What is the swap contract?

A swap, according to the Real Academia Española de la Lengua, is defined as 'the exchange of one good for another without money, with some exceptions'. Such an asset can be real estate, mercantile or any other type of asset that can be imagined. Due to the complexity of the concept in legal terms, here we want to tell you everything you need to know about the contracts that regulate it.

The swap contract

In general, this contract is of a civil nature and must always be concluded between two parties. It must set out the basis on which one party undertakes to give an asset to the other party, regardless of whether it is movable or immovable, in exchange for the other party's giving another asset in return. When both parties are companies, then we must speak of a commercial exchange contract. All this is specified in Article 1538 of the Civil Code.

Main features of the contract

There are a number of elements that define the contracts that regulate this figure. Specifically, these are the following:

• It is consensual: this means that, in order to be drafted, concluded and executed, there must be full consent between the two signatory parties. This means that, for example, it may not be necessary to deliver both goods at the same time as the conclusion of the contract.
• It is reciprocal: in this type of contract, one party cannot receive something from the other without giving something in return, and vice versa. In fact, current legislation specifies that, for it to be concluded, there must be two reciprocal obligations. On the other hand, it should be remembered that both parties must be of the same nature (natural persons or legal persons). It would therefore be impossible to conclude such a contract if one of the parties is a private individual and the other a company.
• It is onerous: this is because, by its heading, each party undertakes to grant the other party an asset and agrees to accept another asset from the other party as consideration.
• It is binding and transferable: in itself, this contract does not transfer ownership from one party to the other. However, as it is transferable, the law recognises it as sufficient to oblige, by whatever system is appropriate, that it be carried out.

In addition, it can involve both movable and immovable property, as mentioned above. In fact, it may involve the exchange between movable and immovable property.

There are also exceptions where the exchange of goods may be supplemented by a cash payment by one of the exchangers, although these are exceptional cases. For example, if you are buying a new car, you may be offered the possibility of exchanging your old car plus a certain amount of money to compensate for the rest of the value of the car to be purchased.

Types

Generally, it is said that there are three types of contracts of this type. The purpose of these is to exchange housing or real estate (houses, flats, flats, etc.), movable property (a car or any physical product) or rights and services (credit, inheritance, usufruct, etc.).

The main peculiarity of contracts involving the exchange of movable goods is that, if possible, the exchangers must bring the thing to be exchanged to the place of conclusion of the contract. Likewise, in those involving rights and services, it must be ensured that they are equivalent.

What is meant by an exchange of a future thing?

Jurisprudence has always considered this figure and the contracts that regulate and establish it to be atypical. However, in view of what has happened over the last few decades, it is difficult to say that this is the case.

This type of exchanges and their respective contracts have been particularly frequent in the real estate sector. The reason is very simple and can be easily explained by a simple example: a developer or builder acquires a plot of land and then proceeds to exchange the houses and flats he plans to build on it with interested parties. In exchange, he undertakes to build these houses and to deliver them within a certain period of time, which is specified in the contract.

Current legislation is quite specific with this type of contract. In fact, in order to be valid, they must be individualised and there must be sufficient factors and elements so that there is no doubt as to the object of the exchange.

Termination of the contract in case of hidden defect or eviction of the property to be exchanged.

Article 1538 of the Civil Code regulates this type of contract. Likewise, Article 1539 of the same legal text specifies how they are to be terminated in such a case. 

Specifically, this article states that the contract will be terminated in the event that one of the two exchangers demonstrates that the property received after initialling was not the property of the other and that, therefore, he/she did not have the power to transfer it. In this case, the agreement is automatically annulled and he must receive what he originally gave.

How does the termination of such contracts take place?

First of all, eviction means the loss of a specific right by virtue of a prior right belonging to another natural or legal person. The only way in which this can occur is by means of a final judgement.

In the event of such an occurrence, the affected exchanger can choose between claiming compensation for damages or requesting the recovery of the property that he gave to the other exchanger during the conclusion of the contract. This is typified in Article 1540 of the Civil Code.

But why does the Civil Code provide for both options? Quite simply. It is possible that, if a certain period of time has elapsed after the eviction has occurred, the exchanger to whom the return of the property is claimed may no longer be the owner of the property. Therefore, it will be impossible to return the property and he will have to compensate for the damage by means of damages. Moreover, the law does not provide for the possibility that the conflict between the two parties may adversely affect the third party who, in good faith, acquired the asset or property.

The same applies in the event that one of the goods transferred through the conclusion of the contract has hidden defects, i.e. defects that are not perceptible to the naked eye or that were concealed in bad faith by one of the exchangers.

In short, the figure of the commercial and civil exchange can be difficult to understand as it is associated with a multitude of details, especially when it affects future goods, rights and services. However, it is advisable to be familiar with all of them and to receive appropriate advice from a specialised professional before concluding the contract that regulates them. This is the only way to ensure that you are treated fairly and that you will be able to make claims in the future if necessary.