Consumer Lecture Notes

TITLE I. – GENERAL PROVISIONS

DECEPTIVE, UNFAIR AND UNCONSCIONABLE SALES ACTS
Article 1. Short Title. – This Act shall be known as the OR PRACTICES
"Consumer Act of the Philippines."
Article 48. Declaration of Policy. – The State shall promote and
Article 2. Declaration of Basic Policy. – It is the policy of the encourage fair, honest and equitable relations among parties in
State to protect the interests of the consumer, promote his consumer transactions and protect the consumer against
general welfare and to establish standards of conduct for deceptive, unfair and unconscionable sales acts or practices.
business and industry. Towards this end, the State shall
implement measures to achieve the following objectives:
Article 49. Implementing Agency. – The Department of Trade
a)​ protection against hazards to health and safety; and Industry, hereby referred to as the Department, shall
b)​ protection against deceptive, unfair and unconscionable enforce the provisions of this Chapter.
sales acts and practices;
c)​ provision of information and education to facilitate REGULATION OF SALES ACTS AND PRACTICES
sound choice and the proper exercise of rights by the
consumer; Article 50. Prohibition Against Deceptive Sales Acts or
d)​ provision of adequate rights and means of redress; and Practices. – A deceptive act or practice by a seller or supplier in
e)​ involvement of consumer representatives in the connection with a consumer transaction violates this Act
formulation of social and economic policies. whether it occurs before, during or after the transaction. An act
or practice shall be deemed deceptive whenever the producer,
CONSUMER PRODUCT QUALITY AND SAFETY 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
Article 5. Declaration of Policy. – It shall be the duty of the
product or service. Without limiting the scope of the above
State: paragraph, the act or practice of a seller or supplier is deceptive
when it represents that:
a)​ to develop and provide safety and quality standards for
consumer products, including performance or a)​ a consumer product or service has the sponsorship,
use-oriented standards, codes of practice and methods approval, performance, characteristics, ingredients,
of tests; accessories, uses, or benefits it does not have;
b)​ to assist the consumer in evaluating the quality, b)​ a consumer product or service is of a particular
including safety, performance and comparative utility of standard, quality, grade, style, or model when in fact it
consumer products; is not;
c)​ to protect the public against unreasonable risks of c)​ a consumer product is new, original or unused, when in
injury associated with consumer products; fact, it is in a deteriorated, altered, reconditioned,
d)​ to undertake research on quality improvement of reclaimed or second-hand state;
products and investigation into causes and prevention d)​ a consumer product or service is available to the
of product related deaths, illness and injuries; consumer for a reason that is different from the fact;
e)​ to assure the public of the consistency of standardized e)​ a consumer product or service has been supplied in
products. accordance with the previous representation when in
fact it is not;
Article 6. Implementing Agencies. – The provisions of this f)​ a consumer product or service can be supplied in a
Article and its implementing rules and regulations shall be quantity greater than the supplier intends;
enforced by: g)​ a service, or repair of a consumer product is needed
when in fact it is not;
a)​ the Department of Health with respect to food, drugs, h)​ a specific price advantage of a consumer product exists
cosmetics, devices and substances; when in fact it does not;
b)​ the Department of Agriculture with respect to products i)​ the sales act or practice involves or does not involve a
related to agriculture, and; warranty, a disclaimer of warranties, particular
c)​ the Department of Trade and Industry with respect to warranty terms or other rights, remedies or obligations
other consumer products not specified above. if the indication is false; and
j)​ the seller or supplier has a sponsorship, approval, or
Article 7. Promulgation and Adoption of Consumer Product affiliation he does not have.
Standards. – The concerned department shall establish
consumer product quality and safety standards which shall Article 51. Deceptive Sales Act or Practices By Regulation. –
consist of one or more of the following: The Department shall, after due notice and hearing, promulgate
regulations declaring as deceptive any sales act, practice or
a)​ requirements to performance, composition, contents, technique which is a misrepresentation of facts other than these
design, construction, finish, packaging of a consumer enumerated in Article 50.
product;
b)​ requirements as to kind, class, grade, dimensions, Article 52. Unfair or Unconscionable Sales Act or Practice. –
weights, material; An unfair or unconscionable sales act or practice by a seller or
c)​ requirements as to the methods of sampling, tests and supplier in connection with a consumer transaction violates
codes used to check the quality of the products; this Chapter whether it occurs before, during or after the
d)​ requirements as to precautions in storage, transporting consumer transaction. An act or practice shall be deemed
and packaging; unfair or unconscionable whenever the producer, manufacturer,
e)​ requirements that a consumer product be marked with distributor, supplier or seller, by taking advantage of the
or accompanied by clear and adequate safety warnings consumer's physical or mental infirmity, ignorance, illiteracy,
or instructions, or requirements respecting the form of lack of time or the general conditions of the environment or
warnings or instructions. surroundings, induces the consumer to enter into a sales
or lease transaction grossly inimical to the interests of the

