Chapter-Four: The Law of Sales

4.1. The Law of Sales Contract

• It is a little bit complicated sales contract has a connection
with law of property and law of general contract;
• It holds up acquisition of ownership and transfer of ownership;
• Sale is an exchange of goods for money where as bartering is
an exchange of goods for goods; and
• a contract of sale is a contract expressed in money.
4.2: Forming Sales Contract
• the basic requirements of general contract such as consent,
capacity and object shall be fulfilled but not form;

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 Chapter-four…cont`d
• Form is not a requirement because a contract of
sale only governs a corporeal (tangible) moveable
goods business transaction in good faith; and
• To form sales contract, one has to determine the
scope of sales contract and its definition.
4.3: Scope of sales contract
• A contract of sale only governs a corporeal
moveable goods in good faith such as
households, clothes, shoes, etc.
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 Chapter-four…cont`d
• It does not include immoveable properties, incorporeal
moveable goods, special moveable goods and stolen and lost
corporeal moveable goods.
• The civil code of Ethiopia Art.2266 defines a contract of sale as
“a contract of sale is a contract where by one of the parties, the
seller, undertakes to deliver a thing and transfer its ownership
to another party, the buyer, in consideration of a price
expressed in money which the buyer undertakes to pay him.”
• This definition shows as the existence the seller and the buyer;
• The capacity and consent of the parties and object of the
contract;

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 Chapter-four…cont`d
• Delivery of the goods sold;
• The existence of the goods sold; and
• Price determination.
• In sales contract acquisition of ownership is possible through:
• Occupation;
• acquisition in good faith; and
• accession.
• Transfer of ownership and delivery of the goods sold are very
important in sales contract because risk transfers at this time.

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 Chapter-four…cont`d
4.4: Understanding Performance of Sales Contract
• Performing a contract of sale is a combination of
the obligations of the seller and the buyer.
A. Obligation of the seller:
• delivery of the thing sold;
• transferring ownership of the goods sold;
• warranty against dispossession of the thing sold;
and
• Warranty against defects and non-conformity.
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 Chapter-four…cont`d
 Modes of delivery:
• Actual delivery;
• Constructive delivery; and
• Symbolic delivery.
B. The obligation of the buyer:
• obligation to pay price and to take delivery;
• to call the seller or his/her agent during inspection; and
• to notify the dispossession by third party made, defects
or non- conformities found to the seller.

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 Chapter-four…cont`d
C. The common obligations of the seller and the
buyer are:
• preservation of the thing sold;
• to cover expenses; and
• To cover customs duties.
• Performance, non-performance of sales contract
and its effects are the same to that of the
principles provided under general contract.