Short answer. Whatever the contract says governs. Where the contract and trade usage are silent, the place of delivery is the seller's place of business, or his residence if he has none, so the buyer collects the goods. Unless otherwise agreed, the seller pays the expenses of putting the goods into a deliverable state.
What the law says
Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state must be borne by the seller.
Civil Code, Article 1521 — Place, Time, and Cost of Delivery. Read the full provision →
The contract comes first, the default second
Article 1521 of the Civil Code begins by saying that whether the buyer must collect or the seller must send is a question depending in each case on the contract, express or implied, between the parties. Only when nothing was agreed, and no usage of trade points the other way, does the statutory default apply: delivery takes place at the seller's place of business, or at his residence if he has no place of business. In practice that means a buyer who agreed on nothing about delivery has agreed to fetch. This surprises many buyers, particularly in online and provincial transactions where the goods were described as being shipped.
Specific goods known to be somewhere else
There is an important exception. Where the sale is of specific goods which, to the knowledge of both parties at the time of the sale, were in some other place — a car sitting in a named garage, machinery standing in a particular warehouse, palay in a specific bodega — that place is the place of delivery. The rule follows the parties' actual understanding rather than an abstract default. And where the goods are in the hands of a third person, the seller has not delivered until that third person acknowledges to the buyer that he now holds the goods on the buyer's behalf. A mere instruction from seller to warehouseman, without that acknowledgement, does not complete delivery.
Cost of putting the goods into a deliverable state
The last sentence of the article is the one that settles most cost arguments. Unless otherwise agreed, the seller bears the expenses of and incidental to putting the goods into a deliverable state — weighing, counting, cutting, crating, assembling or whatever else must be done before the goods can be handed over as the thing sold. That is a different question from freight and carriage to the buyer's premises, which follows from where delivery is agreed to take place. A contract that is silent on freight but clear on place of delivery has, in effect, answered the freight question too.
Timing, and how to avoid the argument
Where the seller is bound to send the goods but no time was fixed, he must send them within a reasonable time. A demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour, and what is a reasonable hour is a question of fact — a delivery attempted at midnight is not a delivery attempted. All of this is avoidable by writing three things into the order: the place of delivery, who pays freight and insurance, and the date or window for delivery. Where those are recorded, Article 1521 never has to be consulted. This is general legal information about the Civil Code's default rules on sale of goods.
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.
- Sps. Alexander and Julie Lam vs. Kodak Philippines, Ltd, G.R. No. 167615, January 11, 2016 — read the decision on LawPhil →