Civil Code and Sale Contracts
The Italian Civil Code defines the contract of sale as:
“The sale is a contract whose object is the transfer of ownership of a thing or the transfer of another right in exchange for a price.”
This makes it clear that a sale involves the transfer of ownership or rights, which distinguishes it as a consensual and translative contract. The sale requires a price, typically in the form of money, and is considered a reciprocal (onerous) contract where both parties benefit economically. The price is always monetary, distinguishing it from barter, where goods or services are exchanged. Here is an in-depth look at its essential elements and legal framework.
Finalising a Sales Contract
A sale contract is finalized when the parties mutually agree without needing delivery of the goods. This characteristic defines the contract as consensual, distinguishing it from “real” contracts that require delivery (such as deposits).
A synallagmatic bond exists in a sales contract, meaning each party’s obligations are reciprocal, with each party’s performance depending on the other. This reciprocity can lead to contract resolution if one party fails to perform.
Effects of the Sale
Once a sale contract is finalized, the primary effect is the transfer of ownership from the seller to the buyer. If the object of the sale is a generic item, the transfer occurs when the item is delivered to the buyer or a carrier for transport.
In some instances, the transfer of ownership is deferred, creating obligations rather than immediate transfer rights. For example, in obligatory sales, the contract establishes a commitment to deliver in the future.
Essential Characteristics of the Sale Contract
In a sale contract, the price can be explicitly set by the parties or assigned to a third party, either agreed upon or appointed by the court if there’s a dispute. If no price is specified, and the seller is a regular vendor of the goods in question, it’s assumed the price is either the seller’s usual charge or the market price based on local price lists.
Any marketable item, including future goods (eg, crops) or rights (eg, credits), can be sold. The contract doesn’t require a specific form for movable goods, but for immovable goods (real estate), a written agreement is mandatory and must be registered in the land registry for it to be valid.
Transfer of Ownership
In a sale, ownership transfers to the buyer as soon as the agreement is made, regardless of whether the goods are delivered or the price paid. However, for fungible goods (those defined by type rather than individual identity), ownership transfers only once the goods are identified or specified.
Types of Sale Contracts
Various sale contracts exist, depending on the circumstances:
- Non-formal or formal: Depending on whether a notary is required.
- Consensual or real: Consensual sales require only the parties’ agreement, while real sales require goods delivery.
- Typical or atypical: Whether or not regulated by the civil code.
- Onerous or gratuitous: Both parties receive something, or only one provides goods.
- Commutative or aleatory: Whether the outcomes are known from the start or depend on future events.
- Inter vivos or mortis causa : The effects occur during the parties’ lifetime or after death.
- Instantaneous or deferred: Payment happens immediately or later.
Seller’s Obligations
The seller must meet several obligations:
- Delivery: The goods must be delivered as agreed, along with any accessories and documents.
- Warranty against eviction: Protects the buyer from losing the goods to a third party claiming ownership.
- Warranty against defects: The seller ensures the goods are free from defects affecting their use or value.
- Warranty of quality: The goods must match the promised quality and be suitable for their intended use.
Buyer’s Obligations
The buyer is responsible for:
- Paying the agreed price.
- Taking delivery at the specified place and covering any transport costs if required.
Special Considerations in Real Estate Sales
When dealing with real estate, it is essential to verify issues such as the contract’s registration, the existence of easements, usufructs, mortgages, or pre-emption rights, and the seller’s legal standing (eg, bankruptcy status).
Special Clauses in Sale Contracts
Specific clauses may be included in sale contracts:
- Sale with reservation of approval: The sale is confirmed only upon the buyer’s approval.
- Sale with right of redemption: The seller can repurchase the goods within a set time.
- Sale subject to testing: The contract is valid only if the goods pass a specific test.
- Sale by sample: The goods must match a pre-agreed sample.
- Sale with retention of title: The buyer only becomes the owner once the final payment is made, although they bear the risk from delivery.
The Confirmatory Deposit
A confirmatory deposit is a sum the buyer pays as a down payment on the purchase. If the buyer backs out, they forfeit the deposit; if the seller defaults, they must return double the deposit. This serves as an incentive for both parties to fulfill the contract.
Forced Release of Goods
In non-payment or other contractual breaches, the buyer may be forced to release the goods, especially in real estate transactions. Legal action may result in the expropriation and forced sale of the property to satisfy the seller’s claim.
Liability for Destruction or Collapse
For real estate sales, the seller (especially if they are the builder) is liable for defects that could lead to structural failures or other significant damages. This liability can extend after the sale and applies to defects that make the property unfit for use or dangerous.
Conclusion
The contract of sale plays a central role in Italian civil law, with its various types, obligations, and special clauses designed to ensure fairness and security for both buyers and sellers. From determining the price to delivering goods and managing warranties, every aspect of the sale is regulated to protect the interests of both parties and ensure smooth execution. Understanding these rules helps buyers and sellers navigate the legal landscape of sales in Italy.
References
https://www.diritto.it/wp-content/uploads/old2022/articoli/civile/contr_compra_rovere.pdf
https://www.consulenzalegaleitalia.it/contratto-compravendita/
