Contracts Relating To The Assignment Of Rights | GOALGOOLE | Because you need Information for your goals !
7023 Bole Kifle Ketema, Addis Ababa, Ethiopia
0116616179/85 mcc@ethionet.et

Contracts Relating To The Assignment Of Rights

BOOK V. SPECIAL CONTRACTS
TITLE XV CONTRACTS RELATING TO THE ASSIGNMENT OF RIGHTS

Chapter 1. Sale

Art. 2266 – Definition.
A contract of sale is a contract whereby 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.

Art. 2267 – Application of this Chapter – 1. Corporeal chattels.
(1)    The provisions of this Chapter shall apply to the sale of corporeal chattels.
(2)    Nothing in this Article shall affect the special provisions relating to the sale of certain kinds of corporeal chattels.

Art. 2268 – 2. Intrinsic parts of immovable.
(1)    The sale of intrinsic parts of an immovable shall be deemed to be a sale of movables where such parts are, under the contract, to be separated from the immovable and transferred as corporeal chattels to the buyer.
(2)    The provisions of sub-art (1) shall apply in particular where the sale relates to crops, materials of a building under demolition or products of a quarry.

Art. 2269 – Sale on delivery.
For the purpose of this Chapter, a contract for the delivery of corporeal chattels to be manufactured or produced shall be deemed to be a sale where the party who undertakes delivery is to provide the main materials necessary for the manufacture or production.
Section 1. Formation of contract

Art. 2270 – Subject of sale.
(1)    A sale may relate to an existing thing belonging to the seller.
(2)    A sale may also relate to a future thing which the seller undertakes to make for delivery to the buyer.
(3)    It may also relate to a thing belonging to a third party.

Art. 2271 – Price estimated by third party.
(1)    The price may be referred to the arbitration of a third party.
(2)    There shall be no sale where such third party refuses or is unable to make an estimate.

Art. 2272 – Terms of the contract.
(1)    A contract of sale may be pure and simple or contain special terms.
(2)    Unless otherwise expressly stipulated, the obligations it imposes on the parties shall not be deemed to be conditions affected the existence of the contract.

Section 2. Performance of contract
Paragraph 1. – Obligations of seller

Art. 2273 – General provisions.
(1)    The seller shall deliver the thing to the buyer in accordance with the provisions of the contract and of this Code.
(2)    He shall transfer the ownership of the thing to the buyer and warrant him against certain defects in the things.
(3)     He shall in addition be liable for any other obligation imposed upon him by the contract of sale.
A – Obligation to deliver

Art. 2274 – Essence of obligation.
Delivery consists in the handing over of a thing and its accessories in accordance with the contract.

Art. 2275 – Quantity fixed approximately.
(1)    Where the seller undertakes to deliver “about a certain quantity” of specified goods, it shall be for him to determine the exact quantity to be delivered, unless it appears from the circumstances that such stipulation has been included in the contract in the sole interest of the buyer.
(2)    The difference between the approximate quantity fixed in the contract and the quantity actually delivered may not be more than ten percent, where, the sale relates to the whole cargo of a ship, or five percent in other cases.

Art. 2276 – Time of delivery.
Where the date of delivery cannot be inferred from the will of the parties, the seller shall deliver the thing as soon as the buyer requires him to do so.

Art. 2277 – Delivery during a given period.
Where the parties have agreed that delivery shall take place during a given period, it shall be for the seller to fix the exact date of delivery unless it appears from the circumstances that it is for the buyer to do so.

Art. 2278 – Simultaneity with payment.
(1)    Unless otherwise provided in the contract, delivery of the thing shall be simultaneous with the payment of the price.
(2)    The seller may in such case retain the thing until payment is made.

Art. 2279 – Place of delivery. – 1. Principle.
Unless otherwise agreed, the seller shall deliver the thing at the place where,. At the time of the contract, he had his place of business or, failing such, his normal residence.

Art. 2280 – 2. Exception.
(1)    Where the sale relates to a specific thing and the parties know the place where such thing is at the time of the contract, the seller shall deliver the thing at such place.
(2)    The provisions of sub-art (1) shall apply where the contract relates to fungible things selected from a stock or a specified supply or to things which are to be made or produced in a place known to the parties at the time of the contract.
B – obligation to transfer ownership.

Art. 2281 – Steps necessary for the transfer of ownership.
The seller shall take the necessary steps for transferring to the buyer unassailable rights over the thing.

Art. 2282 – Warranty against dispossession. – 1. Principle.
The seller shall warrant the buyer against any total or partial dispossession which he might suffer in consequence of a third party exercising a right he enjoyed at the time of the contract.

Art. 2283 – 2. Legal limits.
(1)    Where, at the time of the contract, the buyer knows that he risks dispossession, the seller shall not warrant the thing unless he has expressly undertaken to do so.
(2)    Warranty shall however be due where dispossession is due to the falling in of a pledge made by the seller.

Art. 2284 – Provisions excluding or restricting warranty.
(1)    Provisions which exclude or restrict the warranty due from the seller against dispossession shall be construed strictly.
(2)    Unless otherwise expressly agreed, such provisions shall impose on the seller the obligation to return the price to the buyer, in whole or in part, in cases of dispossession.
(3)    A provision excluding or restricting the warranty shall be of no effect where the seller has intentionally concealed that a third party had a right on the thing or dispossession is due to the act of the seller.

Art. 2285 – Joining seller as party to proceedings.
(1)    Where the buyer is sued for dispossession, he shall join the seller as a party to the proceedings instituted against him.
(2)    Where the seller is joined in the proceedings in due time, he shall make good his warranty unless he can show that dispossession is due to the act of the buyer.
(3)    Where the seller is not joined in the proceedings without any fault on his part, he shall be released from his warranty where he can show that the proceedings might have had a more favourable issue, had he been joined in due time.

Art. 2286 – Compromise.
Where the buyer acknowledges the right of a third party outside judicial proceedings or he has entered into a compromise with such third party, he may not avail himself of the warranty given by the seller unless he can show that the latter could not have prevented dispossession.
C – Warranty against defects in the thing

Art. 2287 – Principle.
The seller shall guarantee to the buyer that the thing sold conforms to the contract and is not affected by defects.

Art. 2288 – Conformity with contract.
The thing shall not be deemed to conform to the contract where:
(a)    the seller delivered to the buyer part only of the thing sold or a greater or lesser quantity than he had undertaken in the contract to deliver; or
(b)    the seller delivered to the buyer a thing different to that provided in the contract or a thing of a different species.

Art. 2289 – Warranty against defects.
The warranty shall become effective where the thing:
(a)    does not possess the quality required for its normal use or commercial exploitation; or
(b)    does not possess the quality required for its particular use as provided expressly or impliedly in the contract; or
(c)    does not possess the quality or specifications provided expressly or impliedly in the contract.

Art. 2290 – Time when defects are to be considered.
(1)    The conformity with the contract and the absence of defects shall be ascertained having regard to the condition of the thing at the time of the transfer of risks.
(2)    Where no transfer of risks occurs as a result of the cancellation of the contract having been declared or the replacement of the thing having been required, regard shall be had to the time when the risks would have been transferred, had the thing been in conformity with the contract.
(3)    The seller shall be held to his warranty where non-conformity or defects occur at a date later than that specified in this Article and are caused by the seller or a person for whom he is liable.

Art. 2291 – Examination of thing by buyer.
(1)    As soon as the buyer has the opportunity, he shall without delay examine the thing.
(2)    Unless otherwise agreed, such examination shall be made as provided by the usages of the place of examination.
(3)    Where the buyer intends to avail himself of the results of the examination, he shall in due time invite the seller or his representative to attend such examination, unless the thing is likely to perish.

Art. 2292 – Notification of defects.
(1)    Where examination discloses non-conformity with the contract or a defect in the thing, the buyer shall without delay give notice thereof to the seller.
(2)    In notifying the defect, the buyer shall indicate its nature in accordance with custom and good faith.

Art. 2293 – Absence of notification.
(1)    Where the buyer has not notified the seller as provided in Art. 2292, he may no longer avail himself of the non-conformity or defects unless the seller admitted their existence.
(2)    Where a defect is subsequently discovered which could not be discovered by the normal process of examination, the buyer may avail himself of such defect where he notifies the seller as soon as he discovers it.
(3)    The seller who has intentionally misled the buyer may not avail himself of the fact that the notification of defects has not been sufficiently precise or made in due time.

Art. 2294 – Warranty limited by agreement.
Where the seller has warranted during a specified period certain qualities or the good working condition of the thing, it shall be sufficient for the buyer to inform the seller of the defect before the expiry of such period.

Art. 2295 – Buyer knowing of defects.
(1)    Where the seller can prove that the buyer knew of the defects at the time of the contract, he shall not be liable on his warranty against defects.
(2)    In such a case, an express warranty given by the seller shall itself be void.
Art. 2296 – Gross negligence of buyer.
(1)    The seller shall not be liable on a warranty against defects which are so obvious that the buyer could overlook them only as a result of gross negligence.
(2)    The warranty shall however hold where the seller has expressly declared that the thing was free from defects or he has expressly warranted certain qualities.

