LAW OF OBLIGATION ACT, PART 2, CHAPTER 11, DIVISION 2

Division 2

Sale with right of repurchase

  • 238. Sale with right of repurchase

(1) Parties may agree in a contract of sale or after entry into a contract of sale that the seller has the right to repurchase the thing (sale with the right of repurchase).

(2) In the event of sale with the right of repurchase, the thing is deemed to have been repurchased by the seller when the seller submits corresponding notification to the purchaser.

(3) The notification specified in subsection (2) of this section shall be made in the same form as the contract of sale. In the case of a written contract of sale, the submission of a notarially authenticated or notarially certified statement is sufficient.

(4) Upon repurchase, it is presumed that the price for which the object was sold is the repurchase price.

  • 239. Term for exercise of right of repurchase

The right of repurchase may be exercised in the case of immovables within ten years and in the case of other things within three years as of agreement on the conditions of the right of repurchase.

  • 240. Liability of purchaser

(1) If a purchased thing has perished or deteriorated before the right of repurchase has been exercised or if it cannot be transferred for any other reason due to circumstances arising from the purchaser, or if the purchaser has materially altered the thing, the purchaser shall compensate the seller for the damage arising therefrom. If a thing has deteriorated due to circumstances for which the purchaser is not liable or if it has not been altered materially, the seller shall not claim compensation for the damage caused thereby or reduce the purchase price.

(2) If a purchaser has disposed of a purchased thing before the exercise of the right of repurchase by the seller or if the thing has been disposed of upon compulsory execution or in bankruptcy proceedings, the purchaser is required to remove the rights of third persons arising from such disposal.

  • 241. Compensation of costs

A purchaser may claim compensation from the seller for costs incurred by the purchaser on the thing purchased thereby before repurchase and to the extent that the value of the thing has increased as a result of the costs incurred.

  • 242. Repurchase at value of thing at time of repurchase

If the parties agree that the repurchase price is the value of an object at the time of repurchase, the provisions of §§ 240 and 241 of this Act do not apply.

  • 243. Several persons entitled to repurchase

If the right of repurchase belongs to several persons jointly, these persons may exercise the right of repurchase only jointly to the full extent. If the right of repurchase terminates for one entitled person or if one of them waives the right, the remaining entitled persons have the right to exercise the right of repurchase jointly to the full extent.

Division 3

Sale by Right of Pre-emption

  • 244. Definition and exercise of right of pre-emption

(1) The right of pre-emption is a right upon the exercise of which a contract of sale between a person with a right of pre-emption and a seller is deemed to be entered into on the same conditions which the seller agreed with the buyer. A contract of sale entered into with a purchaser or obligations arising therefrom do not become invalid upon the exercise of the right of pre-emption.

(2) A right of pre-emption is created on the basis of law or by a transaction.

(21) A right of pre-emption created on the basis of a transaction applies to a contract of sale entered into by a seller with whom the creation of the right of pre-emption was agreed upon. A right of pre-emption created on the basis of law may be exercised upon each sale of a thing.

(3) A person with a right of pre-emption with respect to a thing may exercise the right if the seller has entered into a contract of sale with a purchaser. A right of pre-emption may be exercised also in case of other forms of transfer for charge.

(4) The right of pre-emption is exercised by the person with the right of pre-emption submitting corresponding notification to the seller.

(5) The notification specified in subsection (4) of this section shall be made in the same form as the contract of sale. In the case of a written contract of sale, the submission of a notarially authenticated or certified statement is sufficient.

(6) Disposition of a thing to which a right of pre-emption created on the basis of law applies is void if the disposition is made after the right to exercise the right of pre-emption is created and if it would prejudice or restrict the exercising of the right of pre-emption. The provisions of this subsection do not apply to a pre-emptive right created on the basis of law in the case of the transfer of an immovable or a part thereof.

