Can I keep a defective item and demand a price reduction instead of returning it?

The election is the buyer's

Article 1567 provides that the vendee may elect between withdrawing from the contract and demanding a proportionate reduction of the price, with damages in either case. Sellers commonly answer a complaint by offering to take the item back and refund it, as though that discharged them. It does not. If the defect is one you can live with and the item is one you still need, you are entitled to keep it and pay less, and the seller cannot insist on the return instead. Note also that damages are available on either branch, so choosing the reduction does not waive a claim for what the defect actually cost you.

Which defects the election covers

The article works by reference to its neighbours, and they mark out the territory. Article 1561 is the warranty against hidden defects that render the thing unfit for its intended use or diminish that fitness materially, with the important exception that the seller does not answer for patent or visible defects. Article 1562 supplies the implied warranties of fitness for a stated purpose and of merchantable quality. Article 1564 covers warranties annexed by usage of trade and Article 1565 sales by sample. Article 1566 makes the seller responsible for hidden faults even though he was unaware of them.

Working out what proportionate means

The reduction is proportionate to what the defect does to the value of the thing, which is a question of fact rather than a formula, so the claim is only as good as the assessment behind it. An independent inspection report, a repair quotation from someone with no stake in the sale, and evidence of what a sound item of the same kind sells for are the usual materials. Where the defect also caused you loss, keep that separate and prove it separately, because it is claimed as damages rather than folded into the reduction.

Six months, from delivery

Article 1571 bars actions arising from these provisions after six months from the delivery of the thing sold. That runs from delivery, not from the day the defect appeared, which is why hidden-defect claims are so often lost while the parties are still exchanging service reports. Raise the defect in writing as soon as you find it, state which of the two remedies you are electing, and act within the period. Article 1568 deals with the separate case where the thing is lost in consequence of the hidden faults, and it distinguishes a seller who knew from one who did not.

Cases citing this provision

These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.

• Philippine Steel Coating Corp. vs. Eduard Quiñones, G.R. No. 194533, April 19, 2017 — read the decision on LawPhil →
• Nutrimix Feeds Corporation vs. Court of Appeals, et al, G.R. No. 152219, October 25, 2004 — read the decision on LawPhil →

Related provisions

• Civil Code, Article 1567 — Buyer's Options for Hidden Defects (Redhibition/Quanti Minoris)
• Civil Code, Article 1561 — Warranty Against Hidden Defects
• Civil Code, Article 1566 — Vendor Liable Though Unaware
• Civil Code, Article 1571 — Prescription of Warranty Actions (Six Months)