Art. 2297 – Provisions excluding or restricting warranty.
Any provision excluding or restricting the warranty shall be of no effect were the seller has fraudulently concealed from the buyer the defects in the thing.

Art. 2298 – Period of suing on a warranty.
(1)    The buyer shall, under pain of losing his right, bring proceedings on a warranty against defects within one year from his having given notice to the seller, unless the seller intentionally misled him.
(2)    The arties may not shorten this period.
(3)    Where specified qualities or the good working condition of the thing have been warranted by the seller for a specified period, the time within which the buyer may bring proceedings shall be reckoned from the day when this period has expired.

Art. 2299 – Position of buyer upon expiry of period.
(1)    After the expiry of the period fixed in Art. 2298, the buyer may no longer avail himself of the defect or non-conformity.
(2)    The buyer may, however, where he has not paid the price and he notified the defect or non-conformity in due time, set off against the demand for payment a claim for reduction in price or damages.

Art. 2300 – Seller may put right defects.
(1)    In a sale of fungible things, the seller may replace defective things by new ones within the period provided for in the contract.
(2)    In a sale of goods to be manufactured or produced by the seller on the specifications of the buyer, the seller may put right the defects within a reasonable time, even after the expiry of the period fixed for delivery, provided that the delay causes the buyer no substantial inconvenience or expense.
(3)    Nothing shall affect the right of the buyer to claim damages.
D – Other obligations of seller

Art. 2301 – Handing over documents.
(1)    Where it is customary for the seller to hand over to the buyer documents concerning the thing sold, the seller shall, in addition to delivery, hand such documents over.
(2)    The documents shall be handed over as carefully and quickly as possible at the place fixed in the contract or provided by custom.
(3)    The buyer shall not be bound to accept the documents unless they conform to the contract.

Art. 2302 – Insurance.
Where the seller must know from the circumstances that a carriage insurance is the custom and where the seller is not bound to contract such insurance himself, he shall provide the buyer with the necessary information to enable him to contract an insurance, where the buyer requires such information from him.

Paragraph 2. – Obligations of buyer

Art. 2303 – General provision.
(1)    The buyer shall pay the price and take delivery of the thing.
(2)    He shall be bound by any other obligation imposed upon him by the contract of sale.

Art. 2304 – Obligation to pay the price.
(1)    The obligation to pay the price shall include the obligation to take any step provided by the contract or by custom to arrange for or guarantee the payment of the price.
(2)    The buyer may thus be compelled, according to the circumstances, to accept a bill of exchange, to open a credit account, to provide bank security or otherwise.

Art. 2305 – Price determined by weight.
Where the price is determined by the weight of the thing, the net weight shall be taken into account in cases of doubt.

Art. 2306 – Thing at current price.
Where the thing sold is quoted on the market or has a current price, the parties shall be deemed to have concluded the sale at this price, having regard to the time when and place where delivery is to take place.

Art. 2307 – Thing usually sold by seller.
(1)    Where the sale relates to a thing which the seller normally sells, the parties shall be deemed to have concluded the sale at the price normally charged by the seller, having regard to the time when and place where delivery is to take place.
(2)    The amount shown in the invoice presented by the seller shall be deemed to conform to such price.

Art. 2308 – Quantity greater than agreed.
(1)    Where the seller delivers a quantity greater than that provided in the contract, the buyer may accept or refuse such quantity as exceeds the agreed quantity.
(2)    Where he accepts the whole quantity, he shall pay a price increased in proportion to the quantity delivered to him.

Art. 2309 – Place of payment.
(1)    The buyer shall pay the price at the place fixed in the contract.
(2)    Where no place is fixed, he shall pay the price at the address of the seller.
(3)    Where the contract provides that the price shall be paid when the thing or documents are handed over, the price shall be paid at the place where, under the contract, such thing or documents are to be handed over.

Art. 2310 – Date of payment – 1. Sale for cash on delivery.
Where payment is due on delivery, the buyer shall not be bound to pay the price until he has had an opportunity to examine the thing.

Art. 2311 – Credit sale.
Where the contract relates to a sale on credit and no date of payment is fixed, the buyer shall pay the price as soon as the seller demands it after the date when delivery is to be made.

Art. 2312 – Co-operation in delivery.
The buyer shall, where appropriate, take such steps as may be required of him to enable the seller to carry out his obligation to deliver the thing.

Art. 2313 – Taking delivery.
The buyer shall, after delivery, take such steps as may be necessary fro completing the delivery of the thing.

Paragraph 3. – Common obligations of seller and buyer

A – Expenses
Art. 2314 – Expenses of contract.

The expenses of a contract of sale shall be borne by the buyer.

Art. 2315 – Expenses of payment.
(1)    The expenses of the payment shall be borne by the buyer.
(2)    Where the seller has changed the address of his place of business or residence after the making of the contract, he shall bear any additional expenses arising therefrom.

Art. 2316 – Expenses of delivery.
(1)    The expenses of delivery shall be borne by the seller.
(2)    Such expenses shall include the cost of counting, measuring and weighing the thing.

Art. 2317 – Expenses after delivery.
Any expense arising after delivery shall be borne by the buyer.

Art. 2318 – Expenses of transport.
(1)    The expenses of transport shall be borne by the buyer where the thing sold has to be sent to another place than the place of delivery.
(2)    Such expenses shall however be borne by the seller where delivery is to be carriage-free.
(3)    Where the transport of the thing is interrupted by an event beyond the control of either party, the additional transport expenses shall be borne by the party who bears the risks.

Art. 2319 – Customs duties.
(1)    Where import customs duties or other duties charging the imported thing are to be paid by the seller and such duties increase after the contract is made, such increase shall be added to the price.
(2)    Where, however, a delivery bearing such duties has been delayed by the act of the seller or of a person for whom the seller is liable, the additional duties shall be paid by the seller whenever the buyer can show that the increase would not have been due, had the delivery been made at the time fixed in the contract or provided by law.
(3)    Whenever there is a decrease in customs duties, the price shall be reduced accordingly.
B – Preservation of the thing

Art. 2320 – Obligation of the seller.
(1)    Where the buyer is late in taking delivery of the thing or in paying the price, the seller shall ensure the preservation of the thing at the buyer’s expense.
(2)    He may retain the thing until he has been indemnified by the buyer for the expenses he incurred in preserving the thing.

Art. 2321 – Obligation of the buyer.
(1)    Where the thing sold has been received by the buyer, he shall, where he intends to refuse it, ensure its preservation at the seller’s expense.
(2)    He may not return the thing to the seller without further formality.
(3)    He may retain the thing until he has been indemnified by the seller for the expenses he incurred in preserving the thing.

Art. 2322 – Consignment or sale of the thing.
The seller and the buyer may relieve themselves of the obligation to preserve the thing by consigning or selling it in accordance with the provisions of the Title of this Code relating to “Contracts in general” (Art. 1779-1783).
C- Transfer of risks

Art. 2323 – Principle.
Where the risks are transferred to the buyer, he shall pay the price notwithstanding that the thing is lost or its value altered.

Art. 2324 – Delivery of thing.
(1)    The risks shall be transferred to the buyer from the day when the thing has been delivered to him in accordance with the provisions of the contract or of this Code.
(2)    The provisions of sub-art (1) shall apply notwithstanding that the thing delivered does not conform to the contract, where the buyer has neither cancelled or required the cancellation of the contract nor required that the thing be replaced.

Art. 2325 – Delay of buyer.
(1)    The risks shall also be transferred to the buyer from the day he is late in paying the price.
(2)    Where the sale relates to fungible things, the delay of the buyer shall not transfer the risks to him unless the thing, clearly designated for the performance of the contract, has been especially allocated to the buyer and the seller has sent notice to the buyer to that effect.
(3)    Where fungible things are of such a nature that the seller cannot set aside part of them until the buyer takes delivery, it shall be sufficient for the seller to have performed all the acts necessary to enable the buyer to take immediate delivery.

Art. 2326 – Thing under voyage.
(1)    Where the sale relates to a thing under voyage, the risks shall be transferred to the buyer from the day when delivery has taken place by the thing having been handed over to the carrier.
(2)    The provisions of sub-art. (1) shall not apply where, at the time of the making of the contract, the seller knew or should have known that the thing had perished or was damaged.

Art. 2327 – Provision relating to expenses.
Any provision relating to expenses stipulated by the parties, in particular a provision where by expenses are to be borne by the seller, shall not in itself transfer the risks.

Art. 2328 – Goods shipped in common.
Where goods are shipped in common with others, the risks shall be allocated to each of the buyer in proportion to his share from the day when delivery has taken place by the goods having been handed over to the carrier, where the seller has sent to the buyer the bill of lading or other document showing that the shipment has taken place.

Section 3. Non-performance of contract
Paragraph 1. – Forced performance of the contract

Art. 2329 – Non-performance of obligation to deliver. – 1. Principle.
Where the thing has not been regularly delivered, the buyer may demand the forced performance of the contract where it is of particular interest to him.

