Explanation of Article 361
The article defines the barter contract, which is a contract whereby each of the contracting parties transfers ownership of property to the other by way of exchange, and neither of the properties is money. The definition reveals the characteristics of the barter contract, which are that it is:
A- A contract of exchange.
B- A contract of ownership.
C- A contract binding on both parties.
D- A consensual contract; it is not a formal or real contract.
The general provisions of obligation, previously stated in the first section, apply to the barter contract, and the source of obligation here is the contract; thus, the general rules of the contract specifically apply to it. Moreover, the detailed provisions of the sale contract apply to the barter contract insofar as they do not conflict with the nature of the barter contract as outlined in Article (365).
The fact that neither of the exchanged properties is money distinguishes the barter contract from the sale contract, as one of the exchanged properties in a sale contract must be a monetary price. If a person sells their land for a monetary price, the contract is a sale. If the exchange is for another piece of land, a car, or shares, the contract is a barter. Consequently, each of the contracting parties in a barter contract is considered both a seller and a buyer simultaneously, as each owns one of the exchanged properties in return for owning the other.
From the definition of the barter contract, several provisions become clear:
1- The condition for barter is that neither of the exchanged properties is money, and it makes no difference whether either is a real or personal right; for example, the exchange can be the right of ownership of something other than money or the right of usufruct or easement of that thing, or it can be a personal right as in the assignment of a right if the right and its exchange are not money; such as when a person has a hundred tons of iron owed by a debtor and assigns it to another person in exchange for land given to the assignee.
2- It is not required that the exchanged properties be of the same kind or different kinds; it is valid to barter real estate for a car and a mobile phone for a watch, or to barter a car for two cars or a watch for two watches.
3- It is not required that both exchanged properties be specifically determined or determined by type; it is valid to barter land for a car determined by type, just as it is valid to barter land for another piece of land, or to barter twenty tons of wood determined by type for ten tons of iron determined by type.
Related To
Article 361
Exchange is a contract under which the parties transfer to each other ownership of property other than cash.