Contract of Sales – Two Main Effects
1. Transfer of Ownership of the thing sold from seller to buyer
2. Transfer of Risk of loss of the thing from seller to buyer
Sellers Obligations (3)
ii. *Warranty Against Eviction.*
iii. *Warranty Against Redhibitory Defects.*
Buyer’s Obligation (2)
i. *Pay the Price Sold*
ii. *Remove the thing that has been delivered by seller.*
Transfer of Ownership
Immovables – time of agreement, effective against third persons at registration
Movables – time of agreement, effective against third persons at delivery.
Transfer of Risk
He who bears *possession of the thing is responsible for the risk* of loss attached to the thing.
*Common Carrier* risk of loss shifts when the bill of lading is signed. *Delivery Address obtains risk*
*Other Carriers* buyer receives ownership once the carrier is tendered the thing.
Things that Change the Time of Ownership
1.) Things to Be Individualized
2.) Sold by weight, tale, or measurement
3.) Sale in a Lump
4.) Thing sold on View or Trial
5.) Right’s to Inspect
Things to be Individualized – Timing of Transfer
1. *Delays timing of transfer* until the thing is individualized
2. *Suspensive Condition* until thing is individualized
Things Sold by Weight, Tale, or Measurement – Timing of Transfer
1.) Ownership is transferred *when the seller with buyer’s consent, measures, weighs, or counts the things.
Things Sold in Lump – Timing of Transfer
1.) Ownership is *transferred upon consent of the parties,* regardless of delivery.
2.) *Requires a Lump Price*
Thing sold on View or Trial – Timing of Transfer
When the buyer *reserves the right for trial or view* owners ship is not transferred *until approval of the thing.*
Buyer’s Right to Inspect – Timing of Transfer
Goods are required to conform. *non-conforming goods must be notified to the seller in a reasonable time.* Ownership passes at time of inspection.
Conventional Alterations to Immediate Transfer
1. *Lay Away*
2. *Sale or Return
Lay Away Sales (2) kinds – Timing of Transfer
1. *Thing to Be Individualized Later* – pays a certain amount until thing is individualized.
– Risk and Ownership stay with seller until individualized
2.*Already Individualized* – Ownership to buyer, risk to seller.
Sale or Return – Timing of Transfer
*Seller allows buyer to have a certain amount of a thing, which the buyer in turn sells, the buyer has the option of returning unsold merch within a certain time*
*Return Period is a Resolutory Condition.* Ownership *does not transfer until happening of the resolutory condition.*
Sale with Right of Redemption
*Sell your thing, with the option to buy it back later for a certain price.*
Object and Price – Sale with Right of Redemption
1. Object – *Same thing that was originally sold.*
2. Price – *Determined in any manner agreed upon by parties.*
Effects of Right of Redemption
1. Immovables – Recordation
2. Movables – requires actual knowledge
3. Improvements – buyer gets compensation for improvements that must stay with the original thing.
4. Encumbrances – can screw third parties out of possession if property if the contract is properly filed.
Risk of Loss – Contract of Sale
Transfers upon delivery, *regardless of conformance unless buyer acts in away to dissolve contract before destruction of thing.*
Partial Loss – Contract of Sale
IF it has not rendered *substantial part of the performance impossible there is a proportionate reduction in performance on the buyer.
Risk of Loss – Movables w/ Designated Delivery Location
Risk of loss is not transferred until delivery conforms with the requirements of the sale