Contract Classifications, Sales, and Leases in Civil Law
Classification of Contracts
Unilateral: Obligations are created for one of the parties (e.g., donation) and bilateral or synallagmatic for both (e.g., sales).
Onerous: There are reciprocal obligations, where the provision of one party is in consideration of the other (e.g., lease) and gratuitous, where there is no payment (e.g., donation).
Consensual: These are perfected by mere consent of the contracting parties (e.g., partnership) and real, which need the delivery of the thing to be perfected (e.g., deposit).
Commutative: The benefits are certain from the moment the contract is made (e.g., purchase) and aleatory, where one of the benefits or both are subordinated to the fulfillment of a chance event (e.g., insurance).
Instant effect: These are satisfied in a single act (e.g., cash sale) and successive tract, where the benefits are realized over time (e.g., hire-purchase).
Contracts are nominated or unnamed, according to whether the law designates them under a special name. The parties entering into contracts may not fit exactly in the code.
Adhesion: These contain clauses established in advance by one party, without the other having the possibility of discussing them (e.g., insurance or transport).
Free discussion: The clauses are discussed and agreed upon by the parties.
Sale
A sale occurs when one party transfers the property of a thing to another, and the latter is obliged to receive it and pay a certain price in money for it.
Characteristics:
- Bilateral
- Onerous
- Commutative
- Consensual
- Non-formal (except for the purchase of real estate)
Elements
For a sale to take place, the following requirements must be met:
- Capacity of the parties: Everyone who owns property can sell their property, and anyone capable of binding themselves can buy, with exceptions. Sales between spouses, parents and guardians with those under their custody or care, rulers against the property of their constituents, public employees regarding property whose administration or sale they were responsible for, judges, prosecutors, public defenders, and prosecutors regarding property in dispute before the court before which they exercise or have exercised their respective ministry, among others, are prohibited.
- Consent: Agreement of the parties is required, except in forced sales where there is an obligation to sell.
- Object: Everything that can be covered by contracts can be sold, even future events, as long as their alienation is not prohibited. Things that cannot be sold include those outside of commerce, indeterminate non-existent things, future inheritance, undivided property without the consent of all joint owners, and everything expressly prohibited by law.
- Price: Must be in cash, certain, and genuine. The true price may be determined or determinable. The latter can be left to a third party. Earnest money is given as the value of the thing sold.
Duties
- Buyer: Receive the thing, pay the price at the agreed time and place, and pay the delivery costs.
- Seller: Keep the thing until the time of delivery, deliver the thing at the agreed place and time, receive the money, pay the delivery costs, ensure the free availability of the thing, and guarantee the absence of hidden defects.
Special Provisions
These tend to modify the natural effects of the contract.
- Clause not to alienate to a particular person (the prohibited clause is not to alienate to anyone).
- Sale with redemption agreement: This allows the buyer to recover the thing sold, returning the price received to the buyer, with an increase or decrease.
- Resale agreement: This allows the seller to return the thing purchased, receiving the price paid, with an increase or decrease.
- Better buyer agreement: This is a stipulation that the sale will be undone if another buyer is presented who offers a better price.
- Preference agreement: This is a stipulation that allows the seller to recover the thing sold and delivered to the buyer, preferring them over any third party for the same price.
Lease
A lease occurs when two parties reciprocally undertake, one to grant the use of a thing or perform a service for a fixed price in money. The party who pays the price is the lessee, and the party who receives the price is the lessor. There are three main types of leases: lease of things, lease of work, and lease of services.
Lease of Things
In this type of lease, the lessor agrees to grant the use or enjoyment of a thing, and the lessee agrees to pay a price in money. It is distinguished from a sale in that ownership of the thing is not transmitted, only its use and enjoyment.
Characteristics: Bilateral, consensual, onerous, commutative, non-formal, successive tract.
Elements:
- Capacity: Capacity to manage is needed, not to dispose, as in a sale.
- Consent: Conformity between the contractors is required.
- Object: The object can be fixed and intangible assets that are not expendable, as the same good must be returned.
- Price: Must be in cash, certain, and proportionate to the duration.
- Time: Should be contracted for a maximum of 10 years and a minimum of 2 years for the lease of residential buildings and 3 years for commercial and industrial buildings.
Obligations:
- Lessor: Deliver the thing to the lessee, keep it in good condition, keep the tenant in the enjoyment of the thing, answer for serious faults or defects of the leased thing that impede its use, pay for improvements made by the tenant with permission, and pay charges and contributions of the thing, except by contractual agreement.
- Lessee: Pay the price at the agreed time and place, use the thing as agreed, keep it in good repair, and restore it to the lessor at the end of the lease.
Conclusion of the Lease:
Concludes upon the expiration of the agreed term; if the term is indeterminate, by the will of either party after the expiration of legal deadlines; due to the loss of the leased thing or inability to use it; due to hidden defects; or due to the fault of the lessor or lessee.
Lease of Work
In this type of lease, the lessor is obliged to perform work, and the lessee is obliged to pay a price in money for it. What matters is the work and its outcome. The lessor or manager of this work must do so in due form, ensure its soundness, and answer for any damage it may cause. The lessee (who placed the order) must pay the price and receive the work. An example of this contract is hiring an architect to build a house or a painter to make a picture.
Lease of Services
Here, the lessor must provide a material or intellectual service, and the lessee must pay a price in money. In this agreement, the time of service is taken into account. If you work as an employee, it is not a lease of services but an employment contract.