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consumer or grossly one-sided in favor of the producer, seller who deals in goods of that description (whether
manufacturer, distributor, supplier or seller. he be the grower or manufacturer or not), there is an
implied warranty that the goods shall be of
In determining whether an act or practice is unfair and merchantable quality. (n)
unconscionable, the following circumstances shall be
considered: Art. 1599. Where there is a breach of warranty by the seller,
a)​ that the producer, manufacturer, distributor, supplier the buyer may, at his election:
or seller took advantage of the inability of the
(1)​ Accept or keep the goods and set up against the seller,
consumer to reasonably protect his interest because
the breach of warranty by way of recoupment in
of his inability to understand the language of an
diminution or extinction of the price;
agreement, or similar factors;
(2)​ Accept or keep the goods and maintain an action
b)​ that when the consumer transaction was entered
against the seller for damages for the breach of
into, the price grossly exceeded the price at which
warranty;
similar products or services were readily obtainable
(3)​ Refuse to accept the goods, and maintain an action
in similar transaction by like consumers;
against the seller for damages for the breach of
c)​ that when the consumer transaction was entered
warranty;
into, the consumer was unable to receive a
(4)​ Rescind the contract of sale and refuse to receive the
substantial benefit from the subject of the
goods or if the goods have already been received,
transaction;
return them or offer to return them to the seller and
d)​ that when the consumer was entered into, the seller
recover the price or any part thereof which has been
or supplier was aware that there was no reasonable
paid.
probability or payment of the obligation in full by the
consumer; and When the buyer has claimed and been granted a remedy in
e)​ that the transaction that the seller or supplier anyone of these ways, no other remedy can thereafter be
induced the consumer to enter into was excessively granted, without prejudice to the provisions of the second
one-sided in favor of the seller or supplier. paragraph of Article 1191.

CONSUMER PRODUCT AND SERVICE WARRANTIES

Article 66. Implementing Agency. – The Department of Trade Article 68. Additional Provisions on Warranties. – In addition
and Industry, shall strictly enforce the provision of this Chapter
and its implementing rules and regulations. to the Civil Code provisions on sale with warranties, the
following provisions shall govern the sale of consumer
Article 67. Applicable Law on Warranties. – The provisions of products with warranty:
the Civil Code on conditions and warranties shall govern all
contracts of sale with conditions and warranties. [Link] of express warranty. – Any seller or manufacturer
who gives an express warranty shall:
Article 1547. In a contract of sale, unless a contrary intention
appears, there is: 1)​ set forth the terms of warranty in clear and readily
understandable language and clearly identify himself
(1)​ An implied warranty on the part of the seller that he as the warrantor;
has a right to sell the thing at the time when the 2)​ identify the party to whom the warranty is extended;
ownership is to pass, and that the buyer shall from that 3)​ state the products or parts covered;
time have and enjoy the legal and peaceful possession 4)​ state what the warrantor will do in the
of the thing; event of a defect, malfunction of failure to
(2)​ An implied warranty that the thing shall be free from conform to the written warranty and at
any hidden faults or defects, or any charge or whose expense;
encumbrance not declared or known to the buyer. 5)​ state what the consumer must do to avail of the rights
which accrue to the warranty; and
This Article shall not, however, be held to render liable a sheriff, 6)​ stipulate the period within which, after notice of
auctioneer, mortgagee, pledgee, or other person professing to defect, malfunction or failure to conform to the
sell by virtue of authority in fact or law, for the sale of a thing in warranty, the warrantor will perform any
which a third person has a legal or equitable interest. (n) obligation under the warranty.

