Short note on sales and securities

Ezra d.

Instructor yazachew b.

Sales and securities is a course dealing with two different types of courses. The first part of the
course on contract of sales mainly deals with the nature of special contracts governing sales and
its distinguishing features from other contracts. In this part, we will go through the definition i.e.
the elements forming contract of sales. Accordingly, we will be dwelling on the obligations of
both parties i.e. the seller and the buyer, communality of obligations and contractual and legal
remedies in breach of the contract by either parties. On the other hand the second part focuses
on the creation of contracts governing securities and devices. Under this topic we will be
dwelling on the creation, enforcement and transfer of securities interests the jurisprudence of
which is not developed pretty much in Ethiopia though it is claimed to be the most important
pressing area of law as a country badly urging for attraction of foreign investment. in this area
of civil law, it is hard to come across with helping materials or with any jurisprudence of courts
for it is poorly theorized and practiced. Thus, the second part will be covered by forming various
questions and finding answers. On account of this, the following questions will be addressed turn
by turn. 1what is security interest. How can we form security interest? What is the subject matter
of security and what features characterize it? How can we enforce security interests against the
debtor or against third parties? How can we transfer our security interests?

PART ONE

CONTRACT OF SALES

A contract of sale is a contract whereby one of the parties, the seller, undertakes 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.1 From this provision we simply understand that
a contract of sale is a contract to which the general principles of contract are applicable. It is to
mean that the validity requirement expressed in terms of capacity, consent, object and form if
any serves as basis for creating contract of sale. It is the structure of the civil code to primarily
define contract of sale as any contract which is then followed by its own special features.
Accordingly, the civil code provides two basic obligations, delivery of a thing and payment of
price qualifying a contract as contract of sale. There are two parties i.e. the seller who delivers

1
The civil code of the empire decree no. 65 1960 art. 2266 (1)
the thing and the buyer who pays price for the delivery. If one delivers a thing to another and if
the one pays the price for the delivered thing, then a contract of sale is deemed to exist. We can
thus define contract as any contract which is however expressed by delivery of a thing and
payment of price by the contracting parties. If we single out a delivery of a thing and payment of
price as core elements of contract of sale, it will be our next task to examine as to what do we
mean by these elements in the following sections.

SECTION ONE

Elements of contract of sale

1.1 .

Delivery of a thing by the seller

What do we mean by a thing? As we have said earlier, the general principles of contract are
applicable to contract of sales. In order for us to determine what is to be sold, it would also be
important to make reference to the part of the civil code dealing with property. The civil code of
the empire defines a thing in contract of sale as a good which is movable and immovable. See
art. 1126.art. 2267 of the same code provides that the application of the chapter on contract of
sales shall be to sale of corporeal chattel. We have however an exception that when special law
of sale on contract of sale for certain goods provide otherwise, things remains to stand in a rival
position of this chapter. It is obvious that the law categorizes a corporeal chattel which is a thing
in contract of sale as ordinary and special corporeal chattels for policy reasons. Therefore, if a
law of sale on aircraft appears to deviate from the principles of contract of sale, it will remain
unaffected. for a contract of sale on special corporeal chattel, we can say that a due reference is
deemed to be made to three categories of laws , the law on contracts in general, the law on the
general contract of sale and the law on the special contract of sales. Thus, it would be our prime
observation to the contract of the parties the special law governing the sale of a particular
property, if not adequate to the general contract of sale and if this no adequate too, to the
general principles of contract this will be approach we employ to deal with disputes involving
sales. The general contract of sale also applies to sale of immovable’s if no provision is
otherwise set. See art. 2275. It applies to transfer of usufruct rights and other incorporeal rights .
see art. 2408 and the following. Generally, the reading of articles 2267, 2275 2410 and 2411
distributes the application of the general contract of sales on corporeal chattels which are
ordinary and special, immovables and incorporeal chattels which are referred to be goods under
part of the civil code dealing with property and things in the language of art. 2266 of the same
code. with regard to intrinsic elements forming part of the immovable, the law on sale of
movables shall apply. See art. 2268(1). This will be however if the contract of the parties
specifically treats the intrinsic elements as separate from the principal. The civil code under sub
art. 2 of the same art. Gives emphasis that the sale on crops trees on farm materials for
demolished building and products of quarry shall be the sale of movables. Please think of this if
it is either the principle of the law or the mercy of the contract to determine the fate of the sale on
list of things under this provision? The instructor believes that the provision provides for the sale
of movables by anticipation. Again is it still the blessing of the contract or the law giving the
status of intrinsic elements including movables by anticipation to be governed separate from the
sale of immovable? If the contract or if the law prescribes nothing about the intrinsic element in
the general or special contract of sale, the law presumes it to be part of the principal. See art.
1131. Does the same apply to accessories?