Art. 2330 – 2. Possibility of purchase in replacement.
The buyer may not demand the forced performance of the contract where the sale relates to a thing in respect of which a purchase in replacement conforms to commercial practice or such purchase can be effected by him without inconvenience or considerable expense.

Art. 2331 – 3. Delay.
(1)    The buyer shall lose the right to demand the forced performance of the contract where he fails to inform the seller, within a short period after he has ascertained the delay, of this intention to demand such performance.
(2)    Such period shall be estimated with particular strictness where the date fixed for the performance of the contract is a compulsory date.

Art. 2332 – Non-conformity or defects.
(1)    The buyer who has regularly given notice of the defects may require the seller to deliver new things or the missing part or quality of the thing where the forced performance of the contract may be demanded.
(2)    He may require that the defects be made good by the seller within a reasonable time where the sale relates to a thing which the seller has to make or produce on the specification of the buyer and where such defects can be made good.

Art. 2333 – Non-payment of price.
Where the buyer fails to pay the price, the seller may demand payment unless the sale relates to a thing in respect of which a compensatory sale is imposed by custom.

Art. 2334 – Sale according to specifications. – 1. Right of seller.
Where the buyer’s right to decide later as to the form, measurements or other details of the thing is reserved in the contract and he has failed to give such specifications within the time fixed in the contract or on the expiry of a reasonable period of time notified to him, the seller may himself make the specification according to the requirements of the buyer as he knows them.

Art. 2335 – 2. method and penalties.
(1)    The seller shall inform the buyer of the specifications of the thing where he has determined them and fix him a reasonable period of time for giving different specifications.
(2)    Where the buyer fails to give his specifications within such time, the specifications made by the seller shall be binding.

Paragraph 2. – Cancellation of contract
A – Reasons for cancellation by the buyer

Art. 2336 – Principle.
(1)    The buyer may require the court to order the cancellation of the contract or may declare the cancellation of the contract in accordance with the provisions of the Title of this Code relating to “Contracts in general” (Art. 1784-1789).
(2)    Nothing shall affect the provisions of the following Articles.

Art. 2337 – Compulsory date for delivery.
(1)    The date fixed for delivery shall be deemed to be a compulsory date where the thing has a market price on markers to which the seller can apply to obtain it.
(2)    The date fixed by the seller or the buyer, where it is for either of them to fix such date within a period of time provided in the contract, shall also be deemed to be a compulsory date.

Art. 2338 – Additional time. – 1. Possibility.
(1)    Where the date fixed for delivery is not a compulsory date, the court may grant the seller a period of grace within which he shall perform his obligations.
(2)    The buyer may, in the same circumstances, grant the seller an additional period of time fixed in a reasonable manner and inform him that he shall refuse the thing upon the expiry of this period.
(3)    The contract shall be cancelled as of right where the seller fails to deliver the thing within such additional period.

Art. 2339 – 2. Inadequate time.
(1)    Where the period fixed by the buyer is not reasonable, the seller may, within a short time, inform the buyer that he shall only deliver the thing upon the expiry of a reasonable period.
(2)    Failing such declaration, the seller shall be deemed to accept the period of time fixed by the buyer.

Art. 2340 – Place of delivery.
(1)    Where the seller delivers the thing at another place than that where he is bound to make delivery, the court shall not cancel the contract on the application of the buyer unless the manner in which the contract was enforced constitutes a fundamental breach of contract.
(2)    The contract may not be cancelled where the breach can be made good by the seller within such period of time as is fixed by the contract or by law.

Art. 2341 – Whole ownership not transferred to buyer.
(1)    The contract may be cancelled where, as a result of a  defect affecting his title, the seller has not procured for the buyer the thing free from all the rights belonging to third parties.
(2)    The contract may however not be cancelled where the buyer, on buying the thing, knew of the encumbrance.
(3)    The contract may not be cancelled where the right with which the thing is encumbered is of small importance and it appears that the buyer would have bought the thing had he known of the encumbrance.

Art. 2342 – Dispossession.
(1)    The contract shall be cancelled as of right where the buyer is totally ousted from the thing and the seller is bound to warrant the buyer against dispossession.
(2)    The contract may be cancelled where the buyer is partially ousted from the thing.
(3)    The contract may however not be cancelled where dispossession only affects a part of the thing of minor importance and it appears that the buyer would have bought the thing, had he known that he would be dispossessed of such part.

Art. 2343 – Partial delivery.
(1)    Where part of the thing only has been delivered or does not conform to the contract, the buyer may not cancel the contract for the whole unless it appears that he would not have entered into the contract, had he known how it would be executed.
(2)    In case of delay in the delivery of part of the thing, the buyer may cancel the contract for the whole notwithstanding that the remaining part of the thing is delivered subsequently, where the date of delivery constituted a compulsory date for the whole.
(3)    Where the buyer is not entitled to cancel or require the cancellation of the contract, he may cancel is partially or require that it be partially cancelled and confine himself to paying a price proportionate to the value of such part as has been duly delivered to him.

Art. 2344 – Defects.
(1)    The contract may be cancelled where the thing is affected by a defect against which the seller warranted the buyer.
(2)    The contract may however not be cancelled where the defect is of small importance and it appears that the buyer would have bought the thing, had he known of he defect.

Art. 2345 – Defect of part of the thing. – 1. Principle.
(1)    Where the sale is of several things at a time or of a collection of articles and only some of them are defective, the contract may be cancelled with regard to such defective things or articles only.
(2)    The buyer shall in such case pay to the seller a price proportionate to the value of the things or articles which have been delivered to him free from defects.

Art. 2346 – Exception.
(1)    The contract may however be cancelled for the whole where the defective thing or article cannot be separated, without considerable inconvenience to the buyer or seller, from those which are free from defects.
(2)    The cancellation which relates to the principal thing shall extend to accessories notwithstanding that they have been sold for a separate price.
B – Reasons for cancellation by the seller

Art. 2347 – Principle.
(1)    The seller may apply to the court to order the cancellation of the contract or may declare the cancellation of the contract in accordance with the provisions of the Title of this code relating to “Contracts in general” (Art. 1784-1789).
(2)    Nothing shall affect the provisions of the following Articles.

Art. 2348 – Non-payment of the price.
(1)    The seller may forthwith declare the cancellation of the contract in case of non-payment of the price where this right has been expressly given to him by the contract of sale.
(2)    Failing an express stipulation, the seller may cancel the contract on the expiry of a reasonable period fixed by him in the notice placing the buyer in default, where the sale relates to things which are quoted on the stock market or have a current price or where this right has been expressly given to the seller by the contract.
(3)    The seller may also declare the cancellation of the contract upon the expiry of the period of grace, where such period has been granted by the court to the buyer.

Art. 2349 – Default in taking delivery.
Where the buyer fails to take delivery of the thing on the conditions laid down in the contract, the seller may require the cancellation of the contract where the failure of the buyer justifies the fear that he will not pay the price or it appears from the circumstances that taking delivery was an essential stipulation of the contract.

Art. 2350 – Failure to make specifications.
Where the buyer has reserved in the contract the right to decide later on the form, measurements or other details of the thing and he fails to give such specifications at the date agreed as being compulsory or upon the expiry of a reasonable period granted to him by the seller, the seller may declare the cancellation of the contract.
C- Reasons for cancellation by both parties

Art. 2351 – Contracts for successive deliveries.
(1)    Where, in contracts for successive deliveries, by reason of the nonperformance or the defect of one of the performances due by a party, the other party is justified in fearing that the future performance will not be made or will be affected by defects, such party may require that the contract be cancelled for the future.
(2)    The buyer may also require the cancellation of future deliveries or deliveries already made, or both, where he proves that, by reason of their connection, these deliveries are of no use to him without those which have not been made or where affected by defects.

Art. 2352 – Impossibility of performance.
A party may declare the cancellation of the contract where, even before the date fixed for performance, the performance of his obligations by his contracting party becomes impossible or is delayed in such a way that the very basis of the contract is affected.

Art. 2353 – Anticipatory breach of contract.
Where, before the date fixed for performance, a party has informed the other party that he will not carry out the contract, the latter party may declare the cancellation of the contract in accordance with the provisions of the Title of this Code relating to “Contracts in general” (Art. 1789).
D- Conditions and effect of cancellation

Art. 2354 – Cancellation in case of delay.
Where a party, being late in the performance of an obligation which constitutes an essential stipulation of the contract, asks the other party whether he still consents to the execution of the contract, the contract shall be cancelled as of right where the other party does not answer within a short time.

Art. 2355 – Effect of cancellation.
(1)    Where a contract is cancelled, the parties shall be released from their obligations under the contract, without prejudice to such damages as may be due.
(2)    Where a party has performed his obligations in whole or in part, he may claim the restitution of what he has supplied including the expenses incurred.
(3)    Where both parties have performed their obligations, each of them may refuse the restitution due by him until the other party has effected his.

Art. 2356 – Interest on price profit.
(1)    Whenever the seller is required to refund the price, he shall in addition pay interest on such price calculated from the day of payment.
(2)    The buyer shall restore, in addition to the thing, the profits he has derived therefrom.

