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.