How do we understand the language of art 1135 of the civil code. before dealing with the fate of
accessories, we need to establish the existence of accessory principal relationship on the property
which is the subject of sale. Permanent destination to increase the economic utility of the
principal by the seller obviously proves the existence of such relationship. See art. 1136. After
establishing this relationship, we go against the infringement of our rights during the sale as far
as our rights to the accessory are concerned. In this regard, there are two arguments. Some
including the instructor argue that the fate of intrinsic elements under art. 1131 shall also apply
to accessories. They substantiate their argument by creating the following scenarios. If the
contract isolates the accessory from the sale of the principal, no doubt will be in place in respect
of the accessory. If there is also clear agreement for inclusion of the accessory in the sale the
principal, we still never face doubt on the dealing. If not the law or the contract says any about
the accessory in the sale of the principal, then we say that doubt is in place. Therefore, there will
be no distinction on provisions dealing with intrinsic and accessories of the principal. The
instructor further argues that the doubt could even be attributable to the failure to establish the
existence of accessory/principal relationship. Do you agree? Others argue that it is the rule to
presume to encounter the existence of separate contracts for the sale of the accessory and the
principal and hence is the doubtful case under art. 1135 exception. Thus, it is only in doubtful
cases that the dealing on the principal shall also be the dealing on the accessory. Accordingly, it
differs from the provision governing the sale of intrinsic elements for the latter remains to be rule
while the former is an exception to the rule. Do you agree? Does the silence of the contract on
the exclusion or inclusion of the accessory amount to doubtful cases? Based on this hypothesis,
the instructor summarizes the arguments as follows. 1. Since the owner creates the
accessory/principal relationship, he has the privilege to terminate the relationship prior to the
sale of the principal and the intention of the seller should be interpreted to include the accessory.

2. if the contract says no any on the accessory, then we should resort to doubtful case under art.
1135 and hence should the accessory follow the principal. For this category of argument, silence
of the contract amounts to doubt.

Once we determine that it is a thing in the language of the civil code as to what is to be sold, the
next issue will be on how to deliver the thing element . 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

2
Ibid, art. 2270(1)
make for delivery to the buyer.3 A contract of sale may be concluded regardless of the existence
or nonexistence of a thing. By this, we mean that a subject of sale could be an existing thing at
the time of the conclusion of the contract or a future thing. Particularly, in relation to delivery of
a future thing we have another provision to be reread in to the language of art. 2270/2 of the civil
code. 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.4 Here it is crucial to distinguish between contract
of sale and contract of service through close look at the respective provisions, 2269 and 2610 of
the same code. A contract of work and labor is a contract whereby one party, the contractor,
undertakes to produce a given result, under his own responsibility, in consideration of a
remuneration that the other party, the client, undertakes to pay him. 5 In contract of service, the
materials could be provided by either parties (see art. 2614 and 2615). Even though we cannot
connote a clear distinction between contract of sale and contract of service by of sole
comparison to the above provisions 2610 and 2269 of the civil code, reading of the latter
provision together with the provisions 2614 up to 15 unequivocally distinguishes contract of
service from contract of sale. By sale on delivery of future corporeal chattels, it is the burden of
the party undertaking the delivery to provide for the production of the future thing. If it is
however the party providing the main materials to produce the future thing, it will be regulated
by the contract of services (SEE art. 2615.(. but, it is still difficult to resolve cases in grey areas.
Assume that dispute arises over a certain item. Abebe, a contractor invokes 2610 in conjunction
with 2614 to support his claim for contract of service while abebech, a seller invokes art. 2269 to
buttress her argument claiming for contract of sale in a given transaction. How do we go about
resolving such dispute? Whenever we encounter confusion on the nature of a given transaction
, we should pick the disputed item and characterize it based on the law governing the transaction
through close reading of the provisions that overlap. We put the transaction on one basket and
test it by the laws which are in place to contest with one another. For instance , in our case, we
put the disputed item and test art. 2269 if it fits and art. 2610 cum 2614 another time if the first
test fails to work. Under contract of service, there is a possibility by both parties to provide the
main materials for the production of the future thing. On the other hand, it is only the seller
providing the materials for the production of the good for the transaction to qualify as contract of
sale. In this case the instructor argues that the latter is a bit special over the former. Hence,
whenever there is a dispute over a certain transaction that involves provision of the main
materials and the production thereof, it would be the presumption for the transaction to be a
contract of sale. This will be so in interpreting the rules for canon of interpretation. We can also
resort to another approach. We can easily look in to the definitional elements of each contracts
and determine the nature of the transaction as contract of service or as contract of sale. As sale
involves transfer of ownership, it is natural for the seller to own the property which is subject of