Art. 2357 – Where thing cannot be returned in its previous condition.
(1)    The buyer shall retain the right to require or declare the cancellation of the contract or to avail himself of cancellation already declared where the thing or part thereof has perished or been damaged without this being due to his own act or that of a person for whom he is liable.
(2)    He shall in particular retain this right where the thing has been damaged as a result of an examination made by him in accordance with custom.
(3)    The contract may not be cancelled where the buyer is unable to restore the thing because he has assigned or transformed it or it has perished or been damaged by his act.

Art. 2358 – Transformation of thing.
Where the thing is transformed, the buyer shall retain the right to require or declare the cancellation of the contract where:
(a)    the thing or part thereof has been transformed by him before he was able to discover the defect of which he avails himself to require or declare the cancellation of the contract; or
(b)    the alteration of the thing is of no importance.

Art. 2359 – Expenses.
(1)    As regards outlays made by the buyer on the thing, the provisions of the Chapter of this Code relating to “Unlawful Enrichment” shall apply (Art. 2168-2178).
(2)    The buyer may only claim from the seller the payment of these outlays in the case of dispossession where he is unable himself to be indemnified by the third party by whom he is dispossessed.

Paragraph 3. – Damages

Art. 2360 – General provisions.
(1)    Where the non-performance of one of his obligations by his contracting party is detrimental to him, the seller or the buyer may claim that the damage thus caused be made good by way of damages.
(2)    Damages may be claimed whether the contract is cancelled or upheld, where the contract has not been regularly and exactly performed.
A – case where the contract is not cancelled

Art. 2361 – Amount of damages.
(1)    Where the contract is not cancelled, the amount of damages shall be fixed in accordance with the provisions of the Title of this Code relating to “Contracts in general” (Art. 1790-1805).
(2)    In case of delay in the payment of the price, the buyer shall pay interest at the legal rate (Art. 1803).
(3)    Compound interest shall no be included unless there is a current account between the buyer and the seller.
B – Case where the contract is cancelled

Art. 2362 – Thing having a current price. – 1. Principle.
(1)    Where the contract is cancelled and the thing has a current price, damages shall be equal to the difference between the price fixed in the contract and the current price as on the day when the right to declare the cancellation of the contract could be exercised or on the day following that when the contract was cancelled by the court or as of right.
(2)    Regard shall in addition be had to the normal expenses of a purchase in replacement or compensatory sale.
(3)    The price to be taken into account shall be that on the market where the buyer or seller would, in the normal course of business, buy or sell the thing to which the contract relates.

Art. 2363 – 2. Purchase in replacement or compensatory sale.
(1)    Where the buyer has effected a purchase in replacement or the seller has effected a compensatory sale, the price paid for such purchase or obtained for such sale shall be taken into consideration in calculating the amount of damages.
(2)    Such amount may be reduced where the other party proves that the purchase in replacement or compensatory sale has been effected in bad faith or in abnormal business conditions.

Art. 2364 – 3. Greater damage.
(1)    Damages shall be equal to the prejudice actually caused where the party who suffered such prejudice shows that, at the time of the making of the contract, he had informed the other party of the special circumstances by reason of which the prejudice caused is greater.
(2)    The provisions of sub-art. (1) shall also apply where the party shows that non-performance is due to the other party’s intention to harm, gross negligence or grave fault.

Art. 2365 – Thing having no current price.
(1)    Where the thing has no current price, damages shall be equal to the prejudice which non-performance would normally cause to the creditor in the eyes of a reasonable person.
(2)    Damages shall be equal to the prejudice actually caused where the circumstances mentioned in Art. 2364 have obtained.

Art. 2366 – Anticipatory breach of contract.
(1)    In cases of anticipatory breach of contract, damages shall, where the thing has a current price, be calculated having regard to the market price of the thing on the last day of the period fixed in the contract for the performance of the obligation.
(2)    Where no period has been fixed in the contract, damages shall be calculated having regard to the market price of the thing on the day when the right to declare the cancellation of the contract could be exercised.
(3)    Damages may however not exceed the price actually paid for a previous purchase in replacement nor the difference between the price fixed in the contract and the price actually received for a previous compensatory sale.

Art. 2367 – Dispossession.
Where the buyer is dispossessed of the thing, the seller shall, without prejudice to other damages, reimburse him the judicial and extrajudicial expenses of the proceedings he had to institute, with the exception of the expenses he could have avoided by informing the seller of the proceedings.

Section 4. Various forms of sale
Paragraph 1. – Sale of cattle and other living animals

Art. 2368 – Principle.
Without prejudice to the provisions of the following Articles, the sale of cattle and other living animals shall be subject to the provisions of the preceding Articles.

Art. 2369 – Contagious diseases. – 1. Legal warranty.
On making delivery, the seller shall guarantee that the animal sold by him does not suffer from any of the following diseases:
Rabies in all species of animals, Rinderpest in all ruminants, Pleuropneumonia of cattle (Contagious Bovine Pleuro-Pneumonia), Glanders, Farcy, Dourine and Epizootic Lymphangitis of horses and their crosses (Mules), Anthrax and Piroplasmosis of horses, cattle, sheep and goats.
Foot-and-Mouth Disease of cattle, sheep, goats, pigs and camels.
Blackquarter or Malignant Oedema and Tuberculosis of cattle.
Sheep Pos, and Scabies of sheep and pigs, Swine Fever, Pneumo-enteritis and pox of pigs, Tuberculosis of pigs.
Trypanosomiasis of equines, donkeys and their crosses and in camels.
Spirillosis of horses, donkeys and their crosses.
Oesophagostomiasis of sheep.
Brucellosis of cattle, sheep and goats.
Rickettsiosis, infectious anemia of equines.
Psittacosis, contagious diseases of bees.
Isle of While Disease, Nosema.

Art. 2370 – Contrary stipulation.
Any stipulation contrary to the provisions of Art. 2369 shall be of no effect.

Art. 2371 – Defects. – 1. Legal Warranty.
Warranty shall be due by the seller where the animal sold is affected by a defect such that it is not fitted for the purpose to which it is destined by its nature or under the contract.

Art. 2372 – 2. Contractual provisions.
(1)    The parties may be an express provision in the contract exclude with regard to a given defect the warranty due in accordance with Art. 2371.
(2)    The parties may extend the warranty and provide that the seller shall warrant that the animal possesses a given quality.

Art. 2373 – Cancellation of contract.
Where the animal suffers from a contagious disease or is affected by a defect for which warranty is due under the law or the contract, the buyer may require that the sale be cancelled.

Art. 2374 – Loss of animal.
Where the animal sold dies in consequence of a disease or defect for which warranty is due or of a fortuitous event caused by such defect, the loss shall be borne by the seller who shall refund the price he received.

Art. 2375 – Damages.
The seller shall make good the damage caused to the buyer where:
(a)    the seller has expressly guaranteed that the animal was not affected by the disease or defect by reason of which the sale is cancelled; or
(b)    the seller is shown to have known, at the time of delivery, of the disease or defect by reason of which the sale is cancelled.

Art. 2376 – Contract maintained.
(1)    The buyer shall lose his rights against the seller where he fails to cause the disease or defect to be ascertained by experts and to inform the seller of such disease or defect within the time fixed in writing by the parties.
(2)    Where no time has been fixed, the buyer shall lose his rights where he fails to cause the disease or defect to be ascertained by experts and to inform the seller of such disease of defect within thirty days from the animal having been delivered.
Paragraph 2. – Sale by sample
Art. 2377 – Qualities guaranteed by the seller.

(1)    In a sale by sample or pattern, the qualities of the thing shall conform to those of the sample or pattern.
(2)    Where there is a discrepancy between the sample and the manner in which the thing is described in the contract, the sample shall prevail.
(3)    Where there are differences but no discrepancy, the thing shall combine the qualities of the sample and those of the description.

Art. 2378 – Exhibiting of sample.
The party to whom the sample was entrusted shall have to prove that the sample exhibited is identical to the sample received.

Art. 2379 – Application of this Paragraph.
There shall not be a sale by sample or pattern where the seller proves that the sample or pattern was only presented to the buyer by way of information without any undertaking as to conformity.

Paragraph 3. – Sale on trial

Art. 2380 – Time for acceptance.
(1)    Where the sale has been made upon trial, the buyer shall, within the period fixed in the contract, declare whether he accepts or refuse the thing.
(2)    Where no period is fixed in the contract, the seller may give the buyer a reasonable period of time to decide.

Art. 2381 – Silence of buyer.
(1)    Where the buyer fails to inform the seller of his decision within the period provided in Art. 2380, the sale shall be deemed to be concluded where the thing has been delivered to the buyer so that he may try it.
(2)    The thing shall be deemed to be refused in the contrary case.

Art. 2382 – Implied acceptance.
The sale shall be deemed to be concluded where the buyer pays without reservation all or part of the price or disposes of the thing otherwise than is necessary to try it.

Art. 2383 – Risks.
The risks shall be borne by the seller notwithstanding that the thing has been delivered to the buyer, as long as the buyer has not accepted it.

