The Concept of the Sale Contract and the Parties' Obligations
The acquisition of business assets in Georgia rests on the rules of the sale contract in the Civil Code. Under Article 477, under a contract of sale the seller is obliged to transfer to the buyer the right of ownership in the property, the documents connected with it, and to deliver the goods, while the buyer is obliged to pay the seller the agreed price and to accept the purchased property. This bilateral structure of obligations becomes the skeleton of any asset purchase transaction, whatever the composition of the asset package.
Where the price is not directly indicated in the contract, the parties may agree on the means of determining it — for example, a formula indexed to a benchmark or a method to be applied in the future. That determination should be recorded in writing and formulated so that the price can be calculated without dispute; otherwise the performance of the contract drifts towards litigation, and the transaction that seemed agreed turns into a quarrel over its essential term.
The Passing of the Risk of Accidental Loss
A decisive question in any asset deal is which party bears the risk of chance — what happens if the sold asset is accidentally destroyed before or after delivery. Under Article 482, the risk of accidental loss or deterioration of the sold thing passes to the buyer together with the delivery of the thing, unless the parties have agreed otherwise. The general rule of the law thus ties the risk to the moment of delivery, but the parties remain free to stipulate a different moment in their contract.
A special rule applies to carriage: where the seller sends the sold thing, at the buyer's request, to a place other than that provided for in the contract, the risk of accidental loss or deterioration passes to the buyer from the moment the seller hands the thing over to the carrier or to a person responsible for its execution. In practical terms, the risk of transportation passes to the party at whose instance the conditions of carriage were changed — a rule worth remembering whenever delivery logistics are renegotiated mid-transaction.
The Seller's Obligations on the Sale of a Defective Thing
The quality of an asset often reveals itself only after the deal is closed. Under Article 490, where the sold thing has a defect, the seller must either remedy the defect or, where the thing is generic, replace the thing within the period necessary for the purpose. The seller bears the costs necessary to remedy the defect, including the costs of transportation, carriage, performance of the work and the material.
The buyer's remedies are protected in both directions: the seller may not refuse either the remedy of the defect or the replacement of the thing on the ground that it requires disproportionately large expenses. Where, for the purpose of remedying the defect, the seller transfers to the buyer a defect-free thing, the seller may demand from the buyer the return of the defective thing. When asset purchase agreements are prepared, the exact allocation of these remedies must be balanced in the contract so that the statutory framework and the commercial expectations do not diverge.