Commercial Sales Contracts: Property, Obligations, and Termination

Movable vs. Immovable Property

Movable property is an asset that can be transported without losing its integrity (e.g., appliances, vehicles). In contrast, immovable property is an asset that cannot be transported entirely to another location (e.g., housing, commercial premises).

Defining a Contract of Sale

A contract of sale is an agreement in which one party (the seller) agrees to convey a specific item or right to another party (the buyer) in exchange for a sum of money, known as the price.

Criteria for a Commercial Contract

• The contract must involve movable property.
• The property acquired must be for resale for profit.

Key Elements of a Commercial Contract

• Personal: Refers to the seller and buyer. For a contract to be valid, the contracting parties must be of legal age and capacity, and not incapacitated by a court of law. Minors under 18 (or 16 for emancipated minors) require assistance from their legal representative.
• Formal: A sales contract can take any form (verbal or written), except for specific requirements, such as those for real estate transactions.
• Material: Encompasses the item or object being sold, and the agreed-upon price.

Grounds for Sales Contract Termination

• Payment or fulfillment of the agreed benefits.
• Loss of the item.
• Debt cancellation.
• Confusion of rights (when the creditor and debtor become the same person).
• Settlement of debt.
• Novation (the replacement of a previous obligation with a new one).

Seller's Obligations in a Sale

• Safeguard and retain the goods until delivery.
• Provide or make available the goods to the buyer within the time and place stated in the contract.
• Deliver the goods in full; the buyer is not obligated to accept partial deliveries.
• Ensure the buyer's legal possession of the goods sold.
• Ensure the goods are free of apparent or hidden defects.

Buyer's Obligations in a Sale

• Pay the price of the goods at the time and place determined by the contract, or at the time and place of delivery if no specific agreement is made.
• Receive the merchandise and take care of it. The buyer is not required to accept goods delivered late or those with apparent or hidden defects. Reporting periods for defects: Apparent defects (e.g., within 4 days), Hidden defects (e.g., within 30 days).

Understanding Hire-Purchase Contracts

A contract of hire-purchase is an agreement where the seller agrees to deliver to the buyer a movable, non-consumable, and identifiable item (by a mark or number), and the buyer undertakes to pay the total or partial price deferred over a period longer than three months from the signing of the contract.

Defining a Supply Contract

A supply contract is an agreement where one party (the supplier) commits to the continuous or periodic provision of goods or services to another party (the client), who is required to pay a price for the service received.