Sales Contracts: Essential Elements and Legal Framework

Posted on Mar 17, 2025 in Law & Jurisprudence

The Sales Contract: Definition and Key Aspects

A sales contract is an agreement where one party (the seller) agrees to deliver a thing, and the other party (the buyer) agrees to pay for it in cash. This mutual obligation is fundamental to the contract, as defined in Article 1793 of the Civil Code.

Classification of Sales Contracts

  • Bilateral Contract: Both parties have reciprocal obligations.
  • Commutative Contract: The obligations of both parties are considered equivalent.
  • Consensual Agreement: The contract is perfected by the agreement of the parties.
  • Onerous Contract: Both parties receive a benefit and incur a burden.
  • Principal Contract: It exists independently and doesn’t require another contract to subsist.

Essential Requirements of a Sales Contract

  1. Express Consent: The parties must clearly express their will to enter the contract.
  2. Capacity: The parties must have the legal capacity to enter into the contract.
  3. Object and Consideration: There must be a specific thing being sold and a price to be paid.
  4. Essential Requirements: These are fundamental to the validity of the contract.
  5. Legal Formalities: Certain formalities may be required by law, depending on the nature of the sale.

The item being sold must be marketable, real, specific, and not already owned by the purchaser.

Price (Article 1793): The price is the money the buyer gives for the item sold.

Price Requirements

  • Real: There must be a genuine intention to demand and pay the price.
  • Determined: The precise amount of money must be specified.
  • Agreed in Cash: The price must be agreed to be paid in cash.

Solemnities of the Sales Contract

Generally, solemnities include the agreement of the parties (consensuality), the determination of the thing being sold, and the fixing of the price in money. Additional solemnities can be statutory (required by law) or voluntary (agreed upon by the parties).

Voluntary solemnities are those agreed upon by the parties for the sale to be considered perfected.

Obligations of Parties in a Sales Contract

  • Seller:
    1. To deliver the thing sold.
    2. To ensure the thing sold is free of encumbrances or restrictions (reorganization).
  • Buyer: To pay the price and receive the thing purchased.

Elements of a Real Estate Sales Contract

A real estate sales contract in Chile must be executed through a public deed. Essential elements of this deed include:

  1. Date and place of the contract.
  2. Address and data of the notary public, including their identification number.
  3. Identification of the buyer and seller (full name, nationality, marital status, address, RUT – Chilean tax ID number – all written in letters and figures).
  4. Identification of the property: location, how it was acquired (e.g., through succession due to death), and the registration details at the respective Real Estate Registrar.
  5. The price and payment method, specifically stating the method of payment.
  6. Condition of the property and the delivery date.
  7. Any encumbrances on the property.
  8. Authorization for registration and any required sub-registrations.
  9. Signatures of the parties, authorized by a minister of faith (e.g., a notary).
  10. Statement of delivery and conservation status.
  11. Empowerment of the bearer (of the deed).

Example of a Deed (Escritura)

In Santiago, on November 12, 2009, before me, George Morand Orrego, Notary Public of the Third Notary Office of Santiago, located at San Martin 320, Santiago, appeared: Don Jorge Vargas Lopez, Chilean, married under separate property regime, civil engineer, RUT 3,020,540-4, domiciled at Santa Fe 1250, Quilicura, hereinafter the “Seller”; and Don Pedro Lira Barrier, Chilean, married under community property regime, architect, RUT 7,528,295-4, domiciled at ALDES 439, Las Condes, hereinafter the “Buyer”, who I know by their aforementioned identity cards, and stated:

First: Don Jorge Vargas Lopez owns the property located at street number 250, Santa Fe, commune of Quilicura, acquired by purchase from Israel Vergara, concluded before notary public Raul Hernandez Pinto in 1980. The property was registered with the Real Estate Registrar at number 12,540, folio 8320 of the CBRS of Santiago of 1980.