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Obligation of the Buyer

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2.2.2. Obligation of the Buyer

The main obligations of the buyer under the contract of sale are the obligation to pay price and the obligation to take delivery of the thing sold. These are the conditions of contract of sale with the exclusion of which no contract of sale can be made. The contract of sale may also include some other obligations such as obligation to cover expenses of delivery which are not an intrinsic element of the definition as they are warranties:. The buyer must appropriately discharge all obligations under contract to avoid suit on non- performance of contract of sale. In this regard, article Art. 2303 provides that:

(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.

 

2.2.2.1. Obligation to pay price

The buyer has the obligation to pay the price and take delivery of the thing. The price is the amount of money that the buyer undertakes to pay to the seller in consideration of a thing. It is the cost at which a thing is bought.

 

The obligation of the buyer to pay price includes the obligation to take any steps provided by the contract or by the custom to arrange for or guarantee the payment of price, according to Art 2304. For example, the contract of sale may provide that the buyer should pay the price in check. In this case the buyer must open account in bank and deposit money in the bank from which he orders payment to the seller. Thus, the buyer fails in his obligation to pay price if he does not open an account in a bank. The parties to the contract may agree that the buyer would pay the price after delivery of the thing provided the buyer gives security to the seller. In such case, the buyer’s obligation to pay price includes the obligation, for example, to give surety.

 

In many kinds of business, there are customs and practices of the trade that are known by people in the business. Applying these customs and practices in light with providing gap filling rules considering hypothetical contract that is the contracting parties would assume these customs and practices had they been cognizanct of the gap. The buyer has, accordingly, the obligation to pay in accordance with the custom and arrange for or guarantee the payment of the price. For example, assume that the custom in purchase of pharmaceutical products the buyer has to transfer the purchase price through the bank to the seller. In such case, the buyer should take step to transfer the money through the bank.

 

According to Article 2304 (2), the obligation of the buyer to pay price also includes the obligation to accept bills of exchange, to open credit account and to provide bank security.

 

Parties to sales contracts frequently fail to regulate price or leave gaps which might result in unresolved dispute. In such cases, the provision of the Civil Code determines the price in some instances by its gap filling provisions. Such circumstances relate to the absence of fixed price while the price is based on weight of the thing when the thing; has market price, when the buyer accepts excess quantity, when the time and place of payment is not agreed.

 

? How do you see the validity of a contract whose object (price) is not specifically stated?

 

  1. A) Price determined by weight: According to Art 2305, if the parties determined the price based on the weight of the thing, the price should be based on net weight rather than gross weight and the new weight is taken into account in the event of doubt. For example, if the seller agrees to deliver 20 quintals at 520 Birr per quintals, he has to deliver a quintal containing 100 Kilograms excluding the weight of the container.

 

  1. B) Things at current price: If the thing sold has a market price and the parties did not agree on the price of the thing, the buyer should pay the market price. If the seller normally sells the thing and there is no agreement on the price of the thing, the buyer should pay the price normally charged by the seller. In both cases, the place and time of delivery should be considered. For example, if the place of delivery causes the buyer to incur extra expenses, that expense should be included in the price. Likewise, the price should be increased in proportion to the duration of delay in paying price, when the sale is on credit.

 

  1. C) Quantity greater than agreed: The seller should deliver the quantity of the thing agreed upon in the contract. Where the seller delivers a quantity greater than that provided in the contract, the buyer may accept or reject the excess quantity as he pleases. If the buyer, on the other hand, accepts the quantity in excess, he should pay a price increased in proportion to the quantity delivered to him. For example, A agreed to deliver 10 quintals of sugar to B at 500 Birr per quintal. Instead A delivered 15 quintals. B has an option to accept or reject the additional 5 quintal. If he accepts, he should pay 500 Birr for each additional quintal.

 

  1. D) Place of payment: If no place is fixed in the contract, the buyer should pay the price at the address of the seller. However, if the contract provides that the price is paid when the thing or documents are handed over, when the price is paid at the place where, under the contract, such thing or documents are to be handed over.

 

2.2.2.2. Obligation to take delivery of the thing

The buyer must take necessary steps to complete the delivery according to article 2313 which provides that:

The buyer shall, after delivery, take such steps as may be necessary for completing the delivery of the thing.

 

These necessary steps include the obligation to go to the place of the business of the seller and physically receive the thing from the seller or to keep the buyer’s store opened if delivery is to be made at the buyer’s place. It also includes the duty to accept the thing when the place of delivery is at the residence of the buyer when the thing does not suffer from any defects. The buyer may take deliver by only telling the seller to keep the thing on his behalf. This is the case where the buyer takes delivery through constructive mode of delivery. The buyer’s failure to pay the price might be equated to failure to take delivery when payment of the price is a precondition for delivery.

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