Ethiopian Legal Brief

Common Obligations of the Seller and the Buyer

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Common Obligations of the Seller and the Buyer

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2.2.3. Common Obligations of the Seller and the Buyer

In the preceding discussions, we have discussed the respective obligations of seller and buyer. The obligations of the contracting parties are not limited to these obligations. They have some obligations in common like obligation to pay expenses, obligation to preserve the thing and obligation to bear unpreventable risk of loss and deterioration. The common obligation of the parties will accordingly be deal with.

2.2.3.1. Obligation to pay expenses

The contract of sale may not involve expense when it is an instance sale. For example, when you buy a jacket, you pay the price and take the jacket. You have concluded a contract of sale but you did not incur expenses. However, when contract of sale involves a lot of money, the parties usually make their contract in writing. In such case the conclusion of contract involves certain expenses like advocate’s fee for drafting the document incorporating the agreement, expenses for typing, printing and photocopying the document.

 

Sometimes the conclusion of the contract may involve brokers. The remuneration paid to the brokers is an expense of the contract. When the contract of sale involves expenses, the buyer should cover such expense.

 

The obligation of the buyer to pay price sometimes involves expenses like charges by the bank when the money is to be sent to the seller through the bank according to the contract. The obligation to pay price like obligation to open credit account and the obligation to provide bank security are always accompanied by expenses. In addition to expenses of payment and expenses of contract the buyer bears the expenses of transportation when the goods sold is tobe taken to other places than place of delivery. It can be safely concluded that the buyer bears the following expenses:

 

  • Expenses of a contract of sale;
  • Expenses of payment;
  • Any expense arising after delivery;
  • Expenses of transport where the thing sold has to be sent to another place than the place of delivery and if the delivery is not to be carriage free;

 

Under the discussion dealing with common obligation of the parties, there are certain obligations of the seller. The seller bears the additional expenses incurred by the buyer as a result of changing his residence after the conclusion of contract pursuant to Art 2315.

 

The seller shall pay such transportation expenses when the delivery of the thing is carriage-free as per article 2318. The buyer should bear expenses after delivery like expenses for loading a cargo pursuant to 2317. Where 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.

 

The seller should bear the expenses of delivery where delivery involves expenses. The expenses of delivery including the expenses incurred for counting, measuring and weighing of the thing sold.

 

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. 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. Whenever there is a decrease in customs duties, the price shall be reduced accordingly.

 

2.2.3.2. Obligation to preserve the thing

In addition to bearing expenses, both the buyer and the seller should preserve the thing which has been sold. After delivery of the thing, the ownership transfers to the buyer. In cases of constructive delivery, the thing belonging to the buyer may remain in possession of the seller. The same is true when the buyer is late in taking delivery or in paying the price. In these circumstances, the seller should preserve the thing belonging to the buyer.  The seller should not neglect the goods. The seller’s duty to ensure the preservation of the thing is at the buyer’s expense. In preserving the goods the seller may incur expenses as when the seller hires a guard for the purpose of keeping buyer’s goods or when the seller keeps the buyer’s good in warehouses at his own cost. The buyer should then refund the seller according to Article 2320 of the Civil Code. When the buyer fails to do so, the seller has also the right to retain the thing until the buyer indemnifies him for the expenses he incurred in preserving the thing.

 

Although risk might be transferred to the buyer, the seller has the obligation to preserve the thing and if the thing is damaged for lack of preservation, the seller will be liable for the damage. Article 2325 (1) indicates that risk is transferred to the buyer from the day when he is late in paying the price. Transfer of risk connotes that the buyer shall pay the price notwithstanding that the thing is lost or its value is altered. This is however true if the loss or alteration of the value of the thing is not attributable to lack of preservation of the seller who is in actual control of the thing.

 

The buyer has also the obligation to preserve the thing at the seller’s expense where the thing sold has been received by him and he intends to refuse it either owing to defect or non-conformity. Article 2324 (2) dictates that risk will not be transferred to the buyer even after delivery and the seller is in actual control if he has cancelled the contract, require cancellation or require replacement of the thing. We can infer from this that if the thing which is in the actual control of the buyer is lost or damaged, it is the seller not the buyer who shall cover the price of the thing.

 

However, if the loss or damage is attributable to the noncompliance of the obligation to preserve the thing by the buyer, the buyer will be liable to cover the price of the thing. Even though risk is not transferred to the buyer, his obligation to preserve the thing in his actual control makes him liable.

 

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’ (Article 1779-1783). If for example Ato Yehiya sold 100 kilos of bananas to Ato Waq jira and the buyer died before accepting delivery, Ato Yehiya may be authorized to sell bananas and deposit the money if the person who shall receive performance is not known or refuse to accept.

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