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It involves the formalization of a treaty in which an individual gives up one good and, in return, receives another. In the past, when capital was not implemented, trade was carried out through exchanges or barters, with prior agreement, someone would grant a product in exchange for some other that he needed. The exchange is handled similar to the sale, however, you do not receive a specific amount of money, but an absolutely fungible good. It is a step prior to a sale, it is also known as barter. The main obstacle to successfully completing an exchange at that time referred to the valuation differentiation of the assets. That is why the establishment of a contract is currently required, since it offers the option of establishing equivalences, through the exchange of a good of equal value.

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What is the Swap?

The swap refers to establishing a contract between two parties , in which it is established that one of the parties must assign a piece of furniture, property or good and the counterpart must deliver another object in compensation. It is a civil contract, when they are natural persons and in the case of legal figures, it will be a commercial contract. These types of contracts are regulated by the Civil Code of each country. There are three types, the most common are: swap of movable property, swap of real estate and swap of rights or services. There are also less conventional swaps such as future swap and financial swap.

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  • Real estate swap
  • Swap of movable property
  • Exchange of rights or services
  • Future thing swap
  • Financial swap
  • Characteristics of the contract
  • Requirements of a contract for real estate
  • Termination of the contract of the foreign property
  • Termination of a contract for eviction of the thing exchanged
  • Enforceability
  • Cancellation of a swap contract
  • Disadvantages

Real estate swap

It is used in the case of a real estate purchase and sale and is an option that allows a buyer to offer a property as payment for another one that they will receive. In this case, we do not speak of cash, however on some occasions a difference in value may arise between the two properties. In this particular, it is allowed to pay in cash for the difference. To name a few examples: houses, apartments, land, premises, etc.

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Swap of movable property

It is a reciprocity with very simple terms, in which goods of equal value are exchanged, as happens in the exchange of real estate . In the event that one piece of furniture is of higher value than the other, the delivery of a compensation amount may be required. For example: cars, televisions, refrigerators, etc.

Exchange of rights or services

It is exchanging personal rights . To cite a few examples, a succession or an inheritance. A service exchange can be made, as long as both are of the same or similar amount.

Future thing swap

It is an unusual contract, since at the time of being established, one of the goods, or things to be exchanged exists, but that of the other party does not yet. It will be real, but once it’s built . It is gaining popularity in the real estate sector, where one of the parties delivers its property and the counterpart, generally a contractor, agrees to deliver the one that corresponds to him once it is manufactured or built. Within this swap is the also atypical financial swap.

Financial swap

It consists of establishing a transaction between two figures, in which it is agreed to exchange monetary circulation in the future , in order to reduce the changes in the price of the asset in question.

Characteristics of the contract

  • It is consensual : those affected must agree for the contract to be made and executed.
  • It is bilateral : those involved must receive what has been agreed. This type of contract cannot be made if only one party receives something. It is imperative that two reciprocal obligations appear . It is important to emphasize that both must be natural persons or both must be legal persons. It cannot be concluded or executed if it is between a legal person and a natural person.
  • It is onerous : thanks to the fact that, through their signature, each person is obliged to grant an asset to the other, this implies a commutation of bilateral benefits . Then also, each one is in the obligation to accept as compensation, the good of the other party.
  • It is compulsory responsibility : in case of breach, this contract is sufficiently valid to demand compliance with the established conditions, through the necessary system.
  • It is translational : it is specified when the agreed good is delivered and this is assumed as the transmission, in addition to that it can be used to transmit some good.
  • Main , it is a contract that does not depend on any other.
  • It is commutative : in most cases, the two parties have the same obligations and rights, it is also instantaneous or of successive tract.
  • There are two exceptions in these contracts: the first is that they can be of a mixed type, that is, a movable property can be exchanged for a real property and vice versa. The second is that a money exchange can be agreed as long as the value of one of the goods far exceeds the value of the other, in which case monetary compensation may be required.

In a swap contract, the parties are governed to

  • Ownership of what is exchanged must be transferred.
  • The legal consequences must be assumed in case “hidden defects” are found or produced.
  • The expenses generated as a result of registration procedures, notary’s office, taxes, etc. must be assumed.
  • You must respond in case of eviction.
  • Both parties must go to the registry for the corresponding signature.

Requirements of a contract for real estate

  • In the case of real estate, a requirement is that their price be equivalent.
  • Each of the rates of the exchanged goods will be indicated in the contract.
  • The merchants must deliver the corresponding documents for the ownership of the properties that are being exchanged.
  • mortgage transfer (if any) must be made in the name of the new owner.
  • All services (water, electricity, etc.) must be up to date, at the time the contract is signed.
  • Likewise, condominium payments must be up to date at the time of signing.
  • Proofs of payment of all taxes associated with the property must be delivered.
  • It is up to the parties to go to the registry to register the property.

Termination of the contract of the foreign property

In this case, this contract will be considered terminated once one of the swapped parties demonstrates that he received an asset that did not belong to the counterpart, therefore he had no power to assign it, being a hidden vice. For this reason, the contract would be canceled immediately and it must receive the good that it originally delivered . The only way it can be established is through a final judgment.

Termination of a contract for eviction of the thing exchanged

In the event that there is a final judgment and an eviction occurs, the affected party is entitled to demand compensation for damages or to repeat the thing that was given, in accordance with the provisions of the regulatory Civil Code. The Civil code will contemplate the option of demanding compensation since, if a long time elapses after the eviction, the party to which the claim for the return of the exchanged thing is made, no longer have it in your power, therefore the return would be impossible to carry out, therefore you must respond through compensation for damages.

Enforceability

The termination of the interchangeable contract does not affect the rights of third parties.

Cancellation of a swap contract

This contract may be terminated when:

  • Any of the parties does not deliver the good or the thing in the defined term.
  • If one of those involved delivers something other than that established in the contract.
  • In the event that those affected decide to cancel it.
  • Due to the existence of “hidden vices” .

In the cases mentioned above, the affected party can:

  • Demand the return of what was delivered.
  • Demand compensation for “damages.”

Disadvantages

This type of civil or commercial contracts can seem overwhelming and difficult to assimilate, since it involves many details to consider, especially in the case of exchanges of future goods, services or rights. However, it is important to study them very well, all of them, in depth and request the appropriate advice of a specialist in the area of ​​civil law, before entering into a contract of this type. This will be the only way to achieve a fair negotiation and be guaranteed to be able to make a claim in the future, if necessary.

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