Understanding sales contracts: types, principles of operation, and significance.

Are you planning to buy or sell a property? If your answer is yes, you should be aware of the specifics covered by the purchase agreement to understand the rights and obligations of the parties involved in this process. Learn about the key points that must be included in the purchase agreement, as well as those that, while not mandatory, are still recommended to highlight. Additionally, find out how to approach this agreement from two perspectives: as a buyer or a seller.

What is a sales contract?

A sales contract is a legal agreement between two parties, referred to as the seller and the buyer, under which the former agrees to transfer ownership of an item or right to the latter, who in turn agrees to pay the price. This is one of the most important and commonly encountered contracts in the field of private law and has specific regulations in the Civil and Commercial Codes.

Characteristics of the sale and purchase agreement

According to Article 1445 of the Spanish Civil Code, "under a sales contract, one party is obliged to transfer a specific item, while the other is obliged to pay a certain price for it, in money or in symbols representing it." This type of contract must have the following characteristics:

• Agreed:It is perfected at the moment of agreement between the parties.
• Alienation:A patrimonial exchange is taking place between the parties as a result of the obligations that have arisen.
• Bilateral and reciprocal:This contract will require the consent of both parties and will be endowed with corresponding obligations.
• Interchangeable:The obligation to pay the purchase price and the obligation to deliver the item by the seller are essentially equivalent.

How do sales contracts work?

The sales contract has several functions:

• To protect the rights and interests of both parties, avoiding potential conflicts or future claims.
• Ensure compliance with applicable laws and taxes, such as paying taxes, registering property, or guaranteeing goods.
• To facilitate the proof of the existence and content of the agreement, and to appeal to the court if necessary.

Types of sales contracts

• Purchase and sale with a collateral payment:The buyer pays the seller a certain amount of money to reserve the product.
• Sale and purchase with payment in installments:The buyer pays the price of the goods in installments.
• Purchase and sale with retention of ownership:The seller retains ownership of the goods until full payment is made by the buyer.
• Sale and purchase of movable property on installment.The buyer acquires movable property and pays for it in periodic installments.

Aspects to consider when drafting a sale and purchase agreement

• Documents signed by the parties
• Violations and encumbrances of housing
• Date of transfer of ownership
• The amount of the deposit paid by the buyer as part of the price

What is required for a sales contract to be valid?

For a sales contract to be valid, it must meet certain essential requirements:

• Consent:The parties must express their intention to enter into a contract and accept the terms of the agreement without errors, deception, coercion, or threats.
• Object:A contract must have a definite object, legal, possible and definite
• Price:The document should establish a specific price that is fair and just for both parties.
• Form:The contract can be oral or written.

Until when is the sales contract valid?

In general, a contract of sale is valid from the moment of signing and continues until all the conditions and obligations set out in the contract have been fulfilled, such as full payment of the agreed price and transfer of the property. However, this type of contract has a limited duration and can be forfeited in certain circumstances. In Spain, the general limitation period for private sale contracts is five years.

Sample sales contract

To create a sample sales contract between private individuals, it is necessary to include certain important elements, such as the identification of the parties, a detailed description of the goods, the price, payment terms, warranties, and others:

• SALE AND PURCHASE AGREEMENT BETWEEN PRIVATE INDIVIDUALS
• Both parties recognize themselves as having legal capacity to enter into this contract
• The seller is the owner of ________ (describe the product or service, the object of sale).
• The buyer is interested in purchasing the above-mentioned ________.