Lawyer specialized in Purchase and Sale Contracts

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FBS: Lawyers for Sales Contracts

If you need legal advice for sales transactions, we are the law firm you've been looking for.

What is a sales contract?

The sales contract is the most common and important in legal and economic transactions.

It includes everything from small instant sales we make daily, to large transactions by companies (commercial).

The exchange of goods for money is the cornerstone of the economic system. It rests on the idea of private property.

Article 1,445 of the Civil Code defines it by stating that

“By the contract of purchase and sale, one of the contracting parties (the seller) undertakes to deliver a certain thing and the other (the buyer) to pay a certain price, in money or sign representing it”.

It is a consensual contract

That is, it is perfected by the consent of the parties, without the need for the delivery of the thing. “The sale will be perfected between buyer and seller, and will be mandatory for both, if they have agreed on the thing object of the contract and on the price, even if neither of them has been delivered”, Article 1,450 of the Civil Code.

The specific problems of sales

They are, considering their litigious habituality, those related to the object of the contract. Both in terms of its transmission Regarding the title, the manner, and the question of risk. As in relation to defects or flaws. In relation to the usefulness of the thing and its economic purpose.

Elements of the sales contract

We can distinguish the following elements of the sales contract:

Subjective elements

The sales contract requires, like all contracts, that the contracting parties have sufficient capacity to contract and obligate themselves.

Regarding the prohibitions to celebrate the sales contract

Article 1,457 of the Civil Code establishes that “All persons to whom this Code authorizes to obligate themselves may celebrate the contract of purchase and sale, except for the modifications contained in the following articles”.

Therefore, they cannot celebrate a sales contract

Non-emancipated minors, emancipated minors in those cases established in article 323 of the Civil Code (“…borrow money, encumber or alienate real estate and commercial or industrial establishments or objects of extraordinary value without the consent of their parents … “), and the incapacitated under the terms set by the judgment.

In addition, Article 1,459 of the Civil Code prohibits certain people from acquiring by purchase

Even in public or judicial auction, for themselves or for any intermediary, goods from other persons on whom they have some kind of influence.

For example, they are prohibited from entering into sales contracts

The guardians regarding their wards, or the executors regarding the assets left in their charge.

Likewise, public employees regarding the assets of the Public Administration they administer, or the subjects of the Administration of Justice (judges, prosecutors, lawyers, solicitors, etc.) in relation to the litigious assets of the jurisdiction in which they carry out their work.

Objective elements

The object of the sale is twofold:

On the one hand, the seller’s obligation to transfer the thing.
And, on the other hand, the buyer’s obligation to pay the price.

The concept of “thing” object of the provision is very broad, it admits goods of all kinds: corporeal and incorporeal, movable and immovable, present and future, specific and generic, including also rights of all kinds, as long as they are transferable.

But in order to be the object of the sale, the thing must meet the requirements of any obligation:

Possible
Lawful, that is, that there is no prohibition on trading with them
Determined or determinable

As for the “price”, it must be certain, that is, it must have real existence (without simulation), and it must be determined and not left to the discretion of one of the contracting parties, that is, it must be indicated in advance. Out of respect for the principle of autonomy of the will, the parties can freely set the amount of the price, which means that it is not a requirement that it be fair.

In the matters handled by this firm related to the sales contract, we can highlight the sale of complex banking products (preferred shares, subordinate contributions, convertible bonds, structured bonds, structured notes); in addition to sales related to the mortgage loan market (floor clauses, abusive clauses, multicurrency mortgages, etc.). In the commercial field, we can also highlight cases related to hidden defects in commercial sales (which can occur in both commercial sales of movable and immovable property); in addition, cases of goods transportation and damages can be cited (among others).

Seller’s guarantees in case of deferred price in the sale

To guarantee payment, the Civil Code provides for various security measures to protect the seller.

Thus, according to articles 1466 of the Civil Code, the seller will not have the obligation to deliver the thing in these cases:

Default case
If no term was set for payment
In case a serious risk of default by the buyer occurs (Article 1467 of the Civil Code).

These two rules respond to two correlative principles

Principle of bilateral obligations

By which none of the obligated parties is forced to comply as long as the other does not comply.

And the exceptio non adimpleti contractus or exception of contract not fulfilled.

In both cases, the seller can nullify the action by securing payment within the agreed term (Article 1467 Civil Code).

It seems reasonable to understand that it is enough for the bond to be reasonably sufficient. That is, without the seller being able to demand it exorbitantly.

In case, unjustifiably, the seller does not accept it, it would be a cause, in our opinion, for the resolution of the contract. We say this from our experience as expert lawyers in commercial and civil law.

Postponement of payment of the price for founded reasons

It is a case regulated in Article 1502 of the Civil Code. Its obligation to pay the price may be suspended in some external cases. Specifically, that the peaceful use of the purchased thing is in danger. This is because a third party has a better right over it.

For this case, it is necessary that we find ourselves:

before a perfected contract (accepted by the parties).
with the deferred price
and that the thing has been delivered.

Resolution of the sale made with deferred price

This occurs in three cases:

risk of loss of the thing
non-payment of the price in the purchase
and when the resolution has been expressly agreed.

Risk of loss of the sold immovable thing and of the price

If the seller has a reasonable reason to fear the loss of the sold immovable thing and the price, he may immediately promote the resolution of the sale. This without granting a new term.

Case regulated in Article 1503 of the Civil Code.

But for this to be possible, the following requirements must be met:

It must be the sale of an immovable property with deferred price.
The seller must have delivered the thing.
There must be a reasonable reason to fear the loss of the thing. If that reasonable fear is lacking, Article 1124 of the Civil Code would apply.