Legal Definitions - in diem addictio

This Latin term refers to a type of conditional sale or award of property. It describes a situation where an agreement to sell or transfer an item is made, but it includes a specific condition: the seller retains the right to cancel the initial agreement if a better offer for the same item is received within a predetermined timeframe. If no superior offer materializes by the specified deadline, the original sale or transfer becomes final and binding. Essentially, it's a sale that is initially provisional, allowing for a potential upgrade to a more favorable deal for the seller, before becoming absolute.

• Real Estate Transaction:
  • Scenario: A homeowner agrees to sell their house to Buyer A for $400,000. However, their contract includes a clause stating that if they receive an offer of $425,000 or more from another buyer (Buyer B) within the next seven days, they have the option to terminate the agreement with Buyer A and accept Buyer B's higher offer.
  • Illustration: This demonstrates in diem addictio because the initial sale to Buyer A is conditional. The homeowner has a specified period (seven days) during which they can rescind the first agreement if a superior offer comes along. If no such offer is received by the deadline, the sale to Buyer A proceeds as originally planned.
• Government Surplus Auction:
  • Scenario: A municipal government holds an auction for a fleet of old vehicles. Company X submits the highest bid, which is provisionally accepted. The auction terms, however, state that the sale to Company X is not final for five business days. During this period, if another company (Company Y) submits a bid that is at least 10% higher than Company X's bid, the municipality reserves the right to cancel the sale to Company X and accept Company Y's superior offer.
  • Illustration: Here, the sale to Company X is an example of in diem addictio. The municipality has awarded the vehicles to Company X, but this award is subject to a condition (a higher bid) that can be exercised within a set timeframe (five business days). If no such bid arrives, Company X's purchase becomes absolute.
• Private Sale of Collectibles:
  • Scenario: A private collector agrees to sell a rare first-edition book to another collector for $10,000. They include a stipulation in their agreement that if a major university library or a renowned institution offers $12,000 or more for the book within a two-week period, the initial sale agreement can be voided, allowing the seller to accept the higher institutional offer.
  • Illustration: This scenario exemplifies in diem addictio because the initial sale of the book is made with a clear condition. The seller has a defined window (two weeks) during which they can cancel the existing agreement if a more advantageous offer from a specific type of buyer is presented. If the two weeks pass without such an offer, the sale to the initial collector becomes final.