Art. 1562. In a sale of goods, there is an implied warranty or [Link] warranty – operative from moment of sale. – All
condition as to the quality or fitness of the goods, as follows: written warranties or guarantees issued by a manufacturer,
producer, or importer shall be operative from the moment of
(1)​ Where the buyer, expressly or by implication, makes sale.
known to the seller the particular purpose for which
the goods are acquired, and it appears that the buyer 1)​ Sales Report. – All sales made by distributors of
relies on the seller's skill or judgment (whether he be products covered by this Article shall be reported to
the grower or manufacturer or not), there is an implied the manufacturer, producer, or importer of the product
warranty that the goods shall be reasonably fit for sold within thirty (30) days from date of purchase,
such purpose; unless otherwise agreed upon. The report shall
(2)​ Where the goods are brought by description from a contain, among others, the date of purchase, model of

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the product bought, its serial number, name and warranty; apermit the consumer to elect whether to ask
address of the buyer. The report made in accordance for a refund or replacement without charge of such
with this provision shall be equivalent to a warranty product or part, as the case may be, where after
registration with the manufacturer, producer, or reasonable number of attempts to remedy the defect or
importer. Such registration is sufficient to hold the malfunction, the product continues to have the defect or
manufacturer, producer, or importer liable, in to malfunction.
appropriate cases, under its warranty.
2)​ Failure to make or send report. – Failure of the The warrantor will not be required to perform the above duties
distributor to make the report or send them the form if he can show that the defect, malfunction or failure to
required by the manufacturer, producer, or importer conform to a written warranty was caused by damage due to
shall relieve the latter of its liability under the unreasonable use thereof.
warranty: Provided, however, That the distributor who
[Link] of warranty. – The seller and the consumer may
failed to comply with its obligation to send the sales
stipulate the period within which the express warranty shall be
reports shall be personally liable under the warranty.
enforceable. If the implied warranty on merchantability
For this purpose, the manufacturer shall be obligated to
accompanies an express warranty, both will be of equal
make good the warranty at the expense of the
duration.
distributor.
3)​ Retail. – The retailer shall be subsidiarily liable under Any other implied warranty shall endure not less than sixty
the warranty in case of failure of both the (60) days nor more than one (1) year following the sale of new
manufacturer and distributor to honor the warranty. In consumer products.
such case, the retailer shall shoulder the expenses and
costs necessary to honor the warranty. Nothing therein [Link] of warranties. –
shall prevent the retailer from proceeding against the
1)​ In case of breach of express warranty, the consumer
distributor or manufacturer.
may elect to have the goods repaired or its purchase
4)​ Enforcement of warranty or guarantee. – The
price refunded by the warrantor. In case the repair of
warranty rights can be enforced by presentment of a
the product in whole or in part is elected, the warranty
claim. To this end, the purchaser needs only to present
work must be made to conform to the express
to the immediate seller either the warranty card of the
warranty within thirty (30) days by either the
official receipt along with the product to be serviced or
warrantor or his representative. The thirty-day period,
returned to the immediate seller. No other documentary
however, may be extended by conditions which are
requirement shall be demanded from the purchaser. If
beyond the control of the warrantor or his
the immediate seller is the manufacturer's factory or
representative. In case the refund of the purchase
showroom, the warranty shall immediately be
price is elected, the amount directly attributable to the
honored. If the product was purchased from a
use of the consumer prior to the discovery of the
distributor, the distributor shall likewise immediately
non-conformity shall be deducted.
honor the warranty. In the case of a retailer other than
2)​ In case of breach of implied warranty, the consumer
the distributor, the former shall take responsibility
may retain in the goods and recover damages, or
without cost to the buyer of presenting the warranty
reject the goods, cancel and contract and recover from
claim to the distributor in the consumer's behalf.
the seller so much of the purchase price as has been
5)​ Record of purchases. – Distributors and retailers
paid, including damages.
covered by this Article shall keep a record of all
purchases covered by a warranty or guarantee for such Article 69. Warranties in Supply of Services. –
period of time corresponding to the lifetime of the
product's respective warranties or guarantees. a)​ In every contract for the supply of services to a
6)​ Contrary stipulations – null and void. – All covenants, consumer made by a seller in the course of a business,
stipulations or agreements contrary to the provisions there is an implied warranty that the service will be
of this Article shall be without legal effect. rendered with due care and skill and that any material
supplied in connection with such services will be
[Link] of warranties. – A written warranty shall clearly reasonably fit for the purpose for which it is supplied.
and conspicuously designate such warranty as: b)​ Where a seller supplies consumer services in the
course of a business and the consumer, expressly or by
1)​ "Full warranty" if the written warranty meets the
implication, makes known to the seller the particular
minimum requirements set forth in paragraph (d); or
purpose for which the services are required, there is an
2)​ "Limited warranty" if the written warranty does not
implied warranty that the services supplied under the
meet such minimum requirements.
contract and any material supplied in connection
[Link] standards for warranties. – For the warrantor of a therewith will be reasonably fit for that purpose or are
consumer product to meet the minimum standards for warranty, of such a nature or quality that they might reasonably
he shall: be expected to achieve that result, unless the
circumstances show that the consumer does not rely or
1)​ remedy such consumer product within a reasonable that it is unreasonable for him to rely, on the seller's
time and without charge in case of a defect, skill or judgment.
malfunction or failure to conform to such written

