What is a Sale Contract under Quebec laws?
How do you legally define it?
What are the essential elements you should know!
In this article, we will break down the notion of a Sale Contract so you know all there is to know about it!
Keep reading as we have gathered exactly the information that you need!
Let’s dig into the Civil Code of Quebec and legal knowledge!
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Let’s get started!
Sale Contract In Quebec
A sale contract (also referred to as purchase agreement or contract of sale) is a contract entered between a buyer and a seller relating the sale of goods.
A contract of sale can relate to pretty much anything.
For example, you can sell any tangible goods like a car, bike, home, or furniture.
In essence, when a buyer and seller identify the “property” or “goods” to be sold and reach an agreement on price, they have an agreement on the essential elements of the contract.
A sales contract can be written or oral.
For example, Mary orally offers John her bike for $100 and John agrees to pay this price.
This agreement is legally valid and binding.
The sale contract can also be in writing.
Businesses will typically prefer to purchase the goods they need to run their business by entering into written agreements as the actual contract will serve as evidence of the nature of the parties’ agreement in the event of a dispute.
Generally, a standard sales agreement will include the following basic elements:
- Identification of the seller
- Identification of the buyer
- The description of the goods being sold
- The price
- Payment terms
- Delivery of the goods
- Risk of loss
Now that we’ve done a brief overview of a sale contract, let’s look at how it is legally defined in the province of Quebec.
Legal Definition Under The Civil Code of Quebec
Under the Quebec laws, article 1708 of the Civil Code of Quebec defines a “sale” as:
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.
In essence, for a sale transaction to take place, you’ll need at least two people (a buyer and a seller) and you need the transfer of the ownership of property for a price.
You can refer to a sales agreement in different ways, such as:
- Agreement for sale of goods
- Agreement to sell
- Sales contract
- Purchase agreement
Elements of a Sales Contract
Under Quebec laws, for a transaction be but qualified as a sale under a contract, you need to have the following elements:
- A buyer (person acquiring property or goods)
- A seller (person disposing of property or goods)
- Price (the price the buyer obligates itself to pay the seller)
- Transfer of ownership (the legal rights on the property or goods conveyed to the buyer)
Generally, for a sales contract to be enforceable before Quebec courts, the object of the contract must be legal.
In other words, the sale of illegal products or drugs will not be an enforceable contract in court although it may meet the proper elements of a sales contract.
Terms of a Sales Contract
In most cases, when you are looking to buy something of importance, you may enter into a sale contract with the seller.
Depending on the complexity of the transaction, the sale contract will have different terms and conditions.
You can expect the sale of a large business in a mergers and acquisitions transaction to potentially account for hundreds of pages whereas the sale of a microwave oven may literally be on a one or few pages.
For the purpose of illustrating to you the typical terms in a contract of sale, let’s consider the terms found in a simple contract.
The following provisions are generally found in a sale contract:
- Name and address of the seller
- Name and address of the buyer
- The date the contract
- The identification of the property or goods the seller is looking to sell and buyer looking to buy
- The price the buyer is agreeing to pay for the goods and seller agreeing to receive in exchange for the goods
- The manner of the delivery of the goods from the seller to the buyer
- When is delivery expected to take place
- When is the buyer required to pay the sales price (or payment schedule)
- Warranty provision on the quality of the goods sold
- Risk of loss defining who will assume the risk of damage or loss to the property during the conveyance process
- Governing law
- Date of signing
In Quebec, when you draft a contract in English, you must also include a provision that states that the parties have expressly agreed to draft the contract in English.
This statement must be written in French.
Examples of Contract of Sale
A sale contract is such a common type of contract that it’s nearly impossible to make a meaningful list of all possible scenarios.
Here are some examples that we would like to share with you where you may have entered into a contract of sale with someone:
- The purchase of a cup of coffee from a coffee shop
- Sale of home appliances
- Sale of sports equipment
- Purchase and sale of a car
- Purchase or sale of a home or real estate property
- Sale of groceries at the market
If you think about it, when you purchase a coffee from a coffee shop, you have a legally binding and valid sales contract.
In essence, you have the seller (coffee shop), the buyer (you), the goods (cup of coffee with your specifications), the price (price listed on the menu), payment (you pay on the spot), and delivery (you get your coffee on the spot).
This transaction takes place based on an oral contract, it’s quick, and simple.
Sale Contract Takeaways
So what is the legal definition of Sale Contract?
Let’s look at a summary of our findings.
Quebec Sale Contract
If you enjoyed this article on Sale Contract, we recommend you look into the following legal terms and concepts. Enjoy!