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Sale (articles 1708 à 1743)

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Sale (articles 1708 à 1743)

Written by Me Sébastien Fiset , LL.B., B.A.A.
Friday, 11 June 2010 07:41

CHAPTER I

SALE

(Last update May 27, 2010)

DIVISION I

SALE IN GENERAL

§ 1. —  General provisions

1708. Sale is a contract by which a person, the seller, transfers ownership of property to another person, the buyer, for a price in money which the latter obligates himself to pay.

A dismemberment of the right of ownership, or any other right held by the person, may also be transferred by sale.

1709. A person charged with the sale of property of another may not acquire such property, even through an intermediary; the same applies to a person charged with administration of property of another or with supervision of its administration, subject, for the administrator, to article 1312.

Furthermore, such a person may not sell his own property for a price paid out of the property or patrimony which he administers or of which he supervises the administration.

In no case may such a person apply for annulment of the sale.

§ 2. —  Promise

1710. The promise of sale with delivery and actual possession is equivalent to sale.

1711. Any amount paid on the occasion of a promise of sale is presumed to be a deposit on the price unless otherwise stipulated in the contract.

1712. Failure by the promisor, whether he be the seller or the buyer, to execute the deed entitles the beneficiary of the promise to obtain a judgment in lieu thereof.

§ 3. —  Sale of property of another

1713. The sale of property by a person other than the owner or than a person charged with its sale or authorized to sell it may be declared null.

The sale may not be declared null, however, if the seller becomes the owner of the property.

1714. The true owner may apply for the annulment of the sale and revendicate the sold property from the buyer unless the sale was made under judicial authority or unless the buyer can set up positive prescription.

If the property is a movable sold in the ordinary course of business of an enterprise, the owner is bound to reimburse the buyer in good faith for the price he has paid.

1715. The buyer as well may apply for the annulment of the sale.

He may not do so, however, where the owner himself is not entitled to revendicate the property.

§ 4. —  Obligations of the seller

1716. The seller is bound to deliver the property and to warrant the ownership and quality of the property.

These warranties exist of right whether or not they are stipulated in the contract of sale.

I. —  Delivery

1717. The obligation to deliver the property is fulfilled when the seller puts the buyer in possession of the property or consents to his taking possession of it and all hindrances are removed.

1718. The seller is bound to deliver the property in the state it is in at the time of the sale, with all its accessories.

1719. The seller is bound to surrender to the buyer the titles of ownership in his possession and, in the case of the sale of an immovable, a copy of the deed of acquisition of the immovable, of any previous titles and of any location certificate in his possession.

1720. The seller is bound to deliver the area, contents or quantity specified in the contract, whether the sale was made for a price based on measurements or for a flat price, unless it is obvious that the certain and determinate property was sold without regard to such area, contents or quantity.

1721. A seller having granted a term for payment is not bound to deliver the property if the buyer has become insolvent since the sale.

1722. Delivery expenses are assumed by the seller and removal expenses, by the buyer.

II. —  Warranty of ownership

1723. The seller is bound to warrant the buyer that the property is free of all rights except those he has declared at the time of the sale.

The seller is bound to discharge the property of all hypothecs, even declared or registered, unless the buyer has assumed the debt so secured.

1724. The seller is warrantor towards the buyer for any encroachment on his part unless he has declared it at the time of the sale.

The seller is also warrantor for any encroachment commenced with his knowledge by a third person before the sale.

1725. The seller of an immovable is warrantor towards the buyer for any violation of restrictions of public law affecting the property which are exceptions to the ordinary law of ownership.

The seller is not warrantor towards the buyer where he has given notice of these restrictions to the buyer at the time of the sale, where a prudent and diligent buyer could have discovered them by reason of the nature, location and use of the premises or where such restrictions have been registered in the registry office.

III. —  Warranty of quality

1726. The seller is bound to warrant the buyer that the property and its accessories are, at the time of the sale, free of latent defects which render it unfit for the use for which it was intended or which so diminish its usefulness that the buyer would not have bought it or paid so high a price if he had been aware of them.

The seller is not bound, however, to warrant against any latent defect known to the buyer or any apparent defect; an apparent defect is a defect that can be perceived by a prudent and diligent buyer without any need of expert assistance.

1727. If the property perishes by reason of a latent defect that existed at the time of the sale, the loss is borne by the seller, who is bound to restore the price; if the loss results from superior force or is due to the fault of the buyer, the buyer shall deduct from his claim the value of the property in the state it was in at the time of the loss.