3
Id, art. 2270(2)
4
Ibid, art. 2269
5
Supra note 1 art. 2610 p. 389
sale. It is not however the a validity requirement to own property to effect sale for the law under
art. 2270(3) clearly allows a seller to sell a thing belonging to a third party. This can be done
through representation or through possession in good faith.

1.2

Payment of price by the buyer

It is obvious that parties are expected to reciprocate while entering in to a given contract. In
contract of sale, we consider transfer of ownership over a certain property when the delivery is
accompanied by payment of price expressed in money. If the price element does not exist in a
transaction involving transfer of ownership, the transaction will change in to contract of
donation. In other words, as a contract of sale is a synalagamatic contract, we cannot talk of a
contract of sale unless the price element exists. The price is expressed only in terms of money.
Other means of exchanges like barter are excluded as price element completing a valid
conclusion of contract of sale. In fact, by price element expressed in money, it does imply that it
should always be in money for cash. Any equivalent price for the delivery of the thing
calculated in money qualifies the price element for the Ethiopian contract of sale. Though the
price element in a contract of sale is always unavoidable, the fact that the parties do not fix the
price element in their contract does not make the contract of sale invalid. For instance, we can
have the following provision to better substantiate this notion. The price may be referred to the
arbitration of a third party.6 There shall be no sale where such third party refuses or is unable to
make an estimate.7 Parties can refer estimation of the price to a third party. When the third party
refuses or fails to determine the price based on the reference, there will be no contract of sale for
the price element is lacking. However, the language of the above provision confuses arbitration
estimation in determination of the price element by the third party. We know that classic
arbitration involves filing to arbitration by the parties, appointment arbitrators, paying arbitration
fees, hearing of each party and redenring a final award to the satisfaction of either parties. For
instance, think of that a contract of sale for the building of beherawi bête mingist is referred to
arbitration by third for the determination of its price. If the third party calculates the too
depreciated book value of the building and makes estimation for value of 10 birr by of setting
aside the market value of the buildingcan we think of that the estimation remains binding on the
parties? The controversy extends to estimation of quotation by the third party. What happens if
the one or both of parties are unwilling to accept the quotation. What will be the consequence on
the parties when disagreement to the award or quotation appears to exist? Theoretically, two
contending and strong arguments are forwarded in respect of this issue. some argue that if the
parties have already agreed on the price in reference to a third party either through arbitration or
simple quotation, they are duty bound to respect the terms of the arbitration or the quotation.
However, others argue that for a term of arbitration in its loser sense or a term of simple

6
Supra note 1 art. 2271(1) p. 335
7
Id, art. 2271(2)
estimation to be binding, it must be agreeable for both parties. If there is no agreement in the
price fixed by the third party by arbitration or estimation, a validity issue comes to picture. Since
it affects the freewill of the contracting parties, the contract of sale shall not be as valid as it has
to be when the parties fix price by themselves. Particularly, with regard to the reference of the
price for determination by arbitration, the instructor believes that it is enforcement of the contract
other than determination of price. Thus, we can conclude that 1. The law does not seem in saying
so to contemplate arbitration for practical reasons and theoretical debates as is hereinabove. 2.
Even if we resort to estimation or simple quotation of price by third parties by the intention of
the legislature, it should not remain binding regardless of the parties’ resentment to the
estimation. It should be a term of consensus calling estimation since it is a contract of parties’
freewill.

SECTION TWO PERFORMANCE OF CONTRACT OF SALE

2.1 obligations of the seller

We can divide obligations of the seller into two main categories. They are express obligations of
the seller and implied obligations. Implied obligations of the seller may be inferred from
permissive or gap filling provisions of the law, implied terms of the contract and other customs
and usages in transactions involving contract of sale. We find the implication of these obligations
of the seller under art. 2273/3 of the civil code. the same code under sub articles 1 and 2 of the
same provision provides for express obligations of a seller.