Paragraph 4. – Sale by installments

Art. 2384 – Right of option of the seller.
Where the thing has been sold and delivered on the condition that the price will be paid by installments and the buyer is in arrears with one of the part payments, the seller may proceed to recover the unpaid installment or, where such right has been expressly reserved to him, declare the cancellation of the contract.

Art. 2385 – Cancellation of contract.
(1)    Where the contract is cancelled, the seller and the buyer shall return the payments which they have made to each other.
(2)    The seller may however claim a fair rent and an indemnity for the wear and tear of the thing.
(3)    Any stipulation imposing more onerous obligations on the buyer shall be of no effect.

Art. 2386 – Exigibility of balance.
(1)    Where the exigibility of the balance of the claim has been stipulated in the case of default of payment of an installment the seller may not avail himself of this stipulation unless the buyer is in arrears for two consecutive payments representing together not less than one tenth of the price of the sale.
(2)    Any stipulation imposing more onerous obligations on the buyer shall be of on effect.

Paragraph 5. – Sale with ownership reserved

Art. 2387 – Effect on third parties.
(1)    A provision whereby the seller reserves to himself, until payment of the price, the ownership of a thing the possession of which has been transferred to the buyer shall not affect third parties unless it has been entered in a public register kept for this purpose at the place where the buyer resides.
(2)    Where the third party who acquired the thing is bankrupt, such provision shall not affect his creditors except on the conditions laid down in the Commercial Code.

Art. 2388 – Risks.
The risks shall be borne by the buyer from the time when the thing is delivered to him.

Art. 2389 – Cancellation of sale.
(1)    Where the sale is cancelled, the seller shall return to the buyer all partial payments which he received.
(2)    He may however claim a fair rent and an indemnity for the wear and tear of the thing.
(3)    Any stipulation imposing more onerous obligations on the buyer shall be of no effect.

Paragraph 6. – Sale with right of redemption

Art. 2390 – Sale with right of redemption.
The seller may reserve to himself the right to redeem within a given period of time the thing which he sold to the buyer.

Art. 2391 – Time for redemption.
(1)    The period for exercising the right of redemption may not exceed two years.
(2)    It shall be of two years where a shorter period has not been fixed.

Art. 2392- Penalty.
(1)    The buyer may not assign the thing to which the right of redemption extends.
(2)    The prohibition laid down in sub-art. (1) shall not affect third parties unless the clause providing for redemption has been entered in a public register kept for this purpose at the place where the buyer resides.

Art. 2393 – Obligations of seller.
(1)    The seller who exercises his right of redemption shall refund to the buyer the price which he has received and the expenses of the contract of sale.
(2)    Unless otherwise agreed, the provisions of the Chapter of this Code relating to “Unlawful Enrichment” (Art. 2168-2178) shall apply as regards the expenses incurred by the buyer on the thing.

Paragraph 7. – Sale with obligation to forward the thing

Art. 2394 – Care of transport.
Where the seller is bound by the contract to forward the thing, he shall make, on the usual conditions and by the usual means, the contracts of carriage necessary for the thing to be actually forwarded to the place fixed in the contract of sale.

Art. 2395 – Delivery. – 1. Principle.
(1)    Where the contract of sale implies the carrying of the thing, delivery shall, unless otherwise agreed, be effected by the handing over of the thing to the carrier.
(2)    Where the seller uses his own means of transport or means of transport hired by him for the purpose of effecting part of the carrying,  delivery shall be effected by the handing over of the thing to the carrier with whom the contract of carriage is made on behalf of the seller.
(3)    Where the thing is to be carried by successive carriers and the seller is bound by the contract of sale to enter into one or more contracts of carriage covering the whole transport, delivery shall be effected by the handing over of the thing to the first carrier.

Art. 2396 – 2. Thing no intended for the execution of the contract.
Where the thing handed over to the carrier is manifestly not intended for the execution of the contract, by reason of an address written thereon or otherwise, the duty to make delivery shall not be deemed to have been carried out unless the seller gave notice of the transport to the buyer and sent him, where appropriate, a document describing the thing,

Art. 2397 – 3. Carriage by water.
(1)    Where the carrier to whom the thing is handed over in accordance with the provisions of the preceding Articles is required to carry the thing by water, delivery shall be effected by the thing being put on board or by the ship according to the terms of the contract.
(2)    Nothing shall affect the case where the seller may under the contract present to the buyer a bill of lading “received for loading” or any other document of a similar nature.

Art. 2398 – Right of retention of seller.
(1)    The seller may postpone the forwarding of the thing until he is paid, where the contract of carriage does not give him the right to dispose of the thing under voyage.
(2)    The provisions of sub-art. (1) shall not apply where it has been agreed that delivery would take place at the place of arrival or the price is to be paid after delivery.
(3)    Where the seller has forwarded the thing because he had the right to dispose thereof after the beginning of the voyage, he may, until the price is paid, object to the thing being handed over to the buyer at the place of destination.

Art. 2399 – Payment against documents.
(1)    Where a bill of lading or other document has been issued which permits to obtain the delivery of the thing or the possession of which is necessary to be able to dispose of the thing, the payment of the price may only be demanded against transfer of the document provided by the contract or by custom.
(2)    In such case, the buyer may not refuse to pay the price on the ground that he was not able to examine the thing.
(3)    The obligation to transfer the documents shall be deemed to be an essential provision of the contract where the document is a bill of lading or any other document which permits to obtain the delivery of the thing or the possession of which is necessary to be able to dispose of the thing.

Art. 2400 – Stoppage in transit.
(1)    Where, after having forwarded the thing, the seller comes to know that the buyer has been declared insolvent, he may object to the thing being delivered to the buyer notwithstanding that the buyer is already in possession of the bill of lading or any other document which permits to obtain the delivery of the thing.
(2)    The seller may not object to the delivery where it is required by a third party regularly in possession of the bill of lading or above-mentioned document.
(3)    In such case, the seller may not object to the delivery unless the bill of lading or other document contains reservations regarding the effect of its transmission or he can show that the holder, in acquiring the bill of lading or other document, knowingly acted to the detriment of the seller.

Art. 2401 – Obligation to take delivery.
(1)    Where the thing has been forwarded to the buyer and placed at his disposal at the place of destination, the buyer shall, if he intends to refuse the thing, take possession thereof on behalf of the seller where he can do so without payment of the price and without inconvenience or considerable expenses.
(2)    The provisions of sub-art. (1) shall not apply where the seller is present at the place of destination or there exists at such place a person qualified to receive the thing.

Art. 2402 – Examination of thing.
(1)    Where a thing is forwarded, the buyer shall examine it at the place of destination.
(2)    Where the thing is re-dispatched by the buyer without transshipment and where the seller, at the time of the making of the contact, knew or should have known of the possibility of re-depatching, the examination shall be postponed until the thing arrives at its new destination.

Paragraph 8. – sale by auction

Art. 2403 – Formation of contract.
(1) In the case of sale by auction, the contract of sale shall be concluded by the auction which the seller or the auctioneer makes of the thing.
The person who conducts the auction shall be deemed to be entitled to knock down the thing to the highest bidder, where the seller has expressed no contrary intention.

Art. 2404 – Obligations of bidder.
(1)    The bidder shall be bound by his offer on the terms of the conditions of sale.
(2)    Unless otherwise provided, he shall be released where a higher bid is made or his offer is not accepted immediately after the usual calls.

Art. 2405 – Payment in cash.
(1)    Unless otherwise provided in the conditions of sale, the bidder shall be bound to pay cash.
(2)    The seller who is not paid cash or according to the conditions of sale may forthwith cancel the contract.

Art. 2406 – Warranty due by seller.
(1)    In a public and voluntary sale by auction, the seller shall give the same warranty as in ordinary sales.
(2)    In compulsory auctions, the seller shall not give warranty except in the case of fraud on his part.

Art. 2407 – Warranty due by distrainer.
(1)    He at whose request the auction takes place shall warrant the conformity of the thing with the description given of it in the conditions of sale.
(2)    He shall also be liable for any fraud he may commit.

Chapter 2. Contracts allied to sale
Section 1. Barter contract

Art. 2408 – Differences from sale.
(1)    Each of the exchangers shall, as regards the things subject to the exchange, have the same rights and obligations as a seller.
(2)    The exchanger who is bound by the barter contract to pay a balance shall, as regards the payment of such balance, have the same obligations as a buyer.
(3)    Unless otherwise agreed, the exchangers shall share equally in the expenses of the barter contract.

Art. 2409 – Reference to provisions regarding sale.
The provisions applicable to contracts of sale shall for the remainder apply to barter contracts.
Section 2. Transfer of rights other than ownership

Art. 2410 – Transfer of usufruct.
(1)    The provisions applicable to contracts of sale shall apply where a person transfers fro consideration the usufruct of a thing.
(2)    The obligation of the seller to transfer the ownership of the thing shall in such case be replaced by the obligation to transfer the usufruct of such thing.

