A sale is a legal transaction that normatively regulates the exchange of goods for

money and places it under state protection.

From a legal aspect, a sale contract results from the agreement between parties
whereby one of them, the seller, binds himself to deliver the goods which are the
object of sale to the other party, the buyer, and to transfer the strongest
ownership right over it, while the buyer binds himself to deliver, to the seller, a
specified amount of money and transfer the strongest ownership right over it to
him.
Three basic types of sales contracts. These are sales of civil, business and
international business law.
A civil sale is conducted sporadically and unprofessionally, and its basic goal is
the acquisition of an objects utilization value. The objects of such sales can
include immovable things as well.
A contract of sale is a chargeable, mutually binding and commutative contract.
In an economic sale, the chargeability is implied, and a contract is therefore
existent even if the price has not been specified by the parties agreement. The
commutative quality implies the reciprocal identity of parties obligations and
rights: what is an obligation for one party is a right for the other.
A contract is formed by the agreement between the parties and is consensual.
Generally, a contract is informal, i.e. the agreement between parties is achieved
in any form. In some exceptions, the law prescribes a written form of contract for
individual kinds of sales.
The legal consequences or effects of a contract of sale include the transfer of
ownership from the seller to the buyer, or the emergence of the obligation to
deliver the goods. A contract of sale can, thus, have property-law and obligationlaw effects.
The procedure of contract formation includes the following stages: potential
stages, necessary stages, contract perfecting, and state interference in the field
of the emergence of individual contracts.
The potential stages of contract formation include, first of all, preliminary
contacts - one person invites another to negotiate, or asks for information in
order to make the decision on starting the negotiation.
The second stage includes negotiation as two-sided parties contacts with the
clearly expressed aim of starting the process of determining the participants
intention with respect to the future contract.
The final, third stage includes the so-called preparatory contract, which is the
product of a contract reached through negotiation.
The necessary stages of contract formation include giving an offer and
acceptance. By its legal nature, an offer is a unilateral civil-law transaction;
The offerors obligation is to stick to the offer within the period stated in the offer
or, if there is none, in the dispositive regulation.

Since an offer typically creates a strict obligation for the offeror, special
procedures have been developed to place the person that is the offeror in the
economic sense of the word in the legal position of the offeree. These special
procedures include: public invitation for tenders, pre qualification bidding and
offering collection.
Acceptance is a statement or behavior of the offeree that indubitably indicates
the offerees consent to the offer. A contract can thus be closed by facta
concludentia (declaration of will implied by conduct) as well and, under special
conditions, it can also be formed by silence.
Since silence implies the offerees completely passive conduct, it can be
considered acceptance if the following conditions have been met: a permanent
business relationship between the offeror and
offeree with respect to the specified (not any) kind of goods, and the offerees
failure to declare that he declines the offer within the provided timeframe or
immediately
Business-law sales are always conducted professionally, and their most common
objects are movables specified by classes - standard contracts.
Most frequently, the agreement refers to the quantity as the object determinant,
and the price amount.
A bill of sale is a written receipt of an orally formed contract.
An order is an offer if the buyer, based on previously gathered information, uses
it to express a serious intention to form a specified contract, defined in the
document. If the buyer sends an order based on the already received sellers
offer, then it has the legal character of an acceptance.
Such an order must correspond with the offer in all details. If there are differences
between the order and the offer, it has the legal features of a counter-offer.
Electronic contracts are contracts formed by means of Information
Communication Technologies
Contract formation via electronic messages and using ICT involves search
processes (e.g. searching the offerors website), giving an offer and acceptance,
authorization of payment and payment itself as a form of acceptance by facta
concludentia.
In a traditional environment, transactions are conducted directly, face-to-face.
Participants involved in the transaction can verify the other partners identity in
different ways (e.g. through ID, drivers
license, travel document, etc.). This itself implies security.
An electronic environment requires the same level of security, but requires
different techniques. This is served by the electronic/digital signature, which
serves to confirm the authenticity of the message content, and to provide a
warranty about the message senders identity.