2.1.1 EXPRESS OBLIGATIONS of the seller

We can categorize these obligations into three categories.

1. The delivery of a thing by the seller

Delivery consists in the handing over of a thing and its accessories in accordance with the
contract.8 Delivery in a contract of sale transfers possession of a certain corporeal chattel by the
seller to the buyer. particularly, as far as ordinary corporeal chattels are concerned, delivery has
an effect of transferring ownership since the law in such cases presumes the possessor of a thing
to be the owner there of. It also serves as a center from which multifaceted analysis with respect
to transfer of risks can be made. delivery in contract of sale is an indispensable machine of the
agreement between the parties in that it distributes losses or risks. By the language of art. 2274 of
the civil code, the handing over of a thing and its accessories implies actual or physical delivery.
However we can complete this gap by reference to another provision of the same code.

8
Ibid, art. 2274
Possession may be transferred to a new possessor by the delivery of the documents representing
the thing and enabling him to dispose thereof9. Thus, delivery take effect through transfer of
documents representing a thing. Title deeds or documents of title, warehouses receipts and other
documents best exemplify an alternative mode of delivery to actual delivery of the thing. We
have also another mode of delivery if the seller is in fact unable to satisfy his obligation of
delivery through above modes. The possession of things which are certain and things pertaining
to a generic species which have been individualized shall be deemed to be transferred to the new
possessor where the person who exercises actual control over the thing declares that he shall
henceforth detain it on behalf of the new possessor10. This is known as constructive delivery. In
this mode of delivery, the seller assumes physical control over a thing for legal and contractual
purposes. In situations where the intention of the buyer remains to have bought a certain thing
pertaining to generic species, the law presumes satisfaction of the seller’s obligation to deliver
and hence is the seller the mere holder. See art. 1145 of the civil code. for instance, haftamu
may individualize hundred kuntal of selit in dilamu’s warehouse and reserve them earmarked to
come another time for the transportation. In this case, haftamu remains the mere holder of the
specified kuntals of selit to the satisfaction of his obligation to deliver. However, we should
take note that segregation of certain property does not suffice for the seller to call for
constructive delivery of the property to the buyer. He must also declare his intention not to
possess the property in consideration for his own benefit onwards from the time of the
segregation. It still begs a question as to how we can establish the intention of the seller. Assume
that constructive delivery of a certain property becomes an issue of dispute. Can intention in such
cases be presumed to relieve of either parties from production of additional evidence or be
proved with evidence? There are two arguments to the effect. Some argue that declaration of
intention must be expressed in terms of physical evidence. Since it is impossible to assume
constructive delivery without intention, it should specifically be proved for the benefit of either
parties. They insist on the argument based on the language of art 1145/1 and say by declaration
of intention, we understand that the law requires production of evidence proving the existence of
intention. On the other hand, some include the instructor defend such an argument that the law
makes clear that intention is presumption. They further argue that even though the law lacks
clarity, if we prove the basic facts around the disputes it is not as such important to prove
subsidiary facts. As any civil case, if we prove the existence of contract of sale and the
segregation of the property in dispute then it is adequate to presume that intention exists. As far
as effecting delivery through handing over of documents is concerned, we also experience a kind
of different arrangement by which delivery take effect through handing over documents. Where
it is customary for the seller to hand over to the buyer document concerning thing sold, the seller
shall, in addition to delivery, hand such documents over11. The documents shall be handed over

9
Supra note 1 art. 1144 (1) p. 167
10
Ibid, art. 1145 (1)
11
Supra note 1 art. 2301 (1) page 345
as carefully and quickly as possible at the place fixed in the contract or provided by custom.12
The buyer shall not be bound to accept the documents unless they conform to the contract.13
Here, we can bring the issue of title documents for transfer of vehicles. If the seller does not
deliver the car with the relevant documents such as the title certificate, the declarasion and other
necessary booklets, we can not think of full transfer of ownership by way of delivery. In other
words, delivery is not deemed to be complete unless the relevant documents with the thing to be
delivered are not accompanied by the delivery of the seller to the buyer. By time of delivery, we
can reread art. 2276 of the civil code into the general principles of contract and the seller is
required to deliver as soon as the buyer requires so unless there is an otherwise agreement for
different effect. Parties can also agree to effect 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.14
Provisions, art. 2278, 2279 and 2280 h are also restatements of the general contract principles.
However, we should make emphasis on the exceptions and accord due care while drafting
contract of sale. Moreover, if we have any that does not fall under otherwise stipulation in the
contract but lacks clarity, we need to make sure that we are too clear with contents of the
contract.

