What a sale is, when it is a barter, and what form it needs

They are Articles 1274 to 1276 and 1285 to 1286 of the Civil Code of 2020, which open and internally order the chapter on sales: what the contract is, when a mixed deal is still a sale, which other contracts its rules reach, and what form it requires.

Anyone buying or selling a thing in Puerto Rico under the Civil Code, and anyone who made a mixed deal of thing plus money and needs to know how it is classified.

• That the selling party bind itself to transfer ownership of a thing: without that obligation, Article 1274 does not describe the contract.Verified against the official source
• That the buying party bind itself to pay a certain price.Verified against the official source
• In a mixed deal, that the value of the money be equal to or greater than that of the other thing or right, for it to be a sale and not a barter.Verified against the official source
• No special formality, except where a special statute so requires (Article 1285).Verified against the official source

• The Code requires no document for the validity of a sale; Article 1285 leaves it free of formality unless a special statute imposes one.
• If an already perfected contract is to be modified, the modification document with the same formalities as the original execution (Article 1286).

1. 1

   Step 1: The definition, word for word

   Article 1274: by the contract of sale, the selling party binds itself to transfer to the buying party the ownership of a thing, and the latter binds itself to pay a certain price. Two obligations, one on each side.

2. 2

   Step 2: Thing plus money: the deciding rule

   Article 1275 addresses the ordinary trade-in-plus-cash case. When part of the price consists of money and the other part of another thing or right, the contract is a sale provided the value of the money is equal to or greater than that of the other thing or right. If the money is worth less, the article does not call it a sale.

3. 3

   Step 3: How far the rules of sale reach

   Article 1276 applies them suppletorily to contracts generating the obligation to constitute, modify or transfer real rights over things or rights, including instruments of credit. Suppletorily means they step in where the contract and its own law say nothing.

4. 4

   Step 4: Things to be manufactured or built

   The same article reaches contracts giving rise to the obligation to deliver things that will be manufactured or built, with one exception: where the party ordering them assumes the obligation to provide a substantial portion of the materials. The Code does not define "substantial portion", and this guide sets no percentage the article does not carry.

5. 5

   Step 5: Services are left out

   The last line of Article 1276 is categorical: the rules of sale are inapplicable to contracts for the provision of services. A services contract is not resolved with this chapter.

6. 6

   Step 6: Form: none, unless a special statute asks for it

   Article 1285: the contract of sale requires no special formality for its validity, except where a special statute so requires. The article refers to those statutes without naming them, and neither does this guide, because it did not read them here. Note: the Code itself, in another chapter, does require certain dealings to be put in writing, and that has its own guide.

7. 7

   Step 7: To change what was signed, the same formality

   Article 1286: in the modifications of an already perfected contract, the same formalities as in the original execution shall be observed. If the sale was made by public deed, the modification calls for the same.

A sale is executed between the parties; the Code does not order anyone to go to an agency for it to exist. If the thing is real property and registration is wanted, that is governed by the Property Registry and its statute, which we did not read here. Disputes are decided by the Court of First Instance.

• Believing there is no sale without a signed document: Article 1285 requires no formality unless a special statute asks for it.
• Believing the opposite, that form is never needed: the special-statute proviso is part of the same article.
• Calling every deal with a thing in it a barter: if the money is worth the same or more, it is a sale.
• Calling a sale the deal in which the money is worth less than the thing handed over.
• Modifying orally a contract executed with formalities: Article 1286 requires the same ones as the original execution.
• Applying the rules of sale to a contract for the provision of services.
• Assuming a numeric rule for "substantial portion of the materials": the Code gives none.
• Assuming the price must be entirely in money: Article 1275 admits the mixed deal.

These are the government pages this guide is based on.

• Poder Judicial de Puerto Rico

  Poder Judicial

  bvirtualogp.pr.gov