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Article 70. Professional Services. – The provision of this Act on a)​ whether it is flammable or inflammable;
warranty shall not apply to professional services of certified b)​ directions for use, if necessary;
public accountants, architects, engineers, lawyers, c)​ warning of toxicity;
d)​ wattage, voltage or amperes; or
veterinarians, optometrists, pharmacists, nurses, nutritionists, e)​ process of manufacture used if necessary.
dietitians, physical therapists, salesmen, medical and dental
practitioners and other professionals engaged in their Any word, statement or other information required by or under
respective professional endeavors. authority of the preceding paragraph shall appear on the label
or labeling with such conspicuousness as compared with other
LABELING AND FAIR PACKAGING words, statements, designs or devices therein, and in such
terms as to render it likely to be read and understood by the
Article 74. Declaration of Policy. – The State shall enforce
ordinary individual under customary conditions of purchase or
compulsory labeling, and fair packaging to enable the
use.
consumer to obtain accurate information as to the nature,
quality and quantity of the contents of consumer products and The above requirements shall form an integral part of the label
to facilitate his comparison of the value of such products. without danger of being erased or detached under ordinary
handling of the product.
Article 75. Implementing Agency. – The Department of Trade
and Industry shall enforce the provisions of this Chapter and Article 78. Philippine Product Standard Mark. – The label
its implementing rules and regulations: Provided, That with may contain the Philippine Product Standard Mark if it is
respect to food, drugs, cosmetics, devices and hazardous certified to have passed the consumer product standard
substances, it shall be enforced by the concerned department. prescribed by the concerned department.

