Short answer. Article 1567 of the Civil Code gives you a choice: withdraw from the contract, or demand a proportionate reduction of the price — and you can claim damages either way. This applies where the defect is genuinely hidden, meaning not visible and not something you should have caught given your own expertise.
What the law says
the vendee may elect between withdrawing from the contract and demanding a proportionate reduction of the price, with damages in either case
Civil Code, Article 1567 — Buyer's Options for Hidden Defects (Redhibition/Quanti Minoris). Read the full provision →
What the law says
The vendor shall be responsible for warranty against the hidden defects which the thing sold may have, should they render it unfit for the use for which it is intended, or should they diminish its fitness for such use
Civil Code, Article 1561 — Warranty Against Hidden Defects. Read the full provision →
Two remedies, and the choice is yours
Article 1567 sets up an election between two remedies: withdrawing from the contract, which unwinds the sale, or demanding a proportionate reduction of the price, which keeps the sale in place but adjusts what you paid to reflect the defect. The word "elect" matters — this is a choice belonging to the buyer, not something the seller gets to dictate. You decide which remedy fits your situation better.
Damages come with either choice
Whichever remedy you pick, the article adds damages in either case. Choosing to keep the item and reduce the price does not mean giving up a damages claim, and choosing to withdraw does not mean settling only for a refund. Both paths under Article 1567 carry the possibility of damages on top of the primary remedy, reflecting that the defect itself may have caused loss beyond just the price paid.
What makes a defect 'hidden' in the first place
Article 1561 explains what the seller's warranty actually covers: hidden defects that render the thing unfit for its intended use, or diminish its fitness for that use to the point that, had you known, you would not have bought it or would have paid less. The warranty specifically does not extend to patent defects — ones that are visible — or to defects that were not visible if you are an expert who, by trade or profession, should have caught them.
Putting the two together
In practice, working out whether you have a remedy starts with whether the defect was genuinely hidden under Article 1561's description, not merely something you personally overlooked. Once that is established, Article 1567 is what lets you choose between walking away from the sale or keeping the item at a reduced price, with damages available either way. Document when you discovered the defect and how it affects the item's use, since that record supports whichever remedy you decide to pursue.
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