Art. 2411 – Transfer of incorporeal rights.
(1)    The provisions applicable to contracts of sale shall, as far as possible and without prejudice to the provisions of special laws, apply where a person transfers fro consideration an incorporeal right.
(2)    The transfer of choses in action shall be subject to the provisions of the Title of this Code relating to “Contracts in general” (Art. 1962-1975).
Section 3. Hiring Sale

Art. 2412 – Assimilation to sale.
Without prejudice to the provisions of the following Articles, the provisions applicable to contracts of sale shall apply where the parties have described their contract as one of hiring a thing, if it has been provided that the tenant of the thing will become the owner thereof upon payment of a given number of installments.

Art. 2413 – Risks.
The risks shall be borne by the tenant from the time when the thing has been delivered to him.

Art. 2414 – Termination of contract
The tenant may at any time terminate the contract by returning the thing to the lessor.

Art. 2415 – Cancellation of contract.
(1)    Where the contract is cancelled, the lessor shall return to the tenant the rents which he has collected.
(2)    He may only claim a fair rent and an indemnity for the wear and tear of the thing.
(3)    Any provision imposing more onerous obligations on the tenant shall be of no effect.

Section 4. Contract of supplies

Art. 2416 – Definition.
A contract of supplies is a contract whereby a party undertakes for a price to make in favour of the other party periodical or continuous deliveries of things.

Art. 2417 – Object of contract.
(1)    Where the quantity to be supplied has not been fixed, the supplier shall supply such quantity as corresponds to the normal needs of his contracting party, having regard to the time when the contract was made.
(2)    Where the parties have only fixed a maximum and a minimum limit for the whole of the supplies or for each delivery, the person with whom the supplier contracted may fix, within these limits, the quantity to be supplied to him.
(3)    Where the quantity is to be fixed according to his needs, the person with whom the supplier contracted shall take all he needs, notwithstanding that this quantity exceeds the minimum fixed in the contract.

Art. 2418 – Price.
Where supplies are to be made periodically, the price for each delivery shall, failing an express provision in the contract, be fixed in accordance with the provisions of Chapter 1 of this Title.

Art. 2419 – Time of payment.
(1)    Where supplies are to be made periodically, the price shall be due at the time of each delivery.
(2)    Where supplies are to be continuous, the price shall be due on te usual maturity dates.

Art. 2420 – Term.
(1)    The time fixed for the various performances shall be deemed to have been fixed in the interest of both parties.
(2)    Where the party entitled to the supplies is allowed to fix the time when each performance shall be made, he shall inform the supplier of such time by giving him reasonable notice.

Art. 2421 – Non-performance of contract.
(1)    Where one of the parties fails to carry out his duties regarding a given performance, the contract may be cancelled where non-performance, the contract may be cancelled where non-performance is of importance and capable of destroying the confidence in the regularity of the performance of future obligations.
(2)    The supplier may only cancel the contract or suspend its performance after having given reasonable notice to his contracting party.
(3)    Any provision to the contrary shall be of no effect.

Art. 2422 – Preference clause. – 1. Duration.
(1)    A provision whereby a person undertakes to get supplies in preference from a given supplier, should he need certain kinds of goods, shall not be effective for more than three years.
(2)    It shall be reduced to three years where it has been made for a longer period.

Art. 2423 – 2. Application.
(1)    Whosoever has entered into an undertaking as defined in Art. 2422 shall inform the supplier of the terms offered to him by third parties.
(2)    The supplier shall, under pain of loss of right, declare within the time fixed in the contract or within a reasonable time whether he intends to avail himself of the preference clause.

Art. 2424 – Exclusive clause binding the client.
(1)    Where provision has been made in a contract to the effect that a person shall supply himself exclusively with certain things from a given supplier, such person may not receive from third parties supplies of the things of the nature provided in the contract.
(2)    Unless otherwise agreed, such person may not himself manufacture or produce things of the nature provided in the contract.

Art. 2425 – Exclusive clause binding the supplier.
(1)    Where it has been agreed that the supplier shall supply his products to a given person only, the supplier may not, in the area provided in the contract and during the currency of the contract, directly or indirectly supply third parties with goods of the nature provided in the contract.
(2)    Where the contracting party has undertaken to develop, in the area provided in the contract, the sale of the things which have been reserved to him, he shall be liable where he fails to carry out this obligation, notwithstanding that he sold the minimum quantity provided in the contract.

Art. 2426 – Termination of contract.
Where the duration of the contract of supplies has not been fixed in the contract, each party may terminate the contract by giving notice as provided in the contract or, where not provided, reasonable notice.

Chapter 3. Donation

Art. 2427 – Definition.
A donation is a contract whereby a person, the donor, gives some of his property or assumes an obligation with the intention of gratifying another person, the donee.

Art. 2428 – Donation mortis causa.
A donation to be carried into effect on the death of the donor shall be subject to the provisions regarding wills.

Art. 2429 – Donation on the occasion of marriage.
(1)    A donation made on the occasion of a marriage shall be subject to the provisions regarding ordinary donations.
(2)    It shall in no case be deemed to be done for consideration.
(3)    Nothing in this Article shall affect the special provision regarding a donation made on the occasion of a marriage (Art. 2457).

Art. 2430 – Gratuitous services.
The fact of rendering gratuitous services or enabling another to dispose of a thing free of charge shall not be deemed to constitute a donation.

Art. 2431 – Renunciation.
The fact of renouncing rights in an inheritance, refusing a legacy or failing to fulfill a condition on which the acquisition or preservation of a right depends shall not be deemed to constitute a donation.

Art. 2432 – Natural obligations.
A payment made in performing a moral obligation shall not be deemed to constitute a donation.

Art. 2433 – Reward.
A payment made in accordance with usage to reward services rendered to the donor or his family shall not be deemed to constitute a donation.

Art. 2434 – Personal nature of donation.
(1)    A donation is an act purely personal to the donor.
(2)    The authority given to make a donation shall be of no effect unless it specifies the property to be donated and the donee.

Art. 2435 – Promise to make a donation.
(1)    A promise to make a donation shall give rise to no obligation.
(2)    Where such promise is broken, the promisor shall refund the other party such expenses as may have been made in good faith on the basis of such promise.

Art. 2436 – Acceptance by donee.
(1)    A contract of donation shall not be complete until the donee has expressed his intention to accept the liberality.
(2)    Such acceptance shall not be valid where it is expressed after the death of the donor or his having become incapable.
(3)    A donation may be accepted on behalf of the donee by his legal representative but not by his heirs.

Art. 2437 – Donor of unsound mind.
A donation may not be invalidated on the ground that the donor was of unsound mind unless:
(a)    the donor was interdicted at the time of the donation and the donation was not regularly made by his tutor; or
(b)    An application for the interdiction of the donor was made during his life and the donor died before the application was decided on by the court; or
(c)    The insanity of the donor can be inferred from the terms of the contract of donation.

Art. 2438 – Unlawful motive.
(1)    A donation shall be null and void where it was exclusively or principally inspired by an immoral or unlawful motive.
(2)    No donation shall be null in such case unless the immoral or unlawful motive can be inferred from the contract of donation or other documents written by the donor.

Art. 2439 – Undue influence. – 1. Reference to successions.
(1)    The court may reduce or invalidate a donation on the same conditions as it may reduce or invalidate a testamentary provision (Art. 868-873).
(2)    An application for reduction or invalidation may be made notwithstanding that the donee is a relative by consanguinity or affinity or the spouse of the donor.
(3)    In cases of a donation made to a guardian or tutor, the age of the donor shall not be taken into account.

Art. 2440 – 2. Donation in consideration of a dispute.
An application for the invalidation of a donation may be made where such donation had as its purpose to cause the donee or some other person to use his influence or give his assistance for the settlement of a dispute affecting the interests of the donor or the spouse or a relative of the donor.

Art. 2441 – 3. Application how made.
(1)    An application for the reduction or invalidation of a donation shall, under pain of loss of right, be made within two years from the donation.
(2)    After the death of the donor, it may only be made by the persons who are authorized by law to require the invalidation of a testamentary provision on the ground of undue influence (Art. 874).

Art. 2442 – Mistake or fraud.
(1)    The heirs of the donor may not apply for the donation to be invalidated on the ground of a mistake committed by the donor except on the conditions on which they may apply for the invalidation of a testamentary provision on the ground of mistake (Art. 877).
(2)    The heirs of the donor may not apply for the donation to be invalidated on the ground of fraud.
(3)    The heirs may in any case continue proceedings for the invalidation of the donation on the ground of mistake or fraud which have been instituted by the donor during his life.

Art. 2443 – Form. – 1. Immovables.
A donation relating to an immovable or a right on an immovable shall be of on effect unless it is made in the form government the making of a public will (Art. 881-883).

Art. 2444 – 2. Corporeal chattels and bearer titles.
(1)    Corporeal chattels and bearer titles may be donated by mere delivery.
(2)    They may also be donated in the form governing the donation of immovables.

Art. 2445 – 3. Other rights and credits.
(1)    Other rights and credits may be donated in the form governing their assignment for consideration.
(2)    A donation may be made by remitting the donee’s debt.
(3)    It may also be made by naming the donee as beneficiary of a stipulation for a third party contained in a contract made between the donor and another person.

Art. 2446 – Disguised donation.
(1)    A donation may be made in the form of an act made for consideration.
(2)    The substantive rules governing donations shall apply to disguised donations.

