A Contract of Sale is an agreement for the exchange of goods, services, or property, between the seller and the buyer, for a promised or paid value, usually money.
For there to be a valid contract of sale, all these essential elements must be present. They include:
– Two parties in the transaction (the buyer and Seller).
– Goods, services or property, which must be the subject matter of the agreement.
– There must be some price consideration.
– The interest in the goods must be transferred to the buyer.
– It may be an express or implied agreement.
– There must be transfer of ownership.
A common type of Contract of Sale is the Contract of Sale of land. For the purpose of this text, we highlight the under-mentioned set of facts.
Executing a Contract of Sale of land is the initial step in a conveyancing transaction. At this initial stage, the purchaser acquires an equitable interest in the property at this stage while a legal interest is acquired at the completion step.
Section 4, Statute of Fraud, 1677 is the preliminary statute applicable to the Contract of Sale of land in Nigeria, as well as the Law Reform Contract Act (No 64) of 1961(Lagos), and Property and Conveyancing Laws of Western Nigeria.
Subject to the various laws applicable to the Contract of Sale of land, the contract must be evidenced in writing and signed by the respective persons privy to the transaction, although no particular form is required.
There are certain essentials that must be included in the memorandum of a contract of sale. They include:
1. The name of the parties.
2. The property.
3. The price.
4. The signature of the parties.
Before parties in this contract can enforce it, the memorandum must exist although it need not exist at the time the contract is being made.
The three types of ‘Contract for Sale’ are Oral, Open and Formal Contracts.
Oral Contract is an agreement by word of mouth. This is prevalent under native law and custom.
Open Contract on the other hand provides for the minimum requirements of the Statute of Fraud – the Parties, Property and Signature.
A Formal Contract is one made subject to general conditions of sale, in-spite of the fact that they only apply so far as they are not varied by or inconsistent with the special conditions stipulated by conveyancing laws.
The capacity of parties in a contract of sale is also important; it is the ability of the party to be in a contract of sale of land. The inability of either of the parties renders the contract void.
In conclusion, the existence of these salient essentials guarantees that your interests are well guarded when conducting a sale of land or real property.
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Ed’s Note – This article was first published here.