1728. If the seller was aware or could not have been unaware of the latent defect, he is bound not only to restore the price, but to pay all damages suffered by the buyer.

1729. A defect is presumed to have existed at the time of a sale by a professional seller if the property malfunctions or deteriorates prematurely in comparison with identical items of property or items of the same type; such a presumption is not made, however, where the defect is due to improper use of the property by the buyer.

1730. The manufacturer, any person who distributes the property under his name or as his own, and any supplier of the property, in particular the wholesaler and the importer, are also bound to warrant the buyer in the same manner as the seller.

1731. Sale under judicial authority does not give rise to any obligation of warranty of the quality of the sold property.

IV. —  Conventional warranty

1732. The parties may, in their contract, add to the obligations of legal warranty, diminish its effects or exclude it altogether but in no case may the seller exempt himself from his personal fault.

1733. A seller may not exclude or limit his liability unless he has disclosed the defects of which he was aware or could not have been unaware and which affect the right of ownership or the quality of the property.

An exception may be made to this rule where a buyer buys property at his own risk from a seller who is not a professional seller.

§ 5. —  Obligations of the buyer

1734. The buyer is bound to take delivery of the property sold, and to pay the price thereof at the time and place of delivery. He is also bound to pay any expenses related to the deed of sale.

1735. The buyer owes interest on the sale price from the time of delivery of the property or the expiry of the period agreed by the parties.

§ 6. —  Special rules regarding the exercise of the rights of the parties

I. —  Rights of the buyer

1736. The buyer of movable property may, if the seller fails to deliver it, consider the sale resolved if the seller is in default by operation of law or if he fails to perform his obligation within the time allowed in the notice of default.

1737. Where the seller is bound to deliver the area, contents or quantity specified in the contract and is unable to do so, the buyer may obtain a reduction of the price or, if the difference causes him serious prejudice, resolution of the sale.

Where the area, contents or quantity exceeds that specified in the contract, the buyer is bound to pay for the excess or to restore it to the seller.

1738. A buyer who discovers a risk of infringement of his right of ownership shall, within a reasonable time after discovering it, give notice to the seller, in writing, of the right or claim of the third person, specifying its nature.

The seller may not invoke tardy notice from the buyer if he was aware of the right or claim or could not have been unaware of it.

1739. A buyer who ascertains that the property is defective may give notice in writing of the defect to the seller only within a reasonable time after discovering it. The time begins to run, where the defect appears gradually, on the day that the buyer could have suspected the seriousness and extent of the defect.

The seller may not invoke tardy notice from the buyer if he was aware of the defect or could not have been unaware of it.

II. —  Rights of the seller

1740. The seller of movable property may, if the buyer fails to pay the sale price and to accept delivery of it, consider the sale resolved if the buyer is in default by operation of law or if he fails to perform his obligations within the time allowed in the notice of default.

The seller may also, where it appears that the buyer will not perform a substantial part of his obligations, stop delivery of the property in transit.

1741. Except in the case of a sale with a term, the seller of movable property may, within 30 days of delivery, consider the sale resolved and revendicate the property if the buyer, being in default, has failed to pay the price and if the property is still entire and in the same condition and has not passed into the hands of a third person who has paid the price thereof, or of a hypothecary creditor who has obtained surrender thereof.

Where the buyer is in default to pay the price and the property meets the conditions prescribed for resolution of the sale, the seizure of the property by a third person is no hindrance to the rights of the seller.

1742. The seller of immovable property may not apply for resolution of the sale for failure by the buyer to perform one of his obligations unless the contract specially stipulates that right.

If the seller meets the conditions for applying for resolution, he is bound to exercise his right within five years after the sale.

1743. A seller of immovable property wishing to avail himself of a resolutory clause shall make a demand to the buyer and, where applicable, any subsequent acquirer, to remedy his default within 60 days after the demand is entered in the land register; the rules pertaining to taking in payment set out in the Book on Preference and Hypothec and the measures to be taken prior to the exercise of that right apply, adapted as required, to the resolution of the sale.

A seller who takes back property by exercising a resolutory clause takes it back free of any charges which the buyer may have placed on it after the seller registered his rights.

Last Updated on Friday, 11 June 2010 07:44

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FISET LÉGAL inc. is a law firm located in Montreal and specialized in real estate and in commercial litigation. We are especially active in Condominium Law and in Construction Law.

We represent many syndicates of co-ownership and many co-owners located in Montreal and its surroundings. We provide legal advising to our clients and their property managers in the fields of Real Estate Law, Condominium Law and Commercial Litigation.

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