
Resale Process
- Choice between public or private
- Not necessary to give notice to original buyer
- BUT if resale not based on the fact that goods are
perishable or without there being a provision in the
contract of sale, (this would be relevant if there comes
an issue on whether the resale was made when the
buyer was already in default or not)
- Unpaid seller cannot directly/indirectly buy the
goods himself
- Right to make a resale = foreclosure of lien held to
ensure the payment of the purchase price
4. Right of Rescission
- Unpaid seller can exercise the right of rescission in the
following cases:
i. Seller reserved the right
ii. Buyer in default for an unreasonable amount of
time
- Rescission can be done by:
i. Giving notice
ii. Performing another act showing intention to
rescind (not necessary that seller tells buyer but
whether notice was given or not given, this would
be relevant in any subsequent issues regarding
whether the buyer was in default for an
unreasonable amount of time before the right of
rescission was exercised)
Remedy of Seller in Sale of Immovable Property
As long as seller already has reasonable grounds to fear loss of
immovable property sold & its price he can move for rescission
of the sale.
Rescission of an obligation is implied if one of the obligors does
not perform his obligation.
Injured can choose between: Fulfilment and Rescission (can
also change his mind)
*Without prejudice to rights of third persons who have acquired Contract is broken by the Buyer when Buyer:
the thing in good faith
- Fails to pay the price
- Refuses to accept the goods sold
Remedies of Seller in Sale of Personal Property by - Repudiates his contract
Installments
3 Remedies:
1. Exact fulfilment should vendee fail to pay
2. Cancel the sale (vendee fails to pay 2 or more
installments)
3. Foreclose chattel mortgage on thing sold (can’t recover
any unpaid balance of the price to avoid seller from
seizing the mortgage property, buying the property at a
low price, and asking for the deficiency from the original
buyer)
Seller can only choose one
Lease of Personal Property with Option to Buy
How sellers can circumvent not being able to recover the
balance of the purchase price in case of foreclosure of the
chattel mortgage:
- Enter into a contract of lease of personal property with
option to buy, stipulation: if lessee exercises his option
to buy, all the rentals paid should be considered as part
of the purchase price.
- Art. 1485 prevents circumventing the provisions of Art.
1484 so lessor really can’t recover the unpaid balance
owed by the lessee

BREACH OF CONTRACT OF SALE OF GOODS

When the Buyer breaks his contract and the Seller’s
remedies: