H .

CONSUMER PRODUCT QUALITY AND SAFETY

Article 6. Implementing Agencies. – The provisions of this Article and its implementing rules and
regulations shall be enforced by:

a) the Department of Health with respect to food, drugs, cosmetics, devices and substances;

b) the Department of Agriculture with respect to products related to agriculture, and;

c) the Department of Trade and Industry with respect to other consumer products not specified
above.

Article 7. Promulgation and Adoption of Consumer Product Standards. – The concerned

department shall establish consumer product quality and safety standards which shall consist of one
or more of the following:

a) requirements to performance, composition, contents, design, construction, finish, packaging of a

consumer product;

b) requirements as to kind, class, grade, dimensions, weights, material;

c) requirements as to the methods of sampling, tests and codes used to check the quality of the
products;

d) requirements as to precautions in storage, transporting and packaging;

e) requirements that a consumer product be marked with or accompanied by clear and adequate
safety warnings or instructions, or requirements respecting the form of warnings or instructions.

For this purpose, the concerned department shall adopt existing government domestic product
quality and safety standards: Provided, That in the absence of such standards, the concerned
department shall form specialized technical committees composed of equal number of
representatives from each of the Government, business and consumer sectors to formulate, develop
and purpose consumer product quality and safety standards. The said technical committees shall
consult with the private sector, which may, motu proprio, develop its own quality and safety
standards that shall be subject or agencies after public hearings have been conducted for that
purpose; and shall likewise consider existing international standards recognized by the Philippine
Government.

Article 10. Injurious, Dangerous and Unsafe Products. – Whenever the departments find, by their
own initiative or by petition of a consumer, that a consumer product is found to be injurious, unsafe
or dangerous, it shall, after due notice and hearing, make the appropriate order for its recall,
prohibition or seizure from public sale or distribution: Provided, That, in the sound discretion of the
department it may declare a consumer product to be imminently injurious, unsafe or dangerous, and
order is immediate recall, ban or seizure from public sale or distribution, in which case, the seller,
distributor, manufacturer or producer thereof shall be afforded a hearing within forty-eight (48) hours
from such order. The ban on the sale and distribution of a consumer product adjudged injurious,
unsafe or dangerous, or imminently injurious, unsafe or dangerous under the preceding paragraph
shall stay in force until such time that its safety can be assured or measures to ensure its safety
have been established.

I.​ DECEPTIVE SALES ACTS AND PRACTICES

REGULATION OF SALES ACTS AND PRACTICES

Article 50. Prohibition Against Deceptive Sales Acts or Practices. – A deceptive act or practice
by a seller or supplier in connection with a consumer transaction violates this Act whether it occurs
before, during or after the transaction. An act or practice shall be deemed deceptive whenever the
producer, manufacturer, supplier or seller, through concealment, false representation of fraudulent
manipulation, induces a consumer to enter into a sales or lease transaction of any consumer product
or service.

Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is
deceptive when it represents that:

a) a consumer product or service has the sponsorship, approval, performance, characteristics,

ingredients, accessories, uses, or benefits it does not have;

b) a consumer product or service is of a particular standard, quality, grade, style, or model when in
fact it is not;

c) a consumer product is new, original or unused, when in fact, it is in a deteriorated, altered,

reconditioned, reclaimed or second-hand state;

d) a consumer product or service is available to the consumer for a reason that is different from the
fact;

e) a consumer product or service has been supplied in accordance with the previous representation
when in fact it is not;

f) a consumer product or service can be supplied in a quantity greater than the supplier intends;

g) a service, or repair of a consumer product is needed when in fact it is not;

h) a specific price advantage of a consumer product exists when in fact it does not;

i) the sales act or practice involves or does not involve a warranty, a disclaimer of warranties,
particular warranty terms or other rights, remedies or obligations if the indication is false; and

j) the seller or supplier has a sponsorship, approval, or affiliation he does not have.

J. PRODUCT SERVICE AND WARRANTY

Article 67. Applicable Law on Warranties. – The provisions of the Civil Code on conditions and
warranties shall govern all contracts of sale with conditions and warranties.

Article 68. Additional Provisions on Warranties. – In addition to the Civil Code provisions on sale
with warranties, the following provisions shall govern the sale of consumer products with warranty:
a) Terms of express warranty. – Any seller or manufacturer who gives an express warranty shall:

1) set forth the terms of warranty in clear and readily understandable language and clearly identify
himself as the warrantor;

2) identify the party to whom the warranty is extended;

3) state the products or parts covered;

4) state what the warrantor will do in the event of a defect, malfunction of failure to conform to the
written warranty and at whose expense;

5) state what the consumer must do to avail of the rights which accrue to the warranty; and

6) stipulate the period within which, after notice of defect, malfunction or failure to conform to the
warranty, the warrantor will perform any obligation under the warranty.

b) Express warranty – operative from moment of sale. – All written warranties or guarantees issued
by a manufacturer, producer, or importer shall be operative from the moment of sale.

1) Sales Report. – All sales made by distributors of products covered by this Article shall be reported
to the manufacturer, producer, or importer of the product sold within thirty (30) days from date of
purchase, unless otherwise agreed upon. The report shall contain, among others, the date of
purchase, model of the product bought, its serial number, name and address of the buyer. The report
made in accordance with this provision shall be equivalent to a warranty registration with the
manufacturer, producer, or importer. Such registration is sufficient to hold the manufacturer,
producer, or importer liable, in appropriate cases, under its warranty.

2) Failure to make or send report. – Failure of the distributor to make the report or send them the
form required by the manufacturer, producer, or importer shall relieve the latter of its liability under
the warranty: Provided, however, That the distributor who failed to comply with its obligation to send
the sales reports shall be personally liable under the warranty. For this purpose, the manufacturer
shall be obligated to make good the warranty at the expense of the distributor.

3) Retail. – The retailer shall be subsidiarily liable under the warranty in case of failure of both the
manufacturer and distributor to honor the warranty. In such case, the retailer shall shoulder the
expenses and costs necessary to honor the warranty. Nothing therein shall prevent the retailer from
proceeding against the distributor or manufacturer.

4) Enforcement of warranty or guarantee. – The warranty rights can be enforced by presentment of a

claim. To this end, the purchaser needs only to present to the immediate seller either the warranty
card of the official receipt along with the product to be serviced or returned to the immediate seller.
No other documentary requirement shall be demanded from the purchaser. If the immediate seller is
the manufacturer's factory or showroom, the warranty shall immediately be honored. If the product
was purchased from a distributor, the distributor shall likewise immediately honor the warranty. In the
case of a retailer other than the distributor, the former shall take responsibility without cost to the
buyer of presenting the warranty claim to the distributor in the consumer's behalf.

5) Record of purchases. – Distributors and retailers covered by this Article shall keep a record of all
purchases covered by a warranty or guarantee for such period of time corresponding to the lifetime
of the product's respective warranties or guarantees.

6) Contrary stipulations – null and void. – All covenants, stipulations or agreements contrary to the
provisions of this Article shall be without legal effect.
c) Designation of warranties. – A written warranty shall clearly and conspicuously designate such
warranty as:

1) "Full warranty" if the written warranty meets the minimum requirements set forth in paragraph (d);
or

2) "Limited warranty" if the written warranty does not meet such minimum requirements.

d) Minimum standards for warranties. – For the warrantor of a consumer product to meet the
minimum standards for warranty, he shall:

1) remedy such consumer product within a reasonable time and without charge in case of a defect,
malfunction or failure to conform to such written warranty;

2) permit the consumer to elect whether to ask for a refund or replacement without charge of such
product or part, as the case may be, where after reasonable number of attempts to remedy the
defect or malfunction, the product continues to have the defect or to malfunction.

The warrantor will not be required to perform the above duties if he can show that the defect,
malfunction or failure to conform to a written warranty was caused by damage due to unreasonable
use thereof.

e) Duration of warranty. – The seller and the consumer may stipulate the period within which the
express warranty shall be enforceable. If the implied warranty on merchantability accompanies an
express warranty, both will be of equal duration.

Any other implied warranty shall endure not less than sixty (60) days nor more than one (1) year
following the sale of new consumer products.

f) Breach of warranties. – 1) In case of breach of express warranty, the consumer may elect to have
the goods repaired or its purchase price refunded by the warrantor. In case the repair of the product
in whole or in part is elected, the warranty work must be made to conform to the express warranty
within thirty (30) days by either the warrantor or his representative. The thirty-day period, however,
may be extended by conditions which are beyond the control of the warrantor or his representative.
In case the refund of the purchase price is elected, the amount directly attributable to the use of the
consumer prior to the discovery of the non-conformity shall be deducted.

2) In case of breach of implied warranty, the consumer may retain in the goods and recover
damages, or reject the goods, cancel and contract and recover from the seller so much of the
purchase price as has been paid, including damages.

K. LABELLING AND FAIR PACKAGING

Article 76. Prohibited Acts on Labeling and Packaging. – It shall be unlawful for any person,
either as principal or agent, engaged in the labeling or packaging of any consumer product, to
display or distribute or to cause to be displayed or distributed in commerce any consumer product
whose package or label does not conform to the provisions of this Chapter.

The prohibition in this Chapter shall not apply to persons engaged in the business of wholesale or
retail distributors of consumer products except to the extent that such persons:

a) are engaged in the packaging or labeling of such products;

b) prescribe or specify by any means the manner in which such products are packaged or labeled; or

c) having knowledge, refuse to disclose the source of the mislabeled or mispackaged products.

Article 77. Minimum Labeling Requirements for Consumer Products. – All consumer products
domestically sold whether manufactured locally or imported shall indicate the following in their
respective labels of packaging:

a) its correct and registered trade name or brand name;

b) its duly registered trademark;

c) its duly registered business name;

d) the address of the manufacturer, importer, repacker of the consumer product in the Philippines;

e) its general make or active ingredients;

f) the net quality of contents, in terms of weight, measure or numerical count rounded of to at least
the nearest tenths in the metric system;

g) country of manufacture, if imported; and

h) if a consumer product is manufactured, refilled or repacked under license from a principal, the
label shall so state the fact.

The following may be required by the concerned department in accordance with the rules and
regulations they will promulgate under authority of this Act:

a) whether it is flammable or inflammable;

b) directions for use, if necessary;

c) warning of toxicity;

d) wattage, voltage or amperes; or

e) process of manufacture used if necessary.

Any word, statement or other information required by or under authority of the preceding paragraph
shall appear on the label or labeling with such conspicuousness as compared with other words,
statements, designs or devices therein, and in such terms as to render it likely to be read and
understood by the ordinary individual under customary conditions of purchase or use.

The above requirements shall form an integral part of the label without danger of being erased or
detached under ordinary handling of the product.

L. CONSUMER RIGHTS

Article 81. Price Tag Requirement. – It shall be unlawful to offer any consumer product for retail
sale to the public without an appropriate price tag, label or marking publicly displayed to indicate the
price of each article and said products shall not be sold at a price higher than that stated therein and
without discrimination to all buyers: Provided, That lumber sold, displayed or offered for sale to the
public shall be tagged or labeled by indicating thereon the price and the corresponding official name
of the wood: Provided, further, That if consumer products for sale are too small or the nature of
which makes it impractical to place a price tag thereon price list placed at the nearest point where
the products are displayed indicating the retail price of the same may suffice.

REPUBLIC ACT NO. 10642

AN ACT STRENGTHENING CONSUMER PROTECTION IN THE PURCHASE OF BRAND NEW

MOTOR VEHICLES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled:

Section 1. Short Title. – This Act shall be known as the "Philippine Lemon Law".

