Understanding Business Contracts: Sales, Leasing, Franchising, and More
EXTINCTION: Causes for the Extinction of General Obligations
a) Payment of the contracted debt or compliance with the agreed-upon conditions.
b) Loss or destruction of the goods.
c) Forgiveness of debt.
d) Confusion of rights of creditor and debtor.
e) Compensation.
f) Novation, which may arise due to:
- Variation of the object or conditions of the contract
- Substitution of the debtor
- Subrogation of a third party to the creditor’s rights
PROPERTY SALES CONTRACT
This document outlines an agreement where one person (the seller) agrees to transfer ownership of a property to another person (the buyer) in exchange for an agreed-upon price.
6.2 Elements of a Property Sales Agreement:
a) The Seller: The natural or legal person who delivers the property.
b) The Buyer: The natural or legal person who receives the property in exchange for the agreed-upon payment.
c) The Property Registry: The entity where the buyer will verify the legality of the document and register the property.
d) The Notary: The official before whom the sale is made public. They have the obligation to verify and register the location of the property.
e) Administrative Manager: A freelance professional who can assist in processing the sale.
7. The Hire-Purchase Contract
This contract involves one party (the seller) delivering a tangible, movable item to another party (the buyer) in return for a price, which may be paid in full or in installments. To be considered a hire-purchase agreement, the following circumstances must be met:
- The price is deferred for more than three months.
- The amount is not less than that fixed by regulation.
- It is an installment sale of tangible, non-consumable assets, identifiable by their brand and serial number or manufacturing.
Exclusions from Hire-Purchase Law:
- Deferred sales of property
- Occasional sales made by non-profit entities
- Installment sales contracts
- Sales and loans secured by mortgage or pledge of assets without displacement under the contract
8. The Supply Contract
This contract obligates the supplier to provide certain benefits continuously or periodically in exchange for a fixed price. Benefits under this contract can include diverse products such as raw materials, electricity, piped gas, etc.
Types of Supply Contracts:
a) Public Supply Contracts: Contracts for pecuniary interest concluded in writing between a supplier and another contracting party for the purchase, lease, rental, or lease-counter or option to buy products such as raw water, gas, electric power, etc.
b) Private Contracts of Supply: Contracts for pecuniary interest concluded in writing between the supplier and the consumer.
9. LEASING CONTRACT
A financial lease with a purchase option that can be exercised at the end of the lease term. The purchase option value often coincides with the amount of the last installment.
Advantages of Leasing:
- Finance assets without large upfront investments
- Greater liquidity by avoiding large expenditures
- Frequent renewal of assets without the risk of obsolescence
Disadvantages of Leasing:
- Legal problems if not used for professional purposes
- Cannot be canceled ahead of time like a traditional loan
- Only covers the initial investment, with maintenance costs falling on the tenant
9.4 TYPES OF LEASING:
Financial: it is an irrevocable contract, the lessee has to pay even if you decide to return the leased property. Operating: a contract is revocable, you can return the property and stop paying on the conditions set forth in the contract Back : is the sale of goods with intent to lease with option to repurchase. 9.6 The RENTING: is the leasing of property without buying without a purchase option. It was initially considered as a variable of financial leasing DIFFERENCES BETWEEN LEASING AND RENTING LEASING is a financial product, is a financial lease-purchase does not include maintenance costs, can be terminated early.RENTING: not a financial product, is a lease without a purchase option, includes the maintenance costs pact, including the agreed maintenance costs, can not be, in principle, be terminated early.
10. Excess: is a contract whereby the franchisor provides goods, providing services, grants brands, trade names and so on. the franchisee in return performs an economic consideration for the right to their explotcion, accepting the conditions imposed by them. the franchisor must register with the franchisors only for information and publicity. Elements involved: a) the franchisor is the natural or legal person who gives his name, trademarks or service. b) the franchisee: the natural or legal person that is part of the chain that operates a business with the cession of the franchisor. c) trademark and logo: are the means by which honors the franchise. d) the know-how: the transmission of know-how of the franchisor to fraquiciado.
Rating: a) distribution franchise, the franchisor made the products and the franchisee sells. b) manufacturing franchise: the franchisor to the franchisee part of his formula or manufacturing process by giving them training. c) fraquicias of services: the franchisee gives procedure for filing services.