Art. 2447 – Proof of donation.
(1)    Whosoever alleges that a donation has been made shall prove its existence.
(2)    The possession of corporeal chattels or bearer titles shall not be proof of the existence of a donation unless such possession is unequivocal.

Art. 2448 – Revocation for ungratefulness. – 1. By the donor.
(1)    Notwithstanding any provision to the contrary, a donation may be revoked on the ground of ungratefulness of the donee, where the donee has committed an act which would make him unworthy to succeed the donor.
(2)    The donation may not be revoked where the donor has forgiven the donee.
(3)    Notwithstanding any evidence to the contrary, such forgiveness shall be deemed to have been granted where the donor has not informed the donee of his intention to revoke the donation within one year from his becoming aware of the possible ground for revocation.

Art. 2449 – 2. By the heirs of the donor.
A donation may not be revoked by the heirs of the donor unless:
(a)    the donor, before his death, unequivocally informed the donee of his intention to revoke the donation; or
(b)    The donee has intentionally caused the death of the donor; or
(c)    The alleged act of ungratefulness occurred after the death of the donor; or
(d)    The donee prevented the donor from exercising his right of revocation.

Art. 2450 – Birth of child.
Unless otherwise provided in the contract of donation, a donation may not be revoked where a child is born to the donor.

Art. 2451 – Object of donation.
(1)    A donation may only relate to property belonging to the donor on the day of the donation.
(2)    A donation shall be of no effect to the extent that it relates to future property.

Art. 2452 – Disputed property.
A donation shall be null and void to the extent that it relates to property which, on the day of the donation, is the subject matter of a dispute.

Art. 2453 – Usufruct reserved.
The donor may reserve for himself the usufruct of property donated by him.

Art. 2454 – Donation of periodical dues.
Unless otherwise expressly provided, a donation relating to periodical dues shall lapse on the death of the donor.

Art. 2455 – Conditions or charges.
(1)    A donation may be made subject to a condition or charge.
(2)    The provisions of the Title of this Code relating to “Successions” which concern conditions or charges in respect of legacies shall apply to conditions and charges in respect of donations (Art. 916-923).

Art. 2456 – Impossible or unlawful condition or charge.
(1)    Where the donor has made the donation subject to a conditions or charge which is impossible or contrary to law or morals, such condition or charge shall be deemed not to have been imposed.
(2)    The donation shall not be null and void in such case, notwithstanding that the condition or charge was essential to the donor.

Art. 2457 – Donation on the occasion of marriage.
(1)    A donation to a future spouse shall be subject to the condition that the marriage be celebrated.
(2)    So shall a donation made, on the occasion of a marriage, to the father, mother or other relatives of one of the future spouses.
(3)    The effect of the cancellation or dissolution of the marriage on such donation shall be as prescribed in the Title of this Code relating to “Family relationship” (Art. 684 and 689).

Art. 2458 – Duty to maintain donor.
(1)    Unless otherwise expressly provided, the donation shall be subject to a charge compelling the donee to supply maintenance to the donor, should the donor be in need.
(2)    The donor may in his discretion require maintenance from the donee or from other persons legally bound to supply him maintenance.
(3)    Such persons may claim from the donor where they have supplied maintenance to the donor.

Art. 2459 – Charge for the payment of debts.
A charge compelling the donee to pay the debts of the donor shall not be valid unless it specifies the amount of the debts to be paid by the donee.

Art. 2460 – Returning donated property.
(1)    The donor may stipulate that property donated by him shall be returned to him, should the donee die before him.
(2)    Unless otherwise expressly provided, a stipulation for the return of property may not be enforced where the deceased donee has left descendants.
(3)    A stipulation for the return of property shall have the same effect as a provision prohibiting assignment and shall be subject to the same formalities.

Art. 2461 – Substitution.
(1)    The donor may stipulated that the donee shall keep the property donated and transmit it, on his death or on the expiry of a given period of time or on the fulfillment of a given condition, to one or more persons who shall substitute themselves for the donee.
(2)    Such stipulation shall be effective on the conditions and subject to the formalities laid down in this Code in respect of substitution made by will (Art. 929-934).

Art. 2462 – Execution of charge.
(1)    The donor may demand that the charge stipulated in the contract of donation be executed.
(2)    Execution may also be demanded by the person in whose favour the charge was stipulated, by the person appointed for this purpose by the donor or by the heirs of the donor.
(3)    The duty of the donee to execute the charge shall be restricted to the value of the property donated as on the day of the donation.
Art. 2463 – Endowment and trust.
The donee may constitute an endowment or trust in accordance with the provisions of the Title of this Code relating to “Bodies corporate and Property with a specific destination” (Art. 483-544).

Art. 2464 – Cancellation for failure to execute charge.
(1)    A donation may, on the application of any of the persons mentioned in Art. 2462, be cancelled on the ground that the donee has failed to executed the charge.
(2)    It may not be cancelled on the application of the heirs of the donor unless the donor made an express provision to this effect and regulated the effect of such cancellation.
(3)    The conditions on which a donation may be cancelled and the effect thereof shall be as prescribed by the Title of this Code relating to “Contracts in general” (Art. 1808-1818).

Art. 2465 – Warranty against eviction.
(1)    The donor shall warrant the donee against eviction where he has expressly given such warranty or eviction is due to his default or a fraud committed by him.
(2)    Such warranty shall be subject to the provisions of this Code regarding contracts of sale (Art. 2282-2286).
(3)    The donee who has been evicted may, in accordance with such provisions, require to be refunded such expenses as have been caused to him by the donation and as have not been compensated by the acquisition of the fruits of the property donated.

Art. 2466 – Warranty against defects.
(1)    The donor shall not warrant the donee against defects in the property donated unless he has expressly given such warranty or he has committed fraud.
(2)    Such warranty shall be subject to the provisions of this Code regarding contracts of sale (Art. 2287-2300).
(3)    The donee may, in accordance with such provisions, require to be refunded such expenses as have been caused to him be the defects and as have not been compensated by the acquisition of the fruits of the property donated.

Art. 2467 – Actio pauliana.
(1)    The creditors of the donor may apply for the cancellation of any  donation made by him in fraud of their rights.
(2)    The provisions of the Title of this Code rating to “Contracts in general” shall apply in such case (Art. 1995-1999).
Art. 2468 – Creditors for maintenance. – 1. Principle.
Whosoever has a claim for maintenance against the estate of a deceased donor may, where such estate is insufficient, claim against any person who has received a donation from the deceased within three years before his death.
Art. 2469 – 2. Value to be taken into account.
(1)    The donee shall be liable to the extent of the value of the property donated to him.
(2)    Such value shall be assessed as on the day of the donation.
(3)    Where appropriate, the value of the charges to which the donation was made subject shall be deducted.

Art. 2470 – 3. Plurality of donations.
(1)    Where the deceased made several donations within three years before his death, each donee shall be liable to satisfy claims for maintenance in proportion to the value of the property donated to him.
(2)    The date on which each donation was made shall not be taken into account.

Chapter 4. Loan of money and other fungibles

Art. 2471 – Definition.
The loan of money and other fungibles is a contract whereby a party, the lender, undertakes to deliver to the other party, the borrower, a certain quantity of money or other fungible things and to transfer to him the ownership thereof on the condition that the borrower will return to him as much of the same kind and quality.

Art. 2472 – Proof of loan.
(1)    Where the sum lent exceeds five hundred Ethiopian dollars, the contract of loan may only be proved in writing or by a confession made or oath taken in court.
(2)    The contract of loan may not be proved by any other means.
(3)    The provisions of this Article shall apply as regards the manner of proving the repayment of any sum exceeding five hundred Ethiopian dollars.

Art. 2473 – Relations between bankers and their clients.
(1)    The provisions of Art. 2472 shall not apply to the relations between persons or companies mainly concerned with banking business and their clients.
(2)    The contract of loan or the repayment of the loan may in such cases be proved by witness or presumptions.

Art. 2474 – Obligations of lender.
(1)    The provisions of the Chapter on “Sale” concerning the obligations of the seller shall apply to the lender (Art. 2273-2302).
(2)    The obligations of the lender shall however be construed with less strictness where the loan is made gratuitously.
(3)    In such case, the lender shall only warrant such defects of the thing as are known to him.

Art. 2475 – Insolvency of borrower.
(1)    The lender may refuse to deliver the promised thing where the borrower has become insolvent since the making of the contract.
(2)    He may do so notwithstanding that the insolvency arose before the making of the contract where he has known it only after having contracted.

Art. 2476 – Expenses and safe keeping of thing.
(1)    The provision of the Chapter on “Sale” concerning the obligations of the parties relative to expenses or to the safe keeping of the thing shall apply to the loan (Art. 2314-2322).
(2)    In this respect, the lender shall assume the obligations of the seller and the borrower, those of the buyer.

Art. 2477 – Risks.
(1)    The borrower shall become the owner of the thing lent.
(2)    He shall bear the risk of its loss or deterioration from the moment of delivery.

Art. 2478 – Interest. – 1. When due.
The borrower shall not owe interest to the lender unless the payment of interest has been stipulated.