Section 2. Declaration of Policy. – It is hereby declared the policy of the State to promote full
protection to the rights of consumers in the sale of motor vehicles against business and trade
practices which are deceptive, unfair or otherwise inimical to consumers and the public interest.

The State recognizes that a motor vehicle is a major consumer purchase or investment. Hence, the
rights of consumers should be clearly defined, including the means for redress for violations thereof.

Section 3. Definition of Terms. – As used in this Act:

(a) Brand new motor vehicle refers to a vehicle constructed entirely from new parts and covered by a
manufacturer’s express warranty at the time of purchase that it has never been sold or registered
with the Department of Transportation and Communications (DOTC) or an appropriate agency or
authority, and has never been operated on any highway of the Philippines, or in any foreign state or
country;

(b) Collateral charges refer to the fees paid’ to the Land Transportation Office (LTO) for the
registration of a brand new motor vehicle and other incidental expenses such as, but not limited to,
the cost of insurance pertaining to the vehicle, chattel mortgage fees and interest expenses if
applicable;

(c) Comparable motor vehicle refers to a motor vehicle that is identical or reasonably equivalent to
the motor vehicle to be replaced, in terms of specifications and values, subject to availability, as the
motor vehicle existed at the time of purchase: Provided, That there shall be an offsetting from this
value for reasonable allowance for its use;

(d) Consumer refers to any person, natural or juridical, who purchases a brand new motor vehicle
either by cash or credit from an authorized distributor, dealer or retailer in the Philippines;

(e) Dealer or retailer refers to any person, natural or juridical, authorized by the manufacturer or
distributor to sell brand new motor vehicles directly to the retail buyers and the public;

(f) Distributor refers to any person, natural or juridical, authorized by the manufacturer to sell brand
new motor vehicles to duly authorized dealers or retailers;

(g) Implementing agency refers to the Department of Trade and Industry (DTI), reorganized under
Title X, Book IV of Executive Order No. 292, series of 1987, otherwise known as the "Administrative
Code of 1987";

(h) Lemon Law rights period refers to the period ending twelve (12) months after the date of the
original delivery of a brand new motor vehicle to a consumer or the first twenty thousand (20,000)
kilometers of operation after such delivery, whichever comes first. This shall be the period during
which the consumer can report any nonconformity, as defined in paragraph (k) herein, to the
standards and specifications of the manufacturer, authorized distributor, authorized dealer or retailer,
and pursue any right as provided for under this Act;

(i) Manufacturer refers to any person, natural or juridical, engaged in the business of manufacturing
or assembling motor vehicles;

(j) Motor vehicle refers to any self-propelled, four (4) wheeled road vehicle designed to carry
passengers including, but not limited to, sedans, coupes, station wagons, convertibles, pick-ups,
vans, sports utility vehicles (SUVs) and Asian Utility Vehicles (AUVs) but excluding motorcycles,
delivery trucks, dump trucks, buses, road rollers, trolley cars, street sweepers, sprinklers, lawn
mowers and heavy equipment such as, but not limited to, bulldozers, payloaders, graders, forklifts,
amphibian trucks, cranes, and vehicles which run only on rails or tracks, and tractors, trailers and
traction engines of all kinds used exclusively for agricultural purposes. Trailers having any number of
wheels, when propelled or intended by attachment to a motor vehicle, shall be classified as separate
motor vehicle with no power rating;

(k) Nonconformity refers to any defect or condition that substantially impairs the use, value or safety
of a brand new motor vehicle which prevents it from conforming to the manufacturer’s or distributor’s
standards or specifications, which cannot be repaired, but excluding conditions resulting from
noncompliance by the consumer of his or her obligations under the warranty, modifications not
authorized by the manufacturer or distributor, abuse or neglect, and damage due to accident or force
majeure;

(l) Purchase price refers to the invoice price or the amount of money which the dealer or retailer
actually received for the brand new motor vehicle, in consideration of the sale of such brand new
motor vehicle;

(m) Warranty refers to the written assurance, so labeled, of the manufacturer of a brand new motor
vehicle including any term or condition precedent to the enforcement of obligations under the
warranty; and

(n) Warranty rights period refers to the period provided for under the contract of sale when the
manufacturer would guarantee the materials used, the workmanship and the roadworthiness of a
brand new motor vehicle for ordinary use or reasonable intended purposes.

