Obligations of the Vendor

Nature and Scope

The vendor in a contract of sale is principally bound to transfer ownership of the thing sold, deliver it to the vendee, and answer for the warranties imposed by law or by stipulation.

Sale is not merely an obligation to allow possession; it is an obligation to convey dominion for a price certain in money or its equivalent. Delivery is therefore central because, as a rule, ownership passes to the buyer through tradition, not by perfection alone.

From perfection, the vendor becomes a debtor with respect to the determinate thing sold. He must preserve it with the diligence of a good father of a family, deliver the very thing agreed upon, include its accessions and accessories, and refrain from acts that defeat the buyer's acquisition.

The vendor's obligations may be grouped into four: preservation pending delivery, delivery and transfer of ownership, execution of acts necessary to make the conveyance effective, and warranty against legal or physical defects.

Preservation Pending Delivery

Before delivery, the vendor must keep the thing in substantially the same condition it was in when the sale was perfected, subject to ordinary deterioration, agreed risks, or changes attributable to the buyer.

If the thing is determinate and is lost through the vendor's fault before delivery, the vendor is liable for damages because his obligation to deliver has become impossible through a cause imputable to him.

If the thing deteriorates through the vendor's fault, the buyer may demand performance with damages or seek rescission when the breach is substantial enough to defeat the object of the sale.

If the thing improves by nature or time before delivery, the improvement generally benefits the party who becomes owner under the rules on delivery and risk. If the improvement is due to the vendor's expense, reimbursement depends on the rules on useful and necessary expenses and the circumstances of possession.

For generic goods, loss of particular items chosen by the vendor does not ordinarily extinguish the obligation, because genus does not perish. The vendor must still deliver goods of the stipulated kind, quality, and quantity unless the contract validly limited performance to a specific source or lot.

Delivery and Transfer of Ownership

Delivery means placing the thing sold under the control and possession of the vendee. It may be actual, constructive, symbolic, or effected by agreement when the law recognizes the substitute act as equivalent to physical transfer.

Actual delivery occurs when the buyer is placed in material possession of the thing. In movable property, this may be manual transfer, surrender of the item, or placing the item where the buyer can exercise control. In immovable property, actual delivery may occur through turnover of possession, keys, access, and the ability to occupy or use the property.

Constructive delivery occurs when the parties perform an act that legally represents transfer of possession. The most common form is execution of a public instrument, which is generally equivalent to delivery unless the instrument or surrounding facts show that the parties did not intend immediate transfer.

Constructive delivery by public instrument requires that the vendor have control over the thing and the legal capacity to place it at the buyer's disposal. If a third person holds adversely, or if a legal obstacle prevents the buyer from taking possession, the deed may evidence the sale but may not by itself constitute effective delivery.

Symbolic delivery may be made by delivery of keys, documents, or other symbols that give the buyer control over the thing sold. Delivery by short hand occurs when the buyer already possesses the thing under another title and continues possession as owner. Constitutum possessorium occurs when the seller remains in possession but now holds under a different title, such as lessee, depositary, or borrower.

Incorporeal rights are delivered by execution of the proper instrument, by delivery of the titles of ownership, or by allowing the buyer to exercise the rights with the seller's consent. The vendor must perform the acts necessary to make the assigned right usable and enforceable, especially when notice, endorsement, or turnover of documents is required.

Thing, Accessions, Accessories, and Fruits

The vendor must deliver the thing sold in the condition in which it was at the time the contract was perfected. He must also deliver all accessions and accessories, even if they were not separately mentioned, because they follow the principal thing unless the parties validly agree otherwise.

Accessions are additions produced by or attached to the principal thing, while accessories are items destined for its embellishment, use, or preservation. Machinery permanently installed for the use of a building, keys, duplicate documents, and parts necessary for ordinary use may be included when they are connected with the thing sold by nature, purpose, or agreement.

The buyer is entitled to the fruits of the thing from the time the obligation to deliver arises, generally from perfection of the sale, unless the parties stipulate a different point or the nature of the transaction requires otherwise.

Delivery of a different thing, even if similar in value, is not performance. If what is delivered is essentially different from what was sold, or is so defective that it is equivalent to a different object, the buyer may reject it and pursue the remedies for breach.

When the Vendor May Withhold Delivery

The vendor is not bound to deliver the thing if the buyer has not paid the price and no period for payment has been agreed upon. In a cash sale, payment and delivery are reciprocal acts, so neither party may compel performance without being ready to perform his own prestation.

If a period for payment has been fixed, the vendor must generally deliver despite nonpayment at the moment of delivery, because he extended credit. However, if the buyer becomes insolvent after the sale and does not give security for the price, the vendor may withhold delivery to protect himself from the increased risk of nonpayment.

