Legal Definitions - addictio in diem

Addictio in diem is a legal term referring to a specific clause that can be included in a sales contract. This clause allows a seller to terminate an existing agreement if they receive a more favorable offer from another party within a predetermined timeframe. It essentially provides the seller with a limited period during which they can cancel the current sale in favor of a superior offer.

• Example 1: Real Estate Sale

  Sarah agrees to sell her house to Mark for $500,000. Their contract includes an addictio in diem clause, specifying that if Sarah receives a higher offer within 10 days of signing, she can terminate her contract with Mark. On day 7, another buyer offers Sarah $520,000. Because of the addictio in diem clause, Sarah can legally cancel her agreement with Mark and accept the new, better offer.

  This illustrates addictio in diem because Sarah, the seller, was able to terminate her initial contract with Mark within the specified 10-day period due to receiving a more favorable offer from a different buyer.

• Example 2: Sale of a Rare Collectible

  David, a collector, agrees to sell a rare vintage car to Emily for $150,000. Their contract includes an addictio in diem clause, giving David 14 days to accept a better offer. A week later, another collector, unaware of the initial sale, offers David $165,000 for the car. Thanks to the addictio in diem clause, David can legally withdraw from his contract with Emily and sell the car to the new buyer for the higher price.

  Here, the addictio in diem clause allowed David, the seller of the unique item, to void his first agreement with Emily within the agreed-upon 14-day window because a superior financial offer emerged.

• Example 3: Specialized Equipment Transaction

  A small manufacturing company, "TechFab Inc.," agrees to sell a specialized, custom-built machine to "Innovate Solutions" for $300,000. Due to the unique nature of the equipment and potential for higher bids, they include an addictio in diem clause allowing TechFab to terminate the sale if a better offer comes in within 21 days. On day 15, a larger competitor, "Global Dynamics," learns about the machine and offers TechFab $330,000. The addictio in diem clause permits TechFab to cancel its agreement with Innovate Solutions and proceed with the more lucrative sale to Global Dynamics.

  This scenario demonstrates addictio in diem as TechFab Inc., the seller, utilized the clause to terminate their initial contract with Innovate Solutions within the 21-day period, enabling them to accept a significantly better offer from Global Dynamics.