Acquiring a hospital is among the most complex transactions in the healthcare business: property, equipment, licensing and staffing issues converge with significant financial exposure at the same table. This page addresses the contractual side of the transaction, which Georgian civil law governs through the sale regime of the Civil Code — from Article 477 to Article 498. These are precisely the norms that create the framework of guarantees a buyer relies on when purchasing a hospital: what the seller must transfer, which costs the seller must reimburse when a defect is discovered, and when the buyer may demand rescission of the contract. Understanding this statutory baseline is what turns due diligence from a formal exercise into an enforceable legal position.
The Contract of Sale — Obligations of the Parties
Article 477 of the Civil Code defines the essence of the contract: under a contract of sale, the seller is obliged to transfer to the buyer the right of ownership in the property, to hand over the documents connected with it and to deliver the goods; the buyer, in turn, must pay the agreed price and accept the property purchased. In a hospital acquisition this formulation has a very practical meaning: the list of transferred objects — the building, equipment, devices, debts and any other property — must be defined precisely in the contract, because the buyer cannot demand the transfer of anything the document does not mention. If the price is not directly indicated in the contract, the parties may agree on the means of its determination — a clause that carries particular weight in high-value transactions where the consideration may be structured in stages or tied to verifiable metrics.
Defect Guarantees — The Legal Function of Due Diligence
The central block of buyer protection sits in Article 490. If the goods sold have a defect, the seller must either remedy the defect or, where the case concerns a generic thing, replace the thing within the period necessary for the purpose (paragraph 1). The seller bears the reimbursement of the costs necessary to remedy the defect, including the costs of transportation, road, performance of work and materials (paragraph 2) — in the hospital acquisition context this means that the actual costs of repairing or relocating equipment are by law shifted onto the seller. At the same time, the seller may refuse both to remedy the defect and to replace the thing if this would require disproportionately large expenditures (paragraph 3); and where the seller transfers to the buyer a thing free of defects for the purpose of remedying the defect, the seller may demand the return of the defective thing (paragraph 4). Due diligence exists precisely to activate these norms: documenting each defect at the right moment determines which guarantee comes into play and against what evidence.