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Purchase / Sale and Option of Purchase

16May

Property Law and Tax Issues

  PROFILE DIFFERENCES : CONTRACT OPTION OF PURCHASE is that of an agreement whereby one party grants to another, for a fixed period and under certain conditions, the power to decide to perform or not a contract. It is really a one sided contract although sometimes both parties take part. In the case of the contract of option of purchase, basically the power consists in deciding or not of performing a future purchase/sale, to one of the parties is granted the “option” on deciding on the performance or not of a certain contract whose main contents ( price, object and period ) are stipulated at a time prior to the mentioned purchase/sale, this is in the actual contract of option. It is really a pre-contract, in which is stipulated the parts of same and one of the parties is allowed to take the decision to perform or not the mentioned purchase/sale. The basic parts of this agreed legal negotiation are: • The option in itself, granted to one of the parties (accepting party) to decide on the future performance of the purchase/sale. • The period in which the option should be carried out • The object to be purchased and the price of same • The payment of an amount or deposit that will be used as penalty or not in the case of fulfilling the right of option in favour of the offering party. This is not compulsory. A contract of option can be signed without that known as “ option premium”. • If in the stipulated period the ACCEPTING PARTY does not purchase HE WILL LOSE THE OPTION PAID; If on the other hand the OFFERING PARTY does not wish to sell or sells to a third party, he must pay DOUBLE the amount to the accepting party as a penalty for not selling to him but selling to a third party not included in the legal negotiation as long as there has been established “penitential pledge” and not confirmatory pledge. CONTRACT OF PURCHASE/SALE, is that of a bilateral contract in which one of the parties (seller) is obliged to hand over a certain object and the other (purchaser) to pay a certain Price for same, in Money or symbol that it represents. On the other hand, the purchase/sale is the main way of acquiring the ownership. The basic profile is that it deals with a contract typical, bilateral, agreed, onerous, exchanged, in other words the Price paid by the purchaser is the same as the value of the object being transferred. The Personal elements of this legal transaction are on one side the PURCHASER: This is the individual or legal body who promises to pay for something in exchange of a stipulated price in money or a symbol that it represents. On the other hand, the SELLER: This is the individual or legal body who promises to hand over the object, and the same as the previous case must have legal capacity. The elements of the contract are; The OBJECT: what it is, in opposition to the rights created on same and to the personal benefit. They are assets or rights that are within commerce. The Formal Elements are; basically the carrying out of same in a private document that normally is later made public by the corresponding signature of the Notary Deed. In order that the contract be valid it is also necessary that both parties (Purchaser and Seller) have the necessary legal capacity, Finally the obligations for the contracting parties are: OBLIGATIONS OF THE SELLER • Transfer the property or holders right. • To hold the object of the purchase/sale until its delivery. • To hand over the Object or Article. • Guarantee the purchaser the possession. • Guarantee the purchaser a peaceful possession. • Vouch to the warranty clause. • Vouch to the hidden defects and faults the object may have. OBLIGATIONS OF THE PURCHASER • Pay the price. • Pay interest in the case of delayment or purchase/sale with deferred payment. • Receive the thing purchased. • Receive in good state and not remain as defaulter
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