LESSON 1 PART 5 Flashcards
By the contract of sale one of the contracting parties obligates himself to transfer the ownership of goods or services and to deliver a determinate thing and the other to pay Therefore a price certain in money or its equivalent.
sale
is defined as a transaction involving the transfer of goods, services, funds, property or rights, thereby creating an obligation on the part of those who receive them, that must be complied with in the future.
Credit
is a type of transaction in which the seller delivers goods or services to the buyer, but payment is deferred to a future date.
Sale on Credit
the first party provides the goods, services, funds, property, or a right.
creditor (seller)
the second party has the obligation by promising to pay for them in cash, in kind or to return the thing borrowed.
debtor (buyer)
A creditor may provide the following five types of items on credit:
- Goods
- Services
- Funds
- Property
- Rights
Tangible products such as groceries, appliances, medicines, and hardware.
Goods
Professional or technical assistance, including car repairs, beauty treatments, and electricity supply.
Services
Financial resources, such as cash loans from banks, pawnshops, or individuals.
Funds
Temporary use of physical assets, like a borrowed hammer, a rented car, or a leased beach house.
Property
Authorized access to spaces or privileges, such as the use of a commercial store.
Rights
outline the amount to be paid, the due date, and any conditions for deferred payment, including whether the buyer will pay in full or through installments. It also specifies interest rates and penalties for late payment, ensuring both parties understand their
financial obligations and preventing disputes.
Payment Terms
typically transfers to the buyer at delivery, even if payment is delayed. However, contracts may specify that ownership remains with the seller until full
payment is made, affecting the buyer’s ability to sell or use the goods before payment.
Ownership Transfer
The buyer is legally obligated to pay as agreed. Failure to make payment on time is a breach of contract and can lead to penalties or legal action. The seller must deliver the goods or services as agreed and provide any required documentation, such as invoices.
Contractual Obligations
are the conditions under which the sale on credit occurs. These terms should include the repayment schedule, interest rates, penalties for late payments, and any security measures, such as collateral, to protect the seller in case the buyer defaults on
payment
Credit Terms