The most developed and safest way of electronic contracting is reachingan

agreement via the Trade Partnership Agreement (TPA).
Internet and e-commerce do not recognize the concept of state borders.
Therefore, determining which law is applicable may present some difficulty. it is
recommended that an electronic offer define the applicable law
The method and procedure for accepting the offer, validity and terms of the offer
are a mandatory part of an electronic offer.
If the goods and services offered are available only in some countries, the offeror
must include, in their offer, the geographic limitations clause, which specifies
which clients from which countries the offer refers to.
If this clause does not exist, the offeror risks being bound by unwanted contracts,
i.e. contracts they
cannot fulfill, and thus is liable to damages due to non-fulfillment of the contract.
In business law, the essential elements of a contract of sale always include an
object, a thing. Quantity and price have this quality only under certain
circumstances.
A thing as an object of sale is a limited part of nature that can be put under
human control and rule
According to the existence criterion, an object of sale can include a perished,
existing or future thing, i.e. goods
The goods can be defined by generic or distinctive features. In terms of quantity,
goods can be accurately specified or specifiable. In a contract, the goods that are
the object of sale have to be described at least to a degree that makes them
specifiable.
The object of sale may include ones own or someone elses goods. The situation
that arises by selling someone elses goods is similar to that of a contract the
object of which is a future thing. The seller assumes responsibility to acquire the
property right by the time of delivery, and transfer it to the buyer. If they fail to
do so, they are liable for being late, i.e. for termination of the contract. However,
a conscientious buyer who did not, or did not have to know that they are buying
goods from a non-owner, may terminate the contract and ask for damages if, due
to a legal deficiency, they are not able to achieve the purpose of the contract.
Quantity is the physical, spatial and quantitative specification of the goods which
are the object of sale. Regardless of legal qualification, quantity is always
specified in a contract.
In order for a contract of sale to exist, quantity must be at least specifiable.
Price is the value compensation for the provided goods and the transferred
property right over it. In a legal sense, price is an essential element of the
contract, and represents a primarily monetary counter-value of the object of sale
and property right over it.
Price includes the monetary counter-value of the goods net weight unless the
contract explicitly

provides that it also includes the weight of packaging (gross for net). Since, in
accordance with dispositive rules, the seller is bound to obtain packaging, the
costs thus incurred must also be included in the price. This rule will not apply if
there is an explicit agreement between parties about the opposite, or when it is
required by the features of the packaging.
Price formation by means of a contract is the most frequent case in practice.
Price is entered in a contract as specified or specifiable. Price is considered to be
specifiable when the contract contains sufficient data by means of which it could
be specified
If the price is neither specified nor specifiable in the contract, the buyer has to
pay the price that was regularly charged by the seller at the time of contract
formation
If there is no regular sellers price, it is deemed that the reasonable price has
been contracted. According to the legal definition, the reasonable price is
considered to be the current price at the time of contract formation
The change of price implies its subsequent, different specification compared to
the price in the contract.
According to the principle of the autonomy of will, seller and buyer are, within
legal limits, always authorized to change the price through subsequent
agreement
The first is the termination or change of contract due to changed circumstances
The second is excessive damage
In addition, parties can provide conditions under which, and ways in which, the
specified price will be changed in the contract.
The non-essential elements of a sale transaction are those parts of the contract
that do not have to be included.
Specification of non-essential elements is extremely significant both in an
economic and legal sense. In this way, parties achieve the full adjustment of the
contract to their actual needs.
These elements are quality, transport clauses, and packaging.
Quality is a set of chemical, physical, aesthetic, functional and other features of
the goods that make them usable either for the purposes it is typically used for,
or for special purposes resulting from the contracts or transactions
circumstances.
It is the set of features of the good that make it fit for the purpose
Quality is specified by the agreement between parties
When specifying quality, the description in the contract uses wording and / or
drawings to define all or some of the individual features of the goods.
For many goods, their trade has already established ways to describe quality, and
it is well known
which features attention should be paid to.

The second way, fairly frequent in practice, is to determine quality according to a

sample or model. A sample is a small quantity of the goods, the features of which
must be matched by the entire contracted quantity.
After the deadline for providing quality specification by the buyer has expired, the
seller can choose whether to terminate the contract or to make the specification
himself
Quality can also be determined by type. Type is a set of features with which a
type of good appears in trade and that is more or less known to a broader circle
of consumers. Type is denoted by a special name (e.g. Vlasic cheese).
Packaging may be defined as the protective wrapping of goods.
Packaging should be distinguished from the protection of goods that are not
packaged. Packaging is an essential element of the contract if it has been
prescribed or explicitly contracted. In all other cases, it is a non-essential
element.
Transport clauses are technical trade terms whereby the seller and thebuyer
agree upon a series of issues significant for fulfilling the contract of sale. These
include: organization of delivery, organization of transport, bearing costs of
delivery and transport, formation of the contract on transport insurance and
bearing the cost of the insurance, as well as the transfer of risk from the seller to
the buyer.
In addition to these, depending on the type of clause and the source for
determining its content, transport clauses can also regulate other issues such as:
paying custom duties, acquiring permits, etc.
The sellers obligations are duties to perform certain actions resulting from the
contract of sale. The basic duties include: delivery, warranty for material
deficiencies, warranty for legal deficiencies, and invoicing.
The delivery of goods and putting the goods at the buyers disposal, is the
sellers main obligation. It is inseparably tied to the transfer of risk and passing of
property, and is therefore the characteristic duty of a contract of sale.
Delivery implies the system of factual and legal actions the seller has to take
pursuant to all relevant sources so that the buyer acquires the possession and
ownership of the goods.
Delivery must consist of at least one factual and one legal action.
LoO requires the goods to be delivered in a proper condition. This wording
implies the delivery of the contracted goods, rather than another goods (aliud),
etc. The LoO requires the goods to be without material deficiencies.
The effects of delivery are its legal consequences.
Warranty for material deficiencies is the sellers warranty to the buyer that the
sold goods have no physical properties that would impede regular and