[RT I 2003, 78, 523 – entry into force 27.12.2003]

  • 245. Void conditions

An agreement between the seller and purchaser is void with respect to a person with the right of pre-emption if, according to the agreement,:

1) the contract of sale is valid only if the right of pre-emption is not exercised;

2) the seller has been granted the right to withdraw from the contract in the case where the right of pre-emption is exercised.

  • 246. Accessory obligations

(1) If the purchaser has an accessory obligation arising from a contract which the person with the right of pre-emption is not able to perform, the person with the right of pre-emption shall, instead of performing the accessory obligation, pay the usual value thereof.

(2) The right of pre-emption cannot be performed if the purchaser has an accessory obligation arising from a contract which is not monetarily appraisable and which the person with the right of pre-emption is not able to perform. An accessory obligation does not impede the right of pre-emption being exercised and the person with the right of pre-emption is not required to perform the accessory obligation if it may be presumed that the seller and the purchaser would not have agreed on an accessory obligation if no right of pre-emption had existed.

  • 247. Exercise of right of pre-emption concerning several things

If a purchaser purchases a thing concerning which a right of pre-emption applies together with other things for an aggregate price, the person with the right of pre-emption shall pay a part of the aggregate price in proportion to the value of the thing. The seller may demand that the person with the right of pre-emption also purchase other things which cannot, without harmful consequences for the seller, be separated from the thing concerning which the right of pre-emption applies.

  • 248. Payment of purchase price by instalments

(1) If, pursuant to the contract of sale, the purchaser is not required to pay the purchase price upon entry into the contract, the person with the right of pre-emption has the same right only if he or she gives security for the amount paid by instalments.

(2) If an immovable or a movable or right entered in a public register is the object of a contract of sale with the right of pre-emption and if the purchaser is not required to pay the purchase price upon entry into the contract, the person with the right of pre-emption is not required to give security in so far as establishment of a pledge on the object of the contract of sale has been agreed in order to ensure payment of the purchase price by instalments, or an obligation has been taken over for the ensuring of which a pledge has been established on the object of the contract of sale.

  • 249. Notification of sale to person with right of pre-emption

(1) A seller shall promptly notify the person with the right of pre-emption of any contract of sale entered into with a purchaser and the content thereof.

(2) If a contract of sale is entered into in written form, the seller is required to present the contract to the person with the right of pre-emption at the request of such person.

(3) The notification obligation of a seller is also deemed to have been performed if the purchaser notifies the person with the right of pre-emption of the contract of sale and the content thereof or presents the contract to such person.

  • 250. Term for exercise of right of pre-emption

The right of pre-emption may be exercised within two weeks after the receipt of the notice specified in § 249 of this Act or, in the case of immovables, within two months after the receipt of the notice specified in § 249 of this Act, unless a different term is prescribed by law or the contract.

  • 251. Restrictions on exercise of right of pre-emption

(1) The right of pre-emption cannot be exercised if the thing is sold upon compulsory execution or in bankruptcy proceedings or if the thing is expropriated.

(2) The right of pre-emption cannot be exercised if the thing is sold to the descendants, or ascendants or spouse of the seller.

  • 252. Exercise of right of pre-emption by several persons

(1) If a right of pre-emption belongs to several persons jointly, these persons may exercise the right of pre-emption only jointly to the full extent. If the right of pre-emption terminates for one entitled person or if one entitled person waives the right, the remaining entitled persons have the right to exercise the right of pre-emption jointly to the full extent.

(2) If the right of pre-emption belongs to several persons separately and they wish to exercise the right, they shall draw lots unless otherwise provided by law or an agreement of the parties.

(3) A right of pre-emption acquired pursuant to law shall be preferred to a right of pre-emption established by a transaction.

  • 253. Non-transferability of right of pre-emption

(1) A right of pre-emption is not transferable.

(2) A right of pre-emption for a specified term passes to the successors of the person with the right of pre-emption.

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