If you are preparing to negotiate a property, it is ideal to sign a sales contract and in this way the transfer of the asset is legal. The will of the seller and buyer alone is not sufficient in this type of negotiation to be enforceable against third parties, which is why this agreement exists.
Understanding the specifics of this contract is important because it protects your rights and outlines your obligations as a party involved in a negotiation. We show you the essential points that must be mandatorily included in this contract, and those that, while not mandatory, should be highlighted, whether you are buying or selling.
A sales contract is a legal commitment between two parties, the seller and the buyer, where both assume their respective obligations. The former agrees to transfer their ownership rights, which they legally hold over an asset, or to transfer a right to the latter.
At the same time, the latter undertakes to provide consideration, translated into the payment of the price for the asset or right received. It is a crucial and widely used agreement in private law, regulated by the Spanish Civil Code (CC) and Commercial Code.
It can be perfected with a simple agreement between the parties regarding the asset and its price, without the observance of strictly enforced formulas. However, when negotiating a house or any high-value asset, it is necessary to do so in writing.
In both its form and content, it is an agreement that creates obligations and rights, where the seller is obliged to transfer the asset. Furthermore, the seller guarantees its quality and peaceful possession, while the buyer receives it, committing to pay the agreed price.
In accordance with Article 1445 of the Spanish Civil Code, “… by a sales contract, one of the contracting parties undertakes to deliver a specific item and the other to pay a certain price for it, in money or a sign representing it”.
As an agreement that creates rights and obligations, it has its own characteristics, among which the following can be mentioned:
It can be perfected by the mere consent of the parties.
It is assumed that there must be an exchange of money between the negotiating parties for the commitments arising.
For this agreement to be valid, it requires the consent of two parties, meaning it must be bilateral, with each party assigned their respective obligations, making it reciprocal.
The seller's commitment to deliver the goods is similar to the buyer's commitment to pay the price. This equivalence of duties results in a commutative act between the parties.
Depending on the agreed payment method, the subject of the transaction, and other optional circumstances, there are various types of contracts. In Spain, for example, the following types are available:
In this contract, the buyer gives a sum of money to the seller with the intention of reserving the item they wish to purchase. By doing so, they commit to finalizing the transaction within a specific period, at which point the definitive contract will be signed.
This can involve an earnest money deposit or a simple purchase option that will be formalized upon final payment of the price.
The parties agree that the buyer will pay the price of the item in installments, where conventional interest may be added. It is a widely used transaction for high-value goods, such as houses or vehicles.
In these cases, the seller reserves the right of ownership over the asset until the buyer finishes paying the agreed price. If the buyer is unable to make the agreed payment, the seller would recover the goods without having to sue.
This occurs when the buyer acquires movable property and pays for it in agreed installments, which include the price, some interest, and additional expenses.
This transaction occurs when the buyer acquires something outside of a commercial nature, such as a work of art, for example, and pays for it in cash. It could also be paid in installments without interest, and the transaction is governed by the Civil Code, without special formalities.
In accordance with legal regulations, the contract could function in several ways, namely:
It is a way to prevent potential complications or lawsuits from either party, since everything agreed upon has already been clarified in the contract.
This contract ensures compliance with applicable legal and tax regulations, and this must be put in writing. This would include the payment of taxes, the registration or notarization of the property, or the guaranteed clear title of the asset.
The existence of the contract serves as prior evidence of the content of the verbal agreement, should it become necessary to resort to legal action. Either party can demand compliance with or challenge the non-observance of what was agreed upon, because a written contract exists.
For this type of contract to be fully valid, it must meet certain requirements, specifically the following:
It is imperative that the document shows that the parties freely expressed their willingness to negotiate and accept what is expressly stipulated in the contract. There must be no error, fraud, violence, or intimidation used to obtain the expression of will.
The negotiation must involve a definite subject matter that is lawful, possible, and determinable, specifying whether it is movable or immovable property. The written instrument must also detail whether it is a present or future asset, or if it refers to a real or personal right.
The written contract must establish a certain and determined price that is fair and equitable for both parties, who express their agreement with it.
The sale and purchase agreement can be verbal or written, but if the law requires a special form for its validity, this formality must be met. This is the case for real estate transactions, where it must be recorded in a public deed.
In Spain, it is customary for the buyer to pay for all costs incurred in drafting the transaction deeds. Similarly, expenses for notarization in the Property Registry and special taxes are borne by the buyer.
This contract may have a limited duration, expiring under certain circumstances; in Spain, the statute of limitations is five years. However, generally, it will be fully valid from its signing and will continue until all conditions stipulated in the agreement are observed.
The drafting of this agreement between private parties should include certain fundamental sections, namely:
Typically, this is done at a commercial lawyer's office or a specialized administrative services firm. Both parties receive an original copy of the signed contract.
In Spain, if you fail to comply with the agreement, you could face serious consequences because the aggrieved party might lose the money they paid. Furthermore, they could sue for damages and compensation, initiating legal proceedings.
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A written contract should never be underestimated; on the contrary, it serves as proof of the agreed-upon negotiation and its terms. As you've seen, it is always advisable to draw up a purchase agreement, if you want to make a good investment and have your properties guaranteed.
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Calera, 3
Funded
100%
598.506,15 €
Target
598.506,15 €
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