Article 76. Prohibited Acts on Labeling and Packaging. – It Article 79. Authority of the Concerned Department to
shall be unlawful for any person, either as principal or agent, Provide for Additional Labeling and Packaging
engaged in the labeling or packaging of any consumer product, Requirements. – Whenever the concerned department
to display or distribute or to cause to be displayed or distributed determines that regulations containing requirements other
in commerce any consumer product whose package or label than those prescribed in Article 77 hereof are necessary to
does not conform to the provisions of this Chapter. prevent the deception of the consumer or to facilitate value
comparisons as to any consumer product, it may issue such
The prohibition in this Chapter shall not apply to persons rules and regulations to:
engaged in the business of wholesale or retail distributors of
consumer products except to the extent that such persons: a)​ establish and define standards for characterization of
the size of a package enclosing any consumer
a)​ are engaged in the packaging or labeling of such product which may be used to supplement the label
products; statement of net quality, of contents of packages
b)​ prescribe or specify by any means the manner in which containing such products but this clause shall not be
such products are packaged or labeled; or construed as authorizing any limitation on the size,
c)​ having knowledge, refuse to disclose the source of the shape, weight, dimensions, or number of packages
mislabeled or mispackaged products. which may be used to enclose any product;
b)​ regulate the placement upon any package containing
Article 77. Minimum Labeling Requirements for Consumer any product or upon any label affixed to such product
Products. – All consumer products domestically sold whether of any printed matter stating or representing by
manufactured locally or imported shall indicate the following in implication that such product is offered for retail at a
their respective labels of packaging: price lower than the ordinary and customary retail
price or that a price advantage is accorded to
a)​ its correct and registered trade name or brand name; purchases thereof by reason of the size of the
b)​ its duly registered trademark; package or the quantity of its contents;
c)​ its duly registered business name; c)​ prevent the nonfunctional slack-fill of packages
d)​ the address of the manufacturer, importer, repacker of containing consumer products.
the consumer product in the Philippines;
For purposes of paragraph (c) of this Article, a package shall
e)​ its general make or active ingredients;
be deemed to be nonfunctionally slack-filled if it is filled to
f)​ the net quality of contents, in terms of weight, measure
substantially less than its capacity for reasons other than (1)
or numerical count rounded of to at least the nearest
protection of the contents of such package, (2) the
tenths in the metric system;
requirements of machines used for enclosing the contents in
g)​ country of manufacture, if imported; and
such package, or (3) inherent characteristics of package
h)​ if a consumer product is manufactured, refilled or
materials or construction being used.
repacked under license from a principal, the label shall
so state the fact. Article 80. Special Packaging of Consumer Products for the
Protection of Children. – The concerned department may
The following may be required by the concerned department
establish standards for the special packaging of any consumer
in accordance with the rules and regulations they will
product if it finds that:
promulgate under authority of this Act:

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a)​ the degree or nature of the hazard to children in the

availability of such product, by reason of its
packaging, is such that special packaging is required
to protect children from serious personal injury or
serious illness resulting from handling and use of
such product; and
b)​ the special packaging to be required by such standard
is technically feasible, practicable and appropriate for
such product. In establishing a standard under this
Article, the concerned department shall consider:

the reasonableness of such standard;

1)​ available scientific, medical and engineering data

concerning special packaging and concerning
accidental, ingestions, illnesses and injuries caused by
consumer product;
2)​ the manufacturing practices of industries affected by
this Article; and 4) the nature and use of consumer
products.

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.

Article 82. Manner of Placing Price Tags. – Price tags, labels

or markings must be written clearly, indicating the price of the
consumer product per unit in pesos and centavos.

Article 83. Regulations for Price Tag Placement. – The

concerned department shall prescribe rules and regulations
for the visible placement of price tags for specific consumer
products and services. There shall be no erasures or
alterations of any sort of price tags, labels or markings.

Article 84. Additional Labeling Requirements for Food. –

The following additional labeling requirements shall be
imposed by the concerned department for food:

a)​ expiry or expiration date, where applicable;

b)​ whether the consumer product is semi-processed, fully
processed, ready-to-cook, ready-to-eat, prepared food
or just plain mixture;
c)​ nutritive value, if any;
d)​ whether the ingredients use are natural or synthetic, as
the case may be;
e)​ such other labeling requirements as the concerned
department may deem necessary and reasonable.