The sale contract is one of the most common nominate contracts in Swiss law. It is governed by arts. 184 to 236 CO, supplemented for real estate by arts. 216 to 221 CO. Whether for the sale of a movable good, real estate, a business or a portfolio of shares, the applicable rules determine the parties' obligations, the warranty for defects and remedies in the event of dispute. PBM Avocats in Geneva and Lausanne advises buyers and sellers in all phases of their transactions.
Essential Elements of the Sale Contract (art. 184 CO)
The sale contract requires agreement on three essential elements:
- The good sold: sufficient description of the object of the sale (nature, quantity, quality, specifications)
- The price: determined or determinable amount (may refer to market price under art. 212 CO)
- Consent of the parties: offer and acceptance (art. 1 CO)
The Seller's Main Obligations
| Obligation | Content | Legal Basis |
|---|---|---|
| Transfer of ownership | Transfer valid and unencumbered title | Art. 184 CO |
| Delivery | Hand over the good at the agreed place and time | Art. 184 CO |
| Warranty for defects | The good must conform to the contract (quality, quantity) | Arts. 197-210 CO |
| Warranty of title | The good must be free from third-party rights | Arts. 192-196 CO |
Warranty for Defects (arts. 197-210 CO)
The seller's warranty for defects is one of the most important mechanisms of Swiss sale law. It applies when the good delivered does not conform to the contract (material defect) or when third parties claim rights over the good (legal defect).
The warranty period is 2 years from delivery for movable goods (art. 210 CO). This period is mandatory for consumer sales and may be extended contractually. For real estate, the prescription period is 5 years.
The Sale of Real Estate: Mandatory Authentic Form
The sale of real estate in Switzerland requires an authentic notarial deed for validity (art. 216 CO). A private deed or simple written agreement is insufficient. The notary verifies the legal situation of the property, the absence of encumbrances not disclosed, and the absence of pre-emption rights. Failure to comply with the authentic form renders the sale contract absolutely null, with no possibility of regularisation.
What is the deadline for notifying defects in a sale contract?
Under art. 201 CO, the buyer must inspect the goods as soon as possible after delivery and notify the seller of any defects without delay. For hidden defects, notice must be given immediately after discovery. Failure to give prompt notice results in loss of all warranty rights. For consumer sales, the two-year warranty period (art. 210 CO) is mandatory and cannot be reduced contractually.
What remedies does the buyer have in the event of a defective product?
Art. 205 CO gives the buyer the choice of: (1) rescission of the contract (actio redibitoria) — return of the goods and refund of the price; (2) price reduction (actio quanti minoris) — reduction of the price proportional to the diminution in value. Additionally, if the seller is at fault, the buyer may claim damages (art. 208 CO). The buyer must choose between rescission and price reduction; they cannot demand replacement goods unless the contract provides for this.
Does the seller have a duty to disclose defects in the sale contract?
The seller must not conceal known defects from the buyer (art. 197 CO). Deliberate concealment of a defect constitutes fraud (art. 28 CO) and gives the buyer the right to avoid the contract on grounds of defect of consent, in addition to warranty remedies. In the sale of real estate, the seller must disclose all known material facts (legal position, town planning, easements, contamination) that may affect the buyer's decision.
Is a written form required for a sale contract in Switzerland?
For the sale of movable goods, written form is not required for validity (art. 184 CO). For the sale of immovable property, art. 216 CO requires an authentic notarial deed for the validity of the sale promise and the sale itself. Failure to comply with this formality renders the contract absolutely null. A simple private deed is insufficient for real estate transfers.