Art. 2479 – 2. Rate of interest.
(1)    The parties may not stipulate a rate of interest exceeding twelve percent per annum.
(2)    Where it has been agreed that the loan will bear interest but a higher rate has not been fixed in writing, the borrower shall owe interest at the rate of nine percent per annum.
(3)    The borrower shall also owe interest at the rate of nine percent per annum where a rate exceeding twelve percent per annum has been agreed in writing.

Art. 2480 – 3. Exigibility.
Unless otherwise agreed, interest shall be paid at the end of each year reckoned from the making of the contract.

Art. 2481 – Compound interest.
(1)    The parties may not agree in advance that interest will be added to capital and itself produce interest.
(2)    Nothing shall affect the rules for the calculation of compound interest on current accounts.

Art. 2482 – Time for restitution. – 1. Agreed time.
(1)    The borrower shall return the things lent in the same quantity and quality at the time agreed.
(2)    Where the loan does not bear interest, he may return them before the time agreed after having informed the lender of his intention to restore them to him.
(3)    Notwithstanding any agreement to the contrary, the provisions of sub-art (2) shall apply where a rate of interest exceeding twelve percent has been fixed in writing.

Art. 2483 – 2. Absence of agreed time.
(1)    Where no time has been fixed, the borrower shall return the thing lent within one month from the day when the lender claims the restitution of them from him.
(2)    He may in the same circumstances return them to the lender one month after having informed the latter of his intention to restore them to him.

Art. 2484 – 3. Special stipulation.
Where it has been agreed that the borrower will repay when he can or when he has the means to do so, the court shall fix a time for payment, according to the circumstances, which cannot exceed six months.

Art. 2485 – Object of restitution. – 1. Sum in Ethiopian dollars.
(1)    Where the thing lent is a sum of money expressed in Ethiopian dollars, the borrower shall discharge his obligation by paying an equal numerical sum in notes or cash being legal tender on the day of payment.
(2)    No regard shall be had to variations in the purchasing power of this sum since the date of the loan.
(3)    No regard shall be had to any change which may have occureed in the definition of the Ethiopian dollar since the date of the loan.

Art. 2486 – 2. Sum in foreign currency.
(1)    Where the thing lent is a sum of money expressed in a foreign currency, the borrower shall discharge his obligation by paying a sum numerically equal to the same sum in foreign currency in notes or cash being legal tender on the day of payment in the country of this currency.
(2)    He may, if he prefers, free himself by paying the equivalent on the day of payment of this sum in Ethiopian dollars.

Art. 2487 – 3. Commodities or ingots.
(1)    Where the thing lent consists of ingots, wares or commodities, the borrower shall free himself by returning the same quantity and quality.
(2)    No regard shall be had to the variations in the price of such ingots, wares or commodities since the date of the loan.
(3)    Where it is impossible for the borrower to restore the thing or this restitution is very difficult for a reason beyond his control, the borrower shall free himself by paying the lender the value of the thing estimated on the day and at the place where the restitution should take place.

Art. 2488 – Delay of borrower. – 1. Cancellation of contract.
(1)    In the case of non-payment of interest, the creditor may not demand the repayment of the loan, unless the borrower is in arrears for two consecutive payments representing together at least one tenth of the capital lent.
(2)    The provisions of sub-art. (1) shall apply where it has been agreed that the capital lent shall be repaid by instalments.
(3)    Any provision to the contrary shall be of on effect.

Art. 2489 – 2. Damages.
(1)    Where the borrower is late in returning the thing lent or in paying the interest due by him, he shall pay legal interest in accordance with the provisions of the Title of this Code relating to “Contracts in general” (Art. 1790-1805).
(2)    Any provision increasing the liability of the borrower shall be of no effect.

Chapter 5. Contract for periodical payments

Art. 2490 – Definition.
(1)    The contract for periodical payments is a contract whereby a party confers on the other the right to demand the periodical payment of a certain sum of money or of a certain quantity of fungible things in exchange for the alienation of a thing or the assignment of capital.
(2)    The stipulation for such payments may also be agreed on as counter-part of a liberality.

Art. 2491 – Title evidencing the debt.
(1)    The creditor may compel the debtor to supply him with a new title where nine years have elapsed since the date of the title which he possesses.
(2)    The new title shall be established at the expense of the creditor.

Art. 2492 – Perpetual annuity and life annuity.
The annuity may be set up in perpetuity or as a life annuity.

Art. 2493 – Payment of arrears.
(1)    Unless otherwise agreed, the arrears of annuities shall be paid at the end of each year calculated from the conclusion of the contract.
(2)    The parties may not agree in advance that unpaid arrears shall themselves bear interest.

Art. 2494 – Reference to rules governing loans.
The provisions of Chapter 4. of this Title shall in addition app0ly to the contract for periodical payments.

Art. 2495 – Saving clause.
Nothing shall affect the rules concerning Government loans or loans issued by other public collectivities.
Section 1. Perpetual Annuity

Art. 2496 – Power of redemption. – 1. Principle.
The annuity set up in perpetuity may be redeemed by the debtor notwithstanding any contrary stipulation.

Art. 2497 – 2. Possible limitations.
(1)    The parties may however agree that the redemption shall not take place before the death of the creditor or the expiration of a period not to exceed ten years.
(2)    They may also agree that the redemption shall only take place after notice of one year given to the creditor.
(3)    Where longer periods of time have been agreed, the maximum periods provided in sub-art (1) and (2) shall be substituted therefore.

Art. 2498 – Obligation of redemption.
The debtor of an annuity set up in perpetuity may be compelled to redeem it where:
(a)    he ceases to fulfill his obligations for two years; or
(b)    he fails to furnish the lender with the sureties promised by the contract or new sureties equivalent to those which have failed; or
(c)    the insolvency of the debtor is judicially established.

Art. 2499 – Capital due in case of redemption.
(1)    In the case of redemption of the annuity, the debtor shall pay the creditor a sum corresponding to the capitalization of the annuity effected on the basis of the rate of the legal interest.
(2)    Any stipulation increasing the liability of the debtor in this respect shall be of no effect.

Section 2. Life Annuity

Art. 2500. – Duration of the annuity. – 1. Life of a person.
(1)    The life annuity may be set up on the life of the creditor, of the debtor or of a third party.
(2)    Unless otherwise agreed, it shall be deemed to be set up on the life of the creditor.

Art. 2501- 2. Lives of several persons.
(1)    The life annuity may be set up on the lives of several persons.
(2)    It may also be stipulated to be revertible, on the death of the creditor, on to the life of another person.

Art. 2502 – Case of nullity.
(1)    The contract setting up a life annuity shall be of no effect where none of the persons on whose lives the annuity is set up is alive on the day of the making of the contract.
(2)    The revertibility clause shall be of no effect unless the person on whose life the annuity is stipulated to be revertible is alive on the day of the making of the contract creating the annuity.

Art. 2503 – Transmissibility.
Unless otherwise agreed, the annuity set up on the life of the debtor or of a third party shall pass to the heirs of the creditor.

Art. 2504 – Usurious rate of arrears.
(1)    Where the life annuity is set up in exchange for payment of a capital sum, the arrears due by the debtor shall not exceed twenty percent of this capital.
(2)    They shall be at the rate of twelve percent where a higher rate has not been fixed in writing or a rate exceeding twenty percent has been fixed.

Art. 2505 – Cancellation of contract.
The person fro whose benefit the life annuity has been set up may require the cancellation of the contract where the settler does not give him the sureties stipulated for its performance.

Art. 2506 – Non-payment of arrears.
(1)    Mere failure in the payment of arrears of the annuity shall be no ground for the person in whose favour it has been set up to require the repayment of the capital or to re-enter into the goods alienated by him.
(2)    He may only seize and cause to be sold the goods of this debtor and to have ordered or agreed to the setting aside, out of the proceeds of sale, of a sum sufficient to secure the payment of the arrears.

Art. 2507 – Absence of power of redemption.
(1)    The debtor may not free himself of payment of the annuity by offering to repay the capital and by renouncing to claim the recovery of the arrears paid.
(2)    He shall pay the annuity during the whole life of the person or of the persons on whose life or lives the annuity has been set up whatever the length of the life of these persons and however onerous the payment of the annuity may become.

Art. 2508 – Risks.
(1)    The life annuity shall accrue to the creditor in proportion to the number of days that the person on whose life it is set up has lived.
(2)    Where it has been agreed that it will be paid in advance, the arrears shall accrue from the day when the payment was to be made.

Art. 2509 – Assignment and attachment.
(1)    Unless otherwise agreed, the creditor may assign his rights.
(2)    He who sets up an annuity gratuitously in favour of a third party may stipulate at the time when he sets up the annuity that it cannot be seized by the creditors of such third party.

Art. 2510 – Proof of claim.
The creditor of a life annuity may only demand the arrears by proving his existence or that of the person on whose life it has been set up.

Art. 2511 – Annuity due by virtue of insurance.
Nothing shall affect the rules governing the contract of insurance, where the life annuity is due by virtue of a contract of insurance.