A condition must be clear and precise. In the absence of clear and precise conditions, the contract may be considered inconclusive. The development of these agreements is complex, especially when it comes to valuable assets such as land or structures. Poorly written documents can create problems on the other line. A conditional sales contract also protects the seller when the buyer is in arrears in the necessary payments. Since the goods are transferred to the buyer only at the end of the conditions, the seller remains the rightful owner for the duration of the contract. This allows the seller to legally take back or recover the property, as they do not have to initiate costly seizure proceedings against the buyer after the early transfer of a title. Conditional sales contracts are typical of real estate because of the mortgage financing phases – from prior authorization, valuation to final loan. In these contracts, the buyer can usually take possession and use of the property after both parties have signed and agreed on a deadline. However, the seller usually keeps the deed in his name until the financing is completed and the purchase price is paid in full. The buyer can take possession of the property as soon as the contract is in force, but he does not own the property until after having paid for it in full, which is usually done in instalments.
If the company is in arrears in its payments, the seller will repossess the item. The Bundesgericht ruled in favour of the owner Perpetual that the rental offer did not constitute a binding tenancy agreement. His honor stressed the importance of contracts « subject to the performance by the lessor and the tenant of any legal document » which makes the contract mandatory to the fulfillment of this condition. His honour stated that the effect of those words was such that no contract should be concluded independently of the legal documentation that had not been performed. A conditional contract, also called a hypothetical contract, is a contract that only requires performance if the defined conditions are met.3 min read Many people who rent to their own items like electronics and furniture also participate in conditional sales contracts. The consumer can pay a bill to the retailer for the item – for example. B a television – and consent to a certain number of payments as part of the operation. Until the compensation is paid in full, the merchant has the option to withdraw it if the customer is in arrears with payments.
The acquisition of real estate through a conditional sales contract can allow a company to deduct interest charges in its tax return. A substantial difference was made between the facts of this case and the case of RTS Flexible Systems, which presented similar facts, but with a decisive difference. Indeed, it was found that the draft undistured contractual documents containing a clause « contrary to the contract » constituted a binding contract because of the existence of essential a posteriori conduct on the part of both parties, which indicates that the parties reached a binding agreement and therefore waived the conditional clause. . . .