Section 4. Coverage. – This Act shall cover brand new motor vehicles purchased in the Philippines
reported by a consumer to be in nonconformity with the vehicle’s manufacturer or distributor’s
standards or specifications within twelve (12) months from the date of .original delivery to the
consumer, or up to twenty thousand (20,000) kilometers of operation after such delivery, whichever
comes first. The following causes of nonconformity shall be excluded:

(a) Noncompliance by the consumer of the obligations under the warranty;

(b) Modifications not authorized by the manufacturer, distributor, authorized dealer or retailer;

(c) Abuse or neglect of the brand new motor vehicle; and

(d) Damage to the vehicle due to accident or force majeure.

Section 5. Repair Attempts. – At any time within the Lemon Law rights period, and after at least four
(4) separate repair attempts by the same manufacturer, distributor, authorized dealer or retailer for
the same complaint, and the nonconformity issue remains unresolved, the consumer may invoke his
or her rights under this Act.
The repair may include replacement of parts components, or assemblies.

Section 6. Notice of Availment of Lemon Law Rights. – Before availing of any remedy under this Act
and subject to compliance with the provisions of Section 5 hereof, the consumer shall, in writing,
notify the manufacturer, distributor, authorized dealer or retailer of the unresolved complaint, and the
consumer’s intention to invoke his or her rights under this Act within the Lemon Law rights period.

The warranty booklet issued by the manufacturer, distributor, authorized dealer or retailer shall
clearly state the manner and form of such notice to constitute a valid and legal notice to the
manufacturer, distributor, authorized dealer or retailer. It shall also clearly state the responsibility of
the consumer under this section.

Section 7. Availment of Lemon Law Rights. – Subsequent to filing the notice of availment referred to
in the preceding section, the consumer shall bring the vehicle to the manufacturer, distributor,
authorized dealer or retailer from where the vehicle was purchased for a final attempt to address the
complaint of the consumer to his or her satisfaction.

It shall be the duty of the manufacturer, distributor, authorized dealer or retailer, upon receipt of the
motor vehicle and the notice of nonconformity required under Section 6 hereof, to attend to the
complaints of the consumer including, as may be necessary, making the repairs and undertaking
such actions to make the vehicle conform to the standards or specifications of the manufacturer,
distributor, authorized dealer or retailer for such vehicle.

In case the nonconformity issue remains unresolved despite the manufacturer, distributor, authorized
dealer or retailer’s efforts to repair the vehicle, pursuant to the consumer’s availment of his or her
Lemon Law rights, the consumer may file a complaint before the DTI as provided for under this Act:
Provided, however, That if the vehicle is not returned for repair, based on the same complaint, within
thirty (30) calendar days from the date of notice of release of the motor vehicle to the consumer
following this repair attempt within the Lemon Law rights period, the repair is deemedsuccessful:
Provided, finally, That, in the event that the nonconformity issue still exists or persists after the thirty
(30)-day period but still within the Lemon Law rights period, the consumer may be allowed to avail of
the same remedies under Sections 5 and 6 hereof.

To compensate for the non-usage of the vehicle while under repair and during the period of
availment of the Lemon Law rights, the consumer shall be provided a reasonable daily transportation
allowance, an amount which covers the transportation of the consumer from his or her residence to
his or her regular workplace or destination and vice versa, equivalent to air-conditioned taxi fare, as
evidenced by official receipt, or in such amount to be agreed upon by the parties, or a service vehicle
at the option of the manufacturer, distributor, authorized dealer or retailer. Any disagreement on this
matter shall be resolved by the DTI.

Nothing herein shall be construed to limit or impair the rights and remedies of a consumer under any
other law.