2. Obligation of the seller to transfer ownership

Transfer of ownership is a fundamental principle in contract of sale. We cannot talk more about
sale without transfer of ownership. It is natural consequence for the seller to transfer ownership
to the buyer which is after all the ultimate effect of sale. The seller shall take the necessary steps
for transferring to the buyer unassailable rights over the thing. 15 The law does not only require
the mere transfer of ownership right/title . it also requires the nature of ownership right or title to
be unassailable. In other words it implies the title must be free from defect and should not
involve third parties with better claim than the original seller. In fact, this is not always the case
for we might experience a situation where the seller transfers better title than he exercises. Please
think of these situations. In any case, this directly takes us to the third obligation of the seller.

3. warrant obligation by the seller

We can also divide warranty obligation into two categories these are warranty against
dispossession and warranty against defects in the thing.

A.

Warranty against dispossession or defective title

12
Id, art. 2301 (2)
13
Id, art. 2301 (3)
14
Supra note art. 2277 page 336
15
Ibid, art. 2281
For a seller to make sure that he transfers unassailable ownership right, the law requires him to
secure warranty obligation. this is an obligation of a seller which can be in place to protect the
transferred unassailable title to the buyer against dispossession by third parties. 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. 16 When a seller
guarantees a buyer a peaceful enjoyment of the transferred property, the warranty obligation
does not shelter any trespass. It is however limited to dispossession by third parties with better
title. With respect to the nature of the dispossession, it must be both actual or physical and
constructive dispossession. See art.2285. it is not however always the case for the seller to
prevent dispossession. There are situations where he can be released from warranty of obligation.
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. 17 It is obvious that this
provision provides for the knowledge of the buyer to the risk of dispossession at the time of the
contract can be a ground for release of warranty obligation by the seller where there is no an
otherwise agreement. Nevertheless, it is the question as to how can the seller establish the
knowledge of the buyer. For the purpose of simplification, we can divide the pattern of
knowledge of the buyer to the risk of dispossession into actual or direct knowledge and
constructive knowledge. As regards the actual knowledge of the buyer, witnesses might prove.
There might also be an express clause not to guarantee the buyer in the very contract during
dispossession. The complication however goes to constructive knowledge of the buyer as to
whether it has an equal effect of the actual knowledge by the buyer to the risk of dispossession.
Do you think constructive knowledge is relevant to make a seller free of warranty of obligation?
the law puts mere knowledge as a parameter for the buyer to take risk of dispossession in his
hands. This also brings about a debatable issue as far as constructive knowledge is concerned.
Can we come up with a sort of strong indirect knowledge which is equivalent to actual
knowledge? Particularly, for movables by which transfer of possession is soon accompanied by
presumption of ownership, it is not as such logical to follow constructive knowledge for
exclusion of warranty. In fact it could to some extent make sense if the transaction involves
items requiring registration. If this is not so the case, the law would be of less or no purpose to
come after such a constructive knowledge for plenty of policy reasons and economic rationales.
Warranty shall however be due where dispossession is due to the falling in of a pledge made by
the seller.18 The full knowledge of the buyer that the subject of sale is in pledge by third party
does not deprive of him warranty by the seller. The Ethiopian law does not in such cases exclude
warranty obligation for obvious reason that a seller cannot benefit from his failure to pay back
his debts. Since this is a triangular protection of the seller the buyer and third parties, the law
comprises the rights of each in the transactions through different mechanisms. We all know that
16
Ibid, art. 2282
17
Ibid, art. 2283 (1)
18
Ibid, art. 2283 (2)
warranty is an implied obligation of a seller by operation of the law and hence restriction or
exclusion to this effect be construed narrowly. See art. 2284/1. Infact, it is possible to prepare a
neat draft for contract of sale whose scope of warranty is restricted in terms of time, damage, and
liability and other related issues. Nonetheless, since warranties are principles, restrictions to that
effect should be interpreted in a way buyers are better favored. When we say that warranties are
principles the absence of which should be seen doubtfully, it does not imply that no mutual
agreement of parties can totally exclude warranty obligation. we mean however that the burden
of showing the existence of such an agreement lies in the seller. In other cases, this may not work
if the exemption or limitation of warranty obligation is provided in the contractual clause in bad
faith of the seller. To this effect, the clear language of the law provides that 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.19 The law tries to strike balance between the buyer and the seller. It is logical to assume
that a buyer knows more about third claims on the subject of the sale than seller. In doing so, the
law seems to impose the obligation of disclosure any contending interest over the subject of the
sale and hence will not be failure of further investigation by the buyer as to the existence of the
such an interest a defense for the seller to contest otherwise. Do you agree? Why the law under
art. 2284/3 qualifies the act of concealment to be intentional? Can we say that negligence is
segregated and hence does not the proposition hereinabove hold water?