The right to withhold delivery is distinct from ownership. A seller may be obligated to sell and still retain lawful possession until the buyer performs a condition, pays the price, or furnishes security required by law or contract.

Place, Time, and Manner of Delivery

The place and time of delivery are controlled first by the agreement of the parties. If the contract is silent, delivery is made at the seller's place of business, or at his residence if he has no place of business, unless the specific thing was known to be in another place at the time of sale.

If no time is fixed, delivery must be made within a reasonable time. Reasonableness depends on the nature of the thing, trade usage, distance, required preparation, and the circumstances known to both parties at perfection.

The vendor bears the expenses of putting the goods into a deliverable state unless the parties agree otherwise. Expenses of execution and registration of the sale are also generally for the vendor, subject to contrary stipulation and without prejudice to tax laws or separate agreements allocating taxes and fees.

When the seller is authorized or required to send goods to the buyer, delivery to a carrier may operate as delivery to the buyer if the seller makes a reasonable contract for transportation and observes the precautions required by the nature of the goods. If the seller fails to make a proper shipping arrangement and the goods are lost or damaged, the buyer may reject the delivery or hold the seller liable.

Where goods are shipped under circumstances in which insurance is usual, the seller must give the buyer sufficient notice to enable him to insure them during transit. Failure to give such notice may keep the risk on the seller for losses that insurance could have covered.

Quantity and Quality in Delivery

The vendor must deliver the quantity, quality, kind, and description agreed upon. Substantial compliance may suffice only where the variance is immaterial, accepted by the buyer, or allowed by usage or stipulation.

The buyer's acceptance of a defective or deficient delivery may limit the right to reject, but it does not necessarily waive damages or warranty claims unless the buyer clearly and knowingly accepts the goods as full performance.

Sale of Immovables by Area, Boundaries, or Lump Sum

In sales of land, the vendor's obligation to deliver may be affected by whether the price was fixed by unit of measure or for a lump sum. The distinction determines whether area, boundaries, or the stated object controls.

Actions based on land area deficiency or excess are subject to the short Civil Code period counted from delivery. Delay may bar the special remedies even if other remedies remain available under a different cause of action.

Documents and Registered Land

For ordinary movables, delivery of documents may be evidence of delivery when the documents represent control over the goods. For goods covered by documents of title, the seller's transfer of the proper document may determine who can claim the goods from the bailee or carrier.

For registered land, the vendor's duty normally includes execution of a registrable deed and cooperation in acts reasonably necessary to transfer the certificate of title when the sale contemplates registration. As between the parties, the sale may be binding upon perfection and delivery; as against third persons, registration is the operative act that protects the buyer under the land registration system.

The vendor must not impair the buyer's title by withholding the owner's duplicate certificate, refusing to sign required instruments, or creating inconsistent encumbrances after the sale. If the same immovable is sold to different buyers, ownership priority is governed by good faith and registration rules, without erasing the vendor's liability for breach to the prejudiced buyer.

Warranty Against Eviction

The vendor warrants that the buyer shall have legal and peaceful possession of the thing sold. Eviction occurs when the buyer is deprived of the whole or part of the thing by final judgment based on a right prior to the sale or an act imputable to the vendor.

Warranty against eviction requires deprivation by final judgment, a superior right existing before the sale or caused by the vendor, and proper notice to the vendor so he can defend the title. Without notice, the vendor may be released to the extent he was deprived of the opportunity to protect the sale.

If eviction occurs, the buyer may recover the value of the thing at the time of eviction, income or fruits he was ordered to deliver to the successful claimant, costs of the suit, expenses of the contract if borne by him, and damages when bad faith or a proper basis for damages exists.

In partial eviction, the buyer may seek proportional relief. If the part lost is so important that he would not have bought the thing without it, or if several things were sold together for a lump consideration and one is lost by eviction, rescission may be available.

Parties may increase, diminish, or suppress warranty against eviction, but waiver is ineffective when the vendor acted in bad faith. A waiver made by the buyer with knowledge of the risk and assumption of its consequences has stronger effect than a general waiver inserted without meaningful awareness of the threatened defect.

Non-Apparent Burdens and Encumbrances

The vendor is also responsible when an immovable is burdened by a non-apparent servitude or charge not mentioned in the agreement, if the burden is of such importance that the buyer would not have acquired the property had he known of it.

The buyer may choose rescission or indemnity when the hidden burden substantially affects the use, value, or legal enjoyment of the property. If the burden is apparent, recorded, known to the buyer, or expressly assumed, the warranty generally does not apply.

