Types of Sales Contracts: Auction to Inheritance
Sale by Auction
We can say that a sale by auction is when a seller, with prior public notice, offers an item for sale, and the item is sold to the highest bidder. The highest bidder becomes the buyer.
Sale or Return
This is a sale in which the buyer is expressly given the power to try or test the item. In this type of sale, the “evidence” can be established:
- As a condition precedent: The sale is perfected when the buyer has tested the item and finds it satisfactory.
- As a condition subsequent: The sale is subject to the condition that, if after testing, the buyer does not like the item, the sale is voided.
In our law, it is presumed to always be a “condition precedent” unless otherwise specified (Article 1453 and Judgment of 11.15.1983). However, it is questionable if the buyer can freely reject the item if it is objectively proven satisfactory, even if they do not personally like it.
Ad Gustum Sales
This is a sale in which the buyer may “taste and try” the item before receiving it. This applies if it is customary in commercial practice to taste or try the item before receiving it. Express agreement is necessary to conclude this type of contract. It is also presumed that the sale takes place under a condition precedent. Here, compliance depends on the free will of the purchaser, who may lawfully withdraw from the contract if the item does not meet their subjective taste or pleasure.
Sale with Earnest Money
Earnest money (a deposit) may be involved in a sale, given by the buyer to the seller as a measure of security for the performance of the obligation. According to Article 1454 of the Civil Code, if earnest money or a deposit has been given in a purchase and sale contract, the contract may be terminated, with the buyer forfeiting the deposit if they breach the contract, or the seller returning double the deposit if they breach the contract. The buyer’s obligation is secured by the deposit, and the seller agrees to a penalty of double the deposit.
Disputed Claims Sales
Article 1535.2 provides that “a claim shall be contested from the answer to the claim relating to the same.” It shall be considered “disputed claims” until the ruling becomes final. This refers to the sale of a receivable that the owner has been unable to secure and has claimed from the debtor to demand compliance.
Installment Sales of Movable Goods
This type of sale is not contemplated in the Civil Code, but its use and consistent practice have deserved proper and specific legislative treatment. It consists of the sale of movable property for which payment is often delayed, with the buyer agreeing to pay through regular installments of the price, usually monthly. According to Article 3 of Law 28/1998 of July 13, “for the purposes of this Act, the term hire-purchase contract [means] a contract whereby one party delivers to the other a movable body and the latter undertakes to pay a certain price for it, totally or partially postponed for longer than three months from the perfection of it.”
The Sale of Inheritance
This is a sales contract in which the seller gives the entire inheritance, which they own, in exchange for a contracted price. More thoroughly and completely, it can be defined as “that legal transaction by which the heir disposes of the entire economic content, assets and liabilities, of an open and deferred heritage, the buyer paying a fixed price and the seller being responsible for everything they had paid for the debts and hereditary charges, as well as claims they have against the estate, unless otherwise agreed” (Hill Garcia).