It is obvious that legally or contractually warranted dispossession after sale drags the seller in
litigation between the buyer and third parties. In effect, we can read art. 2285/1 of the CC
together with provisions, 43 and 76 of the CPC to bring the seller as impleader by way of joinder
device. We can also allow intervention of the seller in the suit between a buyer and third party.
See art. 2285/2 of the CC together with art. 41 of the CPC. We know that procedural laws protect
substantive interests provided in substantive provisions. thus, we can understand that buyers,
sellers and third parties are protected under the law of sales. These interests can therefore, be
implemented the way provided here in above. Nevertheless, the buyer can not benefit from
warranty obligation of the seller if the seller is able to meet the requirements under art. 2285/3
of the civil code. in the place, there should exist the failure of the buyer to implead in due time.
Since it is the obligation of the buyer to give opportunity for the seller to fight against the
dispossession, the law considers the failure of the buyer no fault at the seller’s mind. In the
second place, the seller must be able to show the change that can be brought about had he been
joined in due time. It does not stop at the failure of the buyer to inform of the suit while filing
his statement of defense which must have been so. The seller is also expected to go further and
show that the time element has in fact affected the favorable environment that he would have
had. In other scenarios, 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

19
Ibid, art. 2283 (3)
dispossession.20 In order for us to have a complete image of what issues conclude our discussion
on transfer of valid title or perfect ownership and dispossession, we need to reread the following
statements into these provisions. 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.21 The contract may however not be cancelled where the buyer, on
buying the thing, knew of the encumbrance.22 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.23 At the same time, 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.24 The contract may be cancelled where the buyer is
partially ousted from the thing.25 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.26
Generally, we understand from all these provisions that the law somewhat tries to maintain
security of transactions by of setting up regulatory rules against defective title and dispossession.
On one corner of the edge, it limits the right of byres to come after the seller for whatever reason
and, imposes obligation on sellers not to adversely abuse the rights of buyers through warranty
against dispossession on the other.

B. warranty against defects in the thing

It is obvious that we buy certain property for a purpose of satisfying our needs. If the property
we buy to this effect is defective, nothing is served as far as the utility of the property goes.
Thus, the law puts warranty against such defect in place with ultimate goal of satisfying the
interest of the buyer and making the seller responsible for his knowledge of the thing to be free
from defect. Accordingly, The seller shall guarantee to the buyer that the thing sold conforms
the contract and is not affected by defects.27 The subsequent provision, 2288 provides that a
thing does not conform to the contract where it depicts lesser or greater value in quantity, or is
proved to be different from what is provided in the original contract of sale. on the other hand,
by defect in the thing, we refer to the imperfection in the quality ofa thing measured in terms
normal use and commercial exploitation i.e. ordinary and special purpose and specification
iimpliedly or expressly in the contract. See art. 2289. If there is no express or implied agreement
as to the particular use of the thing, the law considers that the buyer purchases thething for its
ordinary purpose. Here, the law provides for commercial exploitation and specification of

20
Ibid, art. 2286
21
Supra note, 1 art. 2341 (1)
22
Id, art. 2341, (2), page 347
23
Id, art. 2341 (3)
24
Ibid, art. 2342, (1)
25
Id, art. 2342, (2)
26
Id, art. 2342, (3)
27
Ibid, art. 2287,
products as parameters measuring quality. By commercial exploitation, we refer to resalepurpose
of some products while specification could mean a given design of a product for example.
Finally, we need to take note that all these standards measuring quality stand independent of
each other to adequately pronounce defects in the thing.