This rule is especially relevant to rights of way, drainage easements, restrictions, leases, liens, and other limitations that may not be visible from inspection but materially reduce the buyer's expected ownership.

Warranty Against Hidden Defects

The vendor warrants against hidden defects that render the thing unfit for its intended use, or diminish its fitness so substantially that the buyer would not have bought it or would have paid a lower price had he known of the defect.

A defect is actionable when it existed at the time of sale, was hidden or not reasonably discoverable, was serious, and was unknown to the buyer. The warranty does not cover patent defects, defects plainly visible, or defects that an expert buyer should have discovered by reason of his trade or profession.

The buyer's principal remedies are redhibitory action, which withdraws from the sale, and quanti minoris, which seeks a proportionate reduction of the price. Damages may be recovered when the vendor knew of the hidden defect and failed to disclose it.

If the thing is lost because of a hidden defect, the seller's liability is heavier when he knew of the defect. If he did not know, liability is generally limited to restitutionary consequences rather than full damages for bad faith.

In sales by description, sample, or model, the vendor warrants that the thing corresponds with the description, sample, or model. If both description and sample are used, the goods must satisfy both, because each forms part of the basis of the bargain.

In sales of goods by a seller who deals in goods of that kind, there may be an implied warranty of merchantable quality. If the buyer makes known a particular purpose and relies on the seller's skill or judgment, there may also be an implied warranty of fitness for that purpose.

Express Warranties and Modifications

An express warranty arises from an affirmation of fact, promise, description, sample, or model that forms part of the basis of the sale. Mere opinion, commendation, or seller's talk does not ordinarily create a warranty unless the circumstances show reliance on a factual representation.

Warranty obligations may be expanded by stipulation, commercial usage, or the seller's specific undertakings. They may also be limited by clear agreement, but limitations are construed against bad faith, fraud, and statutory policies protecting buyers in applicable transactions.

A seller who knows facts affecting title, quality, safety, or usability must not conceal them when the buyer is entitled to rely on disclosure. Concealment may transform what would have been a simple warranty issue into fraud, giving rise to broader remedies.

Remedies for Breach by the Vendor

If the vendor fails to perform his obligations, the buyer may demand specific performance when delivery is still possible, seek rescission for substantial breach, claim damages, or use the special remedies attached to defective quantity, title, or quality.

Specific performance is appropriate when the object is determinate or unique, especially in sales of land or specific movables. Damages may accompany specific performance when delay, deterioration, or expenses were caused by the vendor's breach.

Rescission is appropriate when the vendor's breach defeats the essential purpose of the sale, such as failure to deliver the thing, delivery of an essentially different thing, serious title defect, or hidden defect making the thing unfit for its intended use.

Rejection is available in sales of goods when the seller's tender does not conform to the contract and the buyer has not accepted the goods in a manner that bars rejection. Acceptance does not automatically extinguish all remedies, but it may shift the buyer toward damages or warranty actions.

The vendor's liability may coexist with the buyer's obligation to pay the price when the breach is minor, but a serious breach may justify withholding payment, rescission, or recovery of what has been paid. Reciprocal obligations require each party to be ready to perform what is incumbent upon him.

Sale Distinguished from Contract to Sell

In a true sale, the vendor assumes the obligation to transfer ownership and deliver the thing, and ownership passes by delivery unless a valid reservation applies. In a contract to sell, the prospective seller usually reserves title and undertakes to execute the final sale only upon full payment or fulfillment of a suspensive condition.

Nonpayment in a contract to sell is commonly the non-happening of a condition, not a breach requiring rescission of an already transferred ownership. In a sale, nonpayment is generally a breach of the buyer's obligation, while the vendor's obligation to deliver depends on whether payment was due immediately, credit was granted, or ownership was reserved.

The label used by the parties is not controlling. Courts examine whether ownership was intended to pass upon delivery or only after full payment, whether the seller retained title as security, and whether the buyer was given rights consistent with ownership.

Practical Effects of the Vendor's Obligations

The vendor must deliver exactly what was sold, in the agreed condition, with its natural and legal incidents, at the agreed time and place, and with title and quality sufficient for the buyer's intended legal enjoyment.

The vendor's obligation is not exhausted by signing a deed when further acts are necessary to place the buyer in control, protect the title, or make registration possible. Conversely, when valid constructive delivery has occurred and no contrary agreement exists, the buyer may already bear the incidents of ownership even before physical occupation.

The controlling inquiry is whether the vendor has placed the buyer in the legal and practical position promised by the sale: owner of the thing sold, able to possess or control it, protected against superior claims, and free from hidden defects that substantially impair its use or value.