uninterrupted, prescribed, usual or contracted use. It can also be defined as the

sellers warranty to the buyer that the delivered goods will correspond with what
was provided by the contract.
It is included in the contract of sale whenever it is not explicitly excluded and to
the extent to which it is not limited by the contract itself.
A deficiency exists:
1. if the goods do not have properties needed for their regular use or trade;
2. if the goods do not have the necessary properties for the special use the buyer
acquires them for, and which would be known to the seller or had to be known;
3. if the goods do not have properties and features that are explicitly or tacitly
contracted or prescribed;
4. when the seller delivers goods which are not identical to the sample or model,
except when the sample or model are shown only for the sake of information.
Deficiencies: qulitive or quatitive, visible or hidden, substantial or unsubstantial
VISIBLE: those that can be noticed at a usual external examination of the goods
within sight. HIDDEN deficiencies are those whose establishment requires a
special procedure of checking the properties of the goods or their use.
According to scope, deficiencies can besubstantial or unsubstantial.
Substantial deficiencies lead to the annulmentor decrease of the merchantable or
usable value of the goods.
Unsubstantial deficiencies do not decrease the value of the goods in any way.
Finally, according to their impact on the contract, deficiencies can be essential or
unessential.
ESSENTIAL: prevent the achievement of the purpose of the contract.
UNESSENTIAL: may cause damages, but do not affect the very existence of the
contract.
For a warranty for material deficiencies to exist, conditions provided by law must
be fulfilled. All the conditions must be fulfilled cumulatively.
The deficiency must be present at the moment of risk transfer.
Exceptions are possible if deficiency is caused by something that happened
before risk transfer.
The second condition for the existence of the obligation of warranty is that at the
moment of contract formation the deficiencies were not known to the buyer or
could not remain unknown
The third condition is that the obligation of warranty is not completely excluded
or limited by the contract. The obligation of warranty will exist regardless of such
a clause, if the deficiency was
known to the seller or if he imposed it using his special monopolistic position
The fourth condition is that the goods have not been sold at an auction sale
The fifth condition is the proper complaint of material deficiencies.

Warranty for legal deficiencies is the sellers warranty to the buyer that the
transferred right has no deficiencies that would prevent the emergence or
duration of the buyers property rights, i.e. that would decrease or restrict the
exercise of this right, and thus the quiet possession of the sold goods.
Like material ones, legal deficiencies can be classified according to a few criteria,
namely, those that: exclude, decrease or restrict the buyers right. According to
the scope of impact this theory classifies
legal deficiencies as either full or partial.
For a deficiency to exist it is essential that the interference is legal. It can be
made both by means of an action and in the form of an objection,
and by directly pointing out some third partys rights.
By its legal nature, the warranty for legal deficiencies is a natural component of
the contract; it exists whenever it is not expressly or tacitly excluded by the
agreement between parties.
The existence of a warranty for legal deficiencies requires the cumulative
fulfilment of legal prerequisites.
The deficiency must be present at the moment of the transfer of property right
from the seller to the buyer.
The second condition is that the buyer is conscientious.
The third condition is that the warranty is not excluded or restricted by the
contract.
The fourth condition is informing the seller about the deficiency, i.e. the
complaint about it
Invoicing is one of the sellers obligations. An invoice can be defined as the
sellers statement of will given in the form of a written document, whereby he
requires the buyer to pay the price from the contract and possibly other
expenditures incurred related to the contract. Besides the request for payment,
an invoice always contains some elements of the contract as well: object,
quantity, unit price, transport clause, and the total amount of price.
The buyers obligations are his duties to perform activities that result from the
contract of sales. In our law, the buyers basic obligations are: paying the price,
examination of goods, receiving the delivery, and notifying about material
deficiency (complaint), if one exists.
Payment is the buyers basic and most important obligation. Its fulfilment is the
main reason and cause for which the seller forms a contract. Payment of price is
without any doubt the buyers contractual obligation. The content, object of the
payment obligation is not identical with the price. The obligation of payment is,
as a rule, greater than the price itself, since it includes other expenditures as
well, primarily the various costs of the trade of goods.
The buyer is bound to examine the received goods in the usual way, or have
them examined. Thus
in our law the check for material deficiencies is the buyers obligation.

