The Power of Promises: Express Warranties and Liability for Misleading Advertising

G.R. No. 118325, January 29, 1997

Imagine investing in roofing materials advertised as “structurally safe and strong,” only to see them blown away by the first strong wind. This scenario highlights the importance of express warranties and the legal consequences companies face when their advertising doesn’t match reality. This case explores how a company’s marketing claims can create legal obligations, even without a direct contract with the end consumer.

What are Express Warranties?

An express warranty is a seller’s promise or guarantee about the quality, condition, or performance of a product. These warranties are often found in advertisements, brochures, or product labels. According to Article 1546 of the Civil Code, affirmations of fact or promises by the seller, if they induce the buyer to purchase the product, constitute an express warranty. The key is that the buyer relies on these statements when making their purchase decision.

Express warranties go beyond simply describing a product; they create specific expectations about its performance. For instance, claiming a watch is “waterproof to 100 meters” is an express warranty. If the watch fails at a depth of only 10 meters, the buyer has a claim for breach of warranty.

Metal Forming Corporation vs. Del Rosario: The Case of the Banawe Shingles

This case revolves around Virgilio and Corazon Del Rosario, who purchased “Banawe” shingles from Metal Forming Corporation (MFC) based on the company’s advertisements touting their durability and strength. The ads claimed the shingles were “structurally safe and strong” and that the “Banawe metal tile structure acts as a single unit against wind and storm pressure.”

Here’s a breakdown of the case’s timeline:

• The Del Rosarios, relying on MFC’s advertisements, bought and installed the shingles on their home.
• Shortly after installation, a typhoon blew portions of the roof away.
• The Del Rosarios filed a complaint with the Department of Trade and Industry (DTI) for fraudulent advertising.
• The DTI ruled in favor of the Del Rosarios, finding that MFC misrepresented its product.
• MFC repaired the roof free of charge under its one-year warranty, but the Del Rosarios sued for damages to their home’s interior.

The Regional Trial Court (RTC) ruled in favor of the Del Rosarios, awarding damages for breach of contract and warranty. However, the Court of Appeals (CA) reversed the RTC’s decision, arguing there was no direct contractual relationship between the Del Rosarios and MFC.

The Supreme Court (SC) ultimately sided with the Del Rosarios, reversing the CA’s decision. The SC emphasized that MFC’s advertisements created an express warranty, and the Del Rosarios relied on these warranties when purchasing the shingles. Even though the Del Rosarios contracted through a third party, MFC was still liable for the damages caused by the defective product and faulty installation.

“MFC acted in bad faith and/or with gross negligence in failing to deliver the necessary accessories for the proper installation of the structure…and actually installed inferior roofing materials,” the Court stated. This underscored the significance of fulfilling the promises made in advertisements and product warranties.

Real-World Impact: Liability Beyond Direct Contracts

This case clarifies that companies can be held liable for express warranties, even if there’s no direct contract with the end consumer. If a company’s advertisements or marketing materials create specific expectations about a product, they must ensure those expectations are met.

For businesses, this means ensuring that all advertising claims are accurate and supported by evidence. For consumers, it means that you can rely on a company’s promises, even if you purchased the product through a third party.

Key Lessons:

• Accuracy in Advertising: Ensure all product claims are truthful and verifiable.
• Fulfillment of Warranties: Honor express warranties to avoid legal repercussions.
• Quality Control: Maintain high standards in both product quality and installation.

Hypothetical Example

Consider a company advertising a line of “unbreakable” phone cases. A consumer purchases one of these cases, and their phone breaks after a minor drop. Even if the consumer bought the case from a reseller, the company that advertised the “unbreakable” feature could be liable for breach of express warranty.

Frequently Asked Questions (FAQs)

Q: What is an express warranty?

A: An express warranty is a seller’s promise or guarantee about the quality, condition, or performance of a product, often found in advertisements or product labels.

Q: Can I sue a company for false advertising even if I didn’t buy directly from them?

A: Yes, if you relied on the company’s advertisements when purchasing the product, you may have a claim for breach of express warranty, even if you bought it through a third party.

Q: What should I do if a product doesn’t live up to its advertised claims?

A: Document the advertising claims, keep your proof of purchase, and contact the seller or manufacturer to seek a remedy. If necessary, consult with a lawyer about your legal options.

Q: How long does an express warranty last?

A: The duration of an express warranty can vary. It may be specified in the warranty itself, or it may be implied based on the nature of the product and the circumstances of the sale.

Q: What types of damages can I recover for breach of express warranty?

A: You may be able to recover actual damages (the cost of repair or replacement), as well as moral and exemplary damages if the seller acted in bad faith.

ASG Law specializes in contract law and warranty disputes. Contact us or email hello@asglawpartners.com to schedule a consultation.