The Replacement Agreement

 

Characteristics of replacement as a contract

 

Legal definition

The Replacement Agreement is an agreement under which the parties undertake to transfer ownership of items or other rights to each other. It combines the effect of two successive purchases and sales between the same countries where the purchase price obtained from the first transaction is paid as a selling price for the acquisition of the right under the second transaction. This does not result in the payment of a price because the two counter claims are offset. There is, however, a significant difference between the conclusion of a substitution contract and the two consecutive "counter sales" transactions. Since the transfer obligations under the substitution agreement are synergistic (the fulfillment of one is the basis for the other), the failure to fulfill one leads to the occurrence the possibility of termination of the contract and the elimination of the property effect in respect of both transfers. In two separate sales and purchases with offsetting the due purchase price, concluded between one and the other the obligations for the transfer of ownership will have an independent ground, therefore, the failure of one of them will not affect the property law effect under the other contract.

 

The substitution agreement should also be distinguished from the making of two counter-donations between the same persons. Although the final result sought by the parties is the same as the replacement contract - the transfer of the ownership of the property between the parties involved in the contracts, the two transfers will have a separate contractual and factual effect. The non-transfer of ownership under one contract will not lead to the detriment of the other. Moreover, it will be the responsibility of each of the parties to provide maintenance if necessary for the other party and the possibility of canceling the donation ie donor in case of default of this obligation to nego.Poradi unpaid character both disposal transactions will be vulnerable with regard to the possibility of challenging them by bringing an action to set aside and in respect of supplementing the reserved portion of the necessary heirs of the donor