The Purchase Agreement: the Sale Instrument
A purchase agreement is written with the sale law of the Civil Code. Under Article 477, the seller must transfer to the buyer ownership of the property, the documents associated with it, and deliver the goods; the buyer must pay the agreed price and take delivery. Where the price is not directly indicated, the parties may agree on the means of its determination. The rule is fixed in the document itself.
These six articles — concept, defect-free delivery, cure of defects, damages, conditionality and form — together create the frame in which an acquisition deal is written: what is transferred, at what price, what happens on defect, and when the contract takes effect.
Defect-Free Delivery: Two Dimensions
Article 487 defines the seller’s fundamental obligation: the seller must deliver a thing free of material and legal defects. A material defect is a physical flaw of the goods; a legal defect is a third-party right on the thing — another’s ownership, a pledge or other encumbrance. In drafting a purchase agreement, both dimensions should be reflected separately — in the description of the goods and in the warranty of legal status. Both dimensions are written by direct clauses.
Cure and Replacement
Article 490 governs the defect regime: where the thing sold has a defect, the seller must either cure it or — for a generic thing — replace it within the period necessary for the purpose. The seller bears the costs necessary for the cure, including transport, route, work and materials. The allocation of costs is agreed in advance.
The seller may refuse both cure and replacement where it would require disproportionately great expense; and where the seller delivers a defect-free thing for the purpose of cure, it may demand the return of the defective thing. Writing these rules into the purchase agreement reduces the risk of dispute: the cure period, the burden of costs and the conditions of replacement should be defined in the document itself.
Damages and the Knowledge Exception
Article 494 describes the damages regime: damage caused by a defect of the thing or by breach of other contractual terms is compensated under the general rules. There is an important exception: the buyer acquires no rights on account of a defect if, at the moment of conclusion, it knew of it. The fact of knowledge is established by documents.
Documenting in the purchase agreement the information known about defects therefore protects both parties: the buyer against a sudden "but you knew" argument, and the seller against unforeseen claims. The separation works in both directions.
Conditionality and Form
Article 90 empowers the typical construction of acquisition deals: a transaction is conditional where it depends on a future and uncertain event, in that performance is postponed until the event occurs or the transaction terminates upon its occurrence. In acquisitions such an event is often a consent, financing or a regulatory permit — closing is stretched until the condition stands.
Article 328 defines the form: where a form is prescribed by law or by the parties, the contract takes effect only after it is met. Written form is performed by one document signed by the parties, or by an exchange of messages and letters. For a purchase agreement, where conditionality and form work together, this means: a condition written without the correct form cannot force performance. A purchase agreement stands on two disciplines: the discipline of description — what is acquired and in what condition; and the discipline of time — when delivery, payment and transfer occur. Both disciplines must be written into the document itself, because the court reads exactly the text and not the intention of the parties. The practical check of the draft proceeds line by line: every duty receives a deadline, every price a means of determination, every risk a clause of allocation. What receives no clause receives a dispute instead.
Frequently Asked Questions
Below are the most frequent questions about purchase agreements. The answers gather the practical side of the purchase.
What is the seller’s basic obligation?
Transfer of ownership, delivery of documents and handing over of goods for the agreed price.
What is a legal defect?
A third-party right on the thing — another’s ownership or a pledge; transferring such a thing breaches Article 487.
What happens with defective goods?
The seller cures the defect or, for generic goods, replaces the thing within the necessary period; costs fall on it.
Can cure be refused?
Yes — where it would require disproportionately great expense.
Can a purchase be conditional?
Yes — under Article 90 performance is postponed until the event or terminates with it; form follows Article 328. The form is checked before signature, not after.
How We Help on Legal.ge
The lawyers of Legal.ge help you prepare the purchase agreement: we describe the object and its legal status, write in the cure and damages rules, and anchor the conditionality in the correct form. Contact us — a well-drafted purchase agreement is half the value of the deal.