The acceptance of the delivery or taking over the goods is a system of factual
and legal actions that the buyer, pursuant to the contract, has to perform so that
the seller can deliver the goods and transfer the property right over it.
Just as with delivery, acceptance consists of at least one factual and one single
legal action.
Objections can be considered to be the statements by the buyer or seller,
whereby he informs283
the other that he does not believe the contract has been properly fulfilled. Both in
our and in comparative law, objections are also called complaints, i.e.
notifications of deficiencies.
Both the buyer and the seller can
object.
The most significant objections made by the buyer are those due to tardiness of
delivery, lack of observing the warranty that the goods have no material
deficiencies, and breach of warranty that the
transferred right has no legal deficiencies.
On the sellers side, the most important objection is due to the buyers tardiness
with paying the price.
A complaint of material deficiencies is a legal action, a statement whereby the
buyer notifies the seller that the delivered goods have, according to his findings
and opinion, an actual material deficiency, and whereby he advises the latter on
his intention to use some of the rights he has on this basis.
The complaint of material deficiencies is the buyers obligation, and it is a
prerequisite for preserving the right to damages.
The objection is made by the buyer directly or through his authorized attorney.
The complaint is addressed to the seller or his attorney
The first essential element of the content is a detailed description of the
deficiency.
The second element of content, without which a complaint cannot exist, is the
invitation to the seller to examine the goods in order to make sure that the
complaint is really justified.
The third condition is that it must be seen, from the complaint, that the buyer is
making it with the
intention to use one of the rights he has associated with the unconfirmed goods.
In our law, parties are free to agree upon the timeframe for objections. If they fail
to do so, the regulations of the LoO will apply. If the seller was not conscientious,
i.e. if the deficiency was known to the seller or could not have remained
unknown, the buyer has, at his disposal, an unlimited time to lodge a complaint.
The buyers right in this case does not cease even after the expiration of the
objective deadline of six months upon the delivery.
The timeframe for complaints regarding hidden deficiencies is defined by
subjective and objective timeframes. The subjective timeframe starts from the
day of detecting the deficiency. In contracts of business-law sales, its duration is
determined by the without delay standard.

The day of delivery is also the starting day of the objective timeframe of six
months, within which the complaint to the conscientious seller can be made.
A complaint of legal deficiencies is a statement whereby the buyer notifies the
seller that the transferred right has not been constituted at all or has not been
constituted in the scope and in the way provided for by contract
A debtor is tardy when he does not fulfil the obligation within the timeframe
determined for the fulfilment.
The sellers tardiness with delivery is a fact of nonfulfillment of the obligation of
putting the goods at the buyers disposal at the time defined by the contract or
based on the contract. Liability for tardy delivery is a unilaterally binding
obligation relationship, the subject of which is correcting the damage in kind or in
money, to the extent to which the damage is due to the tardiness.
Liability for material deficiencies is due to non-fulfilment or improper fulfilment of
the sellers obligation of warranty that the goods have no material deficiencies.
Liability for material deficiencies covers the liability to repair damages due either
to qualitative or quantitative deficiencies.
Liability for legal deficiencies results from non-fulfilment of the sellers obligation
of warranty that the transferred right has no deficiencies.
The buyer is tardy when he does not deliver the packaging at the contracted
time.
The seller has, at his disposal, two basic options: keeping the contract in force or
its termination. In the first case, he also has the right to damages for improper
fulfilment of the contract, and in the second those due to the termination of the
sale contract.
B&H law explicitly defines the acceptance of delivery as a buyers obligation.
Therefore, the consequences of tardiness are generally the same as in other
cases of debtors liability on this basis. If the buyer is tardy with the acceptance
of delivery, the seller is bound to guard the goods with due diligence of a prudent
businessman at the buyers risk and cost
Tardy payment of price exists when the buyer does not fulfil its obligation to pay
in due time.