L5 - Contract of Sale Flashcards
(20 cards)
What is the definition of a contract of sale?
Contract by which a person, the seller, transfers ownership of property to another person, the buyer, for a price in money which the latter obligates himself to pay.
What are the 3 seller’s obligations?
- Delivery
- Guarantee ownership
- Quality
What is delivery, as a seller’s obligation?
It means that the seller must give the property to the buyer, or allow him access
The form (colour, size, etc) and quantity of the property must be agreed upon
What is guarantee ownership, as a seller’s obligation?
Seller must guarantee full ownership to the buyer
art. 1714 Al. 1
What can the true owner of a property do, if someone sold to a buyer what was his?
The true owner may apply for the annulment of the sale and revendicate the sold property from the buyer unless the sale was made under judicial authority or unless the buyer can set up acquisitive prescription.
What are the 3 exceptions to an owner revendicating his property?
- Seller becomes owner (art. 1713)
- Judicial sale (art. 1714)
- Prescription ()
art. 1714 Al. 2
What must the owner do, if the item sold is movable and sold by a business
If the property is a movable sold in the ordinary course of business of an enterprise, the owner is bound to
reimburse the buyer in good faith for the price he has paid.
He’d have to sue the seller to get his money back
What is guarantee quality, as a seller’s obligation?
A legal guarantee against latent defects
What are the 4 latent defect conditions?
- The defect exists at the time of sale
- The defect was not apparent, or obvious to a regular buyer
- Makes the item unfit for intended use OR
- Reduces the usefulness of the item, and if the buyer was aware:
-He wouldn’t have purchased it OR
-Wouldn’t have paid such a high price
What are the 2 latent defect exceptions?
- Sales AS IS
- Judicial sales (art. 1731*)
Sale under judicial authority does not give rise to any obligation of warranty of the quality of the
sold property
If the item perishes due to latent defect, what must the seller do?
(2 situations)
If he wasn’t aware of it: Only restore the price
If he was aware, or is a merchant (professional seller who is presumed to have known the defect), he must restore the price and pay for all damages
What are latent defects?
A latent defect is a non-visible defect. This is something that you cannot see or observe without further investigation.
What is conventional warranty and what is legal warranty?
Conventional: What parties agreed upon (e.g., extra warranty)
Legal: What the law says (the one that automatically comes with the product)
art. 1726 Al. 2
When is the seller not responsible for defects?
The seller is not bound, however, to warrant against any latent defect known to the buyer or any apparent
defect; an apparent defect is a defect that can be perceived by a prudent and diligent buyer without the need to resort to an expert.
What are the buyer’s obligations? (2)
Pay for the product
Take delivery (possession of it)
What are the 4 types of sales contracts?
- Outright sale
- Trial Sale
- Instalment Sale
- Sale with a right of redemption
What is an outright sale contract?
The simplest type of sales contract. No conditions attached aside from the general ones
art. 1744
What is a trial sale contract?
Idea that the buyer tries a product before buying it
When there’s no explicit refusal, the buyer is assumed to have accepted the continuance of the product (buy it)
art. 1745
What is an instalment sale contract?
The buyer becomes the owner only once everything is paid for, but still has access to it while not having paid for everything
What is a sale with a right of redemption?
art. 1750
The sold property can be bought back by original owner within deadline (max of 5 years)
